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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (10492)	2/15/2002 7:27:32 PM
From: nsumir81	Read Replies (1) \| Respond to of 19219

If FA is armchair quarterback and retrogression analysis-then do not pay attention/cite information on the 'rebound', inflation, economic signals etc. The market discounts. That is what it is all based on. Economic activity is based on discounting the future. What are technicals anyway? Technicals are WAYS/METHODS to REPRESENT the ACTIONS of people in risk assets. Those actions are an outcome of perceptions and guesses (educated or otherwise; sometimes even manipulation and deception to get choice folks in and out) on the fundamentals of the UNDERLYING assets. Fundamentals will not necessarily dictate the price action magnitude. So P/Es etc are useless to a large extent. I am not denigrating the use of technicals. Only that it is limited when used alone. Technicals could possibly show you the way to future price action but the starting point for technicals is still fundamentals. For example, a stock moves higher during a quarter of increasing earnings (which are publicized at the END of the quarter), but the foundation and the seeds for that move are always ahead of the signs of turning points (I am talking of publicized news of turning points like such and such company beat estimates or exhibited growth) So the market STARTS to move higher AHEAD of the earnings which come out at the END of the quarter of earnings growth or sometimes about 4-6 months ahead of the publicized news. When the move gets too much to sustain (or way too heady for the initial strength of the turn) or the market senses a topping out of the trend in the business the market moves in reverse. jmho Have a good weekend all.