I believe traditional technical analysis (TA) is rooted in historical patterns of economic and social development. However, the rapid acceleration of AI is reshaping everything at an unprecedented pace. This revolution is giving rise to a new TA paradigm—one that reflects the disruptive nature of AI.
In this evolving landscape, conventional expectations like a pullback to the 20-day moving average (20MA) may no longer apply. Vertical price movements could become the new norm. The scale and speed of AI innovation are monstrous, and technical analysis must evolve to capture this new reality.
So don’t short the market or exit your positions based solely on outdated technical analysis patterns. The old rules—like expecting a pullback to the 20-day moving average—may no longer apply in this AI-driven environment. A new kind of momentum is emerging, one that reflects the explosive growth and transformative power of artificial intelligence. To navigate this shift, traders and investors must adapt their strategies and recognize that vertical price action could become the new normal.