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Strategies & Market Trends : Rande Is . . . HOME

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To: Rande Is who wrote (43649)	12/16/2000 5:20:12 PM
From: ~digs	Read Replies (1) of 57584

Rande, poor choice of words on my part. Allow me to rephrase what i'm saying... What i have seen with regards to dml is not so much that it has varied inconsistently... but that it has evolved quite a bit since first being recognized. Okay that would be normal for an ongoing study... no biggie. But the problem i see is that its definition has now become overly complicated. If it is not relatively simplistic in nature than there is not a whole lot that i can conclude from it. Of course this is just my opinion... and because of that opinion... i have simplified my usage of it in order to get some value out of the whole study. The idea that it must start with a gap up is ingrained in your head because that is how it all started on sept 5th. Yes i think that can be a clue towards what might be considered a 4dml... but not a necessity. Again, just my opinion. Moreover, once we get beyond 4 days and start calling it a 5dml etc... then the idea loses its validity. When we start to do this the only thing we are doing is counting the days in an up or downtrend IMO. Remember the basis for a dml: so that those who got trapped at the top or bottom... get forcefully liquidated on their settlement date. Typically 4 days... no more. Also, the idea that the lows must be hit toward the end of the day has been shown to be invalid. I think it has been proven that the houses can liquidate at any hour while the market is open. A couple other points... Given the volatility in this market... almost all gaps get filled! The good news now (for bulls) is that we have gaps above us... and no more gaps below. Keep in mind that your scenario of more downside on monday would likely lead to a new low. Any technician would tell you that is not good. Yes the big houses seem to want to kill the individual investor's trading account. I do not believe however, that they want to scare us away entirely... and if we make new lows on monday before the fomc meeting... there would no longer be a perceived floor for the nasdaq index @ 2600... which could lead to more major declines... and could seriously wipeout some more of the bulls. Ask yourself this question Rande... if we did not get a pullback eod on friday... and instead closed with another perfect hammer candlestick (just like nov 30th)... then would you still believe there is more downside on Monday? My belief is that said pullback occurred in order to keep bulls wary of buying on monday and bidding up stocks like crazy premarket... before the institutions had a chance to fill their quota. All in all Friday's price action was VERY similar to November 30th IMO. The volume was close to the same as well. Please accept this message in the spirit with which it was presented. I'm not trying to knock anybody... my only objective is to determine when to buy... and when to sell. EDIT: pull up your preferred charting platform and draw a daily trend line connecting the compx high on sept 5th to its november 6th high... continue that line down to the high at about 3025 on december 11th. We need to break that line and hold it before I would consider investing again longer term. Set your chart to logarithmic and you can see it even better.

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