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

To: donald sew who wrote (7123)	10/25/1998 10:07:00 PM
From: Tom Trader	Respond to of 44573

Hi Don -- thanks for the update I am in two minds about this market at this point; on the one hand there has been an improvement in the internals which suggest that the worst may be behind us. On the other hand the fundamental picture is hardly one that would inspire a whole lot of confidence. A bunch of earnings reports that exceed expectations don't mean a whole lot when the targets have been lowered to achievable levels that are in many instances well below what the earning were in the prior year. In days gone by, one of my responsibilities entailed looking at prospective acquisitions and evaluating them from a stand-point of what we should pay for them. I still do this today though in a different vein -- and more in the context of start-ups. If one views the purchase of stock in an on-going operation, as acquiring an equity interest in a company and as an investment -- as opposed to a trade--it is difficult to justify these valuations. Now this is a fundamental view as opposed to a technical one -- but sooner or later the fundamentals do catch up. Re the market, having acknowledged the improvement in the technicals, the one thought that went through my mind this weekend is that with the rapid change in sentiment that has occurred -- and with everyone including myself, looking to go long this next dip-- if ever one would have wanted the ideal setup for a trap to suck in the longs, this is it. A lot of people have felt that they missed out on this last rally and that the bottom is in place so why not buy the dips -- so what happens if this was in fact a bear market rally?? What I find interesting is the fact that the market has come up so far and so fast and shows quite a lot of resilience to any selling pressure. Looks like if we rally over the next couple of days, the bradley turning point--on the 28th-- may in fact be a top instead of a bottom. In any event, it would take an external event of some sort to cause a significant sell-off, IMO. I shall look to short more calls into strength and/or into the next sell signal that I get on my system. Maybe I am being a shade despondent and cynical --since I've got a bit of a cold -- I think it has come from dressing the way that I used to do in Southern California -- shorts and tee shirt -- when the weather here is very different especially in the evening. Hope that you are well; your recipes have caught my attention and I've printed out a couple of them --I love to cook as long as I don't have to do it everyday. I shall experiment with them during the course of the next week!! You certainly are a man of multiple talents!!