Quote from rodden:
Once upon a time TA was simple - and it worked. When TA traders referred to simple consolidation patterns, multiple tops/bottoms, volume-trend patterns and other such unsophisticated chart phenomena they had a definite advantage over the general - and generally disorganized - investing population.
Today, almost all transactions are guided by TA considerations (eg.: what fund is managed by the TA-ignorant?) and, for practical purposes, the trading population has distilled down to funds managers and professional 'day-traders'.
Today we have hundreds (thousands?) of TA terms in the trading lexicon; one requires the equivalent to a Ph.D. to comprehend it all.
Proposition: Today's market action is increasingly distorted by way of a feedback loop between the markets and TA application. The markets collective is in a state of transition from what it was to what it will be; what it will be is literally anybody's guess. I'm talking a change in the identity of the system here - and if you're acquainted with Chaos Theory 101, you know that that means danger!
The original basic psychology behind TA has been replaced by a still admittedly inchoate but ever-increasingly organized body of recondite theory; the markets are tending to become a balloon ungrounded in reality.
For example: The Fibonacci series is a pretty little progression, but why on earth should it be applicable to market action? What has it to do with market psychology? If it does work, it's because it indicates that the market is becoming more and more an internally-referencing mathematical phenomenon and less and less a function of grass-roots investor perceptions.
No wonder RSP season is losing its impact.
