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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (1110)	12/31/1999 4:44:00 AM
From: Arthur Tang	Read Replies (1) of 1471

Traditional technical analysis has so many terminology and the complexity overwehlms most of us. Many of us learned that technical analysis while it appears to have covered all investment situation to enable us to make the proper decision to invest wisely; most experts failed to tell us that each day new investors may enter the market and the trend would change before your eyes. The analysis you feel fits the curve yesterday no longer can apply. Case in point, moving average in different number of days changes when you apply it on your curve when you fit it. Another point is that Elliot wave can not be applied to many curves. Fitting the curve is really cheating yourself. Which technical analysis you can do is questionable at best. Most technicians trace the curve each day trying to find one analysis that can define the trading next day or one week later or one year later. Such is technical analysis, after you do some on going investment. You find out very fast that no analysis can help you make money. Having said that, how can I do technical analysis to predict the future. By nature, technical analysis is based on trend lines. But from the trend lines of microtechnical analysis of daily charts, overbought and oversold can be defined. Market size and liquidity can be defined by moving average. What does overbought or accumulation mean? That is when market makers pull back to buy back borrowed stocks. The meaning of oversold and distribution is the opposite when market makers sell their inventory of stocks. We will use some stock to illustrate the new way of using technical analysis to define market action based on overbought and oversold, in terms of breakdown and breakout in technical analysis. Is it really new? No, Wall street technicians have used it for years since the late 1970s. They don't talk about it on Rukyser's Wall Street Week anymore. Today, Rukyser talks about interest rates, technology, sections of economy to invest in. So, why do we want to discuss it? Because, it is elemental understanding of stock market and market makers.

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