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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 (6987)	10/22/1998 10:44:00 AM
From: Patrick Slevin	Respond to of 44573

<The reality is that that various sectors are considered to be the leaders at various times and yes, they do go through cycles. I recall some years ago it was felt that that without the technology stocks leading the charge, the market could not make much headway.> The topic of a recent brief e-mail exchange with Scott. I "think" that the end of a cyclical bull trend is the leadership of the Banks. Once one notes this leadership the signal of a breakdown in this sector is a warning to exit speculative long positions. Vice versa, during a pullback in the market the key indicator to watch is NDX because it typically leads the market out of a decline. So, speculative short-sellers should watch the NDX for a clue. In between times, other sectors rotate leadership. I believe that these two signal the turns between overall bullishness and overall bearishness; the "main" trend, if you will. Makes no difference who said it, that's the way I was taught several years ago and have heard it repeated several times. Further, I have noticed it happen both on charts as well as over the years. I vaguely remember 1987 being very bullish for the Banks mid-year, for example. This time around, one has to be more mindful of the Techs like DELL, MSFT, INTC and so forth because (I think) a break there breaks the recent rally. Anyway, as ugly as it looks for the short side, I have a positional short from yesterday morning per a system I have been testing for about 6 months. I was nearly taken out of it for a 10 or 12 point loss yesterday. You certainly are correct about the Positional trade being a differing mindset than the Day trade. Once I get more comfortable with this I shall return to Day trading and trade both ends. Additionally, I have a system in test for longer term trades....looks like it would keep me in a trade for several weeks to months. Testing back a year so far) it made only 5 trades....one relatively flat, 2 for over 100 points each, 2 for about 20 points. Such a system, if I ever use it, will be traded using only a few Small contracts until it "banks" a lot of cash. Considering the anticipated "hold" time that could be several years. The Neural Net will not see much activity until I buy a new computer ... one has to be acquired prior to November 4th. A friend on Stock Swap tells me prices should drop next week so I'm holding off a bit. So that's where I'm at these days. I'll stop back in later in the afternoon. No sense in posting as I'm not day trading. I'm spending most of my time jiggling around new systems and indicators.