From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #655 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 Wednesday, July 21 1999 Volume 02 : Number 655 In this issue: RE: [CANSLIM] Timeliness Rating - Tom [CANSLIM] VIX - Tom W. [CANSLIM] DGO Services Re: [CANSLIM] VIX - Tom W. Re: [CANSLIM] Timeliness Rating - Tom Fw: [CANSLIM] "L" [CANSLIM] DELL [technical stuff]. [Connie Mack] [CANSLIM] DELL [Technical stuff.] [Connie Mack] [CANSLIM] DELL [Connie Mack] [CANSLIM] VIX [CANSLIM] DELL. [Connie Mack] [CANSLIM] BNBN and DELL. [Connie Mack] VRIO (was Re: [CANSLIM] "L") [CANSLIM] New tool ---------------------------------------------------------------------- Date: Mon, 19 Jul 1999 22:54:16 -0700 From: "mikelu" Subject: RE: [CANSLIM] Timeliness Rating - Tom I went to a seminar where WON said "We don't use that for anything." Mike - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Walter Stock Sent: Monday, July 19, 1999 10:19 PM To: Canslim Group Subject: [CANSLIM] Timeliness Rating - Tom Hi Tom, I now have access to Daily Graphs (print version only), and was wondering about the often-mentioned Timeliness rating. The definition of the rating on the last page of DG seems vague, perhaps intentionally so. Could you (and/or others) shed some light on this? How is it derived? How much importance would you ascribe to it in making a stock purchase decision? Thank you, Walter Oakville, Ontario, Canada - - - - ------------------------------ Date: Tue, 20 Jul 1999 06:40:10 -0400 From: postwhit@sover.net Subject: [CANSLIM] VIX - Tom W. > About two years ago, it was mentioned again in this group > and discussed at some length, and I began to pay even closer > attention as by then I had seen the relationship between it > and a healthy CANSLIM environment. Don't know why it is, > just that it is for me a good indicator on "M". Do you think your success with VIX as an indicator has anything to do with your focus on smaller stocks, which have been loathe to move unless the market was become over blown with enthusiasm? I personally view it as an indicator much like sentiment numbers, and it looks dangerously low when it is in the low 20's. As I understand it, VIX is a panic/complacency indicator, which is currently at it's lowest point since July 1998 (a classic CANSLIM turn). Thought perhaps your focus on smaller stocks, which seem to require (at least over recent memory) virtual capitulation by bears to get them moving, could be the reason you liked the VIX. Appreciate the response. Jeff - - ------------------------------ Date: Tue, 20 Jul 1999 06:56:39 -0400 From: "Tom Worley" Subject: [CANSLIM] DGO Services For those members subscribing, or considering subscribing, to Daily Graphs Online, thought you'd like to know they plan a new software release Sep 1. There are apparently many new features, but two I know of are a daily (vs weekly) update on earnings data; and a Datablock for all stocks, not just those in the books. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - - ------------------------------ Date: Tue, 20 Jul 1999 07:06:44 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] VIX - Tom W. Hi Jeff, Granted, I am pretty old fashioned and still believe in the "I" and "S" of CANSLIM, hence my involvement with small cap stocks. In any case, the person who first tried to teach me about VIX was only buying mid and large cap stocks, and felt VIX was a useful indicator for him, so don't believe it's limited to small cap trading. Lack of volatility (remember VIX is a volatility index) does not equate to complacency. Rather, it equates to a low level of emotional fear influencing the mkt. During times when there is no reason for strong fears to be present, lower volatility is logical. Right now, the big fear is further rate hikes by the Feds, esp with Mr. G speaking on Thursday. So yesterday's jump in VIX didn't surprise me, in fact I would have been surprised had it stayed down. If I see VIX rising sharply, it would serve as an addl indicator of a change in "M". Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - -----Original Message----- From: postwhit@sover.net To: canslim@mail.xmission.com Date: Tuesday, July 20, 1999 6:40 AM Subject: [CANSLIM] VIX - Tom W. > About two years ago, it was mentioned again in this group > and discussed at some length, and I began to pay even closer > attention as by then I had seen the relationship between it > and a healthy CANSLIM environment. Don't know why it is, > just that it is for me a good indicator on "M". Do you think your success with VIX as an indicator has anything to do with your focus on smaller stocks, which have been loathe to move unless the market was become over blown with enthusiasm? I personally view it as an indicator much like sentiment numbers, and it looks dangerously low when it is in the low 20's. As I understand it, VIX is a panic/complacency indicator, which is currently at it's lowest point since July 1998 (a classic CANSLIM turn). Thought perhaps your focus on smaller stocks, which seem to require (at least over recent memory) virtual capitulation by bears to get them moving, could be the reason you liked the VIX. Appreciate the response. Jeff - - - - ------------------------------ Date: Tue, 20 Jul 1999 07:19:17 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Timeliness Rating - Tom Hi Walter, Timeliness is a proprietary formula, so it's natural they would be vague in how it is calculated. Keep in mind it is a long term indicator, generally useful to a long term investor and completely useless to a day trader or very short term investor. The intent of it is to suggest how one stock will perform over the next 12 months compared to another. Because of its long term nature, it is less sig to me than many others, such as RS, EPS, up/down ratio and GRS. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - -----Original Message----- From: Walter Stock To: Canslim Group Date: Tuesday, July 20, 1999 1:30 AM Subject: [CANSLIM] Timeliness Rating - Tom Hi Tom, I now have access to Daily Graphs (print version only), and was wondering about the often-mentioned Timeliness rating. The definition of the rating on the last page of DG seems vague, perhaps intentionally so. Could you (and/or others) shed some light on this? How is it derived? How much importance would you ascribe to it in making a stock purchase decision? Thank you, Walter Oakville, Ontario, Canada - - - - ------------------------------ Date: Wed, 21 Jul 1999 18:30:01 +1200 From: "Dean Edwards" Subject: Fw: [CANSLIM] "L" Privyet =3D (Hi) Everyone! I have been away overseas in Russia on holiday for a month. My only observation; since being back is that the big caps are making new highs a= s usual and the rest of the market is lagging. For your information: CABOT'S INTERNET STOCK OF THE WEEK Diversifying Your Net Holdings Every day, we correspond with investors who see companies like America Online and Amazon.com as the same. . .Net firms with high-flying stocks. What th= ey fail to realize is that these two companies are, in fact, very different. AOL is an Internet Service Provider and Amazon is a retailer. Saying they are the same is like saying Wal Mart is the same as your local phone company. The fact that firms rely on the Internet to generate their business doesn't m= ake them the same! William O'Neil, (of Investor's Business Daily fame) separates Internet stocks into four broad groups: Network Services (such as Inktomi and Network Solutions), ISPs/Content (AOL and Yahoo!), Internet Software (Healtheon a= nd CMGI) and E-commerce (Amazon.com and eBay). It might surprise you to know that these groups move independently of each other. E-commerce stocks might be hot while ISPs are resting. Internet Software firms could be surging while Network Services stocks are cold. For this reason, it's a good idea to diversify across all four groups as you build your Internet portfolio. And if you enjoy short-term investing (or trading) it's important to know where the streng= th (or weakness) is. If you're wondering about companies like Cisco and Microsoft, which deriv= e much of their revenue from the Internet, O'Neil categorizes them in the Networking and Software groups, respectively. These two powerhouses (and the PC make= rs) aren't considered "pure-play" Net companies, so they are found in differe= nt groups. Grouping stocks is not an exact science, but it helps you to determine where pockets of strength can be found. As momentum investors, we always favor strong stocks over weak ones. And today the strongest group of Internet stocks is the Network Services group. The weakest group is E-commerce. So why do we care which Internet groups are = the strongest? Simply put, the strongest groups tend to stay strong for a relatively long period of time. There's nothing more bullish than new hig= hs, and the Network Services group is close to breaking out to new high territory. If you follow the Internet industry closely, you can probably guess which stocks belong to the weaker E-commerce group. eBay for instance, has been struggling lately as a result of outages and negative press about increas= ed competition. On the other hand, the strong Network Services group contain= s Exodus Communications (EXDS), a good performer (and our July 6 Internet Stock of the Week). Stock groups are either in favor or out of favor. And while it's importan= t to have holdings across several groups, the best time to buy a stock is when it's leading a strong peer group higher. When this is the case, the stock is enjoying good sponsorship. And with plenty of support, the odds are great that the stock will push higher. If you're wondering which group will be the next one to fly, we have no idea. It's not wise to anticipate where the market is headed, because it'll alw= ays keep you guessing. Remember that =ECThe trend is your friend.=EE And righ= t now, the positive trend is with the Network Services stocks. In our mind, that= 's the best place to look for growth opportunities that are poised for continued strength. So in that vein, we have another stock in the powerful Network Services group as today's top pick. Verio (VRIO) is a provider of Internet services to small and medium sized businesses. Its services include connectivity services (dial-up, ISDN and DSL), Web hosting and domain name registrations. It ha= s all of the bases covered! ______________________________ VERIO (VRIO 83 NSDQ) In the early days of the Internet, the most visible companies were new retailers like Amazon.com and eBay that moved quickly to stake a claim in this new retailing channel before the more established companies could settle = in. Yahoo, Netscape, E-Trade, Ameritrade and MindSpring were other early winners, partially by virtue of their ability to get their name in front of the individual investor first. The reason these companies were first was that their founders had a brand new vision. And they pursued that vision quickly, unimpeded by any existing bricks and mortar operations. More entrenched organizations (think Merrill Lynch= , Citibank, Barnes and Noble) certainly saw the Internet unfolding and saw competitors taking advantage of the new media. But they were slow to adju= st to the change. However, a shift is happening! And as the weeks and months go by, more an= d more established companies are getting on the Internet. To get there, the= y need help. And that's where Verio comes in. Verio is the world's largest Web hosting company, with more than 240,000 = Web sites in over 127 countries. In the U.S. it has a Network Operations Cent= er in Dallas, Texas manned 24 hours a day, 7 days a week to ensure that all Web sites are functioning as designed. But from the business owner's point of view, Verio seems to be more like local people helping him set up a successful online extension of his existing business! So yes, Verio boasts the strength, reliability and consistency of a natio= nal provider. But it offers the responsiveness of a local organization. In fa= ct, the Verio network was built piece by piece through acquisition. Verio stitched together 29 national nodes and 190 local POPs (points of presence) to bec= ome what it is today. Holding it all together is the Dallas, Texas Operations Center and a 15-y= ear agreement with Qwest that supplies Verio with fast and cheap long-distanc= e fiber-optic transmission capacity. At the ends of its network, wherever the customer is located, Verio has t= he expertise to provide the customer with the right speed connection for his requirements. These can range from ISDN services to always-on ADSL and T1 lines. While competitor Exodus (our pick two weeks ago) focuses on the big Fortu= ne 500 accounts like USA Today, Gateway, eBay and Blockbuster, Verio prefers to serve small and mid-size companies. Major clients include the Air Force Association, American Horticultural Society, United Way, Head USA, District of Columbi= a Bar and Central Atlantic Toyota Dealers. Now maybe this client list isn't as recognizable as Exodus'. But the fact is there are tens of thousands more clients of this size, all in need of the services Verio provides. And Verio already provides services in 127 countries, so it's ready to ta= ke advantage of the expansion that's now beginning in Europe, among other places, that should rival the past couple year's growth in the U.S. In fact, Veri= o is already the biggest Web site host in Europe, hosting over 50,000 sites. So what services does Verio provide, exactly? First, there's the hosting service, which provides the customer with at least part of a computer sys= tem connected to the Internet. Then there are the tools that allow the custom= er to use that site, and (most commonly) to get orders from it. There's also Web site design. Using proven =ECforms=EE, Verio will design= a complete, workable e-commerce site for a price ranging from $1,495 to $9,995. Such a site might incorporate shopping carts, searchable databases and ev= en editable newsletters. Thus Verio makes it easy for small and mid-sized business to get online a= t higher speeds and to sell their products and services online by packaging all the components of e-commerce into a set of easily implemented turnkey solutions. The company also helps its customers set up virtual private networks (VPN= s), the emerging standard for intra-company communications. Such a system use= s the infrastructure of the Internet but adds firewalls, which block out all bu= t authorized company personnel. With a VPN, employees in far-flung cities c= an collaborate on projects as easily as employees in the same building! At the heart of the company is CEO Justin Jaschke, who had the foresight = to see the tremendous demand that would evolve for these services as the Interne= t grew. Behind him are over 300 engineers and customer support personnel, w= ho keep the fast-growing network operating at top speed and make sure the customer is always satisfied. And on the front lines there are over 300 employees = in sales, making sure Verio remains the world's largest Web hosting company. They market Verio's services nationally through direct mail, telemarketing and online marketing campaigns. Like most great Internet companies, Verio is focused on growing the business, not on making a profit. In fact, profits are probably a few years away. B= ut the losses are expected to narrow in the years ahead. In the quarter ende= d March 31, revenues grew 160% to $55.1 million, while the loss per share w= as $1.02 per share, down from a loss of $1.75 four quarters before. There ar= e 28 million shares outstanding, of which management owns 4%. The stock shows great sponsorship. Still, it follows the direction of the broad market. It bottomed last October and it peaked in April, just like = the rest of the market. Since the April top we've seen a six-week pullback th= at ended in May. . . . .and that was good, since most stocks didn't bottom until June. And now the stock has zoomed ahead to new highs! Momentum Analysis tells us there's only one reason for this strength: Investors are becoming more and more bullish about this company's growth prospects! They're continually revising their opinions upward, and they'r= e willing to pay more and more for this stock! The stock broke out to a new price high of 74.75 on Friday, July 9 and continues to blast ahead on big volume as we write this. While it may pull back to the 75 area to build a base, it's equally likely it could keep climbing to 100 or more before pausing. .. . . .in which case buying now is your best bet. And that's what we recommend! - ----- Original Message ----- From: Dave Cameron To: Sent: Tuesday, July 20, 1999 4:53 PM Subject: Re: [CANSLIM] "L" > Tim, > > Good point. I left EXDS off the list. But... EXDS had a great > breakout from a 2 month base about 3 weeks ago. It lofted by > about 50% from that base - way too fast - and has given back about > 60% of the 50% lift. Regardless, EXDS holds about 80% of the > web hosting business. They are spending money to expand faster > than they are making it. If you switched EPS/RS to RPS/RS. > (Revenue replacing earnings) - both EXDS and QWST would be 95+/95+. > Combined with the industry strength, this keeps me in. - - ------------------------------ Date: Tue, 20 Jul 1999 12:15:54 -0400 From: Connie Mack Rea Subject: [CANSLIM] DELL [technical stuff]. [Connie Mack] DELL is sitting on two instances of moderate support since May. I am taking positions at 40.75 and will buy down to 39 in about 1/2 point increments. I will also look to buy up at 41.25 and 41.5. I am presuming that DELL has been pretty thoroughly shaken out. You must be careful. The S&P 500 and the NASDAQ are taking big hits. I am less concerned about the DOW for the moment. The NASDAQ has just passed through some minor support at 2760. There just isn't any clear, firm support until about 2675 if the breakdown continues. The S&P500 has no firm support until 1365. It now stands at 1386. I have also bought: WIT FSR WCS FHS. I am looking to swing trade rather than day trade all my stocks. Connie Mack - - ------------------------------ Date: Tue, 20 Jul 1999 12:32:01 -0400 From: Connie Mack Rea Subject: [CANSLIM] DELL [Technical stuff.] [Connie Mack] I neglected to mention that I am hoping to buy some SPLS. Watch the MACD for an entry point. The stock has already undergone a First and Second Level 3/7/10 EMA buy; the Third Level buy will occur with just a small move up. On the intraday chart: Notice that the 3/7/10 EMA has a near double between the 3 and 7 EMA. There is probably a bit more down yet. The volume is pretty heavily negative, but is diminishing the last 20 minutes or so. The MACD and 3/7/10 EMA have just turned buy. Connie Mack - - ------------------------------ Date: Tue, 20 Jul 1999 15:15:22 -0400 From: Connie Mack Rea Subject: [CANSLIM] DELL [Connie Mack] Here is an opportunity to see how indicators are used in trading DELL. I'll use BigCharts and Island to comment. Pull up DELL on BC with an intraday, 5-minute chart. Pull up Island and stick it in the bottom left corner. I have three positions in DELL at this time averaging 41.25. On BC DELL has just made a double bottom at 40.75. The 3/7/10 EMA shows a doubling. At 2:59 the last sale is 41 7/64. Because BC is 15 minutes delayed, you can fill in the chart in your mind (or print out the chart and fill it in). I'd like to see the 41.25 high at 1:15 taken out. If it were to be, then I'd be interested in another position around 41.37. For me, DELL is acting very well amidst declines everywhere in the indexes. That holding up does not mean I can relax. It merely means that for a trader the probabilities favored entries between 39 and 41.5. The MACD is a bit ambiguous, but promising. As I am positioned now, I can empty all my positions with a nominal loss. Since DELL has made a double bottom at 40.75, I would consider a break to 40.5 as a breach and be ready to clear out. My earlier intention to buy down to 39 has, therefore, been altered because of the double bottom. To say this is an instance of how one must alter his action as things change. Connie Mack - - ------------------------------ Date: Tue, 20 Jul 1999 21:45:15 +0200 From: Johan Van Houtven Subject: [CANSLIM] VIX For those on the list who are not familiar with VIX the following might be usefull (from my archive): The CBOE's Volatility Index is known by its ticker symbol VIX. It is one measure of the level of implied volatility and was developed by the CBOE in 1993. VIX measures the volatility of the U.S. equity market. VIX is updated throughout the day by the CBOE in real time using OEX bid/ask quotes. VIX is calculated by taking the weighted average of the implied volatilities of eight OEX calls and puts with an average time to maturity of 30 days. VIX is therefore a measurement of 30 day index options. It is not a measure of the volatility of any one individual stock or option. It does not measure the implied volatility of any other index other than the OEX. However, many traders use it as a general indication of index option implied volatility. **VOLATILITY INDEX** One of the indicators I have talked about is the VIX. This is another indicator from CBOE whose full name is Market Volatility Index. This index, while it has no nice fixed number, (like >0 = oversold;<0 =overbought), can be best evaluated with the use of simple 20 period Bollinger bands. When the VIX rises to meet or exceed the 20 day upper band, you can generally count on a rally within the next two days....conversely, when the VIX drops near or through the lower band, you can expect the market to reverse and fail within the next two days....It doesn't ALWAYS work that way, but when used in conjunction with some other simple indicators can give you a pretty good idea of market direction near term. Johan - - ------------------------------ Date: Tue, 20 Jul 1999 15:49:12 -0400 From: Connie Mack Rea Subject: [CANSLIM] DELL. [Connie Mack] DELL is notorious for sinking between 9:30 and 10:00. Often the falling away is good entry point. It is equally notorious for its action in the last 15 minutes of trading, even the last five. Because it is such a good trading stock, the presence or absence of traders early in the morning and late in the day call for more than even due diligence. Right now, the 41.25 resistance looks like it may stop any swing up. The last sale is 40 63/64. I won't know what to do until probably the last five minutes. I could hold all positions with a 41 or thereabouts close. Were there a last minute rally, I would consider adding slightly to my positions for a bounce tomorrow. Connie Mack - - ------------------------------ Date: Tue, 20 Jul 1999 17:52:03 -0400 From: Connie Mack Rea Subject: [CANSLIM] BNBN and DELL. [Connie Mack] A couple of members have asked me about BNBN in the last few days. I do not know if either bought the stock. I liked the stock and had considered buying it; however, I got side-tracked, and forgot about it. Today it dropped 3/4 point. This could be a nice entry. If you look at the intraday chart, you'll see a positive divergence on the MACD for the last half of the day. The implication is for a bounce tomorrow. Beyond tomorrow, I am presuming that the correction in the indexes is just that, a correction that is a buying opportunity. I'd be surprised if there were much more on the downside. Until I see otherwise, I will be about 80 percent cash invested and will consider using margin for further trading in DELL. I am carrying all my DELL overnight. If you followed DELL the last 7-10 minutes on Island, you saw those many whole lot sales of 300-1000 shares. The traders are lightening up in the closing minutes. At other times you will see many odd lots; today there was a lot 17 and several between 20 and 40 that were trying to buy at 40. There are comparable odd lots on the sell side during the day. There is a gap to be filled around 40.75; also there is support in this area. The 41.25 resistance will still be in effect tomorrow. Once through that, there is money to be made of about 3.5 points. Connie Mack - - ------------------------------ Date: Tue, 20 Jul 1999 19:36:11 -0400 From: "Tom Worley" Subject: VRIO (was Re: [CANSLIM] "L") Welcome back, Dean On VRIO - nice story, but hardly CANSLIM. EPS 47, lost $5.24 for 1999 and expected to lose another $5.00 in 2000, with a loss of $4.30 in 2001. So while revenue may grow, the bottom line isn't expected to do much for several years. And the mkt cap ratio is over 17 as well. Needless to say, debt is slightly high (333%), and management has little at risk aside from their jobs (mngmt ownership 4%). So while this may be a great success story for the future, hardly a CS candidate. Thanks for the story, tho. I learned a little more about the industry in reading it. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - -----Original Message----- From: Dean Edwards To: canslim@lists.xmission.com Date: Tuesday, July 20, 1999 12:17 PM Subject: Fw: [CANSLIM] "L" Privyet = (Hi) Everyone! I have been away overseas in Russia on holiday for a month. My only observation; since being back is that the big caps are making new highs as usual and the rest of the market is lagging. For your information: CABOT'S INTERNET STOCK OF THE WEEK Diversifying Your Net Holdings As momentum investors, we always favor strong stocks over weak ones. And today the strongest group of Internet stocks is the Network Services group. The weakest group is E-commerce. So in that vein, we have another stock in the powerful Network Services group as today's top pick. Verio (VRIO) is a provider of Internet services to small and medium sized businesses. - - ------------------------------ Date: Wed, 21 Jul 1999 09:29:59 -0500 From: Dave Squires Subject: [CANSLIM] New tool Hi all, For those who like graphs, Excite has a cool new feature called the Evaluator. It's worth a look. http://www.quicken.excite.com/investments/stkeval/?symbol=NTAP&cmetric=rev&histtim=ann&grtim=1yr DSquires - - ------------------------------ End of canslim-digest V2 #655 ***************************** 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.