Finally, a gap down open would be. A tiny little bit gap down within a recent trading range means it will be filled and the day tends to be flat.
A mail from uempel as some of you know that I respect his opinion. Well again, like all the posts here in this blog, it’s just an opinion I’d like to share (which makes me very happy), but it desn’t mean I agree or disagree.
I believe that one of the most important keys to success is an abundance of patience. Sometimes the charts are contradictory and then it might be just that – to be in cash and to wait for a new short- or long-term trend to establish itself.
I can tell you the story of an American guy I knew who sold all his NASDAQ positions in 1999 and waited 8 months before he went short in March and April 2000. But he’s a well-read savvy investor. He was about 65 years old at the time and he knew he could easily make a few hundred percent by shorting the NASDAQ – and he had the necessary patience to wait for the right moment. His moment to pounce was the drying up of all the liquidity Greenspan had put into the markets (in order to avoid the markets from faltering because of computer glitches at the transition 1999/2000). When the Fed started to close the liquidity taps in January/Februar 2000 the guy knew it was time to act.
Well, this guy prepared his moves very, very carefully. I did not quite understand him at the time. But in the end his handling of the situation was absolutely superb. His trading also impressed other people, and some hedge fund wanted him as an advisor, but I think he was not interested. I have lost track of him now, because a mutual friend is no longer in business and lives elsewhere.
Bottom line: I guess the key to making money on the stock-market is to know when to be out of the market. You might miss a move of 10% or even 20%, but you can be pretty sure to catch the next move...
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