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Strategies & Market Trends : Rande Is . . . HOME

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To: Rande Is who wrote (34981)	9/15/2000 10:23:38 AM
From: Kevin Shea	Read Replies (1) of 57584

Rande TA chicken and egg --- I do think that you are thinking along the right track... There are numerous examples of a technical bottom in which you get a "Blip" downward ( taking out stops ) and an immediate return and acceleration to and through the former support...you can almost anticipate this in so much as it happens so regularly, I think the same thing is true for limit buys on breakouts.. This is when automatic entries/exits work against you since you can't see them and "they" can...similarly we can only get month short positions while "they" are watching daily... The "take out the stops dip" can often be previewed by TA signals occurring before the dip, when the signals are trending toward the positive...that is, everything suggests up from the support and you get whacked... In these situations it is best NOT to use auto stops and go with alerts.... thus reacting TO the market... The correlary to this "take out the stops" is the volume AFTER it happens... one must be aware of the total volume traded at the lows ( these dips are often low volume down, then big buying at the intraday low) and then watch to look for a time in the future when the same (nearly the same) volume is traded again ... sometimes these look like bookends as I said before...The volume should indicate the trader to be careful, because if this was one MM then the game is over and the issue can falter... So chicken or egg....My view is that the chicken drops the egg after a bit of a show and then there are two chickens

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