Naz
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I'm off to get my Barrons to see if this works this week.As the markets open after the public holiday today.Did anyone do it last week?
From Larry Williams last week......................
If history repeats itself, Monday will be payday for many pros. Year after year, specialists, market makers and professional traders live for tomorrow. It's Christmas again, only three weeks later.
And why do these professionals live for this Monday (and the next few Mondays) every year, year after year? Because of one reason...
The BARRON'S ROUNDTABLE issue has hit the newsstand!
Each year Barron's (you know, the guys who called the 2000-2001 bear market in as early as 1994) invites eleven of the best and brightest investment minds (their words, not mine) to their office and asks them to to play Kreskin for the upcoming year. These individuals get to show off their clairvoyance on such simple things as to what this year's GDP will be, how many people will be unemployed at the end of the year, the closing price of the Dow, etc. You know, all those easy tasks that no one in the history of mankind has ever been able to consistently do.
Sometimes these folks really are not too bad. But the main reason these guys go onto the Roundtable, is that they get to plug their stocks (hell, last year Abby Joseph Cohen plugged five of them and one even went up for the year). But that doesn't matter to professional traders. What matters is that many of the stocks in today's issue will pop Monday morning. And some will pop big. And this is where opportunity lies.
The Game
The game is not to follow the Roundtable's recommendations (history has proven otherwise). The game, as history has proven, is to:
---Do what the specialists and market makers will do tomorrow, and be on the other side of these trades for a few minutes to a few days!---
If you are a specialist or market maker tomorrow, you are obligated to be on the other side of the influx of tomorrow's early morning buy orders. So what are you going to do? Open the stocks flat? No! (If they do, that stock is then sure as hell going lower.) You are going to open the stocks as high as possible, in order not to get clocked and to create an opportunity for yourself. And you are likely going to try to get yourself short sometime early in the morning once you feel the impulsive buying (not-so-smart buying?) has been absorbed.
A lot of this game will not be in the big cap stocks. The specialists and market makers can handle the size in these stocks. The opportunities lie in the mid-cap to small cap stocks. And the thinner the better (just remember to borrow the stock and short them on an uptick, otherwise the SEC will be knocking on your door someday). The specialists typically go to town on these stocks (this is where they make their money for the day) and open them at absurd levels. Many times these levels are not sustained and these stocks quickly reverse.
Names
As this is being written over the weekend, there is no way of knowing which stocks will gap, which stocks will likely reverse, and where the best opportunities will lie. These answers will come when the stocks open in the morning. In the meantime, Barron's publishes three to four analysts' picks (about 20-25 names) each week for the next few weeks. For copyright reasons, I cannot recopy these names. But, you can get them at your newsstand or at Barron's Online. And the time spent researching these names and following them tomorrow and the next few Mondays, may pay big dividends for you.
One final note: One guy on the Roundtable to really keep an eye on is Marc Faber. In the past, Marc has made it an occasional habit to plug a few low-priced stocks he is long. Nothing wrong with this. But these stocks go wild when he does. A few years back I was long one of Marc's low-priced picks when he plugged it. It took the specialists on the ASE more than four hours to open the stock Monday morning. When he did, I felt the same emotions felt by lottery winners when their numbers come in. The only difference is that they get to keep their money when this happens. I, on the other hand got to keep the money for 48 hours (on paper) as the stock round-tripped in two days. Those who were smart enough to be shorting to these Monday morning buyers cleaned up. (Not me -- I wasn't even smart enough at the time to sell it to them!) But the money was there to be made. And each year, the money has been there to be made. And, I suspect it will be there to be made again this year. Just remember, don't be cocky. These stocks will be volatile, and some will have real follow through. Use tight protective stops on all your trades.
From Larry Williams last week......................
If history repeats itself, Monday will be payday for many pros. Year after year, specialists, market makers and professional traders live for tomorrow. It's Christmas again, only three weeks later.
And why do these professionals live for this Monday (and the next few Mondays) every year, year after year? Because of one reason...
The BARRON'S ROUNDTABLE issue has hit the newsstand!
Each year Barron's (you know, the guys who called the 2000-2001 bear market in as early as 1994) invites eleven of the best and brightest investment minds (their words, not mine) to their office and asks them to to play Kreskin for the upcoming year. These individuals get to show off their clairvoyance on such simple things as to what this year's GDP will be, how many people will be unemployed at the end of the year, the closing price of the Dow, etc. You know, all those easy tasks that no one in the history of mankind has ever been able to consistently do.
Sometimes these folks really are not too bad. But the main reason these guys go onto the Roundtable, is that they get to plug their stocks (hell, last year Abby Joseph Cohen plugged five of them and one even went up for the year). But that doesn't matter to professional traders. What matters is that many of the stocks in today's issue will pop Monday morning. And some will pop big. And this is where opportunity lies.
The Game
The game is not to follow the Roundtable's recommendations (history has proven otherwise). The game, as history has proven, is to:
---Do what the specialists and market makers will do tomorrow, and be on the other side of these trades for a few minutes to a few days!---
If you are a specialist or market maker tomorrow, you are obligated to be on the other side of the influx of tomorrow's early morning buy orders. So what are you going to do? Open the stocks flat? No! (If they do, that stock is then sure as hell going lower.) You are going to open the stocks as high as possible, in order not to get clocked and to create an opportunity for yourself. And you are likely going to try to get yourself short sometime early in the morning once you feel the impulsive buying (not-so-smart buying?) has been absorbed.
A lot of this game will not be in the big cap stocks. The specialists and market makers can handle the size in these stocks. The opportunities lie in the mid-cap to small cap stocks. And the thinner the better (just remember to borrow the stock and short them on an uptick, otherwise the SEC will be knocking on your door someday). The specialists typically go to town on these stocks (this is where they make their money for the day) and open them at absurd levels. Many times these levels are not sustained and these stocks quickly reverse.
Names
As this is being written over the weekend, there is no way of knowing which stocks will gap, which stocks will likely reverse, and where the best opportunities will lie. These answers will come when the stocks open in the morning. In the meantime, Barron's publishes three to four analysts' picks (about 20-25 names) each week for the next few weeks. For copyright reasons, I cannot recopy these names. But, you can get them at your newsstand or at Barron's Online. And the time spent researching these names and following them tomorrow and the next few Mondays, may pay big dividends for you.
One final note: One guy on the Roundtable to really keep an eye on is Marc Faber. In the past, Marc has made it an occasional habit to plug a few low-priced stocks he is long. Nothing wrong with this. But these stocks go wild when he does. A few years back I was long one of Marc's low-priced picks when he plugged it. It took the specialists on the ASE more than four hours to open the stock Monday morning. When he did, I felt the same emotions felt by lottery winners when their numbers come in. The only difference is that they get to keep their money when this happens. I, on the other hand got to keep the money for 48 hours (on paper) as the stock round-tripped in two days. Those who were smart enough to be shorting to these Monday morning buyers cleaned up. (Not me -- I wasn't even smart enough at the time to sell it to them!) But the money was there to be made. And each year, the money has been there to be made. And, I suspect it will be there to be made again this year. Just remember, don't be cocky. These stocks will be volatile, and some will have real follow through. Use tight protective stops on all your trades.
