Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : gem-x's incredibly accurate Elliott Wave forecasts. -- Ignore unavailable to you. Want to Upgrade?

To: pvz who wrote (707)	8/19/2001 1:02:19 PM
From: mishedlo	Read Replies (1) \| Respond to of 2290

Put-call ratio Friday’s high put-call ratio is significant too. I have heard some say it should be discounted because of double-witching, but if other option expiries don’t result in extreme p-c readings, it shouldn’t be discounted too much either. IMO, it is still an abnormally high reading which will definitely result in a rally sometime very soon. It could rise some more before reverting to the mean, especially because the vix, while higher than it has been lately, is nowhere near an extreme. One must look at P/C ration in a couple different ways IMHO. 1) How far from options expiry are we 2) How much delta hedging got us to where we are now 3) Who is the owner of the Puts 1) is easy enough - One month away. Plenty of time to keep dropping for a bit 2) Intense and MMs may try to cover lower - kicker is FOMC and its reaction which is unknown 3) While P/C ratio seems very high (and it is), J6P has been buying calls while the COTs (commercial traders have been taking the other side of that bet in a huge way). If J6P starts buying puts we are headed up in a hurry, otherwise we could continue to drop or just go sideways. We are not quite ready for a moonlaunch here. VXN VIX etc still are on the complacent side. Novemeber most likely time after Sept/Oct tax selling. Now that I think about that, perhaps they do their tax selling early this year (Sept rather than Oct). That would sure fake the most people out. Everyone seems to be expecting a Greenspan rally here. I am not betting against it, but I sure am not betting strongly on it. If we rally and lots of calls are bought, we are going down and down hard later IMHO. M

To: pvz who wrote (707)	8/19/2001 2:01:00 PM
From: eichler	Respond to of 2290

Hi pvw, Yes, I know I'm a prolific poster, but honestly, I do get alot of encouragement feedback including PM's so that's part of the problem...ggg. I do absorb a great deal of thinking material from the number of great threads on S.I. and also enjoy weaving together the variety of ideas from the many intelligent and unique thinking individuals. Sometimes I wonder if I am just doing too much and I certainly think your idea of having a computer grafted onto my hip makes a great deal of sense...hehehe You are correct, last week from the previous Fri's doji I was thinking that up was the next move in store and I was thinking more than two days... after the turn back down, I did mention that no-one should allow profits on longs to evaporate from the (too brief) upleg. This last Fri, I bought into the Q's in the low 38's while considering the look of the daily compx and lower trend support line. I figure with all the compx watching I do, it's about time I start playing the Q's. I'm following my own advice and will be exercising a 7% stop loss should that level get touched. If we gap down Monday, I will stop out if we gap that 7%; if we gap less than 7%, I'll consider that the gap could get filled and watch carefully the action develop. If we move upwards Monday, I'll certainly be breathing much easier...ggg I too am fearful of a potentially bad Mon, Tues though with the Fed watch on alert...not so sure the market should be driven downwards in front of the potential rate cut. Personally, I'm thinking Uncle Greenie has to be aware by now that his now famous (infamous?) "irrational exuberance" tightening was a huge mistake (though of course never to be admitted). The extreme Y2K money supply pumping before the 1999 year end is what fueled the blowoff Nasdaq top. All that money needed a home and the Nasdaq breakout was the most profitable option available at the time. The "over-heated" economy was not something I perceived; I felt that the U.S. was just doing "OK" when AG tightened the lid on that and IMO sent us into the tailspin where we are right now. I often wonder in light of the vast "wealth-effect" stolen from the investing public whether this was a manipulated conspiracy or just a confirmation of aging senility by the man in charge. From what I now know, blow-off tops in any market are always met with the inevitable bust which follows boom, but the boom was manufactured by irrational fears of Y2K and the money pumping which got socked into the market. If the market had been allowed to evolve naturally in it's multi-year bull, I'm not so sure it would have blown off and then inevitably blown apart. In any case, my prevailing feeling at this point is that what should have been allowed to evolve in a slow and methodical fashion was messed with first with unnecessary stimulation and then in an attempt to reign in the "unanticipated" (sheesh) effects, messed with again with the just-what-business-didn't-need interest rate hikes. Two wrongs that did not right anything and has now set us back to the dismal place we are now. The upshot of this is that the market ship has been sinking. Investor confidence has been shattered. Now the Fed is stuck in the unenvious role of doing all that it can to keep the ship afloat. Will we follow the way of Japan and find that even zero interest will fail to re-vive the sick patient? Once the snowball and vicious circle of sinking profits, employment layoffs, declining share prices, declining purchasing and investment dollars has starting rolling round and round, how does one stop the avalanche before it just crashes at the bottom of the mountain and the rebuilding phase must begin anew? As it is in nature, the building up process is painfully slow, the destruction which can occur at any time by stupidity and foolishness goes comparatively fast. One thoughtlessly thrown match can end the life of a very, very old forest. In any case, I do believe we are nearing the end of the worst. I think it's possible (not probable) that the 4/4 low was it and the re-building is under way. I also think it is possible that the end is not yet here and that the "capitulation" panic selling yet being awaited by many may yet be in front of us. It is not my goal really to decide which of these opposite views is correct but to follow along with the ebb and flow of the market and take my shots as best I can when I see them. The correct view will incidentally be seen in the rear view mirror. Anyway, my purpose in re-hashing this is simply to point out that there are great and powerful cause and effect forces at work which are too hard to correctly evaluate and predict their full effect. The only way I know to reasonably manage one's exposure to the out of control stock market is to follow along day by day and and not allow getting taken to the cleaners. No matter what happens, there will be opportunities to make money, up or down (as always anyway). Follow the charts, make oneself aware of potential possibilities, wait for and take the best shots at profit as humanly possible. I agree with the observations in your post and appreciate your setting them out there for others to consider. Monday is I think a "cross roads" day, when perhaps our worst fears will be realized or our hopeful anticipations supported. Either way, strict risk management rules and conservative trading (waiting for the better opportunities) should ensure our survival in this most difficult multi-dimensional game of chess called the stock market. Best of luck to us all! Regards, Eichler

To: pvz who wrote (707)	8/20/2001 11:08:37 AM
From: iowamann, Spam Queen	Read Replies (2) \| Respond to of 2290

PVZ, not important, but my position has basically been for the last couple of weeks sideways with a downward bias. I did bobble a little and said that oversold conditions can't be discounted, but also wondered what might act as a catalyst to move the market up and didn't see any. I did go long last Friday. I don't think the FOMC will significantly impact the market, unless they did nothing at all and stated they saw recovery and no reason to lower rates, which might actually spark a rally.