Chuz, re:"...about how the market values a security." I won't belabor the point because you are a really bright guy and I enjoy your perspective. I comment only because you hit the nail on the head as to my base assumptions for the use of TA. IF, and it's a big IF one can quantitatively discern how the market, as a whole, seems to value a security, AND, that valuation is tracked and modified over time, as necessary, then one can make valid assumptions on what the expected future behavior of a security will be. I also believe in the KISS principle. I have a computer model that works on those assumptions, not too well with Dell though since, as you point out, some companies are to driven by irrational sentiment to be modeled. However, if you subscribe to the notion that there is market manipulation by programmed trading, then you have to conclude TA drives the market to an extent. As in advertising and marketting, the medium IS the message.
Walt |
