DAYTRADING: The Highs and the Woes 2/24/01
I walked into Doc Kronkite's office for my usual Saturday morning appointment. Seated at her desk, filing her nails was the lovely Miss Tushbumper.
"Have a seat," she cooed "the doctor will see you shortly."
I was impatient to discuss my trading week with the doc, but I waited.
Soon a buzzer sounded and Miss Tushbumper said "You can go in now."
As I walked in, doc Kronkite was smiling. "Well now, let me tell you what's been happening. I just got back from a trip to Washington." he said.
"Really? What were you doing down there?" I asked.
"Well, I've always wanted to visit D.C. so away I went. By the way, I took along your trading partner Dortmunder. We had a great time."
"I wondered what happened to the little guy. I really missed him this week." I said.
"Well anyway," Kronkite continued, "I was hoping to get a glimpse of Alan Greenspan. As luck would have it, I was standing across the street from the Federal Reserve building when who should come along but Alan Greenspan in the flesh. As he was crossing the street he was clutching his briefcase. I looked to see if his briefcase was full or empty of course. As he reached the sidewalk he stumbled and out dropped a couple of muffins and a banana. Quick as a flash Dortmunder snatched up the banana, said "Pardon me, my dear fellow" in his clipped British accent and ran up a tree to peel the banana."
"Doc, that's incredible," I said.
"I lost sight of him," Kronkite continued "and decided to go to the Potomac River, another landmark I wanted to see. As I stood on the banks of the Potomac I recalled the story of George Washington throwing a silver dollar across. Impulsively I reached into my pocket and sure enough, I found a silver dollar. I threw it, but it fell short. After a couple of more tries I gave up. Suddenly Dortmunder appeared at my side.
"What's doing?" he asked. I told him.
"Don't you realize," said Dortmunder "that a dollar doesn't go as far as it used to?"
"Gee doc, that's swell. But could we please talk about my trading week? That's why I'm here you know."
"I know, on the couch lie down. Tell me all about your trading week" he said.
"It was pretty exciting doc. See, Pristine brought two rooms together this week. A room from Pristine and Jenna's Market Gems room. Doc, we must have a hundred and fifty traders in the room."
"It must get pretty crowded in there. Some more chairs you need? My son-in-law Morty can get chairs wholesale. I'll give him a call."
"No doc, no chairs. See, the room is in cyberspace."
"Cyberspace? Is that anywhere near Cleveland?"
"No doc. See, we all get together over the internet. We've got Guido from Genoa, and Acarrilloa in Madrid, and Smizer in St. Louis, Missouri, Rk in Virgina...good traders from all over the place."
"No!"
"Yes doc. And it was a tough week with the market being down and all. That's what I wanted to talk to you about. You know doc, the pressure."
"Ok, talk on me about the pressure. I treat traders with pressure. High pressure, low pressure. I'm a specialist you know."
"I know doc. Anyway we were doing pretty good, doing some shorting and occasional quick moves in and out from the long side. But it really got exciting yesterday doc."
"What happened yesterday? Did I tell you I was in Washington yesterday with your trading partner Doodlegrunter?
"Yes doc. That's Dortmunder. Anyway doc, Motorola warned that earnings would be bad and the NASDAQ futures tumbled before the market opened."
"They can do this, tumble before the market opens even?" doc Kronkite asked.
"Sure doc, happens a lot. Anyway the market was geting hit with wave after wave of selling. At one point the DOW was down 225 points, the Nasdaq was down almost 90 points. It was pretty ugly doc."
"So what did you do?" he asked.
"Well doc, we found a few stocks to short from the Watch-list and some of the traders in the room suggested other shorts and we were doing okay and then it happened, around 1:30."
"What? What happened?" he cried.
"Well, doc I was watching the Naz futures and they'd just broken to a new low and it looked like the Nasdaq was gonna have a really terrible day. Then I thought I spotted a bear-trap doc."
"A bear trap? What were you doing in the woods looking for bears?" he asked, "Isn't that dangerous?"
"I wasn't in the woods doc, I was in cyberspace."
"Is that anywhere near Trenton?"
"No doc. Anyway, soon the Nasdaq futures started to turn around and Aron suggested we take a look at ARXX. So we did."
"Who's Aron?"
"He's a moderator doc."
"A modulator? I did a whole chapter on modulation in my best seller, "The Truss: Friend or Foe." Chapter thirty-two, a bargain at only $49.95."
"I know doc, but a moderator works with traders. See, Aron suggested we look at ARXX, that's part of what moderators do. Doc, it was beautiful, just sitting there in a pennant at 15 1/2."
"Did everybody buy ARXX? What happened? Talk on me already, I can't stand the pressure."
"Well doc, the market internals got steadily better and quite a few traders did pull the trigger on ARXX and a few others that were suggested by Jenna. We caught the rally doc."
"But what happened to ARXX?" he cried.
"It ran like it was being chased by an angry bull doc. All the way to 17 and 7/8."
"No!"
"Yes doc. But wait. A lot of traders sold it at 17 1/2 and then it pulled back to 16 3/4 and Aron said it looked good again, a bull-flag patttern I think he called it and the traders jumped all over at again and kicked it out just before the close at 18 1/4. Made the day doc."
"Bulls, bears, bear-traps, flags, pennants. Sounds very confusing. It was a lot easier back when Mendelbaum the fund manager would call and tell me to buy AMAZON at 110 or Sun Micro at 100."
"I don't know doc. You didn't do so well with Mendelbaum. You still got your AMAZON?"
"Yes, of course. I'm averaging down. Maybe I should try this room."
"I don't know doc. It's pretty fast and crowded."
"No problem, I'll bring my own chair. Did I tell you my son-in-law Morty can get me a chair wholesale?"
"Yes doc. And thanks. The pressure's a lot better now."
Lee Kramer |
