Thursday, July 17, 2008

The Fundamentals of Techincals - New Episode

Dear Friends,

Today I am not presenting here any chart as I am going to tell something on fundamentals. The first thing I want to tell is - Please, I do mean it, Please do not trade by fundamentals. Fundamentals are only for economists and somewhat for very long term investors and NOT FOR TRADERS. So, if you are a trader, forget fundamentals and concentrate on charts. Charts incorporate all the news, events and fundamentals in advance, barring unforeseen natural calamities and extreme circumstances (like terrorist strikes on a large scale).

I am a firm believer in Economic Cycles in Global Economy. This means I believe in economic conditions riding on repetitive cycles in Global Economic Activity. To express in simpler terms all events including economic activities occur in cycles - meaning they go up and down with a set and defined set of parameters. The most important of those is the time factor. for Example, an economic cycle goes up and all the economic activities represent a boom and then after some time it goes down and there is a period of depression. In the space between the two there are times of slow growth, stagnation, recession and sometimes stagflations. The recorded history of we human beings is witness to these cycles. There have been great economists throughout our history who calculated and predicted the cycles. One of those is my favorite Professor Nickolai Kondratieff (1892 - 1938) of former Soviet Union. In 1926, Kondratieff published his findings in a report entitled, "Long Waves in Economic Life". According to the report a long depression in the world economy is overdue. The downurn should have started in 1990s !!! For all those who want to know about the great Kondrateiff, all the information is here - Kondrateiff

What happened to the cycle? why was there increasing prosperity in US in the period and and later in other areas of the globe? I was as confused as most of the economists were. I got the answer, but, I am going to tell all that in the next part. Till then I want to see how many people are interested in reading the stuff.

Will continue very soon...



  1. Please continue I am interested

  2. 2 words. - Allan Greenspan!! :)

    You are doing a good job of writing stuff. Keep up!! I would just be happier if you don't keep an Uber bearish view :P

    Also, as a trader one cannot forget fundamentals, 'cos I firmly believe all the price action happens "in a context" there are no absolutes, and the "context" is usually provided by the medium term fundamental scenario....


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