I have been reading this thread and others for quite a while and never posted before. I am finally posting now. I am a daytrader who averages about 15% a month. I don't try to predict what is going to happen.....every time I try I get smacked like everyone else. The market has handed my head back to me on a platter several times in the past and I know it won't hesitate to do it again..... At any rate, I find the SOX as a great indicator of where the NDX is heading. Everyone knows that the sox leads tech. Looking at Friday's action, the SOX looks like it rallied to the top of its downtrend line and is now headed back down. I would think a retest of at least 360 is in order if not lower lows. Also, the NDX broke the uptrend line it created from the WCOM lows. I would think that we are now headed lower. I added a few puts on Friday, but I'm not heavily leaning to one side or the other. All I know is, down have been going and now down we go again. Sorry Lundy.
Here is an article that talks about MZM (liquidity). It is about two months old but I don't think a lot has changed: http://www.zealllc.com/2002/mzm.htm
Well, looks like even a blind squirrel finds a nut once in a while. Loaded the boat up today with short positions (using stops and proper money management of course) and had one of my best trading days today!!! So much for trying to pick bottoms, huh? What was that about a smelly finger? Ka-ching! Hope everyone else made lots of money today too!
Let me offer a little advice...and not to put you down for celebrating....BUT...the truth is, you have to curb your enthusiasm as well as take your losers like a man (or woman). A professional never gets too high or too low. And NEVER gloats or bitches to other traders. Just my feeling about this. I understand you are probably trading alone. But it doesn't fly in a professional environment. Take this FWIW.
Posts: 142 06-27-02 04:41 PM Me, you, Tim Ord, and that stupid Lundy ... think that the market will eventually bottom ... but none of us ... except stupid Lundy said "today is the bottom" ... "the trend is up" ... etc etc etc ... please read my previous message ... ____________________________________________________ I was almost angered enough to call you the "stupid" one but then I caught myself and decided that you are definitely not stupid ....but a bit naive and perhaps a little ignorant. If you were paying attention to these posts with half of a mind, you may have noticed, Lundy posted his interpretations before it hit the fan with worldcom etc. That, combined with the threats of terror over the July 4th holiday, will throw some sand on the fire. This is inevitable. Hang around till the dust settles and you just might find he is right on target.
Hey bbraunstein, You comments about the SOX leading the NASDAQ are true, but NASDAQ futures buy and sell signals can also be used to trade the S&P futures If the NASDAQ takes out key daily support or resistance levels the S&P often follows a little later. So you can get better execution on the S&P by trading off the nasdaq signals. This is for trading swings, not day trading. You'd be surprised how often this allows you to enter at the top of a swing rather than once the movement has started. Or to reduce noise you only trade a move that is confirmed in both markets. So if you're long the S&P and you get a sell signal on your NASDAQ swing system, you close out the position etc. This alone will put about 5% more trades in your favour. Runningbear
Lundy, Please don't let them get you down. I am enjoying and learning from your posts. I believe (ceteris paribus) you called the bottom correctly in the sense that earnings are turning up from a downtrend that has underlined the market since mid to third quarter of 1998. The indices will follow. We are experiencing never (before) seen massive market manipulations that cloud the picture. The bottom line uptrends are there and will emerge when the clouds blow over....ceteris paribus, of course.
Tim Ord was stopped out of his bullish play and says he doesn't know what's going on right now ( sign of an honest man ) but he still doesn't want to be short. The 5 day ARMS is high, the VIX is high. I however am not high ( unless you count nyquil ). Somebody ( probably that group ran by the Fed, but could have been aliens for all I know ) started buying the market in a huge way on wcom day and if you look at bar charts or candle charts you can see that the intraday low today was not bad compared to last week. I'm sure it sucked to be heavily long today but its only monday and that is what stop loss orders and position sizing are all about. My only personal bias is for QLGC to move in a big way either direction. Somebody either reveal an accounting scandal or a suprise double in earnings please. Don't hold back, now is the time.
so, where is the all that fed liquidity going ? The way I was taught in school is that it is all about the multiplier rather than just the actual amount of money. I think a lot of it is going to new bond issues which are being issued solely for paying off older bonds and to meet fixed expenses, so it really isn't having a multiplier effect like it would if it sat in a bank or got spent for new things/more employees. Also when there is a large default like enron or wcom it directly sucks many billions out of the money supply. Personal bankruptcies have the same effect. We needed massive liquidity infusions just to break even. In my humble opinion the smartest thing that was done to date was the IRS giving people money late last year. Back when I was studying economics we discussed this theory as "helicopter money" since it isn't that much different from flying over every city in america and throwing cash out the window ( just a bit more fair than that ). All that cash went straight into bank accounts at least for a little while. Then most of it got spent for christmas or used to pay credit cards and got spent later. That was a real multiplier effect as far as the consumer is concerned. The other thing is to get the business spending multiplier going again. That is harder. If you give money to companies with negative earnings the best that can happen is they fire fewer people, so you are just slowing the drop rather than causing an increase. Or worse than that you buy WCOM bonds and then they go under and it evaporates.