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.

Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: bull_derrick who wrote (22654)	1/4/2005 1:43:15 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

BD, This could be the secular top for the homeboys. They are at the least overextended on many timeframes, and indications are for a retrace in the short term. Good luck. It looks like a pullback to the 20 and maybe the 50 ma is in order, and that could begin the cascade. Kb

To: bull_derrick who wrote (22654)	1/19/2005 12:37:16 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

TOL put strategy: BD, It's sometimes good to revisit ideas floated in the weeks past. You had the reasonable idea of playing what looked, on Jan 4, like a topping pattern in TOL. Well, it turns out, at least as of now, to be a TOHOE, a triumph of hope over experience. If we look at it, we can also see why "reasonable ideas" should have little place in our trading philosophy. TOL now sits about $10 higher than it did on 1/4, while the general markets have been soft and sliding. Where will it go from here? Probability favors higher prices, not lower. So, what can we learn from this? First, never anticipate a top (or a bottom). Stocks trading above the 20 and 50 day moving averages are rising stocks, upward trending stocks by definition. Tops generally take some time to form and form first by testing and then breaking down through those ma lines. Here, the stock had barely come down into its normal Bollinger Band range after an extended run above the BBs to a new all time high. It is so tempting to go for quick profits by declaring, "That stock has gone high enough, it must come down." What sweeter and more seductive story is there than, "This stock has been cut in half; it's an incredible buy here." Unfortunately, the Market does not listen to sounds like that. In fact, it loves sounds like that, that's the sound of easy money. The difference between a stock which should be bought on dips back to the bottom BB, or the 20 dma, like TOL and shortable stocks is pretty easy to see, once you know what to look for. Here's an upward trending stock, a stock which should be bought on retracements to support: stockcharts.com[h,a]daclyiay[pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G Here's a shortable stock, one which should be shorted (puts bought) on retracements to resistance: stockcharts.com[h,a]daclyiay[pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G (My antennae go up anytime any discussion of any stock contains the phrase, "A friend of mine works . . . and reports that . . ." This to me is the beginning of storytelling and myth making. How many friends and smart people reported on this great new company, Enron, which was creating whole new markets, or declaring that you had to be long gold last Thanksgiving?) If we don't learn these things the first or second times we get a chance, guess what? We get to learn them all over again. The Market is the most patient of all teachers. Kb