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Ken -
Funny how you complained about people bashing financial astrology and
then you go and bash technical analysis, when the two methods are so
tightly woven together. Arch Crawford is a full member of the Market
Technicians Association.
Both forms of analysis are based on how crowds react to certain
impulses. While TA is solely based on price, psychology, supply/demand
and astrology is based on other things that I admittedly do not know or
understand, I respect it as being useful. But the same reasons why that
works, is why TA works.
In fact, most central banks use technical analysis and the Fed has
written papers saying it works. So has the London School of Economics.
MIT is now going to accept it as being valid. It is now taught in many
MBA programs given that random walk has been pretty much proven dead.
I do not personally use financial astrology, but I do use technical
analysis. No, I did not nail July 20 for the top, but Princeton
Economics did w/out Zane/Bradley and Chris Carolan missed by a fairly
large eight days (oh he is also a member of the MTA and won the Dow
Technicians award last year though he is certainly a financial astrology
type). And, I was short stocks a week early and stuck with it (from
13-July) while Bob Prechter nailed it (dont tell me about all the
crashes that he has called that did not happen, because alot of the FA
guys have done the same). Furthermore, I had everybody out of stocks
that I know the Tuesday b4 the 500 point down day if they were not
already. And, all the astrologers had last week as an up week for
stocks. Uh-oh.
The bottom line is there is no perfect system. They all give you
probabilities. TA does. FA does. Fundamentals even sometimes help too!
There is no holy grail (or if there was, the person who has it ain't
telling, I know I wouldn't)
Steve
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