From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2851 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, August 22 2002 Volume 02 : Number 2851 In this issue: Re: [CANSLIM] The ultimate "M" meter ---------------------------------------------------------------------- Date: Thu, 22 Aug 2002 22:30:22 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] The ultimate "M" meter This is a multi-part message in MIME format. - ------=_NextPart_000_00CF_01C24A2B.80EA8EE0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable good night Curt, and thanks for understanding. Does your lack of sleep mean your defense contractor is also hopping = with an influx of new orders suddenly? - ----- Original Message -----=20 From: Curt Corley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 22, 2002 10:06 PM Subject: RE: [CANSLIM] The ultimate "M" meter Thanks, Tom. I certainly understand the 12-14 work days. I've only had = 4 hours of sleep since yesterday morning myself. You probably noticed I = wrote "HTTMIS" instead of "HTMMIS". My sleep deprivation is probably = why I switched tenses too. Sorry for the confusion. =20 Also, thanks to Katherine for the kind reception. =20 Anyway, to get back on topic: I've got some techniques for initial = protective stop losses and trailing stop losses that I would like to = share with the list in the near future. So stay tuned. But for now, = I'm going to try to get some sleep. =20 Curt =20 - -----Original Message----- From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley Sent: Thursday, August 22, 2002 8:56 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] The ultimate "M" meter =20 Thanks Curt, both for the understanding and the introduction. Because = you wrote in the "first person, plural" tense I jumped to the conclusion = that you were part of the site you mentioned, should have asked first. = My only excuse is too many 12-14 hour work days, six days a week. =20 Working for a defense contractor, I have no doubt you will have some = observations that can benefit us all, as it right now appears to me to = be a definite candidate for growth for the next few years. And that's = despite the unpredictability of govt contracting. =20 - ----- Original Message -----=20 From: Curt Corley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 22, 2002 7:20 PM Subject: RE: [CANSLIM] The ultimate "M" meter =20 It certainly wasn't my intention to do any commercial solicitation. I am = not -- in any way -- professionally affiliated with the products or = people that I mentioned earlier and could not benefit from endorsing = their products. I'm a software engineer working on a missile defense = project for a major aeorospace-defense company. The sources I mentioned = were used as references only, because I like to back up my words with = examples and facts.=20 =20 You're right. I definitely did not catch the fact that commercial = solicitation is prohibited - especially since there have been numerous = references to commercial sources within the E-mails here in the last few = days, including IBD, Daily Graphs, HTTMIS, and links to cup-with-handle = sites. However, I'm sorry that for the faux pas and will now explain = why I joined the group. =20 I started getting interested in investments a few years back because of = my 401K account. Unfortunately, I bought into the hype that you should = buy indexed funds using dollar-cost averaging. Well, this worked for a = while, and I was satisfied with the results. However, when the bear = market started about 2 =BD years ago, I lost a considerable sum of = money. Whenever something goes sour, I don't cry about it. I analyze = what went wrong and figure out what I can do to correct the problem. So = after getting crushed at the onslaught of the bear market, I started = studying and reading everything I could get my hands on concerning = investment and trading of stock securities. Naturally, my enthusiasm = boiled over into the work place. I was talking to a coworker who is a = diehard CANSLIM advocate, so I bought the HTTMIS book. WON's book made = a lot of sense to me, and I decided to learn everything I could about = CANSLIM. While searching the internet for CANSLIM sites, I found this = mailing list. =20 =20 I was initially offended to be accused of commercial solicitation (can = you blame me?). However, after getting over my initial reaction and = thinking things over from your point of view, there are no hard = feelings. I can understand your concern about the quality of this = mailing list. If people let salesmen get on the mailing list and start = pitching their products, the list would degenerate with spam. It has = been challenging enough to find enough time to read through the dozens = of good messages that I've received every day so far. I respect your = assertiveness in ensuring the quality of this list. Thank you. =20 From what I've seen so far, you have some great advice on this mailing = list. I hope I too can contribute something useful in the future. =20 =20 Curt =20 - -----Original Message----- From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley Sent: Thursday, August 22, 2002 6:28 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] The ultimate "M" meter =20 Curt, if you had lurked here more than a few days, you might have caught = the fact that commercial solicitation is prohibited. =20 If that's not what you intended, then I suggest you introduce yourself = and tell us why you have joined our group. =20 - ----- Original Message -----=20 From: Curt Corley=20 To: canslim@lists.xmission.com=20 Sent: Thursday, August 22, 2002 3:16AM Subject: [CANSLIM] The ultimate "M" meter =20 I've been lurking here for a few days, and I would like to put in my two = cents' worth about the question of whether we're in a bull or a bear = market. I'd also like to give my personal opinion of what the ultimate = "M" meter is. But first, I want to get some definitions down to make = sure we're speaking the same language here. I will use the definitions = that are put forth by the Dow Theory and which, IMHO, are best described = in the book "Technical Analysis of Stock Trends" by by Robert D. = Edwards, John Magee, W. H. C. Bassetti (Editor). =20 =20 What's a bull/bear market? =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D In "TA of Stock Trends," the authors state that a primary trend is the = general direction of price movement over a year or more. A bull market = is a primary trend containing higher highs and higher lows in price. A = bear market is a primary trend containing lower highs and lower lows in = price. Within the primary trend are secondary trends. Secondary trends = last from 3 weeks to many months, and they do not (repeat not) qualify = as bear or bull markets. The secondary trends are merely the = corrections within a bull market and the rallies within a bear markets. = In addition to the primary and secondary trends, there are minor trends = that usually last less than 6 days and rarely as long as 3 weeks, but = they are of little importance here. The main thing that I would like to = get across is this: Using the definitions just described, you can't = talk about bear and bull markets unless you're talking about a time = frame of about a year. =20 What do we use for an "M" Meter? =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Now that the definitions are out of the way, we can talk about how to = get in and out of bull markets easily using our "M" meter. If you're = having CWs (i.e., CANSLIM Withdrawals) during a bear market, you might = try CANSLIM'ing during a rally within the bear market. You can use our = "M" meter to detect rallies as well. The "M" meter is so simple that I = feel like a few of you are not going to believe me and will tell me to = pack sand - but, oh well, here it goes. The "M" meters are moving = averages. =20 For a good explanation as to why this works, visit = http://www.401k-maximizer.com/. =20 =20 How do we use the "M" Meter? =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D The index you choose to graph will depend on the kind of security you're = investing in. For general growth stocks, the QQQ ticker symbol (NASDAQ) = is a good one to use. For especially small cap growth stocks, you can = choose one of the Russell indexes, such as the Russell 2000. To get a = feel for whether you're in a bull/bear market, plot the index against a = 200-day moving average. To get a feel for whether you're in a = rally/correction, plot the index against a 50-day moving average. The = reasons we choose a 200-day average for bear/bull "M" indicator are = because it is: (1) a length of time that approximates the number of = trading days in one year - the minimum time frame for a bull/bear = market, and (2) it is an indicator that is highly watched by many = elephants. The reasons we choose a 50-day average for the = rally/correction "M" indicator are fairly the same: (1) it's a highly = watched indicator, (2) it is a time frame that makes a good compromise = between getting you in and out of a rally without whipsawing you in and = out. =20 Defense of the "M" Meter =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Try plotting a 3-year graph of QQQ against a 200-day EMA moving average. = Imagine yourself getting in on that market when the prices crossed = above the 200-day MA and getting out of the market when the prices = crossed below the 200-day MA. You might have gotten whip-sawed 3 or 4 = times between April and September of 2000 (allowing you to participate = in the rallies of June and August). But you would have stayed out of = the bear market since September. =20 Are we still in a bear market? =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D Truth is: nobody knows yet, because enough time hasn't passed. That's = the way it goes. In a reversal like this, you never know whether it's = rally or the start of a new bull market until enough time has passed = (like the saying goes: Hindsight is 20/20). But whether we're truly in = a bull market or bear market is irrelevant to me. All I care about is = our meter. And the meter says this. Yesterday (Aug. 21) QQQ finally = crossed above the 50-day EMA, but it's still a long way from reaching = the 200-day EMA. I might get into stocks slowly and cautiously right = now, but I'm certainly not ready to jump in with both feet. =20 - -- Curt - ------=_NextPart_000_00CF_01C24A2B.80EA8EE0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
good night Curt, and thanks for=20 understanding.
 
Does your lack of sleep mean your defense = contractor is=20 also hopping with an influx of new orders suddenly?
 
----- Original Message -----=20
From: Curt = Corley=20
Sent: Thursday, August 22, 2002 10:06 PM
Subject: RE: [CANSLIM] The ultimate "M" meter

Thanks, = Tom.  I certainly understand the = 12-14 work=20 days.  I=92ve only had 4 = hours of=20 sleep since yesterday morning myself. You probably noticed I wrote = =93HTTMIS=94=20 instead of =93HTMMIS=94.  = My sleep=20 deprivation is probably why I switched tenses too.  Sorry for the=20 confusion.

 

Also, thanks = to=20 Katherine for the kind reception.

 

Anyway, to = get back on=20 topic:  I=92ve got some = techniques for=20 initial protective stop losses and trailing stop losses that I would = like to=20 share with the list in the near future. =20 So stay tuned.  But = for now,=20 I=92m going to try to get some sleep.

 

Curt

 

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of Tom=20 Worley
Sent:=20 Thursday, = August 22,=20 2002 8:56=20 PM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] The = ultimate "M"=20 meter

 

Thanks Curt, both for the=20 understanding and the introduction. Because you wrote in the "first = person,=20 plural" tense I jumped to the conclusion that you were part of the site = you=20 mentioned, should have asked first. My only excuse is too many 12-14 = hour work=20 days, six days a week.

 

Working for a defense = contractor, I=20 have no doubt you will have some observations that can benefit us all, = as it=20 right now appears to me to be a definite candidate for growth for the = next few=20 years. And that's despite the unpredictability of govt=20 contracting.

 

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

From: Curt = Corley=20

To: canslim@lists.xmission.com= =20

Sent:=20 Thursday, = August 22,=20 2002 7:20=20 PM

Subject: RE:=20 [CANSLIM] The ultimate "M" = meter

 

It=20 certainly wasn=92t my intention to do any commercial solicitation. I am = not -- in=20 any way -- professionally affiliated with the products or people that I=20 mentioned earlier and could not benefit from endorsing their = products.  I=92m a software engineer = working on a=20 missile defense project for a major aeorospace-defense company.  The sources I mentioned were = used as=20 references only, because I like to back up my words with examples and = facts.=20

 

You=92re=20 right.  I definitely did = not catch=20 the fact that commercial solicitation is prohibited =96 especially since = there=20 have been numerous references to commercial sources within the E-mails = here in=20 the last few days, including IBD, Daily Graphs, HTTMIS, and links to=20 cup-with-handle sites.  =20 However, I=92m sorry that for the faux pas and will now explain = why I=20 joined the group.

 

I started=20 getting interested in investments a few years back because of my 401K=20 account.  Unfortunately, I = bought=20 into the hype that you should buy indexed funds using dollar-cost=20 averaging.  Well, this = worked for a=20 while, and I was satisfied with the results.  However, when the bear market = started=20 about 2 =BD years ago, I lost a considerable sum of money.  Whenever something goes sour, = I don=92t=20 cry about it.  I analyze = what went=20 wrong and figure out what I can do to correct the problem.  So after getting crushed at = the=20 onslaught of the bear market, I started studying and reading everything = I could=20 get my hands on concerning investment and trading of stock = securities.  Naturally, my enthusiasm = boiled over=20 into the work place.  I = was talking=20 to a coworker who is a diehard CANSLIM advocate, so I bought the HTTMIS=20 book.  WON=92s book made a = lot of=20 sense to me, and I decided to learn everything I could about = CANSLIM.  While searching the internet = for CANSLIM=20 sites, I found this mailing list. =20

 

I was=20 initially offended to be accused of commercial solicitation (can you = blame=20 me?).  However, after = getting over=20 my initial reaction and thinking things over from your point of view, = there are=20 no hard feelings.  I can = understand=20 your concern about the quality of this mailing list.  If people let salesmen get on = the=20 mailing list and start pitching their products, the list would = degenerate with=20 spam.  It has been = challenging=20 enough to find enough time to read through the dozens of good messages = that I=92ve=20 received every day so far.  = I=20 respect your assertiveness in ensuring the quality of this list.  Thank = you.

 

From what=20 I=92ve seen so far, you have some great advice on this mailing = list.   I hope I too can = contribute=20 something useful in the future. =20

 

Curt

 

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom = Worley
Sent: Thursday, August 22,=20 2002 6:28=20 AM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] The = ultimate "M"=20 meter

 

Curt, if you had lurked = here more=20 than a few days, you might have caught the fact that commercial = solicitation is=20 prohibited.

 

If that's not what you = intended,=20 then I suggest you introduce yourself and tell us why you have joined = our=20 group.

 

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

From: Curt = Corley=20

To: canslim@lists.xmission.com= =20

Sent:=20 Thursday, = August 22,=20 2002 3:16AM

Subject: [CANSLIM]=20 The ultimate "M" meter

 

I=92ve been lurking here = for a few=20 days, and I would like to put in my two cents=92 worth about the = question of=20 whether we=92re in a bull or a bear market. =20 I=92d also like to give my personal opinion of what the ultimate = =93M=94 meter=20 is.  But first, I want to = get some=20 definitions down to make sure we=92re speaking the same language = here.  I will use the definitions = that are put=20 forth by the Dow Theory and which, IMHO, are best described in the book=20 =93Technical Analysis of Stock Trends=94 by by Robert = D. Edwards, John=20 Magee, W.=20 H. C. Bassetti (Editor). 

 

What=92s a bull/bear=20 market?

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

In =93TA of Stock = Trends,=94 the authors=20 state that a primary trend is the general direction of price movement = over a=20 year or more.  A bull = market is a=20 primary trend containing higher highs and higher lows in price.  A bear market is a primary = trend=20 containing lower highs and lower lows in price.  Within the primary trend are = secondary=20 trends.  Secondary trends = last from=20 3 weeks to many months, and they do not (repeat not) qualify as bear or = bull=20 markets.  The secondary = trends are=20 merely the corrections within a bull market and the rallies within a = bear=20 markets.  In addition to = the primary=20 and secondary trends, there are minor trends that usually last less than = 6 days=20 and rarely as long as 3 weeks, but they are of little importance = here.  The main thing that I would = like to get=20 across is this:  Using the = definitions just described, you can=92t talk about bear and bull markets = unless=20 you=92re talking about a time frame of about a = year.

 

What do we use for an = =93M=94=20 Meter?

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

Now that the definitions = are out of=20 the way, we can talk about how to get in and out of bull markets easily = using=20 our =93M=94 meter.  If = you=92re having CWs=20 (i.e., CANSLIM Withdrawals) during a bear market, you might try = CANSLIM=92ing=20 during a rally within the bear market. =20 You can use our =93M=94 meter to detect rallies as well.  The =93M=94 meter is so simple = that I feel=20 like a few of you are not going to believe me and will tell me to pack = sand =96=20 but, oh well, here it goes.  = The =93M=94=20 meters are moving averages. =20

For a good explanation as = to why=20 this works, visit http://www.401k-maximizer.com/.   =20

 

How do we use the =93M=94=20 Meter?

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

The index you choose to = graph will=20 depend on the kind of security you=92re investing in.  For general growth stocks, the = QQQ=20 ticker symbol (NASDAQ) is a good one to use.  For especially small cap = growth stocks,=20 you can choose one of the Russell indexes, such as the Russell = 2000.  To get a feel for whether = you=92re in a=20 bull/bear market, plot the index against a 200-day moving average.  To get a feel for whether = you=92re in a=20 rally/correction, plot the index against a 50-day moving average.  The reasons we choose a = 200-day average=20 for bear/bull =93M=94 indicator are because it is: (1) a length of time = that=20 approximates the number of trading days in one year =96 the minimum time = frame for=20 a bull/bear market, and (2) it is an indicator that is highly watched by = many=20 elephants.  The reasons we = choose a=20 50-day average for the rally/correction =93M=94 indicator are fairly the = same: (1)=20 it=92s a highly watched indicator, (2) it is a time frame that makes a = good=20 compromise between getting you in and out of a rally without whipsawing = you in=20 and out.

 

Defense of the =93M=94=20 Meter

=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D<= /SPAN>

Try plotting a 3-year = graph of QQQ=20 against a 200-day EMA moving average. =20 Imagine yourself getting in on that market when the prices = crossed above=20 the 200-day MA and getting out of the market when the prices crossed = below the=20 200-day MA. You might have gotten whip-sawed 3 or 4 times between April = and=20 September of 2000 (allowing you to participate in the rallies of June = and=20 August).  But you would = have stayed=20 out of the bear market since September.

 

Are we still in a bear=20 market?

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

Truth is: nobody knows = yet, because=20 enough time hasn=92t passed. That=92s the way it goes.  In a reversal like this, you = never know=20 whether it=92s rally or the start of a new bull market until enough time = has=20 passed (like the saying goes: Hindsight is 20/20).  But whether we=92re truly in a = bull market=20 or bear market is irrelevant to me. =20 All I care about is our meter. =20 And the meter says this. =20 Yesterday (Aug. 21) QQQ finally crossed above the 50-day EMA, but = it=92s=20 still a long way from reaching the 200-day EMA.  I might get into stocks slowly = and=20 cautiously right now, but I=92m certainly not ready to jump in with both = feet.

 

--=20 Curt

- ------=_NextPart_000_00CF_01C24A2B.80EA8EE0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #2851 ****************************** 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.