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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (20103)	3/12/2003 6:52:28 AM
From: chowder	Read Replies (1) \| Respond to of 206093

>>> Guess who I thought of when I read this, bum! <<< I don't know Ed, but this guy is talking my game. I'm not an educated man Ed, I even quite high school in the 11th grade, so sometimes I have a problem articulating what it is I'm really trying to say. This guy just did it. He summed up my thoughts almost perfectly. >>> I believe we have to expand our thinking. We can't afford to have tunnel vision. If we can find a balance among technicals, fundamentals and psychology, we'll have a much better chance of maneuvering through this challenging market. <<< Balance. That's what I've been trying to convey. Where does the balance between TA and FA come into play? I've mentioned several times that I don't use TA the way most others do. I don't buy because a certain pattern appeared or because a certain support or resistance level was hit. I don't look for the 4 day moving average crossing up and over the 5 day moving average or some other short-sighted strategy. What I look for at those points is the reaction to them. I look to see how the psychology of buying and selling reacts to all of the technical patterns and how they relate to the fundamentals. I've been referring to what this gentleman wrote about as, "the condition of the market." I wasn't able to explain it like him, but I am able to understand the dynamics behind his thinking, and more importantly, I know how to execute the strategy. >>> The first thing I believe we always have to ask ourselves is, "What is it that actually moves a stock?" Valuations do not move stocks. Fundamentals do not move stocks. Technicals do not move stocks. Tea leaves do not move stocks. What moves stocks are people's perceptions and beliefs, and the actions they take based on those perceptions. People who are buying and selling and the intensity of their actions are moving those stocks. We really need to know what people are basing their perceptions on most of the time. <<< People who are buying and selling ... the intensity of their actions ... This shows up in the volume patterns. I've continuously said that above average volume is what I'm looking at. If it's buying volume, the price is going up. If it's selling volume, the price is going down. It's knowing how to read those volume patterns that helps to add "balance" to our trading decisions. TA shows me where that balance "should" to come into play. Balance is discriminatory in that it doesn't appear out of the thin blue sky. It takes people, lots of people (which is why I have told you I don't like light volume stocks), and those people are represented as buyers or sellers. When I look at a chart, and I see a certain pattern I know is supposed to be bullish or bearish, I take it a step further. I gauge the "condition of the market" and I wait for confirmation that the perception has changed. I really appreciate you sending me this article. This guy is able to articulate most of the things I believe and do, a lot better than I can. I think I'll print it out for further reference. dabum