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</x-html>From ???@??? Wed Oct 14 14:18:19 1998
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Date: Wed, 14 Oct 1998 14:11:37 -0700
Reply-To: szilassy@xxxxxxx
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From: "Szilassy" <szilassy@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: AXP short - advice
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<DIV><FONT color=#000000 size=2>Ketayun, I agree with Earl. Sounds like
you lack any form of serious risk management strategy, which will kill you
quicker than you can say "John Jacob
Jingelheimerschmidt".</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT size=2>My personal suggestion based on my experience is to take time
off to review your situation in some detail. Read as much as you can on
the subject of risk management but despite all that's been written on the
subject, it boils down to this - no trade should be made without a known target
upside and stop-loss level BEFORE initial order entry. You must know how
much of a loss your trading account can withstand on any one trade and, based on
recent support/resistance and any number of your chosen technical indicators, to
what level the price can REASONABLY be expected to ascend. Stick to these
religiously. From a psychological standpoint a big loss is
devastating, while many small ones are manageable. Also, you clearly need
a detailed business plan for trading - this should include what average upside
and downside you strive for - and keep a detailed journal of your trades,
reasons for entry and exit, lessons learned, etc. This investment in time
is the only means for your efforts to bear fruit.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>I know this because I made a similar mistake and am currently
long XCIT from 42. The profit opportunities which have evaporated as I
held the position have been staggering - even in XCIT itself! Misery does
not love company in this case though - I am taking steps to make sure this
experience is not repeated. I have taken a respite from watching the quote
screen this week and am spending nearly all my time at the local library, poring
over all my materials and thinking through my strategic direction. My
confidence level has made consistent progress as my knowledge base expands and
my system evolves in breadth and depth.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>So Ketayun, as far as your specific AXP position, only you can
decide if you are willing to assume additional risk. Aside from waiting or
closing the position now there is of course a third option you may not have
considered - hedging. Among others, you can buy a call with your desired
expiration date and a strike price at a level slightly above the existing
price. Your loss is then limited to the difference between your entry
price and the option's exercise price. If the price goes your way, the
option will expire worthless and you can cover on more favorable terms. If
it doesn't, you have set a predetermined downside risk rather than leaving your
situation up to chance.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Such lessons are always costly at the outset, but it's a part
of tuition. You can either continue to pay with your own money OR you can
hit the books, fill a notebook or two, and define your strategy precisely - the
choice is yours.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Best regards,</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Paul Szilassy</FONT></DIV>
<DIV><FONT size=2></FONT><FONT face=Arial size=2><B></B></FONT> </DIV>
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Earl Adamy <<A
href="mailto:eadamy@xxxxxxxxxx";>eadamy@xxxxxxxxxx</A>><BR><B>To:
</B>RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR><B>Date:
</B>Wednesday, October 14, 1998 1:24 PM<BR><B>Subject: </B>Re: any
thoughts?<BR><BR></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px"></FONT>
<DIV><FONT color=#000000 size=2>I suggest that if you didn't go into the
trade with both a stop loss point and a minimum profit objective, that you
should not be in the trade. Those decisions should never been made while in
a losing trade - might be a good idea to get out and figure out what your
objectives are.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT size=2>Earl</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original
Message-----</B><BR><B>From: </B>Ketayun <<A
href="mailto:ketayun@xxxxxxxxxxx";>ketayun@xxxxxxxxxxx</A>><BR><B>To:
</B>RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR><B>Date:
</B>Wednesday, October 14, 1998 8:58 AM<BR><B>Subject: </B>any
thoughts?<BR><BR></DIV></FONT>I am stupidly short AXP at 73 3/4, any
thoughts if I should abort and at what price?
<P>TIA
<P>Ketayun </P></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Thu Oct 15 07:09:01 1998
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Reply-To: dbtg@xxxxxxx
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From: "dbtg" <dbtg@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: [Doom and Gloom Dow Industrials Forecast]
X-To: <chmeyer@xxxxxxxx>,
"RealTraders Discussion Group" <realtraders@xxxxxxxxxxxxxx>
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There's another article in the NY POST on Oct 12.... guy says the PLUNGE
PROTECTION TEAM was in there on Thursday....
>
>New York Post-October 12, 1998
>
> MARKET-RIGGING: SHORT-TERM FIX, LONG-TERM DISASTER
>
>By JOHN CRUDELE
>
>THANK goodness someone has finally decided to rig the stock market.
>
>With the impeachment process in motion and Ken Starr confirming my
>exclusive of a few weeks ago that there are more impeachable offenses
>being looked into, someone had better take action to rig the market
>before the political crisis turns into an economic one.
>
>My bet on the rigger is Washington, probably through something that the
>Washington Post last year called the Plunge Protection Team. That's a
>group of financial big shots from the Treasury, the Fed and Wall Street
>whose stated job is to keep the financial markets from collapsing - as
>evidenced by Thursday's dramatic turnaround and Friday's 167-point
>gain.
>
>But the prop under the stock market could just as easily be coming from
>Wall Street firms, with the blessing and assistance of the Federal
>Reserve. That's not so preposterous, considering these very firms -
>with
>the Fed's blessing - had to step in a few weeks ago to protect the
>financial system from the mess created by the Long-Term Capital hedge
>fund.
>
>But there are right ways to rig the market and there are wrong ways.
>There are also legal and illegal ways.
>
>As it turns out, the right ways, or the effective ways, at the present
>moment also happen to be the illegal ways.
>
>The wrongheaded and ineffective way would be to continue to try to
>correct the current stock market downturn through things like interest
>rate cuts.
>
>First, I'll tell you how the stock market is being rigged. Then I'll
>tell you what's even more important - what's going to happen in
>Washington and why you should get out of stocks before this rigging
>adventure leads to disaster.
>
>Here's some history:
>
>Back in 1989 a Fed governor named Robert Heller proposed rigging the
>stock market. Heller had just left the Fed when he gave a speech
>suggesting that the central bank should step in and take direct action
>to keep the stock market from collapsing.
>
>The Fed had taken action before. It made sure there was enough
>liquidity
>during the crash of '87 to keep the system going. It may have even
>strong-armed a few banks into propping up the market. And it has often
>lowered interest rates at opportune times.
>
>But Heller's idea was different.
>
>He wanted a more direct approach, especially when the bond and currency
>markets were becoming uncontrollable (like they are these days).
>
>Heller believed that in an emergency, the Fed should start buying stock
>index futures contracts until it managed to pull stocks out of their
>nosedive.
>
>Essentially, whenever there is heavy buying of these futures contracts
>it causes the underlying stock market to rise. The futures contracts
>can
>be bought cheaply; they are highly leveraged so you get more bang for
>each buck, and they eliminate the need for a rigger to purchase, say,
>all 30 stocks that make up the Dow. Heller explained that the process
>was simple. And it is.
>
>The trouble is, the government never has had authority to rig the stock
>market.
>
>But there are indications that this sort of rigging works, at least for
>awhile. Hong Kong authorities rigged their stock market last month when
>selling pressure became too great. That government did it openly and
>proudly.
>
>How do I know the market is being rigged?
>
>I really don't. But I am very suspicious.
>
>Take last Thursday, when the Dow was down more than 200 points and the
>House was passing a resolution to investigate the President of the
>United States. Exactly when the debate was going on in Congress, the
>S&P
>500 futures contracts shot up in price like someone needed a market
>rally awfully bad.
>
>A noble effort. Maybe even a necessary one. But let's keep this to
>ourselves. If the rest of the world found out what was going on they
>might want to find some other place to invest.
>
>The U.S. is likely to need a lot more market riggings in the months
>ahead as more of Starr's findings come to light.
>
>The bottom line?
>
>Washington is going to have to perfect its market rigging technique.
>Make it a little more subtle. Perhaps start at 2:35 p.m. in the trading
>day rather than always at 3 p.m.
>
>And do it in a hurry - the next big explosion in the Starr
>investigation
>of the President will probably come soon after the elections.
>
>But if you're an investor who doesn't trust the government to pave your
>street much less protect your portfolio, it's time to skedaddle.
>
>---- End Forwarded Message
>
>
-----Original Message-----
From: charles meyer <chmeyer@xxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Wednesday, October 14, 1998 4:27 PM
Subject: Re: [Doom and Gloom Dow Industrials Forecast]
>Earl and All:
>
>There was an article about that titled--get this--"Plunge Protection Team"
>about Fed intervention during the little crash last October.
>
>Charles
>
>----------
>> From: Earl Adamy <eadamy@xxxxxxxxxx>
>> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> Subject: Re: [Doom and Gloom Dow Industrials Forecast]
>> Date: Wednesday, October 14, 1998 2:55 PM
>>
>> IMHO, the Fed's been getting practice - I've seen at least 4 days since
>Sept
>> 1 where the Fed's footprints appear to be all over the intraday charts.
>When
>> the spoo runs up 30 points from a pivot low in an hour with zilch change
>in
>> a/d issues and a/d volume, it's a reasonable bet that the Fed's been
>> supporting the market by buying futures - far cheaper/easier to do than
>> buying stocks. I think this is intended to keep the shorts from getting
>too
>> aggressive.
>>
>> Earl
>>
>> -----Original Message-----
>> From: steven poser <swp@xxxxxxxxxx>
>> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> Date: Wednesday, October 14, 1998 9:22 AM
>> Subject: Re: [Doom and Gloom Dow Industrials Forecast]
>>
>>
>> >Mitch -
>> >
>> >That is a point worth noting, but outside of this list and those that
>> >follow the astrology guys, I do not think everybody else is truly
>> >looking for the capitulation trade on Black Monday's anniversary. Though
>> >Acampora downgraded his targets, many of the big street technicians
>> >believe that we have put in a bottom for at least another month.
>> >
>> >The other thing to be aware of is that if the market does blow up by
>> >500-1000 points in a day, it will require some action from the Fed to
>> >make people stick their feet in the water. Every try catching a falling
>> >knife? People will not just jump in without a good reason. How many
>> >times have you said that you will buy when something gets to a certain
>> >level, and then did not (unless you are real disciplined or already had
>> >the trade in, or were smart enough to be short into that level).
>> >
>> >I do believe that the capitulation trade will be met with a rate cut and
>> >that a bottom will be in soon, but I would not count on the views in
>> >this forum as being universal.
>> >
>> >Steve
>
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