You have to look at market delta charts and effective volume charts...they tell you what the big boys are doing...high price range/expansion without volume expansion means its shorts covering and that there is no inherent buying from bulls...2-3 wks ago when bears were salivating I was here telling people to go long...when bearish sentiment reaches extremes and you see a certain % breached on % of stocks trading over 50 day moving avg, that tells you all the bulls have capitulated and there are no more bears to bring it down...hence you get buying pressure...each chart tells a story, youre job is to figure it out on your own with some guidance of course.
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Originally Posted by scorcherjf
Ah fundamental vs. technical analysis... if one is making blind predictions based on not much, is that much different than predictions based on a certain indicator doing something specific (like breaching a bollinger band)?
So EVERY time the SPX falls below 30% it USUALLY marks a bottom? That can be reduced to "usually when A happens, B happens" which is dangerously close to one of those "recommendations based on air."
Anyway, I mean no disrespect. I'm a firm believer in both fundamental and technical analysis when used in a logical way but do you have any financial or economic insight as to why you think there's a bottom forming at certain times or why the VIX breaking a +2 standard deviation is meaningful? Are you assuming that VIX levels are normally distributed?
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