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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 659.00+1.0%Nov 21 4:00 PM EST
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To: Eric Wells who wrote (34994)12/10/1999 12:50:00 PM
From: pater tenebrarum  Read Replies (1) of 99985
 
Eric, an interesting aspect of this is that specialists and MM's often 'run stops' that they know have been established on the basis of TA, only to have the stock reverse in the opposite direction once the stops are picked off. btw, the 'self-fulfilling prophecy' aspect of TA imo contributes to the blow-off moves we can observe in many of today's speculative market darlings.
nevertheless, TA is a legitimate approach at divining market psychology. since psychology and liquidity are the primary forces moving the markets, TA is much more useful for trading purposes than FA can ever be.
the current market bears this out in a very extreme manner. companies that represent great value fundamentally see their stock prices fall day in day out, while basically worthless fluff goes to the stratosphere. based purely on TA, this is less of a surprise than it is in terms of fundamentals, as TA reflects the psychology behind these moves.

regards,

hb
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