warning, page-46

martis...

You are trying to convert the converted...I am one of the greatest supporters of TA and use it on virtually every trade.

But...it is only part of the mix, which is why at times we get false or conflicting "signals".

In the current climate of volatility, most technical indicators cannot cope...this is for the simple fact they are typically designed to work well within a standard probability deviation distribution.

We are currently outside this range.

Therefore, given the underlying fundamental drivers...extended "effort" to talk this down by market commentators...conflicting data from global markets...global growth characteristics and finally, likely limited underlying extent of the subprime "influence"...the charts are pointing to a scenario that simply has no basis.

As I said...in the current "manufacutred" trading environment...the charts will, by default, get key signal points wrong.

It will predict the middle ground well, or in other words, that activity that falls within the standard deviation...they always do in fact...but will give continuous false signals at the key pivot points that matter.

It will get it wrong at the edges, which is where it matter the most...and in this regard, they will lag the underlying direction.

There are times when we should bet our lives on technical analysis...just as there are times we should bet our lives on funadmental analysis...but there always times when we should rely on a little bit of both.

If charting was such an exact science, there would never be a wrong call...same with funadamental assessment...the reality however for both of these "arts" is something more akin to alchemy.

The problems for us as traders, or investors, stems from adopting one over the other...when what we should be doing is taking in everything at our disposal, filtering according to experience, backtesting as often as possible...then acting accordingly.

Cheers!