A funny thing happened on the way to the death of technical analysis, the market got so short-term focused everyone rehired their technicians.
In the early part of this decade, large Wall Street firms dismissed most of their technicians on the premise that clients simply weren’t interested. While Wall Street research was generally gutted across the board, technicians saw some of the sharpest axes.
But the market’s volatility over the last year, not to mention the rise of high-frequency trading, has so increased the focus on the short term, money managers often can’t think about 12-month price targets. And many of the exiled technicians who were forced to start their own firms are now benefiting from the heightened interest in short-term factors.
One of the beneficiaries of the heightened interest in technical analysis and technical research is John Thomas Financial, a broker-dealer servicing mostly retail clients that has mushroomed in size from four brokers three years ago to more than 100 now. It aims to have as many as 300 within the next 18 months....MORE