Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: dan36 who wrote (98592)	5/19/2000 4:45:00 PM
From: Jenna	Read Replies (1) of 120523

Too soon to reenter the tech stocks except for a swing trade and the swing trade ONLY with confirmation from the Market Direction Indicators. If we have a stair step arrangement in the stock charts today and bearish flags and pennants (of upside) in longer term downtrends, we must heed these price patterns. Ironically we have to get IN ON THE LITTLE BEARISH FLAGS AND PENNANTS and EXIT when the continuation of downtrend continues. What this means is actually when you see signs of a reversal of the downtrend, note this is probably a little 'flag or pennant' which translates into a 1-4 day hold at most and most likely a 1-2 day hold or a one to two hour hold. This is your bear flag. The continuation of the trend unfortunately will probably be in the direction of the longer term trend (i.e. the prevailing 8 week trend and NOT the 52 week trend) , namely the downtrend. That is why we need to change our perspective of this current market. We are not getting bottoms, we are getting lower lows and stair step short term 'rallies' in STRONG STOCKS.. We buy the rallying stock after the 'reversal day' with confirmation. We hold the newly rallied stock ONLY UNTIL THE SHORT TERM TREND IS INTACT. We then sell the rallies at technical reversal triggers (i.e. stochastics sloping downwards, intraday charts dropping below support lines, candlestick pattern reversals etc) On occasion I will 'short' the peaks of the rallies (on the daily charts) ( we enter a short position after a point of consolidation and break to downside ON THE 5 or 10 minute chart).. This strategy needs a manual not a post but it works as long as you stick to a strategy and not digress into 'wishful thinking'. We might end up shorting more than going long, but the point is that we follow strategies to a tee and do not buy stocks that are looking very oversold just on 'gut feeling'.. It doesn't work. I found only a few really good trades today and wasn't going to jump in and out stocks because they looked 'tempting' were considerably 'oversold' and had 'hit their bottoms'. Not only is the buy and hold theory dead but so are a lot of other investment theories. We will not give up trying to hold position trades and even longer but we must NEVER take losses indiscriminately because everyone and their brother say it can go only up from here. It will go up but when after you've lost 150% of the stock price? if it takes another 3 months are you willing to lose nearly the entire 401K waiting for this mysterious antidote. Neither will I trade wildly and frantically to get a 1/4 point here or there or trade 'news' on stocks that have already been at the day's highs when the news is out. I have absolutely no doubt we can find 1 -3 good timely trades a day in these markets but to do so needs homework, technical analysis really works with a smattering of 'fundmental background' because otherwise there will be no rebound. The IPO's and non earning stocks will probably never recover.

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