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

To: P.Prazeres who wrote (20256)	6/13/1998 3:10:00 AM
From: Berney	Respond to of 94695

Paulo, and isn't this the current problem. If you can get about 10% apprciation on the bond and the current interest, why expose one's self to Mr. Market. Berney

To: P.Prazeres who wrote (20256)	6/14/1998 2:08:00 AM
From: James F. Hopkins	Respond to of 94695

Hi Paulo; Thanks for the compliment, not sure I deserve to much credit. I have made my share of mistakes. It's one thing to see what the market is doing , ( and try to grab it's shirt tail ) on the reversals. Executing them looks better on paper than a person can do in reality. Spreads skew faster than you can cock load and pull the trigger. Even if you see the bottom, by the time you can buy it, it's moving up and they done skewed the spread. I know if I do happen to nail the bottom or top, ( it's luck ) and rare and actually happened because my timing was off a little. Generally the top or bottom goes to the Brokerage house, Specialist, or a Market Maker. --------------------- Getting right into it is like getting sea legs, it's more a feel than any set rule, picking up the most recent patterns, and then grabbing the shirt tail of the computer program trading. That pattern can change and you have to be on the look out for it. Many distractions and next thing you know your cold. ----------------------- There are a few things I look for , but how do you explain relative motion when it's not always the same. I like to catch the unusual signs, and they don't always show them selves. The anomaly so to speak, TICK falling fast , but indexes still rising..I love that one when you can catch it heck if your not glued right in it's gone. It's not always there on a reversal, but "if" it is there you can just about count on it 90% of the time. Still from the time you see it till you can pull the trigger via internet trading more often than not you miss the bottom some, and the spreads are already skewed. The specialist see it too and they get first dubs. <G> --------------- What I guess I'm saying is seeing it or calling it are one thing, getting in on it is another, as internet trading is just not all it's cracked up to be. I'm trying to work up a better style, I've got a clear picture of it in my mind , but I don't know how to clearly explain it. It has to do with grouping the stocks ( baskets ) the index funds buy and sell via the computer program trading ( from now on CP Trading ). I already know that the majority are in the OEX, then trying to pinpoint which stocks ( approximately ) are in which basket, ie.. they may sell one basket while buying another. In fact I'm sure they often do this, like they have a basket they can buy at times inside the index that are thinner traded, it's when they do this while selling off the more liquid stocks..that the tick goes nuts, the thinner traded ones being bought can run the index UP, although most of the volume is on the down tick. While I can see that happening I haven't isolated the stocks , and that may not be easy to do. Also these baskets are subject to change fast, the programs they use are out fitted with artificial intelligence that can kick out, or bring a stock into the basket, ( based on volume ) faster than a human can. ---------------------- The Killer Whales in the market is the CP trading. Picture all the index funds , plus the SPY, MDY, and DIA all tracking their index step for step. ( I posted about 10 of the best ones about a week ago ). By that I mean the ones that track the closest. Each of them has expense, and they have cash inflow/outflow.. and yet they have to stay in step. The the cost of trading that is in the spread is not counted as an expense on the books ( but it's there) now figure what they have to do to scalp enough to cover that cost, plus the expense ( salaries and bonuses ) and still stay in step with the index. There is the why of most of the volatility they must have it, and will damm sure make it happen one way or another. <G> ----------------- On a strong week, about 20% of the volume is CP trading..that may not sound like much, but it happens in squirts, like at times 80% the volume can be CP trading, then back off. Those squirts move the market too, and fast. Parlay that with some options, and futures just before the move, and you can see what the little guy like myself is up against in trying to catch a shirt tail. Jim ------------- PS the more recent rise in the amount of index funds, is adding a hidden overhead to the value placed on the stocks that are in the index , and this makes for companies having to show more profits to keep the stocks valued the same. Index funds add up to a over all negative impact on market values that has to made up one way or another. As long as we don't run out of fresh blood she will go up. But it's getting were we need more and more fresh blood for it not to sink under it's operational expense. ------------------ Jim