From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2956 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, September 25 2002 Volume 02 : Number 2956 In this issue: Re: [CANSLIM] CANSLIM Hunting List 09/20/02 Re: [CANSLIM] Please DO NOT repost IBD articles Re: [CANSLIM] Please DO NOT repost IBD articles [CANSLIM] Low Number of New 52 Week Highs Today Re: [CANSLIM] CANSLIM Hunting List 09/20/02 Re: [CANSLIM] Low Number of New 52 Week Highs Today Re: [CANSLIM] Low Number... a bit OT ---------------------------------------------------------------------- Date: Wed, 25 Sep 2002 13:50:04 -0500 From: "Katherine Malm" Subject: Re: [CANSLIM] CANSLIM Hunting List 09/20/02 This is a multi-part message in MIME format. - ------=_NextPart_000_00D3_01C2649A.736A6950 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi jans and Patrick, I currently get the forward growth rate from VectorVest and haven't been = able to find any other sources that were as reliable for filtering = CANSLIM candidates. I know that DGO, Quotes Plus, and various internet = sites carry forward estimates, but VV takes it one step further. They do = a statistical analysis on past growth rates, looking for patterns that = would influence future estimates. While the actual formula is = proprietary, as I understand it, they "temper" the forward estimates = done by analysts if the volatility of past growth rates is fairly high = and/or slowing significantly.=20 I chose to filter stocks based on forward growth >=3D15 based on this = reasoning: I needed a way to identify growth stocks from the universe of = all possible stocks. By definition, growth stocks are those displaying = growth that exceeds the industry and/or market average. I didn't want to = rely on past growth rates because the market is a discounting mechanism, = i.e. discounting the future to measure "value" and then pricing = accordingly. That means it relies on future estimates more than past = results when pricing a stock. I then did a study of "average" forward = growth rates (in VV) for all stocks and found that, even at the market = peaks (where forecasts tend to overshoot significantly), the maximum = average forward growth rate was about 12-13%. Again, that's an *average* = of all stocks, so is comprised of stocks with extremely high and = extremely negative growth rates. I knew that my filter had to be higher = than the average. I then did some anecdotal backtesting, pulling up the = charts of many "big winner" stocks and looked at their pattern of = forward growth rates. As it turned out, >=3D15% turned out to be norm = for these stocks when they started their big moves. After that, I went = back in time and simply created subsets of stocks with forward growth = >=3D15% and sure enough, all the stocks that kept popping up in the IBD = were there.=20 With respect to whether or not these growth rates are useful because = they are prone to error....I don't worry about that. Forecasting is a = difficult process, but there is no way to operate in business or in the = stock market without it if you are trying to assess fundamental drivers = in some meaningful way. In business, the shorter the lead times for = acquiring capacity and material, the less far into the future you have = to "guess" about what the needs will be. But there's no way to operate = without some kind of forecasting. For example, if it takes 2 years to = bring a new plant on line, you have to know what the needs are going to = be 2 years into the future so that you can get the ball rolling. Will = the forecast be wrong? Often it is, but to ignore forecasts because they = are error prone leaves you in the dust when competitors have learned to = forecast with the least error possible and then move ahead as necessary = to ensure capacity is available to meet demand. The times where errors = are most prevalent are at the points in time where the trend changes. = So, if a market is expanding, you can make errors, but because the = upward trend is continuing, you can "make up" for the error over time. = However, when the market suddenly stops growing or worse, declines, the = forecasting errors become quite large. Take that same argument and apply it to forecasting future earnings for = a business for use in valuing stocks. I know that the estimates are = going to be wrong. That's the nature of forecasting. But how can I use = it, knowing that it is not a perfect predictor? Simple. Find a "line in = the sand" so to speak. I know, for example, when the trend is up (as it = was going in to the market peak in early 2000), the estimates are going = to be too high. Conversely, when the trend is down, at some point = estimates will be too *low*. Either way, it's not important to me. Why? = Because selecting based on an estimate of future growth is simply a = mechanism for *identifying* CANSLIM candidates. I can also look at the = *trend* in that forward growth rate for any particular stock. If the = trend has been steadily down and has begun to turn back up, I know = something is going on. If a business is suddenly beating estimates over = and over again, I know that the estimates are too low.=20 Will I miss some good quality stocks because of an arbitrary cut off at = 15%? Yes. But what I've found is that the few that I miss are a small = price to pay for the greater universe that I'm able to identify. Why use = forward growth rates based on estimates that may be wrong vs. past = growth rates that are based on actual financial reports? Because = fundamentals lag badly (I'm ignoring accounting fraud...that's another = ball of wax). I can easily find stocks that had 20-25% growth rates in = the past, but what if their business has changed? What if their market = has changed? What if new competitors have come in? What if alternative = products/services are now available? What if the economic backdrop has = changed? The future estimates at least keep that in mind. Once I find = stocks with forward growth rates "above average," then I can look at = technicals to see that the market is confirming the future potential of = the business, then I can look at past fundamentals to see how = effectively the company has generated profits in the past. All told, a = forward growth rate or a forward earnings estimate is just a means for = identifying stocks with potential. Unless I'm buying the whole company, = it doesn't really matter if it's "wrong." Katherine ----- Original Message -----=20 From: Patrick Wahl=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, September 24, 2002 2:26 PM Subject: Re: [CANSLIM] CANSLIM Hunting List 09/20/02 On 24 Sep 2002 at 14:55, Spencer48@aol.com wrote: > about what the stock will do. But how do they divvy up the = quarterlies > (from their yearly projections)-and how many quarters ahead can they > accurately predict? Too often I think the correct answer is zero quarters. Right now I'd = say there is very=20 very little reliablity in any earnings forecast, because they are so = dependent on=20 when the economy turns up, and no one can make that call. During a = period of a=20 growing economy, forecasts are more reliable, its when you get into = these transition=20 periods that they completely lose their accuracy. No one was = forecasting a big slow=20 down in earnings as we approached the recent slowdown. Also, certain = industries=20 and business are easier to forecast for than others. Forecasts for = Abott Labs, when I=20 have paid attention to it, are right on the nose. I think smaller = companies,=20 especially in technology areas, are more difficult to forecast for. - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_00D3_01C2649A.736A6950 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi jans and Patrick,
 
I currently get the forward growth rate from VectorVest and haven't = been=20 able to find any other sources that were as reliable for filtering = CANSLIM=20 candidates. I know that DGO, Quotes Plus, and various internet sites = carry=20 forward estimates, but VV takes it one step further. They do a = statistical=20 analysis on past growth rates, looking for patterns that would influence = future=20 estimates. While the actual formula is proprietary, as I understand = it,=20 they "temper" the forward estimates done by analysts if the = volatility of=20 past growth rates is fairly high and/or slowing significantly.
 
I chose to filter stocks based on forward growth >=3D15 based on = this=20 reasoning: I needed a way to identify growth stocks from the universe of = all=20 possible stocks. By definition, growth stocks are those displaying = growth=20 that exceeds the industry and/or market average. I didn't want to rely = on past=20 growth rates because the market is a discounting mechanism, i.e. = discounting the=20 future to measure "value" and then pricing accordingly. That means it = relies on=20 future estimates more than past results when pricing a stock. I then did = a study=20 of "average" forward growth rates (in VV) for all stocks and found = that,=20 even at the market peaks (where forecasts tend to overshoot = significantly), the=20 maximum average forward growth rate was about 12-13%. Again, that's an = *average*=20 of all stocks, so is comprised of stocks with extremely high and = extremely=20 negative growth rates. I knew that my filter had to be higher than the = average.=20 I then did some anecdotal backtesting, pulling up the charts of many = "big=20 winner" stocks and looked at their pattern of forward growth rates. As = it turned=20 out, >=3D15% turned out to be norm for these stocks when they started = their big=20 moves. After that, I went back in time and simply created subsets of = stocks with=20 forward growth >=3D15% and sure enough, all the stocks that kept = popping up in=20 the IBD were there.
 
With respect to whether or not these growth rates are useful = because they=20 are prone to error....I don't worry about that. Forecasting is a = difficult=20 process, but there is no way to operate in business or in the stock = market=20 without it if you are trying to assess fundamental drivers in some = meaningful=20 way. In business, the shorter the lead times for acquiring capacity and=20 material, the less far into the future you have to "guess" about what = the needs=20 will be. But there's no way to operate without some kind of forecasting. = For=20 example,  if it takes 2 years to bring a new plant on line, you = have to=20 know what the needs are going to be 2 years into the future so that you = can get=20 the ball rolling. Will the forecast be wrong? Often it is, but to ignore = forecasts because they are error prone leaves you in the dust when = competitors=20 have learned to forecast with the least error possible and then move = ahead as=20 necessary to ensure capacity is available to meet demand. The times = where errors=20 are most prevalent are at the points in time where the trend changes. = So, if a=20 market is expanding, you can make errors, but because the upward trend = is=20 continuing, you can "make up" for the error over time. However, when the = market=20 suddenly stops growing or worse, declines, the forecasting errors become = quite=20 large.
 
Take that same argument and apply it to forecasting future earnings = for a=20 business for use in valuing stocks. I know that the estimates are going = to be=20 wrong. That's the nature of forecasting. But how can I use it, knowing = that it=20 is not a perfect predictor? Simple. Find a "line in the sand" so to = speak. I=20 know, for example, when the trend is up (as it was going in to the = market peak=20 in early 2000), the estimates are going to be too high. Conversely, when = the=20 trend is down, at some point estimates will be too *low*. Either way, = it's not=20 important to me. Why? Because selecting based on an estimate of future = growth is=20 simply a mechanism for *identifying* CANSLIM candidates. I can also look = at the=20 *trend* in that forward growth rate for any particular stock. If the = trend has=20 been steadily down and has begun to turn back up, I know something is = going on.=20 If a business is suddenly beating estimates over and over again, I know = that the=20 estimates are too low.
 
Will I miss some good quality stocks because of an arbitrary cut = off at=20 15%? Yes. But what I've found is that the few that I miss are a small = price to=20 pay for the greater universe that I'm able to identify. Why use forward = growth=20 rates based on estimates that may be wrong vs. past growth rates that = are based=20 on actual financial reports? Because fundamentals lag badly (I'm = ignoring=20 accounting fraud...that's another ball of wax). I can easily find stocks = that=20 had 20-25% growth rates in the past, but what if their business has = changed?=20 What if their market has changed? What if new competitors have come in? = What if=20 alternative products/services are now available? What if the=20 economic backdrop has changed? The future estimates at least = keep that=20 in mind. Once I find stocks with forward growth rates "above average," = then I=20 can look at technicals to see that the market is confirming the future = potential=20 of the business, then I can look at past fundamentals to see how = effectively the=20 company has generated profits in the past. All told, a forward growth = rate or a=20 forward earnings estimate is just a means for identifying stocks with = potential.=20 Unless I'm buying the whole company, it doesn't really matter if it's=20 "wrong."
 
Katherine
----- Original Message -----
From:=20 Patrick = Wahl=20
To: canslim@lists.xmission.com=
Sent: Tuesday, September 24, = 2002 2:26=20 PM
Subject: Re: [CANSLIM] CANSLIM = Hunting=20 List 09/20/02



On 24 Sep 2002 at 14:55, Spencer48@aol.com = wrote:

> about=20 what the stock will do.  But how do they divvy up the = quarterlies
>=20 (from their yearly projections)-and how many quarters ahead can = they
>=20 accurately predict?

Too often I think the correct answer is = zero=20 quarters.  Right now I'd say there is very
very little = reliablity in=20 any earnings forecast, because they are so dependent on
when the = economy=20 turns up, and no one can make that call.  During a period of a=20
growing economy, forecasts are more reliable, its when you get = into these=20 transition
periods that they completely lose their accuracy.  = No one=20 was forecasting a big slow
down in earnings as we approached the = recent=20 slowdown.  Also, certain industries
and business are easier = to=20 forecast for than others. Forecasts for Abott Labs, when I
have = paid=20 attention to it, are right on the nose.  I think smaller = companies,=20
especially in technology areas, are more difficult to forecast=20 for.



-
-To subscribe/unsubscribe, email "majordomo@xmission.com"
-In= the=20 email body, write "subscribe canslim" or
-"unsubscribe = canslim".  Do=20 not use quotes in your email. - ------=_NextPart_000_00D3_01C2649A.736A6950-- - - - -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: Wed, 25 Sep 2002 12:50:04 -0700 From: "NANCY POLCARO" Subject: Re: [CANSLIM] Please DO NOT repost IBD articles - ------=_NextPart_001_0000_01C26492.117861A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable aloha mike-I agree- but I had issue with the fact that someone asked not = to post information on the site. I learn something from everything I read= here. I just wish I could organise and retain more of it. One day?? na= ncy =20 - ----- Original Message ----- From: Mike Gibbons Sent: Wednesday, September 25, 2002 10:30 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Please DO NOT repost IBD articles =20 Nancy, =20 I think the point here is not so much the reposting of the IBD editorial,= which IBD can deal with if they wish, as the editorializing that went al= ong with it. =20 The use of emotive language such as "idiotic bill" and "criminal" in the = original posting, which I also objected to, seemed to me to be evidence o= f using the editorial to make a political point. I think we've agreed bef= ore that this is not the place for political discussions which quickly le= ad to a poisonous atmosphere. =20 Aloha, =20 Mike Gibbons Proactive Technologies, LLC http://www.proactech.com - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmissi= on.com]On Behalf Of NANCY POLCARO Sent: Tuesday, September 24, 2002 10:30 PM To: canslim Subject: Re: [CANSLIM] Please DO NOT repost IBD articles I do not get IBD-I cant afford it in this market-will get it again when t= he market changes. I have read others on this site that have said the sa= me thing-If you dont want to read the posts - why dont you just not read = them, instead of deciding what the rest should read. =20 =20 - ----- Original Message ----- From: James Bond Sent: Tuesday, September 24, 2002 6:25 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Please DO NOT repost IBD articles =20 and stay on topic as much as possible. Anyone subscribing to this group will likely to also have subscription to IBD. So reposting IBD articles here is only a waste of bandwidth and everybody's time (in addition to possibly violating IBD's copyright). I was going to rant about the idiotic ultra-conservative IBD editorials but I don't think we should turn this forum into a political one so I'll stop here. I wish my state could pass a similar law (instead of all the tax breaks it gave to the companies and did nothing to help the economy and badly hurt the state budget). __________________________________________________ Do you Yahoo!? New DSL Internet Access from SBC & Yahoo! http://sbc.yahoo.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. - ------=_NextPart_001_0000_01C26492.117861A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
aloha mike-I&n= bsp;agree- but I had issue with the fact that someone asked not to post i= nformation on the site. I learn something from everything I read her= e. I just wish I could organise and retain more of it.  One day= ??  nancy
 
----- Original Mes= sage -----
From: Mike Gibbons
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Please DO NOT repost = IBD articles
 
Nancy,
 
I think the point here is not so much the reposting of the IBD edit= orial, which IBD can deal with if they wish, as the editorializing that w= ent along with it.
 
<= SPAN class=3D470392317-25092002>The u= se of emotive language such as "idiotic bill" and "criminal" in the origi= nal posting, which I also objected to, seemed to me to be evidence of usi= ng the editorial to make a political point. I think we've agreed before t= hat this is not the place for political discussions which quickly lead to= a poisonous atmosphere.
 
Aloha,
&nbs= p;
Mike Gibbons
Proactive Technologies, LLC
http://www.proactech= .com
= - -----Original Message-----
From: owner-canslim@lists.xmission.c= om [mailto:owner-canslim@lists.xmission.com]On Behalf Of NANCY POL= CARO
Sent: Tuesday, September 24, 2002 10:30 PM
To: c= anslim
Subject: Re: [CANSLIM] Please DO NOT repost IBD articles=

I do not get IBD-I cant afford it in this mark= et-will get it again when the market changes.  I have read others on= this site that have said the same thing-If you dont want to read&nb= sp;the posts - why dont you just not read them, instead of  dec= iding what the rest should read. 
 
----- Original Message -----
From: James Bond
Sent: Tuesday, September 24, 2002 6:25 PM<= /DIV>
To: canslim@lists.xmission.c= om
Subject: [CANSLIM] Please= DO NOT repost IBD articles
 
and stay on topic as m= uch as possible. Anyone
subscribing to this group will likely to also = have
subscription to IBD. So reposting IBD articles here is
only a = waste of bandwidth and everybody's time (in
addition to possibly viola= ting IBD's copyright).

I was going to rant about the idiotic
ul= tra-conservative IBD editorials but I don't think we
should turn this = forum into a political one so I'll
stop here. I wish my state could pa= ss a similar law
(instead of all the tax breaks it gave to the
comp= anies and did nothing to help the economy and
badly hurt the state bud= get).

__________________________________________________
Do you= Yahoo!?
New DSL Internet Access from SBC & Yahoo!
http://sbc.y= ahoo.com

-
-To subscribe/unsubscribe, email "majordomo@xmission= .com"
-In the email body, write "subscribe canslim" or
-"unsubscrib= e canslim".  Do not use quotes in your email.
- ------=_NextPart_001_0000_01C26492.117861A0-- - - - -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: Wed, 25 Sep 2002 12:50:04 -0700 From: "NANCY POLCARO" Subject: Re: [CANSLIM] Please DO NOT repost IBD articles - ------=_NextPart_001_0000_01C26492.117861A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable aloha mike-I agree- but I had issue with the fact that someone asked not = to post information on the site. I learn something from everything I read= here. I just wish I could organise and retain more of it. One day?? na= ncy =20 - ----- Original Message ----- From: Mike Gibbons Sent: Wednesday, September 25, 2002 10:30 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Please DO NOT repost IBD articles =20 Nancy, =20 I think the point here is not so much the reposting of the IBD editorial,= which IBD can deal with if they wish, as the editorializing that went al= ong with it. =20 The use of emotive language such as "idiotic bill" and "criminal" in the = original posting, which I also objected to, seemed to me to be evidence o= f using the editorial to make a political point. I think we've agreed bef= ore that this is not the place for political discussions which quickly le= ad to a poisonous atmosphere. =20 Aloha, =20 Mike Gibbons Proactive Technologies, LLC http://www.proactech.com - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmissi= on.com]On Behalf Of NANCY POLCARO Sent: Tuesday, September 24, 2002 10:30 PM To: canslim Subject: Re: [CANSLIM] Please DO NOT repost IBD articles I do not get IBD-I cant afford it in this market-will get it again when t= he market changes. I have read others on this site that have said the sa= me thing-If you dont want to read the posts - why dont you just not read = them, instead of deciding what the rest should read. =20 =20 - ----- Original Message ----- From: James Bond Sent: Tuesday, September 24, 2002 6:25 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Please DO NOT repost IBD articles =20 and stay on topic as much as possible. Anyone subscribing to this group will likely to also have subscription to IBD. So reposting IBD articles here is only a waste of bandwidth and everybody's time (in addition to possibly violating IBD's copyright). I was going to rant about the idiotic ultra-conservative IBD editorials but I don't think we should turn this forum into a political one so I'll stop here. I wish my state could pass a similar law (instead of all the tax breaks it gave to the companies and did nothing to help the economy and badly hurt the state budget). __________________________________________________ Do you Yahoo!? New DSL Internet Access from SBC & Yahoo! http://sbc.yahoo.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. - ------=_NextPart_001_0000_01C26492.117861A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
aloha mike-I&n= bsp;agree- but I had issue with the fact that someone asked not to post i= nformation on the site. I learn something from everything I read her= e. I just wish I could organise and retain more of it.  One day= ??  nancy
 
----- Original Mes= sage -----
From: Mike Gibbons
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Please DO NOT repost = IBD articles
 
Nancy,
 
I think the point here is not so much the reposting of the IBD edit= orial, which IBD can deal with if they wish, as the editorializing that w= ent along with it.
 
<= SPAN class=3D470392317-25092002>The u= se of emotive language such as "idiotic bill" and "criminal" in the origi= nal posting, which I also objected to, seemed to me to be evidence of usi= ng the editorial to make a political point. I think we've agreed before t= hat this is not the place for political discussions which quickly lead to= a poisonous atmosphere.
 
Aloha,
&nbs= p;
Mike Gibbons
Proactive Technologies, LLC
http://www.proactech= .com
= - -----Original Message-----
From: owner-canslim@lists.xmission.c= om [mailto:owner-canslim@lists.xmission.com]On Behalf Of NANCY POL= CARO
Sent: Tuesday, September 24, 2002 10:30 PM
To: c= anslim
Subject: Re: [CANSLIM] Please DO NOT repost IBD articles=

I do not get IBD-I cant afford it in this mark= et-will get it again when the market changes.  I have read others on= this site that have said the same thing-If you dont want to read&nb= sp;the posts - why dont you just not read them, instead of  dec= iding what the rest should read. 
 
----- Original Message -----
From: James Bond
Sent: Tuesday, September 24, 2002 6:25 PM<= /DIV>
To: canslim@lists.xmission.c= om
Subject: [CANSLIM] Please= DO NOT repost IBD articles
 
and stay on topic as m= uch as possible. Anyone
subscribing to this group will likely to also = have
subscription to IBD. So reposting IBD articles here is
only a = waste of bandwidth and everybody's time (in
addition to possibly viola= ting IBD's copyright).

I was going to rant about the idiotic
ul= tra-conservative IBD editorials but I don't think we
should turn this = forum into a political one so I'll
stop here. I wish my state could pa= ss a similar law
(instead of all the tax breaks it gave to the
comp= anies and did nothing to help the economy and
badly hurt the state bud= get).

__________________________________________________
Do you= Yahoo!?
New DSL Internet Access from SBC & Yahoo!
http://sbc.y= ahoo.com

-
-To subscribe/unsubscribe, email "majordomo@xmission= .com"
-In the email body, write "subscribe canslim" or
-"unsubscrib= e canslim".  Do not use quotes in your email.
- ------=_NextPart_001_0000_01C26492.117861A0-- - - - -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: Wed, 25 Sep 2002 15:26:04 -0500 From: "Kelly Short" Subject: [CANSLIM] Low Number of New 52 Week Highs Today This is a multi-part message in MIME format. - ------_=_NextPart_001_01C264D1.C5D597FC Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Interesting that on this high volume up day the number of new 52 week = highs (price>$12, Amex, NSDQ, NYSE) was 10, which is the average daily = number for the past week. - ------_=_NextPart_001_01C264D1.C5D597FC Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Interesting = that on this=20 high volume up day the number of new 52 week highs (price>$12, Amex, = NSDQ,=20 NYSE) was 10, which is the average daily number for the past=20 week.
- ------_=_NextPart_001_01C264D1.C5D597FC-- - - - -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: Wed, 25 Sep 2002 17:08:57 EDT From: Spencer48@aol.com Subject: Re: [CANSLIM] CANSLIM Hunting List 09/20/02 Katherine: I just wanted to thank you for taking the time to indite a most thorough reply. jans In a message dated 9/25/2002 2:51:09 PM Eastern Daylight Time, kmalm@earthlink.net writes: << ...If the trend has been steadily down and has begun to turn back up, I know something is going on. If a business is suddenly beating estimates over and over again, I know that the estimates are too low.... >> - - - -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: Wed, 25 Sep 2002 17:13:50 EDT From: Spencer48@aol.com Subject: Re: [CANSLIM] Low Number of New 52 Week Highs Today Kelly: When the market makes a new low, the first day in a rally will show few "new highs" because stocks have been following the market down. I imagine that's why WON says it takes a few weeks to see if leading stocks (which at the market beginning is at their nadir) will break out. jans In a message dated 9/25/2002 4:27:18 PM Eastern Daylight Time, kelly.short@fw.us.neoris.com writes: << Interesting that on this high volume up day the number of new 52 week highs (price>$12, Amex, NSDQ, NYSE) was 10, which is the average daily number for the past week. >> - - - -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: Wed, 25 Sep 2002 14:46:26 -0700 (PDT) From: Eric Jaenike Subject: Re: [CANSLIM] Low Number... a bit OT - --0-667895171-1032990386=:47425 Content-Type: text/plain; charset=us-ascii This rally has all the makings of rapid failure. Look at what happened here. The markets got oversold right into the natural reversal area of the July lows, which many are looking for as the area for the formation of a double bottom. The market bounces, on poor volume, with the SOX, the ultimate speculator's tool with the worst fundamentals, leading the way. And its the end of the month (think markups). The double bottom has been highly anticipated. The smart play was to get long at close yesterday (or play the ETFs immediately after hours on the lack of blowup announcements after the close. They trade in some volume until 4:15, although afterhours trading is oh-so dangerous). Risk reward is very high for that play. Then, when the secondary players get long today (and possibly a bit for the next couple of days, aided by end of month markup) and drive up the market, close longs and get short again into the rally failure. IMHO. We have just transitioned from the up momentum market off the July oversold low to the current down momentum market. IMHO, this downside momentum has not run its course, and, in fact, has just gotten started. This short/medium term momentum needs to be completed before one should even think of taking the long side. We are still in the middle of warnings season, and things have looked ugly to this point. There are a lot of threats facing this market, beyond Iraq. Anyone notice the Brazilian real? It is now trading BELOW where it was before the IMF bailout, as the leftist Lulu looks likely to win the election. We will probably lose South America shortly thereafter (having dropped $30 billion in the process, but I digress). I don't think that event is priced into the markets yet. There is one other event that has not yet received the press it deserves, but probably will shortly. There is significant liquidity risk right now. There is $1.5 trillion (yes, with a "t") of enery/telco debt floating around right now. That debt is getting floated right now through "life support" (ie Japan style) capitalism. The time is drawing nigh, however, when that debt will have to be crunched. If the banks freeze credit because they have to write down this debt (think JPM, the worst offender of them all), good customers will get frozen out of the liquidity they need to operate. And that would be very bad for everyone. What happens if that debt gets crunched right when we lose South America? Bad things, IMO. I have very serious concerns about this market, and am not sanguine. I am of the opinion that this market will bottom at a level much lower than most people think (although, as a canslimmer at heart, I recognize that my opinion means nothing. The only opinion that matters is that of the market). There are, of course, as myriad of other problems facing the market that I won't bore people with. In the interest of disclosure, I am talking my book. I am still net short, but took down a lot of SPY to hedge my shorts this a.m. (I should have done in last night, but thought I could poach the open, which was stupid. Regardless, I will start closing that long over the next few days). Sorry for taking up so much space. Eric Spencer48@aol.com wrote:Kelly: When the market makes a new low, the first day in a rally will show few "new highs" because stocks have been following the market down. I imagine that's why WON says it takes a few weeks to see if leading stocks (which at the market beginning is at their nadir) will break out. jans In a message dated 9/25/2002 4:27:18 PM Eastern Daylight Time, kelly.short@fw.us.neoris.com writes: << Interesting that on this high volume up day the number of new 52 week highs (price>$12, Amex, NSDQ, NYSE) was 10, which is the average daily number for the past week. >> - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - --------------------------------- Do you Yahoo!? New DSL Internet Access from SBC & Yahoo! - --0-667895171-1032990386=:47425 Content-Type: text/html; charset=us-ascii

This rally has all the makings of rapid failure. Look at what happened here. The markets got oversold right into the natural reversal area of the July lows, which many are looking for as the area for the formation of a double bottom. The market bounces, on poor volume, with the SOX, the ultimate speculator's tool with the worst fundamentals, leading the way. And its the end of the month (think markups).

The double bottom has been highly anticipated. The smart play was to get long at close yesterday (or play the ETFs immediately after hours on the lack of blowup announcements after the close. They trade in some volume until 4:15, although afterhours trading is oh-so dangerous). Risk reward is very high for that play. Then, when the secondary players get long today (and possibly a bit for the next couple of days, aided by end of month markup) and drive up the market, close longs and get short again into the rally failure. IMHO.

We have just transitioned from the up momentum market off the July oversold low to the current down momentum market. IMHO, this downside momentum has not run its course, and, in fact, has just gotten started. This short/medium term momentum needs to be completed before one should even think of taking the long side.

We are still in the middle of warnings season, and things have looked ugly to this point. There are a lot of threats facing this market, beyond Iraq. Anyone notice the Brazilian real? It is now trading BELOW where it was before the IMF bailout, as the leftist Lulu looks likely to win the election. We will probably lose South America shortly thereafter (having dropped $30 billion in the process, but I digress). I don't think that event is priced into the markets yet.

There is one other event that has not yet received the press it deserves, but probably will shortly. There is significant liquidity risk right now. There is $1.5 trillion (yes, with a "t") of enery/telco debt floating around right now. That debt is getting floated right now through "life support" (ie Japan style) capitalism. The time is drawing nigh, however, when that debt will have to be crunched. If the banks freeze credit because they have to write down this debt (think JPM, the worst offender of them all), good customers will get frozen out of the liquidity they need to operate. And that would be very bad for everyone.

What happens if that debt gets crunched right when we lose South America? Bad things, IMO. I have very serious concerns about this market, and am not sanguine. I am of the opinion that this market will bottom at a level much lower than most people think (although, as a canslimmer at heart, I recognize that my opinion means nothing. The only opinion that matters is that of the market).

There are, of course, as myriad of other problems facing the market that I won't bore people with.

In the interest of disclosure, I am talking my book. I am still net short, but took down a lot of SPY to hedge my shorts this a.m. (I should have done in last night, but thought I could poach the open, which was stupid. Regardless, I will start closing that long over the next few days).

Sorry for taking up so much space.

Eric 

 Spencer48@aol.com wrote:

Kelly:

When the market makes a new low, the first day in a rally will show few
"new highs" because stocks have been following the market down.

I imagine that's why WON says it takes a few weeks to see if leading
stocks (which at the market beginning is at their nadir) will break out.

jans

In a message dated 9/25/2002 4:27:18 PM Eastern Daylight Time,
kelly.short@fw.us.neoris.com writes:

<< Interesting that on this high volume up day the number of new 52 week
highs (price>$12, Amex, NSDQ, NYSE) was 10, which is the average daily number
for the past week.
>>

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New DSL Internet Access from SBC & Yahoo! - --0-667895171-1032990386=:47425-- - - - -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 #2956 ****************************** 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.