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Bob,
I don't try to forecast the market. I've never been smart enough to
do that <G>. I usually just stay fully invested. I keep mental targets
and stops on each of my stocks and adjust them weekly. Any time a stock
close violates my stop, I cover the position the next trading day. Any
time a target is hit, I'll either cover or sell covered calls.
I do however, look at several market indices before I replace a
position. From that look, I'll determine if the current prevailing trend
is up or down and what size capitalization stock I want to go with. I
always try to trade in the direction of the prevailing trend. I've been in
long positions for the last couple of years, but will open short positions
when the trend changes. I was mostly in large caps the last two years, but
started moving to small caps a couple of months ago.
To make it short, I don't predict. I just try to follow the trend.
If I'm all long and the market reverse, I'll wait until I'm stopped out and
will slowly reverse to a short position. I know I won't get in at the
bottom and out at the top, or vice versa, but I do hope to catch most of
the trend. The only time I'll stay out is if I'm not sure of the trend
direction.
Hope that made sense <G>.
Jim
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> From: Robert C. Richmond <rcrich@xxxxxxxxxxxx>
> To: JimGinVA <JimGinVA@xxxxxxxxxxxxx>
> Cc: metastock-list@xxxxxxxxxxxxx; Simianer <Simianer@xxxxxxxxxxx>
> Subject: Re: Stochastics Buy Signals
> Date: Sunday, July 27, 1997 11:37 PM
>
> I too noticed some (favorable?) change in NOVL in recent days. I also
> had no Metastock charts on Novell but have been following the company
> since I first ran across them at Comdex in 1987. I remember spending
> time in there "booth" and thinking maybe I should consider going to work
> for them. But I just watched the stock grow for many years. (The $2
> price of 1987 indicated by one of you to Thomas, sounds about right to
> my memory.) Then of course there were the days when NOVL and Lotus were
> going to merge. And then the fiasco among brothers of NOVL buying Word
> Perfect at the perfectly wrong time. My most recent watching has been
> to watch most of my NOVL leap premium vaporize over the last year.
>
> Now with that said, I have a question Jim for you and of course any
> others who want to address it.
> You have done very well indeed via your charts and it has been very
> interesting for me. I have to think you must indeed love the market of
> the last several months. Understand, I don't mean to minimize your
> success in this up market. But I am wondering how you "weigh-in" the
> potential for a substantial (?) pull back of the "market." I realize an
> individual stock's own chart reflects some of what the "market" does.
> But when you see on a Friday a beautiful chart to go long on, how do you
> incorporate the danger of the "market" going south on the Tuesday after
> taking the Monday position. (I don't mean the Friday, Monday, Tuesday
> specifically.) Do you constantly do charting of the DJIA, S&P or other
> indexes? Whether you do or don't, do you temper your TA on individual
> stocks by your "feel" of the broader market? Do you now, or in a bear
> market, look for and buy on bear signals for bear moves.? All this
> became a little wordy. Let me know if the words got in the way of what
> I was trying to say. Maybe clearer stated: If you see a great
> direction in channels of a stock, looking strong to go up, up, up,; do
> you stay out of the stock if you "fear" the overall market to be
> vulnerable to the downside? Or, if you "fear" the broad market is going
> to head down, do you start looking for patterns for stocks to short?
>
> Thanks,
>
> Bob
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