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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Leland Charon who wrote (11131)	7/8/1998 1:51:00 PM
From: Tim Luke	Respond to of 120523

yhoo and eggs coming back strong both should be big gapers tomorrow.

To: Leland Charon who wrote (11131)	7/8/1998 2:52:00 PM
From: LastShadow	Respond to of 120523

Playing the Bouncers When stocks climb for several days, as in the case of XCIT, YHOO, and AMZN, etc. on huge volume, there is bound to be a selloff. The reason is simple, traders, like myself, don't want to give up profits when euphoria or the news wears off. Eventually the mm's will want to beg off some of the shorters just as they have been prone to squeeze them lately. They need the float. So a selloff is inevitable. How far it drops, over one or more days, is really a simple exercise in support and resistence lines. The net said to exit them two days ago, but it is not patterened for this tyupe of behavior yuet, so I give it a little leeway on the short side. If I daytrade them, I will enter early and exit late in the day and redo the same as long as the indicators are there. If it gaps, I just use the Gap Strategy or one of my two variants on it - One variant, the Modified Gap is fairly safe to play for intraday trades, and the other for Down Gaps (not sure if I ever posted that one here - may have last year sometime) is not for the novice and you have to have real-time feeds. At any rate, I don't know whether to enter until I see the bid ask spread for about the first 5 minutes after open. I can't use the preopen for this as, that is funds and brokerages and other mm's doing 'tweeners' (between each other - exchanging underwear) and doesn't count. The first few minute gives me the feel for what the end of day and after hour folks placed orders - to sell or buy. The accumul;ation was there on a huge number of trades, so I figured I had until mid morning to go for the bounce. Only this time they were going to bounce off a ceiling or stagger up and down. The first half hour give you the 'bandwidth' - the potential range for profit - you extend the first half hour for an additional one hour on a one minute chart, lining through single trade lows and set a sell stop at some reasonable number - generally a 1/16th or 1/8th below whatever I posted (if I post $66, it actually means 65 7/8 for example - I only mention this shorthand once a year, so take note). The other reason is that a whole lot of people set stops and limits at even numbers or at quarters, so this gives a slight edge - at least in the pecking order of who gets filled first. So the answer is - I didn't know when, just that it would soon. The preopen numbers said it had fallen too far percentage-wise to continue down (if major players drop more than 8% in a sector, there is almost always a bounce like this - that is because lots of people set trailing stops at 8% below close). So I played it. If my stops hadn't been reached, the sell stop I placed 1/4 above my buy price would have prevented disaster. lastshadow