monthly chart analysis, page-8

benbradley,

Your point is fair, but maybe you misunderstand where I'm coming from.

Some people consider technical analysis as the be-all and end-all. I don't. I believe that fundamental analysis informs TA.

Therefore, you look at the fundamental picture to get a basic trend, then keep it in mind, when you're looking at the technical charts. Having said that, there are all sorts of charts: monthly, weekly, daily, hourly, 5-min, tick-by-tick.

In theory, the longer the timeframe, the more fundamental factors are reflected in the chart. On a shorter scale, hell, almost any bit of news can cause a reaction.

Having said that, it's not as if FA and TA are completely separate. TA, IMO, is the expression of how the market feels about the fundamentals, at any given point in time.

So, the similar chart patterns which you see in previous years, by definition, reflected different events happening then, as compared to now. They, too, were inflection points, but based on different times and different situations.

The fundamental picture always changes and is different, and today, IMO, is balanced on an edge. When I look at the montly DJIA chart and draw my trendlines, I think the TA picture is confirming that the market is drawing the same conclusions.

Which way will it go? Ask the blokes with the $20,000 stock prediction software. They seem to be the only ones who've ever managed to produce "time machines".

Me? I think the fundamentals are ugly. On the daily Dow chart, however, we're going up for now and that's a fact!

You might ask, "How can that be?" Well, it just is! Some reasons: lowering interest rates does relieve some pressure, if only in the short-term; all of these sovereign wealth funds coming in to save the big US and European banks from breaching their capital adequacy ratios gives hope that they will be the source of the "ultimate bailout", when all hope seemed to have gone.