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To: Chuzzlewit who wrote (10695)	2/5/1998 12:56:00 PM
From: Czechsinthemail	Read Replies (1) \| Respond to of 95453

Paul, The "eye of the beholder" subjectivity problem is no doubt a real one in using TA. But fundamental analysis is not immune. Note that projections of price and earnings based on fundamental analysis can also be enormously wrong when they are colored by extreme optimism or pessimism. You see this at work in the tendency of analysts to revise upward their estimates at tops and revise them downward at bottoms. Though I think in the long run how a company's business and earnings turn out will govern where its stock price goes, people's guesstimates along the way can be enormously wrong. One of the values of TA can be in getting a visual read on investor sentiment and the mass psychology of investors. Looking at correlations between price and trading volume, for example, can tell you a lot about a stock, its relation to other companies in its industry, and its relation to an overall market context. A big price movement up or down on 10X normal volume is a likely indicator that something is up, while the same price movement on a few hundred shares volume may not mean much. Forecasting is a complex and difficult business. One of the reasons I think buy and hold strategies work as well as they do is that they take you out of having to make many forecasts. That way you are less likely to impulsively sell at bottoms. But if you are a fundamentally oriented investor wanting to buy an oversold market, you can use TA to assist the timing of your entry. This is using TA not so much for its predictive value as for its risk management advantages. You will not buy at the bottom, but you may buy near the bottom when there is a greater likelihood of the stock beginning to move up. Similarly, TA may be valuable in giving early warning signals of shifts in sentiment that can lead you to the sidelines to preserve capital and possibly avoid a big drop. Not foolproof, but sometimes very valuable in reducing risk. Baird

To: Chuzzlewit who wrote (10695)	2/5/1998 1:09:00 PM
From: diana g	Respond to of 95453

Re: My analogy revised "At the next meeting a very spirited debate ensued, but no concensus emerged as to the interpretation of the chart, although two strong, diametrically opposed camps emerged." Good Point, Paul. Rather than considering TA a single analyst, I shall consider it to be a dozen analysts who often differ but sometimes agree, joining in consensuses of various sizes in varying degrees of opposition to one another. But still, I must hear them because they do have influence. In the event that they pointed in twelve different directions, the effect of each would be minimal. But sometimes eight or ten of them will point the same way. still just MVHO best regards, diana