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Strategies & Market Trends : A.I.M Users Group Bulletin Board
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To: murl who wrote (13348)10/26/2000 10:44:26 AM
From: bob wallace  Read Replies (1) of 18928
 
murl

answering your question more fully,

there seems to be two possibilities at this juncture:

1) the NDX bottom will hold in the 3000 - 2900 range

2) it wil not hold in that range, at which point the next visable support is about 2250

the majority view on the UOPIX thread is that the bottom is set at 3000, and many posters are fully invested at that level.

I have proposed an alternative approach which is to develop a buy scale between 3100 (yesterday's close) and approx 2250 such that I will invest 6% of account value for each 5% drop in the NDX. Part of the plan also involves selling each "scale" at a 5% profit until such time as, a) I run out of cash b) 3500 is breached to the upside or c) "the bottom" is clearly recognized and I will then hold for larger profits.

the constant buying and selling at 5% generates small profits which can be used to lower your average cost or
generate small cash profits.

the disadvantage to the above plan is that you may never get fully invested if the market rallies before you recognize "the bottom", and you make smaller profits on a certain amount of your investment because you are selling at 5% profits (or whatever scale you pick). the advantage of course is that you can make some profits while the market backs and fills while it is trying to find the bottom.

my approach is ridiculed as being anti-AIM and "market timing". to each his own I say

Bob
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