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At 5:23 PM -0500 3/24/98, Jay Mackro wrote:
>Well, I hope this sparks some discussion. I'm not going so far as
>to say that technical analysis doesn't work. I'm just saying that
>I doubt that anything that can be reduced into Easy Language can
>predict something as complex and uncertain as the market's behavior.
But if the market prices were totally random, there would be no point in
doing any analysis.
There is ample evidence that the price tomorrow is strongly influenced by
the prices of the past few days.
Also, prices do tend to react at various support and resistance levels,
perhaps because people think they should, so take actions that are
self-fulfilling.
> If enough people are told that prices will bounce off of a
support level, they will buy at those levels and prices will
rise.
> If enough people think that the price will rise after it
breaks to new highs, they will buy at those levels and
prices will rise.
We are dealing with both the fundamental forces that cause a price to move
and with the psychology of what people think will happen as prices reach
various levels.
Bob Fulks
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