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

To: Patrick Slevin who wrote (2894)	9/1/1998 9:14:00 AM
From: Tom Trader	Read Replies (2) \| Respond to of 44573

>>At least you were short OEX, yes? Yes I am--and that has certainly been a great trade; looking to short it again when it rallies--btw where is the 200dma on the OEX on yur chart. Mine is screwed up because of the split. >>This could be a blessing in disguise. I have heard so many by this hour talking about the effect this shall have on jobs and so forth and all I can think of is the number of times I have heard people say that they are in it for the long haul, we should buy the dips....greed is greed. I just can't get too sympathetic, I am afraid.<< I have no sympathy either for those who have been caught up in this frenzy. I do have a measure of sympathy for the individuals who lack the sophistication and knowledge and end up relying on the broker who touts stocks to buy--many of these brokers basically follow the party line and recommend the stocks that the analysts are pushing--and we know what their opinions are worth, don't we?? >>The market was too high and people thought every pullback would allow them a guaranteed lotto ticket. A further decline will see generations of people saying they lost money in '98 and that they won't touch the market again. << That will take a while, yet--those who have been investing in the markets since the early 90s are still well ahead--but when and if they are under the water--then it will cause people to be turned off stocks for a decade. >>So, I have to presume that a rally tomorrow should be sold. I will look to sell this rally--probably at about the 980 level My only reservation is that I do have to be gone from about 10:30 to 1:00pm--so given the volatility that we are bound to see, I am not sure I should initiate a day trade that I can't watch until I close it out. If it is not too crazy, I might rely on a stop. Those who compare yesterday to the 87 crash don't really know what that was like. On that day there was sheer panic--and stocks were ravaged. A quality stock that I knew a fair amount about literally fell from 39 to 21 although nothing had changed in terms of the fundamentals of the company. What is similar to the day after the crash in October 87 is that the futures gapped up in a big way--but it was sold and it took out the previous day's low before it rebounded some. EDIT--Just noticed that the futures that were up 21+ when I wrote this is now up only 12--so may be it is not so similar >>Too bad you have a 45 point target as you could have crushed that today, my friend<< Yes -- it would have been great. But as I thought about it after the close yesterday, the reality is that even if I had used an intra-day % trailing stop and allowed for 50% retracement, I'd have been stopped out. I went short at 1082 and it made an intra-day low of 38 and the retraced to 62 then it went as low as 22 and then retraced the next day to about 54. All of this is off memory--but I suspect that I'd have been stopped out any way. Quite honestly, I am more pissed off at my self for closing out the day trade that I was short at 12--a few minutes more -- andd I'd have caught the entire down move of yesterday afternoon. Such is life. As far as the market is concerned, I am convinced that we have not seen the lows of this decline. Now rallies in bear markets tend to be short and powerful--and so a rally of 400-500 Dow points would not surprise me one bit. Like I posted to Arik a couple of days ago, I'll use this rally to establish short positions in individual stocks. I posted to someone in a PM that he should be careful--given that he was bullish about this market--because IMO, this market is discounting something--I know not what--whether it is deflation, a recession, a global depression, a currency crisis--who know what. But if one believes that the the market is a discounting mechanism that anticipates events several months down the line, then it is looking at something and does not like what it sees. The good news is that for those who have the cash, I expect that we will have a great opportunity to buy some quality stocks down the line. Well let us see what the day brings