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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Dustin who wrote (13371)	7/10/2001 12:18:06 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 18137

Hi Dustin, Re: Portfolio Insurance - A lot of very bright people don't conclude that it was the culprit in 1987. I happen to see it as a mechanism for the herd instinct of the investor class to kick in, creating a panic where none would have otherwise occured. The market was, of course, way too high in the summer of '87. The fact that it deflated over a two day period is simply indicative of how the market was rigged at the time. No curbs, no halts, and everyone trying to get on one side of the trades. Along with a FRB chairman who was asleep at the switch. Barron's at the time reported that the newly installed Allan Greenspan was on a plane to Dallas when the big drop occurred. Upon landing, he asked his banker associate there how the Dow had done for the day. The chap responded "Down Five O' Eight". Greenspan said, "Pretty quiet day." Thinking that the market had moved down 5.08 points. Oops. They pay more attention now. And keep the Plunge Protection Team ready for catastrophe. Re: The relation of trailing stops to portfolio insurance doesn't make much sense to me anyways. To my mind, they are both automatic response mechanisms that can be self-amplifying. -Ray