Re: [RT] Re: chart formations

["Dom Perrino" <domenick@xxxxxxxxxxxx>]

Hello Gitanshu, 
I like your posts because they are informative, 
stimulating,and interesting. Differences of opinion are not combative to me nor 
should they be.Instead,they stimulate and open the mind to all schools of 
thought.Now, regarding position trading, Let's clarify that. when I take a 
position trade all that means to me is that I feel comfortable enough to hold 
overnight and I am basically extending my day trade into 2,3,4,5 or 6 days 
depending on the size of my position and my intra day observation of the markets 
as well as how much am I making e.g.assuming i have 2000 shs. QQQ if i am making 
5 pts. and the market appears appears weak intra day i will sell immediately. 
This is not by most standards  position trading. If one trades oex puts and 
calls unhedged 30 min. might might equivalent to a day because you are dealing 
with a wasting asset.This is not the type of market where position trading (as i 
understand you to mean it) is warranted. 
Without going into detail re:volume,up stocks vs. 
down stocks etc. just look at the intra day low of theCOMPX NASDAQ  on 
thur. it was 3071 ,on fri it was 3055 On thu. new lows were 433(from Barons) on 
fri. new lows were only 295. On fri. nasdaq went to a lower low yet new lows 
contracted substantially.As far as individual stocks are concerned that's more 
difficult because you have to do technicals on each one separately.
Regards,
Dom
<BLOCKQUOTE 
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  ----- Original Message ----- 
  <DIV 
  style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From: 
  <A href="mailto:onwingsofeagles@xxxxxxxxxxxxx"; 
  title=onwingsofeagles@xxxxxxxxxxxxx>Gitanshu Buch 
  To: <A 
  href="mailto:realtraders@xxxxxxxxxxx"; 
  title=realtraders@xxxxxxxxxxx>realtraders@xxxxxxxxxxx 
  Sent: Sunday, October 15, 2000 3:16 
  PM
  Subject: Re: [RT] Re: chart formations 
  
  
  Not sure how I would position-trade this market on the long side - bear 
  market rally or not.
   
  The A/D and up/down volume numbers on friday were good, but 
  inferior-quality - and while I can't hold a match to Dom and Ben's 
  candles in this analysis, I can see that Friday's volume justification looks 
  more of a coincident event than a predictive event. 
   
  For every good thing you will tell me about Friday volume, I will show 
  you - for eg - the New High New Low list, the fact that the A/D line rolled 
  over one full week after the indices had rolled over in Sep - etc.
   
  Volume analysis used to be descriptive - it looks like it still is. 
  Where is proof of "volume precedes price" or "momentum preceeds price" in this 
  action??
   
  The distance to the 50 and 200 day ma's will make for a powerful rally 
  similar to the one we had in mid-April. No doubt the percentages look 
  impressive because the base is now lower. After all, something went up 1000% 
  last year has to fall only 95% to lose most of its value - so that it can 
  rally 200% again to meet up with its falling 50 day and 200 day ma's. 
  Wow.
   
  The wrong sorts of industry groups are rallying - medicals, energies, 
  defense. Even within those, the secondary names are now rallying harder than 
  the better capitalized names, indicating speculative excess within those 
  groups and lack of sustainability. A few energy stocks look outright 
  toppy.
   
  While the media made big news out of the multi-point moves in some of the 
  glamorous techs, one finds that all these did was trade within their ATRs - 
  and so what if the trade was all one way. A perusal of charts aqs diverse as 
  SUNW, EMC, JNPR, AMCC etc will show you this.
   
  I was struck by how "trade what you see" comments came out - what one saw 
  going into Friday AM was shambles, failed indicators that asked me to Buy way 
  back before the market turned around, failed turning poiint dates, and 
  parabolic range expansion in the direction of the core trend. 
   
  Heck, action coming into Thursday AM looked overdone to the downside and 
  yet the market plunged. Just how is one to participate if all the crutches one 
  grew up with fail at exactly the fulcrum of success and failure?
   
  Unless one was a daytrader or someone lean on longside exposure looking 
  to build small positions, one had no basis for being long coming into 
  Friday. Those oversold/oscillator/VIX over 30 & upper bollinger band / 
  retracements went by the wayside a few hundred points ago - WHEN THURSDAY 
  BEGAN.
   
  I feel Friday was an accident waiting to happen (for the shorts), and a 
  toss of the coin in the predictability of the outcome BEFORE FRIDAY BEGAN. It 
  could equally easily have gone the other way, making thursday look like a 
  simple rainfall before the hurricane.
   
  CSCO found buyers at the obviously broken $50 support, AOL did not find 
  buyers in spite of overwhelmingly good news from the EU. And what would one 
  make of YHOO? YHOO too had triple bottoms, obvious supports, etc - and still 
  there's no stopping it from getting into its own way. I could also cite Intel 
  in the same vein. Or Texas Instruments, Nokia, Microsoft, Dell, Wal 
  Mart...
   
  I don't think Friday's volume tells us anything about next 
  Monday-Wednesday's action. I'd welcome Ben & Dom's opinion - and, even 
  though this sounds combative, you know I mean well.
   
  I believe overall volume will be lesser going into Monday-Wednesday 
  cycle, expiration notwithstanding. I believe this will setup the textbook 1234 
  pullback for shorting. Regardless of what price does.
   
  Yes, I'm anticipating the anticipation of another selloff and when it 
  comes, I'll participate. Until then, I'm better off being directionally 
  neutral in my position trades except for the choicest of charts with the 
  tightest of stops.
   
  The numbers:
   
  NYSE: 10/13
  1619 Advances on 868.3 million
  1254 Declined on 330.6 million
  21 New Highs
  162 New Lows
   
  Nasdaq: 10/13
  2680 advances on 1608.2 million
  1303 declined on 369.4 million
  28 New Highs
  402 New Lows
   
  GitanshuTo 
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