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<DIV><FONT color=#000000 size=2>In the light of the spectacular performance of
the Pound (hope you were long). Can we say it is time to sell the Dec 17200
calls.It is 500 points away at the moment. The volatility is very high and under
these circumstances it is best to be a seller of options. The 295 point gain on
the future can be wiped out in 3 days if the Nikkei does not fall dramatically
Sunday night (Monday morning in Tokyo) at around 180 points premium($1125) is
worth it?</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>What is the probability of the Pound giving us
another 300 point rise? If this does not happen volatility will collapse big
time and one can easily buy back the call in 1 week <FONT color=#000000>max.
</FONT>and keep a substantial part of the premium.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Comments please</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>POP</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV></BODY></HTML>
</x-html>From ???@??? Mon Aug 31 09:02:46 1998
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id rma029037; Mon Aug 31 11:30:15 1998
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Date: Fri, 28 Aug 1998 23:37:16 -0700
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From: David Morse <DMorse@xxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: mkt outlook
References: <01a601bdd4e1$38f9b160$7a2a42cf@xxxxxxx>
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Why did you choose the 19dma and not another period?
Earl Adamy wrote:
> Sentiment readings which work in a bull market are frequently not reliable in a
> bear market so I would be cautious about using them. The H&S bottom in the McOsc
> completed on 8/12, failed on 8/26, the oscillator has not turned up, and at such
> deeply negative levels the McOsc is unreliable without smoothing using a short
> term average - the 5ma of the McOsc is still headed down but a bottom here would
> confirm a rally. The McOsc based on weekly a/d remains headed straight south to
> bear market levels.
>
> I do generally agree with your conclusions. Am looking for a drop to the (NYSE)
> 485 area followed by a sharp rally in both big caps and interest rates, followed
> by another decline to the 480-485 area which may hold.
>
> On the longer term I suspect we may well see a trading range market not much
> above DJIA 7000 for the
> next couple of years (through the millennium) accompanied by long yields in the
> 4% area followed by a resumption of the bull market. The yield curve has been
> saying recession ahead for many months and the earnings yield/tbill model has
> turned down indicating a probable return to historical norms: about half of
> current levels in some combination of reduced rates and reduced stock prices.
> The rapidly increasing downside risk here is that if the global
> financial/political problems are not contained, we could see a horrific bear
> market decline. In any event, if we get a decent rally here, will be looking to
> load in more zeros.
>
> Earl
>
> -----Original Message-----
> From: Proffittak@xxxxxxx <Proffittak@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Monday, August 31, 1998 5:10 AM
> Subject: mkt outlook
>
> >good morning
> >
> >with only 19% of all stocks on big board above their 200 day m/a
> >we are exterimely oversold
> >
> >mkt sentiment has not turned up
> >McClullen osc at -216 is definetely at much HIGHER reading then last sell
> >off
> >with MUCH lower prices(bullish divergence)
> >i suspect intra day low of 490 on nya and then a dead cat bounce to
> >555-560nya intra day hi
> >unless new hi-new low/total issues*100 goes above its 19 day expo/ma
> >i will NOT go long this mkt but re short@ 555-560nya
> >fundamently the mkt is at its best reading in 2.5 years (projected earning
> >growth based on cost of production labor and material ,shipping and
> >marketting)
> >but we must visit 450-475 nya before the new rally starts for real
> >
> >happy trading
> >Ben
> >p.s
> >for the week sep sp low@xxxx and hi@xxxxxxxxx
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