Fundamental Analysis Applied to Technical Analysis; Confused Yet? You Should Be

From MarketWatch:

…two technical areas stand out: Major support spanning from 1,220 to 1,230. The S&P bottomed last week at 1,226. Resistance at the 200-day moving average currently 1,271. The S&P has topped at 1,267 on the recent upturn. So very simply, the S&P and the Nasdaq are compressing between major support and the 200-day moving average.

If you were considering the possibility of trend following trading please be aware that the seemingly fundamental analysis of technical analysis in that article is not trend following. Let go of trying to find an explanation for every situation. You don’t need to know that to profit. And you can’t predict tomorrow anyways.

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7 thoughts on “Fundamental Analysis Applied to Technical Analysis; Confused Yet? You Should Be

  1. Weak by your standards. He is just pointing the support and resistance levels of a range in the market. If he used some nonsense to predict how the market will act going forward then that would be nonsense.

    Just as if I said the top and bottom of the 20 day channel on the SPX is 1292.50 and 1197.34, that is just saying what the range is, nothing more or less.

    There are several examples of nonsense attemptng to pass itself of as either fundamnetal or technical analysis. The example you give here is really not worth commenting on one way or the other.

    Wow us with your insights, don’t give us this stuff. Maybe you were just looking for an excuse to use a movie clip.

  2. Tom, just a post!

    But to clarify, in the piece, he says:

    “…response to these areas should set the near-term technical tone…”

    “Looking ahead, initial support holds around 2,650, and is followed by a major floor around the 2,600 mark.”

    “Price action within this band marks the ‘expected’ consolidation following the October breakout.”

    This kind of language is *fundamental* like. That was the simple point.

  3. So many don’t get the difference between trend following and typical technical analysis in the media. I thought this was a nice contrast.

  4. Bedtime story = Fundamental analysis
    Truth = Trend following

    Its simple, the matrix choice…ignorance or truth?

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