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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: DlphcOracl who wrote (13540)	10/17/1999 9:42:00 AM
From: Rande Is	Read Replies (2) \| Respond to of 57584

I think we sell-off further on Monday . . though I am more interested to see if the volume is strong or weak. . . if we see panic selling on Monday, then we should see those prices or even lower ones . . .the Tuesday's CPI numbers will be important. . .so I don't expect much rebound on Monday. . However, as you point out. . . certain stocks, not only outpace the market, but are more resilient to taking hits. . . bouncing back long before anyone would expect. . . thus they are the ones to grab on such bottom . . .and especially on panic. .. The general M.O. is that we move in positions. . .by placing say a 1/4 position on a sudden drop downward. . we could add to the position by another 1/4 later, should there be further decline. . .like we are doing with Unisys. . .then when the market appears to have bottomed. . .or a certain amount of relief is seen through the news. . .CPI, etc. . . we can begin take another 1/4 position until we see nothing but blue sky. . .then we take our final positions. By doing this, we greatly reduce the money at risk while things are uncertain, yet assure ourselves of a very low average share price. .. .then once we are safely out of the water, topping off our tanks finalizes our positions. For instance, we take a position at 20 on Monday on WXYZ. . .Greenspan takes another leak on the markets and suddenly we are in free fall. . . . our 20 dollar position has now sold off to 15 . . .we double it, now being 1/2 invested at 17.50 AMS [avg. mean share]. . . the markets turn as the CPI comes in unchanged. . .but over the next week, buying volume strengthens and confidence builds. . .so as our stock slowly rises, we are able to pick some up at 16.50. . . lowering our AMS to 17.16 . . . then we get some good news and the October curse is broken .. . . and we begin to rally. . .which I personally expect to happen EARLIER Than originally predicted. . .perhaps even by mid-week. . .and all looks good as we move into November. . . so we make our final position buy at 18.00, thus raising our AMS to 17 3/8. . . not bad. . . Had we tried to call the bottom with a full position, it is easy to see how the risk would far outweigh the potential reward, since the news was yet to come. . . so the beauty is that when risk is higher, we gambling with a smaller position, and as risk is removed, the position is increased. As for November, I am totally bullish right through the Fed meeting. . .as if it didn't even happen. Like a bull in a China shop. . . .[interesting how that metaphor comes to life, when thinking about the markets]. The one thing I won't do . . .is jump in with full positions and call an absolute bottom. . . the cards are stacked against us in the current market. . .fund manager computer trades will get the lows. . .we are lucky to get within 50 cents of them. .. and spending your time trying, will drive you batty and leads to nothing but frustration. .. so we take what we can get realistically. . . but remember. . .we take our positions with full intention of WINNING. . . so missing an 1/8th here or there is of little concern, when we are looking for 40, 75, 100 and even 300 percent gains by the Spring, in some issues. Last warning. . . October is not the month for selling stock. . . only buying. . . Rande Is