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Strategies & Market Trends : The Options Box

QQQ 623.28

+0.7%

Nov 5 4:00 PM EST

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To: Poet who started this subject	11/19/2000 3:28:49 AM
From: chic_hearne	Read Replies (2) of 10876

Hi all, I stumbled upon this thread by seeing it as one of SI's "Hot Stocktalk" threads. I read the last few hundred posts to catch up. I must say that there seems to be a lot of people here that only buy calls on techs. This may have worked in the past, but this isn't the past. I'm a big time bear on the Naz but feel there is no point in even arguing that here. I got out of college last fall and was lucky enough to have an uncle give me some money telling me I need to be in the market under the promise that I would study up on the market. I did. I wasn't part of the bull run so my memory isn't clouded. I followed the market and even toyed around in college with a few G's but it wasn't serious. I didn't put much thought into it and did no research. When I finally did read some history I got an entirely different perspective on things. Like I said, I'm not even going to bother trying to convince anyone to be bearish, but read some history and you'll understand. What's the potential fallout of the Naz 100 currently having a higher P/e than the Nikkei ever had at its top? What's the potential fallout of the current market having a higher market to GDP ratio than was ever seen in 1929 or Japan in 1989? What's the potential fallout of techs making up over 25% of the market and only 6% of the economy? What's the potential fallout of the Naz going 5.5 standard deviations above correlation when no other major market in history has ever gone 4 standard deviations above correlation? These are questions yet to be answered. IMVHO, now is the time for preservation of capital. I think the TA I've seen has been incredibly accurate lately but news NOW is sooooooo powerful that a TA strategy can kill you (if you're holding overnight). Bear market rallies are killer. The Naz can shoot up 8% on any given day on something there's no way anyone can predict on an accurate basis. Same to the downside. As options traders, we all know that premiums can be cut in half or more overnight. I must say Poet, you must be one very intelligent woman. Anyone buying XAU calls will be rewarded huge someday, though it may take some time. Hell, there giving away the calls so why not? FWIW, this is basically what I'm doing... Message 14808048

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