Hi Mike,
To answer your last question first... GE is now squarely on the upper Raff channel trend line... if you want a chart showing it, just ask. The stock hit that trend line 3 other times... March of 95 and 96, Nov of 96 and today. Each time it has done that, it has pulled back between 5 and 10% or more. BUT DON'T BUY PUTS ON GE... YET. Only in the event we smell a true crash coming. Right now it is only a possible correction of 5 - 15% which I have blown up to be something horrendous... and only because of the ridiculous level of the markets. BUT MAYBE NOT???
Again in reverse order... GE will aways be inside it's Raff channel... the channel will expand so the stock can't get outside it. However, you must remember, we are talking least squares from a statistical standpoint... and at the Raff Channel edges, you are talking about a statistically significant deviation from the least squares trend... IT ALWAYS RETURNS TO TREND... unless it is a CTM which goes bust... but if you are in puts, you make a fortune!
Next question back... the first chart I sent you was NOT a Raff channel chart... it was a trendline chart and what it showed is that GE has a baseline to which it regularly returns. To believe otherwise is to believe in the tooth fairy... and when the last one of us starts believing that, THEN the Big K will come.
What I said was when GE greatly exceeded it's base line rate, it always had come back to it.
Finally, I did not go AGAINST Bernie, I just did NOT agree that any stock near the top Raff channel was a good buy... which most of his picks were. We'll have to see what happens and whether they hit. But I will wait for Barron's tomorrow before I make any prognostications... or guesses... is probably more accurate.
Regards,
Bill |
