Careful - is that a sell lurking in the bushes?

["Guy Tann" <grt@xxxxxxxxxxxx>]

List,

I don't know what to say here.  We have several Intermediate Term Signals
(ITS) calling for a sell for tomorrow morning.

Our trading system is comprised of two parts.  The SP39 (formula 39 in our
old DOS version of MetaStock) is our signal that we use for all of our
trades.  We couple this with one of our Intermediate Term Signals (whichever
one happens to come first) and we execute the trade.  We are still able to
trade against the Intermediate Term Signals, but we have tighter rules,
making it more difficult to do so.

Today, our ITS have ALL signaled a Sell!  Our SP39 on the other hand had a
sell triggered as well, but the day ended a little too strong, so our
"Contrary" was in a "never-never land" of possibly don't sell.  This is why
I've never liked those black box approaches to trading.  Nothing is ever
black and white.

So here's the dilemma.  We're sitting on a substantial profit.  Do we close
out our positions and go to the sidelines tomorrow while waiting for a more
conclusive confirmation?  Do we stick it out waiting for the proper
confirmation of our sell signal?

Now my brother and I will be reviewing our trading rules for the last three
years and try to verify whether we should or should not trade this contrary.
More recent activity will count more than farther back.

This is what I mean when I say that the rules are not cast in stone.  The
market is a dynamic, constantly changing place, and while 60, 70, 80 and
maybe 90 percent of the time the decision falls within our regular rule set,
there is always that one time when you have to make a calculated guess as to
what to do.  That's what we'll be doing tonight. :)

When playing at these levels, my thought is to take the money and go to the
sideline.  Why risk a substantial profit for the possibility of an
additional 10 to 15%?

I'll post our decision after we place the trades sometimes tomorrow.  I
guess we'll be monitoring GLOBEX this evening as well.  GLOBEX has the S&P
down 1 and the NASDAQ up 1.50.  No help there.

Happy trading,

Guy

Paranoia...you only have to be right once to make it all worthwhile!