From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1939 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Wednesday, December 12 2001 Volume 02 : Number 1939 In this issue: RE: [CANSLIM] SOME FEEDBACK NEEDED! RE: [CANSLIM] SOME FEEDBACK NEEDED! AW: [CANSLIM] Dangerous Words Re: [CANSLIM] clarification Re: [CANSLIM] stacking the odds in my favor-buying before the pivot point ---------------------------------------------------------------------- Date: Wed, 12 Dec 2001 12:31:37 -0800 From: Richard Herkert Subject: RE: [CANSLIM] SOME FEEDBACK NEEDED! This is a multi-part message in MIME format. - --Boundary_(ID_26f8FX8WsB1E6QHA9SrHmA) Content-type: text/plain; charset=iso-8859-1 Content-transfer-encoding: quoted-printable Tom =96 Your efforts are appreciated as well as being essential to the total value of this discussion group. For me personally, what I learn from you and the group adds to and clarifies what I learn through the=20 IBD Workshops and WON=92s books.=20 Keep up the good work. =20 Many thanks, Dick Herkert =20 - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley Sent: Sunday, December 09, 2001 2:20 PM To: CANSLIM Subject: [CANSLIM] SOME FEEDBACK NEEDED! =20 Every weekend I complete and post my Worley's Weekend Weeview, including a review of many CANSLIM quality stocks. I try to keep the commentary interesting for those not as obsessed as me in reading everything happening about stock markets globally. =20 While this "feature" evolved out of my ongoing process of trying to stay in touch with what "M" is saying, typing it up and posting it instead of just leaving it stagnate in my head was an attempt to share my thoughts with the group, as well as to check out my thinking with all of you. =20 Both the commentary, and the review of charts, begs a response, yet I get none. This weekend, I also throw out the concept of two new chart patterns I called CATs and RATs, and not a single comment, challenge, question, etc. =20 I can only conclude that my WWW is a waste of time for most members, and better kept to myself. I see nothing to convince me I am wrong. =20 Tom Worley stkguru@netside.net AIM: TexWorley - --Boundary_(ID_26f8FX8WsB1E6QHA9SrHmA) Content-type: text/html; charset=iso-8859-1 Content-transfer-encoding: quoted-printable

Tom= – Your efforts are appreciated as well as being = essential to the total value of this discussion group.

For me personally, what I learn = from you and the group adds to and clarifies what I learn through the =

IBD Workshops = and WON’s books.

Keep up the good = work.

Many thanks, Dick = Herkert

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley
Sent: Sunday, December = 09, 2001 2:20 PM
To: CANSLIM
Subject: [CANSLIM] SOME = FEEDBACK NEEDED!

Every weekend I complete and post my Worley's = Weekend Weeview, including a review of many CANSLIM quality stocks. I try to = keep the commentary interesting for those not as obsessed as me in reading = everything happening about stock markets globally.

While this "feature" evolved out of = my ongoing process of trying to stay in touch with what "M" is = saying, typing it up and posting it instead of just leaving it stagnate in my = head was an attempt to share my thoughts with the group, as well as to check out = my thinking with all of you.

Both the commentary, and the review of = charts, begs a response, yet I get none. This weekend, I also throw out the concept of = two new chart patterns I called CATs and RATs, and not a single comment, = challenge, question, etc.

I can only conclude that my WWW is a waste of = time for most members, and better kept to myself. I see nothing to convince me I = am wrong.

Tom Worley
stkguru@netside.net
AIM: TexWorley

- --Boundary_(ID_26f8FX8WsB1E6QHA9SrHmA)-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Wed, 12 Dec 2001 12:38:25 -0800 From: "DiFabio, Nancy" Subject: RE: [CANSLIM] SOME FEEDBACK NEEDED! This message is in MIME format. Since your mail reader does not understand this format, some or all of this message may not be legible. - ------_=_NextPart_001_01C1834C.F2D05FE0 Content-Type: text/plain; charset=iso-8859-1 Content-Transfer-Encoding: 7bit Tom, You are Wrong. I'm too busy and too selfish to prepare and submit a semi-worthy comment. Please forgive me and do not discontinue the WWW. - -----Original Message----- From: Richard Herkert [mailto:herkert@bigplanet.com] Sent: Wednesday, December 12, 2001 12:32 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] SOME FEEDBACK NEEDED! Tom - Your efforts are appreciated as well as being essential to the total value of this discussion group. For me personally, what I learn from you and the group adds to and clarifies what I learn through the IBD Workshops and WON's books. Keep up the good work. Many thanks, Dick Herkert - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley Sent: Sunday, December 09, 2001 2:20 PM To: CANSLIM Subject: [CANSLIM] SOME FEEDBACK NEEDED! Every weekend I complete and post my Worley's Weekend Weeview, including a review of many CANSLIM quality stocks. I try to keep the commentary interesting for those not as obsessed as me in reading everything happening about stock markets globally. While this "feature" evolved out of my ongoing process of trying to stay in touch with what "M" is saying, typing it up and posting it instead of just leaving it stagnate in my head was an attempt to share my thoughts with the group, as well as to check out my thinking with all of you. Both the commentary, and the review of charts, begs a response, yet I get none. This weekend, I also throw out the concept of two new chart patterns I called CATs and RATs, and not a single comment, challenge, question, etc. I can only conclude that my WWW is a waste of time for most members, and better kept to myself. I see nothing to convince me I am wrong. Tom Worley stkguru@netside.net AIM: TexWorley "WorldSecure " made the following annotations on 12/12/01 12:37:26 - ------------------------------------------------------------------------------ PLEASE NOTE: This message, including any attachments, may include privileged, confidential and/or inside information. Any distribution or use of this communication by anyone other than the intended recipient(s) is strictly prohibited and may be unlawful. If you are not the intended recipient, please notify the sender by replying to this message and then delete it from your system. Thank you. ============================================================================== - ------_=_NextPart_001_01C1834C.F2D05FE0 Content-Type: text/html; charset=iso-8859-1 Content-Transfer-Encoding: quoted-printable

Tom,

You=20 are Wrong. I'm too busy and too selfish to prepare and submit a= =20 semi-worthy comment.

Please=20 =66orgive me and do not discontinue the WWW.

-----Original Message-----
From: Richard Herkert=20 [mailto:herkert@bigplanet.com]
Sent: Wednesday, December 12, = 2001=20 12:32 PM
To: canslim@lists.xmission.com
Subject: RE:= =20 [CANSLIM] SOME FEEDBACK NEEDED!

Tom – Your = efforts are=20 appreciated as well as being essential to the total value of this = discussion=20 group.

For me = personally,=20 what I learn from you and the group adds to and clarifies what I learn = through=20 the

IBD Workshops = and=20 WON’s books.=20

Keep up the = good=20 work.

Many thanks, = Dick=20 Herkert

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com= ]= =20 On Behalf Of Tom=20 Worley
Sent: Sunday, = December=20 09, 2001 2:20 PM
To:=20 CANSLIM
Subject: = [CANSLIM]=20 SOME FEEDBACK NEEDED!

Every weekend I complete and pos= t= my=20 Worley's Weekend Weeview, including a review of many CANSLIM quality = stocks. I=20 try to keep the commentary interesting for those not as obsessed as me in= =20 reading everything happening about stock markets=20 globally.

While this "feature" evolved out= = of my=20 ongoing process of trying to stay in touch with what "M" is saying, typin= g= it=20 up and posting it instead of just leaving it stagnate in my head was an=20 attempt to share my thoughts with the group, as well as to check out my=20 thinking with all of you.

Both the commentary, and the = review of=20 charts, begs a response, yet I get none. This weekend, I also throw out = the=20 concept of two new chart patterns I called CATs and RATs, and not a singl= e= =20 comment, challenge, question, etc.

I can only conclude that my WWW = is a=20 waste of time for most members, and better kept to myself. I see nothing = to=20 convince me I am wrong.

Tom Worley
stkguru@netside.net
AIM:=20 = TexWorley

"WorldSecure <irell.com>" made the following
annotations on 12/12/01 12:37:26
- ---------------------------------------------------------------------------= - ---
PLEASE NOTE: This message, including any attachments, may include = privileged, confidential and/or inside information. Any distribution or us= e= of this communication by anyone other than the intended recipient(s) is = strictly prohibited and may be unlawful. If you are not the intended = recipient, please notify the sender by replying to this message and then = delete it from your system. Thank you.

=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D

- ------_=_NextPart_001_01C1834C.F2D05FE0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Wed, 12 Dec 2001 22:46:04 +0100 From: Andreas Himmelreich Subject: AW: [CANSLIM] Dangerous Words - - This is a conviction trade - - Either this trade works or I have to work @ siebel some years longer (this cost me 100.000 $ in on Trade --> a german film making company, hopefully a healing experience) - - The bottom is near - - I can not belive that this stocks falls, the fundamentals are so great (or the other way around for shorting) - - The shorts will be burned - - The longs will be burned - - Long term things will come always back - - I am an investor not a trader - - I am in for the long term, intermediate bear markets will not hurt me, in the long run my stocks will be fine - - I do not deserve the winnings (deep in your self this thinking could be a or the problem) - - I am right, the market must be wrong and will soon see, that I am right - - The PE is to high - - The Market will go up, the market will go down - - Valuations are insane, so the market has to go up - - Valuations are so low, so the market will go down - - The market will do this or that (as WO says, do not predict, only look what the market is doing, so after a follwow through day, you better be long) - - An Expert on CNBC said, the market will do this or that - - An Expert downgraded, upgraded a stock, so you better be in - - This is just an intermediate breathtaking, after this the rally will go on ... > -----Ursprungliche Nachricht----- > Von: Patrick Wahl [SMTP:pjwahl@attbi.com] > Gesendet am: Wednesday, December 12, 2001 8:07 PM > An: canslim@lists.xmission.com > Betreff: Re: [CANSLIM] Dangerous Words > > It can't go any lower. > > > On 12 Dec 2001 at 7:51, Katherine Malm wrote: > > > I have been compiling a list of what I call "dangerous" words. Words that indicate emotion is overtaking rational expectations and decision making. Would you all be willing to add to the list? > > > > Incredible > > Unbelievable > > Go XXXX, Go > > Should (pretty much in any context) > > Have you bought XXXX? (Heard for the third time in 2 days) > > Everyone should have this in their portfolio (usually heard on CNBC) > > This stock is on fire (always heard on CNBC) > > Should I buy XXXX? (Heard from your plumber) > > The Fed is no longer important > > It can't lose > > It's a perfect stock > > It's a perfect company > > > > > > > > Katherine > > > > > > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Wed, 12 Dec 2001 13:17:54 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] clarification You bring up a good point Eric. You're so right that there is nothing in WON's rules that addresses money management, yet this is a key element in generating successful profits. I think it boils down to: 85% psychology/discipline 10% money management 5% system (CANSLIM or other). While the money management % seems small, it is still twice as important as the system itself. I think each person would also place a different degree of importance on each of these, but no system is any good if too much capital is at risk or if the trader is inclined to make donut-head decisions or deer-in-the-headlights reactions when rules tell them to take the trade. >>If you put 7-8% of your trading capital > at risk on any one trade, you will eventually pay some really serious Wall > Street tuition on the path to becoming successful trader. I think that this would imply that you are putting all your eggs in one basket. That is, 100% of your capital would have to go into the trade for a 7-8% stop loss rule to put this much at risk. But I do see this as a money management tool as well, in that it forces you out of a losing trade at a predetermined %. I call it the "I was wrong rule." I think in CANSLIM it's critical to do good due diligence before selecting any B/O. It raises the probabilities that a B/O will go on and make good money. But good money management for me means that if the "I was wrong rule" kicks in, 1% or less of my total capital is at risk in the trade. But once again, lack of due diligence or poor chart reading can eat away at your capital if each loss chinks away at it 1% at a time. Katherine - ----- Original Message ----- From: "Tangen, Eric" To: Sent: Wednesday, December 12, 2001 1:46 PM Subject: RE: [CANSLIM] clarification > Welcome to the club! Breakouts are a high risk and high reward strategy - if > you're batting .500, that's pretty darn good. You should expect 40% success > at finding successful breakouts long-term. > > I just have to get this off my chest for the new subscribers...WON's 7-8% > stop below the pivot is a technical stop. It is a rule of thumb based on > volatility in the handle region before a stock takes off. > > It is NOT A MONEY MANAGEMENT STOP!. If you put 7-8% of your trading capital > at risk on any one trade, you will eventually pay some really serious Wall > Street tuition on the path to becoming successful trader. > > WON's work has virtually nothing in the area of money management (what he > does say is just plain outdated...by 5 stocks with 100k...more appropriate > to an era of high commissions and lower volatility). > > Tharp's books are the best (only?) work in this area and should be required > reading before you head out to the great casino that is Wall Street. > > ERIC TANGEN > > > > > > -----Original Message----- > From: larry l worden [mailto:worden33@juno.com] > Sent: Wednesday, December 12, 2001 12:03 AM > To: canslim@lists.xmission.com > Subject: [CANSLIM] clarification > > > Thanks Tom and Katherien > I looked at DGO last week, expensive. I read HTMMIS and get IBD paper > and web sight. I am having trouble with BO. I am getting stopped out more > than 50%. thanks again I think I have the terms right. > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Wed, 12 Dec 2001 13:32:40 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] stacking the odds in my favor-buying before the pivot point This is a multi-part message in MIME format. - ------=_NextPart_000_04CD_01C18311.78E8F420 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable >>on 11/14/01 i tried to buy KKD at the 38.25 pivot point-didn't get = executed Aside from the due diligence aspect of KKD, I'm guessing that if it = wasn't executed that you placed a limit order? If so, and you're placing = trades for market open rather than real time during the day, I think a = buy-stop-limit is better. But I'm sure there are others on the list will = have other opinions on this. There was a rather lively debate going on = about KKD recently, so it might be worth a trip to the archives to see = what people were saying about this one. In general, KKD had both = technical and, depending on your point of view, fundamental problems at = that point. >>on 12/5/01 executed ORLY before the pivot point of 34.00 on gap up = fast trade Forgive me, as I know you were in a hurry when you wrote this, but I = don't quite understand. Did you place a market order for open? Did you = place a buy-stop or limit order for market open? Or did you buy earlier = in the handle before the gap up B/O? I'm not completely sure what it is = you're asking about this one! Katherine ----- Original Message -----=20 From: camelot.homes@charter.net=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, December 12, 2001 1:18 PM Subject: Re: [CANSLIM] stacking the odds in my favor-buying before the = pivot point katherine, this was a hypothetical. i didn't look at the PECS chart. = here is 2 recent real trades that i did. on 11/14/01 i tried to buy KKD = at the 38.25 pivot point-didn't get executed, the price jumped past the = pivot point. on 12/5/01 executed ORLY before the pivot point of 34.00 on = gap up fast trade. i am sorry about about my poor writing, don't have = much time, have a corporation to run. david ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, December 12, 2001 10:02 AM Subject: Re: [CANSLIM] stacking the odds in my favor-buying before = the pivot point David, I might be misunderstanding your "32.50" pivot as an intended = hypothetical here. But let me answer based on the PECS chart itself: (1) The cup starts on 7/23 at at high of $27.45. The correction took = it as low as $12.50. That's about 54.5%, a little deep, but we'll write = that off to 9/11. It traveled up the right side of the cup and the high = of the handle was set on 11/1 at $26.82. There's one troubling high = volume day in the handle, but let me set that aside for the moment. That = means that the pivot is set and the buy point is at $26.92. The proper = B/O is then 11/14 when it gapped open. That day the volume was 1.8m = shares, about 3.5 times average. What that means is that you're already = too late at 32 to 32.5. By then, the stock's already moved almost 19% = from the B/O. An entry here would be an extended entry into the stock. = An entry here would also have you sitting today on a round trip ride. (2) So let's focus on the other question, which is "should I buy = early?" This is probably a great example. Let's say you're watching the = cup form and you decide to enter as it reaches near the old high on the = left. Let's say it hasn't yet formed a perfect handle. Let's say on = about 11/5 or so, only a few days in. Let's enter at the close of the = day at 25.99. Look what happens the next day. Big down day on big = volume. Low of the day? 21.69. Down 16.5% from your entry. Close of the = day? 22.85. Down 12% from your entry. It would be easy to rationalize = that by saying "But the next day it reversed and later the stock went on = to breakout, so you would have made money." But how can you know that is = going to happen on 11/6? You don't, and stop loss rules, if you had = risked the early entry, would have at least kept you out with a 7 or 8% = loss. Nearly 1/2 the loss of the low of the day. Hope that answered the question you had in mind. Katherine ----- Original Message -----=20 From: camelot.homes@charter.net=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, December 12, 2001 11:48 AM Subject: Re: [CANSLIM] stacking the odds in my favor-buying before = the pivot point katherine, thank you for your answer. i didn't really ask the = question right. i am actually talking about a fast market in a stock = like PECS in the past. The stock has formed a nice cup and handle, the = technicals and the fundamentals are very good. the stock gaps up at the = opening, on very heavy volume, and the price of the stock goes up very = fast. let's say the pivot is 32.50. Since the accumulation is so fast, = that instead of being able to buy around the pivot point, ones execution might = come back 1-2% higher.It looks like to me in this instance, that buying = before the pivot might be a good idea..Lets say maybe buying at 32.00 = to 32.50. What do you think? david ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, December 12, 2001 6:14 AM Subject: Re: [CANSLIM] stacking the odds in my favor-buying = before the pivot point Hi David, I see there hasn't yet been a response to your questions. I was = sure this one would draw some discussion. As I don't know your own level of experience with CANSLIM and = investing, I thought I'd answer this from a more generic point of view. (1) The idea behind waiting for a good stock to form a solid = base and then break out on volume is to identify that magical point at = which Demand outstrips Supply and Price is pushed higher--essentially = the old Supply/Demand curve from economics class. Assuming the lion's = share of sellers have been exhausted and the stock is one that people = would wish to own, the theory is that any additional demand for the = stock will push the price further. In order for the Price to continue = on, the underlying fundamentals that create value in the company have = got to be sound. So from this point of view, waiting for the B/O is = stacking the odds in your favor. (2) The statistics on B/O's from various technical formations = can be measured, but as you notice in our discussion the other day, the = studies we were looking at in Bulkowski's book make no preselection = based on fundamentals, as CANSLIM forces us to do. Even still, there are = still odds that B/O's will fail. It's just the way it is. (3) If you are extremely practiced and confident in CANSLIM = candidate selection and can build a sound argument for the company and = its potential, it is possible to make an early entry. Afterall, = *some*body is buying it on the right side of the cup. Even still, it is = less risky if the entry comes on a major change in trend or at a point = that is very near substantial recent support. I'm not advocating this, I = think even the best of the best get whacked when they try to do this. = But more importantly, I don't believe that anyone who hasn't established = a long running track record of successful selection should do this at = all. Just way too risky. Katherine ----- Original Message -----=20 From: camelot.homes@charter.net=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, December 11, 2001 6:31 PM Subject: [CANSLIM] stacking the odds in my favor-buying before = the pivot point one thing that might increase ones odds-is buying before the = pivot point is reach, if the stock has hugh volume, great technicals and = fundamentals. what do you all think??? david and also do any of you buy before the pivot point , if the volume is = hugh, and the technicals and the fundamentals are excellent, and the = stock is setting up to break out of a nice base pattern??? - ------=_NextPart_000_04CD_01C18311.78E8F420 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable

>>on 11/14/01 i tried to buy KKD = at the 38.25=20 pivot point-didn't get executed

Aside from the due diligence aspect of = KKD, I'm=20 guessing that if it wasn't executed that you placed a limit order? If = so, and=20 you're placing trades for market open rather than real time during the = day, I=20 think a buy-stop-limit is better. But I'm sure there are others on the = list will=20 have other opinions on this. There was a rather lively debate going on = about KKD=20 recently, so it might be worth a trip to the archives to see what people = were=20 saying about this one. In general, KKD had both technical and, depending = on your=20 point of view, fundamental problems at that point.

>>on 12/5/01 executed ORLY before = the pivot=20 point of 34.00 on gap up fast trade

Forgive me, as I know you were in a = hurry when you=20 wrote this, but I don't quite understand. Did you place a market order = for open?=20 Did you place a buy-stop or limit order for market open? Or did you buy = earlier=20 in the handle before the gap up B/O? I'm not completely sure what it is = you're=20 asking about this one!

Katherine

----- Original Message -----
From:=20 camelot.homes@charter.net =
To: canslim@lists.xmission.com=

Sent: Wednesday, December 12, = 2001 1:18=20 PM

Subject: Re: [CANSLIM] stacking = the odds=20 in my favor-buying before the pivot point

katherine, this was a hypothetical. i = didn't look=20 at the PECS chart. here is 2 recent real trades that i did. on = 11/14/01 i=20 tried to buy KKD at the 38.25 pivot point-didn't get executed, the = price=20 jumped past the pivot point. on 12/5/01 executed ORLY before the pivot = point=20 of 34.00 on gap up fast trade. i am sorry about about my poor writing, = don't=20 have much time, have a corporation to run. david

----- Original Message -----
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com= =20

Sent: Wednesday, December 12, = 2001=20 10:02 AM

Subject: Re: [CANSLIM] = stacking the=20 odds in my favor-buying before the pivot point

David,

I might be misunderstanding your = "32.50" pivot=20 as an intended hypothetical here. But let me answer based on = the PECS=20 chart itself:

(1) The cup starts on 7/23 at at = high of=20 $27.45. The correction took it as low as $12.50. That's about 54.5%, = a=20 little deep, but we'll write that off to 9/11. It traveled up the = right side=20 of the cup and the high of the handle was set on 11/1 at $26.82. = There's one=20 troubling high volume day in the handle, but let me set that aside = for the=20 moment. That means that the pivot is set and the buy point = is at=20 $26.92. The proper B/O is then 11/14 when it gapped open. = That day=20 the volume was 1.8m shares, about 3.5 times average. What that means = is that=20 you're already too late at 32 to 32.5. By then, the stock's already = moved=20 almost 19% from the B/O. An entry here would be an = extended=20 entry into the stock. An entry here would also have you sitting = today on a=20 round trip ride.

(2) So let's focus on the other = question, which=20 is "should I buy early?" This is probably a great example. Let's say = you're=20 watching the cup form and you decide to enter as it reaches near the = old=20 high on the left. Let's say it hasn't yet formed a perfect handle. = Let's say=20 on about 11/5 or so, only a few days in. Let's enter at the = close of=20 the day at 25.99. Look what happens the next day. Big down day = on big=20 volume. Low of the day? 21.69. Down 16.5% from your = entry.=20 Close of the day? 22.85. Down 12% from your entry. = It would=20 be easy to rationalize that by saying "But the next day it reversed = and=20 later the stock went on to breakout, so you would have made money." = But how=20 can you know that is going to happen on 11/6? You don't, and stop = loss=20 rules, if you had risked the early entry, would have at least kept = you out=20 with a 7 or 8% loss. Nearly 1/2 the loss of the low = of the=20 day.

Hope that answered the question you = had in=20 mind.

Katherine

----- Original Message ----- =
From:=20 camelot.homes@charter.net=20
To: canslim@lists.xmission.com= =20

Sent: Wednesday, December = 12, 2001=20 11:48 AM

Subject: Re: [CANSLIM] = stacking the=20 odds in my favor-buying before the pivot point

katherine, thank you for your = answer. i=20 didn't really ask the question right. i am actually talking about = a fast=20 market in a stock like PECS in the past. The stock has formed = a nice=20 cup and handle, the technicals and the fundamentals are very good. = the=20 stock gaps up at the opening, on very heavy volume, and the price = of the=20 stock goes up very fast. let's say the pivot is 32.50. Since the=20 accumulation is so fast, that instead

of being able to buy around the = pivot point,=20 ones execution might come back 1-2% higher.It looks like to me in = this=20 instance, that buying before the pivot might be a good idea..Lets = say=20 maybe buying at 32.00 to 32.50. What do you think?=20 david

----- Original Message ----- =
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com= =20

Sent: Wednesday, December = 12, 2001=20 6:14 AM

Subject: Re: [CANSLIM] = stacking the=20 odds in my favor-buying before the pivot point

Hi David,

I see there hasn't yet been a = response to=20 your questions. I was sure this one would draw some=20 discussion.

As I don't know your own level = of=20 experience with CANSLIM and investing, I thought I'd answer this = from a=20 more generic point of view.

(1) The idea behind waiting for = a good=20 stock to form a solid base and then break out on volume is to = identify=20 that magical point at which Demand outstrips Supply and Price is = pushed=20 higher--essentially the old Supply/Demand curve from=20 economics class. Assuming the lion's share of = sellers=20 have been exhausted and the stock is one that people would = wish to=20 own, the theory is that any additional demand for the stock will = push=20 the price further. In order for the Price to continue on, the = underlying=20 fundamentals that create value in the company have got to be = sound. So=20 from this point of view, waiting for the B/O is stacking the = odds in=20 your favor.

(2) The statistics on B/O's = from various=20 technical formations can be measured, but as you notice in = our=20 discussion the other day, the studies we were looking at in = Bulkowski's=20 book make no preselection based on fundamentals, as CANSLIM = forces us to=20 do. Even still, there are still odds that B/O's will fail. It's = just the=20 way it is.

(3) If you are extremely = practiced and=20 confident in CANSLIM candidate selection and can build a sound = argument=20 for the company and its potential, it is possible to make an = early=20 entry. Afterall, *some*body is buying it on the right side of = the cup.=20 Even still, it is less risky if the entry comes on a major = change in=20 trend or at a point that is very near substantial recent = support. I'm=20 not advocating this, I think even the best of the best get = whacked when=20 they try to do this. But more importantly, I don't believe that = anyone=20 who hasn't established a long running track record of successful = selection should do this at all. Just way too = risky.

Katherine

----- Original Message -----

From:=20 camelot.homes@charter.net=20
To: canslim@lists.xmission.com= =20

Sent: Tuesday, December = 11, 2001=20 6:31 PM

Subject: [CANSLIM] = stacking the=20 odds in my favor-buying before the pivot point

one thing that might increase = ones=20 odds-is buying before the pivot point is reach, if the stock = has hugh=20 volume, great technicals and fundamentals. what do you all = think???=20 david

and also

do any of you buy before the pivot point , if the = volume is=20 hugh,
and the technicals and the fundamentals are = excellent, and=20 the stock is
setting up to break out of a nice base=20 = pattern???
<= /BLOCKQUOTE> - ------=_NextPart_000_04CD_01C18311.78E8F420-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #1939 ****************************** 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.