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

To: john722 who wrote (25067)	4/30/2000 3:58:00 PM
From: Rande Is	Read Replies (2) \| Respond to of 57584

reasoning behind your change After undergoing what is easily the biggest stock market crash in the history of tech stocks. . . the stuff we trade. . .yes, my position has changed. When that post was made, I was not expected a dramatically sharp crash like we saw later in April. . . when they go down slowly over time. . . they can drop farther . . .like many did last year. . . however, when they plunge as they did this year, they can quickly rebound. So now we are playing things tighter and shorter term as we wait for clear direction. Ask 10 traders what they think will happen this summer and I'll be you get 10 different answers. Here is an interesting conspiracy theory that popped into my mind over the weekend. For the past 50 years, trading stocks from October to May GREATLY outperformed trading those same stocks from May to October. We have discussed how many REALLY big money trader/investor/hedge fund managers often begin liquidating positions in April when the markets are hot. . . and go with short positions through the summer as they go to their mansions and castles in Tuscany, Monte Carlo, The French Riviera, the Rhine, the Caribbean, etc. . . For 50 years things have basically gone the same. Then it happened. Last October, some expected a decline in October. . .it never came. . .we grew the entire month. . . then as we neared the end of the year. . . EVERYONE expected a selloff into Y2K followed by a sharp surge as 401K & Y2K money found its back into the markets. . . what did we get? Just the opposite! It couldn't have been better orchestrated. . . .if buy/sell timetables were handed out around the street. We surged into Y2K. . .then quickly dumped hard after the first of the year. . . rebounded some in February [known for selloffs]. . .then peaked out in mid-March. . . just in time for one of the best earnings seasons in history!! To which the markets responded by crashing! Hello!?! Are you beginning to see the pattern here? Exactly opposite actions to historical patterns. . . if they were off a bit, it would be easier to conclude that it was a series of random/disconnected acts. But the odds are extraordinary against each one of the historical seasonal market moves of the past 6 months going EXACTLY opposite as expected. . . .implying conspiracy. Could these masters of the markets have done a 180 on us. . .and scheduled 2000 to go exactly opposite as they have done in the past 50 years? Big January [earnings] selloff. . .followed by big surge into a mid-April [earnings] selloff. . .followed by a sharp rebound in late-April. . . . To continue on with that "opposite conspiracy" thinking. . . could we extrapolate the following scenario? [tongue partly in cheek. . . then again. . .look around] . . . continued slow increase in techs through the summer [big players went long through the summer instead of short?]. . .culminating into a big early-October surge [instead of usual selloff]. . .then a late October crash just before elections. . . .that would REALLY throw everyone off. . . .then instead of tech season starting again in November through April.. . . . we sell off right through the winter. Now, I don't necessarily subscribe to such a dramatically opposite conspiracy theory. . . then again. . .look at the last 6 months trading. . . an unbelievable departure from historicals. So how does the prudent investor/trader play? Very close stops. . .very tight limits. . .very open mind. . . throw away the book. . .throw away history. . . forget the traditional indicators. . .ignore the pundits. . .fly-by-the-seat-of-your-pants. . .or develop new indicators to measure this new market. I wish I could give a better answer. . . but anyone who really cares to predict market moves. . .had better be undergoing a massive metamorphosis to adapt to the severe change of climate in the current market. Rande Is