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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (12276)	7/17/1998 1:33:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (1) \| Respond to of 42787

dont have a link right now he is suppose to be posting them this weekend on their site not sure if that is the part accessible to the public +IQBAL LATIF (18964 ) From: +IQBAL LATIF Friday, Jul 17 1998 1:28PM ET Reply # of 18979 Trend is my friend-- thumb rule and the only evergreen rule of the market-- a close above 2000 will be a good signal here. A word on MSFT-- 125 calls only for momentum players -a hi risk but possibly good trade.Msft ater dipping to 116 looks like hitting for 128 area- I se some momentum building up- I agree that the multiple is high but in my opinion it goes higher before retreating.Even later entrants may look at SUNW for OCT 60 calls well outside money.

To: Chris who wrote (12276)	7/17/1998 4:09:00 PM
From: Robert Graham	Respond to of 42787

I think that is the open gap strategy that has been published in the Rightline split report. It is a good technique for trading a gap, but has its limitations particularly for use by position traders. IMO it is more of an approach for the day time frame oriented trader. For the trader that is looking for an entry for a several day or longer hold, since stock can a few days later fill the gap, the gap would need to be in some way validated on the daily charts in order to be completely relevant. Do not forget context here: the context of the gap strategy as an intraday approach to enter a stock and the context of your trade which may be performed on an intraday basis or in your case a position trade designed to be of much longer duration. This does not mean that a trade played on an intraday basis cannot be held longer than one day if the stock is performing well and you see evidence of it to continue to perform, but this trade would still be considered an intraday trade with regards to this "context" of time that I am talking about. Each type of context for your trade requires a different criteria that comes from the specific timeframe of interest: intraday or interday. For example, you would not necissarly hold a trade that was designed to be several days in duration just because the MACD or Stoch looked good on an intraday basis, or exit your trade if the opposite were true. You would be interested in what your daily charts had to say and time your entries and exits accordingly. So the gap up strategy would be used as a part of the methodology used by the position trader to fine tune an entry that your daily charts signaled to take that same day and definitely should not be used to tell you whether to enter the trade that day or not. In practice this means that if you find the stock gap up at the open, you want to wait a period of time like 1/2 an hour before entering the trade. In this was you may get a cheaper price for the stock if the stock broke through the gap. This break through the gap should not influence your decision on entering the stock. This was already made by an analysis of the daily charts. This approach of the interday trader is different from the way a day trader may use the gap up strategy. For intraday trading, the gap up indicates strength that the trader is expecting follow through on. If the gap up remains intact after lets say 1/2 hour, then the trader who trades during the day time frame may then make that trade expecting the price to follow through. However, in this time period if the price breaks down through its up gap, this type of trader probably will not enter the trade. You have to be very careful for the above reasons when you make decisions in one time frame and execute them in another. The context of the information provided my the market in one time frame and the trade based on another time frame can be confused to the detriment of the trader's success. This is one way I have seen ambitous interday traders get burned. Trading within the timeframe of the day takes a very different set ot techniques and frame of mind to be successful. Once the interday position trader gets sucked into trading that is in reality trading during the day, then their failure is set up for them to happen. And when it comes down to it anyway, what is that extra 1/4 or even 1/2 of a point that a trader may have saved upon entry with respect to the goals of his (succesful) interday trading strategy? Likely nothing unless the trader is heavily leveraged. I am not invalidating anyone's interest in the gap up on open strategy. I am just suggesting caution here based on my past close scrutiny of traders in the market. Mater of fact, this topic of "context" of time is what Joe DiNapoli in his book refers to as being a significant problem with traders who manage their trade on multiple timeframes. Bob Graham