Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Platter who wrote (4151)	12/1/1997 10:10:00 PM
From: Thean	Read Replies (3) of 95453

Bry, your view on the chartists and their strategy needs to be further articulated. The computer generated buy/sell signal you cited are as brainless as a computer. We have been through the Vector Vest stupidity before. You need to better specify your bottom to top buy to sell timeframe for the drillers. Don't redicule the charts. We have got to realize the fundamental conditions when charts work best and conditions when charts don't do squat. Right now TA doesn't do squat because the selling pressure is too great. We are not dealing with trading range buy/sell here right now. The opposite occured 1 1/2 months ago when TA failed when momentum money kept buying higher highs. Your strategy will make you catch a falling knife and sell way too soon in this sector IMO. There is no guarantee the drillers will come roaring back before they tumble another 10%. So if you buy now and the drillers take another 10% dive by next week, what would you do? A lot of us thought the bottom was reached 1-2 weeks ago but now here we are. In this situation it is much better to keep cash and buy in after the turnaround has occured. The price may be 10% higher after the turnaround has occured (yes one can characterize a turnaround by all sorts of technical indicators) but one would sleep better and definitely be more confident of having made a sounder decision at that point. I relied on the charts to beat the drillers (by a large margin) this year for the record. The saving grace is TA gave me the sell signal early on before the big dive occured. My charts told me to sell off all the drillers when the turnaround from the top occured 1 1/2 months ago and 10 months ago in January when we also had a similar beating. My problem is taking up positions too early (last 1-2 weeks) but have since raised some cash again because I realized my mistake. By backtesting your strategy on the drillers using the past 12 months data, one would have sold too early. Don't redicule the charts, use it as a tool but don't bet your farms on it.

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