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The attached is an analysis of the DAILY
DOW
for what it is worth.
Clyde
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Clyde
Lee
Chairman/CEO (Home of
SwingMachine)SYTECH Corporation
email: <<A
href="mailto:clydelee@xxxxxxxxxxxx";>clydelee@xxxxxxxxxxxx> 7910
Westglen, Suite
105
Work: (713) 783-9540Houston, TX
77063
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<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=onwingsofeagles@xxxxxxxxxxxxx
href="mailto:onwingsofeagles@xxxxxxxxxxxxx";>Gitanshu Buch
To: <A title=realtraders@xxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxx";>realtraders@xxxxxxxxxxx
Sent: Thursday, October 19, 2000
10:35
Subject: [RT] MKT: Where its
heading
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...To
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