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Strategies & Market Trends : Analysis Class for Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (1115)	1/11/2000 9:13:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 1471

How economy changes TA or technical analysis? What stock market does is average the market pending on the economy. The market broadens so all stocks moves nicely. This is demonstrated by index investing. If you invest in Dow, Nasdaq, S&P500 or any other index; you will get an increase of value in your stock portfolio. Outside of index stocks, you will find the companies insignificant enough to be put in the index category; therefore, company performance sometimes are not receiving attentions of money managers, and the price of stock suffers. In the period of good economy, many companies are not receiving any attention but from the small investors. Small investors have limited resources, and generally do not understand market making, which is accumulation and distribution. They tend to buy cheap and sell high. But buy cheap sometimes get cheaper, if the stock was overbought. Or sell high into oversold and the stock really takes off. Or, the small investor got some story and buy into a "blowoff". Now this new economy has been good for 8 years. No business cycle to worry about. To hold stock until it turns around is entirely possible to make a killing in the stock market. Market makers who prosper by selling first then buy back may have to watch out for short squeeze by good economy. Anyway, in good economy, the stock charts tend to be sloping up or sloping down. Technical chart reading is much simpler. Elliot wave is a thing of the past. One thing to watch is a spike up of very large volume coupled with a 10% price jump. Market maker shorts a large volume and the stock will be ruined for 2 years. Good luck on your technical analysis.