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"The only reason we went lower on Monday ..."
Yuki,
Since we usually think in the [narrow] way "reason->result", we
express two different schools, fundamentals vs technical.
I prefer to consider the divergence as the "reason". It may look
strange [a divergence can never cause a result] but, if you overcome
this, there are some benefits.
You can never anticipate UFJ scandals [some other always know in
advance...]. If you try this direction you will be sooner or later a
victim of various rumors.
On the other side, you may anticipate [or at least expect] a StochD
div. If it doesn´t bother your logic, you may consider the technical
event as the "reason" for the next movement [the result].
If nothing else, you will avoid some crucial mistakes.
If we follow up our recent discussion we would
*buy on Thursday/Friday, because of the next week expectations [!!]
*sell on Monday, because of the bad UFJ news
*buy again on Tuesday, because of what ? [Is the scandal over ?]
Of course, trading is a personal affair and the old problem for the
chicken and the egg is still unsolved [at least AFAIK]
Dimitris Tsokakis
PS BTW, this young girl Naoko Sakamoto was really great last Sunday.
2:25:29 for Jan is most promissing. I hope we enjoy her talent in the
Olympics.
--- In amibroker@xxxxxxxxxxxxxxx, Yuki Taga <yukitaga@xxxx> wrote:
> Hi DIMITRIS,
>
> Monday, January 26, 2004, 2:46:52 PM, you wrote:
>
> DT> Yuki, there is no doubt the market will pay for a double [RSI
> DT> plus STOCHD] divergence. The difference with the [peculiar]
> DT> Nikkei is the timing, I was expecting an immediate response on
> DT> [your] Friday. The trick of the announcements expectation and
the
> DT> relatively hot environment were [IMHO] the main reasons you were
> DT> buying higher and higher the second Friday's half.
>
> I don't know DT. The only reason we went lower on Monday really was
> a potential bank scandal that broke in Saturday's Nihon Keizai
> Shimbun. And after taking the market sharply lower in the morning,
> the afternoon was all positive, as we gained 110 off the low by the
> close.
>
> Now of course the US has jumped again, and the Chicago Boyz say the
> Nikkei will tack on another 100 today. I suspect it will be more.
>
> DT> On the other side of the globe, there was a [tricky] positive
div
> DT> by the end of the Fridays session [see my previous comment]. It
> DT> was not a CLEAR signal, it was not in the middle of the session.
> DT> We shall know more in 3h, the week is still toooo young !!
>
> Maybe we know now . . .
>
> It's the same old story I think, often repeated, often forgotten, or
> if remembered not really believed, or not fully understood. The
> markets go to excess in both directions. What is excess? Good
> question, but it is something beyond the horizon of what one thinks
> is actually possible. If one thinks stocks have to top here, almost
> by definition they have to go higher.
>
> One of the most profitable things I learned a long time ago was that
> T/A signals that run counter to a strong, established trend are
often
> worthless. Especially any kind of anticipatory signal. They are
> either false, or they produce returns that are so meager they don't
> justify the risk. One has to wait for the serious price break in
the
> other direction. Anything else is just asking for trouble.
>
> Another interesting few days lie ahead, as always. ^_^
>
> Yuki
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