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Hi kk,
Thursday, July 3, 2003, 3:46:31 PM, you wrote:
k> Yuki,
k> Is it the euphoria stage now or just the beginning of a bull ? Right here
k> the KLCI up for more than 18 points which I have not seen that for years in
k> the first half session. But it scares the futures boys - extremely volatile.
You are asking me? ^_- Really, I don't know.
But it doesn't matter what I think. You are either a technician or a
fundamentalist. I am a technician. I will do what the market
commands me to do, based on price and volume. When it gets
absolutely beyond a question nuts, as it was today, I try and stand
aside a bit (notice I was not successful in that attempt today, but I
took a very short, calculated risk at the end of the day, when a lot
of other wits were surely somewhat dulled by the shock of what was
transpiring today).
A key, I think, is not mistaking just nuts, which is not all that
uncommon -- in fact it's regular market fare -- with absolutely
beyond a question nuts, like our 400 point adventure today was. We
had a buy-side panic this morning. There is no other way to describe
it. And after about an hour the people that paid through the nose to
buy on the open suddenly realized there was almost nobody in line
behind them, at least not today. So then we had a sell-side panic.
If this was a movie theater everyone would have been trampled getting
in, and then trampled again trying to get out. What a riot.
That . . . is absolutely nuts. But . . . I could not have guaranteed
it was absolutely nuts on the open -- just plain-vanilla nuts. ^_^
It only became obvious as the day progressed. But as the morning
wore on, it was clear this was not a market to participate in on
either side right now, unless you enjoy sudden stunning intraday
reversals against whatever position you take. I did not enter until
a *lot* of energy had been dissipated.
I can't say if other markets have gone so nuts yet. I can't say we
have reached any intermediate limit here either, but the signs today
were not good. The market hit a very big air pocket today. The
airliner is still flying, but a lot of drinks were spilled, and the
passengers have suddenly taken their seats and fastened their belts.
Many stopped smiling, and others were looking out the windows to see
if there might be any terrain obstructions nearby. ^^_^^
In my opinion, the odds of a prolonged vigorous bull market from this
level upwards are not very good right now. But I have been proven
wrong many times. My opinion is worthless. So I have given up basing
my investment decisions on my opinions as much as is humanly
possible. Along this line, I am trying more and more to build an
impenetrable barrier between myself and the purveyors of market
opinion -- the so-called experts.
Think about this . . .
If all of us had turned off the TV, stopped reading the newspaper,
the Internet, or any other source of economic news or opinion. If we
just tuned into our trading screens each day and looked at our charts
that night, all of this from about March 1, where would we be right
now? My guess is that without *any* external noise, opinions,
prognostications, headlines -- without ALL of it -- all of us would
have done much better.
So don't ask me for my opinion. ^^_^^ You'll get one, but it will
be as worthless as anyone else's that you read or listen to.
And about the difference between a bull and euphoria: It doesn't
matter. Euphoria can be just as long, and is certainly just as real
to the people who are experiencing it. There is an assumption by the
non-euphoric that the euphoric are suddenly going to snap back to
sanity, and suddenly see the world the way the non-euphoric sees it.
These folks holding that assumption are the very same people who
shorted the Nas at 3000-something . . . on the way up.
There is only trade management, and money management. If you have
those two down, you can participate in all but the absolutely nuts
markets.
Yuki
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