|
PureBytes Links
Trading Reference Links
|
>>Wrong. Try.....The market moves in a direction and way to LEAST accomodate
>>the consensus opinion.
>
>How true......
>
>So the consensus will never see this, however true, and however many times
>the market tries to tell them they will not see - by definition!
>
On the contrary, it stands to reason the the consensus opinion is generally
correct. That is, if you define the "consensus" as whatever tiny fraction
of the market over 50 percent (dollar-wise)that is a buyer (or seller). The
consensus is correct from that tiny fraction over 50 percent until some
extreme level where all of the buyers have bought or all of the sellers have
sold. Instead of the premise that the consensus is always wrong, signals
from sentiment indicators such as put/call ratio are based on extremes in
consensus. Anthony Plummer offers an excellent discussion of this argument
in his book "The Psychology of Technical Analysis".
In my next post, I will explain how many Fairies can dance on the head of a
pin. Watch for it.
Dan
_________________________________________________________________
Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|