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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (4330)	11/8/2001 8:23:12 PM
From: ajtj99	Respond to of 99280

NV, look at the SPX chart from October-December 1987. That could give some insight into what to expect in this market. The extreme readings we had on indicators in our Sept. 21 low were very close to the readings in that time (although not quite as extreme). During that time, the SPX rose about 15% by November 7 (coincidently), then gave it all back in a re-test in early December. We had a similar rise (20%) in the SPX this time, with the higher percentage gain due primarily to the addition of some more volatile tech stocks in the index. Like they say, those who do not learn from history are doomed to repeat it. I'm just trying to help you see where some of us are coming from here. All that economic stuff is important, but some fundamental principles of the market (re-tests) may take priority over even the most compelling arguments to the contrary. At the very least a hedge like index puts would keep you from losing all of your hard-earned profits on a possible re-test. The puts are some cheap insurance. If you bought them, you'd join some select company of other pro's who do the same to protect their funds' profits from such occasions. With a hedge, you could lose all of your profits on your long positions, but make it up with your puts. It would more or less guarantee you'd be no worse off than you are today, and at most it might cost you a few percentage points. Good luck.