"Give a man a fish, and feed him for a day. Teach him to fish, and feed him for life."

Technical analysis helps you to know for yourself how to invest money wisely. If I tell you what to do, you are dependent on me for what to do.  It is a choice. For those who do not want knowledge, there is news.

Robert sent me this: Earlier this year, physicist Jean-Philippe Bouchaud and colleagues at Capital Fund Management in Paris studied the news feeds produced by Dow Jones and Reuters that provide real-time reports of items of potential interest to investors. Looking at more than 90,000 news items relevant to hundreds of stocks over a two-year period, they studied how “jumps” in stock prices - sudden, large movements - were linked to news items. They were not. Most jumps were not directly associated with any news at all, and most news items didn’t cause any jumps. “Jumps seem to occur for no identifiable reason,” Bouchaud says.

AP News item, Aug 26:  Of the thirty stocks that make up the Dow Jones Industrial, the world’s largest insurer, AIG, was the sharpest decliner, falling 5.5 percent, or $1.09, and closing at $18.78. This is seen as a direct result of a Credit Suisse analyst cutting his price target on the insurance giant, as well as forecasting steep losses for the third quarter. The negative outlook for AIG was compounded by the warning issued late Friday by credit rating agency, Fitch Ratings, that they are considering cutting AIG’s ratings. (I think they are 10 years late!)

The 10-year chart of AIG (courtesy of Telechart) is posted here. There has not been a new high since 2000. Now you know more than a Wall Street analyst! You can read more about this 'distribution pattern' on pages 139 - 141 of "Invest with Success". You can read about contraction patterns (the triangle) on page 91 of "ADXcellence".  We offer you knowledge.- Candy and Charles Schaap 

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