Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: Todd D. Wiener who wrote (3062)	1/15/1998 11:14:00 AM
From: Marc Newman	Read Replies (1) \| Respond to of 14266

More low volume silliness this morning. I just bought more at $20. Thoughts, anyone? Marc

To: Todd D. Wiener who wrote (3062)	1/15/1998 11:22:00 AM
From: Christopher	Read Replies (1) \| Respond to of 14266

Sigmund, this one is for you. I like you Sigmund, this is why I decided to share some knowledge with you on MA. Self fulfilling prophecy has nothing to do with it. No knowledge of any value and I mean of any value has been shed on MA in all the talks about it thus far. All is wrong!!! Why use TA and TA indicators? long term investors need not worry about TA since they will survive all the ups and downs of a stock. For short term investors it is a different story. In this case the investor needs to buy low and sell high. They use TA to help them do just that. There are two kinds of TA. Everything that happen on Wall Street, investors emotion, good news, bad news, earning releases, and so forth are reflected on the price chart of a stock. Every variable and whatever it is will be reflected on the price chart. One kind of a TA is to study the price chart itself and make conclusions about where the stock is heading. The other kind of TA is called TA indicators and MA is one of these indicators. TA indicators are charts that predict the future performance of the stock. There are three kinds of TA indicators. The first one is called momentum indicators. They study the momentum of the stock and wheither it will go up or down. These indicators are called leading indicators because they turn up before the price does. The second kind of TA indicators are called trend following indicators and MA is one of them. These indicators will give you information on the trend of the stock. This could be an uptrend, a downtrend, or a trending range. They are called laggard indicators because they lag after the price. The third kind of indicators is called miscellanious indicators and that would study the market over all as an example. When you study a stock using TA indicators, the first thing you want to do is determine wheither the stock is trending or not. This is extremely important. If you find that the stock is trending then if you use momentum indicators they could be very misleading. You have to use trend following indicators in this case. If you find that the stock is in a trending range then if you use trend following indicators you will get very misleading results. You have to use momentum indicators. THQI has been in a trending range since the middle of last October and this means MA will give you misleading results. I know MA has been hotly debated right now but it can't be used to predict THQ performance right now since THQ is not trending. MA worked very well during the 70's since the market were trending and did very poorly from the mid 80's to late 80's because the market were not trending. Stocks spend the majority of their times in a treanding range. Fidelity and other big similar firms have big TA departments and for a good reason. Professionals on Wall Street also use TA and you say why? The game of stocks is a war between the professionals on Wall Street and amateurs and you are the amateurs in this case. The stock market opens at 9:30 A.M. and closes at 4:00 P.M. Professionals normally make their moves between 3:30 P.M. and 4:00 P.M. Why? They watch amateurs during the day and trade against them at the end of the day. It is professionals against amateurs!!?? Where else do you think professionals are going to make their money from!! If you watch CNBC you will see that the Dow usually surge up or down in the last half hour of the day relfecting the professional move for the day!! A word about MA. Let us say the following are the prices for the last five days of a stock: day1= 1 day2= 3 day3= 2 day4= 4 day5= 2 If we take a two day moving average then here is what we will have: (day5+day4)/2= 3 (day4+day3)/2= 3 (day3+day2)/2= 2.5 (day2+day1)/2= 2 It is called a MA because every new day you will have a new value. MA reflects the past performance of a stock. If the stock price is above its MA while it is trending then this means the stock is going up overall. When the price drops below its MA then it is a sign that the stock is starting to go down overall. This is why TA professional would want to sell the stock. As I have said before, professional monitors amateurs to see what they are doing and they trade against them. When professionals are monitoring a stock and the stock crosses the MA and goes below it then this is an indication that amateurs are selling the stock. Self fullfilling prohecy has nothing to do with it. The stock is being sold by amateurs and probably institutional investors as well. Why should professionals hang on to a stock when amateurs are starting to dump it?! Professional at this point will sell the stock before it goes down too much. Again, if you are a long term investor then you don't care because you can survive the ups and downs of a stock. In conclusion, it is a war between professionals and amateurs and professional use TA to beat amateurs at the game. If you want to make serious money in stocks then you have to take the side of the professionals and not amateurs. I know I do and that is why I am deep into TA!!