Bill, I enjoyed your note and agree with virtually everything you said in it. Raff's charting techniques, although much different, have some similarity to the Bollinger Bands - in that Raff uses two equidistant par. lines above and below the channels, while Bollinger uses one above and below the mid-line.
As far as shorting against the box goes, it has its place if you are going to try to trade on the short side against your position and would like to pick up dollar for dollar on the moves. With this choice, there is no premium to pay and you can stick with it as long as you like since there is no expiration either. But, more often it is used with tax strategies whereby one shorts against the box to protect any loss of profits in one's stock in order to put it into the next calendar year at which time the investor will move out of both. There are a few other situations when it is also well to use this choice.
Your mention of the 100 price for Intel is the same price that I have had in mind for some time that Intel will fall back to should we have an all out bear market. Many who have followed me in the past will remember on Prodigy that when Intel went through 100 and up a few points, I said then that Intel would not see 100 again until we had the next bear market. Well, it did sell off enough to touch something like 99 1/2 intraday. But, I didn't feel that was a bad call at all. And, yes when the Bear comes, Intel falls just like all the other big tech stocks - usually 40 percent on up. In 1987, Intel fell 50 percent in the blink of an eye.
Again, Bill, I enjoyed your note - and the comments within agree alot with my own and my technical work. Good trading. Jack |
