Technical analysis doesnt tell us everything about the future movements of the
market. But, like tracks in the snow, technicians' charts graphically show the
history of price movements and provide the ability to study and interpret the
past for clues as to direction. And they even tell us of probable future
resistance and support areas. Yesterday's commentators were all aghast over
the record of four consecutive days of over 400 points each for the Dow Jones
Industrial Average. And they attributed yesterday's recovery to all sorts of
phenomena: rumors of a short-sale ban in Europe, an upcoming meeting of the
leaders of France and Germany, corporate insider buying, etc. On Wednesday, I
discussed the huge blocks of stocks representing short sales that were purchased
at pre-programmed levels. This practice, called "high-velocity trading," is
what has accounted for the huge swings of the past four days accompanied by the
highest volume of the year. Yesterday's 1.88 billion shares was the lowest of
the last four days, with the others over 2.5 billion. Only computers programmed
to automatically execute thousands of trades in minutes can account for such
volume. This was confirmed by Dick Grasso, former NYSE chief, who yesterday said
that less than 10% of NYSE volume came from the public. Note that two of the
last four days closed
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