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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: raymond marcotte who wrote (6361)	2/26/1998 3:16:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (3) \| Respond to of 42787

raymond.... I have to tell you that the ol' timers are always telling me forget TA etc etc etc..... so I guess you are in the same camp as Jim Cramer ;-0

To: raymond marcotte who wrote (6361)	2/26/1998 5:20:00 PM
From: Judy	Read Replies (1) \| Respond to of 42787

Raymond, no one method is sufficient when investing or trading and each methodology has its own peculiar strengths and weaknesses. Much also depends on one's trading style. FA is key for stock selection and TA facilitates entry/exit points. Neither captures market dynamics and sentiment until after the fact. And when a stock becomes a momentum stock ... neither FA or TA will help much until the momentum players depart. Can't say I played the game for more than 40 years, but the market of the 70's was no stranger to me .. if you get my drift. Here's someone else's experience with FA/TA that may be of interest to you: Message 3539044

To: raymond marcotte who wrote (6361)	2/26/1998 5:42:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

How about considering it this way: that is it the chore of the technician to differentiate the noise from the meaningful. Some do this better than others. Some technicians become "indicator crazy" where the indicators themselves become part of the noise they are attempting to filter out. There are other factors that prove to be very helpful like noting the supply and demand related fundamentals of the market such as money placement by institutions, and market sentiment. The use of TA I think to a large extent will depends on the time frame the market participant plays the market for as in being a ST trader or LT investor, and how much of a role timing plays in their decisions. With some LT investors, timing is simply not an issue since they invest for the very long term. The shorter term players cannot go by balance sheets and earnings report as much as the longer term investors do. They still need something to help them make their month to month, week to week, and day to day trading decisions with. Also note that there are market makers and specialists that use TA to plan their following trading day and also manage their inventory in stocks. But this type of market participants rely on the tape to make their decisions through the day. I thing the smaller the time frame is, the more price itself takes on the leadership role in the decision making process. When trading hour by hour, the traders objective is to make sense of intraday price fluctuations and differentiate the noise from what is significant. When presented with this environment to trade in, the person looks to rules of thumb and indicators to price them with leadership. This can be the DJIA, TICK and TRIN, how the DJIA behaves in relationship to the bond market, S&P Futures and its relationship to S&P cash, and so forth. Furthermore, when you have enough people looking to these indicators to provide leadership, this will create a reality all of its own. The trick for the floor trader is to determine what is providing the leadership for that day. There is no card held up on the floor at the beginning of a trading day that states "WE WILL FOLLOW BONDS TODAY". So part of the skill required to survive the marketplace is to quickly determine what is providing price leadership for the market and the stocks that the trader follows. Initial leadership may be provided by the closed Asian markets as they have done in the past, or the S&P Futures. The bond market can provide the leadership as the day unfolds. And when the market is confused where there appears to be nothing providing leadership for that day, in other words there has not been a group consensus formed in what the traders will choose to follow, then stories about Bill Clinton and his "zipper effect" on the markets can impact how the traders in the market will trade. If this situation is looked at closely, both LT investors and ST traders look for leadership. LT investors look toward more fundamental factors like evidence of an improving financial outlook and earnings growth to provide leadership. ST players look toward evidence of an improving technical picture where there is their anticipation of high prices in the near future. But all of this can be distilled down to one thing: price. This will determine who is "right" and who is "wrong", or who is financially successful and who loses in the markets. The difference is that the LT investor is anticipating a result over the longer term, so this type of market player is willing to ride through downtrends in both the stock and the market for a duration of time before they may decide that a wrong choice was made. This affords them a very different perspective and approach to the market as compared with the ST trader. They will have a different story of what is happening in terms of what is motivating their buying and selling decisions which can be more remotely connected to the price action of the stock. Bob Graham