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Strategies & Market Trends : Rande Is . . . HOME

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To: Mark Konrad who wrote (48427)	3/5/2001 3:13:43 PM
From: Joe Smith	Read Replies (1) of 57584

Some thoughts: The current market seems very event-driven. We look for indications of oversold conditions and overbought conditions, but I think that much of the market's momentum is directed by the perception of the economic downturn. We had that nice rally while everyone got more and more sure that we were going to see a one-quarter wonder of a downturn. Then NT came out with an expansion of that and many others followed suit bringing us another selloff. It seems that we keep having 20% rallies followed by 30% sell-offs in the Naz. What will break that streak? Until now, you just had to sell as soon as the rally weakened at all. It seems that there are two forces at work. The optimistic belief that such a strong economy will bounce back easily from AG's medicine vs' the belief that such a huge bubble has to be counterbalanced by a deep recession. Both are reasonable arguments. Some thoughts on my psychology. I notice that I am most enthusiastic about being a short-term investor when the market is going my way. I have to fight against this in order to take profits and get out of my positions, such as FNSr at 16 and NTAP at 45. Will I cash in on WIND here near 30? Cover my shorts such as OCPI? I also find that I just want to get out of the market when it is not going my way which I also have to fight against so that I don't cash out at the bottom and capitulate with positions that I have taken near the bottom. Do I syop out of the NTAP that I bought when it crossed under 30? I guess that this is a just another way to say that I fight fear and greed. I am also thinking of setting more concrete Limit and Stop orders. Just take the profits I hope for and limit losses. Don't use the mental stop thing. I know that you can get screwed by physical stops but mental ones can also screw you pretty bad. Why not just set a price that I am willing to sell at and be happy? Don't worry about what I could have had. And set up a stop to limit my losses to something acceptable. I think that I know enough to set pretty good targets. I also think that this might reduce stress. Any thoughts out there?

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