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And yet Cramer has also indicated that he wants to build up technical
analysis on thestreet.com. The man speak with forked tongue.
Steve
JW wrote:
>
> >From TheSteet.Com...
>
> JW
> abprosys@xxxxxxx <mailto:abprosys@xxxxxxx>
>
> Wrong! The Trouble with Technicians
>
> By James J. Cramer
>
> You know why I can't stand technicians? Because they have a way of
> weaseling out that just drives me crazy. Take Friday. On Ron Insana's
> excellent afternoon show, Jerry Favors gives his technical rundown of the
> outlook. He sounds terrific and forceful and confident as all technicians
> do.
>
> He mentions that he is not positive or negative on the market and that he
> expects some oversold rally, but nothing special. And what would make him
> more positive? A close above 9400, validating the move.
>
> Ah hah, not to attack Favors in particular, but it is precisely this kind
> of reasoning that costs me so much money. Let's take Favors literally. If
> we did not like the market, we might be inclined to short it or at least to
> stay out of it for the foreseeable future.
>
> After all, he pronounced the market no good, so what would be the harm in
> adopting such a stance? Maybe we should be shorting this bounce right now.
>
> But then when the market gets to 9400, he wants you to be long. He wants
> you to be out for the next 500 points but be in on top of those? Give me a
> break. I want to be in for those 500 and then sell it at 9400, which is
> pretty close to the top of the range as I see it.
>
> That's precisely the problem with technicians. They buy the market when it
> is expensive and sell it when it is cheap. They don't like the market until
> it gets so rich that they feel comfortable buying. To me that is plain
> counterintuitive.
>
> That said, why do I pay any attention to charts and charting at all?
> Because it is something that people follow. It is a pattern that I want to
> understand so I know why people are freaking out or getting more confident.
> It may not be a reason for me to do so -- in fact it never is -- but I like
> to know what levels people feel secure at and when people feel that the
> panic will go on.
>
> For example, when the market declined 5% from the high on Friday -- at a
> moment when I was taking a much-needed nap -- Jeff woke me to tell me that
> we were now down 5%. I figured that would bring in some short covering as
> those who had bet against the market might feel like taking some of that
> win off the table. It did bounce and hold; good call.
>
> But that is not the same as avoiding a market until it validates a new
> high. That kind of thinking gets you in at the top and out at the bottom.
> That, I know, is just plain wrong.
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