[RT] MKT: Where its heading

["Gitanshu Buch" <onwingsofeagles@xxxxxxxxxxxxx>]

I wish I knew.
 
Gut feel says more down before up, intermediate term, as in 
3-10 week horizon. I made the case for this in the correspondence re Dom's 
volume analysis and nothing has changed since then.
 
You have to know, though, that the turning point / wave / 
swing methods do tend to have the upper hand when these turns come out of 
nowhere. Hence maybe the others on your list will tell you where its 
going.
 
How I'm trading it:
 
Buying dips (whether its covering shorts or initiating buys) 
and selling rallies (whether that's adding to shorts or booking 
profits).
 
In detail:
 
1. Believing that its a bear trend for everything that's 
trending down. And it has been a remarkably smooth trend down. Surprising, for 
the stock market.
2. Trailing stops on all directional shorts at 20/50 
ema's.
3. Booking profits if the downside goes parabolically too far 
away from those ma's in relation to their historical performance.
4. Letting them out again short in half-positions at 10 ema 
and half at 20 ema (then trailing @ 50 and then 20 ema).
 
Above description applies to examples like QQQ, AOL, YHOO, T, 
AMZN.
 
As with any trend following system, the intra-trend drawdowns 
are large but the profits are still larger in the direction of the trend so I'm 
dampening total account's p&l volatility by cutting down size as moves 
magnify in my favor and adding to positions as 
contra-moves develop.
 
Counter-textbook, but helps me sleep @ night and spend time 
writing lengthy emails.
 
5. Believing its an uptrend for everything that breaks out of 
sound cups & handle patterns. Taking 1 of every 2 breakouts in the same 
industry group. Setting initial stop below 50 ema, then trailing it at just 
above 50 ema but below 20 ema. Adding on pullback to 20 ema, but liquidating 
total position on obvious reversal bars.
 
Examples for above are LENS, ABT (now short - for a bunch of 
reasons).
 
6. Starting out directionally neutral on most of my trades and 
then builiding positions as direction becomes clear. This typically means 
shorting 100 shares / buying 2 or 3 calls (delta-neutral ratio) OR buying 100 
shares / buying 2/3 puts and then working against that core position as the 
market develops a preference for any one direction.
 
Examples are QQQ, AOL, DIS, ABT (now short all 
4).
 
7. Now (past 2 days) I'm shortlisting stocks that I want to 
own on the cheap - hence scouring the market for short premium opportunities - 
some initiated, some stalked.
 
Examples are INTC, CSCO (both initiated), and possibly AOL 
(soon).
 
Also looking at mutual fund lists and coming up with a few 
winners/losers, and researching further on what those funds own(ed) so I can 
understand what got them here.
 
Above different methods are showing some overlapping 
securities (but that's how they got added to the portfolio - different trades 
with changing markets).
 
I'm not worrying about whether this is the bottom/top or not. 
I wish I knew - but even if I did, I wouldn't trade any 
differently.
 
The positions which start out neutral acquire the direction 
that the market wants them to be in - so then it becomes a q'n of managing the 
size rather than the direction.
 
The positions that don't start out neutral have a tight leash 
because the intraday ranges and chart patterns make that possible.
 
The positions that are pure speculation or gut feel - well - 
there are none, I'm glad to say.
 
Couldn't have said that of myself a few years 
ago....
 
So I believe net of all the above, if this is the bottom then 
the positions will end up capturing some 70%-80% of the eventual bull 
trend.
 
Good enough for me.
 
Gitanshu
 
<BLOCKQUOTE 
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
  BTW, bob, earl, gitanshu, clyde, ben... where the heck is 
  this market heading? is this the real thing? or will it stall soon? they say 
  bear market rallies are fast, short and sweet until it reverts to bearish, 
  or unitl it turns bullish...






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