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To: Nancy who wrote (27909)	11/6/1997 9:24:00 AM
From: Tom Trader	Read Replies (2) \| Respond to of 58727

Hi Nancy re your questions: >>How would your system respond to the big rally Tuesday we had last week after such a sharp sell-off ? just wonder would your system be able to generate signals when market turned around so quick ?<< I got a buy signal that day when the market rallied after the big decline--but based on my system, I am not allowed to take the buy signal because of the sharpness/momentum of the decline. I believe that I posted to Kevin(?) that a buy signal was generated--but that I was not taking it. >>what did the system perform during April's reversal ? In April, the reversal was just about as quick, except the initial sell-off wasn't as sharp<< The buy signal in April was timely--if you look at the charts there was a period of minor consolidation that occurred -- besides the momentum on the downside was not as powerful. Now the rally off the April lows was very strong with a lot of momentum--and so once I exited my long position, I could not take a short position without first going long again and that worked out well. The basic premise behind this is that strong moves in any market/stock don't just turn on a dime--there usually is a period of consolidation before the trend resumes or reverses. It clearly has not happened this time--the stock market did reverse and has not really looked back so far. I have to say, however that I am not impressed with the momentum on the upside--erratic and not what one really sees with sustained moves. Take care

To: Nancy who wrote (27909)	11/6/1997 7:02:00 PM
From: Tom Trader	Respond to of 58727

Nancy--one other thought regarding how my system may have been affected by the decline The day that trading was halted, the range on the S&P futures was impacted--since trading on the futures was also halted. I have never been faced with this situation before -- and the system was never back-tested to allow for this situation. If the market had not been halted and the decline continued or the market partially recovered before the end of the day--the signals for the next day, when I got the buy signal--would have been affected. How all this would ultimately have played out in terms of subsequent signals is a matter of speculation.