From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #381 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, September 10 1998 Volume 02 : Number 381 In this issue: [CANSLIM] Oversold Oscillator Re: Fw: [CANSLIM] Comparison to 1987 [CANSLIM] The new Bull Market is here!!!!!! YA RIGHT!!!!!! Re: [CANSLIM] Comparison to 1987 Re: [CANSLIM] Comparison to 1987 Re: [CANSLIM] Comparison to 1987 [CANSLIM] Re: Where did 80% success rate come from Re: [CANSLIM] Followthrough [CANSLIM] Classic cup/w handle Re: [CANSLIM] Comparison to 1987 [CANSLIM] Re.IBD Re: [CANSLIM] Comparison to 1987 Re: [CANSLIM] Re.IBD Re: [CANSLIM] Comparison to 1987 Re: [CANSLIM] Re.IBD Re: [CANSLIM] Re.IBD [CANSLIM] Johann Re: [CANSLIM] The new Bull Market is here!!!!!! YA RIGHT!!!!!! [CANSLIM] Worth Reading [CANSLIM] Chilling thought, indeed Re: [CANSLIM] Classic cup/w handle Re: [CANSLIM] Breakouts ---------------------------------------------------------------------- Date: Wed, 9 Sep 1998 07:45:14 -0400 From: "Tom Worley" Subject: [CANSLIM] Oversold Oscillator Thought I'd mention that even after yesterday's heavy imbalance favoring up vol over down vol, the Oversold Oscillator at DGO for Nasdaq is still pegged out at -899. On NYSE however, it came off the stops and now is at -632. Tom W - - ------------------------------ Date: Wed, 09 Sep 1998 09:05:11 -0400 From: Craig Griffin Subject: Re: Fw: [CANSLIM] Comparison to 1987 Dean, Thanks for sharing your newsletter with us and your thoughts. As usual, excellent post. I agree with most others posting here in the last 24 hour in their sentiment, the market doesn't really "seem" like it has had a follow-through: no good leadership groups, no great looking bases, few breakouts on the follow-through day, weak volume on Friday to compare against, way oversold so we were due a big bounce, VIX way too high for Canslim investing to be recommended, etc. It is a very tricky market (first bear I have seen when I knew how to notice). This may be another of the 20% of the follow-throughs that fail. Unfortunately to clearly signal its failure the NASDAQ must drop over 10% from here (below 1500). This would be extremely painful if one re-enters stocks at this point. Unlike a normal follow-through, where I am inclined to dive in because I know the water is warm (get 100% invested quickly) ... at this point I am only dipping a toe in the water, maybe two. Unfortunately, O'Neil says that often the inclination is not to believe the follow-through because at that point things look so bleak. So could be the 80% after all. :^0. Yahhhhh ... Well, for the market to get much of my money back, it will have to show some lowered volatility and some decent bases and some breakouts and some leadership and better internals (new high/low, advance/decline line improvement, etc.). Until then I am extremely tentative. Just some thoughts - not "pure" Canslim. Or at least more complex than normal. Best regards, Craig At 08:35 PM 9/9/98 +1200, you wrote: >I agree its not a good time to be on holiday, especially with the market >gyrating so much. This is a portion of a newsletter I receive. > >The market was very oversold and that we would likely see a strong relief >rally >given that several of our sentiment indicators were at historic >levels. > >As you may recall, the 10-day moving average of the CBOE equity >put/call ratio registered .72 Friday. This was the highest mark >since the level posted in October 1990 (.66). The CBOE Market >Volatility Index (VIX) also closed over 48.0 last week. This >extreme level had not been seen since the October 1987 market crash. > >In our experience, the only effective way to isolate and track >relative market strength is through industry sector indexes. You >should keep an eye on them and understand their respective support >and resistance points. Often times, sector indexes reveal the >market's natural rotation. > >We advised you to focus on those sectors that were among the strongest >before the recent correction. Specifically keep an eye on >Hardware, Internet and Retail for they would likely lead the next >rally based upon their relative strength. Not surprisingly, these >sectors were among the leaders on turnaround Tuesday. > > Internet 9.7% > Retail 7.4% > Hardware 6.2% > >Sectors Above/Near 200-Day Moving Average: > > Reversal Near-Term Re-Entry >Sector Signal Support Point >************************************************************** >Drug DRG Tweezer Bottom 610 640 * >Healthcare HCX Tweezer Bottom 600 635 * > >Hardware XCI Tweezer Bottom 505 540 * >Internet INX Tweezer Bottom 145 165 * >Retail RLX Tweezer Bottom 630 665 * > >As wild as today was, not much clarity emerged. Techs and financials shot >higher on the early morning short squeeze. In the second leg, buy programs >lifted everyone. Because they didn't load up on financials in the PM so I am >dubious. And until they by buy the banks this market is still in a danger >zone. So it's hard to tell what people want to hold going into to EPS >warnings season. My guess is they will take a shot at the cyclicals, hold >the drugs and foods and play techs and financials only until bad news from >overseas and EPS comes in. > >-----Original Message----- >From: Frank V. Wolynski >To: canslim@mail.xmission.com >Date: Wednesday, September 09, 1998 6:41 PM >Subject: [CANSLIM] Comparison to 1987 > > >>(Snatched from my journeys into AOL.) >>Frank >>--------------------------- >>In the weeks before the '87 Crash the indexes started gyrating wildly, >>frequently making 1-3% daily moves up and down. >> >>The 51.98 Dow point drop on 9/1/87 was the fitfh biggest point drop ever at >>the time. The 242,8880,000 share day on 9/8/87 was 7th busiest day ever at >>the time. The big up day on 8/11/97 was the second busiest at the time. >> >>On September 22, 1987, the Dow rallied 75.23 points (3.02%) for its biggest >>one day point gain ever. >> >>The death spiral started in earnest on October 7, 1987 - dropping 91.55 >>points (3.47%), most of it in the last hour of trading. The Dow had closed >>the previous day at 2640 - within 82 points (3%) of its all time high. >> >>The Crash occurred 12 days later - and less than 30 days after that record >>gain. Bubbles deflate very quickly once they are pricked. These are the >>times that is imperative to go home flat every night, IMO. >> >>- >> > > >- > > - - ------------------------------ Date: Wed, 09 Sep 1998 07:18:36 -0700 From: Harlan Subject: [CANSLIM] The new Bull Market is here!!!!!! YA RIGHT!!!!!! Yes ladies and gentlemen its a brand new bull market with only one thing thats significantly different from the last one we just went through. Its in the opposite direction! Its all on the SHORT SIDE. The following are a list of names that have either topped or are in a correctional phase. After each name will be a little blurp about it. As for stops those technically oriented use either the moving average mentioned (50,200) as your guide, areas of overhead supply, or resistance levels. For the sake of this post and simplicity we'll use a straight 10% stop. Keep in mind this is just a sampling. OTC stocks AMZN- 100ish is resistance, closed at 92.25, short on any strength ASND-use the 50day as a guide/ overhead supply starts hanging around at 45ish, closed at 45.125 CSCO- use the 50day as your guide 96.25ish, closed at 94.625 COLTY- screamer over last yr!,overhead supply starts at 41ish,50day at 44.875. Closed at 40.25 COST -Bumping head against downtrend line and a tad bit o overhead supply too. closed at 55.375 FILE- resistance is at 22ish closed at 18.25 HBOC- 200 day ave at 28ish, closed at 26.50 INTU- 200 day at 48ish, closed at 44.3125 LAMR- 200 day at 33, closed at 30.375 MSPG- 50 day at 38ish, closed at 35.125 SAPE- 200 day at 42.00, massive overhead supply starts at 40ish, closed at 36.5 and is having trouble moving up. TAGS- 50day at 22, overhead supply starts around the same level,closed at 19.8125 VISX- massive overhead supply around the 59 level, closed at 56.375, prime candidate. YHOO- not for the timid, 50day at 90ish,closed at 84.625 and entering an area of overhead supply NYSE stocks AEH- hasnt broken the 50day yet,but the moment it does on a closing basis watch out. closed at 30.68 AOL- resistance at 105ish, decent overhead supply starts around the 100 mark. Closed at 95.25 BMY- 50day at 113ish, closed at 108.25 GPS- In initial snapback mode yesterday, 50day at 61.40, any weakness and it Could doesnt mean it will fall back down to the sub 50 level, closed at 61.00 GE- use 200 day as your guide (82.125) closed at 81.875, my personal fav. HNZ- 55 is resistance, 50day is 54.625ish, not a screamer. LXK- they're printers are give aways with puter packages these days, basically junk. use 50day as guide (66.40) closed at 59.75, I'd leave alone unless it rallys. UMG- use 50 day as guide, screamed yesterday on mediorce vol. any move back below the 50day ave (46.625) and I'd consider it. Closed at47.31 PFE- massive overhead supply starts at anything over 100, 50 day at 108ish, closed at 100.6875 =========================== thats all I've got time for now but theres a lot more. PS Time to buy the Big banks,Brokerages? NOT Time to buy the Oils? NOT Sucker rally? most likely Retest of the lows on the S&P 500 (940ish) with an undercut? very strong possibility. If your not able to go short, keep your head down, and cash is king. If anyone is looking for a good example of what can happen to these Big sense of security houshold names that HAVE BEEN this big pictures asset class leadership just look at a chart of TOYS R US (TOY) with a 50day ave and a 200 day ave loaded. Notice what happens when the stock went below the 200 day moving ave? It tends to stay below it and trad off of it doesnt it? Has anyone seen the "I've fallen and cant get up" doll? Just calling it as I see it, use your own judgement,trade at your own risks, strictly for informational purposes. Any comments email me direct. Harlan - - ------------------------------ Date: Wed, 09 Sep 1998 09:21:06 -0400 From: Craig Griffin Subject: Re: [CANSLIM] Comparison to 1987 Frank, Thanks for sharing the post from AOL. Excellent food for thought! The gyrations indeed make me uncomfortable - now even more so - see my related post to Dean. It is hard to step back into a market that has been down 18% (!) in a 4 day span (!!) starting on 8/26. Then it goes back up more than 10% in the next 5 days beginning 9/01. That is the entire market! If an individual stock was acting like that, I doubt I would touch it. For an individual stock this is often the type of action you get before it breaks down for good. Now that this occurs to me, I am even happier to have mostly stayed away from yesterday's rally (although I fully expect continued upside today). And as always, I expect to be WRONG. Best regards, Craig BTW - Who was it that introduced the 80-20 success-failure ratio as an O'Neil statement? I never have heard that, but it does seem reasonable (nothing works every time in the market). Did someone hear him say it personally or is it written down somewhere? At 12:55 AM 9/9/98 -0400, you wrote: >(Snatched from my journeys into AOL.) >Frank >--------------------------- >The Crash occurred 12 days later - and less than 30 days after that record >gain. Bubbles deflate very quickly once they are pricked. These are the >times that is imperative to go home flat every night, IMO. - - ------------------------------ Date: Wed, 9 Sep 1998 09:25:18 -0400 (EDT) From: Deepak Kapur Subject: Re: [CANSLIM] Comparison to 1987 Craig, >BTW - Who was it that introduced the 80-20 success-failure ratio as an >O'Neil statement? I never have heard that, but it does seem reasonable >(nothing works every time in the market). Did someone hear him say it >personally or is it written down somewhere? If my memory serves me right, it is in the two articles that WON recently wrote for IBD on identifying market tops and bottoms. I will try to dig further and report. Regards, Deepak - - ------------------------------ Date: Wed, 09 Sep 1998 13:55:53 GMT From: musicant@autobahn.org (Dan Musicant) Subject: Re: [CANSLIM] Comparison to 1987 On Wed, 09 Sep 1998 00:55:21 -0400, you wrote: : : :The Crash occurred 12 days later - and less than 30 days after that = record :gain. Bubbles deflate very quickly once they are pricked. These are the :times that is imperative to go home flat every night, IMO. : =46rank, "...imperative to go home flat every night..." Huh? Whatcha talkin' about? Do you mean "on the sidelines"? ...sober? ...unhyped? Dan musicant@autobahn.org - - ------------------------------ Date: Wed, 09 Sep 1998 10:17:40 -0400 From: Peter Newell Subject: [CANSLIM] Re: Where did 80% success rate come from Craig, >BTW - Who was it that introduced the 80-20 success-failure ratio as an >O'Neil statement? I never have heard that, but it does seem reasonable >nothing works every time in the market). Did someone hear him say it >personally or is it written down somewhere? I beleive in Aug 14 IBD investors corner O'neil stated this rate. Peter - - ------------------------------ Date: Wed, 9 Sep 1998 10:28:29 -0400 From: Jungbluth.Joe@oscsystems.com Subject: Re: [CANSLIM] Followthrough A couple of people have already alluded to it, but comparing Tuesday's volume with Friday's volume is very unreliable since it was the start of a 3 day weekend. In my admittedly inexperienced opinion, this was another contrary Tuesday, trying to sucker us back. The realities of the global meltdown won't change until the Fed actually changes the rate or Japan institutes true reforms. And even then the transition from bear to bull isn't going to be instantaneous. I'd also like to point out that we're in September, not a month typically known for recoveries. Joe Jungbluth - - ------------------------------ Date: Wed, 9 Sep 1998 10:35:31 -0400 From: Jungbluth.Joe@oscsystems.com Subject: [CANSLIM] Classic cup/w handle I was looking at the chart of the company for which I work, Orbital Sciences Corp (NYSE: ORB). On a daily chart, look at 12/31 and 4/15. Those look like textbook inflection points to me. I had sold some of my company stock in mid-April on a gut feel, but I wish I had noticed the exhaustion gap and gone short. BTW, this stock probably wasn't a true CANSLIM candidate due to EPS. Waddaya think? Joe Jungbluth ps. The company was listed on the NASDAQ before April as ORBI. - - ------------------------------ Date: Wed, 09 Sep 1998 11:33:39 -0400 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Comparison to 1987 At 01:55 PM 9/9/98 GMT, you wrote: >Frank, > >"...imperative to go home flat every night..." > >Huh? Whatcha talkin' about? Do you mean "on the sidelines"? ...sober? >...unhyped? > >Dan >musicant@autobahn.org > That was one of the lines that I intended to 'Edit' prior to sending, but my bumbling with my Email sent it unedited! Flat means, clear of any positions. Not short or long. Or if so, then in the box. As many short as long. A trading technique that is not Canslim, thereby the reason I was going to edit it. Besides, way outta my league here with those types of techniques. I believe the intention is to take advantage of a breaking move by clearing the opposing trade. I.E. The stock breaks out to new highs. Cover your shorts quickly, keeping your long position to take advantage of any follow through. Visa Versa, the stock breaks to the down side. Sell your longs quickly and ride the short you held for more shakeout of timid holders of the stock. Frank Wolynski - - ------------------------------ Date: Wed, 9 Sep 1998 12:15:23 EDT From: JANSI1AUG1@aol.com Subject: [CANSLIM] Re.IBD Canslim Group: This article from IBD this morning should prove useful-from this group's perspective. To summarize, I believe it is cautioning us that: like a swallow doesn't make a summer (a stock market phrase that tells investors to use caution); neither does a follow through day necessarily mean a bull (Johan take note). And now here is the article: The stock market on Tuesday erased most of last week's losses as the Dow scored its largest one-day point gain on record. The advance also produced a ''follow-through'' session, a key technical sign that a longer-term rally could be under way. But cautionary signs abound. Most leading stocks - the top 5%-10% in terms of 52-week price performance -still appear to be in the midst of their corrections. And the number of stocks making new lows on the New York Stock Exchange and Nasdaq Stock Market dwarfed the level of new highs. I N V E S T O R ' S C O R N E R Tuesday's gains followed Fed Chairman Alan Greenspan's remarks late Friday that some took to indicate the nation's central bank might be prepared to ease interest rates. The Dow Jones industrial average rose almost 5% on a 4% increase in trading volume, confirming the 288-point rebound on Sept. 1. The Nasdaq composite and S&P 500 index turned in their own follow-through days as well. A follow- through suggests that a new uptrend has staying power. It comes in two parts. First, the market rallies off a low. Within four to 10 days of the rebound, a major average such as the Dow makes a gain of 1% or more on an increase in trading activity over the prior day. The signal hasn't missed the beginning of a major bull move in decades. But it occasionally flags a rally that later fails. Such a failure occurred recently. The Dow rebounded on Aug. 11 from an intraday low of 8316, closing at 8462. On Aug. 18, the blue-chip index gained 139 points, or 1.6%, on an increase in daily trade. The rally failed a few days later, sending the Dow to a near-term low the following week. Indeed, a follow-through day does not mean investors can step into the market and buy stocks indiscriminately. Most leading stocks are still retracing the ground lost during the current downturn. Few have broken out to new highs. Market professionals took Tuesday's action as a good sign, but many see rough waters ahead in the near term. There's a dearth of undamaged leaders in today's market, notes Greg Kuhn, president of Kamco Capital Management LLC, an Easton, Pa.-based money manager and institutional advisory firm. Kuhn was among the early spotters of the July 20 market top, advising clients to pare down sharply on July 21 and warning of a sharp decline in the averages on July 27. ''The market has got to go through a period of convalescence,'' Kuhn said. ''It will need to take at least eight weeks of backing and filling. The leaders still need to build bases. There are times where you have follow- through days where you could start buying stocks right away. We don't have that yet. You want to take your time here and let stocks come to you. Now you should start looking for the next set of leaders.'' Richard McCabe, chief market analyst at Merrill Lynch, believes the market remains in a ''cyclical bear within an ongoing secular, long-term bull trend'' that should resume in early '99. He notes there was strong breadth Tuesday in the number of rising vs. declining stocks. ''The good thing about today is the advance-decline ratio is about 4- to-1,'' McCabe said. ''That's not historic or spectacular. But when I see a rally of 3-to-1 or higher, it usually means the rally has some meaning. The past rallies -Tuesday and Wednesday (last week) -had only 3-to-2 ratios. Nothing great. ''Today's action says the market has broken this recent downtrend off the July high. We should get some kind of recovery trend that might get to the mid-8000s. At that point, I would be a seller because I think there will be further downside tests as we get out into the later part of the year.'' Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter, sees the market heading to new highs next year, thanks to a strong economy that many observers have underestimated. But the market still faces ample economic and psychological hurdles that could mean choppy sailing in the months ahead. ''The market was ready for a bottom,'' Canelo said. ''Every technical indicator we follow - put/call ratio, ticks, option volatility, block discounts - looked as oversold as October of last year, which proved to be a bottom. On a valuation basis, the market went from 18% overvalued to 12% undervalued as of Friday.'' But while the current downtrend has allowed the market to chew down prices, the correction still needs time, Canelo says. ''All the global factors that worry the market are still there. Japan is still in denial. Russia is in free fall. That translates into risks for Mexico and Latin America.'' And of course, President Clinton has yet to face Independent Counsel Kenneth Starr's report. ''Democrats are turning away from the president,'' Canelo said. ''They're afraid they're going to lose seats in the House and Senate. So the president has very little party structure supporting him. It certainly scares foreign investors when they hear words like impeachment and resignation. So I think the Clinton chronicles are a real issue.'' //////////////////////////////////////////////////////////// Copyright (c) 1998 Investors Business Daily, All rights reserved. Investor's Business Daily - Investor's Corner (09/09/98) Market's Turnaround May Have Some Staying Power By Loren Fleckenstein 09/08/98 20:30 jans - - ------------------------------ Date: Wed, 09 Sep 1998 20:26:02 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] Comparison to 1987 >I.E. The stock breaks out to new highs. Cover your shorts quickly, keeping >your long position to take advantage of any follow through. Visa Versa, the >stock breaks to the down side. Sell your longs quickly and ride the short >you held for more shakeout of timid holders of the stock. I'd bet that it was a stock broker who invented this 'trading' technique. LOL! Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Wed, 09 Sep 1998 21:19:35 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] Re.IBD >To summarize, I believe it is cautioning us that: like a swallow >doesn't make a summer (a stock market phrase that tells investors to use >caution); neither does a follow through day necessarily mean a bull (Johan >take note). Jans, Thank you for posting the Investor's corner article. I hope I did not give anyone the impression that I'm bullish. Reason's to be careful/bearish: - - We remain in a downtrend. Connect the recent tops on a 3 months chart. - - We are still under the 200DMA on the major indexes (DJIA, NASDAQ, SP500). - - And around that point (near 200MA) we encounter massive overhead resistance. It would take A LOT of buying power to eat through that is a resonable amount of time now. - - There are very few CANSLIM type stocks with pretty bases. - - It is highly unlikely that after a relatively quick (7 weeks) and steep (more than 20%) decline in the major indexes, we would go straight to new highs, i.e. make a 'V' shaped bottom. A 'W' shaped bottom is much more likely. - - On average decliners are still beating advancers. The amount of new lows also remains high. - - Psychologically we have had the steep decline punishment, but IMO we also need the 'time factor' punishment. Some trow during a steep and fast decline, others only give up after a certain amount of time. We have had the first punishment, the other punishment is also 'needed' to clean out the 'shack'. Of course one or more new lows or retests of those lows would be even better. Having said all of this, one MUST IMO stay flexible and be ready for the unexpected. You take it one day at a time and you focus on what is happening right before your eyes. As Harlan has quoted from the book 'Zen of Investing' (or something like that): Believe what you see, not what you think (imaging). Besides, the longer we go down or basically go nowhere, the more likely it is that the ensueing uptrend will be very rewarding. If God would put the choice in my hands, I'd ask for a 9 to 22 month bear market. B^) Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Wed, 09 Sep 1998 15:47:24 -0400 From: Tom Moulton Subject: Re: [CANSLIM] Comparison to 1987 Johan Van Houtven wrote: > >I.E. The stock breaks out to new highs. Cover your shorts quickly, keeping > >your long position to take advantage of any follow through. Visa Versa, the > >stock breaks to the down side. Sell your longs quickly and ride the short > >you held for more shakeout of timid holders of the stock. > > I'd bet that it was a stock broker who invented this 'trading' technique. > > LOL! > > Johan Van Houtven / CLICK! N.V. For plays like this it might be safer to buy puts and calls. I think that selling short is far more risky than buying a put... It a Short position goes the wrong way the stock price could jump 10 or 20 or 100 points pulling you further into the whole, while a Put Option would just become worthless.. risk is limited by what you payed (Selling short has limited profit - the price you sold at and unlimited risk - the highest price a stock can be priced at) IMHO - Buy a PUT it's cheaper and safer... (But not canslim-ish) - - ------------------------------ Date: Wed, 9 Sep 1998 12:54:38 -0700 (PDT) From: TM Subject: Re: [CANSLIM] Re.IBD "I hope I did not give anyone the impression that I'm bullish" Johan, We hadn't heard from your for awhile. We just thought you were off daytrading again. :-). Thanks for your insight. TM - ---Johan Van Houtven wrote: > > >To summarize, I believe it is cautioning us that: like a swallow > >doesn't make a summer (a stock market phrase that tells investors to use > >caution); neither does a follow through day necessarily mean a bull (Johan > >take note). > > Jans, > > Thank you for posting the Investor's corner article. > > I hope I did not give anyone the impression that I'm bullish. > > Reason's to be careful/bearish: > > - We remain in a downtrend. Connect the recent tops on a 3 months chart. > > - We are still under the 200DMA on the major indexes (DJIA, NASDAQ, SP500). > > - And around that point (near 200MA) we encounter massive overhead > resistance. It would take A LOT of buying power to eat through that is a > resonable amount of time now. > > - There are very few CANSLIM type stocks with pretty bases. > > - It is highly unlikely that after a relatively quick (7 weeks) and steep > (more than 20%) decline in the major indexes, we would go straight to new > highs, i.e. make a 'V' shaped bottom. A 'W' shaped bottom is much more likely. > > - On average decliners are still beating advancers. The amount of new lows > also remains high. > > - Psychologically we have had the steep decline punishment, but IMO we also > need the 'time factor' punishment. Some trow during a steep and fast > decline, others only give up after a certain amount of time. We have had > the first punishment, the other punishment is also 'needed' to clean out > the 'shack'. Of course one or more new lows or retests of those lows would > be even better. > > Having said all of this, one MUST IMO stay flexible and be ready for the > unexpected. You take it one day at a time and you focus on what is > happening right before your eyes. > As Harlan has quoted from the book 'Zen of Investing' (or something like > that): Believe what you see, not what you think (imaging). > > Besides, the longer we go down or basically go nowhere, the more likely it > is that the ensueing uptrend will be very rewarding. > > If God would put the choice in my hands, I'd ask for a 9 to 22 month bear > market. B^) > > > > > > Johan Van Houtven / CLICK! N.V. > > > > > - > > _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Wed, 9 Sep 1998 13:04:07 -0700 (PDT) From: TM Subject: Re: [CANSLIM] Re.IBD Johan, I'm doing my assignment. "Connect the recent tops on a 3 months chart. We are still under the 200DMA on the major indexes (DJIA, NASDAQ, SP500)" Gotcha. "And around that point (near 200MA) we encounter massive overhead resistance" How do you know that, from the volume ? "If God would put the choice in my hands, I'd ask for a 9 to 22 month bear market" That Could coincide with a big political change here with the presidential election cycle coming up. We would have a fresh start all the way around. Thanks, TM - ---Johan Van Houtven wrote: > > >To summarize, I believe it is cautioning us that: like a swallow > >doesn't make a summer (a stock market phrase that tells investors to use > >caution); neither does a follow through day necessarily mean a bull (Johan > >take note). > > Jans, > > Thank you for posting the Investor's corner article. > > I hope I did not give anyone the impression that I'm bullish. > > Reason's to be careful/bearish: > > - We remain in a downtrend. Connect the recent tops on a 3 months chart. > > - We are still under the 200DMA on the major indexes (DJIA, NASDAQ, SP500). > > - And around that point (near 200MA) we encounter massive overhead > resistance. It would take A LOT of buying power to eat through that is a > resonable amount of time now. > > - There are very few CANSLIM type stocks with pretty bases. > > - It is highly unlikely that after a relatively quick (7 weeks) and steep > (more than 20%) decline in the major indexes, we would go straight to new > highs, i.e. make a 'V' shaped bottom. A 'W' shaped bottom is much more likely. > > - On average decliners are still beating advancers. The amount of new lows > also remains high. > > - Psychologically we have had the steep decline punishment, but IMO we also > need the 'time factor' punishment. Some trow during a steep and fast > decline, others only give up after a certain amount of time. We have had > the first punishment, the other punishment is also 'needed' to clean out > the 'shack'. Of course one or more new lows or retests of those lows would > be even better. > > Having said all of this, one MUST IMO stay flexible and be ready for the > unexpected. You take it one day at a time and you focus on what is > happening right before your eyes. > As Harlan has quoted from the book 'Zen of Investing' (or something like > that): Believe what you see, not what you think (imaging). > > Besides, the longer we go down or basically go nowhere, the more likely it > is that the ensueing uptrend will be very rewarding. > > If God would put the choice in my hands, I'd ask for a 9 to 22 month bear > market. B^) > > > > > > Johan Van Houtven / CLICK! N.V. > > > > > - > > _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 8 Sep 98 16:32:400 -0500 From: Jeffry White Subject: [CANSLIM] Johann Johann wrote: "and even if we do have one today, we are still in a down trend. I expect that Jeffrey will be quite delighted when he takes note of my (still) bearish attitude. ;^)" Not sure how good the "Johann Sentiment Indicator" (JSI, for short) will prove to be, but I'm quite delighted, if you are. BTW, what tells you we are in a downtrend "even if we have [a follow through day] today", Johann? JW - - ------------------------------ Date: Wed, 09 Sep 1998 17:18:56 -0400 From: Scott Vickery Subject: Re: [CANSLIM] The new Bull Market is here!!!!!! YA RIGHT!!!!!! I like your idea. Where did the shorting conversation that was started a while back continue? Scott Harlan wrote: > Yes ladies and gentlemen its a brand new bull market with only one > thing > thats significantly different from the last one we just went through. > Its in the opposite direction! Its all on the SHORT SIDE. > > The following are a list of names that have either topped or are in a > correctional phase. After each name will be a little blurp about it. > As > for stops those technically oriented use either the moving average > mentioned (50,200) as your guide, areas of overhead supply, or > resistance levels. For the sake of this post and simplicity we'll use > a > straight 10% stop. Keep in mind this is just a sampling. > - - ------------------------------ Date: Wed, 09 Sep 1998 18:30:09 -0400 From: David Squires Subject: [CANSLIM] Worth Reading Hi All, I snipped this from the CBS Market watch page. The comments below are, IMO, right on the money. DCSquires ********************************* To review, it was mentioned in this space July 30 that "...the market is simply not ready for a sustainable intermediate-term advance at present. More of a corrective process is necessary before the seeds can be sown for the next legitimate ascent." (See July 30 Marder on the Markets column). From July 30 to Sept. 1's intraday low of 7,400.30, the Dow proceeded to stumble 1,626.65 points, or 18.0 percent. During this period, the Nasdaq Composite swooned 23.1 percent. Then on Aug. 27 in this space it was stated that "the market needs to once again prove itself by following through on any initial rally attempt. This means ignoring the first few days of a bounceback and focusing on the market's action in the ensuing sessions." (See Aug. 27 Marder on the Markets column). The market's action of Tuesday Sept. 8 constituted a follow-through day, confirming Aug. 31 as an intermediate-term bottom on the Dow. The follow-through technique, developed by William O'Neil, caught the fifth day off the October 1990 bottom, the seventh day off the July 1996 bottom, the seventh day off the April 1997 bottom, and the fifth day off the January 1998 bottom, among other market troughs. Although nothing works all the time in the stock market, the approximate 80 percent success rate of this indicator is to be noted. The market's raft of worries, touched on in the prior column, is another plus. Since the market factors the future into current prices, bottoms are formed amid a climate of fear. It is to be remembered that the bottoms of October 1987, October 1990, April 1994, April 1997, and October 1997 occurred amid heightened worry on the part of investors. That said, stocks will not have a cakewalk ahead of them. In fact, the ensuing advance promises to be more labored than those following the July 1996 and April 1997 lows. The reason can be summed in one word: breadth. When the Dow and S&P 500 indexes made intermediate peaks in May 1996 and March 1997, the cumulative NYSE advance-decline line peaked simultaneously. This time the story's different. The a-d line topped a full 15 weeks before peaks in the blue-chip averages. The upshot is that the market's subsurface deterioration is much worse than at any other point since the bull move began in October 1990. Technically, this deterioration needs more time to repair itself before a strong move can be expected, Tuesday's gargantuan gains notwithstanding. Specifically, individual stocks need to back and fill for a spell until sideways basing patterns are formed. This, in turn, will set the stage for a healthier, more sustained advance. Until then, the session low of Sept. 1 will prove the bottom of the market's summer selloff, which saw the Dow collapse 21.0 percent in a scant six weeks on an intraday basis. The key point is that getting caught up in the fear of the day normally keeps the investor on the sidelines at precisely the time that the market is done factoring all of the bad news into current prices. This is why it is crucial to listen to the message of the market itself. Given its forward-looking demeanor, the market's story usually is the more important one - - ------------------------------ Date: Wed, 9 Sep 1998 23:37:24 -0400 From: "Tom Worley" Subject: [CANSLIM] Chilling thought, indeed From Infobeat's daily comment tonight on the precious metals market: The Bank of Japan announced overnight that it would try to guide its overnight call rate lower in an effort to ease monetary policy. Although the move had little direct impact on the precious complex, if such a move is a harbinger for cuts elsewhere, gold prices could benefit. "If the move by Japan is part of a coordinated effort to ease monetary policy, then it could be read as a (tolerance) for inflation to sustain economic growth," said Dinsa Metha, managing director of global commodities for Chase Manhattan. One of the greatest strengths, indeed its backbone, of this "aging" bull market has been the solid economic growth without inflation. With stable pricing in everything from raw materials to finished goods, with only the slightest of inflationary trends coming in labor costs, a tolerance for inflation would, for me, spell the definitive end of the bull, only the date of the funeral (and the subsequent barbeque, I want the prime rib while I can afford it!!!) left unanswered. Tom W - - ------------------------------ Date: Wed, 09 Sep 1998 21:38:55 -0700 From: Tim Fisher Subject: Re: [CANSLIM] Classic cup/w handle My mm likes ORBI and is out about 40% on it. I did a short CANSLIM analysis on it for her and wasn't impressed. EPS is fair but ROE is low, D/E is high. Insiders is low at 8%. (July numbers) At 10:35 AM 9/9/98 -0400, you wrote: >I was looking at the chart of the company for which I work, Orbital >Sciences Corp (NYSE: ORB). On a daily chart, look at 12/31 and 4/15. >Those look like textbook inflection points to me. I had sold some of my >company stock in mid-April on a gut feel, but I wish I had noticed the >exhaustion gap and gone short. BTW, this stock probably wasn't a true >CANSLIM candidate due to EPS. > >Waddaya think? > >Joe Jungbluth > >ps. The company was listed on the NASDAQ before April as ORBI. > Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Thu, 10 Sep 1998 13:02:50 +0300 From: "David S. Pinhasik" Subject: Re: [CANSLIM] Breakouts >TSFW breaking out on 2.9x ADV (Av Daily Volume ) currently > >METG trying to breakout on 1.5x ADV currently (2 hours before close Tues 9/8) > Johann, do you have the CANSLI breakdown for the above mentioned breakouts? David - - ------------------------------ End of canslim-digest V2 #381 ***************************** 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.