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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (30399)	1/7/2000 10:48:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Street talks positive about.. <<PMCS reit strong buy, we expect company to beat EPS estimates revenue forecast in 2000 and Q should directly refute recent concerns about Y2K inventory hangovers>>

To: IQBAL LATIF who wrote (30399)	1/10/2000 5:16:00 AM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

<DOT 970 is a solid support watch out for entry with a view that from that point we may bounce on NDX that may take out the NDX resistance of 3500.. so for me the positions in NDX has to wait for 3500 but for super aggressive I will look this test of 970-990 area on DOT.. I am in a meeting but I will be highlighting few stocks today that sold a little but have a lot more going for them if we hold this 970-980 area , like ETEK, PMCS and EXDS.. but I will like to move in above 3500 close however DOT 970 is like my call on BKX 770.. I assume that DOT 970-990 should hold.. fwiw>>Message #30399 from IQBAL LATIF at Jan 7 2000 8:18AM Last week we maintained a nice line to see off the wave of selling, from Monday to Friday, we played the down side effectively and highlighted the need of long put options on breaks and equally presented the points when the rally could be played, I did not see that DOT touched any where near that point above but from low of 1024 we saw most of the stocks we highlighted did well, sometime picking a bottom is impossible but PMCS ETEK made good runs, I did highlight PMCS twice in the day for its potential we ended up on that stock 29 point higher. The issue here is about dynamic call procedure in a falling market keeping one's head up and look for opportunity, even if DOT never rebounded the call to move in on break of 3500 did materialize albeit with lesser profit, the issue today is that are we going to see a second close above 350 on NDX. WE expect we should. WE also highlighted during the course of last few sessions the broadness of rally the oversold nature of the market, the reason was that in S&P 500 stocks the 30% tech sector has a P/E of 60% (even reported in WSJ today) and the other 70% sector has a P/E of 25, now we saw that DRG's and other laggards did make some run the issue now is that is this time the shift in the laggards is long term or like previous occasions it may loose steam, the best sign would be continued broad nature of the rally. Last week in one of the sessions I highlighted a strange point that now as NDX corrects I care about NH's and NL's, this is horses of courses strategy, for me if this rally has some legs it needs broader participation as NDX alone is not the focus of this rally, we did see the move more pronounced but the DOW reversal was based on GE Proctor and Gamble type of stocks and biggest move above 50 days on Drug?s where we advocated entry earlier and have now seen some results. Last week I also wrote that when you trade the dips you try to contain damage to your option premiums, people like us who do not trade and buy stocks and work on leverage only by buying options on both sides of hte markets this strategy pay off cannot be more strongly highlighted than last week actions, I was losing on my premiums 6.74$ at its worst case, made 8.9$'s playing this dip on Friday the profits made on dips appeared great as option premium lost made a quite a bit of progress. These markets need to be played if someone is spending time on them by knowing options well, using them in volatile markets is the most effective tool, if your account if 100 $ in trading, you don't need to be exposed the full 100, for me I would look at the most effective way to only use 30$ but have a leverage of 100$, that can be done through long calls options, the 70$ I will keep it in cash in case of entry on a big correction, that is how you keep implied volatility for your account low. These markets will see a lot of volatility and as such one needs to gear up its knowledge on effective use of options in a bull or a fast correcting market, one should not expect to make money by actually buying the stocks that is a strategy where long term come into play and is good for stocks where huge corrections has moved that stock hugely down like LU or BMCS. That is also good for long term core portfolio but here we expect a trading mind on trading in and out this is also a higher risk game, where you need to have experience to play the dips and enter in a correcting market some quick trades which may look good when you are out of the session after five hectic days of the week. Most of the traders like to think that option trading and use of hedge is too technical, if that is the case and you ARE on the threads everyday looking for tips and trying to make some money more often than not you will need those additional skills in these markets, your ability to support your portfolio in a falling market it is as important as your ability to buy a stock. Long term traders survive through two policies either they buy and forget or if they are trading they use options as a core strategy. SPH put options or call options and individual stock long options is the way like PMCS SNE STM AAPL were good opportunities on Friday. I could not have afforded to play them had it not been exclusively my option account. This is the way I have seen that I am never over extended but rather under exposed by industry averages and keeping a high cash balance do take opportunities as they come by, that is the way to play these markets, it is difficult. long term slow learning process, any one who tells you it is easy and nice is a crook, always keep your focus right, keep your exposure correct and keep your cash intact, market opens every day if you loose your cash you are out of it, never ever follow a train that has left you, every year we have always two to three half price sales and try to be a PART OF IT ON THE WAY DOWN AND UP.. This is how I have known these markets.. Many times it is said that I am difficult to understand fwiw the reason is that fluid markets cannot be explained on daily basis with few posts, I wish I could sit down one whole session and go through every move as I see it, however I think money making and living are two important ingredients one needs to have some time to leave the post and enjoy the earnings, therefore for me my strategy is to coordinate whole days action with the starting bell. I do have the luxury of a good broker but to keep yourself too near to the market keeps you entangled in lot of positions which many times after the noise is over you wished would have not been executed. So distance from the trading post is important too, and it is important that major supports and resistances should only be played in the direction of the break. We have seen that last week is a good test of what we profess, 1382 was never tested but it was within plus minus four points. We did rebound, 3685 was major break down and once 1442 was out on SPH we saw 1386 so in between we had these intermediate levels and we kept moving with the breaks up or down. The bottom line we were not caught as the market moved up on Friday in short positions. We kept our levels on well defined long above 1423 short below 1398 that is how we avoid whipsaw that is how despite of owning LU calls I end up making money. Some of my dear friends wanted me to speak on markets and teach them, I was busy with the small home made seminar yesterday but I thought some points I remembered why not share them at large.. Feel free to ask and educate me, if I am wrong, for the sake of orderly markets we owe it to each other.. It i s never about heroics it is all about the best educated way to make the best trade with lowest risk and highest returns, that is why I started this thread and that is the purpose. Learning through trading .. best regards..