Jim Bryan...
I agree with this post, we are now and will always be a market of stocks.
I do not understand why there is so little emphasis put on the Supply of stock in the market. As you know TA is especially useful when it has a constant to work with. The combined floats of all stocks at any given time represents a Relative constant, and for TA systems this should be a primary place to look to for clues of overall market direction, and more importantly the performance of individual stocks.
More important than market direction is market performance of individual investments, performance of stocks are directly tied to the Supply of shares in the trade. All fundamental, technical, financial data eventually finds it's way to the individual companies stock price.
Along the way, there are major disconnects between the value of a company as reflected by the market and the companies future value based on the awareness of all the factors of the market as it relates to the particular stock. An absolute predictor of a companies forward or downward momentum shows up in the changes in Supply of that issue.
As supply tightens, prices rise, in addition the way the companies respond to the growing awareness is important, as during these key times of expanding positive awareness, the company must add liquidity to it's trade float. At times when Liquidity is out of control, it needs to attack that just as aggressively.
Would like to hear why so little is mentioned about Supplies role in TA, as it is so important, yet so little reported on. |
