From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #158 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk X-No-Archive: yes canslim-digest Sunday, March 22 1998 Volume 02 : Number 158 In this issue: [CANSLIM] MIKL [CANSLIM] Breakouts - KDN MIKL TSCP Re: [CANSLIM] Breakouts - KDN MIKL TSCP Re: [CANSLIM] Re. Money Flow Re: [CANSLIM] Money Flow Overwhelms Funds (was NASDAQ distribution day) [CANSLIM] What is going on with MLHR? [CANSLIM] (noncanslim) NOVL - Novell Re: [CANSLIM] Breakouts - KDN MIKL TSCP Re: [CANSLIM] Money Flow Overwhelms Funds (was NASDAQ distribution day) ---------------------------------------------------------------------- Date: Fri, 20 Mar 1998 19:31:23 -0800 From: "Patrick Wahl" Subject: [CANSLIM] MIKL Michael Foods (MIKL) looks like a breakout today. EPS > 90, RS 88, GRS in the seventies, A/D B, 21 million shares, P/E 18. Volume today twice average. Any opinions on the chart, company, etc, are welcome. - - ------------------------------ Date: Sat, 21 Mar 1998 15:45:16 +0700 From: Peter Christiansen Subject: [CANSLIM] Breakouts - KDN MIKL TSCP KDN, MIKL, & TSCP are three issues from my watch list that broke out Friday. I like the looks of all of them; especially TSCP due to the relative strength and huge volume on up days. I may take a position on Monday. - -- Peter Christiansen Chiang Mai, Thailand - - ------------------------------ Date: Sat, 21 Mar 1998 07:43:29 -0500 From: "Chris Peek" Subject: Re: [CANSLIM] Breakouts - KDN MIKL TSCP Peter, When you say take a position, do you mean sell? If so, are you basically figuring that these stocks are starting to indicate they have reached their peak prices? What do you see that indicates that? Thanks, Chris Peek - -----Original Message----- From: Peter Christiansen To: CANSLIM Date: Saturday, March 21, 1998 3:45 AM Subject: [CANSLIM] Breakouts - KDN MIKL TSCP >KDN, MIKL, & TSCP are three issues from my watch list that broke out >Friday. I like the looks of all of them; especially TSCP due to the >relative strength and huge volume on up days. I may take a position on >Monday. >-- >Peter Christiansen >Chiang Mai, Thailand > >- > > - - ------------------------------ Date: Fri, 20 Mar 1998 20:59:14 -0500 From: Tom Worley Subject: Re: [CANSLIM] Re. Money Flow Good comments, as always, Connie. I won't try to add to the specifics between money, volume and price, but will add some general comments. Like Connie, I too can "watch the tape" and observe each trade go thru, seeing both the size of the trade as well as the price, and how that relates to the current best bid and ask. This is what I have referred to as the "quality of trading" on a particular stock (course I can only do this when business is slow, or I am obsessing on a particular stock and ignoring work as much as possible!). When I see a stock break thru a resistance point, or set a new high, I want to see large blocks come in, not 100 and 200 share trades. That tells me the serious players, and hopefully the institutionals, were just waiting for that moment. If I'm in already, I'm happy, but if I'm not that's the point to leap in vigorously (and usually with a mkt order, not time for limits then). I had at least four this week (INFM, FFGI, EQNX, ZOMX) where that happened more or less that way, and in each case either I hesitated too long, or got distracted by my job, or left for a break just before the price move began, then didn't want to chase it when I returned. When you've already found a stock you like, and it has met all your CS criteria, then all that remains is picking the best entry point. Fortunately, you don't have to be that precise to still make money, but it helps. A stock that only does small, retail size trades at its new high is a warning signal to me. I usually wait for it to pull back, or else confirm the high with more volume, before rushing in. On NASDAQ stocks being double counted, I believe this is still a problem that needs to be corrected, and I don't have the solution. The fault lies in every trade having to be "printed" thus, if I give an order to Knight Securities for 1000 shares of ABCD, and they make a mkt in it, they print my execution and it is counted once. But if they don't make a mkt in it, they give the order to another mkt maker, who prints the transaction in which they sell to Knight, then Knight prints the transaction in which they sell to me, thus double counting. If you don't print the BD to BD transaction, the potential for gouging, price manipulation, excessive profits or markups, poor execution on a moving stock price, etc go up logrithmetically. I believe NASDAQ is working on trying to implement some coding where the BD to BD trade can be recognized, and distinguish between a true "BD to BD" trade vs a "BD to BD on behalf of a client" trade, such that the volume count can eventually be similiar to that found on NYSE. Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - -----Original Message----- From: Connie Mack Rea To: canslim@lists.xmission.com Date: Friday, March 20, 1998 4:37 PM Subject: Re: [CANSLIM] Re. Money Flow >Jans-- > >The relationship among price/volume/money is complex. Perhaps Tom would >wish to explain the many nuances. The answers lie in economics, >psychology, micro-macro float, and how market makers set [and >manipulate] prices to increase volume. > >The easiest way to see that money and volume are only loosely connected >is to set your software so that you see the volume and price of every >trade. Here you will see how float, minute by minute, is tied to price >and volume. What no one knows, not even the market maker, is the exact >float. One reason why a trader may not want to put in a stop is that he >is, in a sense, revealing a part of the float [how much stock is >available to buy and sale] and doesn't want his order to be seen. > >This is the micro-float as opposed to a macro-float of any time period. >Tom had asked me to take a look at EPIQ. One day I examined every >sale. I commented to him what the tape had looked like to me. E.g., >there were sales running from 100 shares to 232,000. That day buyers >ran the stock up until they went out for lunch; once the 232,000 block >went through, the buyers never came back after lunch. > >Suppose that the price before and after the 232,000 is the same. What >would you conclude? Mathematically, it's a wash, but it may a damn lot >matter whether the stock passed into sticky hands or teflon hands. The >float will change, depending on whose hands the stock passed into. You >can infer how float is related to supply and demand. > >As I recall, there was only an eighth difference in price before the >sale of the big block and flat after. Much money and much volume did >nothing to price. If the next sale after the block had been 100 shares >at the same price or lower, what would you say is the relation among >price/volume/money? What would you have said about price/volume/money >before the block, for the block, and after the block? > >Unless you are a tape reader, you have to work with gross indicators of >money and OBV. > >You may set up BigCharts to see up/down volume. Click Indicators. Go >the the top of the list and click Volume+ [Volume and the plus sign]. >Select a 5-day screen from the Time window. Select one of the minute >intervals [or an hour interval]. Then you see an up/down bar volume in >the lower window. You're on your own from there to make an up/down >count. > >You will be able to see what effect up/down volume has on price. > >Too, as I recall, the NASDAQ used to "double count" volume, a practice >different from the NYSE. > >But I do not think that MF and OBV are "measuring the same thing." >Gross volume as indicator is too iffy to be of much use. More useful >would be if you could determine OBV on your Canslim breakouts; you will >have fewer false breakouts whatever your parameters. > >Jans, I fear there is much that I have not attended to. Sorry. > >Connie Mack > > > > > >G1 wrote: > >> Connie, >> >> Good morning. >> >> Thanks for the speedy reply (Actually, I'm astonished. I wrote >> it after >> 1AM Friday, and I received the CanslimDigest reply Friday later in the >> >> morning). >> >> But Connie, I have a question. Aren't MF and OBV based on the >> same >> thing, ie. Volume. Therefore, in everything I've read (eg. Stocks and >> >> Commodites mag) they are autocorrelated, so a signal by the both of >> them is >> not really as valid as a signal based on price and volume (ie. Doesn't >> MF/OBV >> measure the same thing?) >> >> How would you answer this? Based on your experience it works. >> Or is >> there some sort of scientific/statistical reason for the validity of >> the >> MF/OBV- divergence-indicator? >> >> jans >> >> - > > > - - ------------------------------ Date: Sat, 21 Mar 1998 10:23:28 -0500 From: "Frank V. Wolynski" Subject: Re: [CANSLIM] Money Flow Overwhelms Funds (was NASDAQ distribution day) At 21:33 3/20/98 -0500, Tom Worley wrote: .sniped... >I haven't yet >studied the charts tonight, but I have to believe that NYSE in >general, and big caps in particular, are in dangerous territory. > >Any statements or opinions are strictly my own and not that of my >employer. My comments should not be interpreted as a recommendation of >any kind. I am a licensed (inactive) broker and an active investor. >All investors should do their own research prior to any investment, >especially one learned about on the Internet. Hopefully my comments >will better inform and educate all investors. >tom w You've gotten my curiosity up! Do you feel the NYSE, big caps, are overvalued? Ripe for a correction? Due for a downfall? Could this bode well for the small & microcaps? What few technical indicators I have looked at, look increasingly strong! Also the PE of the DOW is a bit below its latest 5 year high. Book value on the Dow stocks stinks, haven't checked the figures this week on the S&P. OTC volume is not a speculative levels. Seems like a fairly healthy advance, that could have a bit more to go! Frank Wolynski ( I am often wrong, plan accordingly!) - - ------------------------------ Date: Sat, 21 Mar 1998 13:43:46 -0500 From: "Bud Barton" Subject: [CANSLIM] What is going on with MLHR? This is a multi-part message in MIME format. - ------=_NextPart_000_000A_01BD54CF.5F6EC3E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable RS number from IBD keep being misprinted I think. Yesterday in the 90s = today 11. Last week 15. Daily Graphs shows in the 90s. Does this = happen very often in IBD? - ------=_NextPart_000_000A_01BD54CF.5F6EC3E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
RS number from IBD keep being = misprinted I=20 think.  Yesterday in the 90s today 11.  Last week 15.  = Daily=20 Graphs shows in the 90s.  Does this happen very often in=20 IBD?
- ------=_NextPart_000_000A_01BD54CF.5F6EC3E0-- - - ------------------------------ Date: Mon, 02 Feb 1998 20:25:34 -0500 From: "Frank V. Wolynski" Subject: [CANSLIM] (noncanslim) NOVL - Novell I believe someone in the group had mentioned trading NOVL at one time or the other, therefore this post. I realize Novell is not a canslim candidate, but as a devoted Novell user ( I never have to reboot my 4 Novell servers, which I have to do to my 1 NT(yes Version4.0) server at least bimonthly.) I couldn't resist the technical display being put on by the stock. It is putting on an interesting display and certainly is giving off all the signs of a turnaround. This first interesting technical development is the double bottom formation. 1st bottom - June-July 97 2nd bottom - January 98 The second interesting phenomenon that is apparently rare is a diamond formation between the bottoms. It shows up more clearly on a weekly chart. According to the Feb 1998 issue of Stocks & Commodities, it is a double top contained within the double bottom. However I can almost describe 3 tops, a triple. I don't know the rarity of such an event. The rally in late November was the assault on the third top, however it never touched the resistance, therefore I don't know if it counts. The rally in early March clearly broke through resistance and has held up for 3 weeks now. It is currently testing the support of the breakout and according to money flow, which is diverging from the retrace of the price back to support, it should hold. I would place my first target price at $14 presuming it gets a pop. ( I'm paper trading, by the way! I don't under any circumstances consider this a recommendation, just an observation!) Frank wolynski ( I am often wrong, plan accordingly.) - - ------------------------------ Date: Sun, 22 Mar 1998 09:01:23 +0700 From: Peter Christiansen Subject: Re: [CANSLIM] Breakouts - KDN MIKL TSCP > When you say take a position, do you mean sell? If so, are > you basically figuring that these stocks are starting to indicate > they have reached their peak prices? What do you see that > indicates that? No, I mean I may buy one or more of them. I think they will go higher. - -- Peter Christiansen Chiang Mai, Thailand - - ------------------------------ Date: Sun, 22 Mar 1998 10:15:49 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] Money Flow Overwhelms Funds (was NASDAQ distribution day) I have been saying for some time that this rather extraordinary sustained record setting rally is not sustainable, as it is a result of unusual money flow into the mkt place, rather than from fundamentals. The biggest single danger to the mkt's continued rally is inflation, and despite the Asian flu (which is covering up some inflationary action) there is still hard evidence of inflationary increases in both medical care costs and overall labor costs. There has yet to be sig shrinking of the labor force, nor has there been the sharp reductions in export activity, or sharp cuts in costs of imported goods. The dollar remains at very strong levels to other world currencies, and multi-national cos will suffer earnings shortfalls which, despite all the earnings forecast cuts to date, won't IMHO account for this. Despite some of the most ruthless cuts in earnings forecasts in the past several years, the S&P500 rose again on Friday to show a trailiing PE of 27.64, up from 27.40. This is an extremely high, and unsustainable, level. The biased flow of money into the most liquid of stocks has resulted in the Dow 30 being further skewed from reality. When I try to look at overall mkt conditions, I usually look at the S&P500 and Nasdaq. I also consider the NYSE composite. While the indexes are hitting new highs, the level of overbot, and of up volume averages, are not also at equally high levels. The mkt indexes are running on momemtum, and any change in this could result in sig correction. And as I have mentioned, this could come about as early as next week if the funds stop pumping all their money into the mkt. Likewise, we have not been seeing the 10dma of up vol hitting similiar records, nor have we been seeing the dn vol decreasing. This may actually be a blessing in disguise, as it suggests to me a continuing level of disbelief in further price increases, and a steady profit taking along the way. If so, this could minimize the effects of any correction. For me and my personal approach to the mkt, I have tightened my stops to around 5% or less both to protect existing profits and to guard against sig loss of principal. I would rather sit in cash at this time and only selectively expose my money for short term moves than to invest for the longer term, and ride out any "valleys". Any statements or opinions are strictly my own and not that of my employer. My comments should not be interpreted as a recommendation of any kind. I am a licensed (inactive) broker and an active investor. All investors should do their own research prior to any investment, especially one learned about on the Internet. Hopefully my comments will better inform and educate all investors. tom w - -----Original Message----- From: Frank V. Wolynski To: canslim@lists.xmission.com ; canslim@lists.xmission.com Date: Saturday, March 21, 1998 10:22 AM Subject: Re: [CANSLIM] Money Flow Overwhelms Funds (was NASDAQ distribution day) >At 21:33 3/20/98 -0500, Tom Worley wrote: >.sniped... >>I haven't yet >>studied the charts tonight, but I have to believe that NYSE in >>general, and big caps in particular, are in dangerous territory. >> >>Any statements or opinions are strictly my own and not that of my >>employer. My comments should not be interpreted as a recommendation of >>any kind. I am a licensed (inactive) broker and an active investor. >>All investors should do their own research prior to any investment, >>especially one learned about on the Internet. Hopefully my comments >>will better inform and educate all investors. >>tom w > >You've gotten my curiosity up! Do you feel the NYSE, big caps, are >overvalued? >Ripe for a correction? Due for a downfall? Could this bode well for the >small & microcaps? > >What few technical indicators I have looked at, look increasingly strong! >Also the PE of the DOW is a bit below its latest 5 year high. >Book value on the Dow stocks stinks, haven't checked the figures this week >on the S&P. >OTC volume is not a speculative levels. >Seems like a fairly healthy advance, that could have a bit more to go! > >Frank Wolynski >( I am often wrong, plan accordingly!) > > >- > - - ------------------------------ End of canslim-digest V2 #158 ***************************** 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.