(Not arguing, just discussing)....by using an "if-then" statement above shows that you are indeed reacting to the market when it happens, not predicting it. If the market were to have opened up today, in a gap, you probably would have figured it would sell off....I know I would (and have been proven correct a lot lately, it seems). Some of the discussion is simply semantics, but since I don't believe in actual market predictions (prior to the facts) for making cosistent money, I like to point out how I might look at the same situation. Where will the market close today, and what do you think will happen tomorrow. And, no "if if closes up, then it will..." stuff....let me know what you really think...this costs us nothing. The "talking heads" at expos and on the TV all cover their bases with " we will probably rally, unless of course we have bad numbers from the FED", etc. etc. You know what I'm talking about... Let's see if you're right about today and tomorrow.... Don PS...when the market opens way down, it almost always bounces for a while...right. Now we are at -145 on the Dow....
You could say I was reacting, but I specifically predicted ahead of time that the gap would be closed. Yesterdays close on NDX was 1022.74 Todays high on NDX was 1022.79 You can call the closing of the gap a coincidence, and that I just reacted to the situation as it unfolded, but the way I see it is that I used prediction to form a plan yesterday, then I followed thru with my plan today. edit: Don, if the market had gapped up, I would not have sold it. I specifically said that if the market gaps up, there will be NO closure to the gap. Just because I use an if then statement doesn't mean i'm not predicting it.
ah worldcom. There is no accounting for fraudulent accounting. But I guess this type of stuff has to happen a few times a year. I don't know if anybody is talking about their positions anymore but I bought puts at the open this morning to go with my calls so now I am long a straddle on QLGC and still in the hole a few hundred bucks. So I'm not betting on a big rally anymore, just a big SOMETHING. Who knows what happens when we have this kind of fraud in the corporate world, maybe most of the stocks out there are nothing but big puff balls. Maybe QLGC will go to 20 and maybe it will go back to the 50's, in any case I think it will do something big between now and July expiration.
Well, the Dow made it up for today...another day of "daytrading paradise".... Gosh I like it when the market moves like this, all we have to do is respond to the S&P FV premium and make money. Lundy...you are right today!! Now what about tomorrow and the rest of the week... Don Oops, Dow selling off....again...I will wait to post this up...down again....
if tomorrow gaps up, there will be no closure. If it gaps down, there will be closure. either way, I will fade the first move of the day. to elaborate a little further, if it gaps down, and the first move of the day is a closure, I will fade it and go short. if it gaps down and first move is down, I will buy. if it gaps up and first move is down, I will buy. if it gaps up and first move is up, I will do nothing unless it's a *huge* gap up, in that case I will short it. The reason why is because the first move will be small, and the second move will be where the market closes.
someone asked earlier if I might share a bit more of my strategies so I don't just get rotten tomatoes. Well I can't reveal everything, but I will reveal somethings. FOR MY GAP PREDICTIONS, I have the computer take a snapshot of the last 3 days OHLC and their relativeness, then I loop thru historical data to find matches. Lets say I find 17 matches. I see what it did each time, normally theres a pattern. FOR MY DIRECTIONAL PREDICTIONS, I use the chinese Yin Yang concept. The market always acheives a miraculous hidden balance here. FOR EXACT NUMBER PREDICTIONS, like todays 979, I use a mixture of fibonacci and gann, customized to my liking so it has a greater accuracy than 50% . FOR LONG TERM TREND PREDICTIONS, I developed my own wave theory thats so simple, a child could figure it out.
Lundy, Have to give my vote to you, as I read this thread and your journal. I too trade gaps (intraday, stocks) and like Fib# myself, however, I think your Fib# chart would be better replaced with this chart (a simple S/R) to explain why your bottom/bounce would occur here. also, when you predict the bottom down to days, you should also consider the unpredictable events/variables(like war, scandal, news...WCOM yesterday would be perfect example in this case)... I don't know how far market will run but I would pay more attention if it run 170-200 pts from here up (1/3 of the down -- fib#), again, I just recently got into swing trades on top of my daytrades, and start to study W.D. Gann's stuff... Keep up the good work and looking forward to reading more your stuff.