Good evening Bill
>>Hear me out on this one, would you?
I am trying, I am trying---and you make some good points in your posting; perhaps, because of my sporadic review of this thread, I have misunderstood the thrust of what you have been trying to say. More to the point, I tended to view your postings in conjuction with that of others who see calamity ahead--as opposed to looking at yours on its own.
>>I believe you characterized yourself as a system trader...
Yes I am, particularly when it comes to trading futures---and the reason I do so is precisely because it takes away the emotional aspect from trading. I use a mechanical system that is to a large extent a trend following system--and therefore, I am never long at the bottom or short at the top--it needs a reversal of trend for me to get a signal. Despite all that I have said in various postings on this thread, the reality is that if the system that I use gives me a sell signal, I will go short the market in heart-beat. I am presently long the S&P futures.
It appears that you too are a systems trader and if you are--and you have already received a sell signal--it basically boils down to whose system has given the correct signal. As I said, I am not wedded to any position as to the market's direction---and if my system signals a sell, I would reverse to the short side. My question for you Bill, is this: will your system give you a buy signal under any circumstance, other than after a decent pull-back. To put it another way, supposing the market moved up another 10% from here, would you based on the indicators that you use, stay out of the market. I ask you this because it is good for others following this thread, to be aware of the essence of how ones system/indicators work in generating signals.
>>So while the top has not been exceeded... we don't have a Big Kahuna staring us in the face...<<
As I said before, this is in part where my misunderatanding has been--I thought that you had already signalled the BEEP and that it constituted the advent of the BigK. I thought that the BEEP as opposed to the beep, was the signal that said that the BigK was imminent. Did I get this wrong and if so what is the difference between the BEEP and the beep?
>>But the market is not going UP any more.
Time will tell; I am not bold enough to make such a prediction--but my question for you again is what would you do in relation to the outlook for the market, if it began to run up again.
>I can Email you the GE and VGY charts I used to show the situation. And basically a Fibonacci analysis in time shows June 20th was the peak... in previous instances it has taken 1-3 MONTHS for a major pull-back to really get underway.<<
I will send you an e-mail today or tomorrow--and would appreciate this information. The interesting thing about your time-frame for a top is that about two months ago, I e-mailed some one that I was expecting a short-term top in the mid-June time frame. This individual who has been following these exchanges on this thread--mildly chastized me yesterday in an e-mail, saying that you after all were saying essentially what I did two months ago. So that begs the question, what has changed, that I should have modified my point of view?? The answer quite simply is that between the power/momentum of the last move and the favorable monetary environment, it just does not support anything another than a relatively minor correction--and 10% to me is minor. The system that I use gives a lot of weight to momentum--and prior history has shown that powerful moves like the one that we have had don't turn on a dime, unless we have blow-off. Now that does not mean that it could not happen this time--but I will give the benefit of the doubt to what seems to have happened over the last 15 years of data that I have tested.
>> But I believe we will have AT LEAST a 10% sell-off by July options expiration... which why I am in puts<<
One thing that I will say for you Bill is that you are clear in your positions--no hedging--and I respect that. I spend a lot of time testing systems and believe me when I say that I am more than willing to adapt my approach/system to include any valid modifications. I shall watch with interest to see how things unfold.
>>I ain't stupid...
I will second that -- I may disagree with you but your views have always been well-reasoned.
>>I believe the DOW SHOULD be priced at around 5,000 but the pendulum will swing AS FAR DOWN AS 2,700... I wonder where THAT figure came from? Now THAT is crazy!!!<<
Not crazy at all--though I doubt that it will happen. What you are saying, if I may paraphrase you--is that the market sometimes moves from one extreme to another. A common phenomenon, whether it is the stock market, real estate, or gold. But the thing to keep in mind is that irrational valuations can continue for quite a while before sanity is restored-- and that applies to both the downside and the UPSIDE.
Regards |
