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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (5778)	3/3/2002 12:19:46 PM
From: Dan Duchardt	Read Replies (2) \| Respond to of 33421

Ray, One of the things that I'm discouraged by in any attempt to do TA is the corrupting effect of interventions of the part of the Working Committee on Financial Markets in the index futures market. It seems to me that the small trader is at a distinct disadvantage and prone to being on the wrong side of the market if he's short, when the FRB in collusion with Goldman and Merrill apply massive amounts of public money to goose the futures and prop up the stock market. Does anyone have, or think they have a way to estimate the extent of the intervention you suggest? How much is the "massive amounts of public money" that have been used to stimulate the futures to prop up the market? As a futures trader, I confess to being frequently confounded by the apparent ease with which long slow downtrends are completely reversed in a small fraction of the time and with a small fraction of the volume. It certainly does appear that whoever is buying is waiting to jump all over a thin offer side to blow through the most price levels with the fewest number of contracts. That certainly suggests the bounces are being fueled by big money rather than a coincidental surge of small player buying, but it does not tell me where the big money is coming from. Could it be the big houses are pumping the futures merely for the sake of their interests in the broader market because they know everyone is watching the futures for market direction? Considering the volume of contracts traded, it does seem to be a small tail wagging an awfully big dog. Dan

To: Raymond Duray who wrote (5778)	3/3/2002 1:47:36 PM
From: Hawkmoon	Respond to of 33421

One of the things that I'm discouraged by in any attempt to do TA is the corrupting effect of interventions of the part of the Working Committee on Financial Markets in the index futures market. Hmmm... why would that be any different than other, "event related", influences on typical TA analysis (good or bad earnings, 9/11, bad news in a related sector such as Enron... etc)?? TA is not prophecy from on high, Ray. It is merely a reflection of past trading activity, money flow, envelopes of volatility... etc, from which analysts derives a statistic prediction of future activity. So whether it's "plunge protection teams", or attacks upon critical infrastructure, or just general uncertainty over the quality of accounting standards, many things can negative (or positively) influence the charts. We can debate ad naseum, the efficacy or morality of various external factors influencing the market, creating the impression of manipulation. But if one is able to factor those influences into the equation and analysis, then one can hopefully make money. We can debate the additional burden of government overregulation, or taxation of corporations (why tax a corporation when they just pass on the cost to consumer?) and other influences that inhibit "capitalism" and give it a "bad name" as well. But the primary goal of this thread, imo, is to make the best attempt to weigh all the influences on the markets and make a "best guess" prediction on future trends, and not to get caught up in moralizing about how it "should be". Separate what "should be" from "what is", or "what was" and TA can be quite useful. But TA is neither a panacea nor infallible. Hawk