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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Capitalist who wrote (79572)	7/6/2001 3:18:41 PM
From: eichler	Respond to of 99985

Cap, Know what you mean <"low-volume" days as meaningless> Not so meaningless as accounts and positions get killed just the same - low volume or not! Mid-next week, I think good buying opportunities will be apparent. How the compx closes today will be crucial to determining what kind of Monday is looming... close at the lows will be terrible. Bounce into the close could provide some further lift Monday... 3/4 hour from now we will all know.... Regards, Eichler

To: Capitalist who wrote (79572)	7/6/2001 5:44:58 PM
From: ig	Respond to of 99985

"...if we see a major sell-off, I will look to get into some cheap calls, seeing as we are so close to expiration, you can get a lot of bang for your buck if you play your cards right." I am doing the same, attempting to play the extremes of the swings by picking up cheap puts at the tops and cheap calls at the bottoms. Got into puts on SEBL, VRSN, QLGC, NVDA and some others late last week and on Monday this week, based on what seems to me to be a very obvious and classic pullback to a H&S neckline on the Naz: dtraders.com Also got some decent puts on June 13 when the initial break of the neckline seemed imminent -- but I was three days late on that. Trying to improve my timing on these things! In fact, I may have sold a bit early today, since the chart suggests the Naz will drop to at least 1900 following this test of the neckline. However, since the H&S pattern is a reversal pattern, and since it doesn't really have a lot to "reverse" in this case -- only that little rally off the April 4 low -- I am hedging a bit, settling for most of a 50% retracement of the run from April 4 to May 22. I also eased into some QQQ July 42, 43, and 44 calls -- again, perhaps a bit early, considering the likelihood of a low-fib retrace to 1900 or so, and also considering that Naz 1900 matches up nicely with the classic way of measuring the minimum expected drop associated with a Head-and-Shoulders breakdown, i.e., the distance from the head to the neckline on May 22 was about 250 points; subtract that 250 points from July 2 test of the neckline and you get a minimum target of 1900. But I chickened out. Too much profit for me to put at risk over the weekend. I don't regret having sold, but I may yet regret having started positions on the QQQ July calls -- not so much because of the premium that will be temporarily lost if the Naz hits 1900, but rather because of the dilemma I will face at that price: whether to stop out or to complete my positions by adding! Decisions, decisions! ig dtraders.com