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

To: Gersh Avery who wrote (20731)	6/19/1998 3:07:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Gersh; I think it's just the angle you look at things, I suppose that for many people spotting a top may be easier than a bottom, but if the change the way the look at things, and start spotting bottoms, I think then they will see, heck this is easier, except the very spike down bottoms, they are fast and don't last long, timing them the very bottom of a spike is more luck than skill, I guess what I'm saying it's easier to be in front of the curve on bottoms, after you get the hang of it. Anticipating the reversal..not that you can hit it right on. BUT this may change if the market goes into an actual longer term bear market. Then tops may be the easier ones to call, even for me. This calling ( timing ) I'm talking about is the short term reversals in a trading range. Trying to call the long term reversals is a good way to get killed..you have to let the market tell you the shorter term trend, then wait to see if it becomes a longer term one. ---------------- Unless your a momentum buyer, ( and they seem to do good too ) but I haven't yet got the hang of it. ---------------- What I really wanted to say with this post. is MSFT BEL & AIG are the 3 stocks holding up the S&P today from a big fall. AND only MSFT and AIG are holding up the OEX from a big fall, the reason is they not only have made nice gains today, but the way the S&P and OEX is weighted those 3 have more effect per pt change than most. I'll carry this two steps more AIG is up 4pts , on 1.02M shares now DIS is down 4-9/16 but they both have about the same weight so AIG almost cancels the DIS loss..as to the index. BUT DIS is down on 4.6M shares..this share volume does not effect the index..but between them tow the one holding the index up is bringing in a lot less money than is being taken out. ---------- Not to mislead you MSFT is up 2-1/2 nad it effects the index over 4 times more that either DIS or AIG..the 2-1/2 move on msft is like a 10pt move on DIS or AIG as to changing the index, also msft is the BIG volume having at this time traded over 15M shares so that is bringing in enough cash that the total cash flow looks about even to slightly negative. ------------------------- One of the things I look for is when the cash flow , vol x price change goes one way , while the index itself goes the other.. and this can and often happens via big price moves in low volume stocks, while the others don't have the big price change but hold the volume and are going the opposite way ..such as DIS and AIG today. ( MSFT is offsetting most of that right now as well as the fact that the majority of the top issues are declining ) ------------------ I don't find time to look at them all, it's just not possible, and I don't have the kind of computing power to keep a running fix on all the issues. So I make shift by looking at the top 50 in the S&P ( which controls 50% of the move ) and skip the 450 Also being the OEX is not just the top 100 of the S&P and has somewhat a different weighting I only scan the top 15 weight wise, as that 15 has more power than the other 85 put together, as to changing the index. It's rough but about the best I can do at this time , and it works or at least gives me a picture I can use that more often than not tells me when the index is lieing. ------------------- Here again I wish to remind any one that does a standard TA on an index how misleading the TA can be if the issues inside are opposed but small volume ones masking the real cash flow. IE you can have an UP day on the chart with heavy volume, but not know that most of that volume was to the down side, and only two or three low volume but big price gainers bumped the index up. ON top of that take CAM today up 12pts , on merger news. well the volume shows over 9M shares ...BUT that 12 pt gain was mostly made on the open with only 1.2 M shares, so you cant do 12pts x 9m to arrive at cash going in or out, as most 8m is just 1/8 th to 1/4 pt up down stuff by scalpers trying to squezz out a small profit. CNBC would have you think the 9M X 12pts and play up the amount of money moved about 8 times more than it did. There are all kinds of tricks and traps you can pick up, or learn to watch out for. When I see something like the MSFT move today , I pop up a daily chart to see what the volume tells me, The Bulls rushed early on with .75 M shares taking her up over 2pts , stop losses kicked in on the bears shortly after and 1.25M shorts covered..most of the rest of the volume has been a fight for position at the top where the shorts that covered will likely try to reshort. That's risky right now, but they may not think so, after all most of the others are falling, yes I think a short on MSFT at the close or close to it might be OK. The bulls likely knew they had those stop loses they could pick off, my guess is over half her rise was short covering. Well I don't short naked , so I'll run and look at the puts to see what kind of price they got on them. Jim