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completely baffling to the practitioners of traditional technical analysis. We have to radically adjust our indicators to trade bear markets effectively. |
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2. Markets where most participants are highly leveraged trade differently than markets where leverage is muted. |
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3. Prices must be adjusted to reflect today's economic reality (i.e., they must be currency- and inflation-adjusted). |
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Neal: So you did an almost 360-degree turnaround of opinion. |
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Grant: I have slightly modified what I preached in my book. In the old days, I would have said sentiment is the most important indicator and that the best indicator of sentiment is media. Today, I have far more confidence in inflation and currency-adjusted charts which you can use on markets not covered by the media and analyze before the latest edition of The Wall Street Journal comes out. |
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Neal: Okay, Grant, what is your favorite technique now? |
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Grant: My favorite technique in the final critical factor in market analysis (time) is something else I have discovered since my book came out. I call it "anniversary days." For example, the Dow topped in the spring of 1997, on March 10exactly 60 years after its 1937 top. But unlike Gann, who used a few preset long-term cycles to determine anniversary days, I try to use every cycle that has been proven to have validity in a certain commodity, index, etc., to determine all the anniversary days for the year. |
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Neal: So it is a matter of combining many techniques? |
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Grant: In the end, nothing can take the place of a trader analyzing and combining all the data into his own winning pat- |
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