Trade What You See, Not What You Think Message Board

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Strategies & Market Trends : Trade What You See, Not What You Think

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To: Apakhabar who wrote (450)	3/14/2001 6:56:23 AM
From: Threei	of 867

Hi Apakhabar! Well, grammar and syntax... :) They are actually a little bit better when I write something like this post... but during live class it's more of streaming conversation that looks often somewhat strange being just reproduced without editing, adding of links between words etc... you know what I mean :) Stalker - this movie by Andrei Tarkovsky was available in movie rental chains up to 1999, lately I don't see it on the shelves. Probably it's possible to order it although I am not sure you would enjoy it - like many europian movies, it's done in very unusual for Americans manner, you can call it boring. Original book that inspired screenplay is much more dynamic. It calls Picnic On the Wayside by brothers Strugatsky... no idea if it was ever translated to English. About capitulation scenario. Of course as intraday traders we are going to miss all the gaps.. this is just a pay for refusing to take a risk. But huge drops like you describe are quite usable intraday also as they take selling pressure out of the market. It would be regular (may be not regular by scale of events) V-bottom with recovery comparable by speed and scale. This kind of scenario is what we utilize on daily basis trading particular stocks. Our market scanner has Capitulation Alert built in (http://www.realitytrader.com/iscan/definition.htm) so we watch for the stocks with extremely sharp decline on increased volume as for reversal candidates. Besides, this kind of capitulatory selling has a good chance to bring liquidity back to market. What I mean is: major problem with bear market is not the direction itself. It's low liquidity that makes movements less readable and increases risk. Monday with its sharp selling was easier to trade than most of the days during last two weeks. Have to add, in spite of sharp decline I do not consider Monday to be ultimate capitulation - there still was no real panic... neither I am sure we are going to see this panic. It all looks more like prolonged agony to me, not one-time crisis followed by huge relief. Also want to say thanks to TraderAlan - his comments helped me to understand various implications of bear market much deeper. Best regards, Vadym

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