From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #404 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 Tuesday, October 6 1998 Volume 02 : Number 404 In this issue: [CANSLIM] Re: canslim-digest V2 #403 [CANSLIM] Re: canslim-digest V2 #403 Re: [CANSLIM] Charting the Tick [CANSLIM] Stoploss. The brokers choice?!! [CANSLIM] WON's follow-through concept & Leaders Re: [CANSLIM] Stoploss. The brokers choice?!! [CANSLIM] The Millenium Bug [CANSLIM] Predictions [CANSLIM] Scan Re: [CANSLIM] Predictions [CANSLIM] General Question on Stop Loss and Limit Orders Re: [CANSLIM] Predictions Re: [CANSLIM] WON's follow-through concept & Leaders Re: [CANSLIM] Predictions Re: [CANSLIM] Predictions Re: [CANSLIM] Predictions Re: [CANSLIM] WON's follow-through concept & Leaders Re: [CANSLIM] Scan RE: [CANSLIM] Scan [CANSLIM] Okay Mr. Bear it's time for hibernation. [CANSLIM] Recommended TA website Re: [CANSLIM] Recommended TA website [CANSLIM] Bulls and Bears Re: [CANSLIM] Stoploss. The brokers choice?!! Re: [CANSLIM] Predictions Re: [CANSLIM] Predictions [CANSLIM] Futures reversal Re: [CANSLIM] Re: your page ---------------------------------------------------------------------- Date: Mon, 5 Oct 1998 20:30:03 -0700 (PDT) From: dbphoenix Subject: [CANSLIM] Re: canslim-digest V2 #403 Sorry about some of the mail getting bumped. I need to empty the wastebasket more often. <> Actually, there's a little more to it than that, and maybe I need to get into it at a later date. By trying to keep things simple, one sometimes simplifies to the point of error. One shouldn't look at a lower price on high volume as an automatic "bad". If you're seriously following the stock, you must analyze each day's activity, particularly if it looks as though things are coming to a head and you're going to have to make a decision soon. For example, if the stock goes up past the previous day's close, plummets, then comes back strongly during the day to close just below the previous day's close, that is a sign of strong support (though it may also be short-covering--you have to take everything you know about the stock into consideration). Therefore, even though the bar may show "red", it's actually a positive. By the same token, if it has a strong move upward on light volume but is hammered down on heavy volume, that is a negative, even if it does close higher than the previous day's close. You can often tell this kind of activity from the end-of-day chart, but the best way to tell what's going on is to use an intraday chart such as those at bigcharts. You can see where the volume is coming in when and at what price. Obviously the more stocks you have on your watchlist, the less likely or able you are to do this, which is why I think your watchlist should be no larger than necessary. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Mon, 5 Oct 1998 20:34:42 -0700 (PDT) From: dbphoenix Subject: [CANSLIM] Re: canslim-digest V2 #403 <> Maybe if we undercut the previous low, we'll finally get the panic and the volume we've been looking for. As long as the bulls keep buying these dips, this could drag on for months. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 6 Oct 1998 00:21:52 EDT From: Ssingh@aol.com Subject: Re: [CANSLIM] Charting the Tick Try this site: http://www.quote.com/cgi-bin/jchart-form?symbols=tick In a message dated 10/5/98 11:05:34 PM Eastern Daylight Time, Wolynski@MindSpring.Com writes: First, thanks Rolatzi, and Talib for the Candlestick sites, it was what I was looking for. Although it wasn't the one I was thinking of, it works well. Secondly, does anyone know where the daily TICK is charted on the Web? I realize the closing value is available at many free sites, but you can't view a chart of the Intraday TICK. Yahoo has this available, but it is not working well tonight. >> - - ------------------------------ Date: Mon, 5 Oct 1998 21:41:24 -0700 From: "Bill Triffet" Subject: [CANSLIM] Stoploss. The brokers choice?!! Hi all, I been a lurker here for quite a while and thought I'd finally join in the great discussion (now that the markets in the dumper ). My question and comment is regarding stoploss trades and the NASDAQ. I've only traded market orders for the past 4 years (my total trading life). Recently I've found that stoploss sales on the OTC stocks are up to the brockerage house. Fidelity told me it's a rule of NASDAQ. Another call to the rep's supervisor gave me the answer " last July the rule changed and "many" otc stocks can now be traded with a stoploss". I asked him to be more specific... he couldn't. Apparently, I will have to call a rep to see if the security I wish to buy will be able to be sold with a stoploss. He must be joking! I trade exclusively online. I tried a stoploss on my JKHY position last Tues and the Fido online trading window said I couldn't place a stoploss on an otc trade. And yes, I got out anyways ( Greenspan had just spoke and the market was tanking ). Needless to say Fido will not be my broker anymore! Have others here ran into this? I feel rather ignorant about this. Could anyone recommend a more "honest" trading house that will allow stoploss on ALL my CANSLIM trades. I'd prefer if they could also handle an IRA rollover as I don't think Fido needs that either. I may never use a stoploss again (per WON) but I want to know I can. TIA! Bill - - ------------------------------ Date: Tue, 06 Oct 1998 08:42:41 +0200 From: Johan Van Houtven Subject: [CANSLIM] WON's follow-through concept & Leaders http://cbs.marketwatch.com/archive/19981005/news/current/marder.htx?source=b lq/yhoo&dist=yhoo Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Tue, 6 Oct 1998 06:46:43 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Stoploss. The brokers choice?!! Hi Bill, Glad you came out of the woods and joined the group discussions. To the best of my knowledge (from eleven years in the securities industry), it is not a NASDAQ issue (or any regulator's as well) whether or not a firm permits a stop loss on an OTC stock. It is entirely up to the brokerage house. The reasons are relatively simple if you consider the differences between Nasdaq and the listed exchanges (NYSE, AMEX). In the listed exchanges, a stop loss order is ultimately given to the floor specialist, where all major trading is centralized. With an OTC stock, there are as many "traders" as there are firms making a market. This means the firm becomes responsible for monitoring the stock and executing your stop loss if necessary. Some firms simply don't want the exposure and responsibility, esp if they are not a major OTC market maker. I have my account at Schwab, which I believe allows stop loss orders on OTC, tho I haven't tested them on it. The key is to "interview" any firm you are considering using, and ask them if they permit OTC stop loss orders, and if so are there any restrictions. As to the issue of an IRA rollover, any firm that can't handle this shouldn't get your business, it's a real basic operation. Tom W - -----Original Message----- From: Bill Triffet To: canslim@xmission.com Date: Tuesday, October 06, 1998 12:39 AM Subject: [CANSLIM] Stoploss. The brokers choice?!! >Hi all, >I been a lurker here for quite a while and thought I'd finally join in the >great discussion (now that the markets in the dumper ). > >My question and comment is regarding stoploss trades and the NASDAQ. I've >only traded market orders for the past 4 years (my total trading life). >Recently I've found that stoploss sales on the OTC stocks are up to the >brockerage house. Fidelity told me it's a rule of NASDAQ. >Another call to the rep's supervisor gave me the answer " last July the rule >changed and "many" otc stocks can now be traded with a stoploss". I asked >him to be more specific... he couldn't. >Apparently, I will have to call a rep to see if the security I wish to buy >will be able to be sold with a stoploss. He must be joking! I trade >exclusively online. > >I tried a stoploss on my JKHY position last Tues and the Fido online trading >window said I couldn't place a stoploss on an otc trade. And yes, I got out >anyways ( Greenspan had just spoke and the market was tanking ). > >Needless to say Fido will not be my broker anymore! >Have others here ran into this? I feel rather ignorant about this. >Could anyone recommend a more "honest" trading house that will allow >stoploss on ALL my CANSLIM trades. I'd prefer if they could also handle an >IRA rollover as I don't think Fido needs that either. >I may never use a stoploss again (per WON) but I want to know I can. > >TIA! > >Bill > > > > >- > - - ------------------------------ Date: Tue, 6 Oct 1998 06:54:10 -0500 (CDT) From: mckeener@ix.netcom.com Subject: [CANSLIM] The Millenium Bug Db, Noticed Dan's post Ditto. Mary On Sun, 4 Oct 1998 09:59:35 -0700 (PDT), you wrote: : : : : :http://www.thesitefights.com/wepatrol/mil_bug.gif : :--Db - - ------------------------------ Date: Tue, 6 Oct 1998 07:03:11 -0500 (CDT) From: mckeener@ix.netcom.com Subject: [CANSLIM] Predictions Tom, Thanks, Tom, for this detailed explanation. O'k with it now. Mary - - ------------------------------ Date: Tue, 6 Oct 1998 06:00:51 -0700 (PDT) From: rolatzi Subject: [CANSLIM] Scan While stocks are going down, let's keep looking for companies with good fundamentals and basing. These are the latest that I find on my qp2 scan. CHCS ,CHICOS FAS INC COM,RTLAPPRL,98 DELL ,DELL COMPUTER CORP COM,COMPMICR,99 EVER ,EVERGREEN RES INC COM NO PAR,OGUSEXP,84 GILTF ,GILAT SATELLITE NETWORKS LTD ORD,TELEQUIP,91 IM ,INGRAM MICRO INC CL A,RTLWCOMP,95 LSON ,LASON INC COM,FINBUSVC,95 NLCS ,NATIONAL COMPUTER SYS INC COM,COMPOCR,95 PAYX ,PAYCHEX INC COM,FINBUSVC,96 STB ,STAR BANC CORP COM,BANKMWES,91 WLA ,WARNER LAMBERT CO COM,MEDDIVER,94 Mike: I ran your scan last night and I had difficulty with not enough days loaded. I changed a few lines of code to scan to 300 days and it ran. Also, I don't use any other programs for my scanning or plotting. Is there any reason for me to use the QP2 virtual program so long as I eliminate the lines of code referring to virtual files? Thanks, Rich _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 6 Oct 1998 06:44:31 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Predictions <> Tom's reply to you was definitely worth saving, but take careful note of his relating the kind of news you pay attention to and how you pay attention to it to the kind of investor you are. All I'd add is that news isn't news unless the market cares about it. Very often, particularly in times like these, I'll find traders and investors tearing their hair out because the market isn't paying attention to, or enough attention to, or the right kind of attention to a particular bit of "news" (much like the apoplexy suffered by Republicans when the President's popularity ratings remained stable even while the details of the "scandal" became more widely known). As far as the anticipatory response you refer to, this is all part of the discounting mechanism. In some ways, traders and investors anticipate news even before it happens (smoke and fire). One could say that, in some circumstances, the market reacts not to news but to what it thinks the news is going to be. This was certainly the case with regard to the rate cut. Same with earnings. We've reached the point where stocks rise not because of earnings, but because of the anticipation of what people think the earnings are going to be. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 06 Oct 1998 05:36:30 PDT From: "ram anantha" Subject: [CANSLIM] General Question on Stop Loss and Limit Orders Hi Canslimers, I have a general question about trading. Say, I buy 50 shares of YHOO at 125. I want to sell it if it reaches 120 or below OR if it reaches 130 or above. Can I place one sell order to indicate this or can I place two sell orders in such a way that if one gets executed, the other order gets canceled automatically? If the above is not possible, is there any other way I can do this? Thanks Ram ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com - - ------------------------------ Date: Tue, 06 Oct 1998 10:02:48 -0400 From: Tom Moulton Subject: Re: [CANSLIM] Predictions dbphoenix wrote: > As far as the anticipatory response you refer to, this is all part of > the discounting mechanism. In some ways, traders and investors > anticipate news even before it happens (smoke and fire). One could > say that, in some circumstances, the market reacts not to news but to > what it thinks the news is going to be. This was certainly the case > with regard to the rate cut. Same with earnings. We've reached the > point where stocks rise not because of earnings, but because of the > anticipation of what people think the earnings are going to be. > > --Db With so many more people getting 'real time news' it sounds like scheduled events (Earnings reports, Greenspan speaking, etc) are no longer news but what So-And-So thinks is going to happen at the upcoming event IS the NEWS that is reacted to. Even earnings suprises are too suprising because you can watch option volume and/or stock volume to give hints that something is about to happen... then the news is what so-and-so thinks... boy is there could be a lot of room for abuse by brokerage firms here... are they watched as per their fund actions vs their recommendations? (ie they sell off and then cut ratings or buy and then raise ratings then sell...) but then again they trade in such large blocks it may not make a difference... - - ------------------------------ Date: Tue, 06 Oct 1998 10:07:17 -0400 From: Craig Griffin Subject: Re: [CANSLIM] WON's follow-through concept & Leaders Johan, Thanks for posting this link! Excellent reading. I found that this URL is better to access the story (the gifs, ie. charts, are missing the other way). If you had trouble with the other one, try this ===> http://cbs.marketwatch.com/news/current/marder.htx?source=htx/http2_mw This new URL is probably only good today, however, because it is for the "current" article. Best Regards, Craig At 08:42 AM 10/6/98 +0200, you wrote: http://cbs.marketwatch.com/archive/19981005/news/current/marder.htx?source=b lq/yhoo&dist=yhoo > >Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Tue, 6 Oct 1998 07:09:27 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Predictions <> This has been debated in this group before. I think it's unlikely a brokerage firm will recommend something it doesn't have a lot of, or downgrade something it hasn't already dumped. Then there's that case of what's-his-name at Magellan touting MU(?) while selling it right and left, though I don't think anything was ever done about it. All the more reason to do your own homework. Abby Cohen, for example, said that PSFT was a buy when it was at 40. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 06 Oct 1998 10:18:49 -0400 From: Tom Moulton Subject: Re: [CANSLIM] Predictions dbphoenix wrote: > This has been debated in this group before. I think it's unlikely a > brokerage firm will recommend something it doesn't have a lot of, or > downgrade something it hasn't already dumped. Then there's that case > of what's-his-name at Magellan touting MU(?) while selling it right > and left, though I don't think anything was ever done about it. I guess it does make sense... That might also be why they always try to teach investors to be in for the Long term... so they can sell them the stocks that are slowing down for Now... but they'll grow in the next few years... RIGHT???!!! i guess i woke up a bit cynical today... - - ------------------------------ Date: Tue, 6 Oct 1998 07:42:22 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Predictions <> I should have made a distinction between fund managers and brokers. It is in a fund manager's best interests to encourage investors to buy for the long term. What else is he going to do? Besides, fund managers don't offer investment advice except in a general way to the public-at-large. Brokers, on the other hand, are a mixed bag. Some have their client's best interests at heart, some put the brokerage first, some put themselves first. Brokers' and brokerages' motives are much more of a mixed bag. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 06 Oct 1998 10:46:02 -0400 From: Craig Griffin Subject: Re: [CANSLIM] WON's follow-through concept & Leaders I sent Kevin Marder (who wrote the Follow Through Article at CBS) a msg to let him know that the Gifs were messed up (and to tell him it was a Great column). Guess what, got the following reply in less than an hour: >> It's been fixed, Craig. My MOTM column doesn't come out daily, just every week or two or three. Sorry, I can't email these things. knm. << Amazing. Kudo's to Kevin and CBS Marketwatch. Here is Johan's original link again (which is not limited to today only): http://cbs.marketwatch.com/archive/19981005/news/current/marder.htx Best Regards, Craig - - ------------------------------ Date: Tue, 6 Oct 1998 08:09:28 -0700 (PDT) From: rolatzi Subject: Re: [CANSLIM] Scan Of the stocks on my scan list the following have nice cup formations: EVER LSON STB WLA On the weekly charts they all show that they have passed their MACD histogram minimums and the histograms while still negative have turned up (Elder, first screen). On the daily charts, they all have over sold slo stos but the 3 day EMA's are still pointing down and are below the 7d and 10d EMA's. EVER is above its 50d MA, while LSON and WLA are at their 50d EMA and STB is below its 50d but above its 200d EMA. I have not yet checked out their fundementals or groups. Ciao, Rich - ---rolatzi wrote: > > While stocks are going down, let's keep looking for companies with > good fundamentals and basing. These are the latest that I find on my > qp2 scan. > > CHCS ,CHICOS FAS INC COM,RTLAPPRL,98 > DELL ,DELL COMPUTER CORP COM,COMPMICR,99 > EVER ,EVERGREEN RES INC COM NO PAR,OGUSEXP,84 > GILTF ,GILAT SATELLITE NETWORKS LTD ORD,TELEQUIP,91 > IM ,INGRAM MICRO INC CL A,RTLWCOMP,95 > LSON ,LASON INC COM,FINBUSVC,95 > NLCS ,NATIONAL COMPUTER SYS INC COM,COMPOCR,95 > PAYX ,PAYCHEX INC COM,FINBUSVC,96 > STB ,STAR BANC CORP COM,BANKMWES,91 > WLA ,WARNER LAMBERT CO COM,MEDDIVER,94 > > Mike: I ran your scan last night and I had difficulty with not enough > days loaded. I changed a few lines of code to scan to 300 days and it > ran. Also, I don't use any other programs for my scanning or > plotting. Is there any reason for me to use the QP2 virtual program so > long as I eliminate the lines of code referring to virtual files? > > Thanks, > Rich > > > > _________________________________________________________ > 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: Tue, 6 Oct 1998 11:32:21 -0700 From: mikelu Subject: RE: [CANSLIM] Scan If you're only using QP2, then you don't need QPVirtual. Mike - -----Original Message----- From: rolatzi [SMTP:rolatzi@yahoo.com] Sent: Tuesday, October 06, 1998 6:01 AM To: canslim@mail.xmission.com Subject: [CANSLIM] Scan While stocks are going down, let's keep looking for companies with good fundamentals and basing. These are the latest that I find on my qp2 scan. CHCS ,CHICOS FAS INC COM,RTLAPPRL,98 DELL ,DELL COMPUTER CORP COM,COMPMICR,99 EVER ,EVERGREEN RES INC COM NO PAR,OGUSEXP,84 GILTF ,GILAT SATELLITE NETWORKS LTD ORD,TELEQUIP,91 IM ,INGRAM MICRO INC CL A,RTLWCOMP,95 LSON ,LASON INC COM,FINBUSVC,95 NLCS ,NATIONAL COMPUTER SYS INC COM,COMPOCR,95 PAYX ,PAYCHEX INC COM,FINBUSVC,96 STB ,STAR BANC CORP COM,BANKMWES,91 WLA ,WARNER LAMBERT CO COM,MEDDIVER,94 Mike: I ran your scan last night and I had difficulty with not enough days loaded. I changed a few lines of code to scan to 300 days and it ran. Also, I don't use any other programs for my scanning or plotting. Is there any reason for me to use the QP2 virtual program so long as I eliminate the lines of code referring to virtual files? Thanks, Rich _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - - - ------------------------------ Date: Tue, 06 Oct 1998 14:32:04 -0400 From: Peter Newell Subject: [CANSLIM] Okay Mr. Bear it's time for hibernation. Dear Mr. Bear, It's supposed to be a cold hard winter and I believe you should have enough of my money and fat stored up to last thru the winter. So please go find a nice warm cave before l nina comes and gets you. Peter P.S. Or I may start shorting again P.P.S Just blowing off steam after seeing todays "rally" blow-off. - - ------------------------------ Date: Tue, 06 Oct 1998 21:31:26 +0200 From: Johan Van Houtven Subject: [CANSLIM] Recommended TA website Just spent about an hour or so reading DB's excellent web-site. It is primarily about TA (technical analysis). Go there and you'll learn about what a chart actually is, bases, W's, cup and handle patterns, etc. It is an absolute must IMHO for anyone even remotely interested in the subject. Click on: http://home.talkcity.com/MoneySt/dbphoenix/index.html to get there. Now, in order to show that I'm not just hyping this oasis of top-notch content I'll add this: It is also one of the most ugly designed web-sites I've come across (when viewed at 1024*768 screen resolution), but I'll gladly forgive DB for this as I couldn't do it any better. B^) Bravo, DB. Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Tue, 6 Oct 1998 13:06:04 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Recommended TA website <> LOL! Well, chalk it up to a first try. The space is provided by Concentric (much the way AOL provides space for its members) and they give you 12MB. Only problem is that you're limited to their software. Anyway, the only reason I messed with it at all is the inability to post charts anywhere. And trying to describe a trendline in words is a real pain. At least now I don't have to bug Jeff with files anymore. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 6 Oct 1998 13:11:40 -0700 (PDT) From: dbphoenix Subject: [CANSLIM] Bulls and Bears From Briefing.com: <<15:35 ET Dow +77, Nasdaq -7, S&P +4.69: Off the highs, off the lows, where it ends nobody knows... Market giving another volatile performance as bulls and bears do battle... Former continue to see dips as a buying opportunity whereas the latter use signs of strength as a reason to sell.>> That pretty much wraps it up. There's a '94 trendline at around 7200, and the midpoint of the W is just below 8200. So we sits and we waits. I hope the newbies in the group are taking voluminous notes. This will be your first opportunity in eight years to see something like this and it would be a shame not to take advantage of it. Anyone who hasn't started a journal ought to do so immediately. Set it up in Word so you can cut and paste articles, news items, posts, e-mails, data, whatever. Next Spring you'll be glad you did. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 6 Oct 1998 18:36:02 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Stoploss. The brokers choice?!! > Apparently, I will have to call a rep to see if the security I wish to buy > will be able to be sold with a stoploss. He must be joking! I trade > exclusively online. > Have others here ran into this? I feel rather ignorant about this. I was told something similar - I can use a stop on most stocks, but not all. I asked how I would know since I trade online, and the guy I talked to said that he thought the order entry system would reject anything where they couldn't hold a stop. Haven't tried to place too many stops since I've made few trades lately, can't tell you how this works, but you aren't the only one to get this story from your broker. - - ------------------------------ Date: Tue, 6 Oct 1998 20:45:52 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Predictions Guess I'll have to disagree in part with db. Important to keep in mind that at any firm large enough to be doing meaningful in-house funds, the funds managers are compartmentalized from the house analysts by what's referred to in the trade as a "Chinese Wall". This same wall is also used to segregate investment banking (where personnel may be privy to takeover and merger/acquisition information of a highly confidental nature) from all other departments. There is extensive SEC doctrine on the need for and application of a Chinese Wall, and it is an item examined closely in any regulatory audits and inspections. Firms are also required to keep a list of prohibited or restricted companies, typically ones where the firm is working on an investment banking situation and a leak of info could result in insider trading. Any attempts to trade on the stock are prohibited, as well as resulting in scrutiny of the reasons behind the attempted trade. But in reality no wall is leak proof, an analyst may be a golfing buddy with a funds mgr, or a neighbor, or just join him for the occasional lunch, etc. Loose lips sink ships, etc. On the other hand, the main players (analysts, funds mgrs, retail brokers) are well aware of and indoctrinated in the requirements and prohibitions of trading on insider info. At firms where I have worked that had house analysts (and I understand this is typical of big wire houses as well), there was usually a morning "brokers call" session in which the house analysts were piped into all offices and all were expected to attend (usually around 8 or 8:30 AM). Sometimes these were general briefings on mkt conditions and house stocks performance, etc. But occasionally they would be a shift in the analyst's perspective on a particular stock. At these times, phone calls were being hurriedly made and buy/sell tickets hastily written once the meeting ended. The general tendency was that if you had recommended a client buy a stock because the house analyst recommended it, then you unloaded it when he said to. You didn't argue, you didn't try to do your own analysis, you called the clients and told them to sell. The funds mgrs work in a very similiar way, tho they don't have to make the phone calls. On the other hand, they usually have more capability of doing some independent research on their own, and thus may feel better able to make their own call. However, there is a considerable risk in going counter to the house analyst's recommendation should he prove right, and you wrong. While the example of the Fidelity mgr selling MU while publicly telling all how great it is does illustrate the potential for "front running", in that case the mgr was acting on his own, not with or contrary to the house analyst. I am sure there are numerous cases of leaks, as well as funds mgrs liking a stock they found on their own, building a position, then whispering in the ear of a house analyst that they should take a look at XYZ. Heck, I've done it myself when I thought I had a real gem, bot the stock then called an analyst at another house to point it out to him. Nothing illegal about that, tho would be illegal if the analyst said something favorable simply to tout the stock. But by and large, considering the number of upgrades and downgrades occuring throughout the industry in the larger wirehouses, I believe that the vast majority of analyst's announcements are being heard by the funds mgrs at the same time as the retail broker groups hear about it. Bear in mind, however, that by the time other firms, or the public at large via news services, become aware of the reasons for the huge volume and sizable price move, the mkt has usually been open for at least several hours. The house is under no compulsion to announce what it's analyst said, they paid for his services and their clients (whether retail or institutional) are entitled to benefit first. Over the years, judging by the unexpected volume and price change in a stock, followed several hours later by the announcement of an upgrade or downgrade, I have little personal or professional doubt that most analyst's recommendations are being handled in accordance with the "Chinese Wall" rules. Granted, most of that volume came from the firm employing the analyst, but I have no problem with that. Day traders could generally care less why a stock is moving, they just trade the momentum. BTW, the most suspicious "ratings" I have seen in the industry occur when a firm "initiates coverage" with a hold or other negative rating. Think about it, why would a firm initiate coverage of a stock it thinks so poorly of?? I have seen several classic cases where it was later proven that the firm already had a substantial short position (OSSI was one case in point some years ago, involving several large wirehouses). These are the ratings I steer clear of, or bail if already owning. Tom W - -----Original Message----- From: dbphoenix To: canslim@lists.xmission.com Date: Tuesday, October 06, 1998 10:07 AM Subject: Re: [CANSLIM] Predictions ><(ie they sell off and then cut ratings or buy and then raise ratings >then sell...)>> > >This has been debated in this group before. I think it's unlikely a >brokerage firm will recommend something it doesn't have a lot of, or >downgrade something it hasn't already dumped. Then there's that case >of what's-his-name at Magellan touting MU(?) while selling it right >and left, though I don't think anything was ever done about it. > >All the more reason to do your own homework. Abby Cohen, for example, >said that PSFT was a buy when it was at 40. > >--Db > > > > > > >_________________________________________________________ >DO YOU YAHOO!? >Get your free @yahoo.com address at http://mail.yahoo.com > > >- > - - ------------------------------ Date: Tue, 6 Oct 1998 21:19:11 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Predictions db is being kind in referring to "retail brokers" as a mixed bag. As a former member of the community, I'll be a little more brutal. I am excluding brokers at discount firms, by and large, as they are mostly order takers, not account managers. The best of the breed are the ones that have survived 20 or so years in the business. They usually command a corner office, have one or more licensed sales assistants, and a personal secretary. They have $20 mil or more under management, and almost exclusively get new clients by way of referral from existing clients. Their style is usually conservative, recommending blue chips and for long term. They may produce a million or more in commissions, and earn a third of a million for themselves. And if your account isn't well into the six figures, or even seven figures, they won't talk to you much less take you as a client. Probably the next best of the breed are the relatively new brokers, the ones with only several years, or less, in the business. They are still somewhat naive and trusting, but still trying to "do the right thing" for their clients. However, their inexperience with the industry also makes them susceptible to deliberate or accidental manipulation, either by management or other "top producers". They also, frankly, don't know a lot and events often take them by surprise. Been there, done that, it's not fun. In between these two extremes are the vast majority of brokers. I worked for seven years as a retail broker, with over two hundred clients, on 100% commission. Every month it was the same, start from zero and produce or don't eat or pay the mortgage or even keep your job. That makes for a tough environment, causes a lot of early burnout, and quickly blurs the edge on ethics and professionalism. Some brokers do manage to hold onto their ethics and put their clients first, from their ranks mostly are the few that eventually graduate to the "corner office". Over the years, I met very few that put their clients ahead of their own paycheck, which should be the first priority. By and large, I also found few that placed their firm ahead of their paycheck. The paycheck was mostly the first choice. But most did place the client ahead of the firm, which is why there is little loyalty in the industry on either side (if you are trying to "job hunt" for a better position, you must do it in secrecy, if the boss finds out they fire you with no notice). Brokers generally consider themselves mobile, and if they've been doing clean and decent business expect most of their clients will follow them to a new firm. There are good and decent and ethical full service brokers in the industry, but even they can be whipsawed by their own employer. The industry is still "self regulating" which suggests it does try to police itself. However, the bad ones still manage to find firms desperate for commission production that will hire them until they either become too costly or the SEC or NASD lifts their license. FWIW, I left the business because I couldn't make a decent living at it, esp considering the high level of stress. I put my clients first, even at the damage to my paycheck. Until this industry revolutionizes itself into a management fee basis, rather than a commission basis, I expect that my experience will be the norm, those that care about their clients will leave, those that care about their personal income will stay and be welcomed by the industry. Tom W - -----Original Message----- From: dbphoenix To: canslim@lists.xmission.com Date: Tuesday, October 06, 1998 10:41 AM Subject: Re: [CANSLIM] Predictions >I should have made a distinction between fund managers and brokers. >It is in a fund manager's best interests to encourage investors to buy >for the long term. What else is he going to do? Besides, fund >managers don't offer investment advice except in a general way to the >public-at-large. > >Brokers, on the other hand, are a mixed bag. Some have their client's >best interests at heart, some put the brokerage first, some put >themselves first. Brokers' and brokerages' motives are much more of a >mixed bag. > >--Db > - - ------------------------------ Date: Tue, 6 Oct 1998 22:02:04 -0400 From: "Tom Worley" Subject: [CANSLIM] Futures reversal Nice solid reversal to the upside from a negative showing in the futures, apparently chasing a strong Asian market. Seems they have a more positive view on the economic outlook than does the US mkts. Will be interesting to see if it can hold thru the night. Tom W - - ------------------------------ Date: Tue, 06 Oct 1998 22:40:23 -0500 From: "John Adair, M.D." Subject: Re: [CANSLIM] Re: your page Thanks for the good page and the information therin. John Adair dbphoenix wrote: > Sorry about some of the mail getting bumped. I need to empty the > wastebasket more often. > > < whether the price rises or falls on relatively high volume days. If it > rises, the probability is that the stock is being accumulated; if the > price falls, the probability is that you are following a currently > weak stock. > As Arsenio would say: "Ah-hah!" >> > > Actually, there's a little more to it than that, and maybe I need to > get into it at a later date. By trying to keep things simple, one > sometimes simplifies to the point of error. One shouldn't look at a > lower price on high volume as an automatic "bad". If you're seriously > following the stock, you must analyze each day's activity, > particularly if it looks as though things are coming to a head and > you're going to have to make a decision soon. > > For example, if the stock goes up past the previous day's close, > plummets, then comes back strongly during the day to close just below > the previous day's close, that is a sign of strong support (though it > may also be short-covering--you have to take everything you know about > the stock into consideration). Therefore, even though the bar may > show "red", it's actually a positive. By the same token, if it has a > strong move upward on light volume but is hammered down on heavy > volume, that is a negative, even if it does close higher than the > previous day's close. > > You can often tell this kind of activity from the end-of-day chart, > but the best way to tell what's going on is to use an intraday chart > such as those at bigcharts. You can see where the volume is coming in > when and at what price. Obviously the more stocks you have on your > watchlist, the less likely or able you are to do this, which is why I > think your watchlist should be no larger than necessary. > > --Db > > _________________________________________________________ > DO YOU YAHOO!? > Get your free @yahoo.com address at http://mail.yahoo.com > > - - - ------------------------------ End of canslim-digest V2 #404 ***************************** 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.