year after the stocks had already rallied for more than 6 months.

My response was to recommend the tire and oil sectors, mainly

because the charts looked better, but also the Street hadn’t gotten around to those groups yet. The last time I looked you can’t

run a car without four tires and a tank of gas, therefore the tire

and oil stocks had to benefit from a boom in auto sales.

This kind of thinking was second nature to most of us. It

was the fault of the technical community, and I include myself,

that we never took the time to back test many of our theories

or indicators and tools, but rather relied on street knowledge to

get us through the day. Had we devoted more time to back testing and proving our work, we would have had a much easier

time in many board meetings during the next 20 years. One major problem at the time was that we had limited access to price

history. The vast majority of technical analysts had all their

data and their notes in old dusty books. It was impossible to go

to any university with that type of data and expect to be given

an audience.

Besides, the campuses at that time were more concerned

about demonstrators against Vietnam rather than any indicators that my colleagues and I could dream up. Wall Street was

in trouble, as a great bear market had taken up residence in

lower Manhattan.

In the 1973–74 period the Dow Jones Industrials Averages

would drop from a high of 1047 in Dec. 1972 to as low as 577

in Oct. 1974, a 55 percent decline. There have been enough books

written about that time, but as perverse as it might sound, technical analysts thrived during that period. After all, this was our

type of market, a market of multidimensional movers. Technical analysts, on the whole, helped many a firm avoid some very

nasty pitfalls during those times. Most of the people that worked

in the finance community had only seen stocks move up for most

of their careers. Brokerage houses that never had an official TA

department up until then found it to be a good idea to have

someone in the research department that actually watched the

stock market. Many of the senior people in the firms felt that

having their own technical department was an irrational move.

They felt that the stock market would bail you out of any bad

positions over time. Keep in mind that from Pearl Harbor to 3

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