Forum Archive Index - February 2003

[Travis Morien <travismorien@yahoo.com>]

--- Phaedrus <Phaedrus@techemail.com> wrote:
> W69,
>      Charts certainly don't come much cleaner or
> clearer than this. How some people can claim that
> the whole concept of support and resistance is
> baseless is beyond my comprehension. Take a look at
> the two 1999 peaks at the top of the chart. Even
> though they occurred ten months apart, they
> coincided exactly. To me, this is very clear
> evidence of sustained buyer resistance at that
> level. 

This statement is quite easily countered.  You give as
your proof of resistance an example of a stock that
stopped at a certain point twice.

The counterargument would be to show the chart of a
stock that didn't stop at the same point twice, and
there are thousands of these.

What is necessary to prove this phenomenon is a
systematic study showing that previous highs and lows
are statistically likely to repeat as future highs and
lows.  Studies have been done on this, and evidence
for the phenomenon was not found.

Any method of analysis that works only in hindsight
and does not indicate much of any consequence in
advance is of very limited usefullness.

Travis
www.travismorien.com


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