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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (17488)	2/18/1999 6:46:00 PM
From: Graeme Smith	Read Replies (1) \| Respond to of 18691

Bill, There are many sorts of indicators and some are a lot less effective than others. Backtesting the stochiastics and other standard indicators on individual stocks shows almost no predictive correlations, certainly not enough to profit against the spread. However that does mean that no indicators work or that they are useless. Part of the reason most don't work in a mechanical sense is that they fail to use all information. A stock popping up on an increase in volume could be caused by many factors. It could be caused because earnings were released, positive news came out, Emerald Research just put out a buy recommendation (sell immediately) or no news (good buy indicator). Using some technical indicators combined with common sense can help time the markets. If market breadth is declining it means people are getting nervous. They are selling less liquid stocks. If the market is opening higher and closing lower then it means that there is selling pressure during the day from more experienced players. The market is driven by periods of fear followed by periods of greed. Market timing is determining which period you are in. Graeme