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At 01:01 PM 5/10/00 EDT, you wrote:
>I am new to this list but I wander what makes someone go long in a bear
>market. Is it an attempt to catch the bottom (it's always a risky attempt) ?
>
>Jean Jacques Chenier
>Global Management
>www.trendoscil.com
Jean,
To go long in a bear market requires that you have a firm definition
of what constitutes a bear market. Perhaps the trader who went long
has a different definition, so he/she may see a bull market.
Also, my LONG entries are always entered when the most recent
movement is downward. I buy dips and sell rallies in an
uptrend, and short rallies and cover on dips in a downtrend.
In my mind, it's a mistake to do the opposite (to buy
rallies and sell dips in an uptrend). Study any chart, think
about that..
Attempting to catch a bottom is not particularly risky if
you know how. All trading is risky. I use leading indicators to
predict future support and resistance. Then I use lagging
(as opposed to leading) indicators and watch price action at
those levels to fine-tune my entries.
The factor of time-frame is very important to your question.
If you look at a monthly chart of the Dow or Nasdaq, you will
see a major uptrend. So we buy dips (as we now have, a dip)
in that trend. We are buying a short-term bear market in a
long term bull market in your example.
Forgive me if I'm stating the obvious above, maybe someone
else on this list will glean something new in this.
Regards,
-Neal.
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