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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: Zeev Hed who wrote (57411)4/26/2002 4:45:31 PM
From: Steve Lee  Read Replies (6) of 99280
 
Your comments would get my wholehearted agreement - if it weren't for the SEC investigation.

My assumptions before this week have been that the market works something like this:

The "Smart Money" or "da boyz" or whoever make the decisions to move large amounts of money have a long term plan for the markets. That plan is based on fundamentals. They know the fundamentals for the economy and therefore individual companies are bad. So the plan is to sell.

But if even just one of these players sells all their stock at the same time, they will only get the first few lots out at good prices. So they want to let it go a bit at a time, as they have been doing for the last two years.

This means we have to have buyers on the way down. I don't mean traders buying at the bottom of short term ranges as works for you, and sometimes works for us<g>. I mean people who are basically conned into buying their shares off them.

Consequently we get down moves and up moves, with the bias being down. Thus we get things like bollinger bands and sentiment indicators and stochastics to tell us when we are overbought and oversold. And we get breaks of support or resistance to tell us when we have moved up or down a trading range.

BUT THINGS ARE DIFFERENT NOW <GGGGGGG>

Really, this analyst enquiry has quite likely removed the pump stage of the perpetual pump and dump that has been going on for years. It has been outlawed and to all intents and purposes removed as a factor. IT REALLY IS DIFFERENT THIS TIME.

I think the indicators are out of the window, we have a big piece of news here that everyone has read but noone has yet realised the impact of - except "da boyz", who have been selling for the last 7 days.

When did you last see 7 down days in a row?

We are in new territory, and as such I am 100% cash going into this weekend. That might seem to contradict what I just said, but the assumption that THINGS ARE DIFFERENT THIS TIME is a very dangerous one, and I will not trade on it.

Let's see how the indicators fare next week, then I will try to plan some sort of strategy.
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