Thread:
Even if one person decides to buy Seagate on a purely technical basis it has an impact on demand and supply for stock and its price. Fundamentals only set the overall trend. And technicals, which monitor buying and selling activity, can signal changes in those trends. Seagate price action before the results and William's price calls attest to that. The entire bond market moves like clockwork to technicals for probably 8 out of every 10 trading days. Prices move many dollars worth many millions/billions. Is the bond market driven by technicals or fundamentals, when such a preponderance of trading is done on technicals? If Favors had enough of a following and the Dow had hit his worst downside targets last year and spiralled us into depression - is that a technical or fundamental event and what is the proper causal sequence? Good luck with the answer to that question. Successful technicians (traders,not newsletter writers) always incorporate and allow for fundamental events. I consider myself more of a fundmentals type of person, but my results have certainly improved after I started paying attention to technicals. It requires a certain arrogance on my part to assert that I know best, and the majority of bond traders are a bunch of fools whose trading activity is based on "garbage." And it requires an ostrich-like mindset on my part to ignore the technicals-based trading in the stock index futures that have a significant and major impact on every stock I own.
In any event, I don't understand the acrimony on this thread the last few days. I'm at a loss to understand the questioning of technicals' raison d'etre on a thread explicitly designated as a technicals thread. Is there a gestapo out there holding fundamental feet to a techincal fire? I am sure nobody would appreciate my going over to the fundamental thread and asserting that all buying and selling are ultimately simple leaps of faith, so enough with heads and platters, gross and net blather already. I don't know if faith can move mountains but it certainly can move stock prices. Earnings, or even the lack thereof, do not determine stock prices. If that was all there was to it you would have a linear relationship between the two. Relative perceptions of worth and value, risk and stability, determine prices. Against a backdrop of that kind of ambiguous, non-deterministic price-setting, my fundamental analysis is about as useful or as useless as the next person's technical analysis. Both are mumbo-jumbo meant to provide a rational framework for a buy/sell/hold decision centred around projections and anticipations for the future. A future which everybody is happy to admit they cannot predict. A nice little conundrum. bwdik. chill people....
mano |
