been very difficult to call things in this sharp de-cline.  ! will  need to evaluate things  in more depth tonight.
Open positions: NoneTotal  profit  for 3/30/00:  -$897.00
Sitting on My Hands
DAY TEN
Friday,  March  31,2000
Yesterday was my first losing day of the challenge, and I wanted to lookback and examine what I did wrong.  It wasn't that I expected to makemoney everyday when I accepted the challenge, but I believe it is always agood  idea to lake a step back and study your trading, especially on  losingdays,  and I  was looking  for something I may have been missing.  I  wanted  ananswer for what happened yesterday, so  I spent a  lot of time going over mytrades.  I finally reached the conclusion  that I had managed risk properly,even on  the three positions that were in-the-money and were given a widewiggle room.  Those  positions  did become  losers and  were  the  difference  be-tween having a winning day to having a losing day;  however,  the $1,500turnaround was only 2% draw down on the entire position.  If I had been cor-rect  in  my assessment at the  time, my entry would have been  the bottom,  andthe rewards could have  been  as  much  as seven  times  the  money I  lost.  If Ihad to do it all over again, I probably would play it the exact same way.
I have spent most of last night studying charts.  I was looking at each andevery stock that is in my Constant watch  list, and I wrote down support andresistance  levels  for each one of these stocks.  Then,  I  studied  the Nasdaqchart in greater depth.
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There were no high percentage trades  that I could  see unless  I wanted  to playwith fire, so I sat on  my hands the entire day.  When  the Nasdaq made a  newintraday low  at  12:00  PM,  I closed everything up,  and  I got a head start onthe weekend.  I felt very fortunate to be all in cash.  I thought that the marketlooked very  ugly.
When  the  final  bell  rang,  I  was  at the  park  flying  a  kite  with  my son.  Whilemy son, Jordan, was  singing the tunes "Let's  go fly a kite" from the classicmovie, Maiy Poppins, and I was  trying to  figure out how you  get the kite inthe air when there is no wind, the Nasdaq managed to rally and close the dayup 114 points from yesterday's close (21 points from the open).
Open positions: NoneTotal  profit  for 3/31/00:  $0.00
The second week of the challenge was over.  It was  a decent week  in  which  Ihad mixed results.  I started the week with four winners on Monday.  I hadtwo decent winners  in JNPR and  WAVX on Tuesday giving me  a comfortcushion for the remainder of the  week.  I  executed  a  lot of trades on Wednes-day making a little profit at the end.  Thursday was my first losing day, inwhich I was trying to catch the market bottom and sit tight.  I was proven tobe wrong time and time again, but I didn't lose too much, even though  I gaveback all my gains.  On Friday,  I did not execute even one trade.  I was wayoff in my expectations  for the day, so  I sat on the sidelines and observed  theaction  from  the passenger's  seat.
My total profits  for week one were $ 1,928.47.  I  faxed MB Trading a requestfor a check in the amount of $2,000.00.  After all, Friday is payday!
The Nasdaq chart was telling me that the market may have topped.  Weclosed below the 50-day moving average for the first time since October  19,1999.  We possibly formed a double top pattern, which was confirmed yes-terday once we  traded  lower than  the  low price made on 3/16 and 3/21.  Thenext support level  I see on the chart is at 4290, and the next support after thatis at 3715.  If we have in  fact topped and the double top pattern is confirmed,we could go as  low as 3700.  This chart was a  legitimate reason  to be appre-hensive.
Following the 186-point decline in the Nasdaq yesterday, I expected the fu-tures to be down big this morning.  I thought that we were going to openlow, sell  even harder at the open, then bounce somewhere around 4290 andcompletely reverse.  I felt there was going to be some serious panic selling inthe morning.  I was ready to pick up all the bargains!  I brought out my wishlist  from  last  Christmas,  and  I  had  my  shopping  bag  ready  to  be  filled  withgoodies.
Then, once my bag is filled up to the top with the best stocks in North Amer-ica, I would sit tight and let the institutions push the market back up.  Todayis the end of the quarter, and I expect fund managers to support the big namestocks, so their portfolios look somewhat better.
But it wasn't so.  The gap down open I anticipated didn't happen at all.  In-stead the  market gapped up!  The Nasdaq was up 93  points at the open!Only then, did it start trading down. And down. And then, down some more.By lunch  time, the Index was down more than  100 points from the open.
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Free Willy
DAY ELEVEN
Monday,  April  3,2000
1 did a lot of research over the weekend, and I had a h a n d f ul of candidatesfor potential long positions.  I was very excited, because I thought 1 hadsome high percentage setups and trading plans.  I had my alarm set to 5:30AM, and I got up without hitting the snooze button.  I look a quick showerand went upstairs to my trading desk.  It was 30 minutes to the market open.I turned on my computer, and saw that the futures were down sharply.Stocks were trading much lower pre-market and my candidates were no dif-ferent.  They were all trading lower than where I was planning to enter them.1 turned on the TV and found out that Microsoft failed to settle their casewith the justice department over the weekend.  This was  very bad news.Suddenly,  all  my trading plans were  tossed out  of the  Windows,  or should Isay out through the  Gates.  I was now expecting a major sell off.  This haschanged my current strategy for the day.  My new strategy will be to  findhigh percentage bounce plays.  The Nasdaq gapped down 78 points, and Mi-crosoft gapped down  12  11/16.
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I was trying to play the opening bounce on MSFT.  The market tends tooverreact to bad news, so  I expected a nice little bounce.  I bought 200 shares
of MSFT at  94  3/4.  The  stock  went up  as  high  as 96  1/2,  but  then  turned  andtanked  very  fast.  I  sold  200  MSFT  and  barely  got  out  at  95.
ORCL bounced  at  77.  I  bought  300 ORCL at 77  5/8.  My  price  target  was80.  My stop  loss was  at 76  15/16, just below  today's  low.  ORCL  nevermade it lo 80, but topped at 78  1/4.  I entered a sell order and got a partialfill.  I  sold  100 shares  at 78  1/8.  The stock went  lower and  I sold  200 sharesat 77  7/16.
ORCL held  77  3/8  and  started  to  move  higher again,  so  I  bought 200  sharesat 77 7/8.  I was still  looking for 80.  I  placed a stop loss at 77  1/4.
This  time  ORCL  traded  as  high  as  79,  before  turning back down.  I  sold  200shares  at  78  1/4.
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MSFT setup a double bottom and  was  now trading higher.  I thought it had achance to pop 93 and run, so I bought 200 shares at 92 7/16.
ORCL was back to the 77 level, and I thought it might be forming a doublebottom.  I bought 200 shares at 77.07.  My price target was 79 -  80.  My sloploss was at 76 3/4, which was  1/4 below the lows of the day.
MSFT went as high as 93  5/16, then lost steam.  I sold 200 shares at92  15/16.
Ouch.  ORCL  breaks  down  through  support,  and  my  stop  loss  is  activated.  Isold 200  ORCL at 76  3/4.  Again,  the chart  shows  the importance of beingdisciplined about keeping a stop.
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SUNVV has support at 90, which were  the  lows several days back on 3/30/00.I  traded  il numerous  times  that day,  and  I remembered  how the 90 level  held,and the stock ran up to 94 from there.
Then the "unthinkable" happened and SUNW actually broke down through90.  My stop loss was activated, and I sold 200 shares at 90.  I got a price im-provement on  my stop  loss order, which  is not very common.
CSCO formed a double bottom as seen in (lie chart above.  I bought 200shares at  73  3/16  as CSCO  bounced  at  the second bottom.  I placed a stoploss  at  72  15/16  (I  felt  that  73  should  hold).  My price  target  was74  1/4 - 74  1/2 (previous tops).  The stock hit 74 and turned around.  I sold200 shares  at 73  9/16.
ORCL pulled back from 78 to 76.  MSCO held it there again, and the stockwas moving up.  I  bought 200 shares  at 76 9/16.  The  stock went to  77  3/8,and SBSH showed some muscle and  axed  it again.  I  sold 200 shares  at76  7/8.
SUNW was trying to bounce.  It moved back over 90.  I bought 200 shares at90  1/2.  MLCO was  axing  the stock,  lots  of green prints  and no  price pro-gress.  The  bid side had a  lot of depth.  Once  everyone saw how seriousMLCO was about selling SUNW, the weight shifted over and sellers camein.  Having no choice, I sold 200 shares at 90  1/4.
CSCO was approaching 73 again.  I decided to step in front of the sellingpressure and buy 300 shares at 73  1/8.  I thought that I had two support  lev-els  in place,  one at 73,  and  one at 72  3/4.  I placed a stop  loss at 72  11/16.
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CSCO does not hold the support level this time.  It takes out the 73 level andthe 72 3/4 level.  My stop loss is triggered.  I sold 300 shares at 72 45/64.Notice the volume spikes when CSCO took out 73 and 72 3/4.  There weremany buyers there, but they still could not rebuff the selling pressure thatcame in.
I bought CSCO for the same reason I bought SUNW.  I was looking for arally into the close.  I bought 300 shares at 72 7/8, and I sold them just be-fore the close at 73.  I was not going to hold any positions overnight.
SUNW bounced at 88.  I was expecting an end-of-the-day rally, and/or ashort squeeze, so I bought 200 shares at 89.12.  The stock only went as highas 90 before falling back down and I sold 200 shares at 89.19.
I also made the exact same play on ORCL.  I bought 300 shares at 76  11/16,and I sold 300 shares at 77, just before the close.
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Wow!  It was a record day.  The final bell just rang, and the Nasdaq  had justsuffered its worst ever point decline.  It was down 349 points for the day.The bears were waking up from their winter hibernation.  The chart belowshows the trading clay on the Nasdaq index.
It was also a record day for the number of trades I have executed today.  Ikept a ll stop losses and trailing stops very tight.  I was not letting my tradeshave wiggle freedom, because the consequences could have been brutal.  Inhindsight, today's meager profits could be considered huge, because I wasable to avoid losing big money trading on the long side through the worstever, down day.  It does  not look good for the bulls, not unless Reno decidesto  free  Willy.
Open positions: NoneTotal profit for 4/3/00: $47.51
Record Volatility
DAY  TWELVE
Tuesday, April 4, 2000
The Nasdaq broke down through the support levels at 4290 yesterday, andclosed at 4223, which was a very bearish sign.  I didn't know what to expecttoday, so I had no trades planned in advance;  however, I was going to beready to  buy stocks should the Nasdaq  sell off hard.  We  have come  down16.8%  over the last six trading days, so  we are getting somewhat oversold.
The Nasdaq gapped up 60 points this morning.  I was going to sit tight on thesidelines and not get sucked  into trades the first 30 minutes of the day.  Ididn't want to relive yesterday all over again.
I  took my sniper position, and I  was waiting to take my shot.  The Nasdaq,which opened up 60 points, was now in negative territory.  It-was selling offhard.  The market had only been open  15  minutes, and the Nasdaq had al-ready lost  121  points.  It was down 61  points from yesterday's close.  Sud-denly, the index started to bounce and shot up almost  100 points over thenext 21  minutes.  It was now  about 20 points  off the  morning high.
I wanted to jump on this rally, and buy all my favorite Nasdaq stocks; how-ever,  I was not going to do so unless I saw a clear confirmation of a  reversalday.  What I was looking for was for the index to take the previous top out.  Ifit did, I would buy the pullback.  I was not going to chase it early in the day.
It turned out to be a classic head fake, and within the next 27 minutes, the in-dex took out the  low of the day,  and it was  now  free  falling.  It took out the4100 level and was now trading at 4070.  It was down 213  points from theopen.  At  10:55  AM, the Nasdaq tried to bounce, but there were just toomany sellers  in the street.  All potential buyers were sitting on their hands,and I  was doing exactly the  same.
The sell off started to accelerate and panic selling was hitting the street.  TheNasdaq just broke through a key psychological number, 4000.  I rememberwhen  the Nasdaq finally broke up through 4000 with much fanfare, but nowthe breakdown came without even a pause.  Within the next  15 minutes, the
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Nasdaq  hit  3900.  At  12:00  PM,  the  Nasdaq  was  down  383  points  from  theopen.  The Nasdaq  bounced  over the  next  15  minutes,  but  the short-termrally only took  it  up  to  3950  and  presented  an  opportunity  for sellers  to  getout.
The  Nasdaq  penetrated  through  3900  at  12:30  PM,  and  traded  down  to  3840.It  was  down  443  points  from  the  open!
This  was  the  biggest  blood  bath  I  have  ever seen.  It was  very depressing  towatch  as  billions of dollars  were  being  evaporated.  I  tried  to  keep  my focusat  my post.  1  knew  that  if the  bounce  I  was  waiting  for was  going  to  takeplace,  I  would  have  to  be  very quick,  or I  would  never get a  fill  on  my order.
At  12:45,  the  index  had  its  uptick.  I  had  four stocks  from  my constant watchlist  in  Level  II  montage  windows.  I  was  ready to  execute  an  order on  eachone  of them  at  a  heartbeat,  if I  sensed  a  bottom.  These  stocks  were  SUNW,ORCL, CSCO and C1EN.
As  soon as  1  saw  the uptick in  the  index,  I  bought  100 shares  of CIEN  at855/16.
This  rally  did  not  last  long  at  all,  and  the  Nasdaq  broke  through  the  lowsagain.  We were now at 3800.
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As soon as the Nasdaq broke down,  I sold  100 C1EN at 83  1/2.
SUNW broke down through 80.  It was  1:00 I'M, mid I decided to step infront of the crowd and catch the  falling knife.  I bought  100 shares  at  78  3/8,and another  100 shares at 78  5/16.  My strategy was to sit tight, if I caughtthe knife just right.  Or let the knife slip  through my hands with a minor cut,if SUNW was  to keep  falling.
I was following SUNW very closely.  It was trading around the $80 level.As you can  see on  the above chart, SUNW penetrated through many supportlevels.  The bottoms  it had back  in the middle of March,  the tops it had backin  January,  and  the tops  it had back in December of 1999.  I  thought it wasgetting to be very "cheap" at current price levels.
SUNW kept falling down, and I sold 200 shares at 76 43/64.  I got away witha minor cut from the falling knife, but I didn't get killed.  Now, my bloodwas  in the street as well.  It made  me  feel  all  better - Not!
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The Nasdaq kept falling down, and it was trading at 3650, well below its200-day moving average.  It broke through all support levels, and it wasdown  a  record  584  points  (13.83%)  from  yesterday's  close,  and  644  pointsfrom  the  open!  This was a  crash,  if I  ever saw one.  The New York StockExchange w i ll  halt trading if the Dow is down over  10% in one day.  Thereis no such rule in effect in the Nasdaq stock market.  Things were gettingvery scary.
As the Nasdaq ticks up,  I bought 300  CSCO at 65.24  and placed a condi-tional  stop  loss  if the Nasdaq  trades  below  3640.  My price  target was68 - 70.
The Nasdaq  hits 3649 and starts to rally.  I was ready to take another shot.
ORCL  hits  65,  which was  the  top  on 2/11/00.  It  looked  like  good  support,  soI  was  looking for it to bounce at that level.
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ORCL does bounce at 65.  1 bought 200 shares at 66  1/4.  My price targetwas 70, which was resistance several times today.  I placed a stop loss at64 7/8 just below the low of the day.  ORCL hits my price target, and I sold200 shares at 69  7/8.
I bought  100 shares of CIEN at 81  3/4.  My price target was 92, which wasthe tops at  12:15.  My stop  loss was at 79 3/4, just below today's  low.
CIEN hits the bottoms it made at  12:00 around 88  1/2.  It was showingsome weakness, so  I  sold  100  shares  at 86  7/16.
CIEN was  trading at 80, which was support from the tops set on 2/25/00, asshown by the horizontal line in the above chart.
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my price target at 78,  My sell order was not executed, and  I was forced tochase  the  stock down before finally selling 300  shares at 76.40.
CSCO hits my price target. I sold 200 shares at 68.  I sold the remaining  100shares at 69 1/4 into buying strength.
ORCL kept running up and finally pulled back.  I was in my sniper positionwaiting to buy it again.  It found support at 71  1/4.  I bought 300 shares at72.  My price target was 78, which was the morning high.  My stop loss wasat 71, which was just below the last bottom made at 3:00 PM.  ORCL hits
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down, so  I  sold  300  shares at 76  1/2.
I  liked the fact that the market has reversed  its direction and recovered mostof its  loss,  so I  bought 300 ORCL at 76 with  the intention of holding it over-night.  It didn't take very long before I realized that 1 better turn around andsell my position and go  to bed  all  in cash,  so  I sold  300 ORCL at  76  1/8.
The reason  I did not hold ORCL overnight was that I  realized that mostlikely we will have a gap down market the next morning.  Psychology movesthe stock market.  As  it was,  the Nasdaq closed the day down  75  points,  andthe  Dow  closed  the  day down  56  points.  That was  no  big  deal;  however,what happened  earlier  in  the  day  was  a very big  deal.  We had  a  record  vola-tility day,  and  the headlines would be telling that story.  Newscasters are notgoing to  focus  on  the closing numbers.  They are  going to  focus  on  the  factthat the Dow was down  504 points, and  that the Nasdaq was  down  584
points.
I  felt that news of this kind would probably scare the public.  I could see the
CIEN went as liigli as  106  1/2.  I tried to give it a chance to move higher.  Ihad my trailing stop  placed at  103  3/4.  The stock came back down, and mystop  loss was triggered.  I sold  100 shares at  100  15/16.
After I sold ORCL  at  76.40 (once  it pulled back  from 78), ORCL started tomove up again.  I bought 300 shares at 76  15/16.  The stock then turned back
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average investor reading the headlines or watching the news and making avery simple  decision.  Get out  of the market now,  or you  will  never get a sec-ond chance.  This will  create a  flood  of sell  orders  prior to  the open.  TheMarket Makers w i ll drop the market as  low as possible prior to the open,then they will buy all the stock that the public is selling, and then bring theprices back up, so they can sell the stock back to the public at a profit.  Ithappens all the time.
This was a scary crash.  The key to my success today was to wait patientlyfor a high percentage bounce play.  I sat on the sidelines for the majority ofthe day.  1 was fooled twice!  I bought CIEN and lost $191.53.  I then boughtSUNW and  lost $352.59.  I was down over $500.00, but I didn't give up.  Iwaited for my chance.  Good things happen to those who wait, according tothe old saying.  I was fortunate to recognize the absolute bottom, and I en-tered three long positions.  I was able to turn the day around and finish withrespectable profits.
Open positions: NoneTotal profit for 4/4/00:  $3,596.33
Technical Problems
DAY THIRTEEN
Wednesday,  April  5,  2000
As  I expected,  the action  in the market yesterday received  major coveragefrom all  the major networks.  Newscasters were  interviewing financial advi-sors,  asking them if the worst  is over.  They were very careful  not to use  theword  crash  in any of the broadcasts;  however,  you  could  sense  that nervous-ness  was  definitely  present.
The futures are down sharply this  morning, just as  I  expected.  Brokeragefirms  were flooded with  sell  orders  from  the concerned retail  investors.  Ididn't want to buy anything pre-market,  although I  expected a run-up  instock prices  as  soon  as  the  opening bell  rang.  I  was  looking  to  buy  ORCL,CSCO and RMBS.
Ding!  Ding!  The  opening bell  rang  and  the  market started  trading.  TheNasdaq  gapped  down  123  points.  ORCL  was  trading  at  73,  CSCO  was  trad-ing  at  70  1/4,  and RMBS  was  trading at 201.  I  sent orders  out  to  buy  300shares of CSCO, and 300 shares of ORCL.
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The  volume  was  very  heavy  this  morning  and  SelectNet was  completelydown; consequently, AR.CA  wasn't working either.  It was a buying  frenzy!Stocks were running, and I could not get a fill on anything.  The only way Icould  roulc  an  order was  via  1SLD or SOES.  Since  there  was a glut of buy-ers, there were no offers on  ISLD that I could take out in my attempt to buyCSCO  or ORCL.  The  best  ISLD  offer  was  three  points  out of market.SOES was completely useless, and I got no  fills using that route either.  Itwas a frustrating morning.  At first, I looked like a genius for not carryingpositions overnight and selling ORCL at 76 yesterday.  It was trading at 73this morning; but now, I was not able to buy my position back, and the stockwas  trading  at  78.
I tried to buy RMBS at the open, but SelectNet was down.  I finally bought100  shares  at 210  taking  an  ISLD  offer 5  1/2  points  out of market!
I studied the ilMBS daily chart last night, and I was looking to buy it.  I feltit had significantly come down in price from its high of $471  a share.  I feltthat a strong bounce could take it back  to 270 - 300.
RMBS  ran  up  to 221.  It then turned around, and started to decline.  I had astop  loss  on  ARCA  at 217  1/2.  RMBS  traded  lower and  my stop  loss  wastriggered;  however,  SelectNet was  slow  (or non  existent),  and  I  was  not  get-ting a fill on my sell  order.  I tried to cancel  the order,  and it was  taking  awhile  for that as well.  I was about to lose it.  I finally got my order can-celled,  and  I  entered  a  sell  order on ISLD  out of market.  I  sold  100  RMBS  at110  1/8.
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This was a sure sign I should have shut things down and gone to the beach.  Iwatched an $1,100 profit turn to dust due to a Nasdaq malfunction.  On piv-otal days like today, the entire trading infrastructure was straining. The vol-ume was so heavy, and the trading so furious, that even with direct accessand DSL speed, home-based traders were at a significant disadvantage.  Iwent downstairs and tried to regroup.  I knew that it should be a great day forthe bulls today.  The Nasdaq has come down too much, too fast.  It is due fora rally.  "It was time to make money!"  I told myself.  I went back upstairsand waited for another opportunity.
RMBS started to move up again.  The volume increased and I bought 100shares at 210  1/8.  My price target was 220 - 240.  I placed a stop loss at 208.
I tried to give RMBS a chance.  The stock went up to 215  1/2, and tradeddown.  210 looked like good support; therefore,  I have not moved my stoploss up.  BIG MISTAKE!  The stock dropped through 208  and triggers  mystop loss.  I sold  100 RMBS  at 206 7/8.
RMBS held 203  1/2 again and started trading higher.  I bought  100 shares at205 9/16.  I decided to give it some wiggle room this time, because I felt thatit could go as high as 250.  I placed my stop loss below the low of the day.Actually, I placed it below 200.
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and it just took out the highs it set two days ago.
But instead, RMBS