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Strategies & Market Trends : Evaluating Rumors and News Along With T/A and F/A -- Ignore unavailable to you. Want to Upgrade?

To: LK2 who wrote (40)	9/22/1998 7:25:00 PM
From: Wayners	Respond to of 141

My reaction to the S&P Futures being down 26 points on the news that Japan wasn't going to be able to pass an economic bill was that it was way overdone. That was my reaction. Short term effect on stocks only. Buy blue chips. I flipped LU twice that day. I had cash and I knew I'd be buying quality companies in the morning. I also started listening to the Bill Clinton tapes on the radio at work. Almost right away I realized that Clinton didn't sound so bad on the tapes--another plus for the market. Predicting tomorrow's stock price--hmmm not sure what you mean by that. Accurately predicting gap up or gap down for S&P Futures IS an exercise in futility. Individual stocks you've got a much better chance at. Strong close or holding price through most of the day after a strong morning is a good bet for a gap up the next day. The S&P Futures have to be way off to mess that up, and it happens and that's life. You wait it out or trade your way out of it. Not sure what your looking for consistency or reliability wise. Rumors, news and T/A goes a long ways for getting that consistency--but its not easy. Maybe you're setting your expectations too high. It takes lots of experience and judgement. If you don't have the experience with it, you're not going to understand what I mean. As to buy and hold, that only works on low volatility stuff. Without several years expereince at trading, mutual funds are the way to go using the buy and hold strategy. Some individual stocks are good for buy and hold like blue chips, but small caps and non-blue chip technology stocks--no way. Day trading is usually short term contrarian. There's two ways to approach it. You can either play into very high momentum where you place a buy stop order above a resistance level on a stock that is the top 10 for volume that day. The other method, you find a stock with decent volume and you flat out buy it at support levels or where you see downward momentum petering out--that's the short term contrarian play. You also have to recognize that the majority of the volume occurs in the first two hours and last two hours. The middle of the day is appropriate for picking up smaller gains using the buy and support level strategy. The beginning and end of the day are for taking advantage of much higher price volatility by either buying large opening dips or buying runaway momentum using buy stop orders. Another play is buying at the end of the day where the stock is forming a strong close--so you can take advantage of potential gap up the next day. Always sell the gap up the next day. If you can't stomach buying when the S&P Futures are down 5 points or more or if you can't stomach buying at prices higher than what its trading out now--then you can't trade.