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Strategies & Market Trends : Classic TA Workplace
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To: Shack who wrote (59538)11/14/2002 9:27:01 PM
From: Perspective  Read Replies (2) of 209892
 
I don't have anything much to add Elliot-wise here, but I will recap a lengthy conversation with a friend of mine today:

1. Bear market rallies are asymmetrical - they move up very quickly, and give ground grudgingly.

2. There is no reason to be early on short entries. There will be plenty of time after it starts to roll to get short, and the risks are against the short-seller. Be patient. If you're ten days late, you might miss out on a few percent. But if you're ten days early, you could lose ten percent or more.

3. As long as we continue to produce 5%-type moves in NDX, it demonstrates a clear danger to those who would short it. When this thing has wrung out all the money it intends to wring out of people, it will stop producing these wild upside days.

4. PROBABLY THE MOST IMPORTANT: Bear market rallies frequently have little backing and filling! Recall last October - we all kept looking for a 38% retracement that never came. That rally produced little form except for stair-step moves of a wave up followed by a flat corrective wave to retest the breakout. Repeated four or five times if memory serves me correctly.

So, I'm reminding myself and those on this thread that, despite the high probability that prices will be lower than this 6-12 months out, this is no time to be exposed to the short side. I've had a few long-term short entries tick off in old favorites, so I'm going to try to keep them hedged until we break a clear support level.

BC
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