To: BigBull who wrote (42807 ) 4/20/1999 9:43:00 PM From: Gary Burton Read Replies (1) | Respond to
Big Bull--My only quibble with your approach is that it more or less REQUIRES one to take the view that the OSX must ultimately go to a new high above 140 and be proven right. I say this because, buy and hold types will now resist selling almost any drop, no matter how severe. The 'when to sell' question really has been taken out of the equation since psychologically anything that goes against this view will in practice be ignored along the way. In effect, emotionally, one will have tied one's hands behind one's back while ascending the heights so that IF the main trend reverses materially below 140 one will not allow oneself emoyionally to recognize it. I suspect that this may have been the case that some on this thread experienced on the way down..small losses turned into big losses sort of thing..no disrespect.....As to whether or not this is a "new bull market", I let the market tell me as I have no preconceived view. For example, the OSX might only end up retracing say 38% of its decline from 140, which would mean we stall out in here and then the main trend reverses again to the surprise of most. Or maybe it will retrace 50% and go to 92ish and top out. Or maybe it will retrace 62% and top out at 104....I don't have to answer that question since I'm not wedded to any one longer term view. I sell when I see 5 waves up completed and buy back when I think I have seen a 3 wave partial retrace. This way, I let the market tell me.Voodoo or not, I have found that this approach has kept me in most of the way up and has also enabled me to not give back most of my profits on the way up when the main trend changes to down. My concern with using your buy and hold stay with the trend approach is that I might not allow myself to accept that the main trend has again changed against me until long AFTER the fact. To me at least, THAT's risky. ..from my point of view, OSX 60.5 is now the floor under this 'new bull market', not 45. If OSX prints 1 tic below the recent 60.52 (?) intraday low, it will be an early signal to me that the main trend may have again changed back to down. In the same vein, if OSX completes 5 waves up this week and peaks out at say 78-80 and then partially retraces back to say 65 (pick a number) and THEN takes out the 78-80 in a new 5 wave sequence, then 65 becomes my new drop dead level, no longer 60.5...And on it goes, hopefully all the way to above 140 but who knows. no criticism intended
