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Strategies & Market Trends : Technical analysis for shorts & longs

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Nov 10 4:00 PM EST

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To: Temple Williams who wrote (16217)	5/30/1998 2:28:00 PM
From: Robert Graham	Read Replies (2) of 67830

Interesting approach you have that I see has value. For short term trades I think it is always prudent to watch for a market's overreaction instead of letting it take you along with it. False indications can come in this form of an extreme market overreations which happens before the market reverses instead of continuing its current trend. I am not saying this situation is such an example. This is just an observation I have made on past behavior of the technicals. Also I will note that from what I remember, correct me if I am wrong, the exception you noted as October 1987 where the market continued down, it did this after a bounce did indeed occur. The difference is that the bounce was very small compared to the initial downward reaction, so this indicated there was more to come. I remember the news reports coming out where the "pros" in the press were saying that the correction was over with, and it was not. Many ended up with egg on their faces back then except for a few like Martin Zweig who insisted that it was just the beginning of the correction. Bob Graham

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