Day-Traders Have a Rough Day Watching for Market Bounce
Montvale, New Jersey, March 12 (Bloomberg) -- Andy Tutak
leans toward his computer screen about 12:30 p.m. New York time
and clicks on the Nasdaq Composite Index screen. The graph shows
it's down about 100 points, though beginning to move up.
``It looks like it's bounced off the lows, but we've seen
this kind of false turnaround before,'' says Tutak, 34, who left a
job with a commercial developer a year ago to trade stocks at All-
Tech Direct in Montvale, New Jersey, a nationwide firm that
provides market access to independent investors -- day traders --
like Tutak.
The 30 traders seated in front of computers around the room
study the rapidly moving columns of numbers and trade comments --
``Look at Sun,'' says one; ``Where's Cisco?'' asks another. Then
conversations trail off as they focus on the screens, buying and
selling in a mouse click, trying to profit from the market's shift
in direction. An hour later, it has shifted again, and is headed
to a new low.
By the close, the Nasdaq Composite Index was under 2000 for
the first time in more than two years, dropping 129 points, or 6.3
percent, to 1923.67.
For day traders, the goal is to go home with nothing but
cash. Sun Microsystems Inc. and Cisco Systems Inc. provided plenty
of opportunities for traders with good timing: Sun fell to as low
as $16.50, then rebounded to as high as $18.31 before closing at
$17.06; Cisco, which helped spark today's decline when analysts
revised profit forecasts after the company said it would cut 8,000
jobs amid slowing demand, was as high as $20.13, and as low as
$18.38, before closing at $18.81, down 8.8 percent.
`Sleep at Night'
``If you're day trading, it means you come in, try to
identify the market's momentum, get in, get out and go home and
sleep at night,'' said Harvey Houtkin, 52, All-Tech Direct's
chairman and chief executive officer, who started the company in
1997.
About 7,000 day traders in the U.S. account for as much as 10
percent to 15 percent of the Nasdaq Stock Market volume, a U.S.
Congressional study found.
All-Tech's clients include doctors and dentists, firemen and
cops, the young and the old, said Houtkin. Though the day-trading
phenomenon accompanied the rise of Internet and other computer-
related stocks in 1998 and 1999, a good trader can just as easily
make money in a falling market, Houtkin said. In its classes for
traders, the firm emphasizes: ``Go home flat,'' with no
outstanding positions, said Houtkin.
Hoping for Bargains
``The Nasdaq's at 1900 -- another 19 days like this and we'll
have some real bargains,'' Tutak joked.
Still, even for All-Tech's more-experienced proprietary
traders, who work out of the company's Edgewater, New Jersey,
office, just across the Hudson River from Manhattan, today was
rough.
``Right now, you just have to be patient,'' Maria DePasquale,
38, said. ``A lot of people are looking for the bottom, but there
are some very violent moves to the downside.''
As recently as a few weeks ago, traders might expect a
partial recovery of the markets by the close, said Diego Laserna,
33, another All-Tech trader.
``Now the dead-cat bounce is just dead,'' Laserna said.
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