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 : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: MCsweet who wrote (19219)	5/19/2004 12:28:48 AM
From: Steve168	Read Replies (1) \| Respond to of 78485

MC, thank you for the message. The model did alright by giving a "sell-off" signal on 4/23/2004. Since then all indices down around 5-10%. My portfolio was break even. While we are still on the big downtrend, my other short-term timing model (not as accurate as the "market top" model mentioned above and I am still fine-tuning it) indicated the market is accumulating energy for a bounce. and it can happen as early as tomorrow. I have covered most short positions. The “market top” model will measure the strength of the rally, and likely give another sell signal later. There is a small chance that the bounce is very strong and the model gives a “reversal of downtrend” signal, however the model will signal it way before the market reaches new high. The 3-5% sell-off in the week after 4/23 was likely just a warning shot. The real bottom is usually built when “panic selling” occurs. There will likely be a day that DJIA goes down 250 points and NASDAQ goes down 75 points. Good luck in the tough 2004! Steve168

To: MCsweet who wrote (19219)	6/5/2004 3:07:11 PM
From: Steve168	Read Replies (2) \| Respond to of 78485

MCsweet, thank you for the warning on shorting those volatile high-fliers. Although I was lucky to have covered short positions in RIMM and SOHU (see my 5/19 update) for a profit, the powerful bounces after that made me really nervous, I could have been caught and end up with big losses. I will stay away from shorting such "volatile high-fliers". QQQ is a tracking stock of NASDAQ 100, the 100 largest tech stocks with trillion dollars combined market cap. It is much less subject to "short squeeze" and manipulation. IWM (Russell 2000) is another choice but less liquid and hard to borrow shares to short, and SPY (S&P 500) is less correlated with my "tech focus". Since my "Potential Bounce" email/update on 5/19, the NASDAQ went up around 5%, DJIA and SP500 had similar bounces. The big downtrend confirmed (by my model) on 4/23/2004 is still intact. We are approaching another leg of the sell-off, this time likely faster than the 10% NASDAQ drop during 4/23-5/13 and end with "Panic Selling". I have entered several hundred contacts of QQQ June 38 puts at $1.5-1.7 on Friday 6/4/2004, and shorted QQQ around $36.35-36.6. I will buy more when the model gives the "Confirmation signal", probably next week. As always I will email "the signal" to my mailing list first, and post it here several days later. Good Luck to all.