From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #887 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 Saturday, April 29 2000 Volume 02 : Number 887 In this issue: Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] Re: [CANSLIM] M [CANSLIM] When M is good, DSPG explodes [CANSLIM] Who would have expected this? Re: [CANSLIM] When M is good, DSPG explodes [CANSLIM] PWR [CANSLIM] DGO List Re: [CANSLIM] PWR [CANSLIM] M (from today's IBD) Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] [CANSLIM] The 8% Stop Re: [CANSLIM] The 8% Stop Re: [CANSLIM] The 8% Stop Re: [CANSLIM] M (from today's IBD) Re: [CANSLIM] M (from today's IBD) Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] Re: [CANSLIM] The 8% Stop Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] Re: [CANSLIM] M (from today's IBD) Re: [CANSLIM] The 8% Stop Re: [CANSLIM] The 8% Stop ---------------------------------------------------------------------- Date: Sat, 29 Apr 2000 13:08:56 +0200 From: Werner Vandewiele Subject: Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] Mr. Pyan, you wrote: >Correct me if I'm wrong however all I've really seen thus far is that >yesterday was a >reversal day and today is day one of a 1234. Is this some part of CANSLIM that I have missed? > As far as a follow thru day is concerned >I'd have to say that we need to have a few things happen on the OTC Tuesday the 25th of April was a follow thru day. Marder. Kuhn, IBD and this list confirmed it. >1. 4th thru 10th day see a 1% follow thru to the upside on good volume or >should I >say a 3 to 4% up day due to volitility. Tuesday the 25th of April. >2. A crossover of 3880 that was put in on last Tues. What is a crossover? The high on Tuesday the 19th of April was 3851.56. Where does your 3880 figure come from? Is this another valid CANSLIM follow thru day requirement I have missed? Friday the 28th of April we broke 3851.56. Not convincingly maybe, be we did break it for now. >3. And How bout the leadership (semi's) crossing over theyre downtrend >lines since >peaking, Is this a valid CANSLIM requirement? It is a TA requirement, to confirm a potential trend change, IMHO. Besides, should one be looking at the SOX index for this? If so, no cigar IMHO. You need to look at the group leaders, not some standard index, no matter how convienient it is, IMHO. If you want an index that is remotely CANSLIM inspired then I would suggest one should make a surrogate index of the leaders. Done it? Can you see the trendline break now? >sure theyre bumping up against them now (some are some arent,mixed bag)but >they need to stick above them for the next few days. Sure. The more confirmation the better. But CANSLIM is not about being late to the party neither. Glad to see all the doubting though! Markets like to climb a wall of worry. And boy do we have that in place? Inflation/upcomming interest rate hikes, MSFT split-up, Soros funds down the drain, many ex-glamours down several 100%, big time overhead resistance in the leading indexes. When everything is starting to look as if it is "OK, to step in now" one is almost certainly late to the party. >4. and most importantly no lack of SOLID BASING STUCTURES out there. I >dont see >enough of them out there to sustain a move of any magnitude currently. >Anybody else see any? What would you expect after such a steep correction? The time factor has changed. In the past corrections took many months. There was time to form nice, solid bases. Now corrections are getting quicker and quicker. Many sometime in the future, it will all change once again. But for now they are quick and swift. This one if by far the quickest and steepest down. One can not form bases as we would like to see in such an environment. So what to do? We must look at what the stocks that have correct the least and/or camiing back the quickest are doing. And how can we play them succesfully now that we have had a follow thru day? Only one way: You want to minimize risk if you can't watch intraday. The by all means wait for bases to develop. They will be formed eventually. If you are quick, nimble and can watch intraday. Then, in this EXTRAORDINARY situation you can buy stocks that are starting to go up the right hand side of there pattern, when they break important down trendlines. Does it work? That how I've made 17.2% net since Tuesday's follow thru day. Do I recommend it to everyone? NO W-A-Y. {Read this over and over again pls until it hits home. Thank you.} >For now? All I really see is a highly emotional market No wonder. >and a lot of damage thats been >done that isnt going to work itself off in a week or two. Agreed. >We need to establish all >new basing structures before we can get to throw darts times again, at >least intech >land. Good risk/reward management. >I'd look at the OTC this way >resistance 3880 >support 3227 or an undercut. >when you look at those two numbers and a chart of the OTC all you really >have to know >is that we'll be locked in a trading range for awhile most likely around >those two >numbers >As for bright spots? POG,SII these are nice trendline trades that trade >off of >theyre 50day MAverages. >Just food for thought. > >Hi TIM F! been awhile hey! >Johan you still out there? >Dan M Where have you been hiding ! >Harlan > >Just a thought. > > >- Regards, <<< Werner Vandewiele >>> - - ------------------------------ Date: Fri, 28 Apr 2000 21:35:18 -0700 From: "WD Fleckenstein" Subject: Re: [CANSLIM] M Jim- Don't you think you should just continue to follow the CANSLIM method. Won't the mkt speak before the Fed finishes with rates? Dan - -----Original Message----- Date: Mon, 24 Apr 2000 14:05:00 -0700 From: han.26@osu.edu Subject: [CANSLIM] M I'm looking for a large enough rally (sucker or real) to get out of this volatile market until at least after the Fed is through raising rates and a clear trend is established. I would not feel comfortable buying OR shorting any time soon because of the volatility and the unpredictability of sentiment. - - -Jim-- - - ------------------------------ Date: Sat, 29 Apr 2000 10:32:39 -0700 From: han.26@osu.edu Subject: [CANSLIM] When M is good, DSPG explodes Because I'm still nervous about the short term behavior of the Market, I decided to sell DSPG into the strength on Friday. Although it netted me +37% in fewer than 8 weeks [which encompassed the NAZ "super-correction"], I have a feeling I sold too early because DSPG meets ALL of the criteria for CANSLIM now that it has blown through its old high on nearly double volume (with the possible exception of technicals; its chart is erratic because of the April correction). The ONLY reason I didn't hold on longer is I'm still not convinced by the vigor of the supposed follow-throughs on the NASDAQ. Based on HTMMIS, DSPG displays the kind of bullish behavior of a stock that could easily double or triple. DSPG showed up again on the Weekend Review. Perhaps I'll gain the courage to pick DSPG up again once the NAZ feels solid. Anyone else still unconvinced by this Market? - -Jim-- - - ------------------------------ Date: Sat, 29 Apr 2000 10:40:46 -0400 From: "Tom Worley" Subject: [CANSLIM] Who would have expected this? Year-to-date, all major indices continue to struggle. The Dow is the year's big loser, down 6.6%, with the Nasdaq following closely on its heels, down 5.1% since Jan. 1. Both the S&P 500 and America-iNvest.com MicroCap1000 indices are down 1% for the year. The Russell 2000 is the only index on the plus side, up 0.3% for the year. Go small caps! Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - - ------------------------------ Date: Sat, 29 Apr 2000 16:47:35 +0200 From: Werner Vandewiele Subject: Re: [CANSLIM] When M is good, DSPG explodes At 10:32 AM 29-04-00 -0700, you wrote: >I have a feeling I >sold too early because DSPG meets ALL of the criteria for CANSLIM now that >it has >blown through its old high on nearly double volume Agreed. >The ONLY reason I didn't hold on longer is I'm still not convinced by the >vigor >of the supposed follow-throughs on the NASDAQ. Based on HTMMIS, DSPG displays >the kind of bullish behavior of a stock that could easily double or >triple. DSPG >showed up again on the Weekend Review. Perhaps I'll gain the courage to pick >DSPG up again once the NAZ feels solid. > >Anyone else still unconvinced by this Market? Is that a question or an observation? [Sorry, my sarcatic side was playing up.] At our near market bottoms, after severe corrections, people are supposed to be sceptical. So in that way I hope many (preferrably not on this list of course) to be 'still unconvinced'. FWIW. Regards, <<< Werner Vandewiele >>> - - ------------------------------ Date: Sat, 29 Apr 2000 10:30:37 -0500 From: "Charles Dille" Subject: [CANSLIM] PWR Quanta Services looks like it has popped again. What do you guys think? I think I am going to go with DSPG also. Go Market!! Charlie - - ------------------------------ Date: Sat, 29 Apr 2000 11:35:43 -0400 From: "Tom Worley" Subject: [CANSLIM] DGO List List not that much different this week, 80 vs 72, before that it was 79 then 71, so may suggest, despite the volatility, a consolidation overall between new and old economy stocks (NASDAQ vs NYSE). Bx = Base, x = nr of weeks ADCT - low volume breakout from an abbreviated handle of the cup NBTY - probably too late to buy this one, but nice volume b/o on stellar earnings TBL - base on ascending base?, B1 HH - Friday's volume suggests the consolidation may be ending GIL - failed b/o, still consolidating TWP - B5 or B1, depending on how you treat volatility IMPH - B1, needs to consolidate nice gain, A/A/A/A DFXI - descending B3, base on base? RARE - nice B2 after nice gain AAON - B3 WDR - B4 PAYX - a little sloppy and volatile, but LLUR BBOX - high end of a long (9 week) consolidation/trading range, volume not convincing AES - broke out Friday on 1.6X ADV from one week handle of a cup, still buyable FCN - trying to breakout, not succeeding yet CHRW - forming the handle to the cup FLM - may be starting a breakout from an 8 week base following a classic double bottom CTV - nice consolidation PAR - nice b/o from short base, at pivot point An unusually high percentage of the 80 stocks on this week's list were already under some form of merger or takeover scenario, and were not mentioned accordingly. Happy hunting Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - - ------------------------------ Date: Sat, 29 Apr 2000 11:46:16 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] PWR PWR looks like it could be worth watching for a 2nd entry point. Both earnings and sales growth are impressive. Obviously, the place to have bought it was in the base as the volume dried up. Now, it is over 10% extended. Rest of its CS elements also fine. Management has a healthy stake (34%) and the funds have already found it (14% of the remaining float). Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - ----- Original Message ----- From: Charles Dille To: Canslim List Sent: Saturday, April 29, 2000 11:30 AM Subject: [CANSLIM] PWR Quanta Services looks like it has popped again. What do you guys think? I think I am going to go with DSPG also. Go Market!! Charlie - - - - ------------------------------ Date: Sat, 29 Apr 2000 10:28:51 -0600 From: Earl Setser Subject: [CANSLIM] M (from today's IBD) IBD continues to be very cautious after the last couple of days, maybe even more so. Here are some quotes from today's THE BIG PICTURE: "While the Nasdaq's point gains have been dramatic in three of the last four sessions, trading volume has not. The moves lack the intensity that would come with determined institutional support. This raises the odds we're seeing a short-term bounce rather than a new bull market." "That may be hard to believe as select tech stocks break out of bases and trade higher. ... But another key element in picking winners is a healthy market. It's still a little early to know whether the NASDAQ has truly turned a corner." They went on to discuss concerns: recent volume patterns (up on lower volume), bullish sentiment (too high), not enough buyers, too short a bear (recent ones have been 3 months min), and the Fed. Overall, quite a bearish article today, even with the NAS up on increased volume. Another note that I found interesting was in Friday's THE BIG PICTURE (which I got 1 day late this morning): "Before bargain hunters congratulate themselves and the revived tech sector, they should look at recent trading levels. Nasday volume dropped for the second day in a row. Rallies in not only lighter but below average volume leave a lot to be desired. If the Nasdaq is indeed out of the woods, institutional investors aren't buying with conviction." "Tuesday's follow-through volume, while heavier than the day before, also was below average on the Nasdaq and just equaled the NYSE's average. Successful follow-throughs out of bear markets since 1974 have always occurred in above-average trade." This is the first mention of "above-average" trade as something to watch for that I remember. Both Friday and Saturday's papers call out the below average on the front page summary for volume. This isn't what I expected after yesterday's action, particularly given the higher volume. I've picked up MTSN and BBRC over the last 2 days and I'm now at 33% invested. I think I'll try to keep my enthusiasm down until Monday unfolds, and watch closely before making any other decisions. (I was very close to grabbing DSPG yesterday, but the volume ended about 40% over 50 ADV while I was waiting for at least 50%.) - - ------------------------------ Date: 29 Apr 2000 09:45:51 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] I too am up +17% (since 4/17) but what is the point? It is definitely NOT CANSLIM and I have taken unduly large risks for just about any sane investor (save day-traders) to get there. I see many stocks that "broke their downtrend" with a dead cat bounce. I'd call them great shorts candidates, not longs. If you can tell a right side of a steep C&H from a DCB with better than 50% accuracy, then you need to write a book about it and retire. At 01:08 PM 4/29/00 +0200, you wrote: >If you are quick, nimble and can watch intraday. Then, in this EXTRAORDINARY >situation you can buy stocks that are starting to go up the right hand >side of there pattern, when they break important down trendlines. > >Does it work? That how I've made 17.2% net since Tuesday's follow thru day. > >Do I recommend it to everyone? NO W-A-Y. {Read this over and over again >pls until it hits home. Thank you.} > > >>For now? All I really see is a highly emotional market > >No wonder. > >>and a lot of damage thats been >>done that isnt going to work itself off in a week or two. > >Agreed. > >>We need to establish all >>new basing structures before we can get to throw darts times again, at >>least intech >>land. > >Good risk/reward management. > > >>I'd look at the OTC this way >>resistance 3880 >>support 3227 or an undercut. >>when you look at those two numbers and a chart of the OTC all you really >>have to know >>is that we'll be locked in a trading range for awhile most likely around >>those two >>numbers >>As for bright spots? POG,SII these are nice trendline trades that trade >>off of >>theyre 50day MAverages. >>Just food for thought. >> >>Hi TIM F! been awhile hey! >>Johan you still out there? >>Dan M Where have you been hiding ! >>Harlan >> >>Just a thought. >> >> >>- > >Regards, > ><<< Werner Vandewiele >>> Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Sat, 29 Apr 2000 19:35:48 +0200 From: Werner Vandewiele Subject: Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] At 09:45 AM 29-04-00 -0700, you wrote: >I too am up +17% (since 4/17) but what is the point? It is definitely NOT >CANSLIM and I have taken unduly large risks for just about any sane >investor (save day-traders) to get there. So what motivated you to take the risk then? And what rule set is your technique based upon? >I see many stocks that "broke their downtrend" with a dead cat bounce. No kidding!? Many of these ex-glamour stocks aren't comming back. Not any time soon. Guaranteed. But some will and are already showing the way. > I'd call them great shorts candidates, not longs. If they are great shorts, as you say, I hope you are shorting them. Or are you more inclined to take 'unduly large risks'? >If you can tell a right side of a steep C&H from a DCB with better than >50% accuracy, Since you are already made up your mind that it can't be done, without even asking what rule set this technique is based upon, I'm going to leave it at that. >then you need to write a book about it and retire. Haha, Tim. Retiring by writing a book about technical analysis (albeit combined with CANSLIM style fundamentals picking), is very unlikely. The chance of retiring by writing a book about investments and retiring from the royalties is much less than 50%. Over and out, son. >At 01:08 PM 4/29/00 +0200, you wrote: >>If you are quick, nimble and can watch intraday. Then, in this EXTRAORDINARY >>situation you can buy stocks that are starting to go up the right hand >>side of there pattern, when they break important down trendlines. >> >>Does it work? That how I've made 17.2% net since Tuesday's follow thru day. >> >>Do I recommend it to everyone? NO W-A-Y. {Read this over and over again >>pls until it hits home. Thank you.} >> >> >>>For now? All I really see is a highly emotional market >> >>No wonder. >> >>>and a lot of damage thats been >>>done that isnt going to work itself off in a week or two. >> >>Agreed. >> >>>We need to establish all >>>new basing structures before we can get to throw darts times again, at >>>least intech >>>land. >> >>Good risk/reward management. >> >> >>>I'd look at the OTC this way >>>resistance 3880 >>>support 3227 or an undercut. >>>when you look at those two numbers and a chart of the OTC all you really >>>have to know >>>is that we'll be locked in a trading range for awhile most likely around >>>those two >>>numbers >>>As for bright spots? POG,SII these are nice trendline trades that >>>trade off of >>>theyre 50day MAverages. >>>Just food for thought. >>> >>>Hi TIM F! been awhile hey! >>>Johan you still out there? >>>Dan M Where have you been hiding ! >>>Harlan >>> >>>Just a thought. >>> >>> >>>- >> >>Regards, >> >><<< Werner Vandewiele >>> > >Tim Fisher, 1995 President, Pacific Fishery Biologists >Ore-ROCK-On Rockhounding Web Site >PFB Information >mailto:tim@OreRockOn.com >WWW http://OreRockOn.com > > >- Regards, <<< Werner Vandewiele >>> - - ------------------------------ Date: Sat, 29 Apr 2000 12:50:56 -0500 From: "walter nusbaum" Subject: [CANSLIM] The 8% Stop Hi guys, I was wondering where the almost-universal use of the 8% stop originated. What is the theory/basis for this number? Is it possible that heavy hitters are aware of its use, and are capable of driving the market past this number? The reason that I'm asking is that "buying the (10%) dip" is popular among certain market timers, and it seems to occur often enough that they have incorporated it into their systems. Could there be a correlation between the sellers at about -8%, and the (usual) buyers at about -10%? While very strong stocks may withstand a general market decline, otherwise "good" stocks may not fare so well. Can the 8% stop be justified in light of the usual turn around just past 10%? Best wishes, Walt - - ------------------------------ Date: Sat, 29 Apr 2000 12:07:37 -0600 From: Earl Setser Subject: Re: [CANSLIM] The 8% Stop At 12:50 PM 4/29/00 -0500, you wrote: >Hi guys, >I was wondering where the almost-universal use of the 8% stop originated. >What is the theory/basis for this number? Is it possible that heavy hitters >are aware of its use, and are capable of driving the market past this >number? WON says that rule number 1 is to limit your losses. He suggests 7-8% as the maximum loss. >The reason that I'm asking is that "buying the (10%) dip" is popular among >certain market timers, and it seems to occur often enough that they have >incorporated it into their systems. Well, remember, the 7-8% is only based on your initial purchase. It does not apply to a trailing stop based on the stocks intraday or closing high. I believe 8% would be too tight for use in such approaches. >Could there be a correlation between the sellers at about -8%, and the >(usual) buyers at about -10%? >While very strong stocks may withstand a general market decline, otherwise >"good" stocks may not fare so well. Can the 8% stop be justified in light of >the usual turn around just past 10%? I'm not sure there is any magic number, 8%, 10%, 15%?? I've seen daily volatility WAY over any of these during the last month. Personally, I try to use the closing price as my trigger point, and I don't set hard stops or react to intraday prices (for the most part). I do try to give my stocks a chance to recover from a late day dip if they are still close to the -08% point. This approach has kept me in some good stocks, and has increased my losses on some bad one. I'm not sure it's worked that well overall, but I haven't found anything I prefer as yet. >Best wishes, >Walt > > > > >- > > > - - ------------------------------ Date: Sat, 29 Apr 2000 13:56:37 -0500 From: "walter nusbaum" Subject: Re: [CANSLIM] The 8% Stop - ----- Original Message ----- From: "Earl Setser" To: Sent: Saturday, April 29, 2000 1:07 PM Subject: Re: [CANSLIM] The 8% Stop > At 12:50 PM 4/29/00 -0500, you wrote: > >Hi guys, > >I was wondering where the almost-universal use of the 8% stop originated. > >What is the theory/basis for this number? (SNIP) > WON says that rule number 1 is to limit your losses. He suggests 7-8% as > the maximum loss. Hi Earl, Thanks for your reply. I understand WON's recommendation, but I was wondering about its derivation. Nearly everyone uses it including mutual fund folks, but I've never heard of the originator or how this *particular* number was arrived at. Thanks again. Best wishes, Walt (Snip) > >The reason that I'm asking is that "buying the (10%) dip" is popular among > >certain market timers, and it seems to occur often enough that they have > >incorporated it into their systems. > > Well, remember, the 7-8% is only based on your initial purchase. It does > not apply to a trailing stop based on the stocks intraday or closing high. > I believe 8% would be too tight for use in such approaches. > >Could there be a correlation between the sellers at about -8%, and the > >(usual) buyers at about -10%? > >While very strong stocks may withstand a general market decline, otherwise > >"good" stocks may not fare so well. Can the 8% stop be justified in light of > >the usual turn around just past 10%? > > I'm not sure there is any magic number, 8%, 10%, 15%?? I've seen daily > volatility WAY over any of these during the last month. Personally, I try > to use the closing price as my trigger point, and I don't set hard stops or > react to intraday prices (for the most part). I do try to give my stocks a > chance to recover from a late day dip if they are still close to the -08% > point. This approach has kept me in some good stocks, and has increased my > losses on some bad one. I'm not sure it's worked that well overall, but I > haven't found anything I prefer as yet. - - ------------------------------ Date: Sat, 29 Apr 2000 17:04:00 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] M (from today's IBD) Both these articles appear predicated on the assumption we were in a bear market, as opposed to a correction in a bull market. Outside the %age drop, I saw little evidence of a bear market. Considering how compressed everything is now, I ignored the %age and looked at other indicators, and believe we never left a bull mkt. Looked at that way, the "shortness" of the "bear market" makes more sense as a correction, severe tho it has been. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - ----- Original Message ----- From: Earl Setser To: Cc: Sent: Saturday, April 29, 2000 12:28 PM Subject: [CANSLIM] M (from today's IBD) IBD continues to be very cautious after the last couple of days, maybe even more so. Here are some quotes from today's THE BIG PICTURE: "While the Nasdaq's point gains have been dramatic in three of the last four sessions, trading volume has not. The moves lack the intensity that would come with determined institutional support. This raises the odds we're seeing a short-term bounce rather than a new bull market." "That may be hard to believe as select tech stocks break out of bases and trade higher. ... But another key element in picking winners is a healthy market. It's still a little early to know whether the NASDAQ has truly turned a corner." They went on to discuss concerns: recent volume patterns (up on lower volume), bullish sentiment (too high), not enough buyers, too short a bear (recent ones have been 3 months min), and the Fed. Overall, quite a bearish article today, even with the NAS up on increased volume. Another note that I found interesting was in Friday's THE BIG PICTURE (which I got 1 day late this morning): "Before bargain hunters congratulate themselves and the revived tech sector, they should look at recent trading levels. Nasday volume dropped for the second day in a row. Rallies in not only lighter but below average volume leave a lot to be desired. If the Nasdaq is indeed out of the woods, institutional investors aren't buying with conviction." "Tuesday's follow-through volume, while heavier than the day before, also was below average on the Nasdaq and just equaled the NYSE's average. Successful follow-throughs out of bear markets since 1974 have always occurred in above-average trade." This is the first mention of "above-average" trade as something to watch for that I remember. Both Friday and Saturday's papers call out the below average on the front page summary for volume. This isn't what I expected after yesterday's action, particularly given the higher volume. I've picked up MTSN and BBRC over the last 2 days and I'm now at 33% invested. I think I'll try to keep my enthusiasm down until Monday unfolds, and watch closely before making any other decisions. (I was very close to grabbing DSPG yesterday, but the volume ended about 40% over 50 ADV while I was waiting for at least 50%.) - - - - ------------------------------ Date: Sat, 29 Apr 2000 23:33:48 +0200 From: Werner Vandewiele Subject: Re: [CANSLIM] M (from today's IBD) At 05:04 PM 29-04-00 -0400, you wrote: >Both these articles appear predicated on the assumption we were >in a bear market, as opposed to a correction in a bull market. >Outside the %age drop, I saw little evidence of a bear market. >Considering how compressed everything is now, I ignored the %age >and looked at other indicators, and believe we never left a bull >mkt. Looked at that way, the "shortness" of the "bear market" >makes more sense as a correction, severe tho it has been. Good point, Tom. But the eternal bullish sentiment as portraited in the sentiment figures is part of the 'problem' of getting this correction/bear or whatever we would like to call it, out of the way. A nice bottom usually goes hand in hand with bearish sentiment figures reaching the 35% level. We haven't seen that yet. We would like to see it. But it must not render us blind to other factors either. There are many things that happen when the market lifts of again. A follow thru day is nice. Leaders breaking out is also very positive. One would prefer this to happen when bearish sentiment is prevalent. But just when you think you can rely on a certain indicator or figure, the market changes it's ways and surprises many. Ask the Soros' guys... Regards, <<< Werner Vandewiele >>> - - ------------------------------ Date: Sat, 29 Apr 2000 23:37:05 +0200 From: Werner Vandewiele Subject: Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] Tim, I reread my post. It came across harsher than I intended it to be. My apologies for that. Regards, <<< Werner Vandewiele >>> - - ------------------------------ Date: Sat, 29 Apr 2000 18:07:56 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] The 8% Stop Walter, In an article I read some years ago, WON started initially using 10%. Through several years of experience, he found that 10% was too much, and ended up using 8%. With the volatility today, I question whether 8% is even functional. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - ----- Original Message ----- From: walter nusbaum To: Sent: Saturday, April 29, 2000 2:56 PM Subject: Re: [CANSLIM] The 8% Stop - ----- Original Message ----- From: "Earl Setser" To: Sent: Saturday, April 29, 2000 1:07 PM Subject: Re: [CANSLIM] The 8% Stop > At 12:50 PM 4/29/00 -0500, you wrote: > >Hi guys, > >I was wondering where the almost-universal use of the 8% stop originated. > >What is the theory/basis for this number? (SNIP) > WON says that rule number 1 is to limit your losses. He suggests 7-8% as > the maximum loss. Hi Earl, Thanks for your reply. I understand WON's recommendation, but I was wondering about its derivation. Nearly everyone uses it including mutual fund folks, but I've never heard of the originator or how this *particular* number was arrived at. Thanks again. Best wishes, Walt (Snip) > >The reason that I'm asking is that "buying the (10%) dip" is popular among > >certain market timers, and it seems to occur often enough that they have > >incorporated it into their systems. > > Well, remember, the 7-8% is only based on your initial purchase. It does > not apply to a trailing stop based on the stocks intraday or closing high. > I believe 8% would be too tight for use in such approaches. > >Could there be a correlation between the sellers at about -8%, and the > >(usual) buyers at about -10%? > >While very strong stocks may withstand a general market decline, otherwise > >"good" stocks may not fare so well. Can the 8% stop be justified in light of > >the usual turn around just past 10%? > > I'm not sure there is any magic number, 8%, 10%, 15%?? I've seen daily > volatility WAY over any of these during the last month. Personally, I try > to use the closing price as my trigger point, and I don't set hard stops or > react to intraday prices (for the most part). I do try to give my stocks a > chance to recover from a late day dip if they are still close to the -08% > point. This approach has kept me in some good stocks, and has increased my > losses on some bad one. I'm not sure it's worked that well overall, but I > haven't found anything I prefer as yet. - - - - ------------------------------ Date: 29 Apr 2000 15:51:46 -0700 From: "Tim Fisher" Subject: Re: [CANSLIM] Re: follow thru day? [Mr. Pyan] At 07:35 PM 4/29/00 +0200, you wrote: >At 09:45 AM 29-04-00 -0700, you wrote: >>I too am up +17% (since 4/17) but what is the point? It is definitely NOT >>CANSLIM and I have taken unduly large risks for just about any sane >>investor (save day-traders) to get there. > >So what motivated you to take the risk then? And what rule set is your >technique based upon? I rotated into Old Tech on a whim. No rules. I didn't want to churn my account once again, and I haven't. >>I see many stocks that "broke their downtrend" with a dead cat bounce. > >No kidding!? Many of these ex-glamour stocks aren't comming back. Not any >time soon. Guaranteed. But some will and are already showing the way. > >> I'd call them great shorts candidates, not longs. > >If they are great shorts, as you say, I hope you are shorting them. Or are >you more inclined to take 'unduly large risks'? I cannot short in my accounts, or I would have. Especially EMLX. >>If you can tell a right side of a steep C&H from a DCB with better than >>50% accuracy, > >Since you are already made up your mind that it can't be done, without >even asking what rule set this technique is based upon, I'm going to leave >it at that. Did I? What I wrote doesn't in any way say that I don't believe it can be done. I have a hard time believing it can be done with statistical accuracy better than 50/50. >>then you need to write a book about it and retire. > >Haha, Tim. Retiring by writing a book about technical analysis (albeit >combined with CANSLIM style fundamentals picking), is very unlikely. The >chance of retiring by writing a book about investments and retiring from >the royalties is much less than 50%. > >Over and out, son. Did I call you dad? Guess I missed that. Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Sat, 29 Apr 2000 18:14:16 -0700 From: "Bill Triffet" Subject: Re: [CANSLIM] M (from today's IBD) Earl, I have to agree with IBD on the volume issue. With bullish sentiment so high it seem to me the real movers are fully invested ( to the degree they wish to be). That means we need fresh faces to come in a buy our stocks for a price higher than we paid. I just don't see it. It just feels like folks are just ping-ponging between the NAZ and the NYE. It's hard to make a lasting rally with this behavior. I'm still 100% in cash having got out during the first market wobbles in March. I almost jumped on ALTR but missed the b/o. Maybe it'll work it's way back? - -Bill - ----- Original Message ----- From: Earl Setser To: Cc: Sent: Saturday, April 29, 2000 9:28 AM Subject: [CANSLIM] M (from today's IBD) ...snip > "Before bargain hunters congratulate themselves and the revived tech > sector, they should look at recent trading levels. Nasday volume dropped > for the second day in a row. Rallies in not only lighter but below average > volume leave a lot to be desired. If the Nasdaq is indeed out of the > woods, institutional investors aren't buying with conviction." - - ------------------------------ Date: Sat, 29 Apr 2000 18:33:05 -0700 From: "Bill Triffet" Subject: Re: [CANSLIM] The 8% Stop Walt, Not sure either but, I've started reading Elders' "Trading For a Living" (non-canslim though helpful). It's mentioned that one should limit their risk to no more that 2% of their trading portfolio per any single trade. I usually hold 4-5 issues at the most. Doing a little math I figured that a 8% loss from one trade on a portfolio equally divided into 4 issues results in a 2% portfolio loss. Interesting. - -Bill - ----- Original Message ----- From: walter nusbaum To: Sent: Saturday, April 29, 2000 10:50 AM Subject: [CANSLIM] The 8% Stop > Hi guys, > I was wondering where the almost-universal use of the 8% stop originated. > What is the theory/basis for this number? Is it possible that heavy hitters > are aware of its use, and are capable of driving the market past this > number? > > The reason that I'm asking is that "buying the (10%) dip" is popular among > certain market timers, and it seems to occur often enough that they have > incorporated it into their systems. > > Could there be a correlation between the sellers at about -8%, and the > (usual) buyers at about -10%? > While very strong stocks may withstand a general market decline, otherwise > "good" stocks may not fare so well. Can the 8% stop be justified in light of > the usual turn around just past 10%? > Best wishes, > Walt > > > > > - > > - - ------------------------------ Date: Sat, 29 Apr 2000 22:06:30 -0600 From: Earl Setser Subject: Re: [CANSLIM] The 8% Stop Ah, history you seek (as Yoda would say). Here is the story from HTMMIS: Limit Your Losses to 7% or 8% of Your Cost (paragraph I took this from) ... "When the late Gerald M. Loeb of E.F. Hutton was writing his last book on the stock market, I had the pleasure of dicussig this issuei with him im my office. In his first work, "The Battle for Investment Survival", Loeb advocated cutting all losses at 10%. I was curious and asked him if he followed the 10% loss policy himself. He said "I would hope to be out long before they ever reach 10%." ... "To preserve your hard-earned money, I think 7% or 8% should be the limit. Your overall average of all losses should be less, prehaps 5% or 6%, if you are strict anf fast on your feet." So this is where the rule came from for us CANSLIM investors. At 01:56 PM 4/29/00 -0500, you wrote: > >----- Original Message ----- >From: "Earl Setser" >To: >Sent: Saturday, April 29, 2000 1:07 PM >Subject: Re: [CANSLIM] The 8% Stop > > >> At 12:50 PM 4/29/00 -0500, you wrote: >> >Hi guys, >> >I was wondering where the almost-universal use of the 8% stop originated. >> >What is the theory/basis for this number? >(SNIP) > >> WON says that rule number 1 is to limit your losses. He suggests 7-8% as >> the maximum loss. > >Hi Earl, >Thanks for your reply. I understand WON's recommendation, but I was >wondering about its derivation. Nearly everyone uses it including mutual >fund folks, but I've never heard of the originator or how this *particular* >number was arrived at. Thanks again. >Best wishes, >Walt > >(Snip) > >> >The reason that I'm asking is that "buying the (10%) dip" is popular >among >> >certain market timers, and it seems to occur often enough that they have >> >incorporated it into their systems. >> >> Well, remember, the 7-8% is only based on your initial purchase. It does >> not apply to a trailing stop based on the stocks intraday or closing high. >> I believe 8% would be too tight for use in such approaches. > >> >Could there be a correlation between the sellers at about -8%, and the >> >(usual) buyers at about -10%? >> >While very strong stocks may withstand a general market decline, >otherwise >> >"good" stocks may not fare so well. Can the 8% stop be justified in light >of >> >the usual turn around just past 10%? >> >> I'm not sure there is any magic number, 8%, 10%, 15%?? I've seen daily >> volatility WAY over any of these during the last month. Personally, I try >> to use the closing price as my trigger point, and I don't set hard stops >or >> react to intraday prices (for the most part). I do try to give my stocks >a >> chance to recover from a late day dip if they are still close to the -08% >> point. This approach has kept me in some good stocks, and has increased >my >> losses on some bad one. I'm not sure it's worked that well overall, but I >> haven't found anything I prefer as yet. > > > > > > >- > > > - - ------------------------------ End of canslim-digest V2 #887 ***************************** 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.