CYA Technicals

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May 18, 2006 8:25 pm

Skeedaddy inspired me to start this thread, after lamenting about the market in a previous thread. Some of you posted technicals that you use, to determine buy / sell points.


I've been looking into PnF (Point and Figure) charting and am considering subscribing to a site that supplies that info on various stocks, indices, etc. Does anyone here use that method? It appears to be a technical indicator that can be used with different kinds of investments.


One of the problems I've had with technicals, in the past, is that different technical indicators work with different stocks. Even two different stocks within the same sector often required using two different indicators. Given 10,000+ stocks, the use of technicals can become unmanageable.


Granted, the productive use of technical indicators can be debated, but (for me and my clients anyway) protection from the ravages of bear markets are much more of an imperative than the "unlimited" upside potential of "buy and hold".

May 18, 2006 10:25 pm

Technicals don't work with clients who fall in love with their investments or don't want to realize a gain at a sell signal.

May 19, 2006 7:53 am

I used to work with a old-timer who kept PnF charts by hand. He was an

active trader for 40 years. I remember in early 2000 calling a "major top".

Also, he was working on a manuscript to leave behind to his family as a

playbook and maybe publish it.



For a short time, I began using Dorsey Wright. I found that D-W was very

quick to lock in small gains. His turnover/velocity was very high. Since

we were in the midst of a bull market, I dropped it, so I don't know how

subscribers did during the decline in '00, '01, and '02.



I maintain a high level of confidence in my stock selections. Investors are

addicted to "growth" so I think they will return to "my" stocks first, but I

was surprised by the shear magnitude of the retracement. Obviously, the

metals were parabolic (too extended), but my other stuff like, energy, and

tech. weren't. As long as the NASDAQ underperforms the blue chips, the

environment is not as attractive.



Good Luck.



May 19, 2006 8:47 am

YOu pick a position based on fundamentals and possible growth aspects, you decide WHEN to buy/sell based on technicals.  Technicals are a way of looking at the stock and how it and it's patrons reacted historically.  Either read up on this field or just buy somebody's dumb-as* system and trust them.  Yeah, right.

May 19, 2006 2:20 pm
doberman:

I've been looking into PnF (Point and Figure) charting and am considering subscribing to a site that supplies that info on various stocks, indices, etc. Does anyone here use that method? It appears to be a technical indicator that can be used with different kinds of investments.




I too have been looking @ DWA.  (using their free trial right now)  But my thought after watching them for a couple of weeks, is it seems they are usually buying/selling at resistance levels instead of RS which is missing out on alot of upside.


Please correct me if someone knows the system. 

May 19, 2006 3:34 pm

TA is garbage


As little respect as I have for SB even they canned there TA department!  

May 20, 2006 8:27 pm

 If TA is garbage, then FA must be also. Conflicts, no conviction, etc.,etc. If you are looking @ Dorsey wright, read their numerous examples, "Anatomy of a Collapse." Pretty compelling. If jones would'a allowed tech analysis, maybe a few would have exited WCOM in high 30's. (A'la Dorsey's recommendation). 

May 22, 2006 9:26 am

I have been a happy Dorsey Wright user for over 5 years now.  The leverage is greatest once you subscribe to the full database and use the ability to save portfolios and analyze charts yourself.  You cannot rely soley on the daily report recommendations and expect to gain the maximum value from their program.

May 22, 2006 11:55 am

Greenbacks...no personal attack on you however you really dont know what you are talking about when you throw something out there about technicals.  This industry brain washes us into thinking technicals do not work but the truth is when you really learn about technical analysis you understand it does in fact work. 


Regarding SB and the technical dept along with Louis Amada, you are uninformed.  Yea, Louis is gone but not because of failure.  Actually to the contrary. 


Did you know this market was gonna do what it is doing now?  I did.  We have had very clear warnings on the tech side.  Spend some time learning about technical analysis and I dont mean Dorsey and you will gain an entire new understanding of how the market really works and it will help biz.     


May 22, 2006 12:32 pm

I used DW as a manager for a while and was very dissatisfied with them.  They were very expensive, have very little upside capture, had a fair amount of downside capture and had a huge LCG bias

May 22, 2006 2:07 pm
frumhere:

I used DW as a manager for a while and was very dissatisfied with them.  They were very expensive, have very little upside capture, had a fair amount of downside capture and had a huge LCG bias



Interesting.  I love their chart service and their daily reports.  Occasionally considered looking into money manager, but never have gotten to the point where I felt comfortable handing over the responsiblity to them.

May 23, 2006 9:57 pm

Greenbacks are you just real stupid or are you just uneducated?  I'm really just curious.  Do you understand what is used by virtually all the huge operators on Wall Street?  Technicals.  Of course technicals along with some other things like information not available to everyone else.  Don't speak of things you have no understanding of ok.  And don't brag about having a few mil under fee based mgnt as you did on another thread.  I was embarrassed for you.  The last thing by the way Wall Street firms want their FCs learning is technical analysis.  Because once you do, you realize that the research depts are full of sh-t. 


To the original poster, I suggest not using DR.  I suggest you seek out other ways to learn technical analysis through direct sources or perhaps some books.  If you want any more input let me know. I manage a decent book "now over 200 mil" of business on a discretionary basis using mostly technical analysis.  It took me five years to get just pretty good at it so don't expect to get real good fast.  Then again I am a slow learner.  Good luck and dont let any fools tell you TA doesnt work.

May 23, 2006 10:54 pm

Wow...that was almost civil.

May 23, 2006 11:07 pm
Greenhills:

Of course technicals along with some other things like

information not available to everyone else.





As it was once explained to me..."Technicals reflect the actions of those with

superior knowledge (information) to yours...shut up and listen."

"Try to participate...not anticipate." "Position management is more important

than position selection" "Cut your losses early, let your winners run"