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People Watching

December 9, 2006

I have always liked to watch people and found it interesting to observe and predict what they do. Such is the essence of Technical analysis. It’s easy to get lost in the lines and geometry of it, but we must remember that we are observing and participating in crowd behavior. Perhaps its a stretch, but I think this video is an interesting way to look at how we as traders must make our move in the market so as not to get run over. Isn’t it interesting to see that there are certain times where there’s a build up of people trying to make the turn or to go straight and when they are finally able to nudge their way through, because of their size and number, there’s little doubt that they’ll be stopped, at least for bit. Likewise, the tiny car or even a bicyclist is in good shape if they can move with a nearby bus or truck.
The point is, the market moves just like a crowd of people because that’s exactly what it is. There are leaders and followers, big guys and little guys. If we stick with the pack and follow the big guys, we should be okay.

(And people say NJ traffic is bad? Try driving in India! I’d wet my pants.)

One Comment leave one →
  1. smokeisms permalink
    December 9, 2006 6:01 am

    That last build up definitely formed an ascending triangle before breaking in the direction of the flow. Nice video. I’ll think about it next time I’m sitting at a traffic light with no one around for miles.

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