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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Tom Trader who wrote (2807)	8/31/1998 6:51:00 AM
From: Arik T.G.	Respond to of 44573

Tom, >>some time last year when you thought that we were about to commence a significant decline that got aborted, you changed your forecast to a major rally into mid 98 and thereafter a significant decline would commence. Just yesterday I reread my early postings from Jul-Aug '97, including the exchange we had last year. As early as 7/14/97 I explored the (then) remote possibility that the Dow would reach 9200 early spring `98 to crash from there. Message 1757221 Message 1878540 Message 1894223 And after the market bounced from the 200 DMA I adopted it as my main scenario. I am quite good at calling the big moves (it's part of my job), but as I mentioned numerous times before, the flaws in my character - lack of discipline and consistency, and overzelousness - prevent me from making money on my calls most of the time. >>for the first time since we began chatting we are in closer agreement regarding the outlook for the market than we have ever been. That helps. Although you're a trader, I value your read of the general trend- You are impartial, you made some very good and observant calls, and when we differed, you were right more often then me. In July of last year your read of the market was better then mine- you said that the market is overextended but called for a 10-15% decline, and were correct. >>My gut feeling is that you are right--now we may differ on how bad it is going to get and how low we are going to go before it is over--but that is not important. I think I trust your gut feeling more then you do. As to the importance of how bad it's gonna be, I believe it is very relevant to 1. How deep OOM puts should I hold. 2. Stretching the profit taking feature in your trading. >>for the most part I have not been short this market through these several years. When I have felt uncomfortable with the market, I have gone into cash or the safety of Treasury bills. And that was wise, because the long term trend was always up. >>I will add to the short positions, if the market after rallying breaks below the lows that it establishes before the rally commences. Good play. Don't be intimidated to short if that day is a very strong down day (-3%), more could follow in succession. >>The conventional wisdom is that we will rally next week--and given the oversold market, that would seem reasonable. In fact, I would not be surprised if we saw a major rally in view of the extreme bearish sentiment readings and the oversold nature of the market. 1. I believe that Monday and maybe Tuesday morning will be up. 2. I think this rally would take us to either 1045 or 1055. 3. I plan to start accumulating a large position in OOM Sep puts Mon pm and continue on Tue and Wed if they confirm my read. 4. IMO the market would drop between 12-35% from this Tue to next Tue. Yes. no tipo. 12-35% drop in five trading days starting tomorrow. >>The one thing that you could help me with is this: given that you believe that we are already in a bear market, what would it take to convince you that we are not--and that this was merely a correction. First sign that my prediction is out of sinc short term is if the we close over SPX 1060 (200 DMA). Then if the market crosses 13 DMA (around 1075) I'd be very puzzled and will have to rethink my position. If we get to 1150 (a distant dream) I'll have to say medium term trend is up, and will predict new highs. ATG