From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #637 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 Sunday, June 27 1999 Volume 02 : Number 637 In this issue: Re: [CANSLIM] Trading on the go. [Connie Mack] Re: [CANSLIM] Trading on the go. [Connie Mack] Re: [CANSLIM] Trading on the go. [Connie Mack] Re: [CANSLIM] Trading on the go. [Connie Mack] [CANSLIM] Earnings Forecasts [CANSLIM] Broker with level II [CANSLIM] DGO list - snapshot Re: [CANSLIM] DGO list - snapshot ---------------------------------------------------------------------- Date: Fri, 25 Jun 1999 15:39:32 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] Trading on the go. [Connie Mack] In adding this comment, I see that I misstated some numbers. I said buy at "18.87" when I should have said "17.87." And I said "18.06" and "18.18" when I meant "17.06" and "17.18." I have included the earlier comment below and made the corrections. TGLO is not acting as I anticipated. The important point here is not to take more than a nominal loss. I have let one half of my position [16.87] go at 16.5. This will give me a 3/8th point loss on 500 shares [$185]. I will hold my other 500 for a look at the close. The ideal, quick resolution for me would be to regain that 3/8th loss on the remaining position. This would require a sale at 17.12 [i.e., I would gain 3/8ths on my lot bought at 16.75, lose 3/8ths on the lot bought at 16.87, and thereby break even.] A trader cannot ask for much more from an unsuccessful trade. There is also this prospect, but not a probably one. If TGLO recovers to 16.87 on good volume [MF is still positively divergent even as the stock has fallen further.], I would consider re-entering. One of the most difficult decisions for a trader or investor is to re-take a position he has just sold. It seems a natural antipathy. Connie Mack Connie Mack Rea wrote: > Here is a sketch of what and why I have been buying TGLO today. > > Yesterday it closed strong. Several my stochastics and MACDs had turned > up a couple of days ago. It looked ripe for a trade, or an investment. > > There was one thing, and an important thing, that bothered me. If > you'll put up BigCharts, 2-day, with the MACD, you'll see what I saw. > The MACD, at about 1:30 started to decline while the stock was staying > steady. I depend heavily on this MACD and several others. > > Though I liked the stock, I do not take the MACDs lightly. I held off > buying. Today price began to fall away rather seriously: 18.37 or so > down to 16.62. > > Now put a 2-day, 5-minute MoneyFlow in the bottom panel. Here is an > instance of MF showing a positive divergence against all of today's > action. > > You are about to see a conjunction of MF, MACD, and trend line support. > To see the support, pull up a 10-day chart and see all the congestive > support around 16.5 and 17. This should be good support in a strong > stock. > > About 1:10 today the MACD turned buy below the trigger line. The best > profits are made when the MACD crosses upward from below the trigger; > and, usually, the farther from below, the greater the profit. > > Notice that between 12:30 and 1:30 price stabilizes. If I am to believe > the indicators, I should be able to buy around 16.75 and 16.87. And > that I am doing. I have one position at .75 and a second at .87. > > A few minutes ago, price rose to 18 but has settled back to 16.87. I > will add a third position at 17.06 and a fourth at 17.18. Each position > will be the same number of shares. I will hold a mental stop for the > two positions I already hold at 16.5 and will take no further loss. > > This entry should be relative safe because of the conjunction of > indicators. If I have read them right, I should be able to take out a > half point, or more if the rebound is strong. The stock is strong > enough to carry overnight. > > Connie Mack > > - - - ------------------------------ Date: Fri, 25 Jun 1999 16:04:41 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] Trading on the go. [Connie Mack] TGLO has come off its 16.12 low and now stands at 16.93. I have re-entered a market order and should be filled at this price. I will carry both positions over to Monday with a combined position averaging about 16.93. I may a little more to say about this trade later when I see the final numbers. Connie Mack Connie Mack Rea wrote: > In adding this comment, I see that I misstated some numbers. I said buy at > "18.87" when I should have said "17.87." And I said "18.06" and "18.18" > when I meant "17.06" and "17.18." I have included the earlier comment below > and made the corrections. > > TGLO is not acting as I anticipated. The important point here is not to > take more than a nominal loss. I have let one half of my position [16.87] > go at 16.5. This will give me a 3/8th point loss on 500 shares [$185]. > > I will hold my other 500 for a look at the close. The ideal, quick > resolution for me would be to regain that 3/8th loss on the remaining > position. This would require a sale at 17.12 [i.e., I would gain 3/8ths on > my lot bought at 16.75, lose 3/8ths on the lot bought at 16.87, and thereby > break even.] A trader cannot ask for much more from an unsuccessful trade. > > There is also this prospect, but not a probably one. If TGLO recovers to > 16.87 on good volume [MF is still positively divergent even as the stock has > fallen further.], I would consider re-entering. One of the most difficult > decisions for a trader or investor is to re-take a position he has just > sold. It seems a natural antipathy. > > Connie Mack > > Connie Mack Rea wrote: > > > Here is a sketch of what and why I have been buying TGLO today. > > > > Yesterday it closed strong. Several my stochastics and MACDs had turned > > up a couple of days ago. It looked ripe for a trade, or an investment. > > > > There was one thing, and an important thing, that bothered me. If > > you'll put up BigCharts, 2-day, with the MACD, you'll see what I saw. > > The MACD, at about 1:30 started to decline while the stock was staying > > steady. I depend heavily on this MACD and several others. > > > > Though I liked the stock, I do not take the MACDs lightly. I held off > > buying. Today price began to fall away rather seriously: 18.37 or so > > down to 16.62. > > > > Now put a 2-day, 5-minute MoneyFlow in the bottom panel. Here is an > > instance of MF showing a positive divergence against all of today's > > action. > > > > You are about to see a conjunction of MF, MACD, and trend line support. > > To see the support, pull up a 10-day chart and see all the congestive > > support around 16.5 and 17. This should be good support in a strong > > stock. > > > > About 1:10 today the MACD turned buy below the trigger line. The best > > profits are made when the MACD crosses upward from below the trigger; > > and, usually, the farther from below, the greater the profit. > > > > Notice that between 12:30 and 1:30 price stabilizes. If I am to believe > > the indicators, I should be able to buy around 16.75 and 16.87. And > > that I am doing. I have one position at .75 and a second at .87. > > > > A few minutes ago, price rose to 18 but has settled back to 16.87. I > > will add a third position at 17.06 and a fourth at 17.18. Each position > > will be the same number of shares. I will hold a mental stop for the > > two positions I already hold at 16.5 and will take no further loss. > > > > This entry should be relative safe because of the conjunction of > > indicators. If I have read them right, I should be able to take out a > > half point, or more if the rebound is strong. The stock is strong > > enough to carry overnight. > > > > Connie Mack > > > > - > > - - - ------------------------------ Date: Fri, 25 Jun 1999 19:37:06 -0400 From: Connie Mack Rea Subject: Re: [CANSLIM] Trading on the go. [Connie Mack] May I add a couple of things to my earlier posts on trading TGLO. My comments are never given with the intention of hustling day trading. Rather, I hope to show that principles and practices of day trading are not irrelevant to investing. I do not encourage anyone to day trade. It's a risky push and can put your headlights out if you don't watch where you're going. Two of the members of my faculty group worry me. They have made sizeable money, hardly at all by day trading, doing short term trades--a few days to a couple of weeks. In fact, they have done better than I have over the last three months. They have a little more than doubled their money. Now they begin to scare me. They want me to teach them day trading. Forget investing, they say. I won't teach them. Neither of them has been in the market more than a year and a half. They've never been broke--which every day trader" ought" to be at least once. They've never even lost half their capital. Which every day trader "will" do at least once. They have yet to suffer an auto-de-fe. My point is this: I don't post to Canslim to proselyte day traders. I discourage day trading unless you've been in the market over five years and you've not just sat on a few positions. What is useful to investors are the principles and practices that traders use to find entries and exits. Canslim is primarily a breakout strategy. Buy strong stocks with high value credentials and wait for them to breakout. Nothing wrong with this strategy. It has a measure of safety built in: One buys on the strength of breaking out. The offset is that you are late to enter and late to get out [by a trader's time table]. A part of this offset is that you buy false breakouts. Buy a couple of these, and you may lose your poise and a lot of money. A breakout may be the beginning of a falling away. You've got to know when to hold 'em and when to fold 'em. Let me see if I can tie some of this together with my trading of TGLO today. If you wish, take a look at my three previous posts. I do not know if TGLO has even a shadowy resemblance to Canslim criteria. Nor do I care. It certainly is not breaking to a new high. But, it is "breaking out" from a long term resistance at about 16, which goes back to mid-December and early January. Too, I read that December low and the June low as a six-month double bottom. Double bottoms are the safest of all entries no matter where the stock is in its travels. When I said in one of the earlier posts that I considered my entry at 16.75 as "relatively safe," I had in the back of my mind those many days of congestive support that appears at 16 or so. Look how many times that 16 area appears. At least six or seven times. This short term breakout of six days ago has held through today. Today's range was a bit over two points; price recovered one point from the low and was reasonably strong on the close. Thus far there is no fault in the breakout. That there has been no fault in the last few days, and none today, gave me reason to keep half of my position [at 16.75; I did let my 16.87 half go when things got a bit shaky late in the afternoon] and to re-enter just before the close [17]. The gelandesprung re-entry is probably the hardest of all choices, for trader and investor. I now hold two 500 share positions that average about 16.87. I am pretty much where I was after I took my first two positions. At the close, how do I look after releasing half of my position and then re-buying? Pull up on BigCharts a 1-day 15-minute chart with MACD in the bottom panel. My 3/7/10 has given a First and Second Level Buy [the 3 EMA through the 7/10 EMA. A slower EMA of 5/10/15 will also give a First and Second Level buy. The MACD is right at a buy from below the trigger line. The OBV is tracking and shows neither a positive nor a negative divergence. Three of the last four bars of the Volume + indicator are black and of increasing height. The Parabolic SAR will turn buy with just another uptick on Monday. MoneyFlow shows only a modestly positive divergence since about 12:00. Indicators I don't follow, but which you might, are: [1] Momentum. It is positively divergent. [2] Williams' %R is powerfully and positively divergent. [3] Volume accumulation is strongly and positively divergent. [4] RSI is positively divergent. Forget, now, about trading, and ask yourself if at this juncture there is reason to enter TGLO at 17. Is entry relatively safe? How much is there to lose on the downside? How much is there to gain on the upside? Answer these questions and you answer the question every trader asks: What's the risk of the trade? Or in the jargon, is this good money management? Though not a trader, you have done about all that I do when I trade. You have used the tools I use, and some I don't. Add further indicators, if you like, but don't give up the 3/7/10 and MACD. They are mechanical give precise [though not necessarily correct] signals. You need preciseness irrespective of trading or investing. Trading and investing rules ought to be neat, divisible, and fundamental like a carpenter's square. There is no reason why you can't apply the same trader's rules to a stock that is breaking through to a 52-week high. With the exception of a single point or two--e.g., you've no resistance for a 52-week high--you're thinking like a trader. When you're ready to depart, think like a trader. And in between, you can count your money. Trading and investing is a bit like hide-and-seek. The stock-seeker thinks he can find a hiding stock. Give up this presumption, and the hide-and-seek of trading and investing is no fun. And hide-and-seek ought to be fun--but only if the hiding stock is found. The stock must in a sense hide discoverably, for it would be no fun for the stock to hide absolutely. Connie Mack - - ------------------------------ Date: Fri, 25 Jun 1999 22:03:06 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Trading on the go. [Connie Mack] Connie, For a CANSLIMer, TGLO would never have even been considered. With an RS of 6 and an EPS of 17, it is so far below proper CANSLIM horizons that it wouldn't have even been spotted. Add to that two of the prior four qtrs fell well under the respective year prior qtr in earnings, and U/D is a miserly D with Timeliness even worse at E, and there are few redeeming CANSLIM qualities about this one. Hope it turns out a good day trading vehicle, but it's definitely not CANSLIM. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - -----Original Message----- From: Connie Mack Rea To: canslim@lists.xmission.com Date: Friday, June 25, 1999 7:37 PM Subject: Re: [CANSLIM] Trading on the go. [Connie Mack] I do not know if TGLO has even a shadowy resemblance to Canslim criteria. Nor do I care. It certainly is not breaking to a new high. But, it is "breaking out" from a long term resistance at about 16, which goes back to mid-December and early January. Too, I read that December low and the June low as a six-month double bottom. Double bottoms are the safest of all entries no matter where the stock is in its travels. - - ------------------------------ Date: Fri, 25 Jun 1999 22:07:31 -0400 From: "Tom Worley" Subject: [CANSLIM] Earnings Forecasts Worth noting that corporate profits were up 6.2% for the first quarter, vs down 1% in the final quarter of 1998. And Second quarter reports, soon to be published, are expected to be strong. I have seen some forecasts already looking for a 10% gain overall. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - - ------------------------------ Date: Sat, 26 Jun 1999 07:44:12 -0500 From: SCOTT COOPER Subject: [CANSLIM] Broker with level II I know this is not canslim but thought I could get some good ideas from this group. I am looking to change brokers (from Schwab ) to go with a brokerage firm that has low commission and real tick 111 data. I am looking at JPR Capital. I would like feed back both good and bad from traders that use level 11 or JPR Capital. Thank you Scott - - ------------------------------ Date: Sat, 26 Jun 1999 10:02:28 -0400 From: "Tom Worley" Subject: [CANSLIM] DGO list - snapshot As I expected, with a lower and more stable VIX, the list grew this week, and I saw a lot more basing patterns. A total of 168 stocks made the list compared with 154 the prior week, which was also up. Nearly 10% growth with the broader mkt down, not bad. Here's the margin notes from my "15 second scan" (timed it this morning, for most charts it's less than 10 seconds, so do your own homework). Remember that the basic list consists of stocks with RS and EPS both of 80 or better, Accumulation/Distribution (A/D) of B or better, and within 5% of their 12 month high during the prior week. All I am doing is looking at the chart pattern, not reviewing any other CS elements. Data is accurate as of Friday's close. BASES AND BASING: SFP, FWRD, JAKK, MNMD??, TWRI??, CHKP (after a c&h), DY ("long" base), FM, VRLN (looks like a takeover, but just a sale of a subsidiary apparently), KARE, FRK, ELK, GENZ (short base), AMM, PTI (unbelievable base), ALNT, TECUA, ATSN, FDC, AMRI, OGNB, SJW, ECL, AT. SLOPPY BASES: DRTE, ALTR, SANM, ASTE. Saucer: MTW, WAT. Teacup, handle: NTT, POSI, FULL. Cup and handle??: RMDY Breakout: CEDC, XETA, DGX, APPB (attempt failed), ASD (2nd b/o failed). LLUR - UNPH Takeovers (don't confuse these charts with a buyable base): LBFC, FCWI, BVSI, ABRX, WLFI, HLP, WLFI, HLP, ATPX, EVR. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - - ------------------------------ Date: Sun, 27 Jun 1999 18:16:07 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] DGO list - snapshot At 10:02 AM 6/26/99 -0400, you wrote: >BASES AND BASING: >SFP, FWRD, JAKK, MNMD??, TWRI??, CHKP (after a c&h), DY >("long" base), FM, VRLN (looks like a takeover, but just a >sale of a subsidiary apparently), KARE, FRK, ELK, GENZ >(short base), AMM, PTI (unbelievable base), ALNT, TECUA, >ATSN, FDC, AMRI, OGNB, SJW, ECL, AT. > >Tom Worley >stkguru@netside.net >chat with me at ICQ # 5568838 >get ICQ software at http://www.icq.com/icqhomepage.html ATLANTA and DALLAS, May 13 /PRNewswire/ -- First Data Corporation (NYSE: FDC - news) today announced it has received clearance from the Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for its proposed acquisition of the outstanding public shares of Paymentech, Inc. (NYSE: PTI - news). A heads up... Regards, Frank Wolynski - - ------------------------------ End of canslim-digest V2 #637 ***************************** 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.