Letters to S&C
Your November 1989 issue was one of your best ever! I found three articles especially interesting: "Chaos Theory," "Fundamentals behind Technical Analysis" and "Neural Networks." Of these, the first and last may well represent the two most important new approaches to technical analysis to have been developed in a very long time and may lead to unprecedented trading strategies. The second article is must reading for all technicians. Too often, fundamentals are ignored in our technical quest of the market, yet most ratios, spreads and sentiment indicators are a function of values that can be affected (and destroyed) by economic and political changes.
I read the chaos article particularly critically, since it is an approach that I have found fascinating but elusive. Bernd Anders' discussion was commendable. It must have been difficult to condense such a vast and highly technical subject into a short, yet readable, essay. However, without intending any criticism, I think a couple of amplifications and modifications may be in order.