From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #337 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, July 24 1998 Volume 02 : Number 337 In this issue: [CANSLIM] Group Review for past 4 weeks [CANSLIM] Not CANSLIM - market reaction to earnings [CANSLIM] "M" Re: [CANSLIM] "M" Re: [CANSLIM] "M" Re: [CANSLIM] "M" Re: [CANSLIM] "M" Re: [CANSLIM] "M" [CANSLIM] Re: Rolatzi's Review of O'Neils Selling Rules Re: [CANSLIM] Not CANSLIM - market reaction to earnings Re: [CANSLIM] "M" [CANSLIM] Re: [NONCANSLIM] Gapping, Elder, Walter,Triple Screen [CANSLIM] "M" RE: [CANSLIM] Not CANSLIM - Today's Market Downturn [CANSLIM] TWMC - Gotta Love that Chart RE: [CANSLIM] Not CANSLIM - Today's Market Downturn Re: [CANSLIM] "M" Re: [CANSLIM] TWMC - Gotta Love that Chart [CANSLIM] Not Canslim - Frank's Nifty 50 RE: [CANSLIM] Not CANSLIM - Today's Market Downturn ---------------------------------------------------------------------- Date: Thu, 23 Jul 1998 08:32:20 -0400 From: "Frank V. Wolynski" Subject: [CANSLIM] Group Review for past 4 weeks I thought I would perform a few exercises that might uncover something about the current rally. Especially since I have little to do. A lawnmower accident has left me off my feet and filled with codine! The % Chg referred to below is from the IBD group tables for change since Jan 1. 1st: Buying the Top Ten Groups at the Time. (Start Date = 6/22/98) Rank Rank % Chg % Chg Gain/ Then Now Group Then Now Loss - ---- ---- -------------------- ------ ------ ------ #01 04 Retail-Apparel/Shoe 33.9 36.8 + 2.9% #02 11 Finance-Investment/Mgmt 53.4 48.5 - 4.9% #03 01 Computer Software-Internet 55.7 92.5 +36.8% #04 03 Retail-Consumer/Elec 56.0 76.0 +20.0% #05 05 Telecomm-Cellular 30.6 49.5 +18.9% #06 06 Financial Svcs-Misc 22.4 34.3 +11.8% #07 30 Medical-HMO 26.1 26.4 + .3% #08 02 Media-Cable TV 21.8 47.0 +25.2% #09 13 Retail-Major Disc Chains 30.1 40.2 +10.1% #10 07 Comml Svcs - Misc 18.5 26.6 + 8.1% 2nd: The past 4 weeks Top Ten performing Groups have been: Rank Rank 4 Week Then Now Group % Return - ---- ---- -------------------- -------- # 03 01 Computer Software-Internet 36.8 # 15 20 Computer-Mini/Micro 26.0 # 08 02 Media-Cable/TV 25.2 # 97 22 Computer Software-Security 21.2 # 04 03 Retail Consumer-Elect 20.1 #108 37 Retail/Whlsle-Cmptr/Cell 19.8 # 05 05 Telecommunctns-Cellulr 18.9 # 87 71 Computer Softwr-Educ/Entr 16.7 # 66 29 Retail-Drug Stores 16.6 # 74 27 Bldg-Resident/Commrcl 16.1 The article that appeared in the June 25th, Thursday edition of IBD was very accurate in broadly identifying the current rallys leaders. "Telecom, computer and other tech issues, under assault for weeks, have rallied broadly." 4 of the Top Ten performing groups during the past 4 weeks were in the Top Ten 4 weeks ago. Frank Wolynski - - ------------------------------ Date: Thu, 23 Jul 1998 07:45:46 -0700 (PDT) From: rolatzi Subject: [CANSLIM] Not CANSLIM - market reaction to earnings I have noticed that my holdings have come in with reported earnings generally better than the estimated and each time the stock has sold off as a result. Generally there has been some run up before the report. It seems that this response is telling something about market sentiment or rotation or something else? This is an example of buy on the rumor and sell on the news but generally in bull markets earnings surprises to the up side are rewarded with positive market action stretching over a month or so. Is it reasonable to suggest that if a stock is extended in price and reports earnings (whether or not the earnings beat expectations) and the response to these earnings does not result in positive reaction in price that the stock has hit a temporary top and will sell off. This could be a useful way to judge the potential for follow through or it may simply reflect current conditions. It would be of interest to me to find out if other's experience is similar this quarter and whether people have noticed this phenomenon in the past. Is this a characteristic of an overbought market? Ciao, rolatzi _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Thu, 23 Jul 1998 10:30:29 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" Sentiment numbers: 54.3% Bulls, 23.3 Bears. Dangerous levels, in my experience. Watch for the inevitable rally attempt after it runs 3-5 days and re-read HTMMIS, 2d Ed. pages 50-51. Get better soon, Frank. Jeffry - - ------------------------------ Date: Thu, 23 Jul 1998 09:07:20 -0700 (PDT) From: Tannis Malone Subject: Re: [CANSLIM] "M" Thank you for keeping us up on this. From, "HTMMIS, 2d Ed. pages 50-51" (top indictions)looking for S&P 500, NYSE Composite and "an index of the current cycle's speculative growth stock leaders". WSJ on Monday mentioned a new informal index; the "Microsoft Index" including Dell, Cisco and Intel. MSFT alone has been responsible for 1/4 of NAZ gains ..."rivals GE as the largest-capitilization issue in the nation". Would you add anyone else? TM - ---Jeffry White <"postwhit@sover.net"@sover.net> wrote: > > Sentiment numbers: 54.3% Bulls, 23.3 Bears. > > Dangerous levels, in my experience. Watch for the inevitable rally > attempt after it runs 3-5 days and re-read HTMMIS, 2d Ed. pages 50-51. > > Get better soon, Frank. > > Jeffry > > > > - > > _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Thu, 23 Jul 1998 18:35:22 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] "M" At 09:07 AM 23-07-98 -0700, you wrote: >WSJ on Monday mentioned a new informal index; the "Microsoft Index" >including Dell, Cisco and Intel. MSFT alone has been responsible for >1/4 of NAZ gains ..."rivals GE as the largest-capitilization issue in >the nation". > >Would you add anyone else? Ian Woodward, of HGS fame, has recently put together an index he calls the Super-Cap IandexMS. The MS stands for Mattress Stuffers. Stocks: Big name techs: MSFT, INTC, CSCO, DELL, LU, AOL. Ethical drugs co's MRK, PFE and consumer co's KO, and PG. And the 'safe' ones: COST, SWY, HD, WMT, and G. Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Thu, 23 Jul 1998 13:02:24 -0400 From: Craig Griffin Subject: Re: [CANSLIM] "M" Tracks of a pullback: Market up in the morning, down by late afternoon. Tracks of a rally: Market down in the morning, up by late afternoon. Nothing absolute of course, but a general pattern I have been noticing. I am sure I read it somewhere at some point. Does seem like the wind shifted with that reversal day ... - - ------------------------------ Date: Thu, 23 Jul 1998 19:28:48 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] "M" At 01:02 PM 23-07-98 -0400, you wrote: >Tracks of a pullback: Market up in the morning, down by late afternoon. > >Tracks of a rally: Market down in the morning, up by late afternoon. > >Nothing absolute of course, but a general pattern I have been noticing. I >am sure I read it somewhere at some point. Does seem like the wind shifted >with that reversal day ... Craig, p. 55 HTMMIS. "During a bear market, stocks frequently open strong early in the morning and close weak by the end of the day. During bull markets, stocks tend to open down and come back later in the day to close up strongly." - ---- DJIA just bounced of the 50MA/EMA area (9012-26) very weakly and is now breaking thru it. NASD is near the 17EMA now. And the day is not over yet. Scary stuff.... Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Thu, 23 Jul 1998 13:49:29 -0400 From: Craig Griffin Subject: Re: [CANSLIM] "M" Johan, At 07:28 PM 7/23/98 +0200, you wrote: >p. 55 HTMMIS. "During a bear market, stocks frequently open strong early in >the morning and close weak by the end of the day. During bull markets, >stocks tend to open down and come back later in the day to close up strongly." Thanks, I should have known it came from O'Neil. This seems true for the market during corrections and pullbacks over the last couple of years (no bear market around for a few years of course). So it seems to apply more to the market trend than to whether we are actually in a bull or bear market. Best regards, Craig PS. I'm off to the Blue Ridge Mountains for a few days of vacation. - - ------------------------------ Date: Thu, 23 Jul 1998 13:50:01 -0400 From: Craig Griffin Subject: [CANSLIM] Re: Rolatzi's Review of O'Neils Selling Rules Rolatzi, thank you! Good show. Note that many of these rules are targeted at longer term holders of leading stocks. Yet others seem more oriented to short term price action. There is a balance somewhere of treating each stock as it requires based on its behavior and leadership and the market. That is one of the difficulties that dbPhoenix was probably referring to in his earlier post. And I agree that it is one of the most difficult areas of Canslim. But, I also believe that this list of rules is one of the 8 or 10 key elements in Canslim. I have found that the more often I read these rules, the more sense they make. Time and experience help one to apply them correctly. But it takes re-reading them a few times for most people. It also probably requires, as many here have stated in the past, developing one's own style or approach to investing (within the Canslim framework). - - ------------------------------ Date: Thu, 23 Jul 1998 12:43:40 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] Not CANSLIM - market reaction to earnings 0000,0000,FF00Date sent: Thu, 23 Jul 1998 07:45:46 -0700 (PDT) From: rolatzi < Subject: [CANSLIM] Not CANSLIM - market reaction to earnings To: canslim@mail.xmission.com Send reply to: canslim@lists.xmission.com > I have noticed that my holdings have come in with reported earnings > generally better than the estimated and each time the stock has sold > off as a result. Generally there has been some run up before the > report. It seems that this response is telling something about market > sentiment or rotation or something else? This is an example of buy on I have noticed this happen occassionally. There are several reasons I've seen given for this when it occurs. Sometimes there is something like a whisper number, where there is a publicly touted number, and then a privately talked about number. Also, sometimes certain growth companies are expected to beat the numbers, that is, they regularly have a positive surprise (which would seem to make it no longer a surprise), so a surprise is normal. Sometimes there are disturbing things tucked away in the numbers, like an increase in inventories, decrease in margins, etc. And finally, with larger companies anyway, they will have a conference call along with the earnings release, and they might say something disturbing. I think yesterday, for example, Amazon said that they expect losses to get even larger. A couple of stocks I was watching this week, SCTC and HCFP, both released good earnings numbers and didn't follow through, so it isn't just your stocks. I don't really know what the explanation was for their lack of follow through either. - - ------------------------------ Date: Thu, 23 Jul 1998 22:27:23 +0200 From: Johan Van Houtven Subject: Re: [CANSLIM] "M" At 05:50 PM 22-07-98 +0200 I wrote: >For trading purposes I've set a minimum pullback on the NAZ to the >1950/1960 area. Next support area after that @ 1930. Today 980723, the NASDAQ closed @1935.38, the low of the day. -1.47% down compared to yesterday. High: 981.05 Low: 1935.38 Large spread again. Volume traded: 869954600 shares. 3.96% higher volume than yesterday, so almost the same. 12.32% higher than ADV(30) and 16.30% higer than ADV(50). I'll bet those advisers and a lot of others are getting more bearish now. Anyone really bullish on here on the list? All we have to do is take it one day at a time. Just as O'Neil tells you to. Johan Van Houtven / CLICK! N.V. - - ------------------------------ Date: Thu, 23 Jul 1998 17:08:25 -0700 (PDT) From: Tannis Malone Subject: [CANSLIM] Re: [NONCANSLIM] Gapping, Elder, Walter,Triple Screen Thanks to the discussion about distribution while prices are rising and the triple screen, I closed out at near highs on my spiders and diamonds on the 17th. It is so nice to have a method. Also, I am afraid I am turning into a bit of a Walter (not a bad thing :)), reading Elder and WON at night. Since you are the resident expert on Elder, Walter would you mind explaining what we should be looking for in the way of watching the gapping that has happened in some of the stocks these last few days? The way it is played out seems to be another confirmation of market health etc. _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Thu, 23 Jul 1998 18:17:10 -0400 From: Jeffry White <"postwhit@sover.net"@sover.net> Subject: [CANSLIM] "M" Johan, you wrote: "Anyone really bullish on here on the list?" daniel seems bullish, or at least he was yesterday....: ;0) > Hold is my opinion. I did not see any down side on the market. > > Hey, this is daniel. > The path to good fortune is education. > fp888@Yahoo.com > >From CIS135A > daniel Look for an "Oh Sh&t!!" type gap down open and reversal on higher daily volume tomorrow or Monday, then a run for a few days. I'll try to re-enter some of the profitable options for that possibly short lived run (i.e., DELL, LU, etc.). Close them out on the reversal day. Jeffry - - ------------------------------ Date: Thu, 23 Jul 1998 18:37:26 -0400 From: "Nelson E. Timken, Esq." Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn This is a multi-part message in MIME format. - ------=_NextPart_000_0003_01BDB668.F0443DA0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable This is off topic, but I have to ask this....how do you people feel = about today's market reaction to earnings problems and do you feel this = is a permanent correction or a temporary dip for a few days to a week? Thanks. Nelson http://onelist.com/subscribe.cgi/investing-list - - ------------------------------ Date: Thu, 23 Jul 1998 22:08:02 -0400 From: "Frank V. Wolynski" Subject: [CANSLIM] TWMC - Gotta Love that Chart TWMC - TransWorld Music EPS/RS 69/99 Just keeps stepping to new highs. Basing right now, volume drying up nicely on the down days. (When it has those.) Deserving of a watch list. Retail-Major Discount Chains holding up nicely. COST looking to step out to new highs any day. If rally is to continue it will most likely be the Large Caps again. Safe, liquid, performing. Too many fraidy cats for the small caps. I'm searching the larger caps for good bases or LLURs. ( Except I had to point out TWMC.) Frank Wolynski - - ------------------------------ Date: Thu, 23 Jul 1998 22:22:25 -0400 From: "Frank V. Wolynski" Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn As a result of the current selloff, I don't see small caps getting involved with the continuation of the up leg declared in IBD in late June. Breadth has been horrible, Hi/Lo's very weak, many divergences, much to work off. When we find a bottom, probably within a day or two at most, the large caps will bounce nicely and leave even more small caps behind. They may continue, depends how deep they sell. Sell too far and it will be tougher climbing out of the hole. The Adv/Decline line will continue to deteriorate and that will lead to another move to the downside. That will be the time to watch very closely any sign of strength and leadership. Up or down. I'm spotting some very isolated strength in mostly large caps currently. Seem to be domestically inclined and known earnings performers. Kinda a nifty fifty sorta market. Still looking for even more. Always hope! If the market gets too crazy these can be taken out also. JMO, so what do you feel about it? Frank Wolynski At 18:37 7/23/98 -0400, Nelson E. Timken, Esq. wrote: >This is off topic, but I have to ask this....how do you people feel about today's market reaction to earnings problems and do you feel this is a permanent correction or a temporary dip for a few days to a week? > >Thanks. > >Nelson >http://onelist.com/subscribe.cgi/investing-list > >- > > - - ------------------------------ Date: Thu, 23 Jul 1998 21:07:12 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] "M" > I'll bet those advisers and a lot of others are getting more bearish now. > Anyone really bullish on here on the list? From a fundamental point of view, I have been neutral to mildly bearish for months, but fortunately I only invest on what I see, not what I think. From a very short term perspective, we are now quite oversold. This only has meaning for the next few days however. By tomorrow I hope to post a chart of the S&P at my page that shows why I think we have a bounce coming. http://home.att.net/~pwahl - - ------------------------------ Date: Thu, 23 Jul 1998 20:23:05 -0700 (PDT) From: rolatzi Subject: Re: [CANSLIM] TWMC - Gotta Love that Chart Frank: Consider Staples (SPLS) as an LLUR which has held up very well. My big problem with it is that there is going to be a very large offering by the family who controls much of the stock. I see that as a big negative but despite my misgivings it has performed very well and has good numbers except for market cap and institutional which are too large and high. Ciao, rolatzi PS I have a financial interest in this stock for the last 10 months. - ---"Frank V. Wolynski" wrote: > > TWMC - TransWorld Music > EPS/RS 69/99 > > Just keeps stepping to new highs. > Basing right now, volume drying up nicely on the down days. (When it has > those.) > > Deserving of a watch list. > > Retail-Major Discount Chains holding up nicely. > COST looking to step out to new highs any day. > > If rally is to continue it will most likely be the Large Caps again. > Safe, liquid, performing. Too many fraidy cats for the small caps. > I'm searching the larger caps for good bases or LLURs. > ( Except I had to point out TWMC.) > > Frank Wolynski > > > - > > _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Fri, 24 Jul 1998 06:54:06 -0400 From: "Frank V. Wolynski" Subject: [CANSLIM] Not Canslim - Frank's Nifty 50 Some LLURs I have an eye on. For now I call it my Nifty 50. There aren't 50 of them, but the list is growing. You also may not agree, buy hey it's my list, I'll watch what I want to. :-) Mostly selected on the basis of their weekly chart. Large Caps AMFM, AMGN, APOL, AWIN, BGEN, BMCS, BMET, CMCSK, COST, CPWR, CSCO, CTAS, CTXS, DELL, ERICY, ERTS, FISV, IMNX, JCOR, MCCRK, MCIC, MSFT, PAYX, ROST, SBUX, SPLS, STEI, SUNW, TCOMA, TLAB, WCOM Small Caps TWMC MSPG Frank Wolynski - - ------------------------------ Date: Fri, 24 Jul 1998 14:42:59 +0200 From: Johan Van Houtven Subject: RE: [CANSLIM] Not CANSLIM - Today's Market Downturn Nelson, You wrote: >This is off topic, but I have to ask this....how do you people feel about >today's market reaction to earnings problems and do you feel this > is a permanent correction or a temporary dip for a few days to a week? Definately permanent. Only kiddin' of course. I'm just going to take it one day at a time, as WON advocates. I hope to at least day of serveral-day trade some of the big caps from the Big Cap IandexMS. Buying during a panic, and selling during recovery. Has nothing to do with CANSLIM whatsoever! Johan Van Houtven / CLICK! N.V. - - ------------------------------ End of canslim-digest V2 #337 ***************************** 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.