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swp wrote:
> It is kind of funny, since I am a technical analyst, but I still
> consider economics quite important. Why is that?
>
> Well, first of all, most technicians understand that fundamentals are
> the driving force behind overall price movement. The problem is, much
> like the sub-atomic particles left over from the Big Bang, it is often
> not apparent or easily measurable.
>
> As an Elliottician, I tend to make sure that my long term projections
> make sense in terms of the fundamentals as I see it (or some reasonable
> set of fundamentals). For example, if I saw the Dow going to 15,000 next
> year, I better have a fundamental reason for that, much as I better have
> a good reason to think that the Dow is going to 4,000 over the next few
> years (I see neither, by the way).
>
> But surprises in the fundamental data can and do change prices and thus
> the technical picture. I will never forget one time I was so bearish
> bonds, I could not see straight. I was sure bonds would drop five points
> in a few days. Well, it was payroll day that day too. The consensus was
> for +250,000 and the number came in -2,000. Believe, if I had the
> number, I would have been long no matter what the charts said. So, bonds
> rallied 1/2 and ended the day down a point. I thought I was a genius.
> Such a horrid response to good news. Well, the next Monday we opened
> down 2/32nds and never looked back, beginning something like a five or
> 10 point run higher. So, even if u r a technician, a fundamental change
> to the landscape is important.
>
> Steve Poser
Steve,
It seems to me that your example proves that the fundamental news has
very little to do with what the market does.
Cheers,
Norman
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