Options for Newbies -(Help Me Obi-Wan-Kenobe) Message Board

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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)

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To: Melissa McAuliffe who wrote (344)	9/21/1997 5:22:00 PM
From: Fred Weiss	of 2241

I love these continuing debates on TA vs. FA. The fundamentalist learns that the horse has been put on a diet of premium oats and concludes the horse will be able to run faster and might win today's race. The technical analyst notes that the horse did better in recent workouts or in it's last race and concludes the horse can apparently now run faster and might win today's race. Either method stands a higher probability of picking winners than throwing darts at IBD. The problem comes up with fundamental analysis as to just how good and how fresh is the information. I am convinced that the insiders get the information long before it filters down to the likes of you and me. On the other hand, the tracks of the insider manuevering show up immediately in technical analysis. Thus a nimble and asute trader can enter and/or exit early before the official public release of fundamental information. Certainly both forms of information have value and one would IMO be foolish to ignore either. At the same time I would express my firm conviction that fundamental data is much more the method of choice for those attempting to manipulate the markets. Today's trading and investing community is much different than a few years ago because of the wide number of computerized tools now available and teachings of certain gurus like Murphy. Opportunities exist when important technical events occur which have nothing at all to do with fundamentals. A stock bounces off support and goes up in value. Why? Because many traders calculated the support area as the price declined and placed buy orders at that price. Herein lies the real value of technical analysis as we reach a time when technical traders are in over abundance in the markets. If we anticipate what the technical traders will do by watching for the approach of key technical events, we are able to make excellent short term trades ahead of the momentum players. You might want to encourage discussion of these events as part of your new thread. Fred Weiss

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