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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Eleder2020 who wrote (13815)	1/22/1998 6:11:00 PM
From: Alan Aronoff	Read Replies (2) \| Respond to of 29386

Ed, I haven't actively relied on TA in the past but it has been growing on me. It appears to be the only way to combat those who are able to trade on inside info. This becomes especially important with micro cap, illiquid stocks like ANCR which can be moved on little volume. A case in point comes from Victor Niederhoffer. In his autobiography, "The Education of a Speculator" which I am in the middle of reading (I highly recommend it) he writes... <<On Thursday, February 10,1983, I had a nice short position in gold, which had been in a bearish trend for several years. And, like magic, it had been going down an average of $3 an ounce from close on Friday to open on Monday for the previous three years. I was sitting pretty. Nothing could go wrong. I shorted heavily at noon that day and smugly began to count my profits. Then, out the clear blue, from 2 P.M to 3 P.M gold jumped $7. No reason for the rise, just technical buying by the funds, we were told. But that weekend, around 4 A.M on Sunday, U.S. Navy fighter planes shot down a Libyan jet flying over the Mediterranean. This caused tremendous tension, always good in those days for at least a good run in gold. After all, nuclear war in the Mideast was now possible. This was just bad luck. No one could have known on Friday that the United States was going to down a Libyan jet 36 hours later. This was some consolation-- until I discovered later that the United States had been buzzing over that area of the Mediterranean for several weeks. Apparently, the Pentagon had put out the word that an incident should be precipitated in order to show the Mideast powers who was boss. Somehow, the U.S gold market, in its wisdom, had anticipated the move. The lesson: Information that seems to be completely fresh is often as smelly as dead fish .>> I have made the simple 50 DMA (one of the most widely followed indicators) a fresh fish sensor for my buying and selling. ANCR broke above the 50 DMA in early May and stayed above until Oct 1. On Oct 1, ANCR opened at its 50 DMA at the time (10 5/8) but closed down 5/8. The following day ANCR did not trade above its previous close, starting a downward trend leading to the earnings report on October 30. The earnings report and the conference call's forward looking guidance were the dead fish. Looking back at events surrounding Oct 1, there are a couple of obvious ones which undoubtedly were the source of the fresh fish. September 30, the close of the quarter followed by the meeting of ANCR's execs with Kinnard. The fresh fish is served to the "insiders" who subsequently started to sell/short. Since most of us were not invited to the dinner, the only way to get a feel on the quality of the food would have been to monitor ANCR TA. Perhaps a new, much tastier fish is ready to be fried????