From: canslim-owner@xmission.com (canslim Digest) To: canslim-digest@xmission.com Subject: canslim Digest V1 #23 Reply-To: canslim@xmission.com Sender: canslim-owner@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Saturday, December 14 1996 Volume 01 : Number 023 In this issue: Re: [CANSLIM] My market comments postings Re: [CANSLIM] SGMA (Sigma [CANSLIM] Re: AMAT Re: [CANSLIM] "Selfish" lurkers Re: [CANSLIM] Re: AMAT Re: [CANSLIM] Intro [CANSLIM] Re: BTGC [CANSLIM] Dow Top Re: [CANSLIM] Dow Top [CANSLIM] Market comments 12/12 Re: [CANSLIM] Dow Top Re: [CANSLIM] "Selfish" lurkers Re: [CANSLIM] Market comments 12/12 Re: [CANSLIM] Re: BTGC [CANSLIM] IOM Re: [CANSLIM] IOM Re: [CANSLIM] "Selfish" lurkers Re: [CANSLIM] IOM [CANSLIM] Re: Trailing PE [CANSLIM] Re: Iomega See the end of the digest for information on subscribing to the canslim or canslim-digest mailing lists and on how to retrieve back issues. ---------------------------------------------------------------------- Date: Thu, 12 Dec 96 13:50:17 EST From: Zoran Mitrovski Subject: Re: [CANSLIM] My market comments postings Johan wrote: > PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) > and QKTN (somewhat speculative, Vinnik owns it, it's a good co, > no overhead (chart)) > BTGC (speculative, got in because of chart looks good) > > Have been holding since a long time: SGMA bought at 16 in the spring (dumb!) > and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. > > TCCO (one of the most stupid things I ever did was buy this stock) Johan, please don't mind a newbie asking, but isn't it too hard to follow 12 stocks at the same time? But then again, if your funds are enormous then I guess you'd have to spread them wider. I noticed you "averaged down" and "bottom fished" on SGMA after it's dive down from 17 earlier this year. Did you have a specific reason to do that? I remember O'Neil strongly advising against doing that. Btw, I'm watching for SGMA to break the psychological barrier at 17-18. I think the basing on high volumes around these values for the past few days is because of all the buyers that bought it around 17 earlier this year and watched it go way below 10 soon after. They must be saying: "Lord thanks for bringing it back up so that I can take my money back and get the hell out of here". Btw, that was my target sell price anyway when I bought it at 14 7/8 few days ago. I'd watch for a potential breakout after the volume dries up enough and there are no more frustrated sellers to feed the interested buyers. Biotechs (LGND) are a scary domain for me. I have hard time figuring the values of the news and the announcements in that field. Cheers, Zoran ------------------------------ Date: Thu, 12 Dec 1996 04:49:00 GMT From: patrick.wahl@unpcbbs.cts.com (Patrick Wahl) Subject: Re: [CANSLIM] SGMA (Sigma ST>From: "tom worley" ST>Date: Wed, 11 Dec 1996 20:36:20 -0500 ST>Subject: Re: [CANSLIM] SGMA (Sigma ST>I couldn't agree more, Patrick. I will certainly admit to holding thru a ST>paper profit into a breakeven or loss or at least one or two occasions (as ST>Mike would say, hehhehheh). I have even, no don't say it, yes, averaged ST>DOWN! on occasion. I try to follow O'Neill's general rule of thumb, if a I can't believe it now, but I did that too, once, in a stock I had a profit in, and I was so sure it was fundamentally sound (AMAT) that I figured it had to go back up. That and a couple of other blunders have me convinced that the market is almost always right, and if a stock isn't behaving in accordance with my understanding of the fundamentals, then I am almost certainly missing something. ST>and giving them a good return. If you are comfortable watching a stock base ST>out, or more likely retreat 25% or more, to maintain a long term position, ST>then it is right for you. This is what I meant when I said I can't stand retracements. I am never confident enough of my own evaluations to sit through such things. You never know when it is a normal pullback, or a symptom of a problem that is going to lead to more severe price declines (I hate it when that happens). ST>On the other hand, I have bot back stocks higher than where I sold, because ST>their characteristics justified it. What I, and my clients, missed out on You can always get back in, although it sometimes seems a little harder psychologically speaking to get back in. I think I have owned Cisco Systems 4 different times. ------------------------------ Date: Thu, 12 Dec 1996 14:41:28 -0800 (PST) From: "David Peterson" Subject: [CANSLIM] Re: AMAT > > I can't believe it now, but I did that too, once, in a stock I had a > profit in, and I was so sure it was fundamentally sound (AMAT) that I > figured it had to go back up. That and a couple of other blunders have > me convinced that the market is almost always right, and if a stock > isn't behaving in accordance with my understanding of the fundamentals, > then I am almost certainly missing something. > Finally a subject I can talk about. I've been keeping pretty quiet as I've only read a couple of chapters in O'Neill's book and I don't know anything about analyzing charts. However, I did notice last year that AMAT was consistently trading between 100 and 105 (before the split). I played this successfully about 3 or 4 times before I got caught in the tech stock fallout. I've been holding onto it ever since. :( Dave ------------------------------ Date: Thu, 12 Dec 1996 18:26:34 -0500 From: "tom worley" Subject: Re: [CANSLIM] "Selfish" lurkers I would like to add my 2 cents worth as a broker/former broker. The brokerage business is male dominated, and most brokers act like women can't handle finances and investing. My experience was that women made the best investors and best decision makers. Surprising to me was to discover that women actually were less emotionally attached to stocks than men. We need more women to speak up, their thoughts are often clearer. Yeah, I admit it, I am a feminist. My poor opinion of Garzarelli has nothing to do with her sex, it is with her opinions and I have said the same about male forecasters. I agree with Zoran, we need to improve the W/M ratio. tom w - ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: [CANSLIM] "Selfish" lurkers > Date: Thursday, December 12, 1996 9:30 AM > > Gina, if you hadn't noticed already, the W/M (women/men) ratio > of the posters on this list is somewhat disasterous > (Sorry guys, crossdressing doesn't count ;^)). > Ladies, please do something about improving W/M. > A big welcome to you, too, Gina. ------------------------------ Date: Thu, 12 Dec 1996 18:46:31 -0500 From: "tom worley" Subject: Re: [CANSLIM] Re: AMAT I haven't looked at the chart in several weeks, but for what's it's worth, AMAT is one of about 20 tech stocks I keep on my monitor at work to help guage the tech groups (cuz I see them as the single most important factor in market leadership). Subjectively, I like the way it has traded the past week or so, and I think an important factor in this is its trailing PE. I plan to post another "market comment" tonight which focuses on this issue. I don't think you will be getting back to your last entry pt any time soon, but the downside from here doesn't scare me. good luck tom w - ---------- > From: David Peterson > To: canslim@xmission.com > Subject: [CANSLIM] Re: AMAT > Date: Thursday, December 12, 1996 5:41 PM > > > > > > I can't believe it now, but I did that too, once, in a stock I had a > > profit in, and I was so sure it was fundamentally sound (AMAT) that I > > figured it had to go back up. That and a couple of other blunders have > > me convinced that the market is almost always right, and if a stock > > isn't behaving in accordance with my understanding of the fundamentals, > > then I am almost certainly missing something. > > > > Finally a subject I can talk about. > > I've been keeping pretty quiet as I've only read a couple > of chapters in O'Neill's book and I don't know anything > about analyzing charts. > > However, I did notice last year that AMAT was consistently > trading between 100 and 105 (before the split). I played > this successfully about 3 or 4 times before I got caught > in the tech stock fallout. I've been holding onto it ever > since. :( > > Dave > ------------------------------ Date: Thu, 12 Dec 1996 18:32:29 -0500 From: "tom worley" Subject: Re: [CANSLIM] Intro Concur. When I was an active broker, I tried altho not always successfully, to reread it monthly. This helped remind me of where and when I was diverging from the discipline. I also found something new every time that either I had overlooked previously or else it didn't apply then but did on the following read. Great book, best investment I ever made. tom w - ---------- > From: Dave Finley > To: canslim@xmission.com > Subject: Re: [CANSLIM] Intro > Date: Thursday, December 12, 1996 10:47 AM > I sympathize with the problem of having too many things to read/do. Been > there, am there, still trapped :) My recommendation is to set aside the > paper and your trading activities for a week and read O'Neil's book. You'll > get much more out of your IBD subscription and this list. There are very > few books I've read more than once in my lifetime, but I plan to do this one > again soon, some chapters multiple times. ------------------------------ Date: Thu, 12 Dec 1996 18:39:35 -0500 From: "tom worley" Subject: [CANSLIM] Re: BTGC I followed BTGC some years ago for a client. After a full due diligence on it (she was long the stock), I told her to sell it. She didn't, I was right. Because of this I had to keep an eye on it for a number of years after, and never saw a reason to own it. One factor was that they kept losing money, and kept selling newly issued shares to compensate. I don't recall seeing a company their size burn thru so much dough. I haven't admittedly looked at it in several years, do recall there was some changing in mngmt forced by some of the outside investors tired of the losses. For me they were a co that always failed to deliver on promises of future prospects/products. Hope for you they have changed their pattern. I like APCC, altho not so impressed with BOOM. I think IOM is holding up well, SGMA today showed good strength in a 100 pt down mkt. good luck tom w - ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] My market comments postings > Date: Thursday, December 12, 1996 12:33 PM > > > PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) > and QKTN (somewhat speculative, Vinnik owns it, it's a good co, > no overhead (chart)) > BTGC (speculative, got in because of chart looks good) > > Have been holding since a long time: SGMA bought at 16 in the spring (dumb!) > and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. > > TCCO (one of the most stupid things I ever did was buy this stock) > > I'd like to hear your comment on these. ------------------------------ Date: Fri, 13 Dec 1996 04:02:24 GMT From: Craig Griffin Subject: [CANSLIM] Dow Top This is a heads up. Looks like to me the dow has formed a top. Sorry to send this out so late at night, many of you will not read it until tomorrow and I know it will take some time to digest. I don't want to encourage anybody to be too worried and please don't panic based on my reading of the tea leaves, or anyone else's for that matter. I have never read one of these before, but it looks pretty straight forward. I'll give you my reading below and you can critique, review, etc. First the bad news, I should have spotted it several days ago, today's 98 point drop was not the defining action, only the start of the follow through. Now the GOOD news, these things do not go straight down. They usually rally alot along the way, looking like a good market for a while, suck some more people in and then drop back again. So this is not a flash bulletin to suggest you sell all your stocks immediately. But if you agree with me, you may want to lighten up in rally's, etc. Some stocks will continue to do well. Breakouts should continue to occur and some will succeed, but I will not be buying any for the time being. Here's the bottom line, IF I am right, the waters just got a lot more treacherous. I hope I am wrong, so anybody who will, take a close look, do some analysis, look backward in time to see if what I describe below has happened in a similar way in the last year. Maybe I am misreading it. If I am reading it right, could be the beginning of a 10% correction. Or could be the beginning of a bear. If I am reading it right, I suspect the correction will go more than 10%, because almost nobody is calling for it (except Ms. G, but that's another story). For this analysis you will need an IBD from today or yesterday. Turn to the page that has the charts of the 3 markets (for today, Thurs., the 12th, it is on page A27). Now look at the chart for the DOW JONES INDUSTRIALS. Get a 3x5 index card or some other straight edge to follow along with. Look at NYSE volume under the DOW chart (the volume comes from the NYSE, the chart comes from the DOW). Ready? OK, look at the Thanksgiving Holiday, November 28 (no trading). Right. Now back up 4 days on the volume chart. 1) This day is Friday, Nov. 22nd. That day is "good action". Note that the volume is high (relative to almost all days since June). Use your straight edge to connect the volume with the price bar for that day. Note that the price closes up for the day on good volume (new high). So far, no problem. 2) Go to the next day, (Monday the 25th) volume drops off, price moves up, another new high. This is not good action. No oompff behind the move to a new high. But, by itself, not particularly bad. Happens occasionally. 3) Go to the next day, (Tuesday the 26th). Higher volume than even Monday the 25th, but the price rally's up (new altime high of 6606.30 on chart) and then CLOSES down for the day. High volume with no progress = distribution. The smart boys are selling. 2nd day of bad action, but much worse than yesterday. Of course everybody not in the know feels good, headline on the Nightly Business Rpt probably mentions "profit takers". They don't know how right they are. 4) Next day, Wednesday the 27th, lower volume, down a little more, but closes off its lows. Pre-holiday, no reading. 5) Next two days are Thursday Thanksgiving and Friday after with short trading session and almost no volume - not significant. 5) Monday, December 2nd, low volume, closes unchanged, but most of action for that day was down. 6) Tuesday, Dec. 3rd, high volume again and closes at low for the day! - CONFIRMATION of the failed new high back on Tuesday, the 26th of Nov. (#3 above). But average guy is not worried, look how close to the recent high we still are. But then comes 3 more high volume days with no progress, more distribution. The last of those 3 days is the Greenspan comment day where the DOW showed "remarkable resilency", well not actually. 7) The DOW rally's back up the next day on LOW volume. Closes at the high for the day, but it is meaningless ... actually bad, there is no volume. 8) The next day is December 10th, Tuesday of this week. The volume picks up and there is an anemic attempt at a rally, which fails and closes at the low for the day. The next day is Wednesday the 11th - higher volume and a down day. That's it. Here are the important days, the ones that define the top from the above discussion. #2 and #3 together, but especially #3. Then #6 and #8. I believe that these days define the top. Perhaps for this bull market, perhaps for a correction. Today's weak close helps to verify it. Sorry to be so late with the info (IF accurate). Don't panic ... this is my first reading like this. So maybe I am misreading it, but see what you think. Even if the worst scenario is right, there should be rally's along the way. Also, any critiques within or outside of the discussion above are welcome. Here are the relevant pages from O'Neils book where he covers this sort of market reading pages 47 to 52 in Chapter 7 (the section called: "Historical Tops for Further Study" through the section "Look for Divergence of Key Averages"). Also, to repeat, sorry to send this out so late at night, many of you will not read it until tomorrow and I know it will take some time to digest. ------------------------------ Date: Fri, 13 Dec 1996 00:47:19 -0500 (EST) From: Zoran Mitrovski Subject: Re: [CANSLIM] Dow Top Craig, excellent analysis, and I did read it at midnight although I am 100% in cash at this moment anyway. I spent couple of hours today studying potential buys today and I didn't come up with anything that would ring as strong as my previous choices. Perhaps, that is a sign of rough times ahead, too. ;^) I also share your feelings about the market conditions, but I couldn't put them in a structured way as you just did. This was also one of the main reasons for my "hit'n run" approach lately. I also found myself totally avoiding overpriced stocks w/respect to their PE ratios, cause I have a feeling they would be the first ones to tank on a sign of panic. I really wouldn't be able to sleep if a big chunk of my $$ were in high PE stocks in these market conditions. Both HDCO and SGMA were tech stocks with great numbers, and promising up volumes on their charts AND with PE<15 when I bought them. Their PE's are still great, and that's why I'm still watching them for possible small rallies as more money (my gut feeling again) should decide to seek quality at no premium price in these risky times for the market. Something tells me that many of the hyped up quality stocks out there ought to make few deep dips before they decide to take off into new highs. And I'll be watching those and perhaps hit'n run on low risk/high reward stack of odds few more times here and there in the meantime. For what they're worth, these are my gut feelings. Good luck to y'all. Cheers, Zoran ------------------------------ Date: Fri, 13 Dec 1996 06:39:58 -0500 From: "tom worley" Subject: [CANSLIM] Market comments 12/12 I also apologize for the late posting, I fell asleep eating a late dinner and, when I woke at midnight, decided to keep sleeping instead of getting back on the keyboard. It's been a long hard week and will get worse as I lose my assistant today with no replacement in sight. If anybody knows someone good who wants to work in a "back office" in Miami for lousy pay (buy, hey, it's a great learning experience) let me know. Yesterday's drop bothered me primarily because I could not see it coming. Craig's post on market top is interesting and I want to study his approach further. My initial reaction is that a market top cannot be called over just a few days. He is correct that it takes weeks to months to form a true top so there is time for an orderly retreat if that is the case. Zoran's comments hit on what I was studying last nite. From a prediction standpoint, when a mkt corrects, the largest losers both in pts and percent are: ones with the greatest RECENT runup due profit taking and, second, ones with the highest PE (usually measured on trailing PE). I noted both HDCO and SGMA held up w/PEs of 17 and 15, for the day up 1/2 and 3/8. That got me examining some of the stocks I keep on my monitor, here are the results. stk PE close CPQ 24 -4.75 TXN 33 -.875 AMAT 12 +.75 CUBE NA -2 CYRX NA -1.22 MSFT 45 -2.375 new high SUNW 23 -.125 MU 13 +.375 INTC 29 --- new high IBM 16 -4.5 MOT 24 -.125 DELL 27 -2.625 ASND 84 -3 new high ELTN 30 -.44 CU 57 -.625 WHC 61 +.25 VTSS 67 -1.18 SGMA 15 +.375 HDCO 17 +.5 CSCO 49 -2.25 new high GATE 20 -2.25 MRVC NA -1 ENCD 46 -.75 ECILF 15 +.125 NETC NA -.5 NSCP 334 -..77 SPYG 48 -1.06 NOVL 28 -.125 OSSI 20 +.187 I also looked at mkt stats and noted following: NYSE NASDAQ Advance 877 2095 Decline 1616 2177 Advance vol 130.5m 232.9m Decline vol 310.3m 290.3m New highs 89 115 New lows 42 101 QUALIFIER: The above stocks which I choose to monitor are not indicative of the mkt at large, simply reflect where I believe mkt leadership is for the most part. You will note a very heavy nr of tech and comms stocks plus a few pets thrown in. You will also note a total absence of meds, food, cyclical, and financials which I simply won't touch, therefore don't watch. This is a PERSONAL bias from my own personal experience, you should not let it influence you. I do watch another 30 or so stocks, some of which are meds, but all are low priced and do not reflect either CANSLIM or mkt leadership. COMMENTS: Remember, just OMHO, the flight of money into the most liquid stocks that fueled a Nov runup into the best monthly gain ever has at least hit a profit taking wall if not ended. High PE stocks and stocks with recent runup got hit the worst. Almost without exception these benefited from the flight to liquidity. NYSE benefited most, now suffers more. NASDAQ still shows strength, adv/decline line while still near two yr low hasn't broken down. In both exchanges, new hi/low held positive which did surprise me after the past week. However, of the 89 new highs on NYSE only 11 closed down for the day and almost all were only down fractionally. On NASDAQ, 16 of the new highs closed down and several were down several pts so the NYSE new hi/low actually ends up looking better to me than NASDAQ's. Of the new lows on both exchanges, only 8 closed down over a pt. Economic reports out yesterday showed CPI in line at +.3%, and retail sales and weekly jobless claims were slightly softer than expected, thus still no evidence of inflation. Note also that the stocks that make up all the indexes are also among the most liquid stocks for the most part. Note also that I felt a week or so ago we were seeing a rotation of money from the top performing highly liquid stocks into the secondary/smaller caps as investors took profits and looked for undervalued stocks that had not joined the rally. While the bond mkt has sold off lately, I think that too is profit taking. Yesterday's early weakness reversed ending down two ticks with futures up two basis pts. CONCLUSION: Bull mkt intact Rotation of money continues from big cap to secondary stks No sig change in industry group leadership Some money shifting back from equities to bonds to take advantage of higher yields/lower prices (I think this shift was sig starting late yesterday morning) Be careful of high trailing PE, make sure it is supported by exceptional forward PE forecasts Be careful of stocks with recent runups that have not already based out, they are good candidates for profit taking for tax reasons for the rest of Dec Some comments noted a sig increase in "short against the box" (a tax strategy, not a trading one) which would go along with my last conclusion Remember I am not as concerned with whether the mkt is bear or bull, I focus on predictability. I can actually make money faster in a bear mkt because stks tend to fall faster than they rise. However, if I can't predict better than 50%, I am gambling, and I go to the Bahamas for that. ------------------------------ Date: Fri, 13 Dec 96 9:05:09 CST From: "David F. Cameron" Subject: Re: [CANSLIM] Dow Top Commenting on Craig's insightful post. > > This is a heads up. Looks like to me the dow has formed a top. > ... Could it be that Mr. Greenspan was right - and I'm not so dumb for unloading 20% of my portfolio at the low for the day last Friday? Of course, I shy away from Dow stocks - and as a professional statistician, I am one of the world's biggest haters of basing the entire market on a non-random sample of 30 stocks. > alot along the way, looking like a good market for a while, suck some more > people in and then drop back again. So this is not a flash bulletin to > suggest you sell all your stocks immediately. But if you agree with me, you > may want to lighten up in rally's, etc. Some stocks will continue to do > well. Breakouts should continue to occur and some will succeed, but I will > not be buying any for the time being. ... This seems to just be happening in the large caps right now. Small caps have been hanging in there. You may very well be right, that this will set the ball in motion though. I need to look at the leaders this weekend - some of the stocks Tom listed are good for that. > > Here's the bottom line, IF I am right, the waters just got a lot more > treacherous. > > I hope I am wrong, so anybody who will, take a close look, do some analysis, ... I'm going to look it over in more detail this weekend, I think we need to compare to the S&P though. (Which at a glance looks similar.) > look backward in time to see if what I describe below has happened in a > similar way in the last year. Maybe I am misreading it. If I am reading it > right, could be the beginning of a 10% correction. Or could be the > beginning of a bear. If I am reading it right, I suspect the correction > will go more than 10%, because almost nobody is calling for it (except Ms. > G, but that's another story). ... it seems we all agree on Ms G. :^) > > Here are the relevant pages from O'Neils book where he covers this sort of > market reading pages 47 to 52 in Chapter 7 (the section called: "Historical > Tops for Further Study" through the section "Look for Divergence of Key > Averages"). .. Exactly. It could be that the Dow is over-extended. The S&P and the NASDAQ had not advanced as far as the Dow this year. Of course, it does seem the S&P and the Dow are moving in lock-step as I look at the charts on the morning of Friday the 13th.... But... the NASDAQ seems to be in more a sideways pattern of late. 6 weeks ago we were bemoaning that the Dow was racing upward, but HGS weren't following suit. So we've had divergence for a while. This could mean a correction just for large caps, but maybe not. > > Also, to repeat, sorry to send this out so late at night, many of you will > not read it until tomorrow and I know it will take some time to digest. > I'll take well thought out opinions whenever I can get 'em! Thanks, I'm taking your analysis and studying it this weekend, Dave dcameron@harper.cc.il.us ------------------------------ Date: Fri, 13 Dec 1996 10:23:55 -0500 (EST) From: Haw-Jye Shyu Subject: Re: [CANSLIM] "Selfish" lurkers > From owner-canslim@xmission.com Thu Dec 12 10:13 EST 1996 > From: Zoran Mitrovski > Subject: [CANSLIM] "Selfish" lurkers > To: canslim@xmission.com > Date: Thu, 12 Dec 1996 09:30:04 -0500 (EST) > Cc: zmitrov@ee.rochester.edu (Zoran Mitrovski) > Mime-Version: 1.0 > Content-Transfer-Encoding: 7bit > > > HJS, I didn't mean to chase you out with my long reply without > any "welcome"-s in it. Welcome! > Zoran, it's ok. I thought that I posted my personal failure on stock trading a few weeks back. I started trading stock last year. So far, I only managed to earn 8%. The commison eat a big junk of my profit (about 4%). I use the Waterhouse. One way is $31.5. I bought BSPT based on the suggestion from one of the guest on Louis Rukiser (sp?) show. I bought them at 9 3/4 and sold them at 6 1/4. I also buy VJET at 11 3/4 and sold them at 7 1/4. Loss big on these two. The winers I had were BLY, LSI, CSCO, OC, and KM. I did not get the golden opportunity to buy Intel, Motorola, nor HewletPacker. Beacuse all my money are tied up in the winners. Sight! I notice most of the charts shown in the IBD seem to form cup. they are small cup, wide and shallow cup, deep and narrow cup, .... Am I correct on this? Thanks! HJS I really have no experience on Canslim hence can not contribute too much discussion about it. ------------------------------ Date: Fri, 13 Dec 1996 16:01:27 GMT From: Craig Griffin Subject: Re: [CANSLIM] Market comments 12/12 Tom, Just a short note to thank you for your response. Great analysis all the way around. Haven't changed my mind about what I see in the chart, looks like significant distribution. But it could be that we are just going through a correction/shake-out, rather than the beginnings of a bear. Right now, until the market shows me otherwise, I believe we will at least have a significant correction. (See pg 52 in O'Neil for way to spot shakeout. See pg 58 and pg 64 for additional bear signals.) Again I want to Thank You! Very insightful and well reasoned analysis. Best regards, Craig At 06:39 AM 12/13/96 -0500, you wrote: > ... >COMMENTS: Remember, just OMHO, the flight of money into the most liquid >stocks that fueled a Nov runup into the best monthly gain ever has at least >hit a profit taking wall if not ended. High PE stocks and stocks with >recent runup got hit the worst. Almost without exception these benefited >from the flight to liquidity. NYSE benefited most, now suffers more. NASDAQ >still shows strength, adv/decline line while still near two yr low hasn't >broken down. In both exchanges, new hi/low held positive which did surprise >me after the past week. ... > ... Note also that I felt a >week or so ago we were seeing a rotation of money from the top performing >highly liquid stocks into the secondary/smaller caps as investors took >profits and looked for undervalued stocks that had not joined the rally. >While the bond mkt has sold off lately, I think that too is profit taking. >Yesterday's early weakness reversed ending down two ticks with futures up >two basis pts. > > ... > Be careful of high trailing PE, make sure it is supported by exceptional >forward PE forecasts > Be careful of stocks with recent runups that have not already based out, >they are good candidates for profit taking for tax reasons for the rest of >Dec > Some comments noted a sig increase in "short against the box" (a tax >strategy, not a trading one) which would go along with my last conclusion > >Remember I am not as concerned with whether the mkt is bear or bull, I >focus on predictability. I can actually make money faster in a bear mkt >because stks tend to fall faster than they rise. However, if I can't >predict better than 50%, I am gambling, and I go to the Bahamas for that. > ------------------------------ Date: Fri, 13 Dec 1996 19:46:14 +0100 From: Johan Van Houtven Subject: Re: [CANSLIM] Re: BTGC Tom, At 06:39 PM 12/12/96 -0500, you wrote: >I followed BTGC some years ago for a client. After a full due diligence on >it (she was long the stock), I told her to sell it. She didn't, I was >right. Because of this I had to keep an eye on it for a number of years >after, and never saw a reason to own it. One factor was that they kept >losing money, and kept selling newly issued shares to compensate. I don't >recall seeing a company their size burn thru so much dough. I haven't >admittedly looked at it in several years, do recall there was some changing >in mngmt forced by some of the outside investors tired of the losses. For >me they were a co that always failed to deliver on promises of future >prospects/products. Hope for you they have changed their pattern. Bought BTGC at 10 5/8, sold at 11 this week. It was just a play because of the brakout situation that I noticed in the chart. >I like APCC, Added to my position yesterday and today. Yesterday at 25 3/8, today at 24 7/8. >altho not so impressed with BOOM. I like them currently forming a base at 9 - 9.5. >I think IOM is holding up Just saw it you under 20... >well, SGMA today showed good strength in a 100 pt down mkt Indeed. I wonder what it will do in a good up day. :-) >good luck >tom w Thank you for your opinion. Johan > >---------- >> From: Johan Van Houtven >> To: canslim@xmission.com >> Subject: Re: [CANSLIM] My market comments postings >> Date: Thursday, December 12, 1996 12:33 PM >> >> >> PS: Currently in APCC ROSS ALPH BOOM (all CANSLIMs) >> and QKTN (somewhat speculative, Vinnik owns it, it's a good co, >> no overhead (chart)) >> BTGC (speculative, got in because of chart looks good) >> >> Have been holding since a long time: SGMA bought at 16 in the spring >(dumb!) >> and added a lot of shares a few weeks ago at 11. LGND. IMGN. IOM. ANLT. >> >> TCCO (one of the most stupid things I ever did was buy this stock) >> >> I'd like to hear your comment on these. > > ------------------------------ Date: Fri, 13 Dec 1996 15:47:36 -0500 (EST) From: Zoran Mitrovski Subject: [CANSLIM] IOM IOM broke an important psychological support level at 20 today, on volume much higher than average. The 400k that brought it down from 19.9 to 19.6 looks particularly scary to me. It's at 19 as I write this. I believe Dave (Cameron) had some IOM. Dave, are you still in? I was watching IOM today to see if I can jump in at the bottom of the 21-26-21-... pattern. Nope, no pattern, no way, Jose! Both HDCO is down 2 at 48 and SGMA is a bit lower on a weak volume. That's what I could observe during this one hour break. Back on my head... Cheers, Zoran ------------------------------ Date: Fri, 13 Dec 1996 23:37:04 +0100 From: Johan Van Houtven Subject: Re: [CANSLIM] IOM At 03:47 PM 12/13/96 -0500, Zoran wrote: > >IOM broke an important psychological support level at 20 today, >on volume much higher than average. The 400k that brought it >down from 19.9 to 19.6 looks particularly scary to me. >It's at 19 as I write this. I've been watching IOM all day. I was also think about getting in at 20. Emerald Research issued a research rapport on IOM today. You can get it from their sit at: http://www.emeraldresearch.com/ It costs 9.95 USD. I did not buy it, so I do not know what it says. >Both HDCO is down 2 at 48 and SGMA is a bit lower on a weak volume. >That's what I could observe during this one hour break. SGMA is holding uo remarkably IMHO. Let's hop efor a few good days next week. :-) My ALPH did well today: +7 %. It is features in IBD's New America today (Fri 13 dec). My ROSS is also looking strong. APCC still in nice base between 24 - - 25. Cheers, ------------------------------ Date: Fri, 13 Dec 1996 22:00:28 -0500 (EST) From: Zoran Mitrovski Subject: Re: [CANSLIM] "Selfish" lurkers HJS wrote: [...] > I bought BSPT based on the suggestion from one of the guest on > Louis Rukiser (sp?) show. I bought them at 9 3/4 and sold them at 6 1/4. > I also buy VJET at 11 3/4 and sold them at 7 1/4. Loss big on these two. I'm sorry to hear that. I hope you learned something from those expensive classes. > The winers I had were BLY, LSI, CSCO, OC, and KM. I did not get the golden > opportunity to buy Intel, Motorola, nor HewletPacker. Beacuse all my money > are tied up in the winners. Sight! Don't worry about it. There's gonna be many other winners in the future as well. Not all of the boats have sailed away. ;^) > I notice most of the charts shown in the IBD seem to form cup. they are small > cup, wide and shallow cup, deep and narrow cup, .... Am I correct on this? Hmmm, you gotta be more specific here. And I'm not exactly the expert for cup-handle pattern recognition. Lately, I even forgot about the cup. The handle (the base) with a proper price and volume behavior is the most important thing when watching for breakouts, I think. > Thanks! > > > HJS > > I really have no experience on Canslim hence can not contribute too much > discussion about it. Me neither. Did you read O'Neil's book though? That can be a good start. Same as many others here, I refer to its chapers regularly. There's too much stuff to remember all at once. Cheers, Zoran ------------------------------ Date: Sat, 14 Dec 1996 01:06:59 -0500 (EST) From: Zoran Mitrovski Subject: Re: [CANSLIM] IOM Johan wrote: > Emerald Research issued a research rapport on IOM today. You can get it from > their sit at: > http://www.emeraldresearch.com/ It costs 9.95 USD. I did not buy it, so I do > not know what it says. Me neither. Frankly, I don't need to see the report. The chart speaks 1000 words. There are piles of "reports" on Iomega, but they are meaningless IMHO. IOM is driven by mass hysteria, and it is mainly a psychological and emotional phenomenon. I enjoy studying it. > >Both HDCO is down 2 at 48 and SGMA is a bit lower on a weak volume. > >That's what I could observe during this one hour break. > > SGMA is holding uo remarkably IMHO. Let's hop efor a few good days next > week. :-) Yep, we'll see. I still think there's more juice in HDCO, too. > My ALPH did well today: +7 %. It is features in IBD's New America today (Fri > 13 dec). My ROSS is also looking strong. APCC still in nice base between 24 > - 25. You take good care of your honeys, Johan. BTW, from all the ELECTR-SEMI stocks featured in the Weekend Graphic Review, I liked SEMX the most. Closed at 13 1/4 Fri with a strong upward price/volume momentum. I'd watch that one on Monday as well. And finally a question: What's a "trailing PE"? Cheers, Zoran ------------------------------ Date: Sat, 14 Dec 1996 05:31:47 -0500 From: "tom worley" Subject: [CANSLIM] Re: Trailing PE A trailing PE is the PE based on the past 12 months, which O'Neill generally ignores as it reflects what the company has DONE. O'Neill looks at the forecasted PE for the next 12 months as this reflects future expectation (what it is expected TO DO). Unfortunately, the market at large still looks at trailing PE, when you pull up a full quote on a symbol, the PE displayed is for trailing, therefore I still watch it. It is also significant since many stocks will trade within a historical range on trailing PE, so when a stock price has risen to where the PE approaches its historic high, it can suggest time for the stock to base or retreat until another qtr earnings are plugged in, thus lowering the new trailing PE (assuming it is a pos qtr earnings) and giving the price room to move higher within the historic range. - ---------- > From: Zoran Mitrovski > To: canslim@xmission.com > Cc: Zoran Mitrovski > Subject: Re: [CANSLIM] IOM > Date: Saturday, December 14, 1996 1:06 AM > > And finally a question: > What's a "trailing PE"? > > Cheers, > Zoran ------------------------------ Date: Sat, 14 Dec 1996 13:30:04 -0800 From: "fjsabour" Subject: [CANSLIM] Re: Iomega > I've been watching IOM all day. I was also think about getting in at 20. Johan, IOM has been moving between 20 and 26 for the past 2-3 months. Yesterday it broke the support line at 20. Now, 20 is resistance line, and IOM is heading south toward the next support line which is at $14. Unless IOM breaks $20 with impressive volume, smart money should be on the short side. Fred - ---------- > From: Johan Van Houtven > To: canslim@xmission.com > Subject: Re: [CANSLIM] IOM > Date: Friday, December 13, 1996 2:37 PM > > At 03:47 PM 12/13/96 -0500, Zoran wrote: > > > >IOM broke an important psychological support level at 20 today, > >on volume much higher than average. The 400k that brought it > >down from 19.9 to 19.6 looks particularly scary to me. > >It's at 19 as I write this. > > I've been watching IOM all day. I was also think about getting in at 20. > ------------------------------ End of canslim Digest V1 #23 **************************** To subscribe to canslim Digest, send the command: subscribe canslim-digest in the body of a message to "majordomo@xmission.com". 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