From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1105 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Tuesday, January 30 2001 Volume 02 : Number 1105 In this issue: RE: [CANSLIM] watching RE: [CANSLIM] watching Re: [CANSLIM] watching Re: [CANSLIM] watching Re: [CANSLIM] watching [CANSLIM] non-event? RE: [CANSLIM] watching [CANSLIM] RE: SPF [CANSLIM] Rate cut Re: [CANSLIM] Russel 2K DBL Bottom? Re: [CANSLIM] watching Re: [CANSLIM] RE: SPF [CANSLIM] FII Re: [CANSLIM] Rate cut ---------------------------------------------------------------------- Date: Tue, 30 Jan 2001 21:50:25 -0500 From: "Ann Hollingworth" Subject: RE: [CANSLIM] watching Thanks, Tim and Tom! This is so much more complicated than I thought! I so appreciate the insights. I hope others are benefiting from the discussion, as Charles mentioned. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher Sent: Tuesday, January 30, 2001 6:41 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] watching I can't answer for Tom, but I sure can butt in. I think he was saying the same thing I said, except he considers the base to be the one I bot off of, which formed around 20 in Nov. A buy over 25 is buying an extended stock, trying a 3rd or 4th stage breakout off a short base, which is not a good CANSLIM buy. I assumed that you paid over 25 (did you say that?) and given the tenuous support at 25, I'd put a stop just under it. From about Dec 10 to last week SPF formed a shallow cup with an ascending handle, typical for LLURs. These stocks are best bot on pullbacks to near the 50 dma or whichever average they trade off of. The last good buying opportunity was right after I got stopped out (which is far too often the case!) around Dec 21 after it bounced off of 20. I think that you could have a stop there, as per Tom's rationale, and still be safe, if you bot near there. IMHO the homebuilders are vacillating right now; the GRS is 98-99 and has been there for months. Depending on M's reaction to the fed tomorrow, either will lead the next leg up or crash big-time. Anyone else think that the FOMC meeting is going to spark a nasty selloff no matter what the outcome? P.S. What is up with GCO? I got stopped out and now it is right back to near the all time high after popping 15% on news that they are losing a licensing agreement! Anyone else smell a setup in the works? On 02:50 PM 1/30/01, Ann Hollingworth Said: >I don't quite get it. On the handle, do you mean that the pivot point is the >point at which the sagging turns up? What do you mean that you want your >stop just under the bottom of the base? You mean the nearby base? I thought >the SPF base was from Dec. 8 to Jan. 7th or so, without the handle. > >Is it really okay to ask these detailed questions on this list? > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley >Sent: Tuesday, January 30, 2001 8:08 AM >To: canslim@lists.xmission.com >Subject: Re: [CANSLIM] watching > >Hi Ann, > >Different people will set their pivot point differently. >Generally, I like to set it on the high side of a pattern, >combined with volume. With a cup and handle, the pivot pt could >be set against the left side of the rim. However, if it does what >we want (form a handle), you may buy too high, and be stuck for >several weeks waiting on the handle to form, and the subsequent >b/o (which may never happen). The ideal handle will droop >slightly as it forms, and the pivot then becomes the reversal >from this down trend. > >If you are simply dealing with a flat base, then the pivot >becomes the high side of the base. > >On SPF, buying where you did means an 8% stop loss puts you at >24.84 or so. That puts you right at the top side of the only >nearby base, not a good place to be stopped out. I usually want >my stop just under the bottom of a base. > >Regards, > >Tom Worley >stkguru@netside.net >ICQ # 5568838 > > > > >- Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - - - ------------------------------ Date: Tue, 30 Jan 2001 21:55:52 -0500 From: "Ann Hollingworth" Subject: RE: [CANSLIM] watching That issue of projections being discounted into the price is interesting. Does the I rate cut get announced at the end of the day? I am hesitant to put in a Stop Loss order, because I have gotten burned with that in the past. But I can't be at computer during the day to trade. Thanks for news. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Tuesday, January 30, 2001 9:33 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] watching Interesting economics reported today: ECONOMIC NEWS: Tuesday, January 30 Period Data Estimate Previous BTM-UBS Warburg Chain-Store Sales Index Weekly + 0.6% N/A - 0.7% Consumer Confidence Index December 114.4 125.0 128.3 Redbook Retail Sales Index Weekly +2.2% N/A +2.4% WEDNESDAY: ** 8:30 a.m. ET: Preliminary GDP: Third quarter. Consensus Estimate: 2.2%. Previous: 2.2% ** 10:00 a.m. ET: New Home Sales: December report. Consensus Estimate: 891k Previous: 909k (or -2.2%) With two different retail indexes reporting (one up strongly, one strong but down slightly from last month), and a sharp drop in Consumer Confidence, and for tomorrow a forecast of flat GDP and a slight decline in New Home Sales, it is a mixed bag but one that looks to me negatively biased short term against major purchases. On the other hand, a full pt cut in Fed rates in a single month will stir up the refinancing business, as well as new mortgages. And the New Home Sales while slightly weaker is still a strong report. As goes home sales (esp new ones) so goes consumer spending as the "new" house is outfitted. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Ann Hollingworth To: Sent: Tuesday, January 30, 2001 5:40 PM Subject: RE: [CANSLIM] watching OK, but even if it is a failed BO, do I still wait until the stop price? The price is up today, but the volume isn't good. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher Sent: Tuesday, January 30, 2001 8:18 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] watching I would call yesterday a failed B/O. The vol was there but the buyers weren't. Probably has something to do with the SSB report downgrading all homebuilders late in the day. Those kind of mass downgrades based on nothing can sometimes be easy entry points as they send a whole sector down, based on "valuations" i.e. they're "too high". But as the group reacts, if you're in already you don't have much of a choice but to sell. I have already sold this one but if I still had it my stop would be kissing 25. At 07:27 AM 1/30/2001 -0500, you wrote: >Tom, > >Thanks so much for this input. > >Are pivot points from the intraday high of the left side of the cup? Or all >time high? >When a stock is setting up, has completed the cup, do you wait for the >handle? Doesn't WON say that sometimes (in new bull markets) a stock won't >form a handle, but will just keep going? > >Also, I bought SPF last week at 27. It went up for a couple of days, but now >am having doubts about whether to sell before it goes down at all below >purchase price. > >This is a great listserv! > >Ann > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley >Sent: Monday, January 29, 2001 8:06 PM >To: canslim@lists.xmission.com >Subject: Re: [CANSLIM] watching > >Hi Ann, > >Some quick comments: > >UCBH - good fundies and nrs, but already 10% extended from a very >short base >DORL - tried and failed to break thru the pivot pt on Friday, >worth watching >ESRX - good CS nrs, but no nearby base, may be a small double >bottom, but if so needs to break 108.50 >NYCB - possible small cup, but no handle yet >USPH - been watching this myself, even tho I hate med stocks, >base too short yet to act for me >LAB - if this was a cup, there was no handle, great play for the >bottom fishers, if handle does form will be too high >RCII - proper buy on this deep c&h was under 35, now must re-base >MSCC - looks like topping action >MTON - again, no base, would have been a good speculative buy >under 25 in the short base >NOC - may be a shallow cup with handle forming here, prospects >improved with a "strong defense" Republican president in place >OTRKB - too volatile for a LLUR, but may be forming a short base >around 47.50 >SWBT - 4 week base built around 43, seen a lot of acquisitions of >banks lately, not sure if this qualifies as a LLUR as it >substantially violated the 50 dma in Nov, and been more volatile >lately. > >Understand that a number of your candidates are banks related, >and I have a personal bias against banks (saw too many clients >burned on Amerfirst debacle, taught me I just don't understand >banks and their cooked books). Also don't like med stocks, tho >have bought a few and made money anyway. But your comments >suggest you are doing better at understanding CANSLIM than you >may be giving yourself credit for. Combining Wm O'Neil's CANSLIM >"rules" with reading a chart is not easy and takes time and >experience, especially in a brutal market like we have had for >many months. > >Good luck, and happy hunting, you have the right idea, > >Tom Worley >stkguru@netside.net >ICQ # 5568838 > > >----- Original Message ----- >From: Ann Hollingworth >To: >Sent: Monday, January 29, 2001 7:52 AM >Subject: [CANSLIM] watching > > >Here's my very novice take on some stocks I am watching: >UCBH, DORL, ESRX, NYCB, USPH - look interesting, but base too >short >LAB - needs pullback, handle? >RCII, MSCC, MTON - too late? Need pullback >NOC - still off high >OTRKB, SWBT - LLUR? >Ann, Mass. > > >- > > > >- > > >- Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - - - - - - ------------------------------ Date: Tue, 30 Jan 2001 21:56:14 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] watching Hi Ann, Yes, it's ok to ask detailed questions, that's how both newcomers to CANSLIM, as well as old-timers can learn and / or have our thinking and understanding challenged and strengthened. You can address the questions to the board, which is usually better as you can get a variety of opinions and interpretations. I also try to answer personal email, tho timely response is not always as good. On 12/8/00, this stock traded to a new high of 25.44 and closed there, on light volume. On 12/11 it traded to another new high of 27.375 and closed at 26.75 on volume heavier than average. Since then (to 12/21) it slid down. I consider the only nearby base to be from 12/26 to 1/12/01 when it began to break the pattern on its second consecutive day of above average volume. Keep in mind that I use DGO charts virtually exclusively. Other charting services can present a different image. Many stocks will break out of a basing pattern, only to later retreat right back into that base. If the breakout didn't go high enough to give you a profit saving exit (normally at least 15% over your entry, assuming the entry was correct) then you don't want to be stopped out in the base. You only want a stop driven exit to protect you from even greater loss of capital. Neither a failed breakout, nor a stock again trading in an established base, is threatening that. But if it falls below the bottom of the base, then the next lower level of support is likely going to be well over your 8% stop point. Thus, the ideal is to enter the stock correctly from some kind of base formation, with an entry point price such that an 8% stop would be just under the bottom of the same base. This way, your stop takes you out before a retreat becomes the edge of the cliff. You lose some money, but can still play the game another day. In your case, it appears you may have bought too late and too high, and must decide between taking greater risks of a more serious loss, or just cashing in and possibly missing a further advance. And yes, the ideal pivot for a true handle of a cup is where the slight droop of the handle begins to reverse. Often, you may have several days to plunge in, before the price creeps over the right side of the cup. Sometimes, the b/o is massive and either you bought while it's handle was still basing, or you missed it. On the rare and few quality c&h formations I find, I tend to buy when I see volume really, really drying up (less than, often way less than) half of average. At that point, the idea is that we have run out of sellers, and it only takes minor buying to start the momentum of a breakout. Hope this helps somehow, Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Ann Hollingworth To: Sent: Tuesday, January 30, 2001 5:50 PM Subject: RE: [CANSLIM] watching I don't quite get it. On the handle, do you mean that the pivot point is the point at which the sagging turns up? What do you mean that you want your stop just under the bottom of the base? You mean the nearby base? I thought the SPF base was from Dec. 8 to Jan. 7th or so, without the handle. Is it really okay to ask these detailed questions on this list? - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Tuesday, January 30, 2001 8:08 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] watching Hi Ann, Different people will set their pivot point differently. Generally, I like to set it on the high side of a pattern, combined with volume. With a cup and handle, the pivot pt could be set against the left side of the rim. However, if it does what we want (form a handle), you may buy too high, and be stuck for several weeks waiting on the handle to form, and the subsequent b/o (which may never happen). The ideal handle will droop slightly as it forms, and the pivot then becomes the reversal from this down trend. If you are simply dealing with a flat base, then the pivot becomes the high side of the base. On SPF, buying where you did means an 8% stop loss puts you at 24.84 or so. That puts you right at the top side of the only nearby base, not a good place to be stopped out. I usually want my stop just under the bottom of a base. Regards, Tom Worley stkguru@netside.net ICQ # 5568838 - - - - ------------------------------ Date: Tue, 30 Jan 2001 22:03:19 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] watching Actually, Charles, I suspect a cut of more than 50 bp will panic the markets into thinking we are already into recession, and Mr. G is trying to dig his way out before he has to admit he put us there (I personally don't think we are in recession or threatened with it). But the media does so like to put a spin on everything, gotta sell the next "news" story, after all. I expect a 50 bp cut, and little reaction by the market, maybe a slow volume day, maybe a small decline, maybe a small gain, but I am not expecting much reaction if we get 50 bp. Especially since it comes about 2:15 PM tomorrow. But then there's always Thursday! Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Charles Layne To: Sent: Tuesday, January 30, 2001 7:35 PM Subject: Re: [CANSLIM] watching - ----- Original Message ----- From: "Tim Fisher" To: Sent: Tuesday, January 30, 2001 6:40 PM Subject: RE: [CANSLIM] watching > IMHO the homebuilders are vacillating right now; the GRS is 98-99 and has > been there for months. Depending on M's reaction to the fed tomorrow, > either will lead the next leg up or crash big-time. Anyone else think that > the FOMC meeting is going to spark a nasty selloff no matter what the outcome? Well, another SURPRISE move (as in cutting more than 50 basis points) would probably cause an upside spark. A less than 50 basis point cut will be a stampede down. 50 exactly? Probably already built in, so who knows which way? Ain't the markets fun? Charles Layne - - - - ------------------------------ Date: Tue, 30 Jan 2001 22:06:40 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] watching The FOMC (Federal Open Market Committee for those acronym inhibited members) should be announced just about at 2:15 PM, and I am sure will be actively covered by CNN among others. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Ann Hollingworth To: Sent: Tuesday, January 30, 2001 9:55 PM Subject: RE: [CANSLIM] watching That issue of projections being discounted into the price is interesting. Does the I rate cut get announced at the end of the day? I am hesitant to put in a Stop Loss order, because I have gotten burned with that in the past. But I can't be at computer during the day to trade. Thanks for news. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Tuesday, January 30, 2001 9:33 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] watching Interesting economics reported today: ECONOMIC NEWS: Tuesday, January 30 Period Data Estimate Previous BTM-UBS Warburg Chain-Store Sales Index Weekly + 0.6% N/A - 0.7% Consumer Confidence Index December 114.4 125.0 128.3 Redbook Retail Sales Index Weekly +2.2% N/A +2.4% WEDNESDAY: ** 8:30 a.m. ET: Preliminary GDP: Third quarter. Consensus Estimate: 2.2%. Previous: 2.2% ** 10:00 a.m. ET: New Home Sales: December report. Consensus Estimate: 891k Previous: 909k (or -2.2%) With two different retail indexes reporting (one up strongly, one strong but down slightly from last month), and a sharp drop in Consumer Confidence, and for tomorrow a forecast of flat GDP and a slight decline in New Home Sales, it is a mixed bag but one that looks to me negatively biased short term against major purchases. On the other hand, a full pt cut in Fed rates in a single month will stir up the refinancing business, as well as new mortgages. And the New Home Sales while slightly weaker is still a strong report. As goes home sales (esp new ones) so goes consumer spending as the "new" house is outfitted. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Ann Hollingworth To: Sent: Tuesday, January 30, 2001 5:40 PM Subject: RE: [CANSLIM] watching OK, but even if it is a failed BO, do I still wait until the stop price? The price is up today, but the volume isn't good. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher Sent: Tuesday, January 30, 2001 8:18 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] watching I would call yesterday a failed B/O. The vol was there but the buyers weren't. Probably has something to do with the SSB report downgrading all homebuilders late in the day. Those kind of mass downgrades based on nothing can sometimes be easy entry points as they send a whole sector down, based on "valuations" i.e. they're "too high". But as the group reacts, if you're in already you don't have much of a choice but to sell. I have already sold this one but if I still had it my stop would be kissing 25. At 07:27 AM 1/30/2001 -0500, you wrote: >Tom, > >Thanks so much for this input. > >Are pivot points from the intraday high of the left side of the cup? Or all >time high? >When a stock is setting up, has completed the cup, do you wait for the >handle? Doesn't WON say that sometimes (in new bull markets) a stock won't >form a handle, but will just keep going? > >Also, I bought SPF last week at 27. It went up for a couple of days, but now >am having doubts about whether to sell before it goes down at all below >purchase price. > >This is a great listserv! > >Ann > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley >Sent: Monday, January 29, 2001 8:06 PM >To: canslim@lists.xmission.com >Subject: Re: [CANSLIM] watching > >Hi Ann, > >Some quick comments: > >UCBH - good fundies and nrs, but already 10% extended from a very >short base >DORL - tried and failed to break thru the pivot pt on Friday, >worth watching >ESRX - good CS nrs, but no nearby base, may be a small double >bottom, but if so needs to break 108.50 >NYCB - possible small cup, but no handle yet >USPH - been watching this myself, even tho I hate med stocks, >base too short yet to act for me >LAB - if this was a cup, there was no handle, great play for the >bottom fishers, if handle does form will be too high >RCII - proper buy on this deep c&h was under 35, now must re-base >MSCC - looks like topping action >MTON - again, no base, would have been a good speculative buy >under 25 in the short base >NOC - may be a shallow cup with handle forming here, prospects >improved with a "strong defense" Republican president in place >OTRKB - too volatile for a LLUR, but may be forming a short base >around 47.50 >SWBT - 4 week base built around 43, seen a lot of acquisitions of >banks lately, not sure if this qualifies as a LLUR as it >substantially violated the 50 dma in Nov, and been more volatile >lately. > >Understand that a number of your candidates are banks related, >and I have a personal bias against banks (saw too many clients >burned on Amerfirst debacle, taught me I just don't understand >banks and their cooked books). Also don't like med stocks, tho >have bought a few and made money anyway. But your comments >suggest you are doing better at understanding CANSLIM than you >may be giving yourself credit for. Combining Wm O'Neil's CANSLIM >"rules" with reading a chart is not easy and takes time and >experience, especially in a brutal market like we have had for >many months. > >Good luck, and happy hunting, you have the right idea, > >Tom Worley >stkguru@netside.net >ICQ # 5568838 > > >----- Original Message ----- >From: Ann Hollingworth >To: >Sent: Monday, January 29, 2001 7:52 AM >Subject: [CANSLIM] watching > > >Here's my very novice take on some stocks I am watching: >UCBH, DORL, ESRX, NYCB, USPH - look interesting, but base too >short >LAB - needs pullback, handle? >RCII, MSCC, MTON - too late? Need pullback >NOC - still off high >OTRKB, SWBT - LLUR? >Ann, Mass. > > >- > > > >- > > >- Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - - - - - - - - ------------------------------ Date: Wed, 31 Jan 2001 04:12:09 +0100 From: "Makara, Tamas" Subject: [CANSLIM] non-event? Couldn't the FED decision, so overhyped now, turn out to be a non-event? The huge reaction to the last rate cut must have been due to it coming as a surprise. Maybe a surprise GDP number could have some effect though. Tamas > Date: Tue, 30 Jan 2001 15:40:31 -0800 > From: Tim Fisher > Subject: RE: [CANSLIM] watching > > I can't answer for Tom, but I sure can butt in. I think he was saying the > same thing I said, except he considers the base to be the one I bot off of, > which formed around 20 in Nov. A buy over 25 is buying an extended stock, > trying a 3rd or 4th stage breakout off a short base, which is not a good > CANSLIM buy. I assumed that you paid over 25 (did you say that?) and given > the tenuous support at 25, I'd put a stop just under it. From about Dec 10 > to last week SPF formed a shallow cup with an ascending handle, typical for > LLURs. These stocks are best bot on pullbacks to near the 50 dma or > whichever average they trade off of. The last good buying opportunity was > right after I got stopped out (which is far too often the case!) around Dec > 21 after it bounced off of 20. I think that you could have a stop there, as > per Tom's rationale, and still be safe, if you bot near there. > > IMHO the homebuilders are vacillating right now; the GRS is 98-99 and has > been there for months. Depending on M's reaction to the fed tomorrow, > either will lead the next leg up or crash big-time. Anyone else think that > the FOMC meeting is going to spark a nasty selloff no matter what the outcome? > > > P.S. What is up with GCO? I got stopped out and now it is right back to > near the all time high after popping 15% on news that they are losing a > licensing agreement! Anyone else smell a setup in the works? > - - ------------------------------ Date: Tue, 30 Jan 2001 22:15:03 -0500 From: "Ann Hollingworth" Subject: RE: [CANSLIM] watching Tom, Thanks for the reassurance and the instruction. The help on this list is truly amazing. I will try to absorb this. Ann - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Tuesday, January 30, 2001 9:56 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] watching Hi Ann, Yes, it's ok to ask detailed questions, that's how both newcomers to CANSLIM, as well as old-timers can learn and / or have our thinking and understanding challenged and strengthened. You can address the questions to the board, which is usually better as you can get a variety of opinions and interpretations. I also try to answer personal email, tho timely response is not always as good. On 12/8/00, this stock traded to a new high of 25.44 and closed there, on light volume. On 12/11 it traded to another new high of 27.375 and closed at 26.75 on volume heavier than average. Since then (to 12/21) it slid down. I consider the only nearby base to be from 12/26 to 1/12/01 when it began to break the pattern on its second consecutive day of above average volume. Keep in mind that I use DGO charts virtually exclusively. Other charting services can present a different image. Many stocks will break out of a basing pattern, only to later retreat right back into that base. If the breakout didn't go high enough to give you a profit saving exit (normally at least 15% over your entry, assuming the entry was correct) then you don't want to be stopped out in the base. You only want a stop driven exit to protect you from even greater loss of capital. Neither a failed breakout, nor a stock again trading in an established base, is threatening that. But if it falls below the bottom of the base, then the next lower level of support is likely going to be well over your 8% stop point. Thus, the ideal is to enter the stock correctly from some kind of base formation, with an entry point price such that an 8% stop would be just under the bottom of the same base. This way, your stop takes you out before a retreat becomes the edge of the cliff. You lose some money, but can still play the game another day. In your case, it appears you may have bought too late and too high, and must decide between taking greater risks of a more serious loss, or just cashing in and possibly missing a further advance. And yes, the ideal pivot for a true handle of a cup is where the slight droop of the handle begins to reverse. Often, you may have several days to plunge in, before the price creeps over the right side of the cup. Sometimes, the b/o is massive and either you bought while it's handle was still basing, or you missed it. On the rare and few quality c&h formations I find, I tend to buy when I see volume really, really drying up (less than, often way less than) half of average. At that point, the idea is that we have run out of sellers, and it only takes minor buying to start the momentum of a breakout. Hope this helps somehow, Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Ann Hollingworth To: Sent: Tuesday, January 30, 2001 5:50 PM Subject: RE: [CANSLIM] watching I don't quite get it. On the handle, do you mean that the pivot point is the point at which the sagging turns up? What do you mean that you want your stop just under the bottom of the base? You mean the nearby base? I thought the SPF base was from Dec. 8 to Jan. 7th or so, without the handle. Is it really okay to ask these detailed questions on this list? - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tom Worley Sent: Tuesday, January 30, 2001 8:08 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] watching Hi Ann, Different people will set their pivot point differently. Generally, I like to set it on the high side of a pattern, combined with volume. With a cup and handle, the pivot pt could be set against the left side of the rim. However, if it does what we want (form a handle), you may buy too high, and be stuck for several weeks waiting on the handle to form, and the subsequent b/o (which may never happen). The ideal handle will droop slightly as it forms, and the pivot then becomes the reversal from this down trend. If you are simply dealing with a flat base, then the pivot becomes the high side of the base. On SPF, buying where you did means an 8% stop loss puts you at 24.84 or so. That puts you right at the top side of the only nearby base, not a good place to be stopped out. I usually want my stop just under the bottom of a base. Regards, Tom Worley stkguru@netside.net ICQ # 5568838 - - - - - - ------------------------------ Date: Tue, 30 Jan 2001 22:35:37 -0500 From: "Ann Hollingworth" Subject: [CANSLIM] RE: SPF Tom, you said: On 12/8/00, this stock traded to a new high of 25.44 and closed there, on light volume. On 12/11 it traded to another new high of 27.375 and closed at 26.75 on volume heavier than average. Since then (to 12/21) it slid down. I consider the only nearby base to be from 12/26 to 1/12/01 when it began to break the pattern on its second consecutive day of above average volume. Keep in mind that I use DGO charts virtually exclusively. Other charting services can present a different image. I am looking at the DGO chart from investors.com. I don't understand why the base doesn't go from 12/11 (left side of cup) to 1/16 (right side of cup) with a little handle after that. Thank you everyone for your patience. - - ------------------------------ Date: Tue, 30 Jan 2001 19:40:51 -0800 (PST) From: Dave Cameron Subject: [CANSLIM] Rate cut FWIW, I read the indicators as a very high probability of a 50% rate cut. As a true nervous type, I envision alternate scenarios - and have my finger on the sell button in case of panic. I can't possibly imagine Alan G agreeing to go MORE than that. It seems strange to see my NYSE stocks quoted in decimal points. One stock closed at 47.92 today. I gotta get used to this. __________________________________________________ Get personalized email addresses from Yahoo! Mail - only $35 a year! http://personal.mail.yahoo.com/ - - ------------------------------ Date: Tue, 30 Jan 2001 20:04:38 -0800 From: "Bill Triffet" Subject: Re: [CANSLIM] Russel 2K DBL Bottom? Ah yes. Missed that little detail about the second low. - -Bill Still in - you guessed it...cash. (g) - ----- Original Message ----- From: Tom Worley To: Sent: Tuesday, January 30, 2001 6:18 PM Subject: Re: [CANSLIM] Russel 2K DBL Bottom? > It did clear the upper lip by 3 pts, however the second low did > not undercut the first, and I don't like the subsequent > correction as it didn't confirm the bottoms. It's been > outperforming Naz for some time, but doesn't look to me like a > strong double bottom. > > Tom Worley > stkguru@netside.net > ICQ # 5568838 > > > ----- Original Message ----- > From: Bill Triffet > To: canslim > Sent: Tuesday, January 30, 2001 12:37 PM > Subject: [CANSLIM] Russel 2K DBL Bottom? > > > Just looking at the markets today I see the chart for the Russel > 2K looks > like it completed a double bottom. Maybe a good sign. > > -Bill > > > - > > > > - > > - - ------------------------------ Date: Tue, 30 Jan 2001 21:09:01 -0700 From: esetser Subject: Re: [CANSLIM] watching Tom, it seems to me you have crept away from CANSLIM, or at least WON's methods, in some of this discusssion. (see notes below) At 09:56 PM 1/30/01 -0500, you wrote: >Hi Ann, > >... >Many stocks will break out of a basing pattern, only to later >retreat right back into that base. If the breakout didn't go high >enough to give you a profit saving exit (normally at least 15% >over your entry, assuming the entry was correct) then you don't >want to be stopped out in the base. You only want a stop driven >exit to protect you from even greater loss of capital. Neither a >failed breakout, nor a stock again trading in an established >base, is threatening that. But if it falls below the bottom of >the base, then the next lower level of support is likely going to >be well over your 8% stop point. Thus, the ideal is to enter the >stock correctly from some kind of base formation, with an entry >point price such that an 8% stop would be just under the bottom >of the same base. This way, your stop takes you out before a >retreat becomes the edge of the cliff. You lose some money, but >can still play the game another day. In your case, it appears you >may have bought too late and too high, and must decide between >taking greater risks of a more serious loss, or just cashing in >and possibly missing a further advance. My understanding of WON and the 8% rule has never had anything to do with the depth of the base below the pivot. The 7-8% sell rule is there for capital preservation only. My take on it is the following: If you buy within 5% of the pivot, you have support at the pivot. The 8% rule gives you at least 3% margin below the pivot. I think WON uses the pivot as support rather than looking for some other base below that level. >And yes, the ideal pivot for a true handle of a cup is where the >slight droop of the handle begins to reverse. From today's IBD Investor's Corner, "The exact buy point, also know as the pivot point, is usually 1/8 of a point above the highest level of the handle." I'm sure this is consistent in everything WON has written (HTMMIS, 25 lessons, etc.). I don't think I've ever seen an mention of a pivot point at the "droop". >Often, you may have >several days to plunge in, before the price creeps over the right >side of the cup. Sometimes, the b/o is massive and either you >bought while it's handle was still basing, or you missed it. On >the rare and few quality c&h formations I find, I tend to buy >when I see volume really, really drying up (less than, often way >less than) half of average. At that point, the idea is that we >have run out of sellers, and it only takes minor buying to start >the momentum of a breakout. > It looks to me like you are trying to "cheat" CANSLIM a little by getting in earlier. I have a good friend that also tries this, and does well at times. These entries would give you a little more profit potential, and a little more room on the downside before hitting the 8% point. However, I've seen a lot of stocks build the patterns where the handle ends up being a resumption of a downtrend. This also explains why your buy points seem to be consistently lower than those I come up with. I always use the handle high, double bottom high, or previous closing high to set my pivots. Generally, I end up buying anywhere from 2 - 5 % higher after the stock moves. Sometimes it works, sometimes not. I thought it was important to point out a few differences in interpretation to give Ann a different opinion. And Ann, I looked through you list also. Overall I found a couple of good candidates, but quite a few stocks with 3 or 4 week bases. WON recommends strongly a 7-8 week base minimum and I lost quite a bit of money jumping in some short bases last spring. I reccomend you keep looking until you find at least 7 week bases. (And I'm sure others will chime in with differences on this one!!) >Hope this helps somehow, > >Tom Worley >stkguru@netside.net >ICQ # 5568838 > > >----- Original Message ----- >From: Ann Hollingworth >To: >Sent: Tuesday, January 30, 2001 5:50 PM - - ------------------------------ Date: Tue, 30 Jan 2001 21:13:44 -0700 From: esetser Subject: Re: [CANSLIM] RE: SPF Ann, that's exactly how I read it also. The only issue here is the "high handle" volume is still very high, so not optimum, and the base is (again, sorry) too short. At 10:35 PM 1/30/01 -0500, you wrote: >Tom, you said: > >On 12/8/00, this stock traded to a new high of 25.44 and closed >there, on light volume. On 12/11 it traded to another new high of >27.375 and closed at 26.75 on volume heavier than average. Since >then (to 12/21) it slid down. I consider the only nearby base to >be from 12/26 to 1/12/01 when it began to break the pattern on >its second consecutive day of above average volume. Keep in mind >that I use DGO charts virtually exclusively. Other charting >services can present a different image. > >I am looking at the DGO chart from investors.com. I don't understand why the >base doesn't go from 12/11 (left side of cup) to 1/16 (right side of cup) >with a little handle after that. >Thank you everyone for your patience. > > > >- > > > - - ------------------------------ Date: Tue, 30 Jan 2001 21:28:57 -0700 From: esetser Subject: [CANSLIM] FII I'm looking through my watch list tonight and came upon an interesting chart. FII. I looks to me to be a really rough base that has smoothed out nicely as it forms a handle. Comments? - - ------------------------------ Date: Tue, 30 Jan 2001 23:54:42 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] Rate cut Dave, I still dream in fractions! I know day traders that think in 1/64ths. And the Naz goes decimal by April. Us old-timers are losing our "insider" lingo, and gotta start talking like regular folks. I just hope it really does contribute to closing the spread, which will help all of us (except the broker dealers trading the spread). Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Dave Cameron To: Sent: Tuesday, January 30, 2001 10:40 PM Subject: [CANSLIM] Rate cut It seems strange to see my NYSE stocks quoted in decimal points. One stock closed at 47.92 today. I gotta get used to this. __________________________________________________ Get personalized email addresses from Yahoo! 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