Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (49288)	8/5/1998 8:57:00 AM
From: Patrick Slevin	Respond to of 58727

<Just heard on CNBC that of the 15 x 3% one day drops,I believe since 1987, 14 of them have bounced back. The one that did not bounce back was the one that in the early 90's at the beginning of that bear market. If I misquoted, please correct me> Did not hear it. Did read this from Hank Camp. ~~~~~~~~~~~ (3.) You may not be aware of this, but back in October 1997 when the "crash" occurred (the second worst one-day plunge in market history)...the Dow found itself back in a range level it hadn't been in for five months. Guess what? Yesterday's plunge took the Dow back into levels it hadn't seen within the past five months! (4.) Only seven prior times in trading history have the S&P Futures dropped -30 or more pts. (Would you be surprised to learn that all of those but one have occurred literally within the past twelve months?) (5.) In the ten day trading period prior to October 1997's "crash" day, the market had posted five days with S&P Future drops between -15 and -72 pts.; in the current ten day trading period, five days have seen the S&P Futures drop between -23 and -44 pts. Equivalent "cumulative" Dow drops within the ten day October 1997 period totalled -1273 points; current "cumulative" Dow drops within the past ten days have been an equivalent -1201 points! (6.) Incidentally, yesterday's "official" Dow was posted with a +70, -299, close -299 performance; if correctly correlated with the S&P Futures' movement yesterday it was more "equivalent" to a +63, -352, close -344 day .......... (1.) First of all, after any case in which the S&P Futures have dropped -30 or more pts., (Dow -240 or more), the "next" day (today) has seen 100% post Highs between +7.5 pts., to +11 pts., to +17.75 pts., to +21.50 pts., to +58 pts.!! 83% posted Lows between -1.6 pts., to -6.25 pts.; to -8.75 pts.; to -14.35 pts.; to -30 pts.!! And, all of these provided "high" and "low" precedent ranges occurred on positive closing days!!! The only prior "day after" which has closed negative posted a "high" of +8.5 pts., then sold off to a -7.5 "low" position (an intra-day drop of about 16 pts. from high to low). ** Specifically, what has occurred in all precedents (except one), is that on the "next" day (today), the market intitially fell in the "low" ranges referenced above, then rallied to those referenced highs 83% of the time. Only 17% of precedents (one instance of six within the past year), has seen the market initially run, then sell off (also as referenced above). Thus, if the market initially opens and runs, precedents tell us to be "on guard" for a selloff to occur later in the day. But, in a way, it could be more difficult to gauge if the market initially opens and drops. Why? Because precedents in this truly "rare" situation tell us that the "lowest lows," i.e. -8.75 pts.; -14.35 pts.; and, -30 pts. have all rallied back to major positive closes! ** (2.) Possible "trickiest" precedent? The one that initially ran +8.75 pts., then dropped to a -12 pts. position, then "bounced" all the way back to a "flat" closing position! (Equivalent to a Dow +70, -96, close -0- day!) ~~~~~~~~~~~~~~~~~~ Hope he does not get too hacked off at me. I'm not really supposed to reproduce any of his stuff. Interesting point you make about Acampora (sp?). When Cohen spoke bullishly in Spring of '97 her traders went out and bought 2000, I think it was, OTM OEX puts. The OEX dropped over 45 points within 4 days. This was pre-split. So for all we know, Pru may be getting long; who knows.