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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.04

-0.3%

3:59 PM EST

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To: Jurgen who wrote (12715)	2/27/1998 2:53:00 PM
From: sepku	Read Replies (1) of 77400

>>>Helios, that's a bold statement. Which historical records do you mean? When i look at the charts of CSCO, ASND, DJ30 etc. i see that buying/selling at the 200 EMA crossovers would have been good investment advice.<<< You exactly right, Jurgen. Anyone can pull a historical graph on a stock, lay some trendlines, and determine their accuracy for that particular stock. Then even a moron can immediately see their accuracy in determining a change in trend. When you do so, it becomes readily apparent that certain indicators such as the 200ema and 50 ema, are very reliable if applied correctly (in combinations with other techniques to verify true changes in trend rather than false alerts). He may be referring to such programs or back-testing like those in Telescan which allow you the option of the computer laying out trendlines on a historical graph, and plotting buy and sell points on every crossover of the indicator, thus providing a %return accuracy rate. This is the only way his statement that "historical back-testing on MAs proves that they don't work" can hold true. But that is not an accurate test of MA validity as an accurate indicator because only a computer would trade based on every single crossover -- using no further analysis/judgement -- thereby including all the false signals (which are usually far more numerous than the true breakouts). But then I suppose all the great minds out there, with the power to move hundreds of millions of $, just use MA indicators for fun and not as an effective aid to time their entry/exit points. Maybe they ought to put Helios and Gerald in charge! ;o) Style Pts.

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