I wish, I was good enough to predict a 5%--10% hair cut or similar 5% or 10% move up.. I can predict a 'bhumbo' but not a move up.. gggg
I move in the market with help of my intermediate supports and resistance's, that has perfectly helped me to be in the market has also helped me not to exit a bit early or bit late.
I think two things for trader are important, one a trader has to be open minded and able to move nimbly on two sides of the market secondly the generation of buy should not take ages in a bull trending market. I would make a similar observation in a 'bear market' where one needs to identify that it is really a bear market on macro economic fundamentals after a two quarter of negative growth and than make an appropriate plan to play the bear market where any strengths are sold into..
Classic example of 'bear whipsaw' was the Oct decline preceded by Sept horrific losses in LTCM and bond markets. Once 1310 the 108 week low was tested and bond positions started to unwind the the whole market turned the corner.. My call on 8 th Oct 98 was based on turning of that 'bond trade' when bond sold off big from 136, first we realized earlier than anyone else something is wrong and we highlighted it that's something is not right here' second once the bond broke we knew it markets will move higher and we jumped in.. that is how I went long big time intra-day.
If I am unable to identify my reasoning behind a major turning point! I will consider myself to be a 'poor and a lousy observer' of the market. A prema- bull is a dead bull, if I demand ( which I have always found to be funnily voodooist) reasoning of others bearish stance I need to post my bullish reasoning with all clarity...
In Brazil, it was again the macro economic glaring dis-similarities with ASEA and Russia due to which we went ahead and highlighted the fact that 'we go higher' as Brazil is no Russia. Now compare my long call with others what were they calling for at that point in time? Was it not disaster of highest order in offing, a revisit of Sept lows! How many more times these catastrophes shall be called and found to be nothing but ‘crying wolf. It surprises me that how much more intransigence do these permanent bears require? When the innocent investors get a respite from these cemented minds? Undoubtedly investment sensationalism like CNBC background music makes moves sound even more drastic than they actually are. Many a times triggers are pulled at wrong moment only because CNBC short-termist makes it look all hell is breaking looses, throwing in a ‘Jerry Favors or Accompaora' tops it off and even the resolve a long term investor just drains away. It is this tabloid sensationalism that attracts more attention and more often than not bearish and disaster news are more in currency leaving the investors stuck in inaction or selling at worst possible time…
On Brazil- Higher did we go, and I feel great satisfaction in calls like this, but no one dares ask this question what happened to that Brazil asteroid which would have put skids under this market. Dutifully new disasters will soon be focussed on but the fact remains that ‘biggest disaster' is not knowing your trend lines and MA's like James Strauss has taught us all. Selling at 799 on BKX and buying at resistance of 873 is oft-repeated mistake, it is for this that not only I point out the support but an interim resistance also like 815 and in last move we capitalize on it was 875 area..as the major resistance and 857 the support below which we needed to come out of the BKX trade.. This is the only way I learnt to trade and this is how one can have consistency otherwise waiting for correction is a process that leads to huge errors.. and that has to be avoided.
I will turn any of these calls made on this thread as fluke if I am not able to pin point academic reasoning of turnarounds. The thing that satisfies me more than the right calls is the fact that I develop my case and one needs not to go to far- the day I longed brazil I posted the reasoning through articles of Krugman and others making my observation that bottom is reached. As far as present set of circumstances are concerned new circumstances may lead to new bottoms.
Occasions like this one needs to be very awake and get out of the long self imposed slumber.. if one is unable to catch these trends what good is all that research? The charts miserably fail at the point where we make our killings and this thread is a living example of the fact that we never let opportunity go begging! This is the only way to pick a change in direction of the market. So far within a move a test of 20 days 50 days and even 200 days MA is a norm we have not seen those tests so far and I see no reason that the market may deviate from the norm. The only thing remains is that one needs to identify what will sell and what will be in. For me that test to come true 500 points away on NDX and 600 points away on composite some thing has to give up, I pin that something to be internets. I would certainly concede that whenever we have this prospective test we would also see some weaknesses in my core stocks like CSCO and MSFT's but the proportionate decline will not be the same.
As far as my strategy is concerned I am a strategist with a game plan with a plan to execute for me when I am out of my 'bhumbo phases' I am looking more at intermediate targets.. Supports and resistance's which I follow religiously, I think first I need to get this 1255 support taken out decisively today if that happens I have this 1228 and my strategy between 1255 break and 1228 would be to play a put spread. Otherwise I will continue to expect that 1292 test on the up..
Once 1228 is taken out, nothing happens to this market we go and test 1210 like we use to test 910 in our old days the 'bhumbo 1' phase from 750 to 990-- and the huge support at 845 area, right now I see this 'bhumbo 2' phase with a target of 1350 and with supports at 1192 and 1130 as the support equivalent to the 880's on the previous the 845 equivalent here is the 990-1000 area, during the course of the year that will be seen and tested, the opportunity binge..
We come here in these markets every day to make our trades on the side of the trend, many a 'hero's' have a different agenda that is to shoot out a game plan, 90 out of 100 time that may have no resemblance with reality. However, as SI trades need no margin calls these guys survive if INTC is at 25 or 140$.
It is for this that they are very touchy 'touch me not' kind of guys.. Just throw few of their Oct posts 97 and 98, a year of missed opportunities is the story of their life. Dutifully never failing to miss an opportunity, they set together a 'nice nest' at the confluence of 'bear convoluted sites' turning SI to a bear haven rightly so they rule the bandwidth. ggggggg
You pat my back, I pat yours, is the going word of wisdom never in short supply. Yes I know one of these markets will be down to 108 weeks averages but these guys true to their self, will be shooting in their feet and shorting at 1320. They have never failed to surprise me. But this is a very sensitive subject, unlike dumpster's ritualistic condemnation, no one can ever make a funny remark on these evergreen bears, they descend on you like a vulture. Many a reasonable posters have been forced to leave this SI for simple reason they had the audacity to challenge their 'logic and workings' of the so-called forecasters..
I think it is a strategic error of colossal proportion to be unable to join the market when it rallies so hard, when SOX was trading at 188 level and DDX at 85 and we were longing it big some of these guys were like the pied piper taking the 'kids' to the river of death..
What justification other than 'cowardice' can define one's cemented attitude towards short side.. Look at the 200 days EMA on NDX see the huge gap which needs to fill their and if AMZN YAHOO or internets are not going to fill this gap I assure you MSFT is not the target. Look at my game plan of yesterday I was long on BKX which did touched 802 again but rebounded from that point, however knowing EXCITE has come good I still was looking for a long put trade on internets and that I did, I went against conventional wisdom and got it right..
TXN MSFT INTC NOK.A LU CSCO, you name the stocks we are in, these are the stocks that have led the market so far. We have made multiple entry on these stocks at all levels from low of 60's on NOK.A to high of 127, we made several calls and identified several option strategies to buy out of the money calls. Replacing in the monies with out of the monies and closing the deep in the monies taking money off the table leaving very little on. Leveraged on the call side but with little allocation for market moves up at these levels was the only strategy and it has perfectly worked well.. The only risk for a trader was the last premium paid which can also be recovered if 1192 is taken out on SPH..
For me BKX second close above 815 is good, C will help the market as MER did and I think that DOT needs to break 500 support for NDX to go lower. Initially that may constitute some selling pressure but the distribution is right now happening in front of us and we will see more of it as some one who has bought AMZN at 190 will try to find a buyer at 90.
Right now look at 1255 if that breaks expect a late bounce off 1248 area or we go to 1228- if we don't hold their we go to 1210 and 1192.. On BKX we need to be very sure if 799 is taken out just short the market where ever it is you will see at 772 on BKX market testing 1175 support a shade lower than 1192 but that is what I can see and I will play it according to this strategy..
SOX or PSE are once again in the limelight and as far as they remain above this old high of 401 I will be comfortable with the market.. If it breaks 401 for two consecutive days my strategy would be to get out of my SOX play and reenter at more appropriate levels. 'RUT' and 'Transportation' break of 427 will also be a point of concern for me, these are many of the things amongst others like macro economic numbers I am concentrating on, and most probably like 14100 on JPN coming true we will see out targets being hit on 1292 and 430 on SOX otherwise we have this strategy where we play a different set of game with slight modifications.. In the end I like to say that these ‘Rip van Winkle's' one day may wake from their deep slumber and find that markets are not at 2000 but at 11000 until such time ‘Pied Pipers' the ‘muted souls' of these sleeping ‘Rip van Winkle's' will dutifully lead a lot of investor's to river of death..ggg
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