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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (30945)	5/23/2003 10:56:28 AM
From: ezspkns	Read Replies (1) \| Respond to of 36161

Iso, There is an outside factor which needs to be considered, unrelated to sector issues. I know this is not your style, but I'm addressing it to you because it may be making more investors (of your style) of us all. The feds have been putting the brakes on active trading. This is not a recent development, but its getting implemented more strictly. One of my accounts is a cash account, and its recently on a settlement (3days) +1 basis - essentially meaning 1 trade per week. With settled securities, I can sell and buy, but if I sell again, I must wait 4 days from the first flip. Margin accounts are not as restricted, but still limited. Now my "style" has been to focus on one or two movers, and trade them aggressively in a certain manner. It works well, PROVIDED I can make the trade. At this point, I'm not sure what the new rules mean for me. It may not be worth the effort to continue the short-term work with the limited trading ability. I'm sure exactly the outcome desired by those in and regulating the industry. I can see several effects of all this. First, it may make a considerable amount of hot money into investment money. (If I'm looking for an aggressive investment - suddenly your EENC - or whatever - gets some funds.) I think this is EXACTLY the factor accounting for the current market action, and as I said, exactly the outcome desired. It may well account for a portion of the reduced volatility. Second, it will clearly put a certain 4-5 day input into the TA. I would also speculate it starts to screw up a lot of short term TA. Third, I would think it puts the broker - dealers - market makers in a huge competitive advantage, with the ability to take momentum moves and shake and jam with some level of knowledge and understanding of fund lock status, and not the same rules. Fourth, Im not sure I'd want to be holding any discount broker here. I don't know how much this have been discussed in the past here or elsewhere, but its a relevant issue, IMVHO. Sorry that its a general topic - but SDII has been known to accomodate some such topics from time to time. EZ