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Monday, September 11, 2006


Arthur Eckart

Also, increased use or popularity of technical analysis may generate volatility, although not a real force, except it causes self-fulfilling prophecies. Moreover, there were few large institutions with the power to move markets. Now, there are many large institutions (including hedge funds, mutual funds, and pension funds) with greater conflicting views. So, confusion may contribute to volatility. Volatility is a reflection of investor's emotions (e.g. greed, complacency, fear, panic, etc.). So, volatility tends to be lower over rallies or uptrends.

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