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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (5537)	11/21/1999 11:12:00 AM
From: E. Davies	Read Replies (1) \| Respond to of 18137

I have a different view on what you stated in your earlier post about trend lines and buying when panic sets in on price action. I'm not sure anymore how that conversation got into a daytrading thread but you should understand that I was discussing position trading (timeframes of weeks or months) at the time. Things like trendlines and waiting for "panics" have much greater significance in longer term trading than they do for the short term. For me "letting winners ride" on a longer term trade (again I am talking weeks here) is a tricky task, since pullbacks of 20% or more are often normal. In addition when the momentum ends on a stock it can happen in a very short period, often losing 1/2 of your gain of a 2 week hold in less than an hour. Do you have a sense of what kind of price action determines a medium term top? I've seen so many ideas, yet have come to conclude that prices inherently form patterns so as to maximize the likelyhood that they might go in either direction at any instant. This is one of the reasons I have shifted to shorter and shorter term trading, its far more predictable. An interesting note on "irrational exhuberance". Are you aware that the Nasdaq composite has moved more in the last three weeks than it did in the period of Jan1-Oct31? This has me very unnerved. The index is now almost 12% above its 50d EMA. I have scanned back to 1992 and only found one peak higher than that- most are around 7%. The one time was January of this year (14% over). A 10% correction over 3 weeks immediately followed. What good news is driving this market so fast? Rising rates? Oil prices breaking up out of its range? Ok but not stellar earnings? Y2K? I'm more in cash than I have ever been in my lifetime. Daytrading seems just the right place to be right now. Eric BTW: my answer to the above question is Y2K. The market is roaring in anticipation of the rally that will occur when Y2K is found to be no big deal. What happens in January then? Another rally? What if there are enough Y2K problems that it looks like it will start to impact the economy? Excuse the random musings. I just needed someplace to write it down.