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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Dr. Edwards who wrote (253)	2/23/1997 4:58:00 PM
From: Herman J. Matos	of 14162

Dr. Edwards, Market Makers (MM) are there to help you part with your hard earned money! I read a book entitled, "Inside the Day-Trading Game," by George Angell who is a well known futures/options trader in the BIG BOYS ARENA! He starts by defining PARADOX: an apparent contradiction which is nevertheless somehow true. He stresses to remember this definition as you begin a study of the market. "For the false move, the misleading, seemingly random events that herald a genuine trend are many and often confusing." The Wisdom of the Paradoxical Event: According to the writing of George Douglas Taylor, the well-know author of the "Book Method," he maintains that the market was "engineered" from within; specifically, that the real powers of the market (the MMs) created selling in a typical market campaign in order to purchase for their own accounts at favorable prices. Everyone should be familar with the three day cycle. That is, the market goes down for three days straight and then reverses direction. The market is "taken higher" in order to create a selling opportunity for the knowledgeable insiders. We saw that happen this week with our ROSS STORES when it jumped up 2 1/2 points in one day after falling the previous three days. Given the market patterns in recent month and years, the "engineering" appears more evident today than ever. Understanding the Logic Behind the Paradoxical Event: George Angell writes, ".... remember to "suspend disbelief" at some of the market events we encounter. The reason? The most obvious signals are often wrong - and vice versa. And remember that this is a good argument why you should never trade because you "need" the money. The market, in general, rewards those who don't need the money. This is why you can't win with "scared" money." Learning to read the MM patterns is value knowledge useful and needed to routinely outwit your covered call buyers! Let the fear work on your side!

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