It’s not often Technical Analysis gets a good rap in the national press. I think this is because journalists like to write stories about the markets, so need a reason to explain a move in a particular stock or market, rather than just a plain old “more buyers than sellers” response.
But to be fair the journalist community is getting better (as are the Economists and Academics). Most people do appreciate the value of Technical Analysis, even if some don’t want to admit it!
This week saw an article published in The Times, written by the highly respected and well read Anatole Kaletsky.
I’m probably not meant to reproduce it in a “cut and paste” style here so I won’t. I’ll give you the link to their website, after I’ve reproduced one or two lines to give you a taster!
“The fact is that the so-called fundamentals that preoccupy media commentators, central bankers and politicians rarely determine market directions on a daily, weekly or even monthly basis”. – Check!!
“…..according to a study by the New York Federal Reserve Bank, “nearly all” currency traders use technical models, which means that some, although not all, must produce consistently useful results”. – true.
“A second reason for taking technical analysis seriously is that its main rationale makes sense”. – here here!!
“A third attractive feature of technical analysis is that its success refutes the efficient market hypothesis (EMH), which has led economists astray for the past 30 years in their efforts to understand financial markets” – BINGO!!!
So here’s the link, and for once I’m going to shut up and let someone else do the talking!
Thank you, Anatole!