Technical Analysis
Technical Analysis
[A series of red and green box-and-whisker plots form a line that starts in the bottom left corner of the image and wiggles up to the top right corner, with a series of peaks and troughs that resemble a typical stock market diagram. The diagram is annotated with lines, arrows and text.]
[Title in top left corner] The basics of technical analysis
[A roughly horizontal section with mostly green boxes:] Allegro
[A horizontal bracket encompasses the next three sections] Prologue
[Slope becomes slightly negative. Mostly red boxes, bordered with a black line above and below:] Decline
[A roughly horizontal section with mostly green boxes, bordered with a black line above and below:] Doldrums
[Line curves upwards with mostly green boxes, with a dashed black line below:] Spline
[Three green boxes at minor peaks in the line are circled and indicated with arrows:] [Hmm!]
[A section with slight positive slope and a mixture of red and green boxes, with a solid black line below:] Lumbar support
[Slope increases. All green boxes, with a black line through the centre:] Renewal
[A sharp upwards incline, with two large green boxes:] Hark! The cliffs!
[Two black dots and a dashed black line connect two major peaks:] These two points define a line! Promising signal
[Inside trough between two major peaks is a roughly drawn black triangle:] Bathtub
[Slope becomes negative, mostly red boxes with a black line through the centre:] Declination
[At the lowest point of the trough:] Inflection
[Slope becomes positive, mostly green boxes with a black line through the centre:] Uptalk
[Slight negative slope, with large error bars. Mixture of red and green boxes. One red box is marked with an arrow:] Yikes!
[Negative slope, all red boxes. Gap between two central boxes is circled:] Wrong!
[Line rises then falls. Mixture of red and green boxes with non-parallel dashed black lines above and below:] If I add some lines here I can convince myself I'm doing something more than just seeing patterns in a graph of a random walk.
[Positive slope, all green boxes with a black line through the centre:] Slope!
[One error bar on a green box is circled:] Could be an omen?
[Arrow indicating peak:] Red + Green = Christmas!
[Positive slope, all green boxes with a wiggly black arrow through the centre. A separate arrow points off the edge of the page:] Likely to continue forever

There are two recognized methods to attempt to predict the stock market, each with its own pros and cons:
Random Walk theory suggests that neither of these methods are particularly useful at predicting the future of the stock market (see link for a funny story about dart throwing monkeys).
The theoretical value of a stock is its net present value , which is the sum of all its future earnings, with earnings in the future discounted appropriately to account for the time value of money . Because these earnings are never fully predictable, traders may have different ideas about the true value of a stock, and buy the stock if they believe the currently offered prices are particularly low, or sell it when the prices are high.
Technical analysis, however, does not even attempt to understand the earnings of the stock, instead focusing on the shapes and patterns that result from traders making their moves. While there is a human behavioral component to stock trading, it is not clear that one can extract much information from the shapes of stock charts. To the extent it does work, a substantial part of its success may be simply an artifact of the herd behavior of traders who engage in technical analysis, a zero-sum game.
The comic displays a stock price chart , annotated with labels which purport to be technical analysis. These labels are nonsense from the perspective of technical analysis, but do accurately describe the graph itself: " allegro " (a musical term used to set the tempo at the beginning of a score), " prologue " (an introductory section of a play, book, or similar), " lumbar support" (the thing in a chair shaped to better support your back), "bathtub" (possibly a reference to the so-called " Bathtub curve "), " uptalk " (a speech pattern). One label celebrates that "these two points define a line! Promising signal." (In geometry, any two points define a line.)
The shape of the chart is similar to the exponential behavior of cryptocurrencies when they are successful, where price (positional height on the chart) roughly increases while volatility (height of the bars or candles themselves, and of the peaks and troughs, on the chart) does the same.  Technical analysis used to be an esoteric domain held by well-paid stock analysts, but as cryptocurrency has spread, and as financial companies have made it easier for members of the public ("retail investors", as opposed to "institutional investors") to engage in investment trading, people from all walks of life have begun staring at charts like this.
The title text is a quote from James Tobin (from his 1984 paper On the efficiency of the financial system ) that raises a question of very talented people building systems to make themselves a lot of money without actually accomplishing anything worth money. The quote was about the stock market and high speed traders in particular. It comments on the 'financialization' of the economy, where activities like speculation and abstracted financial products have become an increasingly large part of the economy, as opposed to investment in productive industry.
Interestingly, this comic appeared the day after Oxfam reported that the world's 2,200 billionaires had added 12% to their wealth in 2018, while the 3.8 billion people comprising the poorest half of the world's population had lost 11%. Perhaps this prompted what appears to be Randall's jab at those whose business is merely making money.
[A series of red and green box-and-whisker plots form a line that starts in the bottom left corner of the image and wiggles up to the top right corner, with a series of peaks and troughs that resemble a typical stock market diagram. The diagram is annotated with lines, arrows and text.]
[Title in top left corner] The basics of technical analysis
[A roughly horizontal section with mostly green boxes:] Allegro
[A horizontal bracket encompasses the next three sections] Prologue
[Slope becomes slightly negative. Mostly red boxes, bordered with a black line above and below:] Decline
[A roughly horizontal section with mostly green boxes, bordered with a black line above and below:] Doldrums
[Line curves upwards with mostly green boxes, with a dashed black line below:] Spline
[Three green boxes at minor peaks in the line are circled and indicated with arrows:] [Hmm!]
[A section with slight positive slope and a mixture of red and green boxes, with a solid black line below:] Lumbar support
[Slope increases. All green boxes, with a black line through the centre:] Renewal
[A sharp upwards incline, with two large green boxes:] Hark! The cliffs!
[Two black dots and a dashed black line connect two major peaks:] These two points define a line! Promising signal
[Inside trough between two major peaks is a roughly drawn black triangle:] Bathtub
[Slope becomes negative, mostly red boxes with a black line through the centre:] Declination
[At the lowest point of the trough:] Inflection
[Slope becomes positive, mostly green boxes with a black line through the centre:] Uptalk
[Slight negative slope, with large error bars. Mixture of red and green boxes. One red box is marked with an arrow:] Yikes!
[Negative slope, all red boxes. Gap between two central boxes is circled:] Wrong!
[Line rises then falls. Mixture of red and green boxes with non-parallel dashed black lines above and below:] If I add some lines here I can convince myself I'm doing something more than just seeing patterns in a graph of a random walk.
[Positive slope, all green boxes with a black line through the centre:] Slope!
[One error bar on a green box is circled:] Could be an omen?
[Arrow indicating peak:] Red + Green = Christmas!
[Positive slope, all green boxes with a wiggly black arrow through the centre. A separate arrow points off the edge of the page:] Likely to continue forever
