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Strategies & Market Trends : Jim's Nasdaq100 Special as a basket. -- Ignore unavailable to you. Want to Upgrade?

To: Daflye who wrote (402)	4/18/1999 3:40:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 2103

Hi D: I'm Glad I was able to say it in a way that made some sense, it's been a problem with me to paint the picture I see but I seem to be getting better at it. Try this one on for size. Sector playing overview. Keep in the back of your mind that even the nature of the market can change over time so even the hard fast rules of today can change, but they do it over time, not over night. A big picture of the longer term nature ( and outline so to say ) gives an over all principle] to see or a way of saying "hey that don't fit the BIG picture" -------------------- With the above said I'll give the BIG picture or general rule to longer term SECTOR analysis. Take the Total market cap ( money invested in a sector ), divided by the amount of stocks in that sector. Which ever has the most money invested with the least issues will be the best long term Sector to play, ( short term buying should also go hand in hand with a long term outlook ) if not it's pure speculation and for the most part speculators that don't have a discipline will lose money in the long run. Just like most winners at Las Vegas, wind up giving it all back then some, that's the future of 90% of the market speculators. ---------------------------- Looking at the spiders ( sectors of the S&P ) XL? &?= B U F - K E Y - V I P (the way I remember the last letter ) Rule (1): Analysis a sector from the strategist point of view, which one has the most market cap "per stock" , that sector will have an edge , based on the way the market works to reward the Big boys over time. Shorter term the ones which have Less market cap per stock will be more volatile, ( but can be more profitable if you can get the timing right ) THe less risky and often best bets are on the 1st gang when they have dropped relatively speaking below their norm. In time one sector may replace another as to having more market cap per stock, but then that should be apparent to one who is doing his home work. ----------------------------- I have not down loaded the Spiders lately and have some home work to do my self. I just want to see if I can convey the main picture of the market I use from a strategy stand point. I use them all (1) Strategy (2) Analysis (3) TA , as they all go hand in hand but keep (1) in my mind first before I let the others suck me into something that could be a mirage. IT also ties to the Head/Tail idea, this extrapolates it to sectors. Jim Ps Do the home work Total market cap/stocks = average cap per stock on what we can use ( the spiders).. Track their relative performance for buy/sell/short signals using the S&P as a base line. We may have to back up the issues prior to the formation of the spiders to back test the idea, I think I can get Monty to do that. quicken.excite.com & ----------- quicken.excite.com XL BI&E have broke out above the S&P , I missed the run on B, in E right now ( trend is your friend but I hate to catch a train after it's clearly out of the station ( B ) and it's rolled over some too. I want to learn the baskets & get em down PAT before I go back to picking stocks, while my picks have been well above average ( you can ask Monty on that as I've sent him a number of list ) I still have the problem with getting enough diversity while weighting them the way they need to be weighted, as that takes more cash than I'm willing to put in the market. I talk stocks a lot but still hold bonds as my core holdings & at my age I'm reluctant to change that dramatically however I am easing more and more towards stocks as I'm gaining more confidence. A trade off is playing the baskets, they are already weighted, and it keeps costs down. Trading stocks on paper is nothing like in real time, you have commission and many more spreads taking a bite if you are swinging with 30 stocks or even 20 ; more than first meets the eye. On top of that even a small portfolio can take more time to do DD on than most people have. I want to dance with the QQQ but not right now. I'm not messing with her breaking below the S&P & the S&P falling to boot quicken.excite.com Jim