My position is that techinical analysis is an useful tool in centain context, but it is always dangerous to depend only on technical analysis. Here is an example.
Do you remember when you heard about that QQQ is going to rebalance its holding and reduce the overweighted AAPL from 20% to 12%? Sometime last week, right? But the QQQ:AAPL chart shows that the concern is revealed in price action as early as 3/14, when QQQ:AAPL hit a new low and reverse. Even if you wanted a higher low to confirm, you got it around 3/28.
XLK:AAPL shows pretty much the same thing.
But the question is, do you dare to trade this when you first saw the reversal of QQQ:AAPL and before you know about the rebalance? For those who'd answer yes, I bet there would be twice the number of traders out there who'd bet against you.
I would say that techinicals reveals fundamentals, not the other way around, though structural is a better description for the above example.
And to promote my new fundamental analysis blog: http://trustamind.blogspot.com/
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