From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #237 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 Wednesday, May 13 1998 Volume 02 : Number 237 In this issue: [CANSLIM] Market Top? - Stocks in the News hints "Yes" Re: [CANSLIM] EQNX [CANSLIM] Deral's Watch List Re: [CANSLIM] Not a Pretty Day Re: [CANSLIM] Futures volatile this morning Re: [CANSLIM] EDAC RE: [CANSLIM] Watchlist - CBUK [CANSLIM] quote.com [CANSLIM] Hewlett Packard poor earnings forcast! Re: [CANSLIM] Futures volatile this morning Re: [CANSLIM] Futures volatile this morning Re: [CANSLIM] Market Top? - Stocks in the News hints "Yes" [CANSLIM] RE: Microsoft Lawsuit- 20 states [CANSLIM] EDAC Re: [CANSLIM] US funds expecting economic slowdown [CANSLIM] OBV/MF: Comment Re: [CANSLIM] CLST (was EQNX CLST) [CANSLIM] "Consolidation" Theory? Re: [CANSLIM] RE: Microsoft Lawsuit- 20 states Re: [CANSLIM] EDAC Re: [CANSLIM] ACF, RESC Re: [CANSLIM] "Consolidation" Theory? Re: [CANSLIM] Hewlett Packard poor earnings forcast! ---------------------------------------------------------------------- Date: Wed, 13 May 1998 11:46:13 -0400 From: Craig Griffin Subject: [CANSLIM] Market Top? - Stocks in the News hints "Yes" Mike wrote: >That's just how it works. I think it shows you stocks hitting new highs, >not too extended, ranked by group strength, until all the squares are >filled up. It's good to notice when low EPS rank stocks are showing up in >that section. Precisely. Just to expand on that ... To quote IBD: the "Stocks in the News" represent stocks "over $12 that hit new price highs or are near new highs or had greatist % increase in volume on stocks over $15 and up 50 cents or more. Stocks that are extended in price over 15% from a base are omitted." The "News" referred to is basicly "New Highs" that are not yet extended from a base by more than 15%. If there are not enough of those, then the table is filled in with those with greatist % increase in volume which were up for the day. A young market advance will have lots of EPS rank 75 or higher with many or most at 90 or above. Later stages of an advance will have more and more low EPS ranked stocks showing up. Looking back to the Feb 24th issue of IBD, the NASDAQ Stocks in the News were all of EPS rank 71 or higher. 16 out of the 24 graphs were EPS rank 85 or higher. All but one showed a RS of 83 or higer. 12 of the 24 had a RS in the 90's. At this point the NASDAQ was in the middle of its advance after giving us the buy signal in early February. The April 28th issue (first one I grabbed) has 10 graphs out of the 24 with EPS ranks below 70. 6 of those graphs have EPS ranks below 50! 6 of the charts have a RS below 70! The turkeys are flying. Be careful out there. Market looks like it wants to rest. Because of the way the filter works to select the graphs for the Stocks in the News pages - O'Neil recommends it as a way to guage market health. If the turkeys (low RS, low EPS rank stocks) are breaking out of bases and "leading the advance" thereby - lookout, the market is getting close to a top of some kind. If the higher quality goods are leading the advance, the advance is still healthy. Regards, Craig PS. It looks like to me the NASDAQ market had sort of a "mini climax run" leading to a top on 4/22 at 1931 with volume of over a billion shares for the day. This is the highest volume on the NASDAQ since one or two of the "mini crash" days back in October during the Asian Flu. If you look on a candlestick chart you will see that the market had opened with a GAP UP on 5 days out of the prior 10! On 4/22 the market closed the day unchanged from it's opening! On the 4 preceeding gap up days - the market actually closed up for the day and near its high for that day. PPS. All this and the "Head and Shoulders" post (from Patrick Wahl (I think?)) makes me very cautious. Thanks for the H&S post! >On Tuesday, May 12, 1998 9:23 PM, Frank V. Wolynski >> P.S. >> Only 2 charts in the IBD NASDAQ Stocks in the News have an EPS in the >90's. >> 4 charts have EPS's in the 80's, the rest are pretty low, even as low as >a >> 5 and a 6. Wow, I know you're dying to know who those guys are! Well I'm >> not telling! >> >> Doesn't that seem a contradiction though? >> CANSLIM as propossed by O.B. WON mandates high EPS's, but yet the IBD >gives >> us charts with 5's and 6's. Haven't the editors of IBD read his book!!!!? >I >> can think of many other things I'd rather see charts of before I begin >> looking at the EPS ranks below 6, or even 25, even 50 or 70. Do we need >to >> see the lowest 6% in the OTC? >> >> Frank - - ------------------------------ Date: Wed, 13 May 1998 12:07:32 -0400 From: Craig Griffin Subject: Re: [CANSLIM] EQNX Hi Tim, At 08:24 AM 5/13/98 -0700, you wrote: >EQNX -Nice breakout yesterday, maybe too extended already? Anyway great >CANSLIM #s, refer to my posted scan results of last week. I don't see any recent base. I would call this a continuation of the advance on good volume, not a breakout. Last base began on 1/29 at 21. It ended on 3/17 with a breakout (pivot point at 20 3/4). This was an 8 week base. Currently the stock is extended by about 30% from that point. Definitely extended IMO. Regards, Craig - - ------------------------------ Date: Wed, 13 May 1998 12:10:50 -0400 From: "Deral Rackley" Subject: [CANSLIM] Deral's Watch List CANSLIM GROUP DERAL'S WATCH LIST (FOR YOUR INFORMATION & COMMENTS) Last Prev. Ann. % Chrt Sym T EPS RS QTR QTR Earn A/D GS Funds SHR Vol %Inst Mgmt Pat Price tmbs A 99 97 240 133 53 A 85 A 7 Up 13.7 27 Up 19.625 crlbf A 99 96 89 130 97 A 28 24 Avg 23 7 Up 29.625 usna A 99 95 67 88 117 B 90 B 6.4 Up 10 63 Up 32 dstm A 99 91 55 62 87 A 95 18.6 Avg 25 24 Dn 22.5 ftic A 97 95 57 233 56 B 98 4.5 Avg 11 32 Dn 17.875 wstf A 95 98 100 25 62 A 90 10.3 Dn 2 57 Up 29.75 frag A 94 95 122 18 40 B 90 13.6 Avg 15 40 Dn 17 mtxc A 93 96 23 100 27 A 39 A+ 6.7 Up 14 59 Up 27.375 lbor A 87 99 N/A 1200 64 A 90 18.4 Dn 16 16 C 33.625 prgx B 98 93 50 50 86 B 98 A- 19.2 Avg 31 65 C 25 caer B 89 93 113 6 30 A 64 13.3 Avg 5 Up 14.437 apco C 98 98 100 125 39 A 98 10.9 Dn 6 36 Dn 12.75 dayr C 96 87 800 36 29 B 36 12.7 Dn 20 38 Dn 23.5 eats C 87 97 133 47 11 A 78 B 4.1 Up 1 Up 8.25 Notes: Sources: Investor's Business Daily, Daily Graphs, various web sites T=DG Timeliness rating % Annual Earnings=Daily Graphs (different mathematical formula than IBD annual) Vol: Up,Dn, Avg. as related to the 50 day average in DG Chart Pattern: B/O=Break out; C=Consolidating; S/U=Straight up (almost); Dn=Down; ("eyeballed" but reference to the 200 day MA) Let me know if you were not able to read this spreadsheet OK. It has considerable width with this many columns. I am thinking about LBOR again. I bought it at @29.5 and stayed with it to 34.5 and sold it previously. I am thinking that It may be ready to break out again at around 35 after a couple of weeks rest. Also news about a 3:2 split on June 9. I have also been watching CRLBF and DSTM on intraday charts for a couple of months. I bought DSTM at 19 and am holding right now. I realize that CRLBF has gone up nicely and appears to be resting at between 29 and 29.5. News today: The government approved the purchase of YURI by Technologies at $35 per share. Deral Rackley - - ------------------------------ Date: Wed, 13 May 1998 12:19:11 -0400 From: Craig Griffin Subject: Re: [CANSLIM] Not a Pretty Day Frank, Another nice post. One more sign that this market is probably in retrench and retrace mode. Time for a little R&R after a job well done the last couple of months. My guess is it will be at least a month or three before we see 1931 on the NASDAQ again. But that is just an opinion and I will change it immediately if the market starts looking healthy again ;^). Time will tell (one day at a time). Regards, Craig At 11:22 PM 5/12/98 -0400, you wrote: >Russell 2000 looks to be in trouble, needs to pull out of it soon! > >My calculations place the OTC Advance/Decline line at a new 1 year low and >still in a steep decline. I was watching this one yesterday and thinking, >one not so great day of advancers and we get a new low. Well, we got it. > >New Hi's and Lo's look to be biased pretty heavy toward not breaking any >new Hi ground soon. This looks to be one of those dips from which you trend >line from the next retest looking for divergences and reversals! > >We need some real buying to come in to turn these technicals around. And a >few last hour arbitrage computer program houses aren't gonna do it. > >Not a good sign my friends. > >Frank Wolynski > > >- > > - - ------------------------------ Date: Wed, 13 May 1998 12:25:32 -0400 From: Craig Griffin Subject: Re: [CANSLIM] Futures volatile this morning Tom, Thanks for posting this information. I found it useful and interesting. Goes along with my view that the market that seems to be "churning" - sort of running in place. Can't seem to make any upside progress, but it doesn't really act like it wants to go down either. Regards, Craig At 08:24 AM 5/13/98 -0400, you wrote: >Been watching the futures a little closer than usual today. Around >5:30AM or so (EST) NASDAQ was down about 4.4 pts, but shortly after >were showing unchanged. About an hour later, they were again down over >4 pts (failed rally??). As we approached 8AM, they were UP over 4 pts, >later moving to up over 6 pts (about a half percent gain), but now >again appear to be slipping, only up 1.5 pts as of 8:20AM. In the same >overall time span, the S&P500 futures were essentially neutral, >swinging from a fraction of a pt down to a fraction of a pt up and >back. > >Looks like it may be hard to call the open, much less the day. > >Tom W > > > >- > > - - ------------------------------ Date: Wed, 13 May 1998 14:49:24 -0400 From: "Tony Austin" Subject: Re: [CANSLIM] EDAC Watch closely, moving strong this pm Tony - - ------------------------------ Date: Wed, 13 May 1998 12:10:00 -0700 From: Mike Lucero Subject: RE: [CANSLIM] Watchlist - CBUK Ari, Craig explained it very well. Mike On Wednesday, May 13, 1998 6:21 AM, Ari Lawson [SMTP:arilaw@erols.com] wrote: > Mike Lucero wrote: > > > > That's just how it works. I think it shows you stocks hitting new highs, > > not too extended, ranked by group strength, until all the squares are > > filled up. It's good to notice when low EPS rank stocks are showing up in > > that section. > > > > Mike > > > > On Tuesday, May 12, 1998 9:23 PM, Frank V. Wolynski > > [SMTP:Wolynski@MindSpring.Com] wrote: > > > Correction: > > > # Funds Own: 22 (22 funds own it, rather than percentage owned by funds.) > > > > > > P.S. > > > Only 2 charts in the IBD NASDAQ Stocks in the News have an EPS in the > > 90's. > > > 4 charts have EPS's in the 80's, the rest are pretty low, even as low as > > a > > > 5 and a 6. Wow, I know you're dying to know who those guys are! Well I'm > > > not telling! > > > > > > Doesn't that seem a contradiction though? > > > CANSLIM as propossed by O.B. WON mandates high EPS's, but yet the IBD > > gives > > > us charts with 5's and 6's. Haven't the editors of IBD read his book!!!!? > > I > > > can think of many other things I'd rather see charts of before I begin > > > looking at the EPS ranks below 6, or even 25, even 50 or 70. Do we need > > to > > > see the lowest 6% in the OTC? > > > > > > Frank > > > > > > At 00:06 5/13/98 -0400, Frank V. Wolynski wrote: > > > >Ticker: CBUK > > > >Co: Cutter & Buck > > > >EPS/RS: 94/90 > > > >A/D: B > > > >% Annual Earnings Growth: 115% > > > >Qtrly EPS % Change: 100 and rising > > > >Qtrly Sales % Change: 67 and rising > > > >Float: 4.2 mil > > > >Funds own: 22% > > > >Group: Textile - Apparel Manufacturers, #63 out of 197. Was 85 last > > week. > > > > > > > >Since I can't justify the DGO pricing, that is all the fundys I have. > > And > > > >all I might add came from IBD. > > > > > > > >Technically it rose nicely from single touch of its 200ma on 10/22/97. > > It > > > >hasn't touched the 200ma since. In late Feb, early March it ceased the > > > >right side of the cup/bowl, doggy dish, whatever and started a base > > ranging > > > >from 24 3/4 to 28. It appears to be holding nicely above its 50ma, > > however > > > >in the past 2 weeks Money flow has turned very slightly negative. Tea > > > >Leaves of things to come? Maybe, but I haven't seen as nice a base since > > > >ANLT last fall. > > > > > > > >It hasn't broken out of the base yet, but looks like a candidate. > > > > > > > >Frank Wolynski > > > >( Often wrong, plan accordingly.) > > > > > > > > > > > > > > > >- > > > > > > > > > > > > > > > > > > > > > -Mike.You say it's good to notice low EPS's.Please explain.Thanks. > > > > - - ------------------------------ Date: Wed, 13 May 1998 12:49:13 -0700 From: Mike Lucero Subject: [CANSLIM] quote.com Does anyone pay for the Live Charts at Quote.com? I noticed that the volume for the DOW stays far behind until around midnight. Right now it says 337,924, while yesterday's bar is above 500,000. I was wondering if it was different for people who pay for the service. I've mentioned the delay to Quote.com a couple of times, but they've never replied, and haven't fixed it. Thanks, Mike Lucero http://www.quote.com/cgi-bin/jchart-form?genApplet=yes - - ------------------------------ Date: Wed, 13 May 1998 17:07:26 -0700 From: "Ken Davidson" Subject: [CANSLIM] Hewlett Packard poor earnings forcast! 5/13/98 20:00 est. Hewlett Packard has announced that there 2nd quarter earnings are going to be far below expectations. In after hours trading they are down -$7.25. This company being in the Dow could have an effect on the market at least tomorrow morning. Globex futures have turned around on this news. The S & P 500 is now down -1.70 points. The Nasdaq 100 futures are off -4.70 points. Could make for an interesting morning! We'll keep an eye on the futures and let you know later on what's up! Ken The information contained in this commentary is based upon data that is believed to be accurate, but is not guaranteed, and subject to change without notice. All projections, forecasts, opinions, and track records cannot be guaranteed to equal our past performance. Persons reading this are responsible for their actions. - - ------------------------------ Date: Wed, 13 May 1998 20:06:15 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Futures volatile this morning I have been satisfied with www.cme.com/cgi-bin/gflash.cgi , there may be better but it suits me, and seems to update automatically every five minutes, so I don't have to keep refreshing, even when minimized. For reference, the S&P500 futures are down nearly two pts and NASDAQ 100 down nearly 5 pts at 8PM. I also use this site to examine the foreign currencies most important to me (yen, British pound, German mark). The values, and changes displayed, are in US dollars, so a negative change means the foreign currency is cheaper against the dollar, and vice versa. If you want to see the foreign currency quoted in the form most often used by the media (e.g. the yen/dollar is at 133.72) then use the Yahoo site. Tom W - -----Original Message----- From: David Smith To: canslim@lists.xmission.com Date: Wednesday, May 13, 1998 9:17 AM Subject: Re: [CANSLIM] Futures volatile this morning >The NASDAQ activity is very interesting..at what site do you get this info??? > - - ------------------------------ Date: Wed, 13 May 1998 20:10:16 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Futures volatile this morning I still am holding to my "consolidation" theory/viewpoint. Out of 22 stocks, all OTC and all small or micro caps, on my current watch list, 4 hit new highs today on good to great volume (EDAC, DKWD, MDII, SNHY) while well over half the list were up measurably more than the NASDAQ Composite change. I'm going to try and examine the entire list tonight to see what was going on with these, as well as the rest of the list, some of which were down notably (MTON, VARL, CAER and TXCC in particular). Tom W - -----Original Message----- From: Craig Griffin To: canslim@lists.xmission.com Date: Wednesday, May 13, 1998 12:23 PM Subject: Re: [CANSLIM] Futures volatile this morning >Tom, > >Thanks for posting this information. I found it useful and interesting. >Goes along with my view that the market that seems to be "churning" - sort >of running in place. Can't seem to make any upside progress, but it >doesn't really act like it wants to go down either. > >Regards, >Craig > - - ------------------------------ Date: Wed, 13 May 1998 17:23:39 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Market Top? - Stocks in the News hints "Yes" > Date: Wed, 13 May 1998 11:46:13 -0400 > To: canslim@lists.xmission.com > From: Craig Griffin > The April 28th issue (first one I grabbed) has 10 graphs out of the 24 with > EPS ranks below 70. 6 of those graphs have EPS ranks below 50! 6 of the > charts have a RS below 70! The turkeys are flying. Be careful out there. > Market looks like it wants to rest. My one market comment, and this isn't meant as a forecast, just an observation, is that the last 5 days or so, where the market has advanced, the decliners have been ahead of advances by several hundred issues per day. So a more narrow advance lately. - - ------------------------------ Date: Wed, 13 May 1998 20:32:37 -0400 From: "Nelson E. Timken, Esq." Subject: [CANSLIM] RE: Microsoft Lawsuit- 20 states This is a multi-part message in MIME format. - ------=_NextPart_000_0001_01BD7EAE.449274A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit What is the feeling about the Microsoft gang-suit which is coming tomorrow? Coupled with the earnings warning from HP, seems like a forecast for a down trend tomorrow. _______________________ Nelson E. Timken, Esq. J.N. Capital, Inc. Douglaston, New York - ------=_NextPart_000_0001_01BD7EAE.449274A0 Content-Type: text/x-vcard; name="Nelson E. Timken Esq..vcf" Content-Transfer-Encoding: quoted-printable Content-Disposition: attachment; filename="Nelson E. Timken Esq..vcf" BEGIN:VCARD VERSION:2.1 N:Timken;Nelson;E.;;Esq. FN:Nelson E. Timken Esq. ORG:J.N. Capital, Inc.;Development TITLE:Secretary TEL;WORK;VOICE:718-423-6800 TEL;HOME;VOICE:(718) 468-6293 TEL;WORK;FAX:(718) 224-4782 ADR;WORK:;Secretary;40-26 235th Street;Douglaston;NY;11363;United States = of America LABEL;WORK;ENCODING=3DQUOTED-PRINTABLE:Secretary=3D0D=3D0A40-26 235th = Street=3D0D=3D0ADouglaston, NY 11363=3D0D=3D0AUnited Stat=3D es of America ADR;HOME:;;80-41 230th Street;Bellerose Manor;NY;11427;United States of = America LABEL;HOME;ENCODING=3DQUOTED-PRINTABLE:80-41 230th = Street=3D0D=3D0ABellerose Manor, NY 11427=3D0D=3D0AUnited States of = Amer=3D ica URL: URL:http://www.geocities.com/wallstreet/5791 ROLE:Attorney/Venture Capitalist BDAY:19980704 EMAIL;PREF;INTERNET:netimken@erols.com REV:19980422T120302Z END:VCARD - ------=_NextPart_000_0001_01BD7EAE.449274A0-- - - ------------------------------ Date: Wed, 13 May 1998 17:20:57 -0400 From: "Deral Rackley" Subject: [CANSLIM] EDAC Tony: I just noticed that EDAC announced that they were purchasing APEX Machine Tool Company. Perhaps this news accounts for the 1 3/8 ths increase today. Deral - - ------------------------------ Date: Wed, 13 May 1998 20:33:27 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] US funds expecting economic slowdown Couple quick comments, Tapas. If you work for a major corp, you may have someone in the Human Resources area that can discuss your 401 options reasonably intelligently. You don't mention if the funds you can choose are publicly traded. If so, you can always call the fund itself for quite a bit of info, including whether the fund mgr has the option of moving some money into bonds. A lot of time you can even find out what the fund mgr's "read" is on the mkt, and see if you agree with it. You also don't mention how many more years you expect to continue contributing, or at least participating, to that 401 plan. If you're young, then growth is the answer, if close to cashing out and retiring, then bond funds make sense anyway. If growth is your true and valid goal, however, then bond funds don't make a lot of sense for the short term. If the feds raise rates in July or subsequent, then existing bonds (and bond funds) will fall in value to bring their yield up to the level of newly issued bonds (this was another contradiction in part in the story I cited). Another issue is how often you can make changes. Some plans allow daily changes by automated telephone contact, others only permit it every quarter, by written application several weeks prior to the qtr. The former permits you more flexibility, the latter basically locks you into long term horizons and requires more conservative approach whether this is what you want or not. I don't encourage investors to try and "day trade" their 401, you will usually lose by this. But if you can make changes on a daily basis, you can stay in growth till you are convinced the mkt is really correcting, then switch to money mkt with usually only one or two days delay till you are convinced the correction has bottomed out and reversed, using a several week or even a month as your time horizon. One thing to beware, and aware, of is that many 401 administrators/plans that permit "daily" changes still require your change order to be entered pretty early in the day (sometimes as early as 10 or 11 AM) to be effective on that day's closing NAV. Your plan adminstrator can answer this. I personally think the Asian and Latin mkts have more room to fall. One or two months ago might have been a good time to switch into some European funds, I'm not so sure right now as they have moved up nicely on expectations of the future of the European Community. Whether they will give back any of these recent gains remains to be seen. For what it's worth, I've had my 401 in the money mkt for the past six weeks, altho this is in part due to the failure by my former employer to send the forms to roll it over into my IRA. But I cashed out when I did because I wanted to protect myself from a possible 7-10% correction that, at the time, I saw as possible. It is still possible, but so far not acting like it's yet ready to happen despite some ugly trends on the advance/decline line and the new high/low line. As always, members, please do not construe my comments intended to help a member think thru his choices as in any way constituting "advice" or "recommendations". I may no longer be licensed, but my ethics are still firmly in place, and this response is in no way intended to be a specific plan for Tapas in particular, or any member in general. Rather, it is intended to give Tapas some food for thought, and remind him of some questions to be asking in his own search for what is right for him. Tom W - -----Original Message----- From: Tapas Banerjee To: canslim@xmission.com Date: Wednesday, May 13, 1998 10:25 AM Subject: Re: [CANSLIM] US funds expecting economic slowdown In this context I'm curious to know, how best to allocate my mutual fund holdings e.g. 401K. Possible options look to me are: 1. Move money from Stock to Bond funds 2. Move to Contrarian funds. 3. Overseas funds 4. Move money in money market Initially I thought overseas fund may be the better options as the prices may be low owing to Asian recession, but based on Tom's analysis it seems not a very good option. I'm also interested to find out whether the fund manager themselves reallocates the fund based on market conditions e.g. move stocks to bonds during market downturn. Appreciate any advise/ideas on this. Thanks, - Tapas - - - - ------------------------------ Date: Wed, 13 May 1998 20:48:06 -0400 From: Connie Mack Rea Subject: [CANSLIM] OBV/MF: Comment Members-- One of the "soft" readings of OBV/MF that goes squishy when passing through the looking glass into the reality of the market is this: How long should it take for a positive divergence to manifest itself in price? The answer is: I don't know that. But I think I know this. That irrespective of the chart look of the divergence [i.e., the contrasting declination of price against OBV/MF inclination] the significance is diminished by the time from that positive divergence to yesterday's trading. A divergence six months old is, indeed, an old divergence; and if there has been no EMA buy, in the next month or so, I weigh the divergence modestly, if at all. However, if after this old divergence, there appears another, then I consider both of them active and the latter one a bit more weighty than if it were a lone divergence. What would keep either divergence alive would be an interim period in which the EMA is bunched together. Bunching keeps alive any divergence, positive or negative; bunching is a metaphor for ambiguity, uncertainty. The significance of the divergence[s] influences my speculation that the bunching will resolve itself to the upside. What is preferable is a positive divergence that is one to two weeks old with more than a modest contrast of price declination and OBV/MF inclination. The time to act on this divergence is dictated by the EMA. If the divergence is strong, you may be more aggressive on your entry. Whether you act on the FastSto or SlowSto is dictated by your aggressiveness. The MACD ought to be turning to buy. When you anticipate an EMA buy, go to a 2-day 15-min chart. You're now in a world where both price, EMA, and volume are flying. But there's no reason to be here if you're not going to fly. In this fast wind tunnel, the Volume+ indicator is useful to confirm your entry. Preparation, mental and mechanical, is all important. Don't go into the tunnel and be buffeted because you're strategy is not settled. In this instance, a market order may be your best order. Don't ever lose an entry or an exit over an 1/8th or 1/4 point. I sold a stock two days ago that was bouncing all around my stop. First the price was a little above, then a little below, and then above. The intraday Volume+ looked like I might be getting out too soon. A half hour later, and 15 minutes before closing, the dipsy-do action hadn't changed. I decided I had made a mistake [the stock was already six days old and hadn't done what I had hoped for]. Screw it. A seventh day is procrastination. Not to get out would imply that a blessed amnesia had settled upon me. A market order filled at a quarter below my stop kept me from making one more bad decision. Today, the stock is jerking someone else about. Connie Mack - - ------------------------------ Date: Wed, 13 May 1998 20:41:50 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] CLST (was EQNX CLST) I haven't followed the company, so won't try to comment specifically. But some quick thoughts after reading the release you included. Who is "Sands Brothers & Co"?? I have never heard of them, so would wonder how much influence or buying power they may command. If a third of the float is "owned by insiders", are they also part of management, and thus at least potentially prevented from wholesale selling, or are they holders of the stock as a result of prior acquisitions and already past any mandatory holding periods, thus representing a potential wave of selling pressure, maybe why the stock has been so volatile. Mkt perception, as well as any recent SEC filings, could be important on this point. I'm not trying to start a debate on this stock, because "I know nothing" about it, but these were thoughts that jumped into my head reading the release. Tom W - -----Original Message----- From: Tim Fisher To: canslim@lists.xmission.com Date: Wednesday, May 13, 1998 11:36 AM Subject: [CANSLIM] EQNX CLST >BTW what the heck happened to CLST Cellstar the past couple days? They had >to release an announcement that they were comfy with estimates and groused >about the shorts in the same release (below). Not a time to get in per WON >but could this be a buying opportunity anyway? > >CellStar "comfortable" with earnings forecast > >NEW YORK, May 12 (Reuters) - CellStar Corp. (CLST - news) President Richard >Gozia said he is comfortable with Wall >Street forecasts that the Texas-based cellular telephone distributor will >report higher fiscal second quarter earnings. ``We are >still comfortable with the earnings estimates from the analysts for the >quarter and the year,'' Gozia said. ``We are going to >have a record year.'' > >Analysts surveyed by First Call expect CellStar to earn $0.53 per share in >its second quarter ending May 31, up from $0.47 >in the first quarter and $0.48 a year earlier. > >The company is forecast to earn $2.32 per share for the full fiscal year. > >Gozia was responding to questions from Reuters about the sharp swings this >week in the company's stock price. > >The stock was up 2-3/4 at 28-5/8 at midday. On Monday it closed down 4-7/32 >at 25-7/8 with 1.9 million shares changing >hands. > >Gozia said he knew of no reason behind Monday's tumble in the stock. >Tuesday's gains came after several analysts reiterated >strong buy ratings on the stock, he added. > >``I have been talking to shareholders assuring them that any kind of rumors >that the shorts are putting out are not genuine, and >we are seeing some rebound,'' Gozia said. > >``Historically the stock has had swings like this, but to me, they are >buying opportunities,'' said analyst Seth Potter of Sands >Brothers & Co. > >Sands Brothers maintains its strong buy rating on the stock with a target >price of $50. > >Potter forecasts that Cellstar will earn $0.53 per share in its second >quarter. > >Short interest in the stock is over three million shares, about 10 percent >of the float, Potter said. Some 34 to 35 percent of the >total float is owned by insiders. > > >Tim Fisher / tim@OreRockOn.com >Ore-Rock-On and Pacific Fishery Biologists WWW Sites: > >http://OreRockOn.com >See naked fish and rocks! > >- > - - ------------------------------ Date: Wed, 13 May 1998 20:53:39 -0400 From: "Deral Rackley" Subject: [CANSLIM] "Consolidation" Theory? Tom, Please explain your "Consolidation" Theory. Thanks for the MDII tip. I will put it on my watch list. I would (as well as everyone else) love to find some low priced stocks (less than $15). I see good CANSLIM stocks all the time that have started at less than $10 during the past year when I am checking prices and have gone up by doubles or triples. - - ------------------------------ Date: Wed, 13 May 1998 21:05:44 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] RE: Microsoft Lawsuit- 20 states Personally, I think news of more class action lawsuits by state attorney generals office against MSFT has about as much impact, or news worthiness, as another expansion of Starr's search for the truth about Slick Willy's sexual behaviour. People will keep buying MSFT products, including Windows stuff, and keep on ignoring what Wild Bill Clinton chooses to do with his interns. Tom W - -----Original Message----- From: Nelson E. Timken, Esq. To: canslim@lists.xmission.com Date: Wednesday, May 13, 1998 8:29 PM Subject: [CANSLIM] RE: Microsoft Lawsuit- 20 states >What is the feeling about the Microsoft gang-suit which is coming tomorrow? >Coupled with the earnings warning from HP, seems like a forecast for a down >trend tomorrow. > >_______________________ >Nelson E. Timken, Esq. >J.N. Capital, Inc. >Douglaston, New York > - - ------------------------------ Date: Wed, 13 May 1998 21:09:17 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] EDAC Yeah, it's possible. Altho usually the acquiring company goes down on the news. In this case, it's a mostly cash buyout, company to be acquired geographically located nearby and privately owned, and in a closely compatible business operation. Volume was good, the new high was sweet (I'm now up 35% and still holding, my only regret was that I thought of putting in a buy order at 12.25, but didn't, and now will never know if I might have filled!!! Tom W - -----Original Message----- From: Deral Rackley To: CANSLIM Date: Wednesday, May 13, 1998 8:35 PM Subject: [CANSLIM] EDAC >Tony: > >I just noticed that EDAC announced that they were purchasing APEX Machine >Tool Company. Perhaps this news accounts for the 1 3/8 ths increase today. > >Deral > - - ------------------------------ Date: Wed, 13 May 1998 21:23:07 -0400 From: "Tony Austin" Subject: Re: [CANSLIM] ACF, RESC RESC penetrated short term resistance of 22 today, closing at 22 1/2 on increasing volume. ACF - Looks like it may attempt an upward run soon, market permiting. Has been correcting since 4/20. Previous high is 36 9/16, currently sitting at 35 5/8. Had a strong surge in volume today. Tony - - ------------------------------ Date: Wed, 13 May 1998 21:58:57 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] "Consolidation" Theory? On MDII, offhand, I'd say a little late to start watching it. I have mentioned it several times before, as recently as my weekend post of "What's left on my watch list". With today's move from a very short base, it is now likely too extended to be a decent buy. On my "consolidation theory", while I place little credence in the Dow 30 hitting another new high, as it did today, I recognize (and grudgingly respect) the fact that a great amount of the investing community, however ill informed, uneducated, or simply stupid they may be, are swayed by airhead media commentators. And today's record on the most visible of the indexes gives them one more shot at talking about how "the Feds won't be raising rates at next week's meeting". Forget the fact that only a week ago they were explaining the mkt's mild drop by "fears of a rate hike at the May meeting of the Feds" and then the next day saying the mkt was up "because the economic reports confirmed the expectation that there would be no rate hike at the upcoming FOMC meeting". Actually, these are not real quotes, but I'm willing to bet if I bothered to go thru a few news stories, I could find real quotes citable by "reputable source" that would be very close. Bottom line: the new high/low lines on NYSE and NASDAQ; the advance/decline lines on both; the volume up/down on both; the indexes themselves, etc. all have been suggesting a short to intermediate top, with a 5-7% correction imminent. Some here in this group have commented on "head and shoulders" patterns, I haven't been vocal in disagreeing with their perception, altho I must admit I've seen better H&S patterns before. However, to date, the mkts seem unwilling to oblige with what should be predictable behaviour. I attribute this in part to simply the steady influx of new money that must be placed somewhere. The continuing Asian crises also contributes, with fresh money flowing into the best performing, most stable, and least risky market in the world, supported by a strong currency and the best collective economic conditions ever recorded in history. Over the past several years, despite all the media predictions of all the "new investors" panicking out of their mutual fund investments at the first sign of trouble, it hasn't come to pass. In fact, about the only time we saw any real slowdown in the inflow of fresh money to growth oriented mutual funds came last fall, when the fears of the Asian economic crises lasted for several months. Otherwise, whenever the mkt has corrected briefly, it has been viewed as a Kmart "blue light special" and new money has rushed in to buy quality stocks at a discount. For the past several weeks (I am a firm, and patient, believer that it takes a week or more, and usually a lot more, to change a trend), I have seen the mkt "churning" around its highs, in many cases with volume decreasing, and with no significant price appreciation. But despite all the reasons why the "mkt" should be correcting, it seems to stay pretty close to its highs. This is providing those who wish to cash out with ample opportunity. And for those still adding fresh money, they feel like they are getting a good investment price for a long term investment. Volume at this point does not suggest to me a true "correction", rather the froth as the mkt consolidates some very strong Q1 gains in price and earnings at the corporate level. But at least as of May 13th, I still see little inclination on the "market's" part to try for a real correction. Should that happen, the "value shoppers" as well as the shorters (who I suspect are hurting once again, while we continue to see record levels of shorting), will seize the opportunity to benefit from lower prices. This wave of fresh buying should stabilize any real selling pressure, and place a "floor" into any attempt at correcting. I'm not sure the mkt is yet ready to start another advance, but I see little reason or likelihood for a major retreat. On the other hand, when you start trying to look at individual stocks, they must be assessed differently. Stocks that suddenly spurt higher, esp without any apparent reason, may be good candidates for profit taking before they retreat back into a base. My overall read on "M" of CANSLIM is that we remain in a bull mkt, economic conditions favor a continuation of a good environment for the stock mkt, and that we are consolidating recent gains without giving back much of what we have made. BTW, I don't add a single stock to my personal watch list that I don't believe can make me at least 20% in the next two months (the famous 20% in 8 weeks rule). Whether any can double or triple if I should hold them long enough remains to be seen. Tom W - -----Original Message----- From: Deral Rackley To: CANSLIM Date: Wednesday, May 13, 1998 8:58 PM Subject: [CANSLIM] "Consolidation" Theory? >Tom, >Please explain your "Consolidation" Theory. > >Thanks for the MDII tip. I will put it on my watch list. I would (as well >as everyone else) love to find some low priced stocks (less than $15). I >see good CANSLIM stocks all the time that have started at less than $10 >during the past year when I am checking prices and have gone up by doubles >or triples. > > >- > - - ------------------------------ Date: Wed, 13 May 1998 22:06:43 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] Hewlett Packard poor earnings forcast! HWP is an interesting stock, it seems to disappoint on earnings every qtr, and still keep on ticking. Its presence in the Dow 30 may be its most significant impact on Thursday's trading. But if I had the risk capital to play it, I would be buying it in aftermkt trading, betting on it opening down, but better than it's trading aftermarket. And since the news came out, futures don't seem to have reacted any further. Will be interesting to see where they are in the morning. Tom W - -----Original Message----- From: Ken Davidson To: canslim@lists.xmission.com Date: Wednesday, May 13, 1998 8:04 PM Subject: [CANSLIM] Hewlett Packard poor earnings forcast! >5/13/98 20:00 est. >Hewlett Packard has announced that there 2nd quarter earnings are going to >be far below expectations. In after hours trading they are down -$7.25. >This company being in the Dow could have an effect on the market at least >tomorrow morning. Globex futures have turned around on this news. The S & >P 500 is now down -1.70 points. The Nasdaq 100 futures are off -4.70 >points. Could make for an interesting morning! We'll keep an eye on the >futures and let you know later on what's up! > >Ken > >The information contained in this commentary is based upon data that is >believed to be accurate, but is not guaranteed, and subject to change >without notice. All projections, forecasts, opinions, and track records >cannot be guaranteed to equal our past performance. Persons reading this >are responsible for their actions. > > >- > - - ------------------------------ End of canslim-digest V2 #237 ***************************** 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.