Post-Meltdown Technical Analysis?

I'm starting to gather information for an Investors' Edition of How to Lie with Charts. Looks like I have a lot to learn about technical analysis (finding patterns in charts to make hypotheses about market behavior).

I wonder:

• Did technical analysis in any way predict or fail to predict last fall's banking crisis?
• Have traders' opinions on the reliability of technical analysis changed since the meltdown?

My scientific wildass guess (SWAG) on this would be that technical analysis would miss the underlying factors that caused weakness.

In Which I Make a Dumb Mistake

There was a howler of an error in the first edition of How to Lie with Charts (published by Sybex and then reprinted by iUniverse). The error had to do with the defintion of mean, which simply "means" average. However, because the term average is sometimes used loosely to refer to other methods of data reduction, mean is the preferred term in mathematics and statistics.

Quite recently, I found a helpful article on the topic here:

Stapel, Elizabeth. "Mean, Median, Mode, and Range." Purplemath. Available from http://www.purplemath.com/modules/meanmode.htm.

I took pains to clarify and carefully explain the meaning of mean in the Second Edition (LaPuerta).

Getting Started

If you found your way here, you probably know that my book How to Lie with Charts is now in its Second Edition and has been adopted for coursework at institutions such as Empire State and Georgetown Public Policy Institute.

(Available from Amazon.com, Baker & Taylor, Booksurge, and other booksellers.)

In June of 2009 (next month as I write this) I will be giving the keynote presentation on this topic to an Operational Excellence conference in San Francisco. We're going to have great fun while I gently help these managers learn to mistrust everything they see in business slides, including their own.

And -- just the cure for post-meltdown bewilderment -- I'm preparing a new edition for release this fall: How to Lie with Charts: Investors' Edition.

There will be more about this edition -- which is aimed specifically at financial analysts and business managers -- on these pages in the days to come. So please consider adding this blog to your regular feeds so you can get all the updates -- and puh-lese post your questions, quibbles, and quantitative musings to the discussion threads.

Feel free to comment on any post to pose a query about the book or about the fascinating topic of visualizing numeric results. And if there's something you want to see in the new edition, there's still time to suggest it.