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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Kevin who wrote (30265)	12/4/1997 1:07:00 PM
From: Patrick Slevin	Respond to of 58727

I know I was not very clear ... I believe you misconstrued some of what I said... I may not finish this right now...I may have to rush someone over to a hospital in Belleville then go the other way over to Seton Hall, So if I stop somewhere I'll get back later. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ head fake. It's not necessarily a head fake and it certainly is very real.<<< Maybe I didn't understand your comments that I read yesterday: For example, if we presume that the SP7Z S1 point was valid at 970.90, we can see that at 11:48 EST that point was pierced. At 11:54....6 minutes elapsed time....SP7Z bounced off 967.70 just above S2. Someone unaware of the likely logic behind this move would perhaps be tempted to bail out of a long position....which of course is the reason why the move was so abrupt in the first place, to stop out the longs rapidly. Correct me if I'm wrong, but you just described a head fake didn't you? Market gets pulled down to scare out people with long positions...people who do not realize the 'overall plan' to shake them out. So you're suggesting that a person should hold their longs in this situation. Right? I think you asked me if a sell program kicks in, do I think it's a head fake and should one hold a long position What I say is, it's real because it's a sell program. It's not necessarily a head fake because more programs could be triggered. Usually they do not because what you refer to as FV adjusts. When I refer to the 'overall' plan, it's not an organized plan. It's just natural market movement. The sharp selloff is enough to grab anyone's attention and instead of reacting to it I try to understand what caused it and factor that into a trading decision. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ >>>lisa tells me you have a mechanical method that works well for you to day or position trade OEX. Personally I cannot do that. Without checking, I'm going to guess you have bad trades on inside days. Because inside days eat premium. When you have a trending day you certainly make out well if you are on the right side.<<< Inside days eating premuim has nothing to do with the success rate of a mechanical system. Inside days eating premium is a downside to trading OEX options (long). I think instead of discounting the value of a mechanical system, you are discounting the value of trading OEX options. Don't you go long index puts and calls? Sounds like you should consider the SPY and / or the SPZ7 as alternatives as well. I'm not trying to put down a mechanical system, I just don't use them. In this case, what I tried to refer to was that a mechanical system, on an inside day, will probably provide too many turn points to be profitable. If I'm wrong, okay. That's what my thoughts on it are. I have a futures account at Waldock and more often than not I only trade OEX if I think I may hold overnight or whatever...once in awhile I just put on OEX spreads to capture premium...once in awhile I just elect to trade the options instead of futures, possibly because I may already have a position in the futures. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ >>>For me, anyway, developing a sense for intraday trend and why it is or is not an aberration in the sense of running stops as opposed to a true turn precludes predetermined mechanically generated exits<<< So what you're saying is that you trust your heart and instinct to tell you when to sell, and feel that is better than seeing a signal generated? No. I use, among other things, techniques of program trading taught to me by a trader in Palm Beach. In conjunction with that I look at ADX, pivots, cycle theory, and various other things....much of which i pick up in e-mail from other traders. My primary methodology is program trading however. Sensing where the turn may be, or if I'm on the wrong side, is an art not a science however. So if you prefer to think of that as an emotional issue then I understand why you would not believe it is viable. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ >>>I cannot explain how to watch certain things like PREM. It requires practice. I was taught by someone who can backtest PREM moves all the way back into the '80s. On balance it does provide clues but no computer (yet made) is going to tell me to sell here or buy there.<<< I know how to watch PREM (I call it Fair Value) and am surprised that you constantly refer to it since you do not trust mechancial systems. I assume you realize that buy and sell programs that are triggered because of the PREM are mechanical system (which I discussed yesterday in a post sent to Esteban but addressed to you as well). If it wasn't for the mechanical systems which use the PREM, the PREM would be worthless. What you call the fair value I call the PREM for 2 reasons. First, that is the symbol, on my machine anyway, for the spread. Second, I use another number for FV. Today I have FV at $1.92, for example. Watching it and generating generating sell programs off it are different. I watch television but once it's on there is nothing mechanical about it. It's mechanical in the sense that it charts on my screen. It's mechanical in the sense it generates programs. But it's art (emotion?) in the sense that I watch it to sense intraday trend. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ >>>Agree or don't agree, I do not dispute how you or others may see it that's just the way I trade it, For Whatever It May Be Worth to anyone.<<< I don't want you to feel that I'm disagreeing with you, but rather questioning some of your comments. I look forward to your response because you have eft me a little confused. I did not mean to infer that I thought you disagreed with me, I just take it for granted that no one will completely agree with everything another trader says or does. I was sure you or anyone else would have an opposing opinion to one or more items I spoke of. That's what makes it all theory and not "quantifiable". The only way it could be quantified is with results. Incidentally, that Palm Beach trader told me on July 20th that the market would sell off on Oct. 27th. I believe I posted it the next day on another thread. I have an idea how he did it....I think it was swing theory or cycle theory, I don't recall. But it sure was quantifiable. I went with OEX puts the prior Wednesday then more on Friday. Anyway, that's just a sidebar. I could not post trades as you do...particularly with futures. The market gets so volitile I would be concerned. Someone once asked me where I was in a trade and I think I said I was short. He went short later after I exited....I did not know at the time....and got crushed. So I don't often post my trades.