To: RGinPG who wrote (22884 ) 5/27/1998 11:53:00 AM From: Timelord Respond to
Ron: As Thean pointed out long ago, TA and FA have their place and are powerful tools for determining entry and exit points when a market is trading in an established cycle. Part of using these tools successfully is recognizing when these cycles are broken, and the rules need to be modified. When are in one such cycle. We are no longer trading the long term fundamentals of the oil industry, the growth rate of the drillers, the shortage of rigs, or any of the other hundred reasons why this sector is the place to be. We are now trading commodity futures, with all of their inherent risks. Oil prices go down, the sector goes down. Oil prices go up, the sector goes up. Its very simple. No logic, no FA, no long term sector health. If you don't mind seeing your investment wacked by 25-30%, then by all means hold and don't watch daily prices. Some day the stochastics indicators will become relevant again, and you can trade in and out of this sector and make money. We aren't there yet, and I'm not inclined to risk my capital to try and catch falling knives. Already did that...iepstein.com
