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Strategies & Market Trends : Ultra OTC Fund - UOPIX -- Ignore unavailable to you. Want to Upgrade?

To: budweeder who wrote (636)	9/30/2000 4:16:02 PM
From: bob wallace	Read Replies (1) \| Respond to of 2063

well Bud, let me try to answer that; often I have talked about trading "in the context" of my AIM model [sometimes called the aggressive spreadsheet] so first thing here is that I do not use an actual AIM spreadsheet to trade - I use my model sheet that goes back a couple of years and then follow signals on my acutal UOPIX AIM account based on the % of cash or the % of shares called for by the model for any specific trade as I have said before, this sheet does a tremendous job of buying and selling in an uptrend, but wants to buy way to soon in a downtrend; attempting to cure the latter destroys the former so now when AIM gives me a buy signal, I try to interpret that signal as sort of a box, bounded by the buy price and the % of shares called for in the signal. This is what I call the context. Now what I try to do is buy the same % of shares at a better price than that specified by the AIM signal. For example, in the most recent case, AIM signal called for 30% of cash at $79 and change. For a host of reasons I figured that was too high a price, so I looked for other reasons to buy, namely Meisler and her oscillators. How did I do? well, I got 50% of cash at about $74, so better price but maybe a bit too much of my cash inventory gone. The conflict of last Friday night came about because I got a new signal from AIM to invest 100% of my cash at the $69 closing price. First of all I do still believe the 100% is too high a %, but I was also very much unresloved about taking the buy. One reason to take the buy was to stay in the contexzt of AIM, especially since I did not feel that $69 itself was an unreasonable price. But as stated, I was spooked by the behavior of the head trader at Craemers. I think that finally I felt the opportunity cost [not having a sufficient number of shares to sell into the next rally] was less than the risk [of having another steep down day]. Two things helped me come to this conclusion: one, I still believe the bullish outlook of individuals and advisors to be way to high for a sustained rally, and two, I have faith that my AIM sheet will give me plenty of shares to trade into any sustained rally, although at obviously lower levels of profit. There is one other way I trade "in the context of" my AIM signals. As you know I discussed on this thread various statistics for the probablility of the NDX going up after two days down etc. As you probably also know, Todd pointed that the statistical probabilities were useless and it was just really 50% 50% that the market goes up or down the next day. Well, nevertheless, you can make some very good profits buying after two days down and selling on the next up day. In order to prevent myself from having "losses" I make sure that each trade I do is in the "context" of my AIM signal; namely that the price is lower than that suggest by AIM and that if I have to keep the shares (because the market goes down and not up), that the number of shares is in the ball park of what AIM wants me to buy. I have made some very nice 9% overnite profits on these trades, and the reason that a have more shares at $74 than perhaps I should is because one of three trades went against me - small price to pay for otherwise steady profits which enhance the performance of AIM. So I am sure Bernie will regale me with another mathematical exercise, and you will still tell me that I am trying tio time the market, and all I can say is that I am trying to enhance the returns of AIM. We wont know until the next bull phase starts whether or not I am successful, but as long as prices are staying in these lower levels I am outperforming my regular AIM. the only way I will be outperformed is not to have enough shares when it has become clear that the market has recovered.... Bob