V. 20:7 (14-24): Letters To S&C

Letters To S&C

Editor,

This technical analysis business seems intriguing. Is the art and science of it developed and practiced by many? How long has TA been practiced?

MARK MCCLATCHEY, via e-mail

I credit Charles Dow with developing the first technical analysis system, which some call Dow theory. Dow was the cofounder of Dow Jones & Company and the first editor of The Wall Street Journal in 1889. The Dow Jones Industrial Average was first published in 1896.

Intellectual debate about the validity of technical versus fundamental analysis has gone on for more than a hundred years. From a practical standpoint, both methods are useful. Fundamental analysis requires a great deal — or ideally, all — current information about the tradable. Technical analysis looks mainly at history (price, volume, earnings over time) to surmise how future prices may move. Most traders use both fundamental and technical analysis. Those who use a chart or computer to trade are using technical analysis. . .