Technical Analysis: Wall Street Can Lie, Charts Can't


Ken Kozar


Copywrite 2004 -

New York Attorney General Eliot Spitzer reached a $100 million settlement with Merrill Lynch in 2003 for misleading investors with questionable research. However, in October of 2003, U. S. District Judge Milton Pollack dismissed nine lawsuits against Merrill Lynch and Company. Judge Pollack stated that an investor would have to be a moron to not know that Wall Street is rigged. Judge Pollack wrote "The plethora of public information" telling the story about analysts "would have required even a blind, deaf or indifferent investor to take notice." ( )

Seems that the Judge believes that Wall Street lies and an investor would have to be stupid to believe otherwise. So where do we turn for help? CEOs?

CEOs tell stories. They hype and get people excited. This is why John Chambers of Cisco Systems is called "Sunshine." Others call the "hypers" on CNBC "pinochio." Witness that Enron, Global Crossing, etc. CEOs were paid to be cheerleaders and always see the bright side of things.

Our Objectives


What is Technical Analysis?

So What Do Charts Tell You?

Charts tell you how many shares are trading and what price is being paid. If volume goes up and the stock price goes up, this is like saying there are more people buying and demand is up and the price is being driven up.

Support and resistance levels indicate where a stock price has been before and whether this price was supported or resisted. If buyers think a stock is too expensive, they will stop buying. If buyers think a stock has upward potential, they will buy more until it gets too expensive.

For the most part, you cannot hide price and volume action. It is the true story of a stock's worth, not what some human who has a reason for a stock being lower or higher telling you what it is worth.

For a stock price to go up, there must be more buyers. If everyone who intends to buy has bought, the price will stabilize or fall and the early/lower price buyers will start to sell. This sets up a movement either up or down in a stock.

Investing or Trading?

Some Basics

Analyzing a Stock

Fundamental Analysis (WHAT to buy or sell?)

Sentiment Analysis

Technical Analysis / Charting (WHEN to buy or sell?)

Technical Analysis / Some Patterns

Technical Analysis / Some Case Studies

Let's Look at Some of Your Stocks.....


KK-October 2004