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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Voltaire who wrote (10386)	10/30/2000 8:27:59 PM
From: RocketMan	Respond to of 65232

Damn! Damn Yankees! Should've had faith, V, would've made bucks on dem dam yankees. Once more, you da man! LOL

To: Voltaire who wrote (10386)	10/30/2000 8:31:57 PM
From: Jill	Read Replies (1) \| Respond to of 65232

Re-reading Elder just now, I do like that book. I believe lurqer recommended it a while back. "Few traders act as purely rational human beings. There is a great deal of emotional activity in the markets...the waves of fear and greed sweep up bulls and bears. Markets rise because of greed among buyers and fear among short sellers. Bulls normally like to buy on the cheap. When they turn very bullish, they become more concerned with not missing the rally than with getting a cheap price. Short sellers feel trapped by rising markets, as their profits melt and turn into losses. WHen short sellers rush to cover, a rally becomes nearly vertical. Fear is a stronger emotion than greed, and rallies driven by short covering are epsecially sharp. Markets fall because of greed among bears and fear among bulls. Normally bears prefer to sell short on rallies, but if they expect to make a lot of money on a decline, they don't mind shorting on the way down. Fearful buyers agree to buy only below the market. As long as short sellers are willing to meet those demands and sell at a bid, the decline continues. As bulls' profits melt and turn into losses, they panic and sell at almost any price. They are so eager to get out that they hit the bids under the market. Markets can fall very fast when hit by panic selling." I guess we could replace "markets" with "sectors" as of late. "Winners feel rewarded when price moves in their favor, and losers feel punished when price moves against them. WHen the trend is up, bulls feel rewarded by a bountiful parent. The longer an uptrend lasts, the more confident they feel. When bulls make money, the add to long positions and new bulls enter the market. Bears feel they are being punished by selling short. Many of them cover shorts, go long, and join the bulls...Eventually a price shock occurs--a major sale hits the market, and there are not enough buyers to absorb it. The uptrend takes a dive. Bulls feel mistreated, but bears feel encouraged." Etc etc. Of course, this section is my favorite part of the book. I glaze over a bit on the t.a. but I am assiduously studying all that bit by bit these days