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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: MJ who wrote (5578)	2/28/2005 5:37:34 PM
From: Walkingshadow	Read Replies (2) \| Respond to of 8752

<< Terry, would the chart of Elan have predicted this slide a week ago or several weeks ago? >> stockcharts.com[w,a]daclyyay[pb50!b200][vc60][iUb14!La12,26,9]&pref=G No. This question came up a while back in reference to DROOPY. The market is a discounting machine and takes all available data, chews it up, and spits out a valuation. All new data must be processed. TA works partly because the rate of data input is fairly constant, and any new piece of data is just one among zillions of others, and doesn't carry any great weight to push the valuation process one way or another. So the discounting system is most often in equilibrium---data input can be readily processed on the fly, and the output is orderly and reasonably predictable. News like ELANs floods the discounting machine with a piece of hugely important data that now resets everything. It is kind of like this. You can eat little snacks throughout the day... or even better, have a feeding tube placed that infuses nutrition at a constant rate. Your body then becomes accustomed, and digests the food very efficiently and everything is in equilibrium. Then one day you decide to go to Chicken Dude's restaurant and eat 10 pieces of chicken and a bucket of mashed potatoes. Your body screams, "Dude... WTF ???" You eat so much you throw up. They have to wheel you out of there, and you can do nothing until that huge meal is processed. You find some nice grass in the shade and pass out. When you wake up, you burn down Chicken Dude's restaurant. Chicken Dude thanks you, calls the insurance company, then takes a long vacation and throws a big party. <gggg> T