From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3003 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 Thursday, October 24 2002 Volume 02 : Number 3003 In this issue: Re: [CANSLIM] RINO and general execution of trades Re: [CANSLIM] CECO and COCO [CANSLIM] AZO Re: [CANSLIM] AZO Re: [CANSLIM] Rino and trade executions--follow up [CANSLIM] JOSB buy point Re: [CANSLIM] AZO ---------------------------------------------------------------------- Date: Wed, 23 Oct 2002 06:55:17 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] RINO and general execution of trades This is a multi-part message in MIME format. - ------=_NextPart_000_000E_01C27A61.25509690 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable You are correct, David, payment for order flow is legal and a long = standing practice. But even before decimalization, the MM never gave as = much as half the spread for order flow, typical was 2 to 4 cents when = spreads were an eighth to a quarter point. Most firms, NITE included, = cut the amount they paid on order flow as spreads began to tighten. When = I ran a trading desk for a Broker Dealer, I did all our Naz trades with = NITE and got consistent and rapid execution. I monitored the quotes as I = got execution, and often was done better than the bid or offer, and = could listen to the dialogue between the person I was speaking with and = his trader. I rarely needed to challenge their execution prices because = I could see if the market was moving, and see every execution going off = at the same time. But this still would not permit execution over the best offer, which is = what it sounds like happened in this case. - ----- Original Message -----=20 From: David Taggart=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, October 23, 2002 2:21 AM Subject: RE: [CANSLIM] RINO and general execution of trades A lot of online brokers use market maker firms and get what is called = payment for order flow. Basically the market maker is guaranteed the = spread that is one of the main reasons a lot of the online brokers did = and some still do charge extra for limit orders. It does not cost them = extra out of pocket to do a limit order but it does cost payment for = order flow. Check out NITE they were and are one of the biggest MM = firms and you can see what decimalization and less online trading has = done to their stock price. Decimals killed a lot of MM firms that = didn't know how to trade but took order flow instead because when you = used to get anywhere from a 1/16th to 1/4th each trade and now you get a = lot of $.01 and $.02 spreads the money just isn't there like it used to = be. Anybody that used to scalp for 1/8th and 1/4th know that the scalp = game left town last year with the decimals. But returning to the reason = for the post Yes, brokers use payment for order flow to get more money. = That is one of the biggest selling points of direct access brokerage = firms you trade with whatever route you want. Happy Trading, David Taggart - -----Original Message----- From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley Sent: Tuesday, October 22, 2002 9:24 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] RINO and general execution of trades I believe this would be entirely illegal, and likely to cause the Broker = Dealer to quickly go out of business, altho by then likely wouldn't have = any customers left anyway. - ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, October 22, 2002 4:31 PM Subject: Re: [CANSLIM] RINO and general execution of trades Buck: Excellent question. I have found myself in similar situations and = have wondered how I was taken. Maybe some of the insiders on the board = will venture a guess. Here is my guess.=20 If you are dealing through a discount broker and are enjoying some of = the $7.00 or $10.00 transaction costs, it is possible your broker has a = deal with a market maker wherein you pay at the highest bid while your = broker buys at a lower price and splits the difference with the market = maker. I have been told this is how some discount brokers can provide = such low acquisition costs. Anyone know for sure?=20 Charley=20 - ------=_NextPart_000_000E_01C27A61.25509690 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
You are correct, David, payment for order flow = is legal=20 and a long standing practice. But even before decimalization, the MM = never gave=20 as much as half the spread for order flow, typical was 2 to 4 cents when = spreads=20 were an eighth to a quarter point. Most firms, NITE included, cut the = amount=20 they paid on order flow as spreads began to tighten. When I ran a = trading desk=20 for a Broker Dealer, I did all our Naz trades with NITE and got = consistent and=20 rapid execution. I monitored the quotes as I got execution, and often = was done=20 better than the bid or offer, and could listen to the dialogue between = the=20 person I was speaking with and his trader. I rarely needed to challenge = their=20 execution prices because I could see if the market was moving, and see = every=20 execution going off at the same time.
 
But this still would not permit execution over = the best=20 offer, which is what it sounds like happened in this case.
 
----- Original Message -----=20
From: David=20 Taggart
To: canslim@lists.xmission.com=
Sent: Wednesday, October 23, 2002 2:21 AM
Subject: RE: [CANSLIM] RINO and general execution of=20 trades

A lot of = online brokers=20 use market maker firms and get what is called payment for order = flow. =20 Basically the market maker is guaranteed the spread that is one of the = main=20 reasons a lot of the online brokers did and some still do charge extra = for limit=20 orders.  It does not cost them extra out of pocket to do a limit = order but=20 it does cost payment for order flow.  Check out NITE  they = were and=20 are one of the biggest MM firms and you can see what decimalization and = less=20 online trading has done to their stock price.  Decimals killed a = lot of MM=20 firms that didn=92t know how to trade but took order flow instead = because when you=20 used to get anywhere from a 1/16th to 1/4th each = trade and=20 now you get a lot of $.01 and $.02 spreads the money just isn=92t there = like it=20 used to be.  Anybody that used to scalp for 1/8th and=20 1/4th know that the scalp game left town last year with the=20 decimals.  But returning to the reason for the post Yes, brokers = use=20 payment for order flow to get more money.  That is one of the = biggest=20 selling points of direct access brokerage firms you trade with whatever = route=20 you want.

 

Happy=20 Trading,

David=20 Taggart

 

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of Tom=20 Worley
Sent: Tuesday, = October=20 22, 2002 9:24 PM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] RINO and = general=20 execution of trades

 

I believe this would be = entirely=20 illegal, and likely to cause the Broker Dealer to quickly go out of = business,=20 altho by then likely wouldn't have any customers left=20 anyway.

 

----- Original Message = - -----=20

From: Chazmoore@aol.com=20

To: canslim@lists.xmission.com= =20

Sent: Tuesday,=20 October 22, 2002 4:31 PM

Subject: Re:=20 [CANSLIM] RINO and general execution of = trades

 

Buck: Excellent question. = I have=20 found myself in similar situations and have wondered how I was taken. = Maybe some=20 of the insiders on the board will venture a guess. Here is my guess. =

If=20 you are dealing through a discount broker and are enjoying some of the = $7.00 or=20 $10.00 transaction costs, it is possible your broker has a deal with a = market=20 maker wherein you pay at the highest bid while your broker buys at a = lower price=20 and splits the difference with the market maker. I have been told this = is how=20 some discount brokers can provide such low acquisition costs. Anyone = know for=20 sure?
Charley

- ------=_NextPart_000_000E_01C27A61.25509690-- - - - -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, 23 Oct 2002 11:01:42 -0500 From: michael_niemotka@baxter.com Subject: Re: [CANSLIM] CECO and COCO On that day, Devry had announced a miss of earnings, so I think the whole sector sunk in sympathy. Mike Niemotka , PE Sr. Principal Engineer Baxter Healthcare Corporation Route 120 & Wilson Road Round Lake, IL 60073 Tel (847) 270-4075 Fax (847) 270-4525 michael_niemotka@baxter.com AJAskey@aol.com Sent by: To: canslim@lists.xmission.com owner-canslim@lists.xm cc: ission.com Subject: Re: [CANSLIM] CECO and COCO 10/22/2002 10:09 PM Please respond to canslim Ed, Maybe I am not understanding your "Charts don't account for new events" comment, but the COCO, CECO, and APOL charts screamed something is wrong on 10/04 with the big gap down. They weren't shorts at that time but look like short side money makers now. The entry point of the short will be determined by the action in the next day or so. Andy The old "Buy the Rumor, Sell the News". Charts don't account for news events. - - - -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, 23 Oct 2002 11:42:53 -0500 From: michael_niemotka@baxter.com Subject: [CANSLIM] AZO Is AZO showing signs of wedging? It seems like during this most recent breakout, and leading up to it, it has been gaining in price, but volume is starting to get lower and lower. Would this be an opportunity to short AZO? Mike Niemotka , PE Sr. Principal Engineer Baxter Healthcare Corporation Route 120 & Wilson Road Round Lake, IL 60073 Tel (847) 270-4075 Fax (847) 270-4525 michael_niemotka@baxter.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: Wed, 23 Oct 2002 10:58:42 -0600 From: "Patrick Wahl" Subject: Re: [CANSLIM] AZO I don't think this stock should be shorted. You do want to short a stock after a move up, but you want to have a few things going your way. Stock should be in a downtrend, say under a downward sloping 50 day moving average for example, and the market shouldn't be so strong. Ok, we could argue about whether or not this is a bear market rally, but I don't think shorting stocks that are making new highs is a winning proposition (although its funny, when I buy stocks at new highs they seem to want to go down). On 23 Oct 2002 at 11:42, michael_niemotka@baxter.com wrote: > Is AZO showing signs of wedging? It seems like during this most recent > breakout, and leading up to it, it has been gaining in price, but volume is > starting to get lower and lower. > > Would this be an opportunity to short AZO? - - - -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, 23 Oct 2002 11:02:07 -0600 From: "Patrick Wahl" Subject: Re: [CANSLIM] Rino and trade executions--follow up Consider using a limit order at the current price. You do risk not getting filled, but you prevent the sort of questionable action you saw with your market order. Using current price as the limit price should get you into most stocks. On 22 Oct 2002 at 21:45, Jerome Buckmelter wrote: > shouldn't blame my broker; instead I should concentrate on trading > quicker, especially when placing market orders with thinly traded, > fast-moving stocks. However, before making a move I'm really careful > about re-checking the chart and other things since last year I jumped - - - -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, 23 Oct 2002 17:29:06 -0700 (PDT) From: James Bond Subject: [CANSLIM] JOSB buy point I think JOSB is at a good entry point now that it has cleared the momo crowd (read CANSLIMer's). This was not a failed breakout because there was no clear pp. IBD was wrong to say that the pp was 23.18 - the drop from 23.08 to 15.96 (7.12 or 31%) was too deep for a handle but too shallow for a double bottom. The entire base was an inverted H&S formation with a complicated neckline. This pullback can be viewed as the normal test of the neckline after a H&S BO. The matching lows of yesterday and today are bullish in candlestick terms. So is the doji star candlestick today. If you were kicking yourself two days ago for missing the JOSB BO, now pretend you actually bought it right at pp of 23.18. What would have you done? You probably were anguishing over whether to hold on or to cut losses. Skip the anguish part. Put your stop at a few cents below 22. That would limit the potential loss at slightly over 5%. Since violations of matching lows rarely happen, now your position is safer than it was a few days ago. OTOH, if the stock drops below 22, I would seriously consider liquidating all positions and go completely in cash - it shouldn't happen in a healthy market, knowing all we know about the fundamentals of JOSB. Won't you say 23 is a great entry point now? __________________________________________________ Do you Yahoo!? Y! Web Hosting - Let the expert host your web site http://webhosting.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. ------------------------------ Date: Thu, 24 Oct 2002 08:24:19 -0500 From: michael_niemotka@baxter.com Subject: Re: [CANSLIM] AZO Patrick, Thanks for the advice. I was in AZO a while back, and made a little bit of money, 5% if I remember, but even though it is going up again, I am cautious. Mike Niemotka , PE Sr. Principal Engineer Baxter Healthcare Corporation Route 120 & Wilson Road Round Lake, IL 60073 Tel (847) 270-4075 Fax (847) 270-4525 michael_niemotka@baxter.com "Patrick Wahl" To: canslim@lists.xmission.com Sent by: cc: owner-canslim@lists.xm Subject: Re: [CANSLIM] AZO ission.com 10/23/2002 11:58 AM Please respond to canslim I don't think this stock should be shorted. You do want to short a stock after a move up, but you want to have a few things going your way. Stock should be in a downtrend, say under a downward sloping 50 day moving average for example, and the market shouldn't be so strong. Ok, we could argue about whether or not this is a bear market rally, but I don't think shorting stocks that are making new highs is a winning proposition (although its funny, when I buy stocks at new highs they seem to want to go down). On 23 Oct 2002 at 11:42, michael_niemotka@baxter.com wrote: > Is AZO showing signs of wedging? It seems like during this most recent > breakout, and leading up to it, it has been gaining in price, but volume is > starting to get lower and lower. > > Would this be an opportunity to short AZO? - - - -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 #3003 ****************************** 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.