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Your question was well received. There are two primary strategies that I will
be employing for this scenario. I will try to be helpful without giving away
the store until we have fully implemented and executed our strategy. The first
strategy will be an option's based strategy. Because of the fact that the S&P
Puts are currently pricey, our first step will be to isolate the option chain
that exhibits the best values. Open interests will be a corner stone to that
piece of analysis. On the more stock specific side, I will be looking for
overvaluation, companies that have the highest probability to disappoint in
the 3rd quarter earnings season, stocks that have the highest parabolic slope
and stocks with block volume and money flow deteriorations. Once all of my
positions have been executed I will be more than happy to divulge specifics.
-----Original Message-----
From: 5150@xxxxxxxxxxxxxxx
Sent: Tuesday, July 29, 1997 8:58 AM
To: Ronny Kraft
Cc: RealTraders Discussion Group
Subject: Re: The Sky will drop about 5%
Let's set aside the issue of prediction and ask another question:
How are you trading this? What is your trade plan for trading what you
predict?
To know this would be very educational. Please post to RT.
Phil
Ronny Kraft wrote:
>
> Rather than deal with the guilt of being called a "taciturn" by the
honorable
> Mr. Kallaus I will give this group a small justification for my recent
market
> prognostication.
> 1. Intraday high prices of the market have increased to a 21 day
high.
> Nonetheless, the advance-decline oscillator and the up/down volume
oscillator
> has been negative. I am reading this divergence (and rather unusual event),
as
> a very strong bearish signal that by my analysis has historically been
> followed by downside price movement.
> 2. In addition the Price Phase indictor (an indicator that I
affectionately
> call a MACD on crack; and an indicator that I love and use often for
> confirmation of broad based signals) is positive but volume distribution has
> started to advance. This is a nonconformation that, regardless of the type
of
> market, is a bearish signal which historically has resulted in downward
> movement in the markets.
>
> I welcome the rest of the groups comments and questions. That is what we are
> here for.
>
>
> -----Original Message-----
> From: owner-realtraders@xxxxxxxxxxxxxx On Behalf Of kurt kallaus
> Sent: Tuesday, July 29, 1997 1:26 PM
> To: RealTraders Discussion Group
> Subject: RE: The Sky will drop about 5%
>
> Below Ron Kraft gives a cryptic warning of a 5 to 10% stk' mkt' fall during
> August. He is taciturn for now but promises a reason for his
prognostication
>
> soon - probably as the correction becomes confirmed. I don't know if this
> will pull some of his reasoning out of him sooner rather than later but Ron
-
> is part of your reasoning for your view due to the Capital Gains Tax Cut
just
> passed today.
> Personally I have expecting a 10 to 14% correction during the last half of
> this year. Cyclically the next sell-off is due in August. I have no short
> term sell yet, but I do have turns due over the next 2 weeks of significance
> (the last mild turn was 7-21 -- a good low). Capital Gains could be a
modest
> trigger - if not then watch out before year end.
> I will elaborate when I get a Sell signal.
> Kurt
> Sunnen@xxxxxxx
>
> ----------
> From: owner-realtraders@xxxxxxxxxxxxxx on behalf of Ronny Kraft
> Sent: Monday, July 28, 1997 5:52 PM
> To: RealTraders Discussion Group
> Subject: The Sky will drop about 5%
>
> I have been viewing all of the postings in the past few weeks and have been
> formulating my opinions on the sidelines. I am professional money manager
who
> manages several hedge funds. With that in mind I would like to tell all that
> will heed that
> THIS MARKET WILL CORRECT 5-10%
> in the next few weeks. That is my contribution to this group. All I ask is
> that you all remember where you heard it first. My message is being stated
in
> no uncertain terms.
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