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Beg to differ.
As an old timer raised on Edwards & Magee, charts patterns still occur and
are very valid indicators. I used to chart by hand on K&E semi-log paper.
That's how far back I go. Now I use MS 6.5 after starting with MS 4.0 for
DOS. IMHO, you also need to have a trained eye and watch volume closely.
Like any other indicator, they are only one arrow in the quiver. Once you see
the pattern evolving, do some fundamental analysis and further technical
anaysis to support your actions. Its a great combination.
For what it's worth, tape reading is a great tool as well if you are
fortunate enough to have the capability (and a tape feed). Admittedly it's an
art. And over the years, I learned to see the accumulation and supply occur
just prior to the upward or downward moves respectfully. High volume trading
in the security is necessary for me to see it. Tape reading is simply another
form of chart reading/interpretation.
This all goes back to the early 1960's when I minored in Investment Anaylsis
at the NYU Graduate School of Business which is located in lower Manhattan,
next to the ASE and near the NYSE. Many of my class mates were analyst's or
brokers from wall street and TA was considered voodoo. And while TA has come
more of age in recent years, it's roots go back to line charts and pattern
recognition. Lest we forget.
Also, I retired my smoking jacket for the current tools of the trade.
Jim Barone
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