I'm one of those who believes one is best served to be cautious of anything that is proclaimed to be always true, or conversely never true....especially in the capital markets.  When it comes to Resverlogix and Technical Aanalysis I don't think one should rely solely on it, but at the same time I think it would be foolish to completely dismiss it. 

I've mentioned many times my affinity for the methodolgy of famed market technician Joe Granville.  Old Joe also espoused the view that one cannot rely solely on technical indications....that chart reading should be done against the backdrop of the fundamental picture, with an emphasis on volume as well as promotion, hype and news.  

So right now Resverlogix is heading for a so called 'Death Cross'...where the 50 DMA is poised to drop below the 200.  That linked article says that a death cross indicates the "potential" for a major sell off.  The key word of course is potential, which is why I used quotation marks around it.  Just because a technical indication indicates there is potential for something to happen, that doesn't mean its a slam dunk. 

This is one case where I genuinely believe that anyone relying solely on technicals could very well make a bad decision if they opt to sell off due to a death cross.  For myself personally, I'm not sweating this death cross, and barring a huge jump Wednesday or Thursday I think its a slam dunk ot happen this week.

My reaction is meh.  Why meh?  Because the volume is so incredibly low....all month, as I noted Monday the month of July has only had one day with volume of over 100K.  I ascribe to the belief that techical indications are most reliable when they happen in tandem with heavy volume....and are least reliable when the volume is low.  And right now I view the volume as being incredibly low.  

Even if the volume was heavier I would still need to measure it off against promotion, news and hype.  And with Resverlogix I see no promotion, very little news and almost zero hype.  

Does it matter that Resverlogix is a highly speculative company with no earnings?  Not in my books....there are plenty of speculative companies out there with negative earnings, living by dilution that are held by institutions that have analysts using technical analysis, think Teslas as a prime example.  Should the chart be thrown out the window for TSLA just because they're burning through epic sums of cash every quarter?  Some think so no doubt, and that's fair enough....but I disagree.  

The busy week for me continues, and its been a blessing....I'm happy to check back in the evening, and am even happier that things are so quiet and boring right now.  Hopefully the weeks and months ahead will bring lots of positive excitement....whether BETonMACE succeeds or fails, when the news hits on the actual results I don't think we'll be seeing daily volume of just 50K.  When the results come out I expect we will be seeing daily volume increasing  one hundred fold versus what traded today.

Cheers all.