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January 31, 2006

Technical mumbo-jumbo, Tues., Jan. 31, 2006, 11:28 AM

In a nice bit of pre State-of-the-Union cheerleading, MarketWatch has mailed out some technical stuff that confuses me. They talk about technical support of ten-week Moving Averages, which require a significantly longer data series than ten weeks to calculate. Then they show a chart with support and resistance lines over less than two weeks. So what's it all about, Alfie?

Posted by Posted by Bill Cara on January 31, 2006 11:28:26 AM | Category: Trader Tools

Discourse


Its funny, I was just reading marketwatch. There was an excellent piece last night by Tomi Kilgore regarding the state of the rally, pointing to divergences in momentum (noting that things could stay that way for a while), and also noting the broadening triangle formation in the dow. I thought it was reasonably objective and informative.

This am, that article is gone, replaced by an article by Michael Ashbaugh "Holding major support Stocks are on a solid upward trend, with few challenges on the horizon, says Mike Ashbaugh."

I've watched the two over time. When Ashbaugh gets bearish, it means you are at a cycle low (April/Oct05).

I wonder how long before the good one quits and goes to bloomberg or something.

Posted by: ClaudeG [TypeKey Profile Page] at January 31, 2006 11:51 AM [link]

Here is the link to the other piece - it is still on the site, just not on the front page. Person who put it up front must have been reprimanded this morning :)

http://www.marketwatch.com/news/story.asp?guid={18407D07-4FC5-493B-8539-165A32D77D93}&siteid=mktw&dist=

Posted by: ClaudeG [TypeKey Profile Page] at January 31, 2006 11:59 AM [link]

Actually, I don't pay that much attention to the people until I get to understand what it is they do, then make up my mind as to whether or not it adds value to me. My point here is that I don't understand the methodology, but somehow I'm getting a message. So I tried to work in reverse, and still can't co-ordinate the two. That's all. He could be a terrific technical analyst for all I know. :-)

Posted by: Bill Cara [TypeKey Profile Page] at January 31, 2006 12:02 PM [link]

Hi Bill -

My skepticism is really geared toward the site and/or editor and not the technical analysts. One story seems to say "the index has taken support" and the other says "the index appears to be broadening (lower lowers, higher highs)". Both are factually correct. But only one gets the front page. Just my opinion, but it all makes for a terrific contrarian indicator. In fact I would love to correlate the morning headline to the end of day close, just for fun.

Posted by: ClaudeG [TypeKey Profile Page] at January 31, 2006 12:59 PM [link]