Fundamental Market Analysis Really Is Technical

Michael N. Kahn, CMT

Let’s take a close look at fundamental analysis. If a company has raised its dividends consistently each quarter, the stock should rise. If earnings continue to grow, that is good, too. This seemingly fundamental information certainly sounds like a pair of rising trends to a technician. A rising trend in these underlying factors usually translates into a rising trend in the stock price.

What about bonds? Rising inflation is usually bad news for the bond market. One of the more popular measures of inflation has been the Commodities Research Bureau (CRB) index of commodities futures prices. When the CRB rises, it is bad news for bonds in any developed country. This is fundamental ...