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Strategies & Market Trends : TA setups-ex th traders -- Ignore unavailable to you. Want to Upgrade?

To: cthruu who wrote (2847)	8/4/2004 8:55:03 AM
From: Ron	Respond to of 7682

No way I would buy right now. At least not until we get back up into that channel on HIGHER volume. Day trading only here at present. At least there is plenty of volatility in some sectors.

To: cthruu who wrote (2847)	8/4/2004 9:21:47 AM
From: Dave Shares	Read Replies (3) \| Respond to of 7682

Point and Figure Everyone uses the tools that work for them. I have studied Point and Figure for 4 years. Sometimes it works, sometimes it doesn't. The most important thing that those who are knowledgeable about Point and Figure say (and by the way, much of what the Threshhold site has written regarding Point and Figure has been copied word for word from one of the most respected of Point and Figure technicians, Tom Dorsey, so Youmast isn't the only one whose material has been stolen for profit) is "DON'T ANTICIPATE". Simply put, even if a sector is "washed out" or "overbought", one needs to wait for the reversal to take action. The reversal (in Point and Figure terms) is where demand takes over from supply (reversal of downtrend) or supply takes over from demand (reversal of uptrend). Point and Figure reversals do not match chart trend reversals; Point and Figure measures supply and demand, charts measure price and volume, these are not always the same, but used together can be helpful. What I have found over the years is that when a Point and Figure reversal occurs, usually there has been a significant price move already, so in one sense, it is a "lagging" indicator - for the shortest term, but it signals a more than short term change that should be noticed. Most good technicians, including the ones on this thread always look for the first pullback after the downtrend reversal or the first rally after the uptrend reversal to take positions as the best risk/reward scenarios. I would offer that the same works well with Point and Figure, after demand takes control, wait for the first pullback, or when supply takes control, wait for the first rally. Occasionally, these opportunities don't happen, but I have observed that more often than not, the opportunity will take place. My main point is this - SMH is in a "washed out sector", but the point and figure experts would not be buying here, they'd be watching for demand to take back over control (a 6% shift in the percentage of semiconductor stocks moving to new buy signals) and then act, and would focus on the strongest stocks in that group, on the old theory that the stocks that weather a downtrend best often lead new uptrends. Point and Figure experts also look at the overall market direction (which is negative in Point and Figure terms right now). Not that everyone will agree, but Dorsey has written (and he was probably not the first) that stock selection is 50% or so market driven, 25% or so sector driven, and only 25% or so is determined by the individual issue. So one must decide whether to take positions that are against the overall market and sector trends. Of course, one can always gamble on buying a holder like SMH on the principal that it can't go lower, but that is more like gambling than a true evaluation of risk and reward. Although in the case of a holder, one is unlikely to take a HUGE hit in one day because it is a market basket. Just some observations to share with you all.

To: cthruu who wrote (2847)	8/4/2004 1:16:14 PM
From: youmast	Read Replies (1) \| Respond to of 7682

RE:There has been a high volume sell off, followed by a puny bounce on low volume...... you did correct analysis on SMH, bro... but high volume sell off on any ETF is not always a bad sign. This stuff sometime could be a hedging game of our "big brothers"... just my 1.5 cents here. i'm not bearish at this point and nothing turns me bullish either. typical churning level right now, I guess... look on $TICK (or ARMS... whatever...) it is in almost single digits right now... 21, 64, 55, -16, ... ... This is no directional market.... at list for the last few hours. Do you remember Cuba Gooding and Tom Cruse? "Show me the money!!!" :)))