Technical analysis uses past prices and perhaps other past statistics to make investment decisions. Proponents of technical analysis believe that these data contain important information about future movements of the stock market. In practice, all major brokerage firms publish technical commentary on the market and many of the advisory services are based on technical analysis. In his interviews with them, Schwager (1993, 1995) finds that many top traders and fund managers use it. Moreover, Covel (2005), citing examples of large and successful hedge funds, advocates the use of technical analysis exclusively without learning any fundamental information on the market.
Academics, on the other hand, have long been skeptical about the usefulness of technical analysis, despite its widespread acceptance and adoption by practitioners. There are perhaps three reasons. The first reason is that there is no theoretical basis for it, which this paper attempts to provide. The second reason is that earlier theoretical studies often assume a random walk model for the stock price, which completely rules out any profitability from technical trading. The third reason is that earlier empirical findings, such as Cowles (1933) and Fama and Blume (1966), are mixed and inconclusive. Recently, however, Brock, Lakonishok, and LeBaron (1992), and especially Lo, Mamaysky, and Wang (2000), find strong evidence of profitability in technical trading based on more data and more elaborate strategies. These studies stimulated many subsequent academic research on technical analysis, but these later studies focus primarily on the statistical validity of the earlier results (reviewed in more detail in the next section).
The U.S. federal budget is on an unsustainable path. In the absence of significant policy changes, federal government deficits are expected to total around $5 trillion over the next decade. Such deficits will cause U.S. government debt, relative to GDP, to rise significantly. Thereafter, as the baby boomers increasingly reach retirement age and claim Social Security and Medicare benefits, government deficits and debt are likely to grow even more sharply. The scale of the nation’s projected budgetary imbalances is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur.
Conventional analyses of sustained budget deficits demonstrate the negative effects of deficits on long-term economic growth. Under the conventional view, ongoing budget deficits decrease national saving, which reduces domestic investment and increases borrowing from abroad. Interest rates play a key role in how the economy adjusts. The reduction in national saving raises domestic interest rates, which dampens investment and attracts capital from abroad. The external borrowing that helps to finance the budget deficit is reflected in a larger current account deficit, creating a linkage between the budget deficit and the current account deficit. The reduction in domestic investment (which lowers productivity growth) and the increase in the current account deficit (which requires that more of the returns from the domestic capital stock accrue to foreigners) both reduce future national income, with the loss in income steadily growing over time. Under the conventional view, the costs imposed by sustained deficits tend to build gradually over time, rather than occurring suddenly.
In a neonatal intensive care unit, care is given to very ill neonates, most of whom are prematures. In the prognosis and treatment of such neonates, both lung and brain conditions play an important role. The treatment of immature lungs has been significantly improved by a routine use of surfactant. The assessment of the brain function remains an important issue.
The patients are continuously monitored. Treatment is evaluated using data recordings from the monitors (vital signs) and intermittently obtained values (blood gases, weight, and defecation). The vital signs, however, are often disturbed by movement artefacts and cannot be measured as easily as in adult intensive care conditions. The evaluation of the condition of the patient and his or her treatment needs a reliable vital signs data set and effective use of the small number of signals measured. A physiological-data acquisition system, capable of real-time artefact reduction and analysis, combining data, and archiving of the measurements, is necessary to optimise the information on the condition of the patient.
