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In defense of technical analysis

Posted on June 29, 2008

In an article for Portfolio.com, Felix Salmon recently dismissed the value of technical analysis by pointing to a blown call by CNBC's Jim Cramer that relied on an interpretation of an arcane technical indicator ( the S&P Oscillator ). In fact, Salmon went so far as to call technical analysis the art of drawing lines on charts and extrapolating from them what the market is going to do next and the financial equivalent of astrology. In response, Barry Ritholtz of The Big Picture has posted a lengthy defense of technical analysis, arguing that it can be an effective tool in any investor's to...

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