Your Complacency (not?)

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holycow

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Post Number: 849
Registered: 08-2004

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Thursday, February 24, 2005 - 09:59 am:

Here's my two bits on the recent so called stoploss raids... the alternative view is the traders have become too complacent in their outlook of the market and have become too "predictable" in their "moves", which as usual, the smart market observer who spotted such opportunity took advantage of them and gave them one hell of a ride they would never forget.

Also alternatively, they should be cautious (warning!) with every kanga tail because every tail tells a story... there will be more raid and dump on the horizon. Just wait and see.

HC

"... if you've got a chart, I have an opinion!"

holycow

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Post Number: 858
Registered: 08-2004

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Saturday, February 26, 2005 - 01:59 pm:

This just crossed me mind this morning, thought might be "useful" to scare some people's pants off. Good amusement as far as I am concerned... avoid now if you can't stomach sadistic joke, horror movie, etc - you'd been warned.

One of the cardinal rules, (hmmm... cardinal rule?) in stock trading is at all times, aim for survival before everything else. Stay alive and fight another day always means you have to pay attention to preservation and conservation - preservation and conservation of your energy, resources and capital that is. Make sense?

Anyway, if you have been to any martial art or self defence courses, and if you are into some kind of martial art contest or competition, the master would almost never fail to tell you to keep your eyes on your competitor. Watch their eyes, they would say. Then watch their shoulders and their knee because that's where you can pick up what move he/she is likely to make. In short, while you are busy with trying to score point, ie, kill your enemy, you never forget to stay out of their killing blows - so you would stay alive.

And fight!

In trading, I think, the same principle applies. Watch your competitors. In this case the big players, the sharks and the syndicates. They have overwhelming resources and capital while you can only manuever to stay out of their killing blow. Your goal is to stay alive at the same time stealing a blow or two hopefully you can get some back. Alternatively you seek out the weaker opponents and you chew them for lunch - harsh, but it's a fact of "trading" life.

Recently there were a whole spates of kangaroo tail "move" been dished out to the hapless punters and traders, whilst many were licking their wounds crying foul, I think not many were looking into the why/how/what/when/who questions. Their focus has been on themselves instead of on the "enemies" - and their NEXT move! For example, the question of "will there be another kangaroo tail on its way?". A surviving question would be "what should/can/will I do to avoid another kangaroo tail?"

So, here is the question - "will the kangaroo tail hit twice?". My answer is "you bet!".

Take a look at the following two charts.

GTP Daily
gtp

1) GTP was hit with a kanga tail on 18/2, and then another on the 25/2 - would you like to have a guess why such tail happen? And would you like to bet that it won't happen the 3rd time? Well that'll be your call and your $$$ - but base on how quickly the traders bought back into the stock after they were shaken out, I am not surprised many did not realise how much risk they are taking on and how PREDICTABLE (read complacent and taking the market for granted!) their trading has become!

2) Here is an alternative view - try imagine you are one of the hedge funds and you have enough resources and capital to carry out such a raid. Will you do it? Will you do it again after you have slapped them on their face and they so quickly turn to the other cheek?

YOU BET!

3) Looking at the chart but without the daily course of sales figure, I'd assume if you look at the volume on the 18/2 and the subsequent 5 days "slapping", I'd assume "they" had acquired many "cheap shares" at the low end at 4.22 instead of at 4.70. If they had bought cheap at 4.22-4.30, they could have nicely "milked" the herd for another 5 more days for a pretty decent profit! Good on them! :-)

4) Do you reckon point 3 makes sense? Or not? If it makes sense, do you reckon GTP is a good long candidate? Start thinking now before it's too late!

MLE Daily
mle

1) no comment on this one cause it's getting too long. Best leave it to everyone's imagination. It's good to bring some fear back or people would forget how tough the market can get - all it takes is 2 good years...

Cheers.

HC

"... if you've got a chart, I have an opinion!"