From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #270 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 Friday, June 5 1998 Volume 02 : Number 270 In this issue: Re: [CANSLIM] CANSLIM will return [CANSLIM] Members - a drum roll please [CANSLIM] RE: Topics of discussion on the list [CANSLIM] OBV/MF/EMA: Radaf [CANSLIM] EDAC moving again Re: [CANSLIM] Quality of toolbox--Johan [CANSLIM] IBD for those living outside of the USA Re: [CANSLIM] EDAC moving again Re: [CANSLIM] Quality of toolbox--Johan Re: [CANSLIM] WOWS--Patrick [CANSLIM] M Thoughts - NASDAQ Re: [CANSLIM] M Thoughts - NASDAQ--Craig Re: [CANSLIM] Members - a drum roll please Re: [CANSLIM] Members - a drum roll please [CANSLIM] jans -canslim-digest V2 #267 Re: [CANSLIM] Members - a drum roll please--Bill Re: [CANSLIM] Members - a drum roll please--Bill Re: [CANSLIM] Members - a drum roll please--Bill ---------------------------------------------------------------------- Date: Fri, 5 Jun 1998 08:03:54 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] CANSLIM will return > Date: 5 Jun 1998 08:48:59 -0500 > From: "Hilton Steve" > back up eventually. For a value play AMAT may be an excellent choice. Ah! > Sorry, not CANSLIM. I'm afraid that by the time AMAT becomes a good CS it I think they just announced they will lay some people off. I think it will lay there a bit longer. - - ------------------------------ Date: Fri, 05 Jun 1998 23:38:56 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] Members - a drum roll please > Date: Fri, 05 Jun 1998 06:52:52 -0400 > From: Tom Worley > Subject: Re: [CANSLIM] Members - a drum roll please > > Frank, there has been virtually no discussion on my project. There has > been none at all on the merits of using MACD vs any other indicator > except for what Connie gave me. There has been no constructive > criticism, nor other comments, on the concept I came up with. What I > am working on is solidly and intrinsically CANSLIM based, using TA at > the tail end to try and fine tune entry and exit. > O.K., Tom, here you go. MACD is a lagging indicator. I watch it, but for timing entry it's usually to late, in my opinion. You would do equally well using traditional price and volume movements (dry ups, climax tops, etc.) Just because you studied it for a few weeks, or even months, and decided it is an indicator you'd believe you can use to help enter stocks (in a market under distribution with no leadership) is no reason to expect that we'll all suddenly jump in and confirm or dispute what you think you've observed as useful or helpful. Your comment that no discussion has taken place on "your concept" is not accurate. There has been continuing discussion since CM's arrival that has focused on all these indicators, including "your" MACD and EMA's. Just because your interest was recently piqued to the point of actually pulling up a few charts and announcing your discovery of a very simplistic approach to entry points with TA (with a lot of fanfare and hoopla, to boot) is no cause for a ticker tape parade, or even a passing comment, IMO. Nevertheless, more recently, I approached you in private with the following notes hoping that you might respond (which you never did) and that we might work jointly to present your latest jewell (EDAC) to the group, in light of the MACD and 3/7/10 EMA and slow stochastics (the latter of the two you commented to the group were of no assistance to you. I'm with the lurkers...what's eating you? And here's our exchange on EDAC: ************************************************************************************************************** Subject: Re: EDAC Date: Tue, 02 Jun 1998 20:22:54 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> To: Tom Worley References: 1 Tom Worley wrote: > > I'd have to dig out the confirm for a precise date, but it was almost > exactly two months ago as it moved up from a slight descending base. > My price was $10, so the buy point should be pretty clear. Keep in > mind that today was the first time I have timed my buy decision using > TA, EDAC was bot purely on the basis of CS and my experience with the > mkt, along with a volume indicator that came early in the day as I > recall. > > Tom W > > -----Original Message----- > From: Jeffry White <"postwhit@sover.net"@sover.net> > To: Tom Worley > Date: Tuesday, June 02, 1998 2:38 PM > Subject: Re: EDAC > > > > >Now, Tom, I've read you MACD message. Would you mind sharing your > first > >entry date of EDAC? I'd like to see exactly where the EMA/slow sto > >crossover was, and illustrate it to you, if I can. > > > >Thanks. > > Your note sounds a little cautious, I don't know. But just so we are clear, given the past tension, I'm not writing you about EDAC to try and prove some point. Also, I hadn't seen your post on MACD when I dropped you a note this morning which suggests that you haven't found much confirmation from these two indicators. Not sure I can provide that for you, but I thought it might be interesting to look at a stock you know well, and show you what I see. Then, see if you can recall what you were looking at (without the indicators) and try to decide whether they are of any potential assistance. I think they work exceedingly well when the "M" is trending. But what doesn't? Still they help me get off the pot sometimes, which is worth something. Just happened to punch in EDAC while I was browsing around at BC this morning and noticed the slow stochs and EMA crossovers in the chart. Looking back through charts with these indicators is a little hard, I find, because the crossovers may be a little more obvious at the time they happen. But due to the "tight" price pattern compared to the move that ensued, they become a bit compressed on the chart. Much easier, and I think more convincing when they are watched on the actual stock you are monitoring or trading. But, I see three buy points on a three month chart, all of which were low risk, in my view. I also think they would have been lower risk than the day of or following the more obvious entry where the thing broke to another new high after consolidating. First one is right in front of the day you probably bought, which is 4/2. Can't really see the volume well until 4/1, but the stochastics on 3/27 crossed, and then the EMA on 3/31. These two points might have given you some added comfort, but it was (as I'm sure you know well) really low risk when you took it at 10. You had a 10% stop at 9 which was ripe for a flush, don't you think? And 7% under 10 was not safe at all, IMO. Might have entered a day or two earlier on the stochastic cross and had a safer 7% stop. What exactly was the "volume indicator" to which you refer early in the day? A block? Next point is a crossover around 4/28-29, I think. You'd have added at around 12 5/8, but still a decent stop placement on the add, or entire position by pulling up an averaged stop. Kind of a fake out, not ready to resume, but another signal to consider in any event. Third, May 12 or 13 crossovers in front of a huge volume surge, to boot. Stochs might have had you add at a little higher than 12, but safe entry even on the volume spike. Do you read the stos and EMA the same way I do on these points? Looks like today will cross the EMA to the downside, but the slow stochs are a few days from oversold. Possible crossovers coming in front of another move? BTW, I don't need to tell you this is a beauty of a chart, Tom. Exceedingly tight, well behaved. So much so, that I'm not sure these indicators help much, but maybe a day or two worth of comfort for what you obviously saw as it was happening. I find them useful when I'm watching a stock that has already broken out, but was not on my watch list. Helps setting a lower risk stop than I am accustomed to getting when the volume doesn't "dry" in an orderly fashion and fakes you in a day or two early. I also find them helpful where you are "stalking" one like this one, I think. Love the indicators for "adds", but I tend to think that they work best for "adds" when the "M" is clearly trending higher (but again what doesn't, huh?). Noticed that the MACD would have been late on the March entry, a good indicator that the April 28 crossover was not likely reliable, but again a day late in May. Interesting stuff, I think. Hope this is coherent. Just finished a brief in the Supreme Court which tested my recovery, and proved I'm not as strong as I thought. Weary of writing. Two days of depositions coming, and a three day rest. Thought I'd have a bit more time to recover, but no one will wait. Regards. *************************************************************************** Connie Mack, Would you double check my work here, please? Thanks, Jeffry - - ------------------------------ Date: Fri, 5 Jun 1998 12:18:10 -0400 From: "Nelson E. Timken, Esq." Subject: [CANSLIM] RE: Topics of discussion on the list Fellow list members: I do not wish to offend anyone on here. I have been in a situation where I offended and was banned from a list and don't want to repeat it. It wasn't pleasant, and left me with a very empty, hollow feeling, and paying for membership in a group whose online list I cannot read or participate in. While I was there, I felt that there was a "cloud" around me, that I was unwelcome, hated, despised, and unwanted- it is a bad feeling, one nobody wants to have to experience for themselves. That list was very strictly administered as to content depending on who the person posting was and how he/she was regarded by the "powers that be". As a known "troublemaker", whenever I dared to stray off topic, I was blasted, often by several of the list owners, threatened with expulsion if I did not stay on topic, and eventually banned for a personal disagreement off-list I had with another member. I often stood my ground, feeling unfairly treated because I did not "suck up" to the powers that ran the list, daring to disagree, and was shunned and often picked on for it. I was constantly on the defensive, ready for a fight, a high level of paranoia constantly clouding my use of that forum. The ban is permanent, I can pay my dues every year till I drop dead and will not be restored. The list processor of that list was set to ignore any commands emanating from my email address. I wasn't even advised of it - one day I just didn't have access and all of the web-ops associated with that site have been told to ignore my emails or questions. This is perhaps why I do not post very often on here, for fear of repetition of this bad experience. The reason I mention all this is that there was a recent post directed to Tom regarding list topics. My feeling is that the pendulum swings both ways- you can have a list administered in a very strict and heavy-handed fashion. Disputes never get out of hand because the moment they seem to get heated, the list owners decide to quickly step in, identify whom the "offender" is and remove his/her access. Jeff Salisbury is very open-minded when it comes to administering this list. He lets people blow off steam, disagree, storm off, come back, and express themselves. He does not treat people unequally depending on how well he personally likes them. This is the other side of the spectrum. I've seen the other side, and feel that this way is much more preferable. People disagree, it's human nature. I'm all for letting them disagree and work it out, if they can, or simply agree to disagree. Please excuse me for getting this off my chest, but I hope perhaps my experience will raise the level of tolerance somewhat when one considers the alternative. Nelson E. Timken J.N. Capital, Inc. Douglaston, New York - - ------------------------------ Date: Fri, 5 Jun 1998 12:05:59 -0500 From: fyxu@mmm.com (Frank Xu) Subject: [CANSLIM] OBV/MF/EMA: Radaf Thought somebody may be interested in Connie's comment on RADAF. Thanks Connie. Frank Xu - ----------------------------------------------------------------- Morning Frank-- I don't see the MF positive divergence that you speak of. If anything, there looks to be a slight negative bias. Today, the MF line is at the 12.9 million mark and the price is 21. Go back until you encounter the MF line at this same level; price is about 19.625. Therefore, the MF is slightly weaker today than it was at the end of March. This divergence is not serious at all. Note that OBV looks much like MF. The SloSto, too, is slightly negative but did go buy yesterday. It has rebounded nicely from the 20-line on each correction. MACD gave a buy Thursday, but it too has been in decline. Pull up a 5-day chart. The EMA buy yesterday was strong; look at the hourly upward price gaps and accompanying volume. A retracement to 19.625 or so would be reasonable. Short term looks okay. Since you're at the 52-wk high, you'd like to see a bit more in price and a close above 21.375. Watch the Volume+ on a 5-day chart today for further plus volume. You ought to expect some follow through in price and volume. There isn't any swing trade strategy, when you're at a high--unless you wish to just take out a few points, but you said you were in for the year. If you wish to post any of this, please do. I see some others have asked about the stock. Thanks for mail. Connie Mack Frank Xu wrote: > Connie, > > Could you take a look at RADAF? It broke out today (Thursday) after > several months of congestion. It had a positive Money Flow divergence in > past few weeks. 3 EMA line crossed 7 EMA line today also. > > The company had excellent fundamental. I will hold it for rest of this > year (target price $30). However, I like to have your opinion on its short > term future. When, for example, will you exit from a swing trader > perspective? Should a trader enter the position on Friday morning at open > price (or other price)? Thanks in advance. > > Regards, > Frank Xu ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ | Frank Xu, Ph.D. 3M Company | | 512-984-3518(O) Sr. Research Scientist | | 512-418-1626(H) 6801 River Place Blvd. | | fyxu@mmm.com Austin, Texas 78726 | ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - - ------------------------------ Date: Fri, 05 Jun 1998 10:04:34 -0700 From: Tim Fisher Subject: [CANSLIM] EDAC moving again Of course I was stopped out 3 weeks ago...that should have been your buy signal! Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites mailto:Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ Date: Fri, 05 Jun 1998 19:05:37 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] Quality of toolbox--Johan Patrick W. wrote: >What is the cost of the WOWS software? I thought you said $40, but >I also think I've seen it advertised for around $300, so maybe they >are different versions. Yes, there are different versions. http://www.wallstreet.net/ Johan Van Houtven CLICK! N.V. / Wilrijk, Belgium - - ------------------------------ Date: Fri, 05 Jun 1998 19:07:28 +0200 From: Johan Van Houtven Subject: [CANSLIM] IBD for those living outside of the USA John W. wrote: >Someone mentioned that most of the data needed for CS is posted at >BigCharts; all the rest I need is in IBD, $1 a week! Trouble is, I live >in England and haven't yet figured out an inexpensive way to get that >kind of info from here. I remember there's a Jan from Belgium on this >list, but don't have his email address handy. Jan, or others, have you >figured out a cheap way to get ahold of this stuff? You could ask IBD staff if they are willing to mail you each Friday's edition of IBD per first class airmail. I think it would take approx 6 days to get to you. Not exactly timely, but maybe better than nothing? You could also have it shipped/mailed to you via UPS, DHL, Fedex or so. But that would make it much more expensive. Somewhere between $35 to $80 I would estimate. >Dank u wel, John W Graag gedaan. :-) Johan Van Houtven CLICK! N.V. / Wilrijk, Belgium - - ------------------------------ Date: Fri, 05 Jun 1998 19:13:16 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] EDAC moving again Tim Fisher wrote: >Of course I was stopped out 3 weeks ago...that should have been your buy >signal! Up 1 3/6 (16x16.5) on 12400 shares... nothing to write home about considering the volume. Johan Van Houtven CLICK! N.V. / Wilrijk, Belgium - - ------------------------------ Date: Fri, 5 Jun 1998 11:47:51 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Quality of toolbox--Johan > Date: Fri, 05 Jun 1998 19:05:37 +0200 > To: canslim@lists.xmission.com > From: Johan Van Houtven > >What is the cost of the WOWS software? I thought you said $40, but > >I also think I've seen it advertised for around $300, so maybe they > >are different versions. > > Yes, there are different versions. What I really meant to ask was - which version did Db find sufficiently powerful for his needs and how much was it. Thats a question for you, Db. TIA. - - ------------------------------ Date: Fri, 5 Jun 1998 12:43:51 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] WOWS--Patrick <> I bought Pro at the time. WOWS was really eager for share and was running a sale on it at a ridiculous price. The main difference, as far as I can tell, between Pro and Deluxe is the system-testing capabilities. Personally, and with no interest in starting another argument, I don't have much use for system testing, so I never use it. Therefore, I'd probably go with Deluxe today. OTOH, the upgrade prices are considerably less than retail. For example, if you buy Deluxe ($150, I believe) and decide to upgrade to Pro, you only have to pay an extra $50, which is $100 less than the full price for Pro. I don't know about upgrades from Personal to Deluxe or Pro (if you discuss this with WOWS, don't mention any of this; act sweet and needy and poor and elict suggestions as to how you might obtain this wonderful program at a more affordable price--you may do even better). But there's no need to buy more than you'll ever want or use. That's why some programs, like WOWS and Omega, come in various versions. In fact, the stripped-down version of Wall Street Analyst that comes free with John Murphy's The Visual Investor might be just what the doctor ordered for some people, esp. those who are just getting used to TA (it does not, however, have near the scanning capabilities that the programs we've been discussing have--after all, it's free). I suggest you buy whatever for a 30-day trial, then upgrade if you want or get your money back. DialData offers a 30-day free trial as well with these programs, so all you're out is postage. Better that than just going by somebody's recommendation, whose needs and wants may be far different from yours. If, however, you are interested primarily in a charting program and don't really care about the fundamental screening capabilities, I'd just go with Personal or stick with bigcharts. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 05 Jun 1998 16:08:40 -0400 From: Craig Griffin Subject: [CANSLIM] M Thoughts - NASDAQ Yesterday I wrote: >Today's NASDAQ rally had the feeling of something more real than the last >few. Like the market is getting it's footing a bit - maybe - we will see. >Gut feel - not Canslim - sorry. Here's something a bit more factual to look at --- Pull up a 1 year chart of the Nasdaq. A cup with handle formed from 10/09/97 to oh say 02/23/98. Not much of a handle really - just sort of a slowing of the move out of the cup - but good enough for a market chart. The top of the cup on the left (10/09) is about 1748, top of the little two day handle on the right is 1731 (02/20). Now, if you look at the breakout on 02/23 and the advance to the top of the mini-climax run on 04/22 at 1931. That advance is about 12%. We have now pulled back that entire advance and are floating along at the top of the cup again. Question is: is this like a "second chance buy" or "buyers remorse pullback" or is it about to collapse back into the base and become a failed breakout? Now take a weekly look and notice the last two weeks - through today. Each week had an intra-week low of about 1740. Each week's close is at about 1778 (this week's was higher than last week's at 1782). The fifty day moving average is overhead at about 1840. Most overhead resistance is at about 1820. The 50 dma is just starting to droop down. Today's Nasdaq was fairly strong at the close (up 5 or 6 points in the last hour or less of trading). I am looking for a retest of 1820 or 1840 sometime in the next two weeks. IF it comes and clearly fails - then that might be a nice opportunity to short some stocks in counter-trend rallies which also fail at the same time. If it succeeds, we may get a Canslim buy signal out of it (up 1% on higher volume). If, OTOH, 1740 gets taken out on the downside, 1700 would appear to be the next support area. Co-incidentally that is where the 200dma is at the moment. Just looking ahead at some possibilities - not making any predictions. Regards, Craig - - ------------------------------ Date: Fri, 5 Jun 1998 13:44:03 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] M Thoughts - NASDAQ--Craig <> Oh, hell, Craig. Go ahead and make a prediction ;) Nice analysis, though I agree that it's not much of a handle. Notice also that there was a very short base in the 1700 area that was tested once in March. 1750 has never been tested, though, until now, and it seems to be doing well. Perhaps that left lip you point out has something to do with it. And more support is provided by the fact that 1750 is a 38% retracement from the top. As you point out, the 200d is at 1700, and there are other supports there as well. 1700 represents a 50% retracement, and it is also a price target calculated from the head-and-shoulders top (depending on how you prefer calculating the target). I, for one, hope that we continue down. Trying to break through all that resistance in the 1850 area will be hard enough from here. At least if more people gave up their shares, there wouldn't be quite so much overhead at that level. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 5 Jun 1998 14:13:13 -0700 From: Bill Subject: Re: [CANSLIM] Members - a drum roll please Jeffrey, you failed to mention the bullish OBV divergence for the month of March just before the big pop in April! This would have placed EDAC on my watch list for sure. I can see where the EMA's and SloSto gave you a better timing indicator than MACD for this example. According to Connie, he always checks the OBV/MF tracks before any of the other indicators. BTW I find many of the CANSLIM chart reading concepts like 'dry ups' correlate directly with TA speak. In this instance, 'bullish' (positive) divergence can only mean a 'dry up.' ie low volume that will not move the OBV track significantly while the price declines. It appears that many of the CANSLIM and O'Neill's investment philosophy is based on TA. I read someplace that when he first started, he was one the pioneers to employ large scale computerized manipulation of market data to create charts and relational concepts for grading performance, etc. ie CANSLI criteria. Bill-->> - ------------------ snip ...... > >Just happened to punch in EDAC while I was browsing around at BC this >morning and noticed the slow stochs and EMA crossovers in the chart. >Looking back through charts with these indicators is a little hard, I >find, because the crossovers may be a little more obvious at the time >they happen. But due to the "tight" price pattern compared to the move >that ensued, they become a bit compressed on the chart. Much easier, >and I think more convincing when they are watched on the actual stock >you are monitoring or trading. > >But, I see three buy points on a three month chart, all of which were >low risk, in my view. I also think they would have been lower risk than >the day of or following the more obvious entry where the thing broke to >another new high after consolidating. > >First one is right in front of the day you probably bought, which is >4/2. Can't really see the volume well until 4/1, but the stochastics on >3/27 crossed, and then the EMA on 3/31. These two points might have >given you some added comfort, but it was (as I'm sure you know well) >really low risk when you took it at 10. You had a 10% stop at 9 which >was ripe for a flush, don't you think? And 7% under 10 was not safe at >all, IMO. Might have entered a day or two earlier on the stochastic >cross and had a safer 7% stop. > >What exactly was the "volume indicator" to which you refer early in the >day? A block? > >Next point is a crossover around 4/28-29, I think. You'd have added at >around 12 5/8, but still a decent stop placement on the add, or entire >position by pulling up an averaged stop. Kind of a fake out, not ready >to resume, but another signal to consider in any event. > >Third, May 12 or 13 crossovers in front of a huge volume surge, to boot. >Stochs might have had you add at a little higher than 12, but safe entry >even on the volume spike. > >Do you read the stos and EMA the same way I do on these points? > >Looks like today will cross the EMA to the downside, but the slow stochs >are a few days from oversold. Possible crossovers coming in front of >another move? > >BTW, I don't need to tell you this is a beauty of a chart, Tom. >Exceedingly tight, well behaved. So much so, that I'm not sure these >indicators help much, but maybe a day or two worth of comfort for what >you obviously saw as it was happening. > >I find them useful when I'm watching a stock that has already broken >out, but was not on my watch list. Helps setting a lower risk stop than >I am accustomed to getting when the volume doesn't "dry" in an orderly >fashion and fakes you in a day or two early. > >I also find them helpful where you are "stalking" one like this one, I >think. Love the indicators for "adds", but I tend to think that they >work best for "adds" when the "M" is clearly trending higher (but again >what doesn't, huh?). > >Noticed that the MACD would have been late on the March entry, a good >indicator that the April 28 crossover was not likely reliable, but again >a day late in May. > >Interesting stuff, I think. > >Hope this is coherent. Just finished a brief in the Supreme Court which >tested my recovery, and proved I'm not as strong as I thought. Weary of >writing. Two days of depositions coming, and a three day rest. Thought >I'd have a bit more time to recover, but no one will wait. > >Regards. > > >*************************************************************************** > > >Connie Mack, > >Would you double check my work here, please? > > >Thanks, Jeffry > > > >- - - ------------------------------ Date: Fri, 5 Jun 1998 14:13:13 -0700 From: Bill Subject: Re: [CANSLIM] Members - a drum roll please Jeffrey, you failed to mention the bullish OBV divergence for the month of March just before the big pop in April! This would have placed EDAC on my watch list for sure. I can see where the EMA's and SloSto gave you a better timing indicator than MACD for this example. According to Connie, he always checks the OBV/MF tracks before any of the other indicators. BTW I find many of the CANSLIM chart reading concepts like 'dry ups' correlate directly with TA speak. In this instance, 'bullish' (positive) divergence can only mean a 'dry up.' ie low volume that will not move the OBV track significantly while the price declines. It appears that many of the CANSLIM and O'Neill's investment philosophy is based on TA. I read someplace that when he first started, he was one the pioneers to employ large scale computerized manipulation of market data to create charts and relational concepts for grading performance, etc. ie CANSLI criteria. Bill-->> - ------------------ snip ...... > >Just happened to punch in EDAC while I was browsing around at BC this >morning and noticed the slow stochs and EMA crossovers in the chart. >Looking back through charts with these indicators is a little hard, I >find, because the crossovers may be a little more obvious at the time >they happen. But due to the "tight" price pattern compared to the move >that ensued, they become a bit compressed on the chart. Much easier, >and I think more convincing when they are watched on the actual stock >you are monitoring or trading. > >But, I see three buy points on a three month chart, all of which were >low risk, in my view. I also think they would have been lower risk than >the day of or following the more obvious entry where the thing broke to >another new high after consolidating. > >First one is right in front of the day you probably bought, which is >4/2. Can't really see the volume well until 4/1, but the stochastics on >3/27 crossed, and then the EMA on 3/31. These two points might have >given you some added comfort, but it was (as I'm sure you know well) >really low risk when you took it at 10. You had a 10% stop at 9 which >was ripe for a flush, don't you think? And 7% under 10 was not safe at >all, IMO. Might have entered a day or two earlier on the stochastic >cross and had a safer 7% stop. > >What exactly was the "volume indicator" to which you refer early in the >day? A block? > >Next point is a crossover around 4/28-29, I think. You'd have added at >around 12 5/8, but still a decent stop placement on the add, or entire >position by pulling up an averaged stop. Kind of a fake out, not ready >to resume, but another signal to consider in any event. > >Third, May 12 or 13 crossovers in front of a huge volume surge, to boot. >Stochs might have had you add at a little higher than 12, but safe entry >even on the volume spike. > >Do you read the stos and EMA the same way I do on these points? > >Looks like today will cross the EMA to the downside, but the slow stochs >are a few days from oversold. Possible crossovers coming in front of >another move? > >BTW, I don't need to tell you this is a beauty of a chart, Tom. >Exceedingly tight, well behaved. So much so, that I'm not sure these >indicators help much, but maybe a day or two worth of comfort for what >you obviously saw as it was happening. > >I find them useful when I'm watching a stock that has already broken >out, but was not on my watch list. Helps setting a lower risk stop than >I am accustomed to getting when the volume doesn't "dry" in an orderly >fashion and fakes you in a day or two early. > >I also find them helpful where you are "stalking" one like this one, I >think. Love the indicators for "adds", but I tend to think that they >work best for "adds" when the "M" is clearly trending higher (but again >what doesn't, huh?). > >Noticed that the MACD would have been late on the March entry, a good >indicator that the April 28 crossover was not likely reliable, but again >a day late in May. > >Interesting stuff, I think. > >Hope this is coherent. Just finished a brief in the Supreme Court which >tested my recovery, and proved I'm not as strong as I thought. Weary of >writing. Two days of depositions coming, and a three day rest. Thought >I'd have a bit more time to recover, but no one will wait. > >Regards. > > >*************************************************************************** > > >Connie Mack, > >Would you double check my work here, please? > > >Thanks, Jeffry > > > >- - - ------------------------------ Date: Sat, 06 Jun 1998 05:20:31 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] jans -canslim-digest V2 #267 > Date: Thu, 4 Jun 1998 22:42:04 EDT > From: > Subject: [CANSLIM] Re: canslim-digest V2 #267 > > Jeffrey, > > I just read your Canslim post concerning A/D, and you seem to be > undecided about the market based on Adv./Declines and High/Lows. However, the > A/D is in very weak divergence, as I understand A/D, as the Dow had hit around > 8800 in late April and June 3rd but the A/D declined even more than the late > April Dow lows. Also, High/Lows are very discouraging. Even today (June 4th) > as the market rose, highs were only about 1/2 lows (ie., highs were 38 and > lows were 81-even as the Dow closed 66 points higher). > In what way, and why do you believe that "both offer hope that we are > nearing the end of this correction?" > > jans > With Db's continual guidance, I hope not to "hope", I think. But, I think my "hope" was based upon last Wednesday's reversal on price and volume, not A/D or new highs/lows, jan. And, thus, I'm counting for a follow through day, I hope. Jeff - - ------------------------------ Date: Fri, 5 Jun 1998 15:08:46 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Members - a drum roll please--Bill <> Bill, I'm afraid I see no divergence here. The OBV is tracking the price pretty closely. As you say, volume dry-ups correlate well with some of these accumulation-distribution indicators, but that may have less to do with "positive" divergence than it does with how the indicator takes its measurement. In other words, what you see as a divergence may be only an "unchanged" level in volume, since, without changes in volume, the indicator has less with which to alter its direction. When evaluating divergences using indicators which incorporate volume, it's important to incorporate volume yourself, i.e., in how you view the indicator and in how much importance you place in it. Notice, for example, that IGEN--mentioned recently--is still "positively divergent". This may have more to do with the stability of the volume than with quiet accumulation. However, if you had been tracking with a slow stochastic, you'd have noticed that IGEN's high was unconfirmed. If you had been using an RSI as well, you'd have noticed that not only was the high unconfirmed by the RSI, but that a trendline drawn across the peaks in the RSI were in direct contrast to the price activity. While there are no guarantees with chart analysis, anyone seeing this would have had ample warning that something ugly might happen. My point here is not that you should abandon accumulation-distribution indicators, but that you should avoid using them to confirm each other. Try instead using one indicator that factors in volume and another that doesn't. If they then confirm each other, you've got something. Sorry for butting in. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 5 Jun 1998 16:12:26 -0700 From: Bill Subject: Re: [CANSLIM] Members - a drum roll please--Bill On the 3 month chart for EDAC, Price and OBV are bullishly divergent for the most part of March on the BC chart I am looking at as we speak. Not very obvious on the scaled down version but positive nevertheless. Price dropped from 10 to 9 1/2 in that period while the OBV rode on the zero line. As I mentioned, this is what, I believe, Connie uses as his first indicator to create his watch list. He then runs through all of the other relevant indicators to confirm. I agree, IGEN is a better example of a bullish divergence. Looks like its ready to resolve the divergence based on today's 3 7/8 move but as you caution, more than one indicator must confirm a change in direction. On the short term chart, IGEN looks likes a winner and I may take nibble on Monday. Thanks for the pointers, Bill-->> - ----------------------- At 3:08 PM -0700 6/5/98, dbphoenix wrote: ><month of March just before the big pop in April! This would have >placed EDAC on my watch list for sure. > >BTW I find many of the CANSLIM chart reading concepts like 'dry ups' >correlate directly with TA speak. In this instance, 'bullish' >(positive) divergence can only mean a 'dry up.' ie low volume that >will not move the OBV track significantly while the price declines.>> > >Bill, I'm afraid I see no divergence here. The OBV is tracking the >price pretty closely. As you say, volume dry-ups correlate well with >some of these accumulation-distribution indicators, but that may have >less to do with "positive" divergence than it does with how the >indicator takes its measurement. In other words, what you see as a >divergence may be only an "unchanged" level in volume, since, without >changes in volume, the indicator has less with which to alter its >direction. When evaluating divergences using indicators which >incorporate volume, it's important to incorporate volume yourself, >i.e., in how you view the indicator and in how much importance you >place in it. > >Notice, for example, that IGEN--mentioned recently--is still >"positively divergent". This may have more to do with the stability >of the volume than with quiet accumulation. However, if you had been >tracking with a slow stochastic, you'd have noticed that IGEN's high >was unconfirmed. If you had been using an RSI as well, you'd have >noticed that not only was the high unconfirmed by the RSI, but that a >trendline drawn across the peaks in the RSI were in direct contrast to >the price activity. While there are no guarantees with chart >analysis, anyone seeing this would have had ample warning that >something ugly might happen. > >My point here is not that you should abandon accumulation-distribution >indicators, but that you should avoid using them to confirm each >other. Try instead using one indicator that factors in volume and >another that doesn't. If they then confirm each other, you've got >something. > >Sorry for butting in. > >--Db > >_________________________________________________________ >DO YOU YAHOO!? >Get your free @yahoo.com address at http://mail.yahoo.com > > >- - - ------------------------------ Date: Fri, 5 Jun 1998 16:44:55 -0700 (PDT) From: dbphoenix Subject: Re: [CANSLIM] Members - a drum roll please--Bill <> Perhaps this is a function of bigcharts and the screen size. OBV falls from 3/9 to 3/30. Granted it does not fall to the same degree as price, but low are successively lower. Therefore, it would be difficult to argue that it's a divergence. <> I'm afraid you misunderstood me. I was offering IGEN as an example of what looks like a divergence but is not, that is, what looks like divergence is more the result of static volume than of accumulation. Today's action is less proof of divergence than of waiting until the stock became oversold, which it did. However, the stochastic and the RSI have only begun to turn and no buy signal has been given. Buying on Monday would be preemptive, but perhaps you have a bit of the luck of the Irish with you. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ End of canslim-digest V2 #270 ***************************** 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.