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Strategies & Market Trends : Option Trades -- Ignore unavailable to you. Want to Upgrade?

To: zx who wrote (1860)	2/20/2000 7:24:00 AM
From: Don Pueblo	Read Replies (1) \| Respond to of 2341

That is a great post, sir. A good friend of mine pointed it out, and I just read it. A couple of humble suggestions and clarifications, if I may: You use the words "all", "always", and other adjectives to describe your rules. In point of fact, it might be better to use "almost all" an so on, because all rules can be broken. I understand that your purpose for these rules is to give others clues about what is going on, and I applaud that...but to assume that ALL stocks behave this way for these exact reasons EVERY time is not totally accurate. All one must do is find one single example that does not fit the rule and the rule is invalid. Not to be invalidative, because as guidelines, they are very, very useful. Assuming they always happen is not a bad thing, especially for someone who is throwing money at a deal they are not familiar with...but I would prefer to read the rules as completely accurate statements. Nothing personal, you understand. Secondly, you use the word "distribution" to refer to a top, and "accumulation" to refer to a bottom. The first mention I have of these words being used in this context is in an obscure book titled, "How To Make The Stock Market Make Money For You" by Ted Warren. It was originally published by Sherbourne Press in 1966. I found this book in a specialty bookstore in 1987. It was a small printing, and was out of print for many years. I believe that the book has recently been republished by Ken Roberts, the cowboy commodity trader. (I paid 10 bucks each for two first edition first printings of the book, and I see now from a search on the Internet that I have a good investment if I ever want to sell them <G>) Among other extremely interesting ideas and some utterly fascinating anecdotes about how he went from being broke with a third grade education in the middle of the depression to a multi-millionaire (and how he did it) Warren clearly describes the phases the stock goes through...accumulation, markup, distribution, and markdown. He even likens these phases to the seasons of the year, which is a very artistic (and accurate) concept. To understand how really astute the man was, you have to understand that when he started making charts, he did it by hand...there were no charts, and what is now called "Technical Analysis" was pretty much non-existant! He was a real weird dude <G>. Interestingly, the chart patterns he noticed on daily and weekly handmade charts are some of the same patterns that now appear on intraday day trading charts...and his long term chart concepts are still as valid now as when he first noticed them in the 1930s. Other authors, in particular Stan Weinstein, have claimed a copyright on this '4 stage phase' idea, but Warren, as far as I know, is the first person to put it in writing and copyright it. It's a very valid way of observing a stock's movement. "How To Make The Stock Market Make Money For You" by Ted Warren is a good book. It's not chock full of secret tips, but it is worth reading, I guarantee it. The title alone is a great clue about Ted Warren's attitude. Finally, it appears you have the makings of a book there in your post. You should be aware of the Terms of Use regarding your work when it is put up on Silicon Investor. I suggest you read the Terms of Use very carefully, and that you copyright your work clearly when you post it on SI. And thanks again for a great post! I enjoyed reading it. Regards, TLC