Technical Analysis as a tool

News last week that Smith Barney closed its entire technical analysis department provided some good fodder for discussions about the value of technical analysis. After all, if TA is such a worthwhile way of predicting the movement of stocks, why would Smith Barney dump it just to save a few nickels?
I seriously doubt that there is now no one at Smith Barney using technical analysis. I suspect that the move has more to do with eliminating redundancy than it does with concluding that it isn't a worthwhile pursuit. Even the most fundamentally inclined stock-picker tends to use rudimentary forms of TA even if its just to manage positions. Technical analysis is so integral to the stock-picking decision, it probably doesn't make sense to separate it into a different department.
Stock-pickers, fund managers and analysts use an amalgamation of methods to arrive at their decisions, and many probably prefer to do their own technical work. Many folks, including me, believe that technical analysis is more an art than a science. There is a lot of subjectivity in its use, and it is not the sort of thing you can easily delegate to someone else.
An important thing to remember about TA is that it doesn't have to be a good predictive tool for it to have value. One of the key benefits of using TA is that it provides a very logical framework in which to implement a money management system. TA is essential if you desire to cut losses quickly and let winners run. Without it you end up acting in an arbitrary manner.
The value of technical analysis as a money management tool is seldom acknowledged by market commentators. A basic understanding of TA principles and how they relate to money management can enhance your investment results nicely.