Ask Colin

There is an interesting article on possible insider trading before the NY terrorist attack. Maybe its still possible to anticipate a sharp downturn using charts?

I think there are two issues here. Firstly, these stories always make the rounds in these situations. For me, they fall into the category of conspiracy theories. Insider trading is exceptionally difficult to prove. Usually there is at best evidence of association, but not collusion.

Secondly, there is the issue you raise of the usefulness of charts. As my columns in Shares Weekly evidence, there was a lot of warning on the charts. I doubt this is due to insider trading though. I see it as evidence that a bear market was already under way and the events in NY only became the trigger for many in the market to resolve the cognitive dissonance building up between their positions and reality.