From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2642 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 Monday, July 22 2002 Volume 02 : Number 2642 In this issue: [CANSLIM] 36% growth (was: Mr. Greenspan's testimony) [CANSLIM] Rebuilding Process - When Will It Begin Re: [CANSLIM] Mr. Greenspan's testimony [CANSLIM] Correction Re:ant Tech SyusCogniz Re: [CANSLIM] Cognizent Technology Solutions Re: [CANSLIM] Cognizent Technology Solutions CTSH (was Re: [CANSLIM] Cognizent Technology Solutions) Re: [CANSLIM] M - How low will it go - reverse CANSLIM. Re: [CANSLIM] M - How low will it go - reverse CANSLIM. Re: [CANSLIM] M - How low will it go - reverse CANSLIM. Re: CTSH (was Re: [CANSLIM] Cognizent Technology Solutions) RE: [CANSLIM] M - How low will it go - reverse CANSLIM. ---------------------------------------------------------------------- Date: Sun, 21 Jul 2002 13:30:31 -0400 From: Hermann Ertl Subject: [CANSLIM] 36% growth (was: Mr. Greenspan's testimony) > From: "Tom Worley" > Date: Sat, 20 Jul 2002 20:02:37 -0400 > > Interesting that he waited for the final paragraph of his speech > to reveal that the Feds were making a sizable increase in their > forecasts for this year's GDP growth rate. This is a full percent > increase over what they forecasted as recently as Feb '02. snip > > quote: > Indeed, the central tendency of Federal Reserve policymakers' > forecasts is for expansion of real GDP over the four quarters of > 2002 of 3-1/2 to 3-3/4 percent, somewhat above the rates > anticipated in our February report. > From: "Tom Worley" > Date: Sat, 20 Jul 2002 23:10:48 -0400 > > that 1% change means a 36% growth in a weak and recovering economy. snip > Put it in perspective, if you believed your present cash for > investing would go up 36% this year if invested, would you still be > in cash? > From: "zillagirl" > Date: Sat, 20 Jul 2002 19:37:54 -0700 > > Thanks Tom for providing insight about these things for those of > us that know that are relevant but not sure to what degree. I > would have thought that 1 % was not much but you use the term > sizable increase. Helps to see things more clearly. zillagirl, I agree with you. An increase of 36% of the rate of growth is not equivalent to 36% growth (of GDP, cash, or whatever). - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 16:00:50 -0500 From: Gene Ricci Subject: [CANSLIM] Rebuilding Process - When Will It Begin This is a multi-part message in MIME format. - ------=_NextPart_000_02D1_01C230CF.C8D1A060 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I wonder when our thirst for 'blood' will be satiated and we'll start on = the rebuilding process?=20 - ------=_NextPart_000_02D1_01C230CF.C8D1A060 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I wonder when our thirst for 'blood' = will be=20 satiated and we'll start on the rebuilding process?
 
 
- ------=_NextPart_000_02D1_01C230CF.C8D1A060-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 17:01:35 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Mr. Greenspan's testimony 3.75% (the upper end of the new forecast) divided by 2.75% (the upper end of the Feb forecast) equals 36% increase - ----- Original Message ----- From: "Barry Marx" To: Sent: Sunday, July 21, 2002 1:46 PM Subject: Re: [CANSLIM] Mr. Greenspan's testimony > that 1% change means a 36% growth in a weak and recovering economy. Could you explain this more, Tom. Thanks, Barry - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 16:36:34 -0400 From: "Donald Wallker" Subject: [CANSLIM] Correction Re:ant Tech SyusCogniz This is a multi-part message in MIME format. - ------=_NextPart_000_000B_01C230D4.C6BB2A30 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable July 17, 2002 is the correct date re the Cognizant Tech Sys Article. = Sorry about that. - ------=_NextPart_000_000B_01C230D4.C6BB2A30 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
July 17, 2002 is the correct date re = the Cognizant=20 Tech Sys Article.  Sorry about that.
- ------=_NextPart_000_000B_01C230D4.C6BB2A30-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 17:37:43 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Cognizent Technology Solutions This is a multi-part message in MIME format. - ------=_NextPart_000_0091_01C230DD.51D93410 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable makes sense (with the corrected publication date of 7/17) since it just = spiked 10% the day before, on nearly 6X ADV with the benefit of hindsight, it has held that b/o for three days, = despite heavy selling on Friday. Too early to call it a handle forming, = but the 7/16 spike did break prior highs. - ----- Original Message -----=20 From: Donald Wallker=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 21, 2002 2:30 PM Subject: [CANSLIM] Cognizent Technology Solutions The breakout of Cognizant Technology Solutions is discussed in the IBD = issue of JULY 22, on page B8, in Col 1 (upper left hand corner of the = page). And right next to it is the Chart that is discussed in the = Article. Judging from the author's remarks(something for everybody), = buying the stock should be decided by a coin flip..=20 - ------=_NextPart_000_0091_01C230DD.51D93410 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
makes sense (with the corrected publication date = of 7/17)=20 since it just spiked 10% the day before, on nearly 6X ADV
 
with the benefit of hindsight, it has held that = b/o for=20 three days, despite heavy selling on Friday. Too early to call it a = handle=20 forming, but the 7/16 spike did break prior highs.
 
----- Original Message -----=20
From: Donald = Wallker
Sent: Sunday, July 21, 2002 2:30 PM
Subject: [CANSLIM] Cognizent Technology = Solutions

The breakout of Cognizant Technology = Solutions is=20 discussed in the IBD issue of JULY 22, on page B8, in Col 1 = (upper=20 left hand corner of the page).  And right next to it is the Chart = that is=20 discussed in the Article. Judging from the author's  = remarks(something=20 for everybody), buying the stock should be decided by a coin=20 flip.. 
- ------=_NextPart_000_0091_01C230DD.51D93410-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 17:59:44 EDT From: Chazmoore@aol.com Subject: Re: [CANSLIM] Cognizent Technology Solutions - --part1_1bf.83d29d1.2a6c88d0_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Tom: Take another look. Wasn't the right side of the cup completed on June 28th, followed by a 2 1/2 week handle, then the breakout on July 16? Charley - --part1_1bf.83d29d1.2a6c88d0_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit Tom: Take another look. Wasn't the right side of the cup completed on June 28th, followed by a 2 1/2 week handle, then the breakout on July 16?

Charley - --part1_1bf.83d29d1.2a6c88d0_boundary-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 18:06:59 -0400 From: "Tom Worley" Subject: CTSH (was Re: [CANSLIM] Cognizent Technology Solutions) This is a multi-part message in MIME format. - ------=_NextPart_000_00A1_01C230E1.6870E840 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable you could read it that way, but then would be only a 7 week cup = formation. With 6/28 being only a single day spike, then immediately = falling back to the base already formed and continuing at that level, I = take the 6/28 as just part of the overall volatility and continue the = cup until the b/o 7/16. Also note that the volume on 6/28 (as well as 6/27) was below daily = average, thus would not count as a b/o. Even the selling volume on 7/1 = which took it back to the base was barely over daily average. - ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 21, 2002 5:59 PM Subject: Re: [CANSLIM] Cognizent Technology Solutions Tom: Take another look. Wasn't the right side of the cup completed on = June 28th, followed by a 2 1/2 week handle, then the breakout on July = 16?=20 Charley=20 - ------=_NextPart_000_00A1_01C230E1.6870E840 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
you could read it that way, but then would be = only a 7=20 week cup formation. With 6/28 being only a single day spike, then = immediately=20 falling back to the base already formed and continuing at that level, I = take the=20 6/28 as just part of the overall volatility and continue the cup until = the b/o=20 7/16.
 
Also note that the volume on 6/28 (as well as = 6/27) was=20 below daily average, thus would not count as a b/o. Even the selling = volume on=20 7/1 which took it back to the base was barely over daily = average.
 
----- Original Message -----=20
From: Chazmoore@aol.com=20
Sent: Sunday, July 21, 2002 5:59 PM
Subject: Re: [CANSLIM] Cognizent Technology = Solutions

Tom: Take = another look.=20 Wasn't the right side of the cup completed on June 28th, followed by a 2 = 1/2=20 week handle, then the breakout on July 16?

Charley=20 - ------=_NextPart_000_00A1_01C230E1.6870E840-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 23:45:10 +0100 From: Subject: Re: [CANSLIM] M - How low will it go - reverse CANSLIM. First I want to say that this is one of the best lists I have ever joined in terms of the signal to noise ratio and general quality of contribution. Maybe what we need is a kind of reverse CANSLIM to help us take advantage of the bear markets. Some basic principals to identify falling stocks - both fundamentally and technically as CANSLIM does so well with rising stocks. Sorry about such a long post due to the included article from IBD. :-) I was intrigued by Ira's idea of turning CANSLIM on its head (Counter-CANSLIM or ANTI-CANSLIM?), and found that real life hedge fund managers are indeed doing this for real. (See IBD ARticle attached below). WON did not have a lot of good things to say about shorting stocks, I do wonder if anyone on this list has been successful shorting. One shorting idea I am trying out is to take a small (less that 20% of the portfolio's value) portfolio of shorts in QQQ, SPY, DIA and an ISHARE of the UK market index. Besides trying to make a little money, the big idea being doing this is that if I have a real short position in the major market indices then I will be highly focused and motivated in monitoring them and the relevent charts - hopefully improving the chance of judging M correctly as well as noticing divergence between major indices etc. I also feel safer shorting ETFs as opposed to individual stocks. Regards Victor Chang (vchang@win-invest.com) www.win-invest.com ============= FROM IBD ============================= General News Monday, July 22, 2002 Looking for a recent story in IBD? Visit the IBD Archives. Printer-Ready Version E-mail this Article to a Friend Who Can Crow In This Market? Short-Selling Pros Sitting Pretty BY KEN HOOVER INVESTOR'S BUSINESS DAILY Short sellers are in hog heaven. And shorting is getting more popular as the bear market grinds on. New York Stock Exchange short interest released after Friday's close was a record 7.6 billion shares. The short interest ratio was 4.3, down from recent highs due to heavy volume. Most investors watch their stakes decline. Others content themselves with money-market rates while waiting for a new bull market. Short sellers profit by selling borrowed stock and buying it back later at a lower price. Indeed, the short sellers are raking it in. The short-biased component of the CSFB/Tremont Hedge Fund Index gained 7.6% in June and is up 9.3% year to date. The highly dangerous Rydex Venture 100 Fund, which shorts the Nasdaq 100 index, leveraged by a factor of two, is up 95% for the year. Short selling is tricky. Even professionals confess it's harder to find the right entry point than it is when going long with a stock. Bear markets and falling stocks have fierce whipsaws, sometimes crashing down one day and rocketing up the next as short sellers close out their positions by buying back shares, or covering, as it's called. Image: Shortage Of Fear? Robert Maltbie's Millennium Asset Management in Nipomo, Calif., runs $20 million going both long and short. He thinks the market now is ruled by hedge funds that are aggressively shorting. Spectacular Reversals He says that's why we're seeing huge reversals, such as last Monday's snapback from a 400-point Dow deficit and the 324-point, post-holiday July 5 rally. Those rallies are being driven by hedge funds covering, he thinks. It may be good for the bulls that so many investors are shorting. When everybody is so pessimistic, maybe a new bull market is right around the corner. The short-interest ratio is one way to measure the popularity of short selling. Since May 1931, NYSE members have reported their and their customers' short positions to the exchange as of the 15th of each month. The exchange releases the number four days later. Because trades settle in three days, the release is a snapshot of short selling on the 12th, assuming it's a business day. The ratio is calculated by dividing the total number of shares held short by the average daily volume for the past month. A short interest ratio of 4.3 means it takes 4.3 days of average volume to cover all those shares held short. IBD charts the short-interest ratio daily on the General Markets Page, B2 in the print edition. Rather than use the past month's volume as of the 15th, though, IBD calculates the ratio with volume from the prior month as of the day before publication. For decades, the short-interest ratio was one of the market's best contrary psychological indicators. "Readings over 1.75 are followed by rising prices between 94% and 98% of the time, about as close to perfect as one can expect in the stock market," wrote Norman Fosback in his '75 classic, "Stock Market Logic." But in the late '70s, the ratio started rising due to professional hedging and arbitrage strategies. In June '97, the ratio hit an all-time high of 7.34, a level Fosback never dreamed of. But it still has value. It dropped to 3.70 in January '01, when investors were greedy, and has been rising since then as fear built. Some analysts track its variance from a 12- or 16-month moving average. Since December '86, the Nasdaq has released a short-interest report eight business days after the 15th of each month. It breaks down short interest between big and small caps. Nasdaq stocks are less likely to be part of an arbitrage strategy. So it's no surprise the Nasdaq small-cap short-interest ratio has been a somewhat better sentiment barometer. It hit an all-time low of 0.36 as the market peaked in March '00. It hit an all-time high of 3.07 as the market sold off in September '01. June's reading was 1.56, showing above-average bearishness. Among the hedge funds that have benefited from short selling is Maltbie's Argonaut Fund, which goes long and short. It's up 11.5% year to date. That's driven by a 23% profit in his short positions. "Part of our strength is that we are short selling on a daily basis in good times and bad," Maltbie said. Dianon Systems (DIAN) is one of his recent short-side successes. He shorted as it broke down early this month on an earnings warning. He covered quickly because he wanted to lock in profits before other short sellers lock in theirs. "You don't know when they're going to cover or why, but you know they are, so you better cover before they do," he said. Maltbie uses the CAN SLIM system to buy stocks. He turns the system upside down for shorting, buying stocks that break down, showing declining relative strength and often buying as a stock breaks below a key support level, like the 50-day or 200-day moving average. "Old support becomes new resistance," he said. Mark Boucher, who runs money from his Investment Research Associates in Menlo Park, Calif., also likes to take profits quickly when he successfully shorts a stock. He takes partial profits when he's ahead 40%, then uses trailing stops to take the rest unless he covers into a selling climax or a big rally on volume. "A bear market rally can erase six months of profits in two days," he said. He also uses some IBD techniques in reverse. He looks for short-sell candidates on the new low list and among stocks with declining earnings growth, declining institutional sponsorship and high debt. He likes to short when a stock breaks down after a four-week consolidation. Thanks to short selling, he's up 10% this year. He says 2000 was his best year. He was up 70%. Many stocks, he says, were declining even as the tech and growth stocks were still advancing. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 19:03:45 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] M - How low will it go - reverse CANSLIM. Hi Victor, Interesting article, thanks for sending it along. I was particularly intrigued by the percentage gains of some of the funds doing shorting using CANSLIM, as it was close to what I was doing until mid June by going long on small / micro cap stocks. I have done some shorting years ago when I had the time to watch the markets closely, mixed success, never comfortable with it as I am just too bullish by nature. I also have found that I work harder, and pay more attention, when I put real money to work, even if it's just a small percentage. - ----- Original Message ----- From: To: Sent: Sunday, July 21, 2002 6:45 PM Subject: Re: [CANSLIM] M - How low will it go - reverse CANSLIM. First I want to say that this is one of the best lists I have ever joined in terms of the signal to noise ratio and general quality of contribution. Maybe what we need is a kind of reverse CANSLIM to help us take advantage of the bear markets. Some basic principals to identify falling stocks - both fundamentally and technically as CANSLIM does so well with rising stocks. Sorry about such a long post due to the included article from IBD. :-) I was intrigued by Ira's idea of turning CANSLIM on its head (Counter-CANSLIM or ANTI-CANSLIM?), and found that real life hedge fund managers are indeed doing this for real. (See IBD ARticle attached below). WON did not have a lot of good things to say about shorting stocks, I do wonder if anyone on this list has been successful shorting. One shorting idea I am trying out is to take a small (less that 20% of the portfolio's value) portfolio of shorts in QQQ, SPY, DIA and an ISHARE of the UK market index. Besides trying to make a little money, the big idea being doing this is that if I have a real short position in the major market indices then I will be highly focused and motivated in monitoring them and the relevent charts - hopefully improving the chance of judging M correctly as well as noticing divergence between major indices etc. I also feel safer shorting ETFs as opposed to individual stocks. Regards Victor Chang (vchang@win-invest.com) www.win-invest.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 20:44:46 -0400 From: "Ira Post" Subject: Re: [CANSLIM] M - How low will it go - reverse CANSLIM. Victor, I'm glad you're interested. I threw that out to see if anyone had any thoughts on it. It would be very useful to identify some simple basic principles to identify stocks that one would consider shorting. Maybe it could be done using the CANSLIM variables - though instead of going for ratings of 80 or 90 and higher, we could look for ratings of 10 or 20 and lower. I have puts on SPX and am shorting SPY. It's working well. Identifying vulnerable stocks could work even better in this kind of market. Ira - ----- Original Message ----- From: To: Sent: Sunday, July 21, 2002 6:45 PM Subject: Re: [CANSLIM] M - How low will it go - reverse CANSLIM. > First I want to say that this is one of the best lists I have ever joined in > terms of the signal to noise ratio and general quality of contribution. > > > Maybe what we need is a kind of reverse CANSLIM to help us take advantage of > the bear markets. Some basic principals to identify falling stocks - both > fundamentally and technically as CANSLIM does so well with rising stocks. > > > Sorry about such a long post due to the included article from IBD. :-) > > I was intrigued by Ira's idea of turning CANSLIM on its head > (Counter-CANSLIM or ANTI-CANSLIM?), and found that real life hedge fund > managers are indeed doing this for real. (See IBD ARticle attached below). > > WON did not have a lot of good things to say about shorting stocks, I do > wonder if anyone on this list has been successful shorting. > > One shorting idea I am trying out is to take a small (less that 20% of the > portfolio's value) portfolio of shorts in QQQ, SPY, DIA and an ISHARE of the > UK market index. > > Besides trying to make a little money, the big idea being doing this is that > if I have a real short position in the major market indices then I will be > highly focused and motivated in monitoring them and the relevent charts - > hopefully improving the chance of judging M correctly as well as noticing > divergence between major indices etc. I also feel safer shorting ETFs as > opposed to individual stocks. > > Regards > > Victor Chang (vchang@win-invest.com) > www.win-invest.com > > ============= FROM IBD ============================= > General News > Monday, July 22, 2002 > Looking for a recent story in IBD? Visit the IBD Archives. Printer-Ready > Version > > E-mail this Article > to a Friend > > > Who Can Crow In This Market? Short-Selling Pros Sitting Pretty > BY KEN HOOVER > INVESTOR'S BUSINESS DAILY > > Short sellers are in hog heaven. And shorting is getting more popular as the > bear market grinds on. > New York Stock Exchange short interest released after Friday's close was a > record 7.6 billion shares. The short interest ratio was 4.3, down from > recent highs due to heavy volume. > Most investors watch their stakes decline. Others content themselves with > money-market rates while waiting for a new bull market. Short sellers profit > by selling borrowed stock and buying it back later at a lower price. > Indeed, the short sellers are raking it in. The short-biased component of > the CSFB/Tremont Hedge Fund Index gained 7.6% in June and is up 9.3% year to > date. The highly dangerous Rydex Venture 100 Fund, which shorts the Nasdaq > 100 index, leveraged by a factor of two, is up 95% for the year. > Short selling is tricky. Even professionals confess it's harder to find the > right entry point than it is when going long with a stock. Bear markets and > falling stocks have fierce whipsaws, sometimes crashing down one day and > rocketing up the next as short sellers close out their positions by buying > back shares, or covering, as it's called. > > > > Image: Shortage Of Fear? > > > > Robert Maltbie's Millennium Asset Management in Nipomo, Calif., runs $20 > million going both long and short. He thinks the market now is ruled by > hedge funds that are aggressively shorting. > Spectacular Reversals > He says that's why we're seeing huge reversals, such as last Monday's > snapback from a 400-point Dow deficit and the 324-point, post-holiday July 5 > rally. > Those rallies are being driven by hedge funds covering, he thinks. > It may be good for the bulls that so many investors are shorting. When > everybody is so pessimistic, maybe a new bull market is right around the > corner. > The short-interest ratio is one way to measure the popularity of short > selling. Since May 1931, NYSE members have reported their and their > customers' short positions to the exchange as of the 15th of each month. > The exchange releases the number four days later. Because trades settle in > three days, the release is a snapshot of short selling on the 12th, assuming > it's a business day. > The ratio is calculated by dividing the total number of shares held short by > the average daily volume for the past month. A short interest ratio of 4.3 > means it takes 4.3 days of average volume to cover all those shares held > short. > IBD charts the short-interest ratio daily on the General Markets Page, B2 in > the print edition. Rather than use the past month's volume as of the 15th, > though, IBD calculates the ratio with volume from the prior month as of the > day before publication. > For decades, the short-interest ratio was one of the market's best contrary > psychological indicators. > "Readings over 1.75 are followed by rising prices between 94% and 98% of the > time, about as close to perfect as one can expect in the stock market," > wrote Norman Fosback in his '75 classic, "Stock Market Logic." > But in the late '70s, the ratio started rising due to professional hedging > and arbitrage strategies. In June '97, the ratio hit an all-time high of > 7.34, a level Fosback never dreamed of. > But it still has value. It dropped to 3.70 in January '01, when investors > were greedy, and has been rising since then as fear built. Some analysts > track its variance from a 12- or 16-month moving average. > Since December '86, the Nasdaq has released a short-interest report eight > business days after the 15th of each month. It breaks down short interest > between big and small caps. > Nasdaq stocks are less likely to be part of an arbitrage strategy. So it's > no surprise the Nasdaq small-cap short-interest ratio has been a somewhat > better sentiment barometer. > It hit an all-time low of 0.36 as the market peaked in March '00. It hit an > all-time high of 3.07 as the market sold off in September '01. June's > reading was 1.56, showing above-average bearishness. > Among the hedge funds that have benefited from short selling is Maltbie's > Argonaut Fund, which goes long and short. It's up 11.5% year to date. That's > driven by a 23% profit in his short positions. > "Part of our strength is that we are short selling on a daily basis in good > times and bad," Maltbie said. Dianon Systems (DIAN) is one of his recent > short-side successes. He shorted as it broke down early this month on an > earnings warning. He covered quickly because he wanted to lock in profits > before other short sellers lock in theirs. > "You don't know when they're going to cover or why, but you know they are, > so you better cover before they do," he said. > Maltbie uses the CAN SLIM system to buy stocks. He turns the system upside > down for shorting, buying stocks that break down, showing declining relative > strength and often buying as a stock breaks below a key support level, like > the 50-day or 200-day moving average. > "Old support becomes new resistance," he said. > Mark Boucher, who runs money from his Investment Research Associates in > Menlo Park, Calif., also likes to take profits quickly when he successfully > shorts a stock. > He takes partial profits when he's ahead 40%, then uses trailing stops to > take the rest unless he covers into a selling climax or a big rally on > volume. "A bear market rally can erase six months of profits in two days," > he said. > He also uses some IBD techniques in reverse. He looks for short-sell > candidates on the new low list and among stocks with declining earnings > growth, declining institutional sponsorship and high debt. > He likes to short when a stock breaks down after a four-week consolidation. > Thanks to short selling, he's up 10% this year. He says 2000 was his best > year. He was up 70%. Many stocks, he says, were declining even as the tech > and growth stocks were still advancing. > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.377 / Virus Database: 211 - Release Date: 7/15/02 - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sun, 21 Jul 2002 19:56:06 -0400 From: "Donald Wallker" Subject: Re: CTSH (was Re: [CANSLIM] Cognizent Technology Solutions) This is a multi-part message in MIME format. - ------=_NextPart_000_0020_01C230F0.A6753A60 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable The conclusion that Cognizant Tech Solutions broke out was not mine, it = was that of the author of the IBD Article. ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 21, 2002 6:06 PM Subject: CTSH (was Re: [CANSLIM] Cognizent Technology Solutions) you could read it that way, but then would be only a 7 week cup = formation. With 6/28 being only a single day spike, then immediately = falling back to the base already formed and continuing at that level, I = take the 6/28 as just part of the overall volatility and continue the = cup until the b/o 7/16. Also note that the volume on 6/28 (as well as 6/27) was below daily = average, thus would not count as a b/o. Even the selling volume on 7/1 = which took it back to the base was barely over daily average. ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Sunday, July 21, 2002 5:59 PM Subject: Re: [CANSLIM] Cognizent Technology Solutions Tom: Take another look. Wasn't the right side of the cup completed on = June 28th, followed by a 2 1/2 week handle, then the breakout on July = 16?=20 Charley=20 - ------=_NextPart_000_0020_01C230F0.A6753A60 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
The conclusion that Cognizant Tech = Solutions broke=20 out was not mine, it was that of the author of the IBD = Article.
----- Original Message -----
From:=20 Tom=20 Worley
Sent: Sunday, July 21, 2002 = 6:06 PM
Subject: CTSH (was Re: = [CANSLIM]=20 Cognizent Technology Solutions)

you could read it that way, but then would be = only a 7=20 week cup formation. With 6/28 being only a single day spike, then = immediately=20 falling back to the base already formed and continuing at that level, = I take=20 the 6/28 as just part of the overall volatility and continue the cup = until the=20 b/o 7/16.
 
Also note that the volume on 6/28 (as well as = 6/27) was=20 below daily average, thus would not count as a b/o. Even the selling = volume on=20 7/1 which took it back to the base was barely over daily = average.
 
----- Original Message -----=20
From: Chazmoore@aol.com=20
Sent: Sunday, July 21, 2002 5:59 PM
Subject: Re: [CANSLIM] Cognizent Technology = Solutions

Tom: Take = another look.=20 Wasn't the right side of the cup completed on June 28th, followed by a = 2 1/2=20 week handle, then the breakout on July 16?

Charley=20 - ------=_NextPart_000_0020_01C230F0.A6753A60-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 22 Jul 2002 06:41:37 -0600 From: "David Taggart" Subject: RE: [CANSLIM] M - How low will it go - reverse CANSLIM. Mark Boucher who was mentioned in the article has a good book out Hedge Fund Edge that goes over shorting and he does pretty much turn CANSLIM upside down with some of his own changes. He looks for high debt levels 50% or more, very high institutional sponsorship, and other stuff. He is very risk adverse and goes over a ton of stuff to cut risk while maximizing returns. For me Hedge Fund Edge picks up where HTMMIS ends. Hes a smart guy and I have learned a lot and have done pretty good shorting. David Taggart - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of vchang@win-invest.com Sent: Sunday, July 21, 2002 4:45 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] M - How low will it go - reverse CANSLIM. First I want to say that this is one of the best lists I have ever joined in terms of the signal to noise ratio and general quality of contribution. Maybe what we need is a kind of reverse CANSLIM to help us take advantage of the bear markets. Some basic principals to identify falling stocks - both fundamentally and technically as CANSLIM does so well with rising stocks. Sorry about such a long post due to the included article from IBD. :-) I was intrigued by Ira's idea of turning CANSLIM on its head (Counter-CANSLIM or ANTI-CANSLIM?), and found that real life hedge fund managers are indeed doing this for real. (See IBD ARticle attached below). WON did not have a lot of good things to say about shorting stocks, I do wonder if anyone on this list has been successful shorting. One shorting idea I am trying out is to take a small (less that 20% of the portfolio's value) portfolio of shorts in QQQ, SPY, DIA and an ISHARE of the UK market index. Besides trying to make a little money, the big idea being doing this is that if I have a real short position in the major market indices then I will be highly focused and motivated in monitoring them and the relevent charts - hopefully improving the chance of judging M correctly as well as noticing divergence between major indices etc. I also feel safer shorting ETFs as opposed to individual stocks. Regards Victor Chang (vchang@win-invest.com) www.win-invest.com ============= FROM IBD ============================= General News Monday, July 22, 2002 Looking for a recent story in IBD? Visit the IBD Archives. Printer-Ready Version E-mail this Article to a Friend Who Can Crow In This Market? Short-Selling Pros Sitting Pretty BY KEN HOOVER INVESTOR'S BUSINESS DAILY Short sellers are in hog heaven. And shorting is getting more popular as the bear market grinds on. New York Stock Exchange short interest released after Friday's close was a record 7.6 billion shares. The short interest ratio was 4.3, down from recent highs due to heavy volume. Most investors watch their stakes decline. Others content themselves with money-market rates while waiting for a new bull market. Short sellers profit by selling borrowed stock and buying it back later at a lower price. Indeed, the short sellers are raking it in. The short-biased component of the CSFB/Tremont Hedge Fund Index gained 7.6% in June and is up 9.3% year to date. The highly dangerous Rydex Venture 100 Fund, which shorts the Nasdaq 100 index, leveraged by a factor of two, is up 95% for the year. Short selling is tricky. Even professionals confess it's harder to find the right entry point than it is when going long with a stock. Bear markets and falling stocks have fierce whipsaws, sometimes crashing down one day and rocketing up the next as short sellers close out their positions by buying back shares, or covering, as it's called. Image: Shortage Of Fear? Robert Maltbie's Millennium Asset Management in Nipomo, Calif., runs $20 million going both long and short. He thinks the market now is ruled by hedge funds that are aggressively shorting. Spectacular Reversals He says that's why we're seeing huge reversals, such as last Monday's snapback from a 400-point Dow deficit and the 324-point, post-holiday July 5 rally. Those rallies are being driven by hedge funds covering, he thinks. It may be good for the bulls that so many investors are shorting. When everybody is so pessimistic, maybe a new bull market is right around the corner. The short-interest ratio is one way to measure the popularity of short selling. Since May 1931, NYSE members have reported their and their customers' short positions to the exchange as of the 15th of each month. The exchange releases the number four days later. Because trades settle in three days, the release is a snapshot of short selling on the 12th, assuming it's a business day. The ratio is calculated by dividing the total number of shares held short by the average daily volume for the past month. A short interest ratio of 4.3 means it takes 4.3 days of average volume to cover all those shares held short. IBD charts the short-interest ratio daily on the General Markets Page, B2 in the print edition. Rather than use the past month's volume as of the 15th, though, IBD calculates the ratio with volume from the prior month as of the day before publication. For decades, the short-interest ratio was one of the market's best contrary psychological indicators. "Readings over 1.75 are followed by rising prices between 94% and 98% of the time, about as close to perfect as one can expect in the stock market," wrote Norman Fosback in his '75 classic, "Stock Market Logic." But in the late '70s, the ratio started rising due to professional hedging and arbitrage strategies. In June '97, the ratio hit an all-time high of 7.34, a level Fosback never dreamed of. But it still has value. It dropped to 3.70 in January '01, when investors were greedy, and has been rising since then as fear built. Some analysts track its variance from a 12- or 16-month moving average. Since December '86, the Nasdaq has released a short-interest report eight business days after the 15th of each month. It breaks down short interest between big and small caps. Nasdaq stocks are less likely to be part of an arbitrage strategy. So it's no surprise the Nasdaq small-cap short-interest ratio has been a somewhat better sentiment barometer. It hit an all-time low of 0.36 as the market peaked in March '00. It hit an all-time high of 3.07 as the market sold off in September '01. June's reading was 1.56, showing above-average bearishness. Among the hedge funds that have benefited from short selling is Maltbie's Argonaut Fund, which goes long and short. It's up 11.5% year to date. That's driven by a 23% profit in his short positions. "Part of our strength is that we are short selling on a daily basis in good times and bad," Maltbie said. Dianon Systems (DIAN) is one of his recent short-side successes. He shorted as it broke down early this month on an earnings warning. He covered quickly because he wanted to lock in profits before other short sellers lock in theirs. "You don't know when they're going to cover or why, but you know they are, so you better cover before they do," he said. Maltbie uses the CAN SLIM system to buy stocks. He turns the system upside down for shorting, buying stocks that break down, showing declining relative strength and often buying as a stock breaks below a key support level, like the 50-day or 200-day moving average. "Old support becomes new resistance," he said. Mark Boucher, who runs money from his Investment Research Associates in Menlo Park, Calif., also likes to take profits quickly when he successfully shorts a stock. He takes partial profits when he's ahead 40%, then uses trailing stops to take the rest unless he covers into a selling climax or a big rally on volume. "A bear market rally can erase six months of profits in two days," he said. He also uses some IBD techniques in reverse. He looks for short-sell candidates on the new low list and among stocks with declining earnings growth, declining institutional sponsorship and high debt. He likes to short when a stock breaks down after a four-week consolidation. Thanks to short selling, he's up 10% this year. He says 2000 was his best year. He was up 70%. Many stocks, he says, were declining even as the tech and growth stocks were still advancing. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #2642 ****************************** 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.