FYI:  Prudential, recently purchased by Wachovia Securities, has laid off its entire Technical Analysis group. This follows a similar layoff by Citibank back in February (also while digesting a major acquisition).

On a personal note, I took the NYIF Technical Analysis course with Ralph a decade ago; He is not only a terrific instructor, but he is a consumate gentleman as well. I wish him the best in whatever he chooses to do in the future.

For those of you who may be too young to recall, Ralph’s Dow 10,000 call — back when the industrials were about 3,000 — was both controversile and dead right. (As of late, he has been way too optimistic).

From the AP, here’s the Ubiq-cerpt:™

NEW YORK – Prudential Equity Group has shuttered its technical research group, laying off Wall Street veteran Ralph Acampora, who has been with the firm for 15 years.

Jim Gorman, a spokesman for Prudential said Tuesday the move to close the department was due to cost cuts.

In addition to Acampora, the group included analyst Peter Martin.

Acampora has been in the business for 40 years and was called the dean of technical analysis by many colleagues. He was most well-known for being the first analyst to say, in June 1997, that the Dow Jones Industrial Average would hit 10,000. The Dow did so on March 16, 1999.

Technical analysts use charts and supply and demand patterns to get a read on whether stocks or sectors are attractive and pose buying opportunities.

Acampora was managing director and the director of technical analysis for Prudential Equity Group. He joined the firm in 1990 after working for 10 years at Kidder Peabody & Co.

In 2003, Acampora was named to the Institutional Investor All-America Research Team for the eighth consecutive year.

Acampora’s departure comes roughly seven months after Citigroup Inc.’s Smith Barney unit fired its U.S. technical analysis team. The move was part of Citigroup’s cost-cutting efforts.


UPDATE:   October, 6, 2005 12:28pm

It turns out that Economist Richard Rippe and the entire Economics department have also been let go as part of the same cost-saving move at Prudential . . .

 

 

Source:
Prudential shutters tech research group
Associated Press

http://www.mercurynews.com/mld/mercurynews/business/financial_markets/12816518.htm

Category: Technical Analysis

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14 Responses to “Prudential kills its Technical Analysis Group”

  1. Brian says:

    I don’t really know all that much about technical analysis. But the line I always hear is something like:

    “It’s bunk, but some people believe in it. So you need to know how it allegedly works anyway.”

    Sounds like the “it’s bunk” school is winning the day?

  2. john says:

    let’s see if the following technical analysis proves itself prescient…..

    below are two interesting pieces re. the SPX in post-presidential election years, 1968-2005.

    http://www.stockmarketcycles.com/current_observations.htm

    http://www.safehaven.com/article-3880.htm

  3. Actually, I suspect its the opposite reason:

    There are so many PC programs and websites for charting and Technical Analysis, its become much easier relatively speaking — for just about anyone to do basic TA than in the days when you charted stocks by hand — that half of the street are technicians now.

    I do not know many traders that do not rely on some form of charting to trade off of . . .

  4. Abbi Vakil says:

    What’s the 1st thing we all do when someone tells us about a stock? We pull up the chart. Whether we admit it or not, we all rely on charts and some basic level of technical analysis to pick our entry points and exits.

  5. CMG says:

    wow – i cannot beleive it.

    ralph is such an incredible asset – I think PRU made a
    critical mistake.

    I can’t wait to see what he does next…

    TA is used by everyone who’s serious about the market.

    It’s just sad to see how the Net cannibalized Ralph’s metier.

    Talk about disintermediation.

  6. john says:

    in defense of TV (related to the bigpicture/realmoney posts) see

    http://www.contrahour.com/

    :Why Investors Should Use Technical Analysis

    Yesterday, a heated discussion of technical analysis broke out on the Realmoney.com chat board with some participants declaring they don’t “believe” in technical analysis. It’s the same discussion that breaks out about once a month on Realmoney.com and it’s often repeated on other fundamentally oriented sites like Fool.com.

    But saying you don’t “believe” in technical analysis in investing is like saying you don’t “believe” in hammers in carpentry. It’s a completely nonsensical statement that is borne out of hubris and complacency. Technical analysis is simply an investing tool and using it competently can only increase your investing success. …….(continued)”

  7. john says:

    here’s the permalink for the above mentioned article…..

    http://www.contrahour.com/contrahour/2005/10/why_investors_s.html

  8. royce says:

    “But saying you don’t “believe” in technical analysis in investing is like saying you don’t “believe” in hammers in carpentry.”

    Not an appropriate analogy. There’s no dispute that when you hit a nail with the hammer the nail moves deeper into the wood, but there’s a lot of disagreement over the efficacy of technical analysis. It’s the financial world’s equivalent of the Israeli/Palestinian conflict.

  9. creirinn says:

    As a young broker in Kidder Peabody’s retail system I remember Ralph always being willing to take a call or when he came to our office spend some time going over his charts with the likes of a small “puke” like me.

    A classy fellow.

    Creirinn

  10. John East says:

    TA can only work if few players use it. How can everybody who chucks a dollar into the bucket expect to take two dollars out when everybody is getting the same trade advice from TA? It’s just not possible.

  11. Larry Nusbaum, Scottsdale says:

    I joined Prudential Securities in November, 1990, after many years with Lehman Brothers. I flew to NYC shortly thereafter to meet Ralph and his two assistants. They had a small area on the trading floor. Great guy and my first lesson on technical analysis. I am not sure that I got it back then. Too bad for me…..

  12. Larry Nusbaum, Scottsdale says:

    “TA can only work if few players use it. How can everybody who chucks a dollar into the bucket expect to take two dollars out when everybody is getting the same trade advice from TA? It’s just not possible.”

    Because, there are many ways to interpret the charts and many MAs to use to add or subtract or go short. Some, simply use Point and Figure charts for stocks, sectors and indexes. They provide simple supply and demand patterns. Boy, are they easy to use and quite helpful. In addition to that, I use Stockcharts.com.

  13. M. Parrett says:

    Also as a young broker at Kidder Peabody I have to second creirinn’s remarks. Ralph Acampora is indeed a classy fellow and a truly objective, scientifically disciplined technician. I hope we still get to hear from him regularly. Personally, his example encouraged me to build the technical skills that have made all the difference in my investing career.

  14. Harold Schmidt says:

    What is the real motivation behind Prudential and Citi dumping their technical analysis groups? Could it be that they are not telling them what they want to hear? In the past there were analyst that could move markets, this is not true now after the blood bath that many of us took. Think about it.