From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #84 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk canslim-digest Saturday, January 10 1998 Volume 02 : Number 084 In this issue: [CANSLIM] advice for Monday Re: [CANSLIM] Insults Re: [CANSLIM] Re: The $8 trades [CANSLIM] Insults Re: [CANSLIM] R2000 - long live the small caps!! Re: [CANSLIM] Introduction of a "grand mind" Re: [CANSLIM] the Markets [CANSLIM] "M" "Spews" Re: [CANSLIM] Re: How did you perform in 1997? [CANSLIM] "grand mind", "cooling jets" and "Joe J." Re: [CANSLIM] Re: How did you perform in 1997? [CANSLIM] Re: up/down ratio Re: [CANSLIM] advice for Monday [CANSLIM] Semiconductor Earnings ---------------------------------------------------------------------- Date: Fri, 9 Jan 1998 21:44:12 -0800 From: Mike Lucero Subject: [CANSLIM] advice for Monday I've still got a couple stocks (HD and CCE) that weren't stopped out, but I'm guessing they'll hit the stops Monday. Does someone with more down-market experience than me have some advice on whether I should just remove the stops? In October the market for DELL opened about $10 below my stop and went straight up from there. I'd like to not repeat that. (I know I could use STOP-LIMIT.) Also, I was wondering what percentage most of us are putting into CANSLIM. I've got about 1/3 in mutual funds, 1/3 in SPY, and 1/3 available for CANSLIM. Mike - - ------------------------------ Date: Sat, 10 Jan 1998 01:55:12 -0500 From: "sboone" Subject: Re: [CANSLIM] Insults This is a multi-part message in MIME format. - ------=_NextPart_000_0057_01BD1D6A.CA2C9460 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable their is a lot of money to be made off of fear. logical or not. someones buying what others are selling, and they will = be glad to sell it back to us, at ofcorse a resonable profit. Then start = the game all over again.=20 -----Original Message----- From: Ken Davidson To: canslim@mail.xmission.com Date: Friday, January 09, 1998 3:46 PM Subject: [CANSLIM] Insults =20 =20 Just wanted to pass on this message to Jeffrey. Unfortunately I = don't think that I spew out my opinion on anything on this group. Why, = I'm an index trader! Not all economic indicators affect the market but = the unemployment report is the most important indicator of the month and = some people like to know about it as soon as possible! Sorry to say but = not everyone has access to getting the information as fast as you do. = As a matter of a fact its rare that I ever say anything anyway. When = the Asian debacle first started I was constantly supplying information = for everyone but Tom is doing such a great job at it now I don't need = to. I will give my opinion on one thing though. I have been in this = market for over 16 years and have found that economic data does affect = stocks, even WON stock recommendations at different times!! Here's a = question for anyone to consider; why are we selling off if Asia's = ECONOMIC crisis isn't affecting us. Sorry to those for being so = cynical!! =20 Ken - ------=_NextPart_000_0057_01BD1D6A.CA2C9460 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

their is a lot of money to be made = off of=20 fear.

logical or not. someones buying what = others are=20 selling, and they will be glad to sell it back to us, at ofcorse a = resonable=20 profit. Then start the game all over again.

-----Original = Message-----
From:=20 Ken Davidson <davidson@silk.net>
To: = canslim@mail.xmission.com = <canslim@mail.xmission.com&g= t;
Date:=20 Friday, January 09, 1998 3:46 PM
Subject: [CANSLIM]=20 Insults

Just wanted to = pass on this=20 message to Jeffrey. Unfortunately I don't think that I spew = out my=20 opinion on anything on this group. Why, I'm an index = trader! Not=20 all economic indicators affect the market but the unemployment = report is the=20 most important indicator of the month and some people like to know = about it=20 as soon as possible! Sorry to say but not everyone has access = to=20 getting the information as fast as you do. As a matter = of a fact=20 its rare that I ever say anything anyway. When the Asian = debacle first=20 started I was constantly supplying information for everyone but Tom = is doing=20 such a great job at it now I don't need to. I will give my = opinion on=20 one thing though. I have been in this market for over 16 years = and=20 have found that economic data does affect stocks, even WON stock=20 recommendations at different times!! Here's a question for = anyone to=20 consider; why are we selling off if Asia's ECONOMIC crisis isn't = affecting=20 us. Sorry to those for being so cynical!!

Ken

- ------=_NextPart_000_0057_01BD1D6A.CA2C9460-- - - ------------------------------ Date: Sat, 10 Jan 1998 02:10:52 -0500 From: "sboone" Subject: Re: [CANSLIM] Re: The $8 trades I'm currently with farsight, they now charge $20.00 a round trip, after 1/12/97 $40.00 . I'm changing to suretrade. $7.95, market and limit orders. $16.00 round trip. It's not a hard decision - -----Original Message----- From: Joe J. To: canslim@lists.xmission.com Date: Friday, January 09, 1998 5:44 PM Subject: [CANSLIM] Re: The $8 trades >I have a couple of comments on the internet "discount brokerage" issue. Seems as though Tom >is indicating that these firms are using the low price just to lure us to their firms, then >they will jack up the price later. He also seemed to think that since these trades were >costing at least $19 or so to execute, these are loss leaders to these firms. > >Well, I have been with Ameritrade (formerly E-Broker) for some time now and they always had >lower rates than $19 (from $12-$13 area down to $8 depending on the type of order). To my >knowledge, these commissions generate at least a majority of their business (i.e., they are >not investment bankers also). That being the case, you would expect these firms to be showing >losses. Yet, for the latest period AMTD reported EPS of 40 cents per share, up from 18 cents >for the same period a year ago. > >Um, seems like this company is doing just fine. Anyone else have any comments on this? > >Joe J. > > >- > - - ------------------------------ Date: Sat, 10 Jan 1998 16:11:26 +0800 From: Viv Tansley Subject: [CANSLIM] Insults Jeffrey, as I understand this is a discussion group for both novice and experienced investors to gain more information/knowledge about canslim, I find the various flows of information useful, some maybe not so useful. If it is of no use to you, there is no point in reading or criticizing it. I read the posts to learn something not to read pointless insults. Viv Tansley - - ------------------------------ Date: Sat, 10 Jan 1998 11:55:33 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] R2000 - long live the small caps!! On Fri, 9 Jan 1998 11:02:16 -0800, you wrote: :> From: "Tom Worley" : :> Anybody else besides me hoping they are seeing a cup&handle on the = Russell :> 2000 currently??? : :I see a series of lower highs, nothing like a C&H on the thing. With=20 :all the negative news announcements coming out of the high tech=20 :companies lately, I have a hard time seeing how the market can go=20 :higher anytime soon. At best we might go sideways for a while, but a=20 :decline wouldn't be too surprising either. Seems like Seagate and=20 :Adaptec have recently warned of problems with earnings, and I am sure=20 :they are indicative of what a number of other companies are=20 :experiencing due to the Asia problems.=20 : :If anything, some of the Asian markets have accelerated their=20 :declines this week. Indonesia's currency lost 25% of its value in=20 :one day this week, its market fell 12% that day. Anyway, I'll be=20 :waiting to see some stability in our market before making any=20 :purchases. =20 : No kidding! Unless you want to short... Anybody with a short position in place on Adaptec yesterday made a killing. Dan - - ------------------------------ Date: Sat, 10 Jan 1998 09:32:00 -0700 (MST) From: cando@highfiber.com Subject: Re: [CANSLIM] Introduction of a "grand mind" Hi Tom, Thanks for your sharing a bit more of your background and history with us. I appreciate knowing more about where you've been and are coming from, and value your contribution and sharing attitude with the group. James Coburn Albuquerque, NM PS Started at 10, huh? Wow! - - ------------------------------ Date: Sat, 10 Jan 1998 12:23:37 -0500 From: "sboone" Subject: Re: [CANSLIM] the Markets I'm a novice at this, so pardon me for my confusion, If oil and oil products are cheaper. gasoline yesterday I paid 87 cents a gallon for gas. CPU's under a thousand. airline fuel, transpotation, and production cost all going down unemployment low, wages are not going up, inflation low, economy strong, morgages cheaper than they have been in over 25 years, seems like more spending power for the average consumer. everyone. last but not lease, goods from asia will be cheaper. what's the problem? - -Original Message----- From: cando@highfiber.com To: canslim@lists.xmission.com Date: Saturday, January 10, 1998 11:40 AM Subject: Re: [CANSLIM] Introduction of a "grand mind" >Hi Tom, > >Thanks for your sharing a bit more of your background and history with us. >I appreciate knowing more about where you've been and are coming from, and >value your contribution and sharing attitude with the group. > >James Coburn >Albuquerque, NM > > >PS Started at 10, huh? Wow! > > > >- > - - ------------------------------ Date: Fri, 09 Jan 1998 19:02:45 -0500 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" "Spews" Patrick Wahl and Kenneth: Sorry to both of you for the mispelling. I see you both are more skilled than I in that area. Ken, you are an index trader, you don't trade CANSLIM stocks, you pay no attention to WON's "M" as it is set out in HTMMIS (in fact you perform the opposite of that "M", as I understand it), and you appear to have a link to some commercial site (which I admit I've never followed). I apologize for such a blunt statement, and I can see why you (and others) might take offense. However, I never see anyone commenting upon your commentary, congratulating you on how it has enhanced their struggle with CANLSIM, any effort on your part to apply your commentary on what the market has *done* to CANSLIM "M" and I just don't understand what you are doing in this forum. Perhaps if you could explain your intentions here, it would help. I just don't see anything in your comments other than some commercially motivated showmanship (sp? Patrick?). Tom has an extraordinarily rich CANSLIM based background, but what is your background with CANSLIM? An explanation would help some of us (and I have confirmed that I'm not alone) determine whether the "have a great day" commentary, that seems so much like CNBC media noise, has some place in our continual struggles in the CANSLIM discipline. Without it, I'll be hard pressed to restrain myself from a sarcastic jab, now and then. If that means I'm the one who should reevaluate my participation in this forum, then I'm willing to abide by the group's wishes. So, Ken, an explanation, please. Well, as someone pointed out, the distribution days in the indices were indeed "cautionary", as I characterized them. After "follow through" days, distribution days are rarely incicative of sudden and collosal failure in the indices. Things are certainly different, it seems, but the '87 crash chart shows some similarities here. Worth a study, I think. The sentiment downtick just doesn't seem to have reached the point where the market is generating "follow through" days with much, if any, staying power. (an embarrassingly obvious statement, huh?) This is the second failed "follow through" follwing the October debacle, and the third time we've flirted with disasterous breaches of the 200 day moving average in most indices. A gigantic flush on Monday on the open, followed by an unchanged to higher close with increased volume over today's would start me counting again. If not, I'll look for the next bottom and start the count again. Noticed yet another downtick in the bullish sentiment yesterday. Maybe it's enough, but the market will tell us, won't it? Oddly, I will say that I have bought stocks that were breaking out on the two follow through days that have now failed to commence a new uptrend. And most of those issues have performed remarkably well, or at least have not stopped me out, yet. Of course, two that I sold didn't stop me out because a momentary "tall and invincible" delusionary frame of mind had me in the likes of QCOM and LUFK without STOPS!! Killed and deservedly so. Looking for a new bottom (in the indices and otherwise) so the new count can begin. Tightening my stops and studying charts. I'm also about ready to post a possible application of Connie Mack's utilization of the 3/7/10 EMA as applied to safer entry points on CANSLIM stocks that have massive breakouts on no news or coverage upgrades that are followed by volume dry ups and gradual price declines before the move resumes. Still can't see any useful relationship to pure CANSLIM of the OBV/MF divergence, but I'm still looking. Jeffry - - ------------------------------ Date: Sat, 10 Jan 1998 14:08:05 +0000 From: Peter Christiansen Subject: Re: [CANSLIM] Re: How did you perform in 1997? ** Reply to note from "Joe J." Fri, 09 Jan 1998 15:13:45 -0700 > Ok, with that said. What I want to know is how all of you did in 1997? Did any of the > "experts" of the group beat the averages? Be honest. Whether you are a regular poster or > not, please respond and maybe share a bit of your strategy (strict CANSLIM, CANSLIM with a > twist, strict Technical Analysis, etc.) For 1997, overall my accounts are up a little more than 20%. My keogh accounts are up close to 75%. Unfortunately, I have this damn margin account that allows me to play with options and shorts. If I would have stuck to long positions on quality CANSLIM stocks, as I did in the keogh accounts, My performance would be substantially better. You would think I would learn from this, as every year my retirement accounts outperform the margin account, but right now I have no longs and a short position in MSFT. Will I ever learn? I basically am 100% CANSLIM oriented, but will forgive a less than ideal EPS number if the last two quarters have been very strong. As the stock price increases, I follow it up with a stop as described in Stan Weinstein's book. Peter Christiansen Chiang Mai, Thailand Connected with OS/2 Warp 3.0 & The Post Road Mailer _____________________________________________________________________________________ Are ya feelin' lucky, punk?!! - Harry Callahan - - ------------------------------ Date: Sat, 10 Jan 1998 10:19:42 -0500 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "grand mind", "cooling jets" and "Joe J." Tom, you wrote: "To the group, my apology for the length of this diatribe, for some reason, most likely personal pressures, I felt the need to vent. For the individual members of this group, I hope this renewed background will help you better understand any comments I may make on "M" or individual stocks and will serve as a further qualifer" to my regular signature block below." Your renewed background is obviously something I missed the last time or came before my arrival. This explanation helps me understand your "M" which has obviously brought me out of lurker status. I think the first post to the group I made suggested that your "M" seemed different from WON's "M" and with so little discussion of the HTMMIS "M" system (actually I saw none despite relatively clear signals in early Oct.), I suggested that your focus on the more subjective might be misleading to those who had not really studied the indices under WON's objective. With this understanding, I won't seek to engage you on the issue again. I really do enjoy reading your comments on the "M", although I must immediately check myself so that I don't "listen" to them, if you understand my point. I hope you don't mind if I chime in at times to suggest that you post a "reminder" comment on how your "M" analysis may vary from the Chapter 7 objective signal approach coupled with contrarian indicators, etc. My "grand mind" comment was not intended as an insult, Tom. I am sorry if you took it that way. I'm a sarcastic *astard, and I work in a field suitable to that temperament (sp? Patrick?) where argument, confrontation and dispute is the nourishment of the day. Connie Mack used the phrase in a more diplomatic way, and I was simply observing that much of your interpretive comments are similar to the types of information that can divert the speculator from obeying technical signals and maintaining discipline. You may be the "grand mind", I don't know. I just know that I am not, and that I am most susceptible to the influences of "grand mind"-like commentaries about what the market means or what an economic factor means or predict. My apologies to you and the group for commenting in a way that was viewded as an insult. Tom, you also wrote: "Well, Jeffry, maybe I needed some humbling, I have certainly been wrong on my selling strategy lately, and will admit to misreading "M" even from my "cerebral, interpretive, complicated, disputed, opinion" (BTW, I unfortunately haven't had a whole lot of "disputes" from the group, so I welcome yours, feel free to continue, but I would ask that you "cool your jets" just a little, this group is pretty adult and doesn't like unneccessary or pointless insults or flaming)." Again, my comments were not directed at "humbling", just what I thought was a fair categorization of the *type* of information you watch and interepret. It is fair to say that economic, financial and geopolitical information is "cerebral, interpretive, complicated, disputed, opinion", isn't it? I didn't mean it as a personal attack on you, just as an effort to group the types of information that are so toxic to my personal efforts at trading discipline. My point was that I can't imagine how you can keep your head on straight, trading CANSLIM stocks, trying to interpret that type of market information. If you can, that's great. I can't, and with the encouragement of HTMMIS, I don't even want to try. My goal is the opposite, and it is a heck of a lot easier, I think. "Cool my jets"? You bet. I hope I have explained that I was not intending to insult you or flame you. I was trying to make a point, in my typical overzealous way. Again, my apoligies to the group and to you for the *strength* of my comments. I do feel strongly about my comments, and I have fought long and hard to reach some measure of discipline in my trading and "M" analysis. I paid a hefty price weaning myself from paying daily attention to the news, the fed and CNBC. I hope to never understand the types of information that you obviously understand. Now, as far as Ken is concerned, in hindsight, even my callous soul would regard those as insults and flames. Because I am a digest subscriber, most of you have already seen my follow up comments to Ken, and probably his and others to me. I have not, however. But until I see Ken's response, I'll stand by the response I made to him. What is his mission in this group, if not a commercially driven agenda that has absolutely nothing to do with CANSLIM? Finally, Joe J. wrote: "Consider my current strategy more like that of Connie's in that I want to do more short-term timing of the "M" and related CANSLIM stocks (i.e., buy them on pull-backs, etc.). I first want to try to time the market, then time the industry group (I use IBD's rankings for this) and then time the stocks." I wasn't ready to post my own efforts to the group concerning how I am finding Connie Mack's 3/7/10 EMA signal useful. But, Joe J. has obviously discovered exactly what I am examining. So, a brief comment, with more to come. I spent a year trying to figure out why, when I bought new highs that met all CANSLIM criteria, I kept getting stopped out. My entry point always seemed too high, that was obvious, even when I bought within the tolerable window above the pivot point. Some of my failures had to do with an "M" I paid no attention to, but most occurred in a strong "M". With the help of a good teacher, I started waiting for what Joe J. is calling "short term pullbacks". Massive breakouts (particularly where they were not the result of news, analyst coverage initiation or upgrades, or even features in IBD's New America or charts features) were often followed by declining price and volume action before the move resumed. This type of action was stopping me out just before the real move ensued. It was psychologically devastating and caused me to make more and more mistakes. A mistake in entry point to this day almost guarantees that I am headed for a second mistake in exiting at a loss. So, I tried to discipline myself and buy the short term pullbacks only. But the only way I knew to do it was to just wait until the volume was seemingly going to be, or had in fact been, less that average daily volume and the price had not reentered the base on an increase in volume. It often works, but there's not much confirmation unless you're right, of course. Nerve racking to say the least, especiallly when you watch the several stocks that broke out and didn't correct go to the moon without you. Connie Mack's illustration of the 3/7/10 EMA indicator and slow stochastics may help confirm that you are watching a stock which will resume it's move after a massive breakout on volume, and ensure that you have a *safer* entry point in case it doesn't work. I'm sure there are better examples, but since Joe J. has broached the subject, I'll give you the best example I have so far, PAYX. First look at a two year daily or weekly chart. I think it is a nice c&h, and the h is actually a three month c&h on it's own. Not a picture perfect CANLSIM stock, but good enough for a further look, I thought. Also it was one of the first CANLSIM-type stocks I saw breaking out on the follow through day, in mid-November. Now, a 6 month chart. Massive breakout on huge volume, but I missed it coming out of the base in mid to late November. I almost always miss the first breakout, and psychologically I do better when I miss them because I get fragile when I have a 10% or more gain and have to sit through a correction. On PAYX, there was no news, no analyst activity, no articles I could find, SI thread quiet, no IBD feature. Perfect. Just a big breakout from an 18 month base. Better yet, the stock was in a rising group and had not participated in the last big "M" move which began at the end of April 97. I went south for Thanksgiving without net access but phone trading access. I memorized the avg daily volume, took a printed chart with me and listened periodically to the quotes. I think the day after turkey day, it was under 41 and volume was low, so I popped it. As you can see I sat for a couple of weeks, trying to keep my head in a hole and hang on, but it behaved. Never even came close to my 8% stop loss order. Finally, it resumed and the resumption was followed by coverage upgrades and great earnings report and news, to boot. Then along came Connie Mack's comments on the 3/7/10 and slow stochastic buy signals on a beaten down CANSLIM type, CRY. I ran the PAYX chart at bigcharts on a one month with those indicators and, there you have it. December 15 was the buy on both!!! I had my money tied up in PAYX for two weeks longer than necessary. Confirmation, at last? Haven't tested enough stocks to be comfortable, but it sure seems to work. Connie Mack does not think this is a great example because the 3/7/10 is "tangled up" before the 12/15 crossovers, but it's the best I've found so far. Discussion? Thoughts, please. Connie Mack can you help illustrate the indicators on PAYX? Thanks. Jeffry - - ------------------------------ Date: Sat, 10 Jan 1998 10:23:12 -0700 From: Tim Fisher Subject: Re: [CANSLIM] Re: How did you perform in 1997? At 03:13 PM 1/9/98 -0700, you wrote: >Ok, with that said. What I want to know is how all of you did in 1997? Did any of the >"experts" of the group beat the averages? Be honest. Whether you are a regular poster or >not, please respond and maybe share a bit of your strategy (strict CANSLIM, CANSLIM with a >twist, strict Technical Analysis, etc.) > I transferred my inactive 401k from a previous employer to an IRA in April since I was disappointed with returns of the S&P 500 fund which I was almost 100% invested in - it lagged the S&P's performance by significant points and I could get no satisfactory explanation why. I started trading based on my mom's picks in May; at the time I was +4% on the year on my funds. She had done great with the techs prior to that; she was up about 50% since buying her first stocks in Oct. 96. I was not happy with my returns from these stocks so I started putting the rest of my current 401k and more of the IRA into CANSLIM stocks about the beginning of June after I read HTMMIS. With the help of the book, this list, and James Taylor's list, I was up a max. of 40% ROI for the year in Sept/early Oct. I had some great 100% winners like MAVK and DELL that boosted my confidence. I started getting stopped out of my stocks in Oct. well before the correction, ignored this trend and put all my proceeds back into LLUR stocks without much reagrd for their CANSLIM characteristics. Of course those stocks went down hard i.e. SMOD dropping 20% the day after I BOT. I then lost all that profit the week before and the week of the correction (right back to 0% ROI for the year). Blithely ignoring M, I reinvested all my cash during Nov/Dec and was up a max. of 4.9% ROI for the year last week. I'm down to my all-time low of -1% ROI as of today. It's been a hell of a learning experience for me, and I really don't mind the poor performance much. I don't miss this money, I never had it and can't have it until I retire, and my long-term goal is obviously to get max. ROI until age 65-1/2. I hope I can learn to trade stocks and make money so that I am making all the right decisions by the time I am playing with seroius cash in 10 years or so. Right now I'm only playing with $40k or so and I feel this is a good amount to risk since I feel the sting of losses but it's no so great that I really get hurt in the long run. Plus the funds I was in have all been totally stalled since I pulled out so I don't feel like I missed out on anything there. I think the sooner the better to learn all this so I can make the mistakes early and not later like so many I know have done. They wait until they're 45 and then panic, realizing they will retire on Soc. Sec. alone, and proceed to make the riskiest investment decisions at the wrong time. One guy at work pulled out of all the standard funds our employer offers and put all his money into oils after seeing the profit I made by repeatedly getting in and out of KEG, UTI, FLC, etc. He's 40-ish and is down thousands of dollars holding onto these stocks for the wrong reasons at the wrong time, so I really consider myself lucky to have gotten out of the year at about even with no experience prior to this spring. What I have been doing is screening with Zacks free database and Research Marvel software (an overstatement of a title; it is pretty hamstrung and the data has many holes in it). I have a pretty strict CASLI scan and then I let the stock tell me when the N kicks in (news on Yahoo coupled with a WON-style breakout for the most part). I use relative 5-year EPS growth, insider and institution holdings, market cap (even thought I ignore that on many stocks since I think it's an artificial number and has little to do with a stock's prospects), last quarter and the prior quarter EPS accelleration, price, ADV, RS, and GRS, and throw in a little "value" analysis from VectorVest to make my decisions. I really really really like LLUR stocks that have very solid CANSLIM characteristics and that is where I think my future buys will come from. In this crappy market I have been holding up on those type picks and watching non-LLUR stocks with great CANSLIM numbers lose their pants. I set stops based on VectorVest stops and they seem to make sense if the stock is solid and the market is healthy. Otherwise I have been getting burned with these typically 20% trailing stops and am back to 15% trailing stops for some of my holdings, which is where I started. I have mixed feelings about WON's 8% stops; they can save your butt when you haven't made any profit on a stock; but they would have taken me out of almost all my "Wunderkinder" stocks long before they hit that magic 100% profit. I am thinking of a system wherein I give a stock essentially no room until it has made 20%; then I set the stop there and follow up with a looser stop ala VectorVest so I never lose that initial gain. I can think of no better system; I don't have the time or TA skills to come up with anything better. I don't know when a 2-pt. drop is the beginning of a long fall or when the market or analysts are pulling the price down; I have failed to recognize when to get out in the past and I fear my desire to hold the stock and "give it a chance" is too strong to just remove my stops. Finally I have ignored M for the most part, wanting to be "in" so I can learn what it's like to "buck the trend" or even if that's possible. That has cost me some nice profits but I am learning a great deal by seeing what holds up in this kind of panic-react-to-anything-by-selling market. I compare myself on a daily basis to the R2000, DOW, NASDAQ average, S&P500, to gauge my performance. When I cannot beat the indices I want to know why; so far I can conclude nothing from this comparison but I keep trying nonetheless. And lately I have been developing a strong dislike for analysts who I _know_ are making their recommendations to make money for their employers. I have seen the most asinine reccomendations come out after the stock has dropped for no apparent reason; I can only conclude that these jerks are shorting it and telling their clients to sell so they can make a buck when they announce their ridiculous recommendations. Ditto goes for the Motley Fool who deserve an investigation for their reports which _routinely_ buoy failing stocks up (ala IOM) or trash perfectly good ones (ala almost everything that has made their "Daily Double" column). Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information tfish@spiritone.com WWW http://www.spiritone.com/~tfish -- See naked fish and rocks! - - ------------------------------ Date: Sat, 10 Jan 1998 19:48:43 -0500 From: "Tom Worley" Subject: [CANSLIM] Re: up/down ratio I've had several private requests for an explanation on the up/down ratio, so posting to the entire group for everyone's benefit. The up/down ratio (which I often write as u/d) is a simple ratio measured over the prior 50 trading days of the total volume on days the stock closed up divided by the volume on days it closed down. There is no weighing against just how much it was up or down, which might be a nice refinement, but don't if it would mean a whole lot. My source is Daily Graphs, usually Online, but sometimes the paper version. The online version is updated daily sometime after midnight, the paper version is updated every weekend. Because it is a simple (unweighed) ratio, then obviously you want it to be over 1.0, altho I have been told that WON considers it to be positive to as low as 0.7 (naturally, the chart and other CS elements would matter here). Because we should all know it seems to take more buying vol to move a stock up than selling vol to move it down, you want to see u/d as high as possible. Occasionally you will see it up at 5 or so, this is fairly rare and usually due unusual circumstances (or else the stock is already way extended). My experience has been that a decent CS stock poised for breakout is likely to have an u/d ratio of about 1.5 to 1.7 or better. I don't know of any other online source for this ratio, but since it is not a fancy formula, someone may know of an alternate source or can write a simple formula to duplicate it using free website volume and price change data. If someone does the latter, it might be interesting to experiment with weighing it, so that volume on a big up day would count more than volume on a minor down day. One weakness in u/d shows in stocks with large spreads. You can have the bid and ask both move up, yet if the last trade on the prior day was on the offer and the current day on the bid, it can show as a down day. I find that u/d is more timely than the Timeliness indicator, altho I use it as well. Being able to see it on a daily basis also helps. It is also more sensitive than the Accumulation/Distribution indicator (A/D), which is a proprietary formula I suspect would be similar to a weighed u/d, but having only 5 grades (A-E) doesn't change as quickly as u/d which is in decimals. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - -----Original Message----- From: Brown, James F. To: 'stkguru@netside.net' Date: Friday, January 09, 1998 4:33 PM Subject: up/down ratio >Tom, I've been a lurker on the CANSLIM list since almost the very >beginning, but I always enjoy your posts and analysis. One question: >relatively recently I've noticed you referring more often to the up/down >ratio, which I expect is an up-volume-to-down-volume measure, but I >can't find it easily anywhere. I subscribe to IBD, but not DG, so if >it's in DG only, do you have any idea how it's calculated, or whether >it's equivalent to any indicator in SuperCharts or other software >packages? Do you find it useful in gauging whether a breakout is likely >to occur, or in simply measuring whether a breakout is likely to >continue? Any thoughts would be appreciated. (I'm not posting this to >the list because I probably missed an earlier explanation, but if not, >feel free to post this with your answer. Otherwise, a reply email would >be great.). Thanks. James > - - ------------------------------ Date: Sat, 10 Jan 1998 21:58:18 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] advice for Monday I do expect a further selloff on Monday considering Friday's action, what I can't guess at now is whether the mkt will rally and close up for the day, or do an multi-percent drop. If the former, I would not expect HD to move much under 55, or CCE much under 34, so depending on where you have your stops you may hang on. However, if the mkt repeats on Monday like Friday, then violating these levels could be more serious, and take some time to recover. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - -----Original Message----- From: Mike Lucero To: 'canslim@lists.xmission.com' Date: Saturday, January 10, 1998 12:44 AM Subject: [CANSLIM] advice for Monday >I've still got a couple stocks (HD and CCE) that weren't stopped out, but >I'm guessing they'll hit the stops Monday. Does someone with more >down-market experience than me have some advice on whether I should just >remove the stops? In October the market for DELL opened about $10 below my >stop and went straight up from there. I'd like to not repeat that. (I know >I could use STOP-LIMIT.) > >Also, I was wondering what percentage most of us are putting into CANSLIM. >I've got about 1/3 in mutual funds, 1/3 in SPY, and 1/3 available for >CANSLIM. > >Mike > >- > - - ------------------------------ Date: Sat, 10 Jan 1998 22:41:57 -0800 From: "Patrick Wahl" Subject: [CANSLIM] Semiconductor Earnings There are a slew of semiconductor earning reports due out next week, starting on Monday with Motorola, then Intel, Linear Tech., and a couple of others on Tuesday, and Atmel later in the week. Obviously the earnings reports and any comments the companies might make are going to be pretty important to the market. - - ------------------------------ End of canslim-digest V2 #84 **************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.