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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Loren who wrote (18136)	6/9/1998 4:15:00 AM
From: Raymond James Norris	Read Replies (2) \| Respond to of 31646

I agree when you say that TA is a 'reactive science', because everything that TA outputs comes from past data. Loren: I'm glad we agree that TA is a reactive science but I don't agree with your reasoning for this. I call it a reactive science not because it depends on past data but because its signals are based on contingencies. There are many techniques and strategies that may be based on past data but that doesn't imply they are reactive (i.e. the Moving Averages are all based on past data but they are not a reactive measure of TA). However, I am surprised when you say that TA 'doesn't assume anything'. In my mind, there are assumptions inherent with just about ANY TA tool I've ever seen and used. I think you misunderstood what I meant by "TA does not assume anything." I meant it in the context of actual usage and application - not the composition of the strategy itself. There is not strategy or science in picking stocks (fundamental and technical analysis being the most popular and used) that does not assume anything. Fundamental analysis assumes that the present indications of a company's well being through earnings, ROE, Margins, growth, etc. can be used to forecast future price levels. Technical Analysis makes assumptions as well similar to the ones you pointed out. However, the context of my reference of TA was the actual assumption for making trades. That is, the technical analyst never assumes the stock will go here or there. He/she doesn't assume this indicator will read this or that in the future. He/she doesn't assume the chart will form a handle and be ready for the breakout. All assumptions are thrown out the window and the Technical Analyst reacts to what the stock price does. As you pointed out and I clarified above, the tools that he/she uses to assess the action may be assumptive in nature, but the actual "buy" or "sell" signals are never based on assumptions. That is the reason you see my reference to "If TAVA stays above," or "If not, then this," etc. I'm giving scenarios that I think are possible. I don't assume any of them will come out. But by being cognizant of the possible scenarios, I am better able to react when the time comes to do so (i.e. a close above 10 1/4 on hopefully better volume). Conservatively Yours, Raymond J. Norris