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Jim,
I respect you posts and your willingness to let it all hang out
in public. I would like to caution you on your Dell trade. I'm
just a dumb ex stock jockey who chooses to play in another arena
(futures)...but TA is TA is TA and I think there is some
compelling reasons why Dell is dead in the water. I don't know
where to start, but how about some Japanese candles?
DELL posted a Bearish Engulfing pattern on Wednesday (very
bearish), followed by a Doji (indecision) that gapped down.
Worse yet, in "candlestick land", is the weekly pattern: Dell
created a Evening Star pattern over the last three weeks, with a
nice looking Hanging Man at the end of the three candle
formation (nothing but bad news in that formation). If that
isn't evidence enough, candlestickwise, (a new word here), the
monthly chart is posting a big fat Shooting Star (another
bearish brick in the candlestick wall). So, what do the
Japanese know about the markets anyway? Let's move on to some
good old amerikan technical indicators.
I studied with Welles Wilder for a week back in '81. I think
the RSI can be helpful as tool (in conjunction with other
indicators). Looking at the daily, weekly, and monthly charts
(applying the RSI), I can only repeat the same word that
describes the three charts: divergence, divergence, divergence.
This is the classic formation that all futures and equities get
"crushed" from. Higher market, lower RSI ... eventually, the
market follows the indicator.
George Lane taught some classes at University of Chicago and
University of Michigan (Guy's dorky school) and along the way he
came up with the stochastic indicator. I'm well aware that it
moves to the same drummer as the RSI...but, I think it's a
useful tool and I look at it daily, while applying it to
indices, equities, and futures' charts. Daily, monthly, weekly
(for DELL) ... all the same story ... turning over and turning
down. Not many issues can fight this indicator once it starts
slipping away. Also, it's rare to find agreement in all three
time categories.
Finally, I'd like to share with you the Gann numbers that were
developed off the move from the high on 8/27 of 64.88 and the
low of 9/1 of 46.87. The retracement levels are as follows:
51.32
53.55
55.78 9/3 high=55.56; 9/4 high=55.62; 9/10 high=55.75
58.00 9/2 high=57.75
60.23 9/8 high=60.25, 9/9 high=60.75
Got love "dem" retracements when the issue keep slamming up
against them
Jim, I not trying to talk you off the trade. You are an astute
trader that's willing to share your ideas with the group. We
all appreciate the effort you make. The above Dell comment made
me want to see what you were doing. Everyday, I do the above
exercise and use an additional 7 or 8 indicators to supplement
RSI, Sto's, Gann and Fib, andthe the candles. I work these
indicators on about thirty commodities and look for solid
opportunities. I hope you don't mind me sharing my thoughts on
your play tomorrow. As a wise investor, you have already
determined your objective and risk. Your sell stop should
protect you and this should be a lesson to all equity players.
As you are so acutely aware of: you don't put on a trade and
then when it doesn't work out ... you "position trade it".
That's totally wrong and incredibly bad advice. So Harley, if
you're reading this, knock off the monotonous dribble about your
trading style and take a hint from Jim. Real traders always have
a plan. Jim states his reasons, identifies his objective,
assigns risk, and puts the plan to work. Good luck Jim, I hope
the market goes up to exactly 1067 and Dell touches 71 1/4.
Steve Karnish
CCT
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From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
To: Metastock <metastock@xxxxxxxxxxxxx>
Subject: DELL
Date: Thursday, September 10, 1998 4:01 PM
ALL,
Tomorrow could be a very interesting market. I see
potential for a big move either way, but think the DJIA 7500
level will hold. If we look like we are getting an up move, I'm
going to open a fairly large (for me) long trading position in
DELL. DELL bounced off the bottom of its Intermediate Term Up
Trend Channel late this afternoon and could get a trading move
to the top which is at 71. I'll set the stop at 53 3/4.
Jim
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