From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #78 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk canslim-digest Monday, January 5 1998 Volume 02 : Number 078 In this issue: [CANSLIM] My Watch List, "M" / Divergence [CANSLIM] To: canslim@xmission.com Re: [CANSLIM] My Watch List, "M" [CANSLIM] World Mkts Re: [CANSLIM] To: canslim@xmission.com [CANSLIM] Market Direction [CANSLIM] Small Cap Stocks [CANSLIM] Re: Learn and Profit [CANSLIM] Re: Learn and Profit [CANSLIM] Strategy to Add to Portfolio Re: [CANSLIM] Re: Learn and Profit [CANSLIM] BTO LBOR MODT [CANSLIM] I'm Back! Re: [CANSLIM] IBD says downtrending Re: [CANSLIM] Small Cap Stocks ---------------------------------------------------------------------- Date: Sun, 04 Jan 1998 12:13:15 -0500 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] My Watch List, "M" / Divergence Tom and Connie Mack: I'm a digest subscriber, so I hope all will excuse my inability, or unwillingness, to submit my comments attached to the specific notes to which they are addressed. Connie: Thank you for your CRY illustration. I will study it in earnest. I think there is great opportunity to utilize your teachings to acheive appropriate entry into CANSLIM stocks which afford fair, technically accurate, but prudent stop placement. I'm all ears (and eyes), Connie Mack. Thank you also for your comments concerning the "M", although they were not couched in specific CANSLIM terms. My "M" analysis attempts to be as mechanical as WON describes it in HTMMIS, Chapter 7 re: bottoming and topping action, distribution days, follow through days, etc. The market must tell us when it is safe to buy stocks, and the news, analysts, comments of friends, relatives and people on the street should be actively and strictly ignored. Speculation is more about self-examination, self-control, and self knowlege, than any other single topic. Technical analysis, of issues and the market in general, is the means to that end, in my view. Your artful descriptions of the trader's psyche and goals continually impresses me, and provoke me to greater insight into my own development as a speculator. Thank you. Tom: I seem to be unable to avoid offending or provoking you with my comments on the "M" (which is really the only time I chime in and participate in this group discussion). However, you asked what people thought about the the CANSLIM "M", so here goes. Although I continue to read, enjoy and respect your thoughtful analysis of the markets, economy, etc., I must continue to suggest that your efforts to "understand" the market are the complete antithesis of my efforts, and, I believe, the most dangerous disease that can aflict speculators. Perhaps you are an investor, which may explain the dicotomy? I will never figure it all out, I am no "grand thinker", and never was and never will be. In fact it is my "thinking" that usually cost me the most money. When I have an opinion, it is usually a good bet that I'm about to take a serious loss. When I fight with the "M", I inevitably lose. When I fail to place a stop because I think I found a "new leader" (QCOM most recently), ignore signals in other indices (like the Dow in early December), watch my stock break technical resistance and think that it will surely bounce, that's when I get killed. When I listen to what the "green one" says, worry about Asia, wish that techs and oils will just bottom so I can buy them cheap and makes extraordinary returns, I'm probably about to get wiped out. When I am in a state of abject "mindlessness" about the "M", my open positions, stop placement, etc., I make money. The more "mindlessness" I acheive, the more I seem to make. "You do not need to know what the market is going to do! All you need to know is what the market has actually done! This is the key!" WON, HTMMIS, p. 58 We made a bottom in this downtrend on December 19. One percent on volume days (follow through days) occurred in the Nasdaq, NYSE and SP on both December 29 and 30. Both within the 3-10 day window. December 31 was a distribution day (higher daily volume, higher high, but insignificant price appreciation from the day before) on the Nasdaq, but not the NYSE or SP. A distribution day after follow through days is not an outright sell signal, just a cautionary signal. Distribution occurs as the market sorts out and commits to a new uptrend. Puts calls ratio hit a 52 week high on 12/19/97 and bullish sentiment took a dive just as the new year began. Leadership appears to be coming from directions other than utilities, soaps and detergents and other defensive sectors. If you want to listen to the news, Ralph Accampura is bearish for Pete's sake. That's encouraging! Wonder what Garzarelli is saying? Whoops!! I'm thinking again. In my view, that's what the "M" has done under a CANSLIM analysis, and I'm buying stocks. What is it going to do? Will it fail with sell signals coming from the Dow (which I missed) like the last Nasdaq uptrend which began with the bottom of 11/13? I will wait to be told, by the "M" and not CNBC, if I can remain disciplined. That's what the market is telling me it has done, as best I can hear it. If it has told me true, it should be telling us a good story over the intermediate term. As my three year old child commented when asked about the gender of her imminently expected sibling, "we won't know 'til it comes out". Others? Jeffry White - - ------------------------------ Date: Mon, 05 Jan 1998 02:41:08 -0500 (EST) From: OWENTIME@delphi.com Subject: [CANSLIM] To: canslim@xmission.com Market direction With this discussion of Asian worries and other walls of worry; has anyone a guess if the superstition about the first 5 days of January (to rally or not) will sketch the overall curve of the DOW / NASDAQ direction in '98? Will this week reveal the entire trend of the market? - - ------------------------------ Date: Mon, 5 Jan 1998 06:51:33 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] My Watch List, "M" Jeffry, whatever it takes to get more members to participate! Actually, I agree with most of what you said. I agree fully with WON's position that you let the mkt tell you what it has done, but I also agree with his philosophy that you let the mkt tell you what it will do. In that light, I add to WON's technical approach any other factors that I expect will be a major influence on short term direction, which includes expected economic reports. As a broker, when I was wired to the mkt minute by minute, the last thing I wanted to do was enter an order for a client in the face of an opposing mkt trend, be that a trend I expected to last for hours, days or weeks. No client is happy to have bot a stock at 53, only to have it close at 50, even if they agreed to the trade at the time it was trading 53. Same goes for every member here. Fighting the tape is foolhardy, and I do not agree that my comments and posts are suggestive of doing that, rather they are intended to help educate and inform this group of the various dynamics that control the short term direction of the mkt. If they are not achieving that, then someone should say so and I will shut up. Yes, I am concerned about the short term direction and health of the mkt. And, yes, during the next week some members here will enter buy and sell orders regardless of "M", or their interpretation of it. If my comments and "education" help them time those orders better, then I have accomplished something. If I can get more members just thinking about "M", much less discussing it, then I have also done something that may benefit me as well as many other members. However, I don't recall WON ever saying to disregard upcoming events nor suggesting you should not try to anticipate the mkt. In fact, much of CANSLIM is designed to HELP you anticipate the future mkt. I am never offended by comments opposing anything I have written when they are as thoughtful and substantiated as yours. I am appreciative of those members that have chosen to respond, including you. If I didn't seek countering comments, I would not have asked for responses. I recognize that I am particularly cautious right now, as I wait for a resumption of "normal" mkt conditions to see where we will go for the next few weeks. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - -----Original Message----- From: Jeffry White <"postwhit@sover.net"@sover.net> To: canslim@mail.xmission.com Date: Sunday, January 04, 1998 7:06 PM Subject: [CANSLIM] My Watch List, "M" / Divergence >Tom: > >I seem to be unable to avoid offending or provoking you with my comments >on the "M" (which is really the only time I chime in and participate in >this group discussion). However, you asked what people thought about >the the CANSLIM "M", so here goes. > >Although I continue to read, enjoy and respect your thoughtful analysis >of the markets, economy, etc., I must continue to suggest that your >efforts to "understand" the market are the complete antithesis of my >efforts, and, I believe, the most dangerous disease that can aflict >speculators. Perhaps you are an investor, which may explain the >dicotomy? > >I will never figure it all out, I am no "grand thinker", and never was >and never will be. In fact it is my "thinking" that usually cost me the >most money. When I have an opinion, it is usually a good bet that I'm >about to take a serious loss. When I fight with the "M", I inevitably >lose. The more "mindlessness" I acheive, >the more I seem to make. > > "You do not need to know what the market is going to do! All you need > to know is what the market has actually done! This is the key!" WON, >HTMMIS, p. 58 > - - ------------------------------ Date: Mon, 5 Jan 1998 06:54:56 -0500 From: "Tom Worley" Subject: [CANSLIM] World Mkts As a follow on comment to my last posted response, it appears that despite Japan and Hong Kong losing ground last night, the futures are trying to reverse, and Europe is doing nicely. S. Korea had a good day, and I am wondering if the "Asian" crises is now singly focusing on that country, and taking guidance there (least that has seemed to be the case lately). Right now looks to me like a slight positive to the opening bell. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - - ------------------------------ Date: Mon, 05 Jan 1998 14:46:50 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] To: canslim@xmission.com On Mon, 05 Jan 1998 02:41:08 -0500 (EST), you wrote: :Market direction : :With this discussion of Asian worries and other walls of worry; has : :anyone a guess if the superstition about the first 5 days of January :(to rally or not) will sketch the overall curve of the DOW / NASDAQ=20 :direction in '98? Will this week reveal the entire trend of the market? Your characterization of this as "superstition" seems accurate here. I've always thought of superstition as something to be overcome, done away with, ignored, seen through and otherwise dispelled. Too many of them are likely to sink you. "If the sun or moon were to doubt, they would immediately go out." - William Blake - -Dan Musicant - - ------------------------------ Date: Mon, 5 Jan 1998 08:11:48 -0800 From: "Ken Davidson" Subject: [CANSLIM] Market Direction In all of my years of experience I have never seen the market do the same thing twice even if it seems that it should. For example, the Dow just set a new record by being up over 20% for 3 years in a row. Will we see 4 years, who knows, but I doubt it. Market history is important to look at when judging the market but should never be accepted as a true guide to where the market may go. There are all kinds of market indicators to tell us the direction from hemlines to the winner of the superbowl . I like the hemline one myself. It's actually been quite accurate the past few years. One of the best historians on the market is Yale Hirsh. He tracks just about everything. For example, last year he said that Tuesday's had the most up days of the year. However, that was last year. This year could be Friday's but we won't know until the end of the year. I'm expecting the market to be relatively flat with some great intra day volatility this year. The first quarter will probably be up, maybe even 10% but then it will be sideways for the rest of the year. Being a index trader, direction is important and for that reason I only like to look at the market month to month. Most people here are stock traders. When I was a stock trader I put all of my study into fundamentals and the psychology of that segment of the market to find the true direction for that stock. Even the 1987 crash didn't see every stock go down!!! Have a great day!! Ken www.agoraoutlook.com The information contained in this commentary is based upon data that is believed to be accurate, but is not guaranteed, and subject to change without notice. All projections, forecasts, opinions, and track records cannot be guaranteed to equal our past performance. Persons reading this are responsible for their actions. Officers and employees of this publication may at times have a position in the securities mentioned, or related services. >Market direction > >With this discussion of Asian worries and other walls of worry; has > >anyone a guess if the superstition about the first 5 days of January >(to rally or not) will sketch the overall curve of the DOW / NASDAQ >direction in '98? Will this week reveal the entire trend of the market? > >- > > - - ------------------------------ Date: Mon, 5 Jan 1998 12:16:00 -0500 From: "bamend" Subject: [CANSLIM] Small Cap Stocks This is a multi-part message in MIME format. - ------=_NextPart_000_000A_01BD19D3.AF393E00 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable What is the reason some stocks are small cap (listed under the small cap = heading) and other stocks are in the regular list? Is it the size of = the shares outstanding? What is the mechanism whereby a stock goes from = small cap to the big league? Bob Amend - ------=_NextPart_000_000A_01BD19D3.AF393E00 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
What is the = reason some=20 stocks are small cap (listed under the small cap heading) and other = stocks are=20 in the regular list?  Is it the size of the shares = outstanding?  What=20 is the mechanism whereby a stock goes from small cap to the big=20 league?
 
Bob=20 Amend
- ------=_NextPart_000_000A_01BD19D3.AF393E00-- - - ------------------------------ Date: Mon, 5 Jan 1998 12:20:20 -0500 From: "bamend" Subject: [CANSLIM] Re: Learn and Profit This is a multi-part message in MIME format. - ------=_NextPart_000_0025_01BD19D4.4A4D8F40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Connie Mack wrote: [3] [Switch to a 3-mos chart.] The old faithful 3|7|10 MA has given a = buy. You may want to switch to a 1-mos chart to see the indicator = better.=20 what is the old faithful 3|7|10 MA? Bob Amend - ------=_NextPart_000_0025_01BD19D4.4A4D8F40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

Connie Mack wrote:

[3] [Switch to a 3-mos chart.]  The old faithful 3|7|10 MA = has given=20 a buy.  You may want to switch to a 1-mos chart to see the = indicator=20 better.  

what is the old faithful 3|7|10 MA? 

Bob=20 Amend
- ------=_NextPart_000_0025_01BD19D4.4A4D8F40-- - - ------------------------------ Date: Mon, 5 Jan 1998 12:24:14 -0500 From: "bamend" Subject: [CANSLIM] Re: Learn and Profit This is a multi-part message in MIME format. - ------=_NextPart_000_0034_01BD19D4.D5C41300 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Connie Mack wrote: [3] [Switch to a 3-mos chart.] The old faithful 3|7|10 MA has given a = buy. You may want to switch to a 1-mos chart to see the indicator = better. =20 what is the old faithful 3|7|10 MA?=20 OBV|MoneyFlow - What's this? [7] The stock passed through the 20|50|100 MAs and closed above the = 100MA. Nothing too significant here, for the 3 MAs were relatively = close. Would like to see the stock hold above the 100, but nothing to = worry about if it doesn't. It's the 13 support level that is most = important.=20 Could someone tell me what the 20|50|100 MA is? Bob Amend - ------=_NextPart_000_0034_01BD19D4.D5C41300 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

Connie Mack wrote:

[3] [Switch to a 3-mos chart.]  The old faithful 3|7|10 MA = has given=20 a buy.  You may want to switch to a 1-mos chart to see the = indicator=20 better.  

what is the old faithful 3|7|10 MA? 

OBV|MoneyFlow - What's this?

[7] The stock passed through the 20|50|100 MAs and closed above = the=20 100MA.  Nothing too significant here, for the 3 MAs were relatively = close.  Would like to see the stock hold above the 100, but nothing = to=20 worry about if it doesn't.  It's the 13 support level that is most=20 important.  
 
Could someone tell me what = the=20 20|50|100 MA is?
 
Bob = Amend
 
 
- ------=_NextPart_000_0034_01BD19D4.D5C41300-- - - ------------------------------ Date: Mon, 5 Jan 1998 12:30:46 -0500 From: "bamend" Subject: [CANSLIM] Strategy to Add to Portfolio This is a multi-part message in MIME format. - ------=_NextPart_000_0052_01BD19D5.BF521D00 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I have a smallish portfolio of my non-IRA money that I'm working. I = currently have three stocks in the portfolio. What is the best strategy = to use if I want to add $3-400/month to the portfolio? Do I add money = every month and take the commission hit, $20/trade, or wait a few months = and put larger amounts into the portfolio? Also do I buy the same = stocks I already own or do I buy new stocks?=20 Bob Amend - ------=_NextPart_000_0052_01BD19D5.BF521D00 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I have a = smallish=20 portfolio of my non-IRA money that I'm working.  I currently have = three=20 stocks in the portfolio.  What is the best strategy to use if I = want to add=20 $3-400/month to the portfolio?  Do I add money every month and take = the=20 commission hit, $20/trade, or wait a few months and put larger amounts = into the=20 portfolio?  Also do I buy the same stocks I already own or do I buy = new=20 stocks? 
 
Bob=20 Amend
- ------=_NextPart_000_0052_01BD19D5.BF521D00-- - - ------------------------------ Date: Mon, 5 Jan 1998 13:10:49 EST From: SACADS Subject: Re: [CANSLIM] Re: Learn and Profit Sure Bob, MA stands for Moving Average. The best location I've found to learn about indicators such as OBV (on balance volume) and Moving averages is Bigcharts.com. If you go into interactive charts you will be allowed to select different time frames, indicators, etc. The best way to learn is spend some time changing indicators and then going to chart help and reviewing the definitions of the indicators you have selected. Hope this information helps. I owe all my knowledge of this subject to Connie (great guy) and hours in Bigcharts and other locations such as Decision Point, Stockman, and Pristine Trader. Greg - - ------------------------------ Date: Mon, 5 Jan 1998 11:36:29 -0800 (PST) From: Anindo Majumdar Subject: [CANSLIM] BTO LBOR MODT Hi BTO seems to be a play on regional banks. They have shown strength throughout the past few months. Would this qualify as a CANSLIM stock. LBOR is in the temp labour business and the stock price seems to have held up fairly decently. Another company whose business does not depend on Asia. MODT - play on the crowded classrooms of california. Any opinions on the above 3 stocks would be appreciated. Anindo - - ------------------------------ Date: Mon, 05 Jan 1998 17:13:37 -0500 From: sam Subject: [CANSLIM] I'm Back! I know not many people even noticed but I was on vacation over Christmas and have not checked my email in three weeks. I was suprised. I only had 201 msgs; and that includes about 30 non canslim msg. Is everybody still lingering around? I was able to stay in only one stock over the holidays...FOSL, fossil inc. PIR Pier One stoped me out on the rumour (sp) that they would not make estimates. Oh well. Is there any stocks people can recommend I look at. I know there are 175 recommendations from the past three weeks but it may take me a few days to read all the messages. I was also away form IBD for two weeks so I have a lot of paper to weed through, so any suggestions would be nice. Just need a litle jump start. Sam - - ------------------------------ Date: Mon, 05 Jan 1998 18:03:14 -0500 From: sam Subject: Re: [CANSLIM] IBD says downtrending I am waiting on the sidelines unless a very impressive stock comes along. i am only in FOSL because I have not been stoped out of it. I have a decent sum of money sitting on the side lines for such a stock or a turn around. I still am bearish on the market. One thing I have been toying with because I am bored is buying both put and call options on one of the indices and waiting to see if ither pays off. I believe the put option will pay a better return. I would purchase the longest option avail at the time. We'll see. I may not do it, just depends on if I find the time to research my thoughts. Sam At 09:44 PM 12/27/97 -0800, you wrote: >Friday's IBD seems to say we should have gotten out of the market the week >of 12/8, and since been waiting for an up day as day 1, and a >follow-through day on days 4-7. The topping signs are: > >1. The DOW rallies, but on contracting volume >2. The DOW stalls, but trading stays heavy in a churning pattern >3. The DOW then declines on expanding volume > >I have a couple questions. What do you all think? > >1) How far out of the market would you get when you sees the signs, and how >quickly? I was scared that week, and got out almost 100%, not counting my >mutual funds. But, then I got 100% back in the next week - too early. I >didn't like being totally out. Now, I'm thinking perhaps getting out more >slowly, just getting stopped out of a few, and selling the weaker stocks. > >2) How would you treat S&P Depository Receipts (SPY), like a stock or a >mutual fund (which WON recommends buy-and-hold)? I treated them like stocks >and sold and rebought them. > >I think the market is about to rebound, since volume has been shrinking, >but I'm a little afraid that the holidays are obscuring things. > >Thanks, > >Mike > > >- > > - - ------------------------------ Date: Mon, 5 Jan 1998 19:43:07 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] Small Cap Stocks The "regular" list is National Mkt System (NMS) stocks, while the small cap list are those not NMS listed. Generally speaking, NMS stocks have met a higher financial standard than small caps, however, just cuz they're still listed there doesn't mean they are currently meeting the necessary maintainence std (they could be under review for removal, which takes some time usually). In addition to meeting a higher standard, the co must also be willing to bear the cost of the higher registration fee (and you thought NASD did it for free, huh!). The cost can be considerable, one CEO who's co met the criteria elected to remain small cap (at a savings of something like $40,000/year) because the stock traded very thinly and he was concerned about the effect on his stock if it became marginable. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - -----Original Message----- From: bamend To: Canslim xmission Date: Monday, January 05, 1998 12:15 PM Subject: [CANSLIM] Small Cap Stocks What is the reason some stocks are small cap (listed under the small cap heading) and other stocks are in the regular list? Is it the size of the shares outstanding? What is the mechanism whereby a stock goes from small cap to the big league? Bob Amend - - ------------------------------ End of canslim-digest V2 #78 **************************** 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.