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Levels Matter

I've been having an ongoing debate with a friend (he manages a sizable mutual fund) about technical levels; He's a fundie guy who looks at earnings, listens to conference calls, speaks to management (Ha!) and does channel checks.

Out of all of those activities, the only ones that have value to me are the channel checks -- they are objective data points.

His takeaway on today is: "Oil's up, and the Fed will keep tightening."

My view: the Bulls have been unable to get over the resistance hump -- at least so far-- and each failed attempt weakens them.

That's why one never anticipates a breakout, and waits until it occurs. I said earlier I was "back to watching my levels, and getting ready to flip more bullish (on a closing basis) as necessary." That remains the plan. That said, the day is still young.

Regardless, for those of you who may not appreciate the technical side, recognize that charts include, encompasses and reflect all the activity that the fundamental side is doing -- especially the big institutional players.

I think of charts as the elephants' footprints . . .

Friday, May 06, 2005 | 12:39 PM | Permalink | Comments (4) | TrackBack (0)
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Comments

Ready to flip bullish after your much publisized and reiterated bearishness? Come on now, stick in there. Where do you think the market is heading, even if it breaks out. Your bear call came at 10400+ (end of march). Surely you can withstand the same 4% rally above your call to stay on the cautious side. If not, then it was not really an intermediate call as you went out of your way to indicate.

As for your mea culpa on GM and Mr. K, check your facts befpre you accuse, and not pander to getting a headline comment. It will serve you better to take the time to research before commenting.

Posted by: anon | May 6, 2005 3:30:50 PM