alice, my observation is that you may be misunderstanding michael. let me provide an example to illustrate the point. take the computer industry. michael believes the margins will tank due to fierce competition. margins go south ---> profits go south ---> stock prices go south.
if this is true and this comes to pass, michael's point is that the "technicals" of options investing don't matter that much. if stock prices tank, you'll make money whether there are technicals or no technicals.
do you disagree his opnion? if so, why?
michael also has a disdain for technicals. i think they have some value. first and foremost, though, are fundamentals. imho, anyone that doesn't understand fundamental analysis should not be in the game. i think technical analysis provides a small "peek" into the psychological makeup of the investors in a company. the psychology is dynamic, though, and it can be dangerous to assume it is static.
in my world, it is a small tool to be used in the proper perspective. technicals vs fundamentals? there is no question. fundamentals are 100x more valuable.
using technicals alone is like rolling dice (to me) - i'd rather do it in vegas because you get all those free flashing lights ;-)
relying on technical indicators alone can give you a false sense of security - very dangerous and very costly. how many billions have been lost by people with a false sense of security due to technical analysis? don't know, but i bet many...
good luck in your trading,
jeff |
