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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (71108)	6/10/2005 9:55:42 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

Sometimes being OUT of the market is the best thing one can do for his or her financial health -g-. This usually applies to trendless markets. Now, I don't think it's the Fed who manipulates the stock market, rather it's someone close to the Fed, the dealers, who are the options sellers. They don't manipulate it, but their computers do - perhaps, without even the intention of doing so. In other words, the character of the market has changed in the past 2 years - everyone is long, and keeps puts as a hedge, which means puts will expire worthless, and longs won't move higher. The market is now driven by derivative market, which is much larger. So, can you call them "derivatives" then? Derivative means a financial instrument with a value derived from the market. But it's the other way now -the value of the market is derived from all derivatives traded. This is not new - it has been happening for a while with credit derivatives. For stocks it's relatively new. Trading Max pain, and things like that may be benefitial in this environment. Also, having a system that detects a break of this environment, which eventually will occur, is useful. That should get you on board for a big move. I think something simple, such as a trend break in bonds or stocks should work. This is what I've seen in stocks, so I'm on full alert for a potential large move. Also, looking at max pain fails should be benefitial, IMHO. We had 4 fails, and 1 win. I think June will also be a win - that's where things are traded now.