Posted on 08/08/2002 10:12:00 AM PDT by Axion
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Dynamic language. Is the author also a sportswriter?
Stay well - Stay safe - Stay armed - Yorktown
A whipsaw occurs when a buy or sell signal is reversed in a short time. Volatile markets and sensitive indicators can cause whipsaws. For example: A whipsaw would occur if a position trader initiates a long position on a bullish MACD crossover and has to close it the next day because of a bearish moving average crossover. The signal was reversed and the trader had to exit quickly.
That kind of action is a little too fast for my blood. Those in the pits can go ahead at warp 8 or whatever speed they want. I prefer to follow the more sedate trends, things that take a week or a month, or even a quarter to show up. Watching the tides, not the waves.
No, treating fundamental things like earnings and sales as technical momentum indicators is what got us here.
Just look at how earnings are reported: vs. expectations, rather than normalized by some other fundamental like book value or the industry norm for earnings. It is still so reported to this day despite the raging bear.
People have largely forgotten that earnings do not add value for the shareholder unless they are retained (increase owners' equity) or distributed as dividends. Why should I care that earnings exceeded expectations if my owner equity is plummeting off a cliff like Wile E. Coyote?
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