Forum Archive Index - June 2001

[Phaedrus <Phaedrus@techemail.com>]

Jerrold,
         I was surprised that you found the TLS chart to be unclear. I 
purposely put hardly anything on it (only one trend-line and two support 
levels) to avoid clutter, and make it easy to see the down-trend. 
  "When is it safe to buy again?"   That would depend on the individual, their 
trading system and their risk tolerance. The safest entry would be after the 
current trendline has been broken, and when a new up trend had developed 
(higher highs and higher lows). This would suit a very conservative long-term 
holder. Slightly less safe would be simply after the trendline has been broken. 
If you were a short/medium term trader, you could have been trading the swings 
all the way down, (5 trades in 18 months) using oscillators for Buy/Sell 
signals. If so, you would have bought again yesterday. The swings are plotted 
in Blue. If you were an active short-term trader, you would be trading the 
fluctuations between the swing chart turning points, using a short-term 
indicator such as the Stochastic oscillator. Day-traders use the shortest 
timeframe of all. Whatever the timeframe, buying a stock in a long-term 
downtrend is always more risky than buying one in a long-term uptrend.
  The uptrend you saw in October would have been quite tradeable, so long as 
you were using suitable indicators. 
  I am disappointed that you had not noticed that the charts do use a 
logarithmic Y axis. See how the distance between 550 and 600 is much greater 
than the distance between 900 and 950. This means that equal percentage changes 
are of the same magnitude regardless of the level at which they occur.

       Phaedrus

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