To: still learning who wrote (2824 ) 5/13/1999 4:54:00 PM From: michael r potter Read Replies (1) | Respond to
Trading thoughts: SL, you could very well be correct about your sell points re: SFE, but in general, I believe the environment for making large gains now, and going forward will be quite different than it was during the Oct through April period where many stocks made huge gains. Many internet stocks are way off their highs, and while rallying of late, do not appear to have the strength to make a move in the next few months that will take out their highs. This applies to many other very high PE stocks. Against that background, I will be more aggressive in taking profits in those stocks making 25% to 50% gains in a relatively short period of time. Fewer will be doing it, and many won't show the follow through that one might have expected in the past few months. Subsequent to the previously reported sale of latest trading position, I sold more SFE later today. Had to dip into part of the Jan. '97, $27 5/8 [Jan.stochastic buy] cost basis stock to do it. [Ouch-tax hit!] Still have some of that, plus long term buy and hold if it keeps charging. One can also buy higher if it breaks resistance levels, nothing wrong with that. Not suggesting you should alter the strategy that works well for you, but I just see other uses of funds that have a better R/R right now. FCGI, stochastic buy today. [note: previous discussions regarding my interest in FCGI have almost exclusively been devoted to its virtues based on fundamentals]. Some of these select stocks that have been in "small stock hell" might just surprise going forward. Fantasy is better than reality: SFE hit $120 when people were imagining the wonders of ICG, now that details are mostly out, upper $90s. This is a case where T/A is showing OK on SFE, but [todays sell] decisions based on valuation, psychology, perceived reward/risk, and general market background. As stated in the past, T/A, F/A, and [analysis of] mkt. psychology are just tools in the toolbox. Sometimes one uses a hammer, sometimes a saw, but using all helps me complete the project. Best of luck Mike [P.S.] Sunday nights comments stated that I thought a defensive posture was still warranted and that probably, that is probably, SFE would break support [$72]. Mon. went long SFE $76 5/8 and stated why. Contradiction.? While inconvenient for anyone wanting a "stand your ground conviction", the market said [by Mondays action, breaking a series of down-trending highs], that the next course was higher. At that point one could stand his ground and say the market is stupid, wrong, get ego involved, and miss out on what may be [and was] a good opportunity or simply recognize reality based on the new information that tips the scales the other way and act accordingly. Any belief or "conviction" that I have is subject to immediate change based on any and all new information received. If it puts previous comments in an awkward light, so be it. Yes, even though I don't expect it, it could mean buying a trading position in SFE breaking $100 if the other parts of the picture confirm. Bob Prechter, Elliott Wave Theorist, who I consider brilliant and admire has been out of this bull market for 10 years. No use getting oneself in an intellectual stranglehold. In other areas of life like politics and religion, there may [or not] be limited downside to unflagging belief regardless of evidence, but the market is not so forgiving. I will continue to attempt to label discussions about short term trading strategy as such at the beginning, so long term holders can easily skip if so desired. Mike
