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Fusion Analysis by V. John Palicka

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11SENTIMENT AND TECHNICAL TOOLS

The ability to be so obsessed with an asset price as to drive it up and then down again out of proportion to its intrinsic value shows that emotions are highly volatile. For example, an item such as a pack of chewing gum is selling for $1.00. You certainly do not wait in line all night to buy it. In fact, there is no line because that is the market value and you expect it to be there, at the same price, next time you want some gum. Now, if some magic gum could grow hair on your head, then there would likely be a shortage—and a line. Some would actually buy the item to use on their heads; others would try to purchase a large quantity of the gum in order to sell it on eBay at a premium.

This is what happened in 2007 ...

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