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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (691)1/13/1998 3:03:00 PM
From: Arthur Tang  Read Replies (1) of 1471
 
Why Tang writes different from what full service brokers' language you often heard?

Brokers talk to their clients using their analysts' rating on companies. It is generally :

1) Strong buy
2) Buy
3) Hold
4) sell
5) Strong sell

Anything but "Stong buy" is not worthy of buying. a "Hold" means you had it. Sell at will.

Tang writes the low down as a market maker would talk. Strong hand (people who do not need the money in the investment). Weak hand (people who is not steady, either take the profit and run, or need the money they just bought some stock; they are usually forced to sell at the wrong time). Weak hands form the resistance; strong hands do the support. Pull back means accumulate for the market makers. Nice moves means market makers distribute. Short interest is the amount of borrowed stock market makers sold. When short interest is depleted, market makers generally will distribute again.

Since market makers make a market, they raise price or lower them to maintain a market. The size of the market is the ability of the market maker and his cash and stock pools. So investment depends largely on the ability of the market maker; not so much on the earnings ratio and other fundamentals. Technical analysis is charting after the market makers' actions. All news can change the technical analysis, therefore beware.

This is a quick review of all the previous writings.
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