To: Skipperr who wrote (7192 ) 3/21/1998 12:34:00 PM From: Robert Graham Read Replies (1) | Respond to
This market may provide an interesting learning experience for those using TA. Many are new to TA, and have learned in a strong market.. What we may be seeing is the strong inflow of money continues to support prices, but in place of the market's overall bullishness supporting higher prices. Once the inflow of fund from funds stop, I wonder if the TA the sophisticated investor has been seeing will then reveal itself in a falling or at least a cosolidating market? So perhaps what is to be learned here is that it is very helpful looking outside of TA for the bigger picture. In this case it is in terms of market fundamentals: the movement of large amounts of money into the market. Still I am sure TA is giving a picture that is worth taking seriously. But it comes down to market timing. It is just like a very strong rally and how this shows up in an overextended OB/OS indicator. Does this tell you when to sell? Of course not. But it is worth monitoring. This is one example where it pays to have price validate your indicators. This market requires a more discriminating look at TA. Watch other indicators like that of momentum fall in line to help paint a more convincing picture with technical analysis. For example, as far as the waning techs, I wonder to what extent the composition in the A/D line reflects this? Are there fewer techs making new highs? For that matter, are there fewer stocks making new highs?
