Message

From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2468 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 Thursday, May 30 2002 Volume 02 : Number 2468 In this issue: Re: [CANSLIM] CAKE [CANSLIM] improving corporate profits [CANSLIM] Today's WebLink Re: [CANSLIM] Today's WebLink [CANSLIM] Maybe off-topic, but I don't think so Re: [CANSLIM] Today's WebLink ---------------------------------------------------------------------- Date: Wed, 29 May 2002 22:51:02 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] CAKE This is a multi-part message in MIME format. - ------=_NextPart_000_0166_01C20763.4EDD7C10 Content-Type: text/plain; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Hi Alicia, Chart wise (on a daily chart) we may be seeing a head and shoulders = pattern in progress. If so, then definitely not the time to be buying = CAKE I note a trailing PE of 46, and a projected PE of 38, both well above = the S&P500, and makes it more vulnerable in a market correction (which = we certainly have right now, at a minimum). I also note that management only owns 9%, while funds own 31%. That's = too low on the first, and well too high on the second, for my tastes, = especially in a poor "M". - ----- Original Message -----=20 From: Alicia Lensing=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, May 29, 2002 9:04 PM Subject: [CANSLIM] CAKE I am wondering about CAKE now. It was a nice buy a few months back, but = as I look at the weekly chart, I am thinking that it may be in a topping = pattern. Any thoughts? The restaurant industry still seems to be = strong, and CAKE still is growing... =20 Thank you, Alicia - ------=_NextPart_000_0166_01C20763.4EDD7C10 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable

Hi Alicia,

Chart wise (on a daily chart) we may be seeing a = head and=20 shoulders pattern in progress. If so, then definitely not the time to be = buying=20 CAKE

I note a trailing PE of 46, and a projected PE = of 38, both=20 well above the S&P500, and makes it more vulnerable in a market = correction=20 (which we certainly have right now, at a minimum).

I also note that management only owns 9%, while = funds own=20 31%. That's too low on the first, and well too high on the second, for = my=20 tastes, especially in a poor "M".

----- Original Message -----=20

From: Alicia = Lensing=20

To: canslim@lists.xmission.com=

Sent: Wednesday, May 29, 2002 9:04 PM

Subject: [CANSLIM] CAKE

I am = wondering about=20 CAKE now. It was a nice buy a few months back, but as I look at the = weekly=20 chart, I am thinking that it may be in a topping pattern. Any = thoughts?=20 The restaurant industry still seems to be strong, and CAKE still is=20 growing...

Thank=20 you,

Alicia

- ------=_NextPart_000_0166_01C20763.4EDD7C10-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 30 May 2002 07:21:52 -0400 From: "Tom Worley" Subject: [CANSLIM] improving corporate profits good article at http://money.cnn.com/2002/05/28/news/companies/profits/index.htm Tom Worley stkguru@bellsouth.net AIM: TexWorley - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 30 May 2002 09:02:20 -0400 From: "Duke Miller" Subject: [CANSLIM] Today's WebLink This is a multi-part message in MIME format. - ------=_NextPart_000_000B_01C207B8.B4951040 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Bulletin: Here we go again with some new CANSLIM tactics springing from WON's perfect hindsight in today's WebLink on HOV. I quote: But on May 8, the stock notched a new intraday high on quiet trade and finished lower that day (Point 4). New highs on low volume are one sign that demand is waning and pose as a key sell signal. However, given that the stock was only in the 10th week of its advance, it can be worth waiting to see if a rally still has juice. Over the next week and a half, Hovnanian fell hard and clipped its 50-day line on heavy trade (Point 5). On May 16, the stock closed below its 50-day for the first time since November. But from the next day, it began clawing its way back above the key intermediate trend line. The first new lesson (to me, anyway) is couched in the statement, "But (operative word) on May 8...a new intraday high on quiet trade...a key sell signal." When I look at the chart on May 8, I see something different: It tells me the stock closed down that day on low volume. I thought this was a good sign. But now its a bad sign, because it reached a new "intraday" high on light volume. Maybe I was in the men's room during the advanced seminar when they covered this. :) My point is, if you new about the "intraday high on low volume sell rule," wouldn't you have SOLD the next morning at the open? (If you didn't, then today's Investor's Corner is for naught.) But wait a minute, lo and behold, yet another new rule surfaces: "However, given that the stock was only in the 10th week of its advance, it can be worth waiting to see if the rally still has juice." Where in the 24 Rules is that hidden? I searched the whole Investors.com for "rally juice" and nada. In hindsight, the fact remains, if you held HOV, you would be wise to have sold on the new intraday high on low volume. That is, if you knew about that rule. I guess we learn something new every day, don't we? Where oh where did I put that darn time machine! Duke - ------=_NextPart_000_000B_01C207B8.B4951040 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable Message

Bulletin: = Here we go=20 again with some new CANSLIM tactics springing from WON's perfect = hindsight in=20 today's WebLink on HOV. I=20 quote:

But on May 8, the stock notched a = new=20 intraday high on quiet trade and finished lower that day (Point 4). New = highs on=20 low volume are one sign that demand is waning and pose as a key sell = signal.=20 However, given that the stock was only in the 10th week of its advance, = it can=20 be worth waiting to see if a rally still has juice. Over the next week = and a=20 half, Hovnanian fell hard and clipped its 50-day line on heavy trade = (Point 5).=20 On May 16, the stock closed below its 50-day for the first time since = November.=20 But from the next day, it began clawing its way back above the key = intermediate=20 trend line.

The = first new lesson=20 (to me, anyway) is couched in the statement, "But (operative word) = on May=20 8...a new intraday high on quiet trade...a key sell signal." When = I look=20 at the chart on May 8, I see something different: It tells me = the=20 stock closed down that day on low volume. I thought this was a = good=20 sign. But now its a bad sign, because it reached a new "intraday" = high on=20 light volume. Maybe I was in the men's room during the advanced = seminar=20 when they covered this. :)

My point is, if = you new=20 about the "intraday high on low volume sell rule," wouldn't = you have=20 SOLD the next morning at the open? (If you didn't, then today's = Investor's=20 Corner is for naught.)

But wait a = minute, lo=20 and behold, yet another new rule surfaces: "However, given = that the=20 stock was only in the 10th week of its advance, it can be worth waiting = to see=20 if the rally still has juice." Where in the 24 Rules is that = hidden? =20 I searched the whole Investors.com for "rally juice" and=20 nada.

In hindsight, = the fact=20 remains, if you held HOV, you would be wise to have sold on the new = intraday=20 high on low volume. That is, if you knew about that=20 rule.

I guess we = learn something=20 new every day, don't we? Where oh where did I put = that darn=20 time machine!

Duke

- ------=_NextPart_000_000B_01C207B8.B4951040-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 30 May 2002 09:43:58 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Today's WebLink This is a multi-part message in MIME format. - ------=_NextPart_000_02C8_01C207BE.85AEC7C0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable MessageDuke, I would be a lot more impressed with IBD if they had = reported that potential sell signal just a day or two later, rather than = weeks later.=20 On the other hand, I would disagree that selling the next day was = necessarily the right action. We see many signals, both buy and sell, as = well as hold. It is the collective accumulation of those signals that = should trigger an action, in most cases (the 8% stop loss rule being one = of the few that stands on its own). I realize that IBD is not being paid for specific investment advice, and = likely would not want to precipitate a correction by reporting every = sell signal immediately. But I do agree, all these new rules they seem = to be coming up with, are they their interpretation of CANSLIM, or is = this actually coming from WON? - ----- Original Message -----=20 From: Duke Miller=20 To: CANSLIM=20 Sent: Thursday, May 30, 2002 9:02 AM Subject: [CANSLIM] Today's WebLink Bulletin: Here we go again with some new CANSLIM tactics springing from = WON's perfect hindsight in today's WebLink on HOV. I quote:=20 But on May 8, the stock notched a new intraday high on quiet trade and = finished lower that day (Point 4). New highs on low volume are one sign = that demand is waning and pose as a key sell signal. However, given that = the stock was only in the 10th week of its advance, it can be worth = waiting to see if a rally still has juice. Over the next week and a = half, Hovnanian fell hard and clipped its 50-day line on heavy trade = (Point 5). On May 16, the stock closed below its 50-day for the first = time since November. But from the next day, it began clawing its way = back above the key intermediate trend line. The first new lesson (to me, anyway) is couched in the statement, "But = (operative word) on May 8...a new intraday high on quiet trade...a key = sell signal." When I look at the chart on May 8, I see something = different: It tells me the stock closed down that day on low volume. I = thought this was a good sign. But now its a bad sign, because it = reached a new "intraday" high on light volume. Maybe I was in the men's = room during the advanced seminar when they covered this. :) My point is, if you new about the "intraday high on low volume sell = rule," wouldn't you have SOLD the next morning at the open? (If you = didn't, then today's Investor's Corner is for naught.) =20 But wait a minute, lo and behold, yet another new rule surfaces: = "However, given that the stock was only in the 10th week of its advance, = it can be worth waiting to see if the rally still has juice." Where in = the 24 Rules is that hidden? I searched the whole Investors.com for = "rally juice" and nada.=20 In hindsight, the fact remains, if you held HOV, you would be wise to = have sold on the new intraday high on low volume. That is, if you knew = about that rule. =20 I guess we learn something new every day, don't we? Where oh where did = I put that darn time machine! =20 Duke - ------=_NextPart_000_02C8_01C207BE.85AEC7C0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Message

Duke, I would be a lot more impressed with IBD = if they had=20 reported that potential sell signal just a day or two later, rather than = weeks=20 later.

On the other hand, I would disagree that selling = the next=20 day was necessarily the right action. We see many signals, both buy and = sell, as=20 well as hold. It is the collective accumulation of those signals that = should=20 trigger an action, in most cases (the 8% stop loss rule being one of the = few=20 that stands on its own).

I realize that IBD is not being paid for = specific=20 investment advice, and likely would not want to precipitate a correction = by=20 reporting every sell signal immediately. But I do agree, all these new = rules=20 they seem to be coming up with, are they their interpretation of = CANSLIM, or is=20 this actually coming from WON?

----- Original Message -----=20

From: Duke=20 Miller

To: CANSLIM

Sent: Thursday, May 30, 2002 9:02 AM

Subject: [CANSLIM] Today's WebLink

Bulletin: = Here we go=20 again with some new CANSLIM tactics springing from WON's perfect = hindsight in=20 today's WebLink on HOV. I=20 quote:

In hindsight, = the fact=20 remains, if you held HOV, you would be wise to have sold on the new = intraday=20 high on low volume. That is, if you knew about that=20 rule.

I guess we = learn something=20 new every day, don't we? Where oh where did I put = that darn=20 time machine!

Duke

- ------=_NextPart_000_02C8_01C207BE.85AEC7C0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 30 May 2002 09:49:15 -0400 From: "Duke Miller" Subject: [CANSLIM] Maybe off-topic, but I don't think so This is a multi-part message in MIME format. - ------=_NextPart_000_0014_01C207BF.42491930 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit I'm a leading-, leading-edge baby boomer (that's a euphemism for I'm older than most of you, having been born DURING the war, not after!). As I aged, the boomers made my life quite good. To wit: I bought my first home in 1971 for a mere $2500 down (borrowed, of course, from my parents). I recently sold my third home, where I resided for 25 years, parlaying that borrowed $2500 into over $400,000 in equity (without taking another dime beyond that initial $2500 out of my pocket all those years). Thank you boomers for pushing the prices of housing up the way you did. There are other examples too many to mention, like Viagra, dubbed by Hef as the greatest legalized drug of all time, but I'm sure you get the point. You read everyday about the 75,000,000 boomers on the precipice of retirement. Well, while the market is the way it is, I'm looking for some new ideas, and an article in the a.m.'s New America about Monaco Coach Corp. is bang on. "That group's (boomers) growth between 2000 and 2010 is expected to be 65.5% compared to 12.9% for the rest of the population." Same issue, in a blurb about expensive home builder Toll Bros., "The builder of luxury homes expects aging baby boomers to fuel demand in the next few years." And the special section today about financial advisors is all about boomers. The point is, Canslimmers, in the very near future, beer commercials during football games will give way to commercials for Depends! You watch. Further to this issue, I live in a coastal community. A Money survey about five years ago said 44% of all boomers are going to "invest" in property near the water in anticipation of retirement. Well, guess what the boomers are doing right here in our village of 1500 people? Over the last three years, housing costs have risen (documented, mind you) an average of 3% PER MONTH. Obviously rents lag (by a long shot) that kind of inflation, which means I can't afford to invest in that stuff. But I can invest in NFI, a company that finances REIT's (I have a small position in NFI). I can invest in HOV or TOL stock. Or HOTT, which sells clothes to boomer's kids. What about Botox? And, yes, I can invest in Monaco Coach. My question of the week: Can you suggest other boomer-centric companies? We could call the list CANSLIM-B. They don't need to have great charts of fundies right NOW, but I can't help but think if you mix equal parts of CANSLIM and aging boomers, you're going to have some winners that will rival the tech boom of the late nineties. Duke Everybody should believe in something - I believe I'll have another glass of great wine! - ------=_NextPart_000_0014_01C207BF.42491930 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable Message

I'm a leading-, = leading-edge baby boomer (that's a euphemism for I'm older than most of = you,=20 having been born DURING the war, not after!). As I aged, the = boomers made=20 my life quite good. To wit: I bought my first home in 1971 = for a=20 mere $2500 down (borrowed, of course, from my parents). I recently = sold my=20 third home, where I resided for 25 years, parlaying that borrowed $2500 = into=20 over $400,000 in equity (without taking another dime beyond that initial = $2500 out of my pocket all those years). Thank you boomers = for=20 pushing the prices of housing up the way you did. There are other=20 examples too many to mention, like Viagra, dubbed by Hef as the = greatest=20 legalized drug of all time, but I'm sure you get the = point.

You read = everyday about the=20 75,000,000 boomers on the precipice of retirement. Well, while the = market=20 is the way it is, I'm looking for some new ideas, and an article in the = a.m.'s=20 New America about Monaco Coach Corp. is bang on. = "That=20 group's (boomers) growth between 2000 and 2010 is expected to be = 65.5%=20 compared to 12.9% for the rest of the = population." Same issue,=20 in a blurb about expensive home builder Toll Bros., "The = builder of=20 luxury homes expects aging baby boomers to fuel demand in the next few=20 years." And the special section today about financial advisors is = all=20 about boomers. The point is, Canslimmers, in the very near future, = beer=20 commercials during football games will give way to commercials=20 for Depends! You watch.

Further = to this=20 issue, I live in a coastal community. A Money survey = about five=20 years ago said 44% of all boomers are going to "invest" in property near = the=20 water in anticipation of retirement. Well, guess what the boomers = are=20 doing right here in our village of 1500 people? Over the last = three years,=20 housing costs have risen (documented, mind you) an average of 3% = PER=20 MONTH. Obviously rents lag (by a long shot) that kind of = inflation, which=20 means I can't afford to invest in that stuff. But I can invest in = NFI, a=20 company that finances REIT's (I have a small position in NFI). I = can=20 invest in HOV or TOL stock. Or HOTT, which sells clothes to = boomer's=20 kids. What about Botox? And, yes, I can invest in Monaco=20 Coach.

My question of = the=20 week: Can you suggest other boomer-centric companies? We = could call=20 the list CANSLIM-B. They don't need to have great charts of = fundies right=20 NOW, but I can't help but think if you mix equal parts of CANSLIM = and aging=20 boomers, you're going to have some winners that will rival the tech boom = of the=20 late nineties.

Duke

Everybody should believe in something - I believe I'll have another = glass of=20 great wine!

- ------=_NextPart_000_0014_01C207BF.42491930-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Thu, 30 May 2002 09:33:03 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] Today's WebLink This is a multi-part message in MIME format. - ------=_NextPart_000_0053_01C207BC.FEEBAF60 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable MessageHi Duke, Churning is a well documented sign of distribution at the top and isn't = something pulled out of the air by the author. Below I've sited some = resources from TradingMarkets.com (Loren F. used to write for the IBD) = and from Investors.com. With respect to HOV in general, just goes to show that sell rules aren't = all that cut and dried. Most of the sell "rules are actually guidelines = and are used to "stack up" the evidence so to speak. With HOV, I would go through a what-if similar to this: - -Breakout from sound base? Yes 2/26, approx. $22.40 - -Run up of >=3D20% in less than 8 wks? Yes. By 4/19 was up 38% - -At this point, a subset of sell rules start to kick in: That is, if the = stocks runs up >=3D20% in 8 wks, you "may" want to sit through the first = correction. (from HTMMIS, paraphrased) - -May comes along and HOV gets its first bout of churning and = distribution ( 5/6 heavy dist., 5/7 churning, 5/8 heavy dist.) - -What to do?=20 -Step 1: stack up the evidence pro: leading group, high RS and rising, market had FTD con: group has been on a long run since early 2000, may = be finished, many stocks breaking down Choice 1: Weigh in, make a descision to hold on based on the = >=3D20% in 8 wks guideline. Evidence you'll be looking for = thereafter--support at 50dMA, action of other stocks, etc. (similar to = the Weblink article) -Choice 2: 2 days of heaving distribution + 1 churning =3D heavy = evidence of unloading in 5 short days. Sell. As far as I've been able to figure out, sell rules are *not* cut and = dried. The individual's interpretation of the evidence, their tolerance = for pain, their profit goals in entering the position, the length of = time they've held the stock and current gains will weigh in to the = decision. So, two people decide completely differently given the same = chart AND the same set of WON/CANSLIM sell rules. Darn, wish it were = more clear. I'd love to do a calculation and punch a button in/out. Now = wouldn't *that* be keen? =20 - -Katherine Here are a few articles I've uploaded on the subject: http://WallStreet-LLC.com/canslim/NewHighLightVol011901.JPG http://WallStreet-LLC.com/canslim/NewHighsWeakVol060600.JPG http://WallStreet-LLC.com/canslim/BuySellTipsVol102301.JPG http://WallStreet-LLC.com/canslim/StickWithLeaders101000.JPG =3D=3D=3D=3D=3D=3D=3D=3D=3D Q: Eric S. Hill: How is it that a stock can trade many times its = average volume on a given day with hardly any price hange? Is this to be = considered bullish or bearish?=20 Loren Fleckenstein: A: Eric: You cannot apply a mechanical rule that applies to all = siutations. However, generally speaking, what you're describing is = called "churning." Churning after a stock has made an extended advance = could be bearish and a tip-off of a major price decline to come. = Churning after a stock has suffered a major downturn could be bullish = and signal that the stock is near a bottom.=20 =3D=3D=3D=3D=3D=3D Question (Ask Bill O'Neil): How do I know when to sell a well-performing stock to protect my gains? Answer: Many investors don't pay much attention to sell rules. But they are just = as important as buy rules. After a stock has had a significant run-up, = look for signs of fatigue.=20 One is what we call "churning." That's when the stock trades on = comparatively heavy volume but can't manage to make meaningful price = gains.=20 Another red flag is when the stock makes a new price high on low volume. = Also troubling is when the stock repeatedly falls as volume increases.=20 Some stocks that double or go even higher over several months will peak = in a "climax top" characterized by a couple of weeks in which the price = bursts up 25% to 50% or more on heavy volume. Also watch for weakness in = the stock's industry group, as well as the general market.=20 ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, May 30, 2002 8:43 AM Subject: Re: [CANSLIM] Today's WebLink Duke, I would be a lot more impressed with IBD if they had reported = that potential sell signal just a day or two later, rather than weeks = later.=20 On the other hand, I would disagree that selling the next day was = necessarily the right action. We see many signals, both buy and sell, as = well as hold. It is the collective accumulation of those signals that = should trigger an action, in most cases (the 8% stop loss rule being one = of the few that stands on its own). I realize that IBD is not being paid for specific investment advice, = and likely would not want to precipitate a correction by reporting every = sell signal immediately. But I do agree, all these new rules they seem = to be coming up with, are they their interpretation of CANSLIM, or is = this actually coming from WON? ----- Original Message -----=20 From: Duke Miller=20 To: CANSLIM=20 Sent: Thursday, May 30, 2002 9:02 AM Subject: [CANSLIM] Today's WebLink Bulletin: Here we go again with some new CANSLIM tactics springing = from WON's perfect hindsight in today's WebLink on HOV. I quote:=20 But on May 8, the stock notched a new intraday high on quiet trade and = finished lower that day (Point 4). New highs on low volume are one sign = that demand is waning and pose as a key sell signal. However, given that = the stock was only in the 10th week of its advance, it can be worth = waiting to see if a rally still has juice. Over the next week and a = half, Hovnanian fell hard and clipped its 50-day line on heavy trade = (Point 5). On May 16, the stock closed below its 50-day for the first = time since November. But from the next day, it began clawing its way = back above the key intermediate trend line. The first new lesson (to me, anyway) is couched in the statement, "But = (operative word) on May 8...a new intraday high on quiet trade...a key = sell signal." When I look at the chart on May 8, I see something = different: It tells me the stock closed down that day on low volume. I = thought this was a good sign. But now its a bad sign, because it = reached a new "intraday" high on light volume. Maybe I was in the men's = room during the advanced seminar when they covered this. :) My point is, if you new about the "intraday high on low volume sell = rule," wouldn't you have SOLD the next morning at the open? (If you = didn't, then today's Investor's Corner is for naught.) =20 But wait a minute, lo and behold, yet another new rule surfaces: = "However, given that the stock was only in the 10th week of its advance, = it can be worth waiting to see if the rally still has juice." Where in = the 24 Rules is that hidden? I searched the whole Investors.com for = "rally juice" and nada.=20 In hindsight, the fact remains, if you held HOV, you would be wise to = have sold on the new intraday high on low volume. That is, if you knew = about that rule. =20 I guess we learn something new every day, don't we? Where oh where = did I put that darn time machine! =20 Duke - ------=_NextPart_000_0053_01C207BC.FEEBAF60 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Message

Hi Duke,

Churning is a well documented sign of distribution at the top = and isn't=20 something pulled out of the air by the author. Below I've sited some = resources=20 from TradingMarkets.com (Loren F. used to write for the IBD) and from=20 Investors.com.

With respect to HOV in general, just goes to show that sell = rules aren't=20 all that cut and dried. Most of the sell "rules are actually guidelines = and are=20 used to "stack up" the evidence so to speak.

With HOV, I would go through a what-if similar to = this:

-Breakout from sound base? Yes 2/26, approx. $22.40

-Run up of >=3D20% in less than 8 wks? Yes. By 4/19 was up=20 38%

-At this point, a subset of sell rules start to kick in: That = is, if the=20 stocks runs up >=3D20% in 8 wks, you "may" want to sit through the = first=20 correction. (from HTMMIS, paraphrased)

-May comes along and HOV gets its first bout of churning and = distribution=20 ( 5/6 heavy dist., 5/7 churning, 5/8 heavy dist.)

-What to do?

-Step 1: stack up the = evidence

&nbs= p; =20 pro: leading group, high RS and rising, market had FTD

&nbs= p; =20 con: group has been on a long run since early 2000, may be finished, = many stocks=20 breaking down

Choice 1: = Weigh in, make=20 a descision to hold on based on the >=3D20% in 8 wks guideline. = Evidence you'll=20 be looking for thereafter--support at 50dMA, action of other stocks, = etc.=20 (similar to the Weblink article)

-Choice 2: 2 days of heaving = distribution=20 + 1 churning =3D heavy evidence of unloading in 5 short days. = Sell.

As far as I've been able to figure out, sell rules are *not* = cut and=20 dried. The individual's interpretation of the evidence, their tolerance = for=20 pain, their profit goals in entering the position, the length of time = they've=20 held the stock and current gains will weigh in to the decision. So, two = people=20 decide completely differently given the same chart AND the same set of=20 WON/CANSLIM sell rules. Darn, wish it were more clear. I'd love to do a=20 calculation and punch a button in/out. Now wouldn't *that* be = keen?

-Katherine

Here are a few articles I've uploaded on the = subject:

http= ://WallStreet-LLC.com/canslim/NewHighLightVol011901.JPG=

http= ://WallStreet-LLC.com/canslim/NewHighsWeakVol060600.JPG=

http:= //WallStreet-LLC.com/canslim/BuySellTipsVol102301.JPG

htt= p://WallStreet-LLC.com/canslim/StickWithLeaders101000.JPG

=3D=3D=3D=3D=3D=3D=3D=3D=3D

Q: Eric S. Hill: How is it that a stock can trade many = times its=20 average volume on a given day with hardly any price hange? Is this to be = considered bullish or bearish?

Loren = Fleckenstein:

A: Eric: You cannot apply a mechanical rule that applies to all = siutations.=20 However, generally speaking, what you're describing is called = "churning."=20 Churning after a stock has made an extended advance could be bearish and = a=20 tip-off of a major price decline to come. Churning after a stock has = suffered a=20 major downturn could be bullish and signal that the stock is near a=20 bottom.

=3D=3D=3D=3D=3D=3D

Question (Ask Bill O'Neil):

How do I know when to sell a well-performing stock to protect my=20 gains?

Answer:

Many investors don't pay much attention to sell rules. But they are = just as=20 important as buy rules. After a stock has had a significant run-up, look = for=20 signs of fatigue.

One is what we call "churning." That's when = the stock=20 trades on comparatively heavy volume but can't manage to make meaningful = price=20 gains.

Another red flag is when the stock makes a new price high = on low=20 volume. Also troubling is when the stock repeatedly falls as volume = increases.=20

Some stocks that double or go even higher over several months = will peak=20 in a "climax top" characterized by a couple of weeks in which the price = bursts=20 up 25% to 50% or more on heavy volume. Also watch for weakness in the = stock's=20 industry group, as well as the general market.

----- Original Message -----
From:=20 Tom=20 Worley

To: canslim@lists.xmission.com=

Sent: Thursday, May 30, 2002 = 8:43=20 AM

Subject: Re: [CANSLIM] Today's=20 WebLink

Duke, I would be a lot more impressed with IBD = if they=20 had reported that potential sell signal just a day or two later, = rather than=20 weeks later.

On the other hand, I would disagree that = selling the=20 next day was necessarily the right action. We see many signals, both = buy and=20 sell, as well as hold. It is the collective accumulation of those = signals that=20 should trigger an action, in most cases (the 8% stop loss rule being = one of=20 the few that stands on its own).

I realize that IBD is not being paid for = specific=20 investment advice, and likely would not want to precipitate a = correction by=20 reporting every sell signal immediately. But I do agree, all these new = rules=20 they seem to be coming up with, are they their interpretation of = CANSLIM, or=20 is this actually coming from WON?

----- Original Message -----=20

From: Duke=20 Miller

To: CANSLIM

Sent: Thursday, May 30, 2002 9:02 AM

Subject: [CANSLIM] Today's WebLink

Bulletin: Here we=20 go again with some new CANSLIM tactics springing from WON's perfect = hindsight=20 in today's WebLink on HOV. I quote:

But on May 8, the stock notched = a new=20 intraday high on quiet trade and finished lower that day (Point 4). = New highs=20 on low volume are one sign that demand is waning and pose as a key = sell=20 signal. However, given that the stock was only in the 10th week of its = advance, it can be worth waiting to see if a rally still has juice. = Over the=20 next week and a half, Hovnanian fell hard and clipped its 50-day line = on heavy=20 trade (Point 5). On May 16, the stock closed below its 50-day for the = first=20 time since November. But from the next day, it began clawing its way = back=20 above the key intermediate trend line.

The = first new lesson=20 (to me, anyway) is couched in the statement, "But (operative = word) on May=20 8...a new intraday high on quiet trade...a key sell signal." = When I look=20 at the chart on May 8, I see something different: It tells = me the=20 stock closed down that day on low volume. I thought this was a = good=20 sign. But now its a bad sign, because it reached a new = "intraday" high=20 on light volume. Maybe I was in the men's room during the = advanced=20 seminar when they covered this. :)

My point is, = if you new=20 about the "intraday high on low volume sell rule," wouldn't = you have=20 SOLD the next morning at the open? (If you didn't, then today's=20 Investor's Corner is for naught.)

But wait a=20 minute, lo and behold, yet another new rule surfaces: =20 "However, given that the stock was only in the 10th week of its = advance, it=20 can be worth waiting to see if the rally still has juice." Where = in the=20 24 Rules is that hidden? I searched the whole Investors.com for = "rally=20 juice" and nada.

In hindsight, = the fact=20 remains, if you held HOV, you would be wise to have sold on the new = intraday=20 high on low volume. That is, if you knew about that=20 rule.

I guess we = learn=20 something new every day, don't we? Where oh where did I put = that darn=20 time machine!

Duke

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