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Originally posted by Skipper To each their own, but I see more and more money managers using it now that fundamental analysis has shit the bed. We'll see how that works out I guess.

Hopefully not a mutual fund...

Data speaks for itself
http://papers.ssrn.com/sol3/papers....ract_id=1356021

Fama, Eugene F. and French, Kenneth R.,Luck versus Skill in the Cross Section of Mutual Fund Alpha Estimates(March 9, 2009). Tuck School of Business Working Paper No. 2009-56. Available at SSRN: http://ssrn.com/abstract=1356021

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Originally posted by SSSanchez Hopefully not a mutual fund... Data speaks for itself http://papers.ssrn.com/sol3/papers....ract_id=1356021 Fama, Eugene F. and French, Kenneth R.,Luck versus Skill in the Cross Section of Mutual Fund Alpha Estimates(March 9, 2009). Tuck School of Business Working Paper No. 2009-56. Available at SSRN: http://ssrn.com/abstract=1356021

A lot of money managers use quant and technicals to better understand the market. You're kidding yourself if you think otherwise.

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Originally posted by Skipper ...there are tangible signs in the market that things are getting at least less bad, if not actually improving.

That's exactly what's bothering me. The US economy isn't good right now, it's just less bad, and markets shouldn't be rallying on that kind of news, they should be trading sideways or creeping back up slowly.

Personally I think this is just a big Wall Street circle jerk; they all want to drum up investor hype and a media frenzy so they can sell off at ridiculously inflated prices. I don't normally think in such a paranoid fashion but I just don't believe there's any real foundation for these gains, it's pure speculation.

And I agree that technicals are probably the most important thing in current market conditions. I need to get more education on those, all this crap like bollinger bands and MACD confuse the hell out of me.

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Originally posted by exstasie HOU has been doing great for me so far! Up 29% so far in the last couple of days! Go Baby Go!

I've been in DXO, good results there too. I checked out today and went into HOD. We'll see if I end up regretting that decision; there seems to be huge resistance where oil is now, though not a whole lot above. If it breaks through, I'll be losing my pants.

I'm annoyed, could have done so much better this week but had too much money tied up in some shitty investments that I really thought would follow or do better than the market.

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Originally posted by Skipper A lot of money managers use quant and technicals to better understand the market. You're kidding yourself if you think otherwise.

No one is kidding themselves; I know folks that only use technical analysis-pseudo blackbox approaches..it's the fact that no method or common combination of 'technical analysis or strategy' has been proven to be effective - weak form EMH...eons ago. What is the value of these blackbox approaches...nothing more than shotgun guesses? Why not try roulette? Real quants work in arbitrage.

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Originally posted by SSSanchez No one is kidding themselves; I know folks that only use technical analysis-pseudo blackbox approaches..it's the fact that no method or common combination of 'technical analysis or strategy' has been proven to be effective - weak form EMH...eons ago. What is the value of these blackbox approaches...nothing more than shotgun guesses? Why not try roulette? Real quants work in arbitrage.

generally indexes are climbing, sometimes you need to sell at a loss but you can't compare the stock market to roulette.. the odds of roulette are at best 49 %


technical analysis will definatley help build a stronger portfolio. ITs like neglecting statistics. just because its not 100% confidence doesnt mean its pure luck. Otherwise insurance companies would be out of business, and clearly they are making the most money out of any businesses.

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Originally posted by Nrg2Nfinit generally indexes are climbing, sometimes you need to sell at a loss but you can't compare the stock market to roulette.. the odds of roulette are at best 49 % technical analysis will definatley help build a stronger portfolio. ITs like neglecting statistics. just because its not 100% confidence doesnt mean its pure luck. Otherwise insurance companies would be out of business, and clearly they are making the most money out of any businesses.

I am extremely well versed in statistics; repeatability is not something you can achieve with any method. There is plenty of empirical evidence that no method of technical analysis has ever achieved results greater than the market. Roulette wheels are close to random as possible; there are no strategy for all tables. If you sampled one single table and collected hordes of data, then can you deduce probabilities that display some normality. Stock returns are hardly normal.

I don't know where you get your 49% (European table of 37?) because a $1 bet has an expected value of -0.053 cents, std dev (+/- $0.998/$) winning on red is 18/38 (18 red, 18 black, 2 green). Your outcome is a combination of win or lose. You make 50 bets, your error decreases and you have an expected value of -0.053 cents and a std dev of $0.14/$. You go 3 sigma (which is 99% of the time...+/- 42 cents) and this range can be from a loss of 47 cents to a gain of 37 cents. You make 1000 bets, you would lose money with an expected value of -0.053 cents and a std dev = 0.03.

There is no proven statistical market data that has yielded an advantage (assuming efficient markets)...done through autocorrelation and 'runs' tests. The reality is that markets are not perfectly efficient nor completely inefficient. The fact that you have gained is more likely than not purely chance (getting lucky).

I grabbed a bunch of shares of Activision Blizzard... you know, the recently combined publisher that makes those tiny little franchises Call of Duty and World of Warcraft.

Basically, I can't see their stock going down any time soon, so if you guys want something stable to invest in, I suggest ATVI

http://www.google.com/finance?q=NASDAQ:ATVI

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Originally posted by English Rachel I fancy trying my hand at FOREX, any tips?

http://www.babypips.com/school/

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Originally posted by SSSanchez There is no proven statistical market data that has yielded an advantage (assuming efficient markets)...done through autocorrelation and 'runs' tests. The reality is that markets are not perfectly efficient nor completely inefficient. The fact that you have gained is more likely than not purely chance (getting lucky).

Haha, I hope this isn't a brewing religious debate about fundamental vs. technical analysis.

I've always understood technical indicators as a means for finding good entry and exit points for stocks you believe are good (or bad, if you're shorting) for fundamental reasons. Once you've picked out something you want to buy, you're faced with the secondary question, do I buy it now or do I wait for a dip, and how much of a dip?

I missed out on a few good opportunities last week because I considered a few stocks to be overvalued - and long-term, I still believe they are - but they were nevertheless trending upward and meeting very little resistance on the way.

Playing the peaks and valleys of a "good" stock can get you a much higher return than holding on long-term... if you time it right. And I'm not claiming that I've been able to do this, just that people who are a lot more experienced can use technicals to do it successfully at least part of the time.

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Originally posted by DigiNut Haha, I hope this isn't a brewing religious debate about fundamental vs. technical analysis. I've always understood technical indicators as a means for finding good entry and exit points for stocks you believe are good (or bad, if you're shorting) for fundamental reasons. Once you've picked out something you want to buy, you're faced with the secondary question, do I buy it now or do I wait for a dip, and how much of a dip? I missed out on a few good opportunities last week because I considered a few stocks to be overvalued - and long-term, I still believe they are - but they were nevertheless trending upward and meeting very little resistance on the way. Playing the peaks and valleys of a "good" stock can get you a much higher return than holding on long-term... if you time it right. And I'm not claiming that I've been able to do this, just that people who are a lot more experienced can use technicals to do it successfully at least part of the time.

You can not effectively time the market-the professionals admit to this and more likely than not, you can't do it either. I restate this: NO technical analysis method/combination of 'technical analysis' method have proven ever to be more effective than the market(the analysis conducted eons ago)...and markets are far more efficient today than they were 20 years ago. Market adjusts very quickly to new information and arbitrage is hard to find if you're an outsider. Professional money managers have a difficult time earning alpha (excess returns relative to the market after adjustment for fees/commissions)...Fama & French paper. You can not ascertain that your method of timing and 'playing peaks & valleys' will yield you better returns. You just can't. Where you can earn abnormal returns (in excess of the market) is if you have superior estimation abilities and even then do you risk having many shortfalls...and you're not a hedge fund that has hordes of bodies and sophisticated models to look at arbitrage opportunities, includes the opportunities outside equity markets...though so many performed poorly the last 2 years...unless you're John Paulson or Steve Cohen.

I thought I indicated pretty clearly that I wasn't talking about "my" method and don't even have a method other than watching the chart and making educated guesses.

You are criticizing systems based entirely on technical analysis for stock selection and price targets. I'm not arguing with that. I am referring to the use of technical indicators as part of a larger context which includes factors such as the company's history and management, competition, the state of the economy, recent news, expected news, and so on.

This is no different from almost any other job or hobby. Almost everything we do that you could call skilled relies on some combination of theory, experience, and intuition. There are fundamental aspects, there are technical aspects, there are human aspects, and there is always a certain amount of pure dumb luck.

Can you point to a research paper that samples a large number of investors and shows that at least half of the most successful ones do not look at technical indicators at all? Because that's very different from saying that algorithmic solutions don't work (we already knew that). Most professionals in any industry rely on their experience and instincts but also have rules of thumb that they follow most of the time.

who thinks we hit a bottom?

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Originally posted by bossi who thinks we hit a bottom?

Once the stimulus money runs dry I think we're going back down at least 25%-30% from where we are today.

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