A very good thing happened yesterday.

Manage
1

MDY finally broke above its 200 day moving average. That might be a good sign for us small and mid-cap investors.

2

Unfortunately the stock market does not care how we look at it or what kind of conclusions we draw from it. It doesn’t know what a “200 day moving average line” is, only we humans do and WE think this is important.

Oh well…

3

Koronbock,

You are right, the Market doesn’t care. But there are a lot of TA traders that do care and for good or bad; they have a big influence in the market’s short term direction. But no one knows for sure how long or even which way they will influence the Market. There are too many different groups using too many different signals to trigger there trades. Which group wins?

Denny :sunglasses:

4

Brian, Koronbock, and Denny,

All 3 of you guys are making good points. Mr. Market doesn’t care, but we, investor and traders, do. Whenever we, investors and traders, use TA, we very likely influence Mr.Market, and some of the oldest TA tools are moving averages. Whenever we see persistent rises in the prices in small and mid cap stocks, we are feeling great!

Robert

5

Brian, Koronbock, and Denny,

All 3 of you guys are making good points. Mr. Market doesn’t care, but we, investor and traders, do. Whenever we, investors and traders, use TA, we very likely influence Mr.Market, and some of the oldest TA tools are moving averages. Whenever we see persistent rises in the prices in small and mid cap stocks, we are feeling great!

Robert
[/quote]

Robert,

I can symathize with your point but I would have to ask: “What TA” ?
There are a zillion different kind of TAs out there, moving averages (what kind of moving average, what period)?, Bollinger Bands, Keltner Channels, “Double Bottoms/Heads”, “Head and Shoulder”, “triple bottoms”, volume surges/declines, New Highs/New Lows, lagging indicators, predictive indicators…the list could go on forever.

I’d guess all of this is canceling itself out and the more people use it, the more it becomes useless. I don’t like this insight myself but that’s how it is, I am afraid.

6

[quote]
Robert,
I can symathize with your point but I would have to ask: “What TA” ?
There are a zillion different kind of TAs out there, moving averages (what kind of moving average, what period)?, Bollinger Bands, Keltner Channels, “Double Bottoms/Heads”, “Head and Shoulder”, “triple bottoms”, volume surges/declines, New Highs/New Lows, lagging indicators, predictive indicators…the list could go on forever.

I’d guess all of this is canceling itself out and the more people use it, the more it becomes useless. I don’t like this insight myself but that’s how it is, I am afraid.
[/quote]Koronbock,

Nothing is perfect, not even TA. However, more often than not, TA works on the short run. Therefore TA is popular with day traders and swing traders.

Robert