From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #274 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk X-No-Archive: yes canslim-digest Sunday, June 7 1998 Volume 02 : Number 274 In this issue: Re: [CANSLIM] Non-CS Investment Idea [MU: Connie] Re: [CANSLIM] Re: SPX Daily Prices Re: [CANSLIM] For Connie: other members excuse me please [CANSLIM] [non-CANSLIM] Laszlo Birinyi's Prize-Winning MF Re: What happened to this group? (was [CANSLIM] Quality of toolb Re: [CANSLIM] Re: Groups Re: [CANSLIM] Re: Groups--Johan Re: [CANSLIM] [non-CANSLIM] Laszlo Birinyi's Prize-Winning MF [CANSLIM] Split market? On one hand? On the other hand? Re: [CANSLIM] Laszlo Birinyi's Prize-Winning MF [CANSLIM] TA Talk Re: [CANSLIM] Re: O'Neil's Seminar on June 6 [CANSLIM] On the other hand [CANSLIM] Group Stuff - No Stocks - No Canslim [CANSLIM] Rolatzi - M - Db Re: [CANSLIM] CS Re: [CANSLIM] Re: O'Neil's Seminar on June 6 Re: [CANSLIM] Haven't you guys had enough! ---------------------------------------------------------------------- Date: Sun, 7 Jun 1998 11:38:32 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Non-CS Investment Idea [MU: Connie] <> Quite right. Even though MU is, as you point out, not a CANSLIM stock, the double-bottom or "W" is only one of the patterns discussed by O'N in HTMMIS. If you have a copy of the book, it's on p. 156. Those of you who are interested in the subject of divergence may also want to look at the chart of Dome Petroleum he provides as one of his examples. It shows the same sort of divergence between the relative-strength line and the second downleg of the W that was discussed in IBD not long ago. There is also a discussion in that article about the best time for re-entry. AOL users can go to the IBD site and do a search of Investors' Corner using "double bottom" or "W bottom". - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 7 Jun 1998 11:44:22 -0700 (PDT) From: Tim Fisher Subject: Re: [CANSLIM] Re: SPX Daily Prices I'll argue with you if I want to! My point was that you don't have to dial in to play with these charts. I am not always able to get on (jeez, imagine that, someone else in my family likes to use the phone!), and some like Jans pay exhorbitant fees for online time. At 09:33 AM 6/7/98 -0700, you wrote: >Try this: Go to http://www.bigcharts.com and display the interactive chart >for SPX. Select the time period of your choice and play with the >indicators in REAL-TIME! VFINX closing prices don't get published by >Vanguard for about 2 hours after market close and you don't get any >intraday data. Never have to worry about importing data - let the ISP/Web >master worry about that. > >Now, don't argue with me, I know what I'm doing. ;-) > >Bill-->> >---------------------------- > > >At 9:11 AM -0700 6/7/98, Tim Fisher wrote: >>FWIW, I own a few shares of VFINX (Vanguard Index Trust 500), and when I >>want to know how the SPX is doing on a daily closing basis, I just pull up >>my Quicken chart of VFINX prices. Quicken is good for quickie charts which >>you don't have to connect to the net to generate, all you have to do is >>download the prices once a week. You could just track it by entering the >>symbol in Quicken without buying any. The only drawback is you have to find >>another source for historical data, which you have to import yourself. >> >>VFINX >>5/29 101.44 >>6/1 101.47 >>6/2 101.67 >>6/3 100.71 >>6/4 101.84 >>6/5 103.62 >> >>At 07:36 AM 6/7/98 -0700, you wrote: >>>Interesting that my numbers are different from these, though only >>>slightly. I brought up the historical database from stocktools and >>>got the following: >>> >>>5/27: 1742.50 >>>6/01: 1741.69 >>>6/03: 1742.02 >>> >>Tim Fisher, 1995 President, Pacific Fishery Biologists >>Ore-ROCK-On Rockhounding Web Site >>PFB Information >>mailto:tim@OreRockOn.com >>WWW http://OreRockOn.com >> >> >>- > > > > >- > > > Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Sun, 07 Jun 1998 14:46:22 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] For Connie: other members excuse me please Afternoon David-- Please don't think that you're bugging me. I'm more than glad to help. I'll have an answer to you by 5:00. Thanks for the mail. Connie Mack David Reid wrote: > > Netscape > > Connie I want to ask a favor of you and I promise I wont bug you again.Will > you look at NSCP's chart and give me your T/A feeling on it for the short > term. > I have some friends and we share a little info and they have some differing > opinions on > the charts.. > I have been holding this stock for a while and missed a sell oppurtunity a > couple weeks ago at 32 because I was out of town and it slipped up on me. > It is hovering around my entry point now and I am wanting to move out of > this stock > asap. > > Thanks in advance and if you cant get to it that will be ok too. > > thanks Dave > > - - - ------------------------------ Date: Sun, 07 Jun 1998 20:32:21 +0200 From: Johan Van Houtven Subject: [CANSLIM] [non-CANSLIM] Laszlo Birinyi's Prize-Winning MF Connie Mack, Why do you equate the money flow mentioned and described in the essay to the MF as it is presented at BigCharts? As far as I can see the two have nothing or very little to do with each other. I have know about Birinyi's technique for a long time. I envy the possibilities these institutions have. Can you image the advantages one would have if one could do this kind of stuff at home? Lots of technical indicators could be made much more precise, etc, etc. Sincerely, JVH Connie Mack wrote: > . Members-- > >My use of OBV/MF as indicators for screening stocks has not set well >with one or two vocal members, and perhaps some not so vocal. The >positive and negatiave divergences were thought "imaginary" and an >aspect of technical "tricks" that one should avoid. > >I've edited a short essay even shorter to offer this comment on MF. > >There are two points worth noting in the essay: [1] Not all investors >think MF divergences are imaginary or trickery. [2] Why may price rise >and MF fall; or the reverse? - - ------------------------------ Date: Sun, 7 Jun 1998 12:13:55 -0800 From: "Patrick Wahl" Subject: Re: What happened to this group? (was [CANSLIM] Quality of toolb > From: "Tom Worley" > You are correct, Patrick, that my response to a member's post asking > for advice on a buyout scenario on DSC Communications was "off topic". > My error, for which I apologize, was in responding to the original > post which was sent to the entire group. You are correct, I should I wasn't complaining about your post, I'm sure many people found it helpful. Just trying to point out that all of us, you included, at one time or another, make off-topic posts. I think you put yourself in the precarious position of trying to squelch some off-topic stuff, but not all, or at least it appeared that way if it was not your intention. Unless alternate threads really get out of hand, probably best to let them pass. - - ------------------------------ Date: Sun, 07 Jun 1998 21:52:18 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] Re: Groups DB, Some Tele-Equips also look good: I'm watching CMVT. Others in the same group also look strong (compared to the rest of the market): ERICY, TSCP, PLT, UNPH, NT, LU. Could you please explain how one best uses the groups listed at the RANlord sit you mentioned a few posts ago? http://members.aol.com/RANord/reports/PUBGRP3.HTM At 09:51 AM 06-06-98 -0700, you wrote: > >Some groups to look at: > >Computers--Optical Recognition > >All Building groups except for Paint and Wood Products > >Financial--Consumer/Commercial Loans > >Financial--Miscellaneous Services > >Some airlines--like America West and Southwest--look interesting, but >with the possibility of rising fuel costs, these are problematic. > >Other groups, like Supermarkets, also look good, but aren't really >CANSLIM. > >--Db > > > > > >_________________________________________________________ >DO YOU YAHOO!? >Get your free @yahoo.com address at http://mail.yahoo.com > > >- > > Johan Van Houtven CLICK! N.V. / Wilrijk, Belgium - - ------------------------------ Date: Sun, 7 Jun 1998 13:12:34 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Re: Groups--Johan <> Take care with UNPH. A large part of its business is still semiconductor equipment, and that group is still iffy. Plus, one of its biggest customers was CIEN. Now that they're being bought, it's not clear whether that will dry up or not. But as for the group, you're right. Like retail, telecom has been strong for some time. I was looking for groups that may be gaining strength. If the market is in fact turning, this is a good time to look. As far as the groups on Roger's site go, they are the IBD groups, but the business with group speed and color-coding and so forth has to do with HGS (high-growth stock) investing, originated by Ian Woodward, based on CANSLIM, and discussed at the Telescan site. I can't even begin to get into all of it here. The Telescan site is, unfortunately, very new. The board used to be on AOL and you could access the old posts to "catch up" on the discussions. Whether all that will be transferred to the website or not, I don't know. If you're not interested in HGS and the Color Legend doesn't answer your questions, go ahead and e-mail Roger (RANord@aol.com). He may refer you to the HGS material, since it's all rather complex. If so, let me know. Maybe I can help in some way. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 07 Jun 1998 16:49:39 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] [non-CANSLIM] Laszlo Birinyi's Prize-Winning MF Afternoon Johan-- A few points: [1] I wished to show that MF was not "imaginary"; and if, therefore, not imaginary its remarkable ability to show the diveragence that makes it a powerful tool. [2] You can fine-tune and massage the variables until their usefulness is inundated by the mathematics. Soon most of the discussion relates to permutations, derivations, and the orthodoxy of caretry in mathematical expressions. [3] I have an axiom of conduct that each of us may express and expect. I have a couple of mathematicians in my faculty investment group who can give you ten variations on MF and any nine other indicators you choose. But there is always the ironic smirk that much of what they do to MF is a game--something analogous to "How many angels can sit the head of a pin?" My father was a mathematician who with a couple of 18th century philosophical texts in one hand a book of fractals in the other could produce the number of angels you wanted and foretell their sex. Then, he'd say: "Who gives a rat's ass?" The two faculty I spoke of can give me an MF screen different from BC's, but none they have come up with are remarkable for accuracy greater than BC's. I use BC's so that everyone can see what I'm looking at. I don't have hidden in the background indicators that I "really" use and upfront indicators that I "pretend" to use. I have access to Worden's T2000, which several members use, access to Time/Size numbers, and a couple of esoteric screens that my two math whizzes put together. Still, I trade 90% on what I speak about with members. Most of the percentage remainder is experience. And I don't skip about from site to site, comparing indicators. OBV/MF are macro, not micro indicators--unless you wish to apply them to BC's short term charts. And I do that. I'm not ready to ratify my father's rhetorical axiom, but there is overmuch made of the sophisticates of mathematics over market. Were this not true, why would half of the traders have been broke at least once, or that three quarters of mutual funds don't do better than some standard index, or that random walks do turn profits? I will fight to the death [well, not quite to the death] your right to have your say, but you must not, therefore, think that I am obligated to build tabernacles to your wisdom or suffer your disparagement. Johan, there is not a single word here pointed at you. This is just my day to lay down a few tried stones in the open field. I want to have my head cleared so I can make some non-imaginary spending money on MU come Monday. Thanks for the mail. Please write anytime. Connie Mack Johan Van Houtven wrote: > Connie Mack, > > Why do you equate the money flow mentioned and described in the essay to > the MF as it is presented at BigCharts? > > As far as I can see the two have nothing or very little to do with each other. > > I have know about Birinyi's technique for a long time. I envy the > possibilities these institutions have. Can you image the advantages one > would have if one could do this kind of stuff at home? Lots of technical > indicators could be made much more precise, etc, etc. > > Sincerely, > > JVH - - ------------------------------ Date: Sun, 07 Jun 1998 15:59:08 -0700 From: Harlan Subject: [CANSLIM] Split market? On one hand? On the other hand? Ok folks, When I look at the market (specifically Thurs. and Fri's action) I get a lot of conflicting thoughts. Which lead me to look at this market as very split if you will. I see issues and groups in corrections, and I see issues and groups emerging out of corrections. On the Bear side of me heres what I see 1. Thurs. and Fri's moves Pointwise were a impressive theres no denying that! However the Volume? WHERE WAS IT!!!! I didnt see it. 2. Corrections just dont spin on a dime and thats it folks green light lets go! 3. The OTC was and is still having problems 4. When I look at the leaders of this new upcycle Most if not all are still in corrections and below theyre 50day aves. Yes they ran em late last week but to where?! 5. The new low list is higher than the new high list. 6. I've seen them do this last yr. just before they kicked the crap out of us. Meaning they ran em all and ran the index's up and over the 50day moving ave's for a day or two to make it look like everthing's all hunky dory. You know Just when you think its safe to get back into the water type thing. Look at the following stocks (1yr chart with 50day ave on it) and tell me what you see. Ask yourself a simple question: Are these issues in uptrends and above theyre 50day moving aves? or are they in downtrends below theyre 50day moving ave.s trending lower overall. YHOO,XCIT,CMGI,LCOS,SAPE,SAVLY,MEDI,AEOS,BLDPF,MRK,AMZN,ELNK,PSFT,CPWR just to name a few. Heres a question for you: What do all these issues have in common? ANSWER: At the start of this NEW UPCYCLE these issues were the stongest of the strong for the most part. They WERE the leadership at least up until the markets started consolidating (And thats all this really is that were going through) Some of these issue will finish theyre corrections and break on out to NEW HIGHS again but not now. They need time to digest theyre gains. So whats the game plan with these issues? Well you gotta take it on a stock by stock basis with them. Watch em as they rally back up to theyre respected resistance levels are and on signs of stalling start to consider going short these issues FOR A TRADE. So in summary, Yes I can build a case for the market still being in trouble. The next post to you will be talking about " On The Other Hand" Stay tuned, do your own homework, enter the water at your own risk. Harlan - - ------------------------------ Date: Sun, 7 Jun 1998 15:24:06 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Laszlo Birinyi's Prize-Winning MF > Date: Sun, 07 Jun 1998 10:55:10 -0400 > From: Connie Mack Rea > My use of OBV/MF as indicators for screening stocks has not set well > with one or two vocal members, and perhaps some not so vocal. The > positive and negatiave divergences were thought "imaginary" and an > aspect of technical "tricks" that one should avoid. > > I've edited a short essay even shorter to offer this comment on MF. I haven't looked into the money flow indicators provided with the usual software packages to know how useful they are, but I've read a bit about Birinyi's indicator, and it is much more sophisticated than what is available to us lowly investors. As the note says, he tracks every single trade for the stocks he follows, notes whether a large block trades on upticks or down ticks, likewise with smaller transactions, and tries to determine if smart money (institions I suppose) are buying or selling. So he is looking pretty deeply into the market, while most money flow indicators are more simplistic, based only on the single end of day volume numbers and end of day price change. - - ------------------------------ Date: Sun, 7 Jun 1998 15:24:06 -0800 From: "Patrick Wahl" Subject: [CANSLIM] TA Talk Since there is so much technical analysis talk floating around, thought I would offer my own opinion on it, which probably shows my own limitations in this area. This is really meant as a sort of prologue for anyone new to TA and is just thinking of getting into it. First, pretty much all indicators offered in charting packages are price based. They are looking at a single thing, and there aren't that many ways to view price. This means they are all pretty closely correlated. Tushar Chande has a book called The New Technical Trader (I didn't get too much out of it) where he prints the statistical correlation between various indicators. Momentum, Stochastics, RSI, ADX, are all fairly closely correlated. You might get something from one of them, but piling them on isn't going to yield much additional information. Second, you can probably get most of what the indicators tell you by simply looking at the chart. Stochastics, for example, simply tell you where a price is relative to the last X days, and this can be quickly seen by looking at the chart. You can also spot where a divergence occurrs. This is simply a slower move downwards than a previous move - lower momentum, a higher low in an oscillator, easily picked out by looking at the price bars. Also, in one of the market wizards books, when questioned about what indicators they found useful or not, a couple of the people who were systems people said they had not been able to get anything out of the RSI and stochastics when used in systems. Just my two cents, anyone who wants to tell me I don't know what I am talking about, feel free to do so. - - ------------------------------ Date: Sun, 7 Jun 1998 15:24:06 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Re: O'Neil's Seminar on June 6 > Date: Sat, 6 Jun 1998 18:37:52 -0500 (CDT) > From: mckeener@ix.netcom.com > Just returned from O'Neil's seminar. The value for me was that it > "got me back on track". Too easy to hear and worse, listen to all > the noise that diverts one from CANSLIM. Thanks for the summary. > 3) Make a list of those stocks you wished you had bought. Note their > characteristics to help you in the future. I have done this a little bit, figured the following things out about some of the stocks I have missed, which include AOL, XCIT, AMZN. A few things I think I have figured out are - What prevented me from buying at least two of these are their lack of earnings. But apparently there were enough other things in their favor to make them strong performers. Among the things I missed, I think, are the overriding importance of the N factor, that is, what is New. These are all involved in the internet, which clearly is the newest biggest kid on the block. Also, the internet is pretty open ended, by which I mean its ultimate potential is still unknown, which means people can put valuations on these stocks that exceed what I think are reasonable levels. And finally, this is a very well known investing area. People who may only casually follow stocks probably know about Amazon and AOL, and so you have a lot of buying power from the public available. I'm probably going to mangle this pretty badly, but George Soros said something like - one way to make money is to recognize a trend and get aboard even if it is a trend bases on faulty assumptions, and then be ready to get off before everyone else does. Put another way, I guess he means that just because something is a mania, a bubble that will ulitmately burst, that doesn't mean you can't make money on it. This is definitely tangential to CANSLIM, but maybe somewhat helpful. - - ------------------------------ Date: Sun, 07 Jun 1998 16:49:54 -0700 From: Harlan Subject: [CANSLIM] On the other hand On the Other hand? When I look at the action on thurs. and Fri I see that Yes we're back above the 50day moving ave. On all the index's for 1. 2. When looking at the IBD mutual fund index I see that it hit its 200 day average and bounced signaling the end of this consolidation is near. But still needs some time to finish off its consolidation by backing and filling. 3. Look at the Retailer's! these groups are making tracks! Are they the leadership that we need to carry us to the next level? could be? I wouldnt disreguard that statement. 4. Look at the following stocks (1yr chart with a 50day moving ave. applied of course) And tell me what you see. Are these issues all breaking out of bases hitting NEW HIGHS? are they all trending higher? are they all above theyre 50day moving ave's? TSCP-21.875 NEON-33.00 RADAF- 20.875 ABTX- 23.00 If this isnt a textbook example of a cup and handle I dont what one is!!!!! Rule of thumb here is the bigger the base the bigger the break out or down for that matter. BVSI- 13.00 HCFP-56.75 AKRN- 8.375 This ones a trendline trade HDWY- 11.00 This ones a trendline trade too LSON-43.50 KSS- trendline trade too Just to name a few. Also look at the Retail S&P index (RLX) is that a beautiful chart or what. Question: When looking at all these charts what do they all for the most part have in common? 1. All hitting or attempting to hit new highs 2. All are in uptrends 3. All are above they're 50 day moving ave's 4. And most importantly, the bulk of them didnt participate in this yrs' earlier moves in the market. Remember how the Model Book of the biggest winners states in a Macro view that "Last cycles Leaders are next cycles Laggards? Semi's and Oils case in point. Well in the Micro sense In the next surge forward in the mkts (assuming there is one) The leaders earlier this yr are gonna lag and possibly come out of corrections later in the yr for another move (some will some wont) in the mean time its gonna be a whole new ballgame with new players. So watch the new high list folks. In sumary? Yes I can also build a case for us going higher from here. In my honest opinion all this mish mash in the markets are just a normal correction in a NEW Bull market cycle. Are we eventually going to finish this consolidation in the market? IMHO yes. When we do though you gotta ask youself do you wanna just participate with the market or do you wanna participate by being in the Market Leaders? The choice is yours. Why do they call em market leaders? Because the lead the Market right? I guess that means that they're also the 1st to take off when the market finishes its consolidation. That also means they start they're moves before the general market does too. Is that what the retailers are doing? Hmmm you be the judge. So in summary going forward? Whats the game plan? If the Mkts roll over? On the shortside the names mentioned earlier need to be watched closely for signs of stalling (names in my last post) once they stall they could be shorted for a POP to the downside for a TRADE The longs? that'd be a good time to start picking em off one at a time. If the markets decide to plow forward from here and never look back? (I doubt that) but in that scenario? Plot your entry and stop points on some of the longs mentioned or issues that have similiar characteristics. and make a posibble probing position (they can always be added to along the way) The shorts? let these issues speak for themselves. Use what you can throw out the rest. Comments? sure but I really dont care, I'm just calling it as I see it. You? your on your own. Unless your my clients that is. Harlan Stay tuned - - ------------------------------ Date: Sun, 07 Jun 1998 19:36:13 -0400 From: "Frank V. Wolynski" Subject: [CANSLIM] Group Stuff - No Stocks - No Canslim Well, my aggregate percentage number is less negative than the prior week, but it is still negative. Last week -352% This week -46% Some groups have resisted the downslide, but I'm having trouble getting interested in Ford or GM!! Retailers, Specialty, Major Discount Chains (4 weeks in a row of advancing), Shoes&Apparrel all very strong and looking like they want to go higher. Super/Mini Markets (bouncing back up to it's 200day MOV, 50day MOV is pointing South! Retail/Drug Stores looking real firm, but the volume is drying up on this advance. When I dig into other groups that are moving, I either find a bunch of Turkey's really getting it on or I find some big caps that the Institutions own 98.6% of with a PE of 8,976,432 and a ROE of .12%, excluding the past two years losses! Well enough opinion: On to Numbers Best one week performance: Finance-Investment Mgmt = 9.0% Telecommunctns-Cellulr = 6.7% Auto Mfrs-Domestic = 6.2% Food-Flour & Grain = 5.7% Retail-Major Disc Chains = 4.5% Retail-Consumer Elect = 4.4% Comml Svcs-Linen Supply = 4.0% Beverages-Alcoholic = 3.6% Computer-Mini/Micro = 3.3% Retail-Apparel/Shoe = 3.2% 79 Groups were positive for the week. 123 Groups were negative. Nothing in particular stands out other than the retailers and defensive issues. Frank Wolynski ( Standing aside! ) - - ------------------------------ Date: Mon, 08 Jun 1998 07:40:04 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] Rolatzi - M - Db > Date: Sun, 7 Jun 1998 07:20:59 -0700 (PDT) > From: dbphoenix > Subject: Re: [CANSLIM] Rolatzi - "M"--Jeffry > > < Nasdaq take out the Wednesday, May 27 low on June 1 or 3?>> > > Jeffry, the Naz was .04 lower on the third than the twenty-seventh, > but I'd be reluctant to claim that O'N's observation can be reduced to > that level of mathematical hair-splitting. Even if we get the > "follow-through", anyone reentering here should remember those > fake-outs you mentioned and watch closely with tight stops. > > - --Db > Fair enough, but I've never seen such a hair splitting situation when trying to find the low in front of a potential follow through day, have you? If I were to "think" about it, I'd obviously chose to see follow through off that huge reversal of 5/27. But, who's thinking? I'm certainly not going to admit it with the watchdogs in this crowd!! ;) JW - - ------------------------------ Date: Sun, 07 Jun 1998 19:50:31 -0400 From: Tom Worley Subject: Re: [CANSLIM] CS Jeffry, I must admit you have finally badgered me into directly answering your questions publicly. However, I expect this will be my final response to you publicly or privately, so please do not continue to fill my inbox, I won't respond. Further comments imbedded below. Tom W - -----Original Message----- From: Jeffry White <"postwhit@sover.net"@sover.net> To: canslim@mail.xmission.com Date: Friday, June 05, 1998 7:23 AM Subject: [CANSLIM] CS >So, how about a few CANSLIM questions, instead? Perhaps we can all take >away something of value from your answers, or, alternatively, you may >find in answering them that you clarify your own thoughts on the "M" and >take away something of value yourself. I sure hope you "take away something of value", all I got was a delay in looking at my latest DG charts. > >I'm not sure why my questions to you some time ago were percieved as >intended to taunt, flame or harrass you, Tom. As I've repeatedly said >(and been flamed for in public and private) I was quite serious about my >curiosity then, and now, in attempting to understand the study, testing >and experience which led you to so resoundingly reject WON's price and >volume "distribution" indicators. Never once said I had abandoned WON or his "price and volume" distribution indicators. But have tried to suggest that this not be applied on a day by day basis due to the change in mkt action and climate from when HTMMIS was written ten years ago as well as due to the volatility over the past several years. Even in the late 80s I don't believe WON intended these "indicators" to be provided on a pure "absolute" basis, rather they are a part and parcel of the total makeup of "M", which I continue to believe includes such dynamic things as economics, Fed policy, international events, etc. > >So, here are the questions, again with one deletion which because you >responded to it. Let's talk CANSLIM, Tom. > >1. When you indicate a lack of clarity in distribution signals in the >last >5 years, are you talking about distribution signals that pre-sage a bear >market, or intermediate topping action leading to intermediate term >corrections/conslidations? HTMMIS was written ten years ago and only marginally updated in the second edition. Since then, the dynamics of the marketplace have changed. Money flow into both mutual funds and 401 plans have increased dramatically, and this money must be placed somewhere. During the past 8 years, I have repeatedly seen several declarations that we have gone from a bull to a bear market, my advice to my co-workers in the securities industry was that we were seeing another correction, within a continuing bull mkt. Historically I seem to be correct. (looks like I am going to cut this short, my DG books just arrived, late but here, and they take priority, so the rest of this response may be abbreviated). But yes, my comments are more intended towards topping action, as I remain convinced (from economic reasons) that we remain in a bull mkt overall. > >2. Were the "distribution" signals "clear" to you back in early October >of >1997, prior to the crash? How about January 1997? Not really, as I was focused on the small and micro caps by then, as the one arena where I felt I could continue to find (and did) earnings growth exceeding 20% in the face of the Asian crisis which was then building. > >3. If not, what exactly did you find to be unclear in each of those >intermediate term tops? While I try to pay attention to "intermediate term tops", I am more concerned about how the stocks I presently own, or am contemplating buying, are acting and performing. If they remain strong in the midst of evidence of overall mkt topping action, I feel more confident in them. And if they correct the same as or less than "M", then I also feel good about them. Signs of topping of the overall mkt make me more cautious, but don't force me out of individual stocks, altho they may, and did, chase me out of my mutual funds, to my regret (and lost profits). > >4. Whether you found those tops true to WON's distribution signals, what >other points in the indices did you have in mind where "distribution" >signals (compression type after an 3-6 month advance) were not clear >during the past five years compared to those in the prior period which >are referencing in your comments here? I won't even try to fire up the mental computer for 5 years of data, rather I will simply comment on the time frame involved in my comments, which is last fall thru early 98. During this period, I saw earnings forecasts on big cap stocks being sliced and diced. At the same time, earnings forecasts on small cap and micro caps were, if anything, being raised. From my economics perspective, even if you don't consider economics to be canslim, I saw and anticipated a strong housing and labor market, thus combined my preference for small caps and economics reports into making a profit on stocks like MDC and HDWY, even tho at the same time many were suggesting we should be going to cash in anticipation of a correction (however short term it might be). Simply put, what others were seeing as a correction and/or mkt top, I was seeing as a rotation of money from one sector to another, and was switching my investments accordingly. > >And, since that post, I think there are a couple more "M" questions >which have come up in this group which I would hope you could favor us >with a reply: > >5. What, if anything, was unclear to you about the price and volume >"distribution" signals in the indices in early April of this year? Mostly the lack of serious volume sustained to the downside. Yes, we had some heavy volume days on the downside, but these were quickly reversed. I have learned from my experience to step back and look at things more from a weekly or even monthly perspective rather than from a daily or hourly view. We seem to be in a holding pattern in which any serious drop in price brings in the cash sitting on the sidelines (I suspect this is a factor of the $20 billion or so of new money flowing into stocks every month I mentioned above) along with any real conviction that we are on the brink of, or have entered into, either a true bear mkt or at least a sig correction. > >6. How, if at all, do you use the A/D line to confirm or dispel possible >market turns? On a daily basis, I compare the A/D stats to the price move in the mkt indexes. If I see a neg or flat A/D but a price gain in the indexes, I say to myself, "yep, big caps (with their commensurate high volume) had a good day, but neg breadth". On a weekly basis, I do basically the same, however looking at several other indexes to evaluate true breadth of the mkt. > >7. Do you track leadership groups in determining Market Direction? No > >8. Do you see IG's that are making moves from the middle of the pack >which might from which leadership might emerge with the new uptrend? Can't answer, don't understand your abbreviation of "IG" > > >Thanks in advance for your efforts on these questions, Tom. > >Jeffry > >- > - - ------------------------------ Date: 8 Jun 98 11:30:42 From: Dean Edwards Subject: Re: [CANSLIM] Re: O'Neil's Seminar on June 6 Just my 2 cents worth I still think you are treading on dangerous ground. I remember when Netscape first went public and roared over a $100 within a short space of time. Now look at it! And AOL also collasping to $20 about 2 years ago. Just recently a music internet stock zoomed from $6-$40 now selling at $12. The problem is that it is very hard to pick the winners with no earnings. By the way AOL is not listed in the S&P 500 index. But the Megellan Fund $50 billion dollar fund, now owns a big chuck of AOL and are backing it. An Internet find manager dealing exclusively with internet stocks, said he didn't have clue what was going to be a winner or not. He diversified heavily into these stocks. William O'Neil: Our model book book studies of all the outstanding stocks show the most important criteria was that they had big increases in earnings already behind them. Why mess around with maybes? Recent Internet IPOs --- where he would consider investing in a company that hadn't yet published a profit. William ONeil: AOL has shown earnings in the last few years. They ran through a short period of problems, but they showed 4 cents in 90, 4c in 91, 5c in 92, 6c in 93 up to 24c in 1995. They had a problem in 1997, but they should come out of it this year. If a new comapny had never shown a profit, I would not buy it. So with a Yahoo at its IPO and Amazon at present... William O'Neil: That does not mean it will not eventually be successful, but we are playing probabilities. Why guess with something that has not been profitable yet. Our approach dictates waiting until profitability. - ---------------------- Forwarded by Dean Edwards on 08/06/98 10:56 - --------------------------- pwahl@postoffice.worldnet.att.net ("Patrick Wahl") on 08/06/98 07:24:06 To: canslim@lists.xmission.com @ INTERNET cc: (bcc: Dean Edwards) Subject: Re: [CANSLIM] Re: O'Neil's Seminar on June 6 > Date: Sat, 6 Jun 1998 18:37:52 -0500 (CDT) > From: mckeener@ix.netcom.com > Just returned from O'Neil's seminar. The value for me was that it > "got me back on track". Too easy to hear and worse, listen to all > the noise that diverts one from CANSLIM. Thanks for the summary. > 3) Make a list of those stocks you wished you had bought. Note their > characteristics to help you in the future. I have done this a little bit, figured the following things out about some of the stocks I have missed, which include AOL, XCIT, AMZN. A few things I think I have figured out are - What prevented me from buying at least two of these are their lack of earnings. But apparently there were enough other things in their favor to make them strong performers. Among the things I missed, I think, are the overriding importance of the N factor, that is, what is New. These are all involved in the internet, which clearly is the newest biggest kid on the block. Also, the internet is pretty open ended, by which I mean its ultimate potential is still unknown, which means people can put valuations on these stocks that exceed what I think are reasonable levels. And finally, this is a very well known investing area. People who may only casually follow stocks probably know about Amazon and AOL, and so you have a lot of buying power from the public available. I'm probably going to mangle this pretty badly, but George Soros said something like - one way to make money is to recognize a trend and get aboard even if it is a trend bases on faulty assumptions, and then be ready to get off before everyone else does. Put another way, I guess he means that just because something is a mania, a bubble that will ulitmately burst, that doesn't mean you can't make money on it. This is definitely tangential to CANSLIM, but maybe somewhat helpful. - - - - ------------------------------ Date: Sun, 7 Jun 1998 22:48:47 EDT From: Subject: Re: [CANSLIM] Haven't you guys had enough! Enough is enough! Can we all just try and get along? Say the serinity prayer, count to ten, or kick your dog. Lacking Connie's ability to articiculte I'll simply state the obvious. We all have opinions, their like - --feet. Some are small and some are larger but we all try to avoid stepping on other people's. OR DO WE. I like Tom's posts. He made me aware of some stocks such as MSON, TMBS, and others. Using Connie's brand of TA for entry, AND exit, I've made a considerable amount of money on stocks that Tom has mentioned. I also enjoy Jeffrey and Db's discussion of "M". I saved a good deal of money by going to a large percentage of cash based on their observations. Your all wonderful! Pat yourselves on the back and get back to identifying quality stocks-both long and short. Please, Greg - - ------------------------------ End of canslim-digest V2 #274 ***************************** 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.