From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #371 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, August 30 1998 Volume 02 : Number 371 In this issue: [CANSLIM] a/d tabulations Re: [CANSLIM] Back to where we started Re: [CANSLIM] a/d tabulations [CANSLIM] NonCanslim - World Currencies/Bonds/etc... Liquidity! Aha! RE: [CANSLIM] I'm in Re: [CANSLIM] I'm in Re: [CANSLIM] remove [CANSLIM] Rogue stock - DRD [CANSLIM] "M" [CANSLIM] Re. TMBS ---------------------------------------------------------------------- Date: Fri, 28 Aug 1998 22:05:40 -0500 From: "John Adair, M.D." Subject: [CANSLIM] a/d tabulations Deepak Kapur wrote: > > John, > >I have been following ibd 600 accumulation/distribution totals as well > >as the market sector indexes daily until August 27 IBD editon( till aug > >26) each day there has been fewer numbers in each colum. I take this to > > Would you be kind enough to explain this, and where you find them? Thanks. > > Deepak > >Look just below the psychological market indicators on page A23 of IBD August 28 as you know each stock in IBD is ranked for its A/D. This is a summary of the total number. I record these figures daily to give me what the demand is. Its an a/d line of sorts but I feel more comfortable with it as I list below. Accumulation/ Distribution index IanWoodard RULES: 1:Sum A+B+C+D+E 2:A+B/A+B+C+D+E= May rise to 80% but this is exception and indicates corection near. 70% extended and should expect a correction If it holdsaround 62%the correction minor. 62% if drops below 62% expect an intermediate correction. If above 62% market is stable the total of A+B should be around4500 the % of E is significant and should be below 4% it should come down to below 3%. Week Jan/22/98 A B C D E TOTAL A+B A+B% E% jan\98 957 2985 1570 1242 470 9454 3942 42% 5% 6-Feb 1308 3270 1416 978 296 10572 4578 43% 3% may 7/9 1677 3338 1311 891 235 11341 5015 44% 2% 3-Jun 1040 3041 1641 1217 414 9803 4081 42% 4% july\10\98 1162 2916 1486 1170 474 9640 4077 42% 5% 8-Jun 981 2932 1610 1323 454 9436 3913 41% 5% 7\15\98 1152 2886 1425 1217 517 9501 4038 43% 5% 7\26\98 1073 2773 1470 1344 502 9162 3846 42% 5% 08\02\98 766 2405 1557 1572 798 7899 3171 40% 10% 8\5\98 650 2198 1533 1709 943 7229 2848 39% 13% 8\7\98 448 1856 1514 1910 1253 6122 2304 38% 20% 8\11\98 499 2051 1591 1843 1040 6691 2550 38% 16% 8\12\98 497 2027 1577 1823 1092 6625 2524 38% 16% 8\13\98 424 1828 1528 1953 1230 6032 2252 37% 20% 8\14\98 471 1934 1591 1853 1146 6401 2405 38% 18% 8\18\98 448 1928 1552 1844 1195 6304 2376 38% 19% 8\19\98 479 1935 1539 1784 1210 6367 2414 38% 19% 8\21\98 513 2021 1557 1730 1313 6625 2534 38% 20% 8\24\98 506 1972 1509 1763 1174 6465 2478 38% 18% 8\25\98 472 1861 1503 1291 6132 2333 38% 21% 8\26\98 \ 484 1807 1475 1800 1314 6057 2291 38% 22% 8\27\98 490 1801 1452 1780 1340 6034 2291 38% 22% 8\28\98 443 1624 1406 1836 1509 5540 2067 37% 27% 8\298 I dont plan to buy this market until the a+b >4500. At this point there will be enough buyers inthe market to make it worth the risk. John Adair - - ------------------------------ Date: Sat, 29 Aug 1998 03:53:09 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] Back to where we started On Fri, 28 Aug 1998 22:39:19 +0200, you wrote: :Anyone noticed that the NASDAQ (!COMP on QPv2) is now back to where we :(CANSLIMers) started at the end of Jan / begin Feb 1998? Funny. : :Here is a list of the major indexes with the '% from the 52 week high' = and :'% from 52 week low' data (based on Thursday's data!): : :ID stands for IntraDay, so %frHigh-52Wk-ID means % from 52 Week IntraDay= High. : :Notice that you can see were the strenght is located. Those that have :corrected the least (% from 52 week high is relatively low). And those = that :are relatively far from their 52 week low. : :The Russell 2000, which represents the small-caps is a disaster. It is = near :it's 52-week low and is approx -35% from its 52W high! I'd say it is in = a :bear market.=20 The R2000 wasn't doing all that well even before the slump that started in July. It lagged the other indexes. It is conservative to call it's current condition "bear". I don't have the experience to put all this in *perspective*, however, I have to think that conditions are not conducive to a continuation of the *bull market*. I don't think that CANSLIM investing will resume any time soon. To me, it looks gloomier than last year's end. : :The NDX, NASDAQ 100 is still approx 29% higher than its 52W low and is :approx 13% from its 52W high. That is relatively quite good. Therefor = the :strenght is in the quality big cap stocks. Even the big cap Nas stocks: Dell, Cisco, even MSFT are cracking. However, note that MSFT is holding up the best. So what? You can't make money on a declining stock unless you can short it (or otherwise *bet* it will go down).=20 Is it still possible to short in these conditions? Does anyone have experience with this? Dan : :Conclusion for me: I'll be playing these strong, super quality big caps, :during counter trend ralleys. Nothing to do with CANSLIM! I do not = expect :the simple 'counting' to work in the next few weeks, unless we really = SHOOT :up in big spurts several days after each other. No CANSLIM for at least :several weeks, is my 'wild guess'. : :Enjoy your weekend, : : : : : :Johan Van Houtven / CLICK! N.V. : : : : :- musicant@autobahn.org - - ------------------------------ Date: Sat, 29 Aug 1998 03:58:15 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] a/d tabulations On Fri, 28 Aug 1998 22:05:40 -0500, you wrote: John, This looks fascinating, if not irrefutable. However, I'm having a hard time making out what it is! Could you conceivably demystify this, make it more intelligible, or direct us to where we can learn about it? Thanks. Dan :8\13\98 424 1828 1528 1953 1230 6032 2252 37% 20%=09 :8\14\98 471 1934 1591 1853 1146 6401 2405 38% 18%=09 :8\18\98 448 1928 1552 1844 1195 6304 2376 38% 19%=09 :8\19\98 479 1935 1539 1784 1210 6367 2414 38% 19%=09 :8\21\98 513 2021 1557 1730 1313 6625 2534 38% 20%=09 :8\24\98 506 1972 1509 1763 1174 6465 2478 38% 18%=09 :8\25\98 472 1861 1503 1291 6132 2333 38% 21%=09 :8\26\98 \ 484 1807 1475 1800 1314 6057 2291 38% 22%=09 :8\27\98 490 1801 1452 1780 1340 6034 2291 38% 22%=09 :8\28\98 443 1624 1406 1836 1509 5540 2067 37% 27% 8\298= =09 : :I dont plan to buy this market until the a+b >4500. At this point there :will be enough buyers inthe market to make it worth the risk. :John Adair : :- musicant@autobahn.org - - ------------------------------ Date: Fri, 28 Aug 1998 23:06:52 -0400 From: "Frank V. Wolynski" Subject: [CANSLIM] NonCanslim - World Currencies/Bonds/etc... Liquidity! Aha! Found this in a Usenet Group. At the risk of sounding entirely dumb, who is Jeff Steinberg and Steven Lewis? Frank Wolynski - ----------------------------------------------------------- JEFF STEINBERG: We now have a very special guest on the line from London. Steven Lewis is the chief economist of Monument Derivatives. Good afternoon, Steven. MR. STEVEN LEWIS: Good afternoon. Q: Thanks very much for taking the time to speak with us today on an obviously very tumultuous day on the international markets. MR. LEWIS: Well, it certainly has been a tumultuous day. We've had markets flying in all directions, with significant pressure on the Deutschmark early on. But subsequently, with the fall in the U.S. stock market, the dollar has begun to weaken, and this has taken some of the pressure off the German currency. But all in all, I don't think anyone would like to say what the next move in markets is going to be. Clearly, in the equity markets, there is significant downward pressure from the concerns that we have over Russia and Japan, and Southeast Asia. But bond markets are doing well, in broad terms. But within the bond markets, there are significant differences in performance, with government bonds of the United States and Germany scoring strong gains, but some of the emerging market bonds are being very weak indeed. Q: I understand that there's been a significant drop in the bond market throughout Latin America today: Brazil, Argentina, Venezuela, Mexico, and Chile are all suffering dramatic losses. Is this just a general reflection of insecurity and flight out of any kind of investment in the new emerging markets, as a result of the Asia and now Russia turmoil. MR. STEVEN LEWIS: Yes. This is a general concern about any security which carries with it the risk of capital loss. In fact, the economic conditions of the Latin American countries differ quite widely, and there is little fundamental reason behind the uniform fall in bond markets in that region. But Argentina is seen as being rather similar to Hong Kong, in that both countries operate with a currency board and link their currencies to the U.S. dollar. And because there has been pressure recently on the Hong Kong link to the U.S. dollar, Argentina is suffering from spillover pessimism. Brazil, on the other hand, is seen as operating a currency regime which was very similar to the one which Russia operated, until the ruble was effectively devalued and made inconvertible earlier this week. So, there is concern that Brazil will follow the route that Russia has taken. Though it has to be said that the Brazilian authorities have much stronger reserves of foreign exchange to defend their currency, than the Russians had. Meanwhile, Mexico, which has been following the policy of free-floating in its currency, is simply seeing the market fall away. And I think that this reflects a concern that the balance of payments position of Mexico has been deteriorating and funds are being brought back from Mexico to the United States, because many of the funds that are being invested in Mexico originated in the United States. Q: I wanted to pick up on a comment that you were quoted earlier in the day today, in the Frankfurter Allgemeine Zeitung. You said that, I think, that Western investors in Russia, can hope, under the most optimal circumstances, to get perhaps 17 cents or 20 cents on the dollar out of their investment. Perhaps you could give us a little bit of an update on the Russia crisis, which is clearly has been one of the triggers for the broader spread of what was initially called the ``Asia contagion,'' pretty much all around the world, now even impacting on Wall Street. MR. STEVEN LEWIS: It is still not entirely clear of what the result will be of the Russian decision to reschedule the internal debt. But, on the most optimistic reading of the statement that they have made, an investor who accepted the dollar alternative-- There are two alternatives. One is for repayment in dollars, one is for repayment in securities which are ruble-denominated. If the investor chose the dollar option, then that investor would have to accept, at most, a conversion of 20 percent of the holdings into dollar securities. And that means that the other 80 percent of the holdings, would not be worth anything. If, on the other hand, the ruble alternative were accepted, then the investor would be exposed to the risks of hyperinflation in Russia, which could render those securities worthless in very quick time. JEFF STEINBERG: Now, you made a point, in discussions with one of our economists for {EIR} in our European office last week, that in addition to the direct investments in the GKO and the Russian stock market, and in other government debt instruments, that there is also an enormous exposure of a number of Western hedge funds and other investors, in off-balance-sheet currency future options, which could result in a loss on the Russian front of in the range of $100 billion. That obviously puts Russia into a situation where it could dramatically affect the financial situation in Europe, where of course the Euro is about to come on line in January, U.S. markets, and others. Could you say a bit more about that situation? MR. STEVEN LEWIS: Yes. The problem here is that in buying Russian securities, European banks and other European investors have normally hedged their position with Russian banks, so as to eliminate the currency risk. But those hedges are only valuable, to the extent that there are Russian banks surviving to honor them. And the total commitment of European investors in Russia, including GKO investments, investment in OFZs, and the investment in joint ventures, is something on the order of $100 billion. Now, if the Russian banks are not there to satisfy their part of the forward contract agreements, and if the ruble is reduced to nil value, as a result of hyperinflation, then those European investors will find that those derivative contracts with the Russian banks, are worthless. And this could lead on to a knock-on effect in the European banking system with devastating consequences. JEFF STEINBERG: Is the situation now potentially reaching a point where the entire global financial superstructure goes into a kind of rupture that can't be repaired by any of the kind of conventional methods that have been used, say in the past 25 or so years since the end of the Bretton Woods system? Are we at that crisis point, or near it? MR. STEVEN LEWIS: I mean, this is certainly the worst crisis the world financial system has faced, not only since the breakdown of the Bretton Woods system, but even during it. And I think that occasionally, we find that the leaders of the G-7 are hinting at this. We had a German government official earlier this week saying that what we faced was a global systemic breakdown. But, for the most part, the G-7 leaders are trying to play down the seriousness of this crisis, because they fear that if this were widely appreciated in the markets, it would only add to the volatility and to the damage that would result from that volatility. So, I think that we have to be careful in interpreting the official statements that come out. The situation is far more serious, than leaders are having us believe at this stage. JEFF STEINBERG: Do you have any indications of what kinds of things are being discussed behind closed doors, among, for example, the leading central bankers, or treasury ministers? Because clearly, as you say, the public discussion is not an adequate reflection of the degree of concern and perhaps even panic among government officials, that are going to have to come up with some kind of policy for dealing with this crisis. MR. STEVEN LEWIS: There's a disappointing lack of coordination between the leaders of Germany, the United States, Britain, and other G-7 countries, on this question. Partly perhaps this reflects the fact that they have different objectives, and would prefer to see different ways out of the problem. It's going to be difficult for them to reach agreement on a solution, and their failure to come up with a convergence of view on this question, is one of the factors that is making the problem worse. JEFF STEINBERG: There were statements made by U.S. Treasury Secretary Rubin, last April, in the run-up to the G-22 meeting in Washington, D.C., where he discussed the need for a new, global financial architecture. The Japanese Deputy Finance Minister, Sakakibara, at one point acknowledged that there's been widespread behind-the-scenes discussion about some kind of a return to a Bretton Woods-type arrangement, back to a more fixed-exchange-rate system to undercut the efforts of speculators. Do you foresee that as something that will increasingly emerge as a point of discussion, possibly implementation, as this crisis plays out? MR. STEVEN LEWIS: I think it will come up for discussion. The difficulty with it is that the markets have become much more powerful than they were in the days of Bretton Woods. And, in order for a system like that to work, they would have to be some control of the markets, especially the derivative markets, to prevent these forces, which are so powerful, from overturning the stable exchange rates that governments leaders would wish to impose. JEFF STEINBERG: In, I guess, what you're describing as a kind of a showdown between governments on the one side, and the leading figures in the global financial markets on the other side, doesn't this current crisis of the global financial system, offer, perhaps, a moment of opportunity, where governments could marshal sufficient public support, to where these kinds of measures could be adopted? MR. STEVEN LEWIS: I think it would do, if there were a unified view among the governments themselves, as to the final destination they were seeking. The most dangerous aspect in this situation, is that governments in different parts of the world, may be seeking different ends to this crisis, with the development of the dollar on the one hand, and the euro on the other, and the jockeying for position between those two currencies, it may be difficult to reach a universal consensus on this. JEFF STEINBERG: Well, we're going to have to cut off at this point. Steven, I want to thank you again for your most informative comments. And I would hope, as this crisis plays out, that we'll have another opportunity to speak in the near future. MR. STEVEN LEWIS: Well, I hope we're all still around then. Thank you. JEFF STEINBERG: Thanks very much. for more information about EIR and the LaRouche movement: http://members.aol.com/eusebius7 - -----== Posted via Deja News, The Leader in Internet Discussion ==----- http://www.dejanews.com/rg_mkgrp.xp Create Your Own Free Member Forum - - ------------------------------ Date: Fri, 28 Aug 1998 21:54:32 -0700 From: Mike Lucero Subject: RE: [CANSLIM] I'm in It isn't going very well for me. I honored my stops on two stocks the first day, but then the second day was the collapse, and I didn't want to sell during a blowoff, but it didn't come back up as I expected. I picked stocks that were high ERG, trending up, above their 50-day average, within 10% of their highs (but not breakouts). Waiting for the breakouts would have saved me, I guess, since I only had a couple of those. WON says "There will be some scarce cses where whipsaws may occur; however, in almost every situation where the rally has a valid follow-through and then abruptly fails, the market will very quickly come crashing down on furious volume, normally the next day. Just because the market corrects the day after a follow-through, however, does not mean the upward follow-through was false. When the general market bottoms, it frequently backs and fills (testing) near the lows made during the previous few weeks. It is usually more constructive if these pullbacks or tests hold up at least a little above the absoluve intraday lows made recently in the market averages." I don't think he's saying what you'd do in that case, but I guess "respect your stops" would be it. Mike On Wednesday, August 26, 1998 6:04 AM, owner-canslim@lists.xmission.com [SMTP:owner-canslim@lists.xmission.com] On Behalf Of Tom Moulton wrote: > Mike Lucero wrote: > > > I hope I'm not making a big mistake, but I've been getting in. I bought a > > couple stocks last week and was stopped out on the retest. But most of the > > stocks on my watchlist look pretty good. > > > > As long as you watch your stocks and stick to your stops you'll do better > than the "average joe" > > Learn and use technical signals, I've been testing on paper and looked back > at a number of loosing trades and while the RS, EPS, etc were all good the > technical indicators (MACD and trend lines were wrong...) > > > - > > - - ------------------------------ Date: Sat, 29 Aug 1998 06:34:16 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] I'm in Mike, As much as I have complained that WON needs to update HTMMIS for more modern times, this quote so well describes the past several days of trading. I must admit, and apologize, for my decision to call a bottom, and a successful third retest. Looked to me at the time like the worst was over, even allowing for further deterioration in Russia. The worldwide ripple effect that that has caused was far greater than I anticipated. What I saw on the charts as a successful retest and going into a consolidation has now proven to be the pause just prior to a very serious breakdown. The volume for the past several days is screaming "danger, danger". My optimism of just a week ago is rapidly fading into pessimism. We may have some very tough times ahead. Right now this environment "feels" to me worse than any bear mkt I have endured, maybe because it broke down so fast, maybe because I have a far greater global outlook than before, maybe because the mkts are now so globally linked. I see no valid basis for relief in sight, other than a tremendous amount of money is flowing into money mkts ($13 billion this past week, even tho only an estimated $2.2 bil left the stock mkt). But this money won't come back till there is some stability, and the longer that takes the more likely it is that a big portion of this money will find another longer term home than a money market. Tom W - -----Original Message----- From: Mike Lucero To: 'canslim@lists.xmission.com' Date: Saturday, August 29, 1998 12:59 AM Subject: RE: [CANSLIM] I'm in > >WON says "There will be some scarce cses where whipsaws may occur; however, >in almost every situation where the rally has a valid follow-through and >then abruptly fails, the market will very quickly come crashing down on >furious volume, normally the next day. > Just because the market corrects the day after a follow-through, however, >does not mean the upward follow-through was false. When the general market >bottoms, it frequently backs and fills (testing) near the lows made during >the previous few weeks. It is usually more constructive if these pullbacks >or tests hold up at least a little above the absoluve intraday lows made >recently in the market averages." > - - ------------------------------ Date: Sat, 29 Aug 1998 11:25:56 -0700 (PDT) From: Ty C Smith Subject: Re: [CANSLIM] remove remove canslim for tsmith@nsccux.sccd.ctc.edu - - ------------------------------ Date: Sat, 29 Aug 1998 16:46:09 -0400 From: Al French Subject: [CANSLIM] Rogue stock - DRD DRD broke out yesterday to a new high on big volume. Strong group, but negative earnings. I'm not buying anything right now, but it is good to see a chart like this for a change. Al French - - ------------------------------ Date: Sat, 29 Aug 1998 17:49:08 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" Deepak: I'm still watching for a climax sell off with a reversal to virtually unchanged to higher on the day. Thought we had it on Thursday, knew we didn't on Friday, and with any luck, we'll see it on Monday. The best bottoming indicator to begin the count for follow through. That indicator is usually an extreme gap down open, higher daily volume with the close I mentioned above. To specifically answer your question in a prior post, I've not seen such a sell off so far. Frank: Why aren't the sentiment numbers much better? Fools don't want us long the market, I suppose!! ;) Near a 52 week high in bears, but still pretty strong in the bulls. Remain in fertile territory for a bottom, but a lot of damage to overcome. Notice the 52 week and 5 year numbers for sentiment, however. We could be in for a long fall. Started worrying about my mutual funds on Friday, that's usually a pretty good contrary indicator. Jeffry - - ------------------------------ Date: Sun, 30 Aug 1998 09:49:43 EDT From: JANSI1AUG1@aol.com Subject: [CANSLIM] Re. TMBS Tom & Mary: To me, TMBS looks as if it's going into the trough-base from the left lip of a C&H that began at 27.5 in early July. I reach this conclusion because while wkly and daily MACD say TMBS is a sell, wkly and daily OBV and MF both seem in a strong divergence-ie, even as price declines, OBV and MF remain steady, which indicates to me that it is being accumulated. Meanwhile, wkly. and daily slow stoch. are giving mixed signals, though both show in oversold territory. Thus, TMBS may temporarily rise to resistance at approx. 20, but my take is that it will build a longer base in that area. To find when it will rise to right lip, I would use the MACD-see if it is in a wkly. buy, and then buy the TMBS when daily confirms. jans - - ------------------------------ End of canslim-digest V2 #371 ***************************** 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.