From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #341 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, July 26 1998 Volume 02 : Number 341 In this issue: Re: [CANSLIM] Possible Shorts RE: [CANSLIM] Not CANSLIM - Today's Market Downturn Not [CANSLIM] Possible Shorts RE: [CANSLIM] Not CANSLIM - Today's Market Downturn [CANSLIM] New 3 week LLUR stocks Re: [CANSLIM] New 3 week LLUR stocks Re: [CANSLIM] New 3 week LLUR stocks,IBD ranks Re: Not [CANSLIM] Possible Shorts Re: [CANSLIM] Possible Shorts Re: [CANSLIM] Possible Shorts Re: [CANSLIM] "M" and lurkers afraid to post Re: [CANSLIM] Possible Shorts Re: Not [CANSLIM] Possible Shorts RE: [CANSLIM] Not CANSLIM - Today's Market Downturn [CANSLIM] "M" - Db [CANSLIM] "M" [CANSLIM] "M" Nelson Re: [CANSLIM] Ian Woodward's HGS discussion area [CANSLIM] Re: Trying to figure out a list Re: Not [CANSLIM] Possible Shorts Re: [CANSLIM] Re: Trying to figure out a list ---------------------------------------------------------------------- Date: Sat, 25 Jul 1998 20:49:50 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Possible Shorts Date sent: Sat, 25 Jul 1998 10:48:58 -0700 (PDT) From: dbphoenix > Comments welcome. > > ASI I like the chart for a short, looks like it is falling off after trying to rally. I don't have group strength handy, aren't these staffing companies very strong? > DMMC Looks pretty strong, hasn't struggled very long, so far only a short decline. > CVC Same comment. > IDTC Looks pretty benign, I wouldnt' expect to see much one way or another. > PZZA Similar to ASI, failed rally, generally starting to top out and roll over. A couple I was looking at, I don't do any of this shorting stuff, so any comments helpful - Gateway(GTW) had a poor earnings announcement the other day and the stock tanked. I think any rally attempt might be a good try at a short. ACAI and AWA, a couple of airlines. The transports seemed a bit sickly last week. ACAI tried to breakout a few times but couldn't seem to stay up there. Havne't checked what happened to AWA yet, but it gapped down. - - ------------------------------ Date: Sat, 25 Jul 1998 20:49:49 -0800 From: "Patrick Wahl" Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn From: "Nelson E. Timken, Esq." > Well, you guys have me totally confused as usual. I am holding some options > and the stocks have tumbled. Nothing to do but hold on, but I was wondering > what your probability of a recovery would be in the near future. I think we are due for a bounce next week. This isn't the same thing as a recovery, but I think we'll get a little upward movement. This might be your best chance to bail out of your options. Or, at least if things move up next week, then use some point slightly below the highs as your sell threshold, and if there is no follow through, exit. I can't say how far any rally we have might carry. - - ------------------------------ Date: Sat, 25 Jul 1998 20:52:11 -0700 (PDT) From: rolatzi Subject: Not [CANSLIM] Possible Shorts The best shorts in this market have been the oil service stocks and to some degree the semi's. As Db pointed out they are the most undervalued but maybe they are still good shorts. Ciao, rolatzi _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 01:14:11 -0400 From: "Nelson E. Timken, Esq." Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn I hope you are right Patrick. I will be beating a hasty exit indeed if there is a gain large enough to recap my losses. Thanks. Nelson - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Patrick Wahl Sent: Sunday, July 26, 1998 12:50 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn From: "Nelson E. Timken, Esq." > Well, you guys have me totally confused as usual. I am holding some options > and the stocks have tumbled. Nothing to do but hold on, but I was wondering > what your probability of a recovery would be in the near future. I think we are due for a bounce next week. This isn't the same thing as a recovery, but I think we'll get a little upward movement. This might be your best chance to bail out of your options. Or, at least if things move up next week, then use some point slightly below the highs as your sell threshold, and if there is no follow through, exit. I can't say how far any rally we have might carry. - - - - ------------------------------ Date: Sun, 26 Jul 1998 06:48:29 -0700 (PDT) From: rolatzi Subject: [CANSLIM] New 3 week LLUR stocks The following LLUR stocks in their 3rd week on the list. The columns are symbol, week, date, RS(0), RS(-1), %ch in RS, BLL 3 7/24/98 82 88 -7% BMY 3 7/24/98 83 81 2% EGR 3 7/24/98 93 91 2% QUIX 3 7/24/98 92 91 1% SPEH 3 7/24/98 90 92 -2% STC 3 7/24/98 98 98 0% This is from Mike A's CARS scan. I am concentrating on the week 3 listings to try and determine which succeed and which don't. Three weeks on the list is his recommendation for a minimum consideration for buying. Ciao, rolatzi _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 07:13:53 -0700 From: Tim Fisher Subject: Re: [CANSLIM] New 3 week LLUR stocks While I too occasionally peek at Mike A's list, I filter it using LOOSE CANSLIM criteria. I was dissapointed at the 7/24 list in that only one LLUR, SUIT, met these loose criteria. It was the only one that had decent 5-year growth. At 06:48 AM 7/26/98 -0700, you wrote: >The following LLUR stocks in their 3rd week on the list. The columns >are symbol, week, date, RS(0), RS(-1), %ch in RS, > >BLL 3 7/24/98 82 88 -7% >BMY 3 7/24/98 83 81 2% >EGR 3 7/24/98 93 91 2% >QUIX 3 7/24/98 92 91 1% >SPEH 3 7/24/98 90 92 -2% >STC 3 7/24/98 98 98 0% > >This is from Mike A's CARS scan. I am concentrating on the week 3 >listings to try and determine which succeed and which don't. Three >weeks on the list is his recommendation for a minimum consideration >for buying. > >Ciao, >rolatzi 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, 26 Jul 1998 09:13:22 -0700 (PDT) From: TM Subject: Re: [CANSLIM] New 3 week LLUR stocks,IBD ranks IBD Industry group rankings: Symbol/IBD 3 month ago/IBD (6/27)/group BLL/111/136/Container-Metal Glass BMY/102/40/Med-Drug Diversified EGR/185/151/Food:Flour Grains QUIX/15/12/CompSvcs Enterprise SPEH/8/11/Comp Svcs STC/67/50/Insur Prop Casualty Title TM - ---rolatzi wrote: > > The following LLUR stocks in their 3rd week on the list. The columns > are symbol, week, date, RS(0), RS(-1), %ch in RS, > > BLL 3 7/24/98 82 88 -7% > BMY 3 7/24/98 83 81 2% > EGR 3 7/24/98 93 91 2% > QUIX 3 7/24/98 92 91 1% > SPEH 3 7/24/98 90 92 -2% > STC 3 7/24/98 98 98 0% > > This is from Mike A's CARS scan. I am concentrating on the week 3 > listings to try and determine which succeed and which don't. Three > weeks on the list is his recommendation for a minimum consideration > for buying. > > Ciao, > rolatzi > > _________________________________________________________ > DO YOU YAHOO!? > Get your free @yahoo.com address at http://mail.yahoo.com > > > - > > _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 09:32:34 -0700 (PDT) From: dbphoenix Subject: Re: Not [CANSLIM] Possible Shorts <> It's possible, but they've fallen so far already that most of those who are interested are probably looking to buy, not sell. I wouldn't be surprised to see a change of attitude by September. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 17:49:10 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] Possible Shorts On Sat, 25 Jul 1998 10:48:58 -0700 (PDT), you wrote: : : :These are a few of the stocks I'm watching. They all have negative :charts. Some have just tested major support and failed. Some look to :be just as ready to rally as to fail, depending on the market. The :groups they belong to are all weak as well. Some have already lost a :substantial percentage of their value but may still be worth trading.=20 :Comments welcome. : :ASI :DMMC :CVC :IDTC :PZZA :TBA : :Incidentally, I always look at every potential buy as a potential :short and vice-versa. It helps keep me out of trouble when I can :stick to the discipline. : :--Db A couple of comments: 1. Someone noted on this list in the last couple or so of days that you usually have to be quicker in shorting than going long.=20 2. I think your statement that you always look at potential buys as potential shorts is very astute. I haven't been doing this, but have noticed recently that usually when I sell a stock I hold long, I would have done a lot better to sell more shares than I own and thereby go from long to short in a moment. My Datek account (I think) supports this procedure. In this way of thinking, before I click my execute button, I could/should ask myself whether or not I am confident enough that the stock will retreat to short it, rather than simply go neutral on it. Dan musicant@autobahn.org - - ------------------------------ Date: Sun, 26 Jul 1998 12:06:37 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Possible Shorts <> We've already enumerated some of the disadvantages with options, but one of the advantages is being able to buy them whenever you like. With shorts, not only do you have the uptick rule to deal with, you also have to find the shares. This can make placing the order very tricky. I don't like to place a short until I see the volume actually coming in and the bid starting to weaken. So far, no problem. The problem arises with the limit. I'm not about to place a market order on a short, but if I don't give the limit enough wiggle, I may lose the order altogether. I can't wait for the uptick to place the order because by then it may be too late (after the order is placed, they still have to locate the shares; granted, this may take only seconds, but seconds count in this circumstance). If the stock were collapsing, a market order might be justified; however, in the time it takes to find the shares, the stock could plummet considerably and you might find yourself in the position of having to cover almost as soon as the order was executed. You don't get instant execution with shorts as you do with longs. That's why I usually prefer stocks with a slow leak rather than those that are about to implode. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 17:44:28 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] "M" and lurkers afraid to post Jeffry wrote: >Initiating short >positions might have been prudent on the distribution day of Tuesday At the time, the action on Tuesday was not enough for me, to conclude: this is an important change in market direction. Anyone recognized it on Tuesday? Please tell me how you did it. I recognized the distribution on Tuesday alright , but I didn't recognize the short-term trend change then. On Wednesday things where pointing in that direction allright. >To initiate a short in the face of a highly probable "rally attempt" to >come is probably not the best idea. Hey, I'm merily preparing to go short. Takes a few days (I'm slow, I guess). I don't even know yet if I will short anything, only getting ready for the eventuality. >I am reminded, by all of the discussion about shorting, that it just >seems too obvious. Just as the long side seemed obvious early in the >week on many of the chat groups, talking heads and whore analysts, so >too may be the short side after the latter part of this week's action. >My thought (from having suffered the pain of being short too early in >April) would be to watch for a "failed rally attempt". Excellent advice IMO. A bounce is likely now, somewhere next week. And until "the failed rally attempt" one can use the time to look for potential shorts. We might also not have a bounce of any significane and break down hard below the 50MA to the 200MA. >Changes in market direction do not happen overnight, usually. I know what you mean, and I agree. I'll also add that it also depends on ones time frame. >We are >likely early in any change of market direction, if that's what this is. >We saw some distribution accompanied by high sentiment numbers in a very >narrow market. That's somewhat different (on the breadth side >particularly) than what happened in April, but don't jump the gun here >and assume that a bear market is upon us or even that the market has >change direction. In my book the market has changed direction. We broke a mid-term uptrend. That is only important for traders, not necessarily of any significance to long-term investors. >All we seemingly have is a mini-blow off run which >corrected on a reversal/distribution day with sentiment running fairly >strong. The leaders have not yet "failed", only corrected. Indeed, MSFT, LU, DELL, CSCO to name a few have not failed yet. Watching the market leaders is very important. Watching breadth is also important. This has been a market lead by a small number of stocks. If breadth doesn't get better during a rally, usually the rally can not be sustained. Seems to me like the market is currently proving that point. Maybe it will all change again next week. Who knows? I certainly don't. One day at a time. >Sentiment is high, but it can wobble at these ranges for some time before >we really know what is going to happen with the "M" direction. > >If the rally doesn't fail, in the classic sense, watch for further >distribution signals. >BTW, if Deepak or Dan Cash are out there today, perhaps they have a copy >of a note I sent which attempted to memorialize my thinking in moving to >cash back in April. Maybe they could post it to the group. I think it >shows how watching the "M" *TOO* closely, and with too much emotion can >be hazardous (missed profits, premature shorts, etc.) Good point. Concerning missed profits: I co-authored the book. Not proud of that. Nr. 1 on my list of "things to improve". Thank you for your response, Jeffry. Always interesting. And I appreciate the remarks. Makes me think even harder. I've recieved email and heard that a lot of the lurkers are afraid to post here in fear of being critiqued or humiliated. 100% understandable. I do hope that everyone who wants to participate on the list, or ask a question or whatever, will do so. Here's my perspective on "being critiqued/humiliated or whatever label you want to put on it": In my case, I choose to post here, because I'd much rather take the chance of being critiqued or humiliated by the members of this list than being humiliated by the markets. Being critiqued or even being humiliated by the posters here "for me" is like a trip to Disney World compared to being humiliated by the markets. To take it one step further: One can CHOOSE to feel hurt OR NOT when reading a post. After all a post basically is only a bunch of ASCII characters that appear on your screen. You look at it, form words, sentences and assign meaning to them, interpret it and even try to mind-read the other person's intentions. But that is a completely different topic than 'M'. Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Sun, 26 Jul 1998 16:51:38 -0400 From: Robert Bomba <73223.2767@compuserve.com> Subject: Re: [CANSLIM] Possible Shorts >> 1. Someone noted on this list in the last couple or so of days that you usually have to be quicker in shorting than going long. << Why?? Because stocks generally move down FASTER then they move up? The biggest problem with going short is in people's head. It's like it's a sin to hope a stock price goes down (G). A short is a little tougher then a long but you can definitely get around the problems. A. Make sure your broker has the shares. I never place an order to go short unless I know the shares are there. B. Wait for some sign of strength (dead cat bounce) in a stock making new lows C. Use stop orders D. cut your loss short E. Have your stops set both up & down (written down!) before you make the trade F. Don't second guess your stops! Bob P.S. I think I've said all I can say about shorting. So it's back to lurk mode. I bet your all happy about that!! LOL - - ------------------------------ Date: Sun, 26 Jul 1998 16:51:37 -0400 From: Robert Bomba <73223.2767@compuserve.com> Subject: Re: Not [CANSLIM] Possible Shorts >> It's possible, but they've fallen so far already that most of those who are interested are probably looking to buy, not sell. I wouldn't be surprised to see a change of attitude by September. << I got a kick out of that. Ask the gold bugs about picking bottoms. I'll be selling you the shares I can borrow in both oils & semis. If you were averaging down in the commodity (oil) & you had deep pockets then ok but to buy a driller because they look cheap? They very well may get a lot cheaper. Why do you think WON says buy strength???? When they start making new highs (52 week) then I'll start buying. Bob - - ------------------------------ Date: Sat, 25 Jul 1998 12:49:13 -0400 From: "Nelson E. Timken, Esq." Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn This is a multi-part message in MIME format. - ------=_NextPart_000_0001_01BDB7CA.A072D940 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit It is absolutely true if you wait for their expiration date! :) Nelson E. Timken http://onelist.com/subscribe.cgi/investing-list - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher Sent: Saturday, July 25, 1998 12:32 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn My hangover this morning must be making me reminiscient (I have a love/hate relationship with the Oregon Brewers' Festival) but I am reminded of a statement in Motley Fools' book - something like "90% of all options expire worthless." Is this even remotely true? - At 12:18 PM 7/25/98 -0400, you wrote: > >I cannot buy more- I am margined out. That is not an option, since I >foolishly got in too deep. I could sell half at a huge loss, since they are >now almost worthless. I could sell it all and take a huge loss. Practically >speaking, I feel holding is all I have as an option. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - ------=_NextPart_000_0001_01BDB7CA.A072D940 Content-Type: text/x-vcard; name="Nelson E. Timken Esq..vcf" Content-Transfer-Encoding: quoted-printable Content-Disposition: attachment; filename="Nelson E. Timken Esq..vcf" BEGIN:VCARD VERSION:2.1 N:Timken;Nelson;E.;;Esq. FN:Nelson E. Timken Esq. ORG:J.N. Capital, Inc.;Development TITLE:Secretary TEL;WORK;VOICE:718-423-1827 TEL;HOME;VOICE:(718) 468-6293 TEL;WORK;FAX:(718) 224-4782 TEL;HOME;FAX:(718) 776-0084 ADR;WORK:;Secretary;40-26 235th Street;Douglaston;NY;11363;United States = of America LABEL;WORK;ENCODING=3DQUOTED-PRINTABLE:Secretary=3D0D=3D0A40-26 235th = Street=3D0D=3D0ADouglaston, NY 11363=3D0D=3D0AUnited Stat=3D es of America ADR;HOME:;;80-41 230th Street;Bellerose Manor;NY;11427-2105;United = States of America LABEL;HOME;ENCODING=3DQUOTED-PRINTABLE:80-41 230th = Street=3D0D=3D0ABellerose Manor, NY 11427-2105=3D0D=3D0AUnited States = of=3D America URL:http://www.geocities.com/wallstreet/5791 URL:http://www.geocities.com/wallstreet/5791 ROLE:Attorney/Venture Capitalist BDAY:19980704 EMAIL;PREF;INTERNET:netimken@erols.com EMAIL;INTERNET:JNCapital@yahoo.com REV:19980614T135754Z END:VCARD - ------=_NextPart_000_0001_01BDB7CA.A072D940-- - - ------------------------------ Date: Sat, 25 Jul 1998 19:07:03 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" - Db > YOur points are well-taken, Jeffry. However, the time to begin a > shorting strategy is not when the market is in the middle of a major > correction. The time to begin a shorting strategy is in advance of > the event so that one can develop a list and monitor the stocks' > activity, just as one develops a list of long candidates in advance of > their breakouts. My comment was intended for those who sounded as though they had a short strategy, but may not have the "M" truly behind them, at this point. For those with a short strategy, Tuesday's distribution day would have been a good initial entry point, with very tight stops. Now, we face the likelihood of a rally attempt. So, it's not a good time to put out shorts, IMO. If it fails, however, then another opportunity to have the "M" on your side with a disciplined short strategy. If yo've got no strategy, fogetaboutit. > As far as a change of direction goes, the market HAS changed > direction. It changed direction several days ago. And it may change > direction again on Monday. By suggesting a thread on shorting, I'm > not advocating that everyone jump in and short AMZN and YHOO and DELL > on Monday morning. I'm suggesting that those who are interested and > have some experience in the strategy share what they find. As always, > caveat emptor. The market changes direction several times a day, no? I'm not talking about daily or one week swings, I'm talking about the right time to buy and the right time to sell market leadership. Perhaps you remain distrustful of WON's "M"? Try it, you'll like it. It's so simple, just let it talk to you. > I don't know what more I can say about controlling hope and fear. > Some lessons just have to be learned the hard way. But I want to > caution anyone who's considering shorting stocks that if he has not > yet dealt with his emotions on the long side, he's going to be in even > deeper trouble on the short side. I also urge anyone who's confused > or anxious or fearful to write down everything that he's feeling or > thinking about the market, stocks, his portfolio, his strategy, > whatever. We can intellectualize all we like about hope, fear, greed, > and all the other emotions that prevent us from succeeding as much as > we might in the stock market. But it's at times like these, when push > comes to shove, that all of that comes bubbling up again and our > stomachs begin to tighten. Anyone who hasn't already worked through > this process ought to begin doing so right now, this weekend, as > painful as it might be. Otherwise it will be no less painful and no > less expensive the next time around. > > --Db I'll second that. Jeffry - - ------------------------------ Date: Sat, 25 Jul 1998 19:14:49 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" Dan Cash was good enough to find this email which I've discarded more than once. Perhaps it provides a scenario that plays out time and time again in the "M", or perhaps it provides nothing more than the mindless ramblings of a would-be market timer who simply got lucky making it to 100% cash three times since January 1997. Hope it's helpful to someone out there: $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ You asked me to try and reconstruct the indicators I was watching that led to my decision to exit the market in early April. Unfortunately, I don't keep records of what I see as it occurs (but am now seeing the value of doing so). So, first let's try to identify the WON distribution days, as I see them in the Nasdaq chart. They come in two varieties: "reversal" and "compression" types. Reversals involve a higher open (usually, but can simply be a higher high during the day) followed by a close virtually unchanged to lower on higher daily volume. Compression can exhibit a seemingly narrower or larger spread during the day's trade, but without substantial price improvement, given the increased volume. Compression type distribution is the easiest to miss, and I think the most cautionary signal of all (the October crash was preceeded by a compression day on 10/6 that led to the initial downturn followed by a classic failed rally attempt). Double check these dates, if you have access to a chart with OHLC data and volume. Big charts will work, but the dates are hard to get. These are the distribution days I see following the beginning of the late January bottom: 2/5 - reversal 2/17 - reversal 2/27 - reversal 3/17 - reversal 4/2 - compression 4/22 - compression 5/4 - reversal Using your charting service, check to make sure the price action made a higher high than the prior day, and that volume was greater than the prior day's trade. The Stock Farmer's computerized backtesting of 20 years of index data suggests that distribution is evident when the index makes at least a 4 day high. So, when you pull up the Farmer charts and see "red bars", those are days which meet the additional requirement that at least a 4 day high was achieved. I think each of the signals I've listed above meet that requirement, as well. It is quite common, actually expected, that you will see several distribution days on the way up in a new uptrend. HTMMIS, page 50 and 51, says this, but in a confusing way, I believe. WON seems to focus on the distribution days near the "top", but never describes how you learn to tell whether the index is near the top, or not. WON does not satisfactorily explain that distribution days may occur during the run from the bottom, which is a confusing point. But, it clearly happens, over and over again. This may be where Chapter 7 is a bit outdated, or it may be that it was not written with an eye toward a rotating bull market like we are seeing, with repeated 2-3 month upturns and consolidation/corrections. So, how to recognize when we are seeing distribution near the top? That's where the sentiment and leardership behavior become the corroborating indicators for me. Also a bit of basic chart reading. Notice the price action on the first two distribution days in Feb. Those are pretty typical of the less indicative distribution days? Why? They are reversals and the new uptrend had just gotten started from the late Jan. follow through day, is my thinking. Sentiment was not overly bullish at this point either. Leadership stocks are looking strong and behaving technically at this point (look back at some of the charts of the stocks I mentioned to you in earlier mail). February was a powerful month, no two ways about it. It looked and felt that way then, and the chart reflects it now. (Can't say what it felt like if you were listening to the noise of the street). These two distribution days were followed by the 2/27 action. That day is really not much different than the earlier two, except the run up to the high was a bit more vicious, if you see what I mean. I know that one perked up my eyes and ears and I started to get concerned during that "flag" type formation which formed thereafter. * Then on the 3/17 another distribution day. Again, its a reversal type but we had flattened out in the chart by the time it came, and this was a more likely area to start thinking about becoming a bit more defensive. The new high in the Nas was not by much, if at all, over the 2/27 high. Of course we resumed the uptrend, broke to another series of new highs, but the April 2 "compression" day a few days later was about all the fun this move was going to provide. That one would certainly should have had you off margin and thinking about exit strategy. ** Then you get an ugly reversal day on April 22 where the volume was almost a billion shares. *** My read is that once you get up into a potential top, see compression, sentiment is out of control, then the "reversal" days become indicative of a coming problem. If you miss the compression day, and stops haven't taken you out, it's time to pack it up. Sentiment was way out of wack at the time of the April 2 distribution day. Notice how the sentiment corresponds to where the market really got in trouble. Bearishness hit a 5 year low on April 6, and the Bullishness was over 50%, I think. Bulls went on to hit a 52 week mark on April 27, just a few days after the April 22 distribution day. Also notice the behavior of the leadership stocks as the month drags on. They'd have gotten you on stops or hurt you terribly, if you weren't already out. Is this helpful? Hit me with questions, and I'll try to flesh it some more. Good weekend, Jeff * Looking back at my trades, I see I dumped everything around March 9, but I was wrong (should have just let the stops talk, but I had a ton of options where stops are really a joke). February was the best month I've ever had in my CANSLIM account, however. Consequently, my head got into the game a bit (I was spending paper profits in my dreams). Just couldn't sit tight at that point, but I got back in to several of my stocks, but not fully out on margin.I see also that I got right back on many of the same horses two and three days later, 3/11 and 12 where we resumed the uptrend. ** April 2 was the distribution day that prompted me to move all the way to cash, again. That may seem a bit early, but I watched my former leaders, and a bunch of others and the didn't do much after that, although I could have profited a bit. Remember that leadership stocks make the majority of their move early in the new uptrend, so if you hit it right, the kill is fast and furious. After I moved to cash, I looked to see if others leaders would emerge, but no luck and then by late April it was over, in my opinion. *** Remember this is where Tom W. indicated that he did not think it was a distribution day because the index closed higher!!! I then had to post quoted language out of HTMMIS on the issue. Just goes to show how easy it is to miss distribution and how much information is in every sentence of Chapter 7 on Market Direction. Just look at the chart now...April 22...the "head", the all time peak, the climax. It's so obvious, but so hard to see when you are sitting in stocks, and not wanting to miss that last little bit of action. - - ------------------------------ Date: Sun, 26 Jul 1998 07:26:07 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" Nelson Nelson, I, too, know the situation you are in all too well. It remains one of my most dangerous tendencies, despite paying hefty tuition to the "M" over the years. And I know that it's your play to work out and learn from, so I am cautious to comment on your predicament. But, I noticed something in Friday's action of MSFT, CSCO and DELL which I personally find encouraging for a bounce starting early next week. I should probably preface with the overarching reality of your situation with the Livermore passage quoted in WON's IBD piece this Monday: "There are only two emotions in the market -- hope and fear. The problem is, you hope when you should fear, and fear when you should hope." Your situation is seemingly a classic from which we can all learn or be reminded of how delicate the psychological balance of trading is. Now, the Nasdaq action on Friday made a lower low, but it closed off and volume was lighter. Similar action in the SP500 and NYSE, but better closes. We know that a virtually unchanged to higher close accompanied by higher daily volume would have been the clearest signal of at least a short term rally against the down trend that began last Tuesday. That did not occur in the Nasdaq on Friday. However, a potential "bottom" does not necessarily have to occur with this type of price and volume signal. For example, the 6/15 low was not a "reversal" low, just a low. And we followed through nicely from there. The reversal low is much easier to spot and provides much more comfort, for me anyway, in the count for a follow through day or just a resumption of the uptrend. Pulling up MSFT, CSCO and DELL, you see three leading stock for this move showing the price and volume action which would be indicative of a potential bottom and the beginning of at least a short term bounce, were they alone the index. Not saying that they will rally or that they are necessarily indicative of the broader indices, just pointing out the pattern forming in some of the Nasdaq leaders. Same pattern exists for LU, but not in the internet stocks. AOL, YHOO, AMZN, for example. However, MSPG produced the reversal type low on higher daily volume. Do the reversals in these selected leadership stock foreshadow a rally attempt in the indices? I *think* it is likely, but I am not sure that I'm going to commit to a reentry positions without a clearer indication that the "M" is behind me. For you, I *hope* and *fear* that it is enough. "The speculative, or swinger-type, stock index is occasionally significant because market movements are almost always led by a few agressive stocks. The leaders of the original move up may at times turn on their heels first. Therefore, a speculative index may highlight the one-day price reversal or stalling action on increased volume. I term this 'heavy or increased volume without further price progress to the upside." HTTMIS, 2d Ed at p. 51. Anyone care to point out and comment on the recent action of a "speculative stock index" as described here? "Immediately following the first selling near the top, a vacuum exists where volume may subside and the market averages will sell off for perhaps four days. The second and probably the last early chance to recognize a top reversal is when the market attempts its first rally, which it will always do after a number of days down from its highest point." HTTMIS, 2d Ed. at 50. It would seem that the inverse of the first passage would hold true, as well. That is, where the aggressive leaderships stocks reverse on higher volume, a potential bottom/short term rally will ensue. Of course, where only a few of them reverse, perhaps it means nothing. We'll see, I suppose. Good luck, Nelson. Jeff - - ------------------------------ Date: Sun, 26 Jul 1998 17:42:34 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] Ian Woodward's HGS discussion area On Sat, 25 Jul 1998 17:52:38 +0200, you wrote: :Dan wrote: : :>Your *smiley* with a "B" suggests you wear glasses, :>Johan? Not knocking it, I wear glasses myself! : :Yep, I wear glasses? Is that important to you? No, Johan. It's completely unimportant to me, but when I see a smiley more complex than :) I often lower my left ear to my left shoulder and try to grok the concept. In your case I thought: "Hmmm, glasses?" For all and sundry, here's one of Johan's smilies (this one with a somewhat stern knitting of the eyebrows) -- }B^) Usually, it's more like (I think) -- B^) : :When I was about 11 years old I started doing a lot of microscopy (sp?).= At :1200x you need a very intensive light source. Ruined my eyes for ever. I started wearing glasses at about 14. It appears to be in the genes. All parents and siblings are nearsighted too. Dan musicant@autobahn.org - - ------------------------------ Date: Sun, 26 Jul 1998 14:58:39 -0700 (PDT) From: TM Subject: [CANSLIM] Re: Trying to figure out a list Today, I'm trying to figure out the HGS Mumbo Jumbo on http://members.aol.com/RANord/ I am looking at detailed info in Yahoo of the stocks listed by portfolios made of Ians Box for 2 reasons: 1. looking for candidates to buy 2. going to Ian's workshop in October in Houston; understand he is a great teacher - this solitary learning is a hard thing; mentoring is needed. A number of you seem to be familiar with this HGS system. There are crytic postings on the several boards I have checked out after they were mentioned here on CANSLIM. Are there any presuppositions other than CANSLIM, that you would think I must know for this to make sense? If so, please clue me in. What I am doing is a retrospective study or backtesting, I guess most of you prefer to call it, these things can really get off target. I'd prefer not to have to relearn anything. Since you have been talking about shorts, a question comes to mind about shorts. Would the negative speed rows indicate likely candidates for shorting? The speed, I believe, is based in part on industry group but there is something more as well. I just haven't figured out what it is yet. TM _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 15:05:34 -0700 (PDT) From: dbphoenix Subject: Re: Not [CANSLIM] Possible Shorts <<>> It's possible, but they've fallen so far already that most of those who are interested are probably looking to buy, not sell. I wouldn't be surprised to see a change of attitude by September. << I got a kick out of that. Ask the gold bugs about picking bottoms. I'll be selling you the shares I can borrow in both oils & semis. If you were averaging down in the commodity (oil) & you had deep pockets then ok but to buy a driller because they look cheap? They very well may get a lot cheaper. Why do you think WON says buy strength???? When they start making new highs (52 week) then I'll start buying. Bob>> Where did I say that I was interested in buying? My point was that these would have made better shorts last November, not after they've lost two-thirds of their value. I couldn't care less whether anyone shorts them now or not. It's not my money. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Sun, 26 Jul 1998 15:25:32 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Re: Trying to figure out a list <> Could you be more specific? What do you mean by "cryptic postings"? What presuppositions are you running in to? Have you read the introduction to HGS at Woodward's website? Is there anything there that confuses you? What is it that doesn't make sense? <> From Roger's site: "G Speed, as it's name implies represents a measure of the 'speed' at which the G is moving, either up or down. It is calculated as the average of the current G when compared to G of the preceding weeks. Two numbers are shown. The first is the G Speed as of the date in the title of the report and the second number is the G Speed for the previous week." If you want to know the formula, I'm sure Roger would be happy to provide you with it. Just e-mail RANord@aol.com. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ End of canslim-digest V2 #341 ***************************** 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.