From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3047 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 Friday, November 22 2002 Volume 02 : Number 3047 In this issue: RE: [CANSLIM] Shorting [CANSLIM] Volume and CWH (was M) ---------------------------------------------------------------------- Date: Fri, 22 Nov 2002 18:17:12 -0700 From: "David Taggart" Subject: RE: [CANSLIM] Shorting This is a multi-part message in MIME format. - ------=_NextPart_000_0015_01C29253.610FEE10 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Another thing regarding shorting is that I have found it doesn't hurt as much to take some profits a little early as It does on the long side. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of David Taggart Sent: Friday, November 22, 2002 6:10 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Shorting Gene, I think that really the only concept that shorters NEED to know well is risk control. Luckily most people that finally wake up and see the light (actually are willing to short) realize that. For that matter Risk control is about the only thing that is imperative in any investment/trading method. Risk aside I think inverted CANSLIM works like a champ. I add and take away a few things but mainly I like it to have huge debt levels. I made some money on a few cable companies back in the Adelphia days. Unfortunately I was only short two stocks and I got out of one way to early the other one I made some good money on though. I also don't require a stock to be above $12 for a short. I only require it to be above $6 though I have shorted a few right above $5. Another point on shorts is that while numbers like 50 and 100 might be resistance for longs it is for a purely psychological reason. But on the way down stocks have two important levels $10 and $5 A lot of pension funds and some other institutional types are not allowed to hold stocks that are under $10 so a lot of times it is a good area to take some profits because they tend to support them for a time. $5 is a strong level because once they are below $5 they aren't marginable so a lot of holders have to sell. So it is an area to be watched both for people trying to support the stock and for when it breaks below a lot of times it will go $.50-1.00 the same day due to all of the selling. Fundamentally I mentioned High Debt levels. I also like (actually require) large institutional holdings like above 60% and ideally above 80%. One thing I heard from Cramer once that made sense (actually about the only thing that has made sense from his mouth) is that you can look at the holdings for Janus funds and if it is a large holding in their portfolios then it is a good shorting idea because they have had to sell a ton to meet redemptions. Of course Janus isn't the only fund company that has seen way better days. Some people that get in the news sometimes that are worth reading regarding shorting are the guys at Gotham Partners, they do some awesome research so when they go short they are usually right. David Rocker is also a good short seller. Bill Fleckenstein is good too but his column is TOO negative for me as opposed to him I don't think the world will end next week. If you are a member of Tradingmarkets I love Mark Bouchers stuff on trading and he has somne great criteria for shorting. Another person who you get to hear from on occasion in the news in Ahtmet Okomus he is a smart guy and really does his homework. In general Short-Sellers are better at their homework than the long side crowd. But like I said at the beginning Risk Control is the most important part of trading short or long so I would obviously stress that. Another thing I just remembered is that many people think that you can only make 100% on a short. That is not true. As the stock drops your equity grows so you can short more and more as it goes down while staying at the same margin level. Good Luck, David Taggart - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Gene Ricci Sent: Friday, November 22, 2002 1:16 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Shorting I'm trying to develop a training module on shorting for our local user group and want to start with an outline. I would really appreciate your inputs on the minimum concepts that an investor must know before adding shorting to their bag of tricks? Thanks in advance, Gene - ------=_NextPart_000_0015_01C29253.610FEE10 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

Another thing regarding shorting is = that I have found it doesn’t hurt as much to take some profits a little = early as It does on the long side.

 

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of David Taggart
Sent: Friday, November = 22, 2002 6:10 PM
To: = canslim@lists.xmission.com
Subject: RE: [CANSLIM] = Shorting

 

Gene,

 

I think that = really the only concept that shorters NEED to know well is risk control.  = Luckily most people that finally wake up and see the light (actually are willing = to short)  realize that.  For that matter Risk control is about = the only thing that is imperative in any investment/trading method.  Risk = aside I think  inverted CANSLIM works like a champ.  I add and take = away a few things but mainly I like it to have huge debt levels.  I made = some money on a few cable companies back in the Adelphia days.  = Unfortunately I was only short two stocks and I got out of one way to early the other = one I made some good money on though.  I also don’t require a stock = to be above $12 for a short.  I only require it to be above $6 though I = have shorted a few right above $5.  Another point on shorts is that = while numbers like 50 and 100 might be resistance for longs it is for a purely psychological reason.  But on the way down stocks have two = important levels $10 and $5  A lot of pension funds and some other = institutional types are not allowed to hold stocks that are under $10 so a lot of = times it is a good area to take some profits because they tend to support them for a time.  $5 is a strong level because once they are below $5 they aren’t marginable so a lot of holders have to sell.  So it is = an area to be watched both for people trying to support the stock and for = when it breaks below a lot of times it will go $.50-1.00 the same day due to all = of the selling.

 

Fundamentally I = mentioned High Debt levels.  I also like (actually require) large = institutional holdings like above 60% and ideally above 80%.  One thing I heard = from Cramer once that made sense (actually about the only thing that has made = sense from his mouth) is that you can look at the holdings for Janus funds and = if it is a large holding in their portfolios then it is a good shorting idea = because they have had to sell a ton to meet redemptions. Of course Janus = isn’t the only fund company that has seen way better days.  =

 

Some people that = get in the news sometimes that are worth reading regarding shorting are the = guys at Gotham Partners, they do some awesome research so when they go short = they are usually right.  David Rocker is also a good short seller.  = Bill Fleckenstein is good too but his column is TOO negative for me  as = opposed to him I don’t think the world will end next week.  If you = are a member of Tradingmarkets I love Mark Bouchers stuff on trading and he = has somne great criteria for shorting.  Another person who you get to hear = from on occasion in the news in Ahtmet Okomus he is a smart guy and really does = his homework.  In general Short-Sellers are better at their homework = than the long side crowd.

 

But like I said = at the beginning Risk Control is the most important part of trading short or = long so I would obviously stress that.

 

Another thing I = just remembered is that many people think that you can only make 100% on a short.  That is not true.  As the stock drops your equity = grows so you can short more and more as it goes down while staying at the same = margin level.

 

 

Good = Luck,

David = Taggart

 

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Gene Ricci
Sent: Friday, November = 22, 2002 1:16 PM
To: = canslim@lists.xmission.com
Subject: [CANSLIM] = Shorting

 

I'm trying to develop a training module on shorting for our local user group and want to start with an outline. I = would really appreciate your inputs on the minimum concepts that an = investor must know before adding shorting to their bag of tricks?

Thanks in advance,
Gene

- ------=_NextPart_000_0015_01C29253.610FEE10-- - - - -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: Fri, 22 Nov 2002 20:30:57 -0600 From: "Curt Corley" Subject: [CANSLIM] Volume and CWH (was M) This is a multi-part message in MIME format. - ------=_NextPart_000_0001_01C29266.11DC6090 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Katherine, =20 Thanks for your input. Your help is invaluable. I looked at the indices in TC2000 with MoneyStream and Time Segmented Volume. I looked at the NASDAQ, S&P-500, and Russell 2000. Here=92s what I found on all = 3 charts. =20 CMS: MoneyStream stayed above it=92s linear regression line on the left side = of the cup, on the right side of the cup, and during the BO. However, it stayed below the linear regression line along the bottom of the cup and during the handle formation. =20 TSV: TSV stayed mainly above the center line during the left-side of the cup. Toward the bottom of the cup, TSV plunged way below the zero line. On the right side of the cup, TSV shot high above the center line again. During the handle formation and the BO, TSV dipped down and back up again. =20 I guess this is supposed to tell me that volume supported the price action because there were no divergences. Since you mentioned Accumulation/Distribution, I probably should have looked at On Balance Volume and/or Balance of Power. However, I haven=92t had much success with those indicators in the past. =20 I=92m trying to become more proficient at chart reading, and you=92re certainly helping a great deal along with other members of this list. Once again, thank you very much. =20 Cheers, Curt =20 =20 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Thursday, November 21, 2002 10:58 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] M =20 Hi Curt, =20 I don't think when you're looking at patterns on major indexes such as the NASDAQ that the pattern of volume would be used in the same way that it is on an individual stock. My take on it is simply that an index represents a huge number of individual stocks, and while the general price pattern will indicate a reversal of a trend or a general shift in psychology and pattern of buying and selling in the market, the volume doesn't really tell you the same story as it does in an individual stock. In other words, I think that it's more important to look for a pattern of accumulation outpacing distribution (up days on higher volume than the previous day vs. down days on higher volume), than it is to look for the "bathtub" volume pattern that one would use on an individual stock. =20 Katherine - ----- Original Message -----=20 From: Curt Corley =20 To: canslim@lists.xmission.com=20 Sent: Thursday, November 21, 2002 6:27 PM Subject: RE: [CANSLIM] M =20 I=92m glad you mentioned the General Markets & Sectors commentary in today=92s IBD. I looked at the charts, and they did not appear to have rising volume on the sides of the cups. As a matter of fact, the heaviest volume days were at the very bottom of the cup. I don=92t = think the indices have shown great cwh characteristics. However, I=92m a = novice at this stuff, so I would appreciate any criticism or validation of my view. =20 =20 Curt =20 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Kelly Short Sent: Thursday, November 21, 2002 3:11 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] M =20 Speaking of handles- what are peoples' thoughts on WON's comment from this morning about the NASDAQ forming a cup and handle? Volume in the handle seems a bit "imperfect" but I don't want to be the one to rain on the parade! - -----Original Message----- From: Katherine Malm [mailto:kmalm@earthlink.net] Sent: Thursday, November 21, 2002 3:04 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] M Hi Ian, =20 Just a quick note... re your comment "It is also baffling to me that the sectors that stand to benefit the most from coming increases in government spending - the defense and security sector - are watching this action from the sideline as well."=20 =20 I noticed SFNT powering ahead today. I've also noticed that money is definitely coming *out* of the safe-haven defensive issues such as healthcare/hospitals, etc. In general, I see far more breakouts than I've seen since last year, so all together, still looks promising to me. =20 Katherine - ----- Original Message -----=20 From: Ian =20 To: canslim@lists.xmission.com=20 Sent: Thursday, November 21, 2002 3:23 PM Subject: [CANSLIM] M =20 Is anyone else finding any "NEW" winners emerging from this buying frenzy? =20 It seems to me that several recent rally leaders are rolling over ugly today - HITK, LCI, ACET - while the indices power ahead, propelled by the most heavily shorted isues. =20 It is also baffling to me that the sectors that stand to benefit the most from coming increases in government spending - the defense and security sector - are watching this action from the sideline as well. =20 So am I mising the new leaders of the bull, or is this just shot-term traders using liquidity to squeeze heavily shorted positions? Opinions? Whither 'M'? =20 Ian _____ =20 For your protection, this e-mail message has been scanned for viruses.=20 Visit us at http://www.neoris.com/=20 _____ =20 - ------=_NextPart_000_0001_01C29266.11DC6090 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

Katherine,<= /p>

 

Thanks for your input.=A0 Your help is invaluable.=A0 I looked at the indices in TC2000 = with MoneyStream and Time Segmented Volume.=A0 I looked at the NASDAQ, = S&P-500, and Russell 2000.=A0 Here’s = what I found on all 3 charts.

 

CMS:

MoneyStream stayed above it’s linear = regression line on the left side of the cup, on the right side of the cup, and = during the BO.=A0 However, it stayed below = the linear regression line along the bottom of the cup and during the handle = formation.

 

TSV:

TSV stayed mainly above the center = line during the left-side of the cup.=A0 = Toward the bottom of the cup, TSV plunged way below the zero line. =A0On the right side of the cup, TSV = shot high above the center line again.=A0 = During the handle formation and the BO, TSV dipped down and back up = again.

 

I guess this is supposed to tell me = that volume supported the price action because there were no = divergences.=A0 Since you mentioned = Accumulation/Distribution, I probably should have looked at On Balance Volume and/or Balance of Power.=A0 However, I = haven’t had much success with those indicators in the past.

 

I’m trying to become more = proficient at chart reading, and you’re certainly helping a great deal along = with other members of this list.=A0 = Once again, thank you very much.

 

Cheers,

=

Curt

 

 

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm
Sent: = Thursday, November 21, = 2002 10:58 PM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] = M

 

Hi Curt,

 

I don't think when you're looking at patterns = on major indexes such as the NASDAQ that the pattern of volume would be used in = the same way that it is on an individual stock. My take on it is simply that an = index represents a huge number of individual stocks, and while the general = price pattern will indicate a reversal of a trend or a general shift in = psychology and pattern of buying and selling in the market, the volume doesn't = really tell you the same story as it does in an individual stock. In other words, I = think that it's more important to look for a pattern of accumulation outpacing distribution (up days on higher volume than the previous day vs. down = days on higher volume), than it is to look for the "bathtub" volume = pattern that one would use on an individual stock.

 

Katherine

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

Sent: Thursday, November 21, 2002 6:27 PM

Subject: RE: [CANSLIM] M

 

I’m glad = you mentioned the General Markets & Sectors commentary in today’s IBD.=A0 I looked at the charts, = and they did not appear to have rising volume on the sides of the cups.=A0 As a matter of fact, the heaviest = volume days were at the very bottom of the cup.=A0 = I don’t think the indices have shown great cwh characteristics.=A0 However, I’m a novice at = this stuff, so I would appreciate any criticism or validation of my view.=A0

 =

Curt

 =

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Kelly Short
Sent: = Thursday, November 21, = 2002 3:11 PM
To: = canslim@lists.xmission.com
Subject: RE: [CANSLIM] = M

 

Speaking of handles- what are peoples' thoughts on WON's comment from this = morning about the NASDAQ forming a cup and handle? Volume in the handle seems a bit "imperfect" but I don't want to be the one to rain on the = parade!

-----Original Message-----
From: Katherine Malm [mailto:kmalm@earthlink.net]
Sent: Thursday, November = 21, 2002 3:04 PM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] = M

Hi Ian,

 

Just a quick note... re your comment "It = is also baffling to me that the sectors that stand to benefit the most = from coming increases in government spending - the defense and security sector - are watching this action from the sideline as well." =

 

I noticed SFNT powering ahead today. I've = also noticed that money is definitely coming *out* of the safe-haven defensive issues = such as healthcare/hospitals, etc. In general, I see far more breakouts than = I've seen since last year, so all together, still looks promising to = me.

 

Katherine

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

From: Ian

Sent: Thursday, November 21, 2002 3:23 PM

Subject: [CANSLIM] = M

 

Is anyone else finding any "NEW" = winners emerging from this buying frenzy?

 

It seems to me that several recent rally = leaders are rolling over ugly today - HITK, LCI, ACET - while the indices power = ahead, propelled by the most heavily shorted = isues.

 

It is also baffling to me that the sectors = that stand to benefit the most from coming increases in government spending - = the defense and security sector - are watching this action from the sideline = as well.

 

So am I mising the new leaders of the bull, = or is this just shot-term traders using liquidity to squeeze heavily shorted = positions? Opinions? Whither 'M'?

 

Ian

For your protection, this e-mail message has = been scanned for viruses.

Visit us at http://www.neoris.com/

- ------=_NextPart_000_0001_01C29266.11DC6090-- - - - -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 #3047 ****************************** 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.