RE: [CANSLIM] Direction of M

From: "Robert Gaston" <rkgaston@flash.net>
Subject: RE: [CANSLIM] Direction of M
Date: Wed, 6 Jun 2001 12:58:36 -0500
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Doug - what would be a good list of leaders to follow?  The DOW 30 or ...?

Robert


 -----Original Message-----
From: 	owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]  On Behalf Of Doug Shannon
Sent:	Wednesday, June 06, 2001 12:01 PM
To:	canslim@lists.xmission.com
Subject:	RE: [CANSLIM] Direction of M

One should not immediately jump out the market after 4-5 distribution days.
This is only a major warning sign that tells you to immediately start
watching for a break down in the leaders.  If you see leading stocks
starting to break down and 4-5 distribution days (preferably on at least
avg. volume) within a 2-3 week period then it is time to start dumping your
stocks as they initiate sell rules.

Doug

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of asosis@ca.ibm.com
Sent: Wednesday, June 06, 2001 12:51 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Direction of M


I have asked this question before and I recall Tim posting that after 4-5
days one should be out of the market.


Anna



"Tom Worley" <stkguru@netside.net>@lists.xmission.com on 06/06/2001
12:41:08 PM

Please respond to canslim@lists.xmission.com

Sent by:  owner-canslim@lists.xmission.com


To:   <canslim@lists.xmission.com>
cc:
Subject:  Re: [CANSLIM] Direction of M


Hi Ian,

I am not the best expert on distribution days, but I believe I recall a
member posting recently on an article from IBD, or maybe from Ask Bill
O'Neil, and it indicated that he was not concerned about distribution days
until there were more of them.

Maybe someone still has the ref and can repost it?

Tom Worley
stkguru@netside.net
AIM: TexWorley
 ----- Original Message -----
 From: Ian
 To: canslim@lists.xmission.com
 Sent: Wednesday, June 06, 2001 12:22 PM
 Subject: Re: [CANSLIM] Direction of M

 Tom:

 My recent thinking has been along the lines you described below. However,
 if we close down today on increasing volume from yesterday (on the NASDAQ,
 volume is already a very healthy 900,000,000 and its only 9:00 am on the
 west coast)., then we will have had the 4th profressional distribution day
 in a short timeframe (May 22, 29, 30 were the other 3). How many does it
 take to make WON cautious?


 Thanks,

 Ian


 Of course, if the market reverses today and it closes up on another big
 volume surge - I will think that is very bullish :)


 ----- Original Message -----
 From: Tom Worley
 To: canslim@lists.xmission.com
 Sent: Wednesday, June 06, 2001 5:51 AM
 Subject: Re: [CANSLIM] Direction of M

 Hi Steve,

 I didn't see the IBD article, but had already noticed the c&h formed by
 the DOW 30, NYSE Composite, S&P 500, and Russell 2000. All formed the
 handle well in the upper half of the cup, and built a 2+ week tight
 handle. In the case of the first three, the recent two week correction
 brought them right back to the handle, and it provided support, a healthy
 sign. In the case of the R2000, it never reached the handle.

 In the case of the NASDAQ 100 and NASDAQ Composite, they also formed a
 c&h, however the handle formed in the lower half of the cup. Both were
 close to the 50% level, but not quite there, with the Naz Comp closer.
 Their handle was not as tight, and the recent correction brought them more
 towards the lower side of the handle.

 Treatment of bad news is much more positive today than just a month ago.
 XLNX (a chip maker), for example, is being credited with inspiring
 yesterday's big rally in the Naz. What they said is that order
 cancellations have slowed. Stated another way, that means that as bad as
 it already is, it is getting worse at a slower rate. Not only did the
 stock add nearly 10%, it rallied the market. A month ago, it would have
 taken a statement that order cancellations have stopped, or that order
 cancellations were being completely offset by new orders, to have achieved
 this.

 I review earnings warnings daily, and I see a steady sign that warnings
 that a company will miss either/both earnings or revenues is more often
 being received as a positive and a price gain. I also note that where the
 shortfall is quantified, in most cases it is only slightly below current
 forecasts, where before most were large drops. To me this signals that the
 investment community believes (or wants to believe) that the worst is
 over, the 2nd quarter won't be very pretty, but by the 4th qtr everything
 will be looking pretty good.

 From an economics standpoint, I am generally pleased with what I see. I
 still expect a rate cut at the June FOMC meeting, and there is probably a
 50/50 chance of another 50 BP. I still think 25 BP makes more sense, tho.

 We appear to be into the usual summer doldrums now. Volume is down, and
 likely to remain that way until after Labor Day. So events (earnings,
 economics, etc) could cause greater volatility. But aside from that, I see
 a lot less volatility in the market.

 I also note that the IPO market is coming to life. I am seeing as many
 deals, if not more, being completed as are being withdrawn. And quite a
 few of the ones done opened with a nice premium.

 Bottom line, "M" is ultimately determined by investor sentiment, and right
 now that sentiment is quite positive despite what the media sometimes
 chooses to report.

 Tom Worley
 stkguru@netside.net
 AIM: TexWorley
  ----- Original Message -----
  From: SKutney@aol.com
  To: canslim@lists.xmission.com
  Sent: Tuesday, June 05, 2001 10:09 PM
  Subject: [CANSLIM] Direction of M



   I was wondering what others thought of the general directions of the
  market?

   IBD recently made a big deal about the "cup with handle"  pattern of the

  major indexes. I don't get the feel from reading the paper that they
  think
  the market is going down. They expect the 7% stop to just get you out.

  I take that paper each day and draw in red trend lines to remind me of
  the
  general direction of the market. I see three major indexes plus the
  mutual
  fund index breaking past the current trend line on real low volume. I
  always
  thought that the stock market is like trying to keep a ball up in the air

  with a water hose. The greater the volume the more is will go up.

  I see stocks like CPN and SHFL which have been strong leaders breaking
  down.
  I see other stocks ready to break into new highs.

  Steve



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