Technical Analysis vs. Fundamental Analysis

[tech/a]

Re: Technical Analysis vs Fundamental Analysis

Yes

CLICK TO EXPAND

 

[prawn_86]

Re: Technical Analysis vs Fundamental Analysis

Yes

I dont see how that description indicates any hint of a 15% drop To me it says 'it may go up, or down'

 

[wayneL]

Re: Technical Analysis vs Fundamental Analysis

T/A is not an efficient predictor, toss of the coin stuff generally.

T/A is about creating trading boundaries (to borrow Nick's phrase) and creating favourable risk/reward scenarios.

Simples.

 

[tech/a]

Re: Technical Analysis vs Fundamental Analysis

Oh you wanted the degree of movement as well.

Would Technical Analysis picked up that something wasn't quite right?

I thought that I was answering this question.

 

[prawn_86]

Re: Technical Analysis vs Fundamental Analysis

And how did it indicate something wasnt quite right? It seemed a very neutral comment to me unless im reading it wrong.

More of a 'watch this space' thing than 'look out somethings about to go wrong'. Thats just my view though, i could be interpreting it wrong

 

[ThingyMajiggy]

Re: Technical Analysis vs Fundamental Analysis

And how did it indicate something wasnt quite right? It seemed a very neutral comment to me unless im reading it wrong.

More of a 'watch this space' thing than 'look out somethings about to go wrong'. Thats just my view though, i could be interpreting it wrong

Would have thought with no demand being around that obviously there is more supply, therefore a down move, especially with the negativity in the background.

If its not interested in going up....thats usually a good sign that "somethings about to go wrong".

My personal thoughts though of course.

 

[tech/a]

Re: Technical Analysis vs Fundamental Analysis

Chart needs to be read in context
Ive labelled it up--hope it helps.

 

[Julia]

Re: Technical Analysis vs Fundamental Analysis

Did Fundamental Analysis give any warning that this was coming?

Would Technical Analysis picked up that something wasn't quite right?

I'm no charting expert but I wouldn't have thought that chart predicted anything, and certainly not that sort of gap down.

But it ties in pretty well with the announcement that the ACCC is after Cabcharge.
Seems like a straightforward response to negative news to me.

 

[tech/a]

Re: Technical Analysis vs Fundamental Analysis

That it was.---The day after the alert.

The question was Would Technical Analysis picked up that something wasn't quite right?

The answer is yes there was no demand with background weakness.
So before the drop-- infact a day before there was a warning that although price did rise slightly there was no demand.

The analysis told you it was weak not that it was going to crash next day.
So the "something not quite right" was No demand on that up bar.
You wouldnt have been placing a long buy based on that technical evidence.

You all seem upset that there was software that actually picked up that something was indeed wrong??

 

[ceasar73]

Re: Technical Analysis vs Fundamental Analysis

Ive a few wealthy older friends who claim to be long term investors. They insist its all about the fundamentals...EPS mainly.Guess how they make their money in the market? They rely on good broker tips or insider info, they jump in at the right time and ride the trend...they go with the flow for a few weeks and make a killing.

Every time they research a company to death and stay on it long term...they seem to make FA!......but its still all about the fundamentals they insist, yeah rite!

 

[wayneL]

Re: Technical Analysis vs Fundamental Analysis

That it was.---The day after the alert.

The question was Would Technical Analysis picked up that something wasn't quite right?

The answer is yes there was no demand with background weakness.
So before the drop-- infact a day before there was a warning that although price did rise slightly there was no demand.

The analysis told you it was weak not that it was going to crash next day.
So the "something not quite right" was No demand on that up bar.
You wouldnt have been placing a long buy based on that technical evidence.

You all seem upset that there was software that actually picked up that something was indeed wrong??

Ahhhhh the master of non-sequitur strikes again.

The something not quite right may have resulted in further sideways action.

Look! VSA adds another dimension to analysis, maybe it gives an edge... I'm sure it does, but picking an extraordinary example like that is what option course marketers do. In isolation, it's total BS.

That's not a criticism of the software at all, I'm certain it's quite good, but that signal must be taken in context with another 999 or so identical signals.

 

[prawn_86]

Re: Technical Analysis vs Fundamental Analysis

You all seem upset that there was software that actually picked up that something was indeed wrong??

It didnt pick up something was wrong, its mearly indicated a neutral situation. You said you wouldnt place a long with that bar, fair enough. But would you have placed a short?

 

[Timmy]

Re: Technical Analysis vs Fundamental Analysis

Start with the disclaimer - I am a fan of VSA/Wyckoff, makes a lot of sense to me.

The alert given in the software is an alert, a heads up. Read in context it says there is further weakness expected.
Does it indicate a 15% drop coming, No. It could have just been more sideways coming up, that's a trade management issue after entry.
Can it get you on the right side of the market, yes. How you manage the trade after that is the next question.
Did it create a favourable risk/reward scenario. Well, that's in the eye of the beholder but I've already said I am a fan so you know what I think.

The alert came a day before the ACCC announcement. That's the sort of thing technical analysis purports to pick up, especially VSA/Wyckoff.

 

[johnnyg]

Re: Technical Analysis vs Fundamental Analysis

I'm no charting expert but I wouldn't have thought that chart predicted anything, and certainly not that sort of gap down.

But it ties in pretty well with the announcement that the ACCC is after Cabcharge.
Seems like a straightforward response to negative news to me.

CAB for myself came up on one of my scan's on the 18/6/09. In my notes I put down that there was an indication of selling.

Now for myself, and using T/A if I had a long position in CAB I would of tightened up my stop. Did I know that CAB was going to fall 15% in the coming days? No, but for myself, I was of the opinion that something wasn't quite right, and in order to minimize my risk, or protect my profits, I would of tightened my stop.

What were the Fundamentals saying?

I'm pretty much just repeating what Tech has already posted, maybe and most probably my line of thinking is different to other people (which i hope is a good thing)

wayneL - I'm curious as to when you would use some type of signal in Isolation?

 

[Timmy]

Re: Technical Analysis vs Fundamental Analysis

Even going back a little further there were very clear alerts on about the 8th, Tech can you provide the dialog box for those earlier alerts to weakness?

 

[nunthewiser]

Re: Technical Analysis vs Fundamental Analysis

ok . all well and good saying it indicated this or it indicated that

what i,d like to know is why it wasnt actually pointed out until afterwards or is this more hindsight i told u so bull that ppl like to preach so freely here ?

and before anyone starts stomping off or getting upset please note theres no offense intended , just intrested in all these great hindsight calls and indicators and wondering why they so easy to spot afterwards but not mentioned at time

 

[johnnyg]

Re: Technical Analysis vs Fundamental Analysis

Even going back a little further there were very clear alerts on about the 8th, Tech can you provide the dialog box for those earlier alerts to weakness?

Looks like Upthrust Bars.

 

[skc]

Re: Technical Analysis vs Fundamental Analysis

That it was.---The day after the alert.

The question was Would Technical Analysis picked up that something wasn't quite right?

The answer is yes there was no demand with background weakness.
So before the drop-- infact a day before there was a warning that although price did rise slightly there was no demand.

The analysis told you it was weak not that it was going to crash next day.
So the "something not quite right" was No demand on that up bar.
You wouldnt have been placing a long buy based on that technical evidence.

You all seem upset that there was software that actually picked up that something was indeed wrong??

Using the same argument, fundamental analysis could also have revealed the same.

Cabcharge has increased their market share from 50% to 85% in the last 2 years. In a public interview, CEO mentioned that they install their own meters below cost so competitors can't get theirs in.

A very good fundamentalist would have thought ACCC is on their tails - a conclusion that can easily be arrived at in hindsight. The fundamentalist will exit the trade as soon as ACCC news is out.

 

[Timmy]

Re: Technical Analysis vs Fundamental Analysis

ok . all well and good saying it indicated this or it indicated that

what i,d like to know is why it wasnt actually pointed out until afterwards or is this more hindsight i told u so bull that ppl like to preach so freely here ?

and before anyone starts stomping off or getting upset please note theres no offense intended , just intrested in all these great hindsight calls and indicators and wondering why they so easy to spot afterwards but not mentioned at time

Just for clarity/definition sake, if the alert came up at the close on the 25th then that would not be hindsight?

 

[Timmy]

Re: Technical Analysis vs Fundamental Analysis

Using the same argument, fundamental analysis could also have revealed the same.

Cabcharge has increased their market share from 50% to 85% in the last 2 years. In a public interview, CEO mentioned that they install their own meters below cost so competitors can't get theirs in.

A very good fundamentalist would have thought ACCC is on their tails - a conclusion that can easily be arrived at in hindsight. The fundamentalist will exit the trade as soon as ACCC news is out.

I suppose an example of a fundamentalist pointing this out would be conclusive. Tech has posted the example of T/A actually pointing it out.