|  MAY 1983

The Evolving State of Technical Analysis

The Evolving State of Technical Analysis Leafing through a back issue of ""Success Farming"" magazine the other day, I was quite surprised to run across a fairly sophisticated article on the technical analysis of some of the meat and grain futures. The purpose of the article was apparently to educate and to provide a method of calculating hedging levels for some of its subscribers. In fact, some of the Midwestern farmers I know, use words like ""Elliot wave or 50% retracement"" just as easily as they use ""heifer or grain combine."" At first, it sounded somewhat strange to me, hearing all this technical jargon used so naturally. I always thought that farmers generally perceived the futures market more in terms of a fundamental rather than technical perspective. It emphasized to me just how pervasive the use of technical analysis of price activity has become in the 1980's. This widespread use of technical analysis relative to 10 or 20 years ago, seems to be a natural product of the convergence of several factors. I once read a very interesting article that classified Americans as the ""engineers"" of the world. Although we are not the only ""engineers"" around as evidenced by the tremendous technological advances arising out of Japan and Western Europe, the fact still remains that we have engineered a great portion of the major technological advances of the 20th century.

by Technical Analysis, Inc.