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Steve:
I am not questioning candlesticks nor am I questioning your experience. I
just want to read the paper.
There have been many articles published that purport to debunk parts or all
of technical analysis, especially the ones that many/some people use to make
money. Most of the time these articles are useful as a guide for misusing
technical analysis.
For example, back around the middle '60s there was a study by a group of
professors at the University of Chicago that proved that technical analysis
doesn't work. The so-called research team, used technicians to identify
bullish patterns. Then in January of the beginning of the trial year they
tagged, a basket of these stocks with favorable patterns. The prices for
these stocks were then examined in December of the trial year. Surprise!
Surprise! the performance was very poor, therefore technical analysis
doesn't work. QED (Latin for that which was to be proved). These eminent
researchers probably never heard of or read Curtis Dahl's pioneer book on
technical analysis, published in the 1950's. Curtis Dahl used several ways
to determine exits, one simple one was if the price drops 10% from its high,
sell it. If these researchers had use even this simple exit tactic, they
would have made money.
Lionel Issen
lissen@xxxxxxxxx
----- Original Message -----
From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Thursday, March 01, 2001 6:47 PM
Subject: A handle on candles
> List,
>
> Since some of you have probably received the paper "proving" that
> candlesticks are useless...I thought it might be a good time to jump in
and
> stir up the pond.
>
> Candles are between 137 and 521 times better than bars. Take it from a
> technician who has read Edwards and Magee ten times.
>
> I monitor, then buy and sell, 50 stocks (key components of the Naz 100,
Dow
> 30 and S&P 500). Of the 50, approximately half of them have posted rather
> significant "bottoming" candles today. The crude breakdown is:
>
> Hammers: MER, MDT, HDI, DYN, MCHP, VTSS, PAYX, RATL
>
> Bullish engulfing: ALTR, VSTR, MXIM ERTS, CMVT, CIEN, SEBL
>
> Piercing: ATML, KLAC, LLTC, ORCL MOLX, AMAT, PCAR
>
> Unless one approaches the markets with a completely mechanical system,
which
> I do, all interpretations of charts and indicators involve a lot of
> subjectivity. Having said that: the above stocks, in general, should
enjoy
> a nice bounce because of the pattern of "supply and demand" that is
> graphically represented by the candles drawn today.
>
> The markets will always do whatever they want to do...but, the candles
drawn
> today suggest we are in for a good bounce.
>
> Steve Karnish, CTA
> Cedar Creek Trading
> http://www.cedarcreektrading.com
>
> ----- Original Message -----
> From: "Lionel Issen" <lissen@xxxxxxxxx>
> To: <metastock@xxxxxxxxxxxxx>
> Sent: Thursday, March 01, 2001 7:27 AM
> Subject: candlesticks
>
>
> > A few months back someone posted a comment about candlestick charts. I
> think
> > he mentioned that his daughter had done a study and found that the
> patterns
> > are random. Would the writer will please e-mail me privately and let me
> know
> > if/where I can get a copy of this paper, I'd appreciate it.
> >
> > Lionel Issen
> > lissen@xxxxxxxxx
> >
>
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