Barron's, Anyone doing this?

Naz

Experienced member
1,391 22
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.
 

Naz

Experienced member
1,391 22
Lots of us have our own opinion as to where we think the market might go,however I just react to what my screens tell me and take good risk reward trades.As some say"trade what you see not what you think."

Mind you i like many others always have in the back of my mind important factors that could change the direction of the market. I know that fib levels are at about 1940 and 1900 on the Nasdaq so thats my support and resistance levels.Those are the levels i'll be looking at.

I also know in the longer term there is a gap to fill at 2000 which is also another fib level and if it bounces off 1900 the 50% retracement is 2000.

But in the short term i know that there are 2 economic events coming out today that the market will watch.One at 10am EST and one at 2pm EST.As these are important time periods for the US markets either one of them could start an intraday short term reaction.So i'll be watching those two.

If at any time the Dow started moving up, the stock i would follow would be Dow Chemicals.DYOR, but i feel its oversold and will attract buying if the Dow did move up strongly.
 

Mr. Charts

Legendary member
7,367 1,184
Naz,
Larry Connors actually, not Larry Williams ;-)
What an absolutely wonderful day so far - shorted emini nasdaq at 1560 and closed at at 1528 for a lovely +32. Flat for now, but watching for further breakdown later or snap back rally
Mr. Charts
 

Naz

Experienced member
1,391 22
Thanks for correcting me on Larry Connors name :)

Didnt that 10 o'clock turnaround create such a fantastic short.It Literally happened to the minute.I went short on the Q's immediately and rode the wave down.
 

Naz

Experienced member
1,391 22
Yet another 10 o'clock turn around on the Nasdaq.All you've got to do is trade what you see not what you think.
 
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