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<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999>Adam</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=250235903-11081999>Our
system is probability based (so I guess you could say statistically
based). I don't think it's much different than some of the pattern
recognition programs that other systems use except that we don't use any
charts. All of our stuff is based upon a certain probability of success in
making a trade. Overall, we maintain between 75% and 80% probability of
success trading the S&P futures. If we hadn't screwed up with money
management techniques over the years we'd be really rich by now. :-) After
reading some of those money management books, we discovered we were running a
100% probability of failure (and we proved that several times
over).</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999>Hopefully by applying proper money management
techniques, we will solve that problem. The market seems to be in a
holding pattern at present, and while we have been right in most of our
trades, we've been experiencing some major drawdowns. In a couple of our
accounts I will start trading the longer term signals only. In our
speculative account we'll keep on with our basic system that seems to have
worked for the last 15 years, again trying to apply those money management
rules.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=250235903-11081999>We
don't really look at support levels or breakouts or anything else chart
based. Over the years we've seen too many 'signals' triggered by those
'breakouts'. We've seen so many of these bull and bear traps over the
years that we've come to ignore this type of signal and go with our probability
type signal believing that we are correct more often than those breakout or
support type systems (that's probably ego talking). While we do get a
lot of signals, our short term system excels at identifying major market
direction changes (even though we usually don't know it at the time
and think that it's just another, regular trade). We have had very
few, major changes of direction that we've missed and almost all of those
were caused by external market factors such as war, drought, political
upheaval, or other out of the ordinary circumstances. Interest rate
changes are usually anticipated by the market.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999>Anyway, I've got to get back to work here and put the
two 9 year olds to bed on their sleep over. I've already been told they
need to be up by 7AM for Pokemon (the TV show).</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999>Regards</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999>Guy</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=250235903-11081999></SPAN></FONT> </DIV>
<DIV class=OutlookMessageHeader><FONT face="Times New Roman"
size=2>-----Original Message-----<BR><B>From:</B> owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]<B>On Behalf Of</B> Von
Hef<BR><B>Sent:</B> Tuesday, August 10, 1999 7:41 PM<BR><B>To:</B>
metastock@xxxxxxxxxxxxx<BR><B>Subject:</B> Re: S&P 500
chart....<BR><BR></FONT></DIV>
<DIV><FONT size=2>Guy,</FONT></DIV>
<DIV><FONT size=2> I like the idea of "adaptive" periods in a system
and I have wrestled with this concept, but the current MetaStock</FONT></DIV>
<DIV><FONT size=2>language doesn't lend itself to easily implement these
techniques. Of course I realize that your system is completely</FONT></DIV>
<DIV><FONT size=2>different (statistical based isn't it?) than anything I have
looked at. </FONT></DIV>
<DIV><FONT size=2>You wrote:</FONT></DIV>
<DIV><FONT size=2>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999>"Hopefully, we're testing the low and will see some
recovery before our STS signals a sell."</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT face=Arial size=2><SPAN class=790262101-11081999> I also hope
you are right....because technically speaking we are getting very close to
some</SPAN></FONT><FONT face=Arial size=2><SPAN class=790262101-11081999>
bearish signals. The market closed</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN class=790262101-11081999>right above the
1280-1290 support level (as I read it). If the market falls much further
than this in the next days, then when the</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN class=790262101-11081999>market turns back
up, we would</SPAN></FONT><FONT face=Arial size=2><SPAN
class=790262101-11081999> need the up-swing to continue past the previous high
(1431) before I could omit this</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN class=790262101-11081999>bearish (low)
warning. Anywise enough of my rambles.</SPAN></FONT></DIV>
<DIV><FONT face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT face=Arial size=2><SPAN class=790262101-11081999>
Adam</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </FONT>----- Original Message
----- </DIV></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
Guy Tann </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:metastock@xxxxxxxxxxxxx";
title=metastock@xxxxxxxxxxxxx>metastock@xxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, August 10, 1999 8:42
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> RE: S&P 500 chart....</DIV>
<DIV><BR></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999>Adam</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=790262101-11081999>Our
STS varies from 1 day to 30 or 40 days. It reacts fairly quickly and is
usually able to anticipate major market turns. Our ITS can also
vary. In the past, it has run from as little as 5 days to signaling a
buy on 10/1/98 and not signaling a sell until 6/3/99. It varies also, as
you can see. Our ideal trade is when they're both in agreement.
That sell on 6/3/99 (signal date to trade the next day or at the close that
day) did not have a STS sell. That was followed by an ITS buy signal on
6/14/99 and has been long ever since (S&P @1298 approximately). The
ITS has had one losing trade (8.50 points) in the last 3 years, but has
experienced some significant drawdowns. That's why we're sticking out
this long trade, hoping that we will either have a little loss or make a few
dollars. :-)</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999>Hopefully, we're testing the low and will see some
recovery before our STS signals a sell.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999>Again, we feel that any major market move will
be signaled when both our STS and our ITS are in agreement. In that
case, we plan on increasing our exposure and shorting the immediate world.
:-) Since we don't have that situation right now, we feel we're
basically still in a bull move retracement.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN class=790262101-11081999>The
combined STS and ITS has not had a loss in the last few years. The
current trade there is long S&P @ 994 on 10/1/98 and still long
today. Now, my dad had calculated 11,2xx as a potential market high (I
believe I did communicate that to the list a while back or at least to JimG)
and stated that he felt this might hold. We were looking for a retest of
that number but didn't get it. If we blew through the 11,2xx level, our
next target was 11,9xx. These are all using the S&P. This
picking of targets is not a science but something we do using Elliot Wave type
numbers (they tell me) and trying to identify points from which to make your
calculations. If we're lucky in picking the right point, then we look
like geniuses. In the last few years, the market has blown through all
of our targets, so we look like idiots, for the most part. That's why we
don't use these targets as actual trading points, but occasionally wish we
would have (like this move).</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999>Guy</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=790262101-11081999></SPAN></FONT> </DIV>
<DIV class=OutlookMessageHeader><FONT face="Times New Roman"
size=2>-----Original Message-----<BR><B>From:</B>
owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]<B>On
Behalf Of</B> Von Hef<BR><B>Sent:</B> Tuesday, August 10, 1999 4:25
PM<BR><B>To:</B> metastock@xxxxxxxxxxxxx<BR><B>Subject:</B> Re: S&P 500
chart....<BR><BR></FONT></DIV>
<DIV><FONT size=2>Guy,</FONT></DIV>
<DIV><FONT size=2> Just out of curiosity, what kind of time span is your
short and intermediate systems?</FONT></DIV>
<DIV><FONT size=2> Thanks,</FONT></DIV>
<DIV><FONT size=2>
Adam</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
Guy Tann </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
href="mailto:metastock@xxxxxxxxxxxxx";
title=metastock@xxxxxxxxxxxxx>metastock@xxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, August 10, 1999 12:43
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> RE: S&P 500
chart....</DIV>
<DIV><BR></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999>Adam</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999>FWIW, our system still is long (the Intermediate
Term System and our Short Term System) so we're not looking for a major
break yet. Our system has been pretty good at picking market tops and
bottoms, and while we've been getting tossed about lately, we've been
holding on and riding the trades out for small gains. Actually,
we've been averaging down (or up as the case may be) and making a few
bucks.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999>Until our ITS turns bearish, we'll be trading the
long and short side of the S&Ps based upon our STS. When the ITS
and the STS both turn down, we'll be buying all kinds of Puts as well as
shorting the S&Ps. Our ITS went bullish at 994 (S&P) so it's
been a fairly good ride so far. We had one ITS (without a STS sell)
sell on 6/3/99 with a buy on 6/15/99 and that was the only sell we've had on
the ITS since our original buy at 994. Made a few points on the sell
and are fairly even on the buy side, so far.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999>Regards</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999>Guy</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff face=Arial size=2><SPAN
class=360443305-10081999></SPAN></FONT> </DIV>
<DIV class=OutlookMessageHeader><FONT face="Times New Roman"
size=2>-----Original Message-----<BR><B>From:</B>
owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]<B>On
Behalf Of</B> Von Hef<BR><B>Sent:</B> Monday, August 09, 1999 8:21
PM<BR><B>To:</B> MetaStock<BR><B>Subject:</B> S&P 500
chart....<BR><BR></FONT></DIV>
<DIV>Looks like the S&P may be ready to turn up. The price is close
to support (the center</DIV>
<DIV>tine of the long-term fork) AND the short-term momentum is turning (but
hasn't crossed</DIV>
<DIV>the trigger line yet). Will wait and see what the next
bar's action is.</DIV>
<DIV> </DIV>
<DIV> Adam</DIV>
<DIV> </DIV>
<DIV><IMG align=baseline alt="" border=0 hspace=0
src="cid:250235903@xxxxxxxxxxxxx";></DIV></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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