Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: Re: [CANSLIM] breakouts to come
Date: Mon, 2 Jun 2003 23:42:23 -0500
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Hi Ann and all,
I have to agree with Bill on this. By the time something makes it to a list like
the WR or the IBD100, they've already *become* the leaders. It makes a heck of a
lot more sense to catch them as they're *becoming* leaders. That is, if RS>=85
is considered a leader, then how the heck did they get there? They rose from a
lower RSRank to get there in the first place. If they were rising in RSRank,
then they were *rising in price.* While looking for outperformance to the market
and to other stocks is a cornerstone of CANSLIM investing, I've never agreed
that mining should only be done after the stock is at RSRank 80 or 85. It's true
that leaders will pull back and offer new entry points, so having a list of
leaders is helpful. But the problem is, if you want to get the best part of the
move, you've got to be watching these guys as they set up and start the lion's
share of the move. The IBD started publishing an index of the WR stocks over
time, showing a mild percentage gain vs. a sink hole return in the indexes
during the Bear, but I suspect that if one were to instead publish an index of
stocks breaking out of sound bases starting at a non-laggard RSRank>=70, then
the index would be substantially higher.
Years ago, a friend of mine and I would meet every Saturday for coffee and pour
over the IBD together. At the time, he kept asking why the heck all the stocks
mentioned in the paper didn't offer up a good entry point. Most of the time, the
lists of stocks, the minigraphs, etc. were already too extended. That meant that
in order to use the IBD itself for mining, we had to sift through the
lilliputian stock tables highlighting stocks from RSRank 70 and up, highlight up
and coming Industries, add the stocks from "Where the Big Money is Flowing" then
one by one look at all the charts. It was exhausting and incredibly time
consuming. My conclusion after practically loosing my eyesight (and my
Saturdays) was that while the IBD is an incredible resource for current news,
information on companies, keeping tabs on the Market and learning about CANSLIM,
it's a lousy mining tool.
Once I'd figured that out, I set out to instead devise a methodology that would
let me mine for stocks that met the minimum requirements for a CANSLIM-quality
stock and were *just* beginning to outperform and setup for a breakout. The goal
was to own a stock before it showed up in the IBD. Just as Bill suggested,
seeing it in the IBD *after* I'd found it was the ultimate test. Or, another way
of saying it was that I didn't want to see a single stock mentioned in the IBD
that I didn't already know about. For the most part, I think that implies that
at the very least, one needs some sort of technical software to do this. Many
here use HGS/Quotes Plus (QP2), DGO, Vectorvest and others to do this and each
has their own particular approach. But even with these tools, it still requires
looking through a lot of charts every day to make sure you're seeing the stocks
*as* they set up. As I'd rather be hiking the Grand Canyon or having a margarita
by the pool, that time spent motivated me to develop even better tools for
finding stocks setting up for a breakout, leading to my partnership with Mike at
the cwhcharts.com site. That means that there is a third alternative to sifting
through the IBD or through a lot of charts, and that is to let a computer do all
that time consuming work for you. Our approach is to let the computer find *all*
the non-laggard stocks currently setting up in cup with handle bases, put them
on a watchlist, and then let us know automatically if they are breaking out
above their pivots. Now *there's* an excuse to have another dip in the pool!
Katherine
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Ann Hollingworth
Sent: Monday, June 02, 2003 9:01 PM
To: canslim@lists.xmission.com
Subject: Re: Re: [CANSLIM] breakouts to come
Thanks, Bill, and Rolf, for the watch list ideas. I may have to change the
source of my minings.
Ann
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Rolf Hertenstein
Sent: Monday, June 02, 2003 11:39 AM
To: canslim@lists.xmission.com
Subject: Re: Re: [CANSLIM] breakouts to come
Hi Bill - Are you referring to IBD's Screen of the Day?
I think in a recent discussion of the market, IBD mentioned that further
breakouts at this stage of this bull run (however long it'll be) are more likely
to be 'second rate'. The real leaders have broken out and already have good
gains. This won't stop me from looking of course.
Rolf
----- Original Message -----
From: Bill Triffet
To: canslim@lists.xmission.com
Sent: Monday, June 02, 2003 12:22 PM
Subject: Re: Re: [CANSLIM] breakouts to come
I use WR as a confirmation that I bought right. I like to see one of my buys
show up there AFTER I've bought it. I also find those graphs tend to be "Monday
morning quarterbacking". I think it's IBD's way of showing how you how a stock
already broke out - not time to buy. I also find many of them have broken out of
upwards trending handles which is troubling to me.
As far as the IBD100, I like to track #25-100 for increasing strength and a
proper entry points. By design, most of the top will be already extended.
For list creation, I'd also do a quick scan of the daily updated stocks
featured on the IBD site for possible setup/entry points.
Btw, the use of an offline charting tool such as Quotes Plus is a real time
saver when you need to look at lots of stocks for list building. The charts pop
up instantly allowing you to make quick end of day scans. Doing it online - even
with a highspeed connection is much slower though you see them intraday.
--
Bill
-----------------------------------------------------------------
I was just going through the charts of IBD100 last night, and was thinking
the exact same thing. Are there any other lists of high quality CANSLIM
stocks that should be scanned to check for proper price patterns?
Chris
----- Original Message -----
From: Ann Hollingworth
To: CANSLIM Listserv
Sent: Monday, June 02, 2003 4:28 AM
Subject: [CANSLIM] breakouts to come
It seems to me, as I hunt through WR and IBD100, that there are a lot of
overextended stocks, and not to many on the right side of their cup or
ready to break out.
It would seem to me that there could be two reasons for this:
1. The rally is going to wane.
2. The WR and IBD100 do not produce stocks at this state of their
development.
Any comments??
Ann
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<DIV><SPAN class=3D125404003-03062003>Hi Ann and all,</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>I have to agree with Bill on this. =
By the=20
time something makes it to a list like the WR or the IBD100, they've =
already=20
*become* the leaders. It makes a heck of a lot more sense to catch them =
as=20
they're *becoming* leaders. That is, if RS>=3D85 is considered a =
leader, then=20
how the heck did they get there? They rose from a lower RSRank to get =
there in=20
the first place. If they were rising in RSRank, then they were *rising =
in=20
price.* While looking for outperformance to the market and to other =
stocks is a=20
cornerstone of CANSLIM investing, I've never agreed that mining should =
only be=20
done after the stock is at RSRank 80 or 85. It's true that leaders will =
pull=20
back and offer new entry points, so having a list of leaders is helpful. =
But the=20
problem is, if you want to get the best part of the move, you've got to =
be=20
watching these guys as they set up and start the lion's share of the =
move. The=20
IBD started publishing an index of the WR stocks over time, showing a =
mild=20
percentage gain vs. a sink hole return in the indexes during the =
Bear, but=20
I suspect that if one were to instead publish an index of stocks =
breaking out of=20
sound bases starting at a non-laggard RSRank>=3D70, then the index =
would be=20
substantially higher.</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>Years ago, a friend of mine and I =
would meet=20
every Saturday for coffee and pour over the IBD together. At the time, =
he kept=20
asking why the heck all the stocks mentioned in the paper didn't offer =
up a good=20
entry point. Most of the time, the lists of stocks, the minigraphs, etc. =
were=20
already too extended. That meant that in order to use the IBD itself for =
mining,=20
we had to sift through the lilliputian stock tables highlighting stocks =
from=20
RSRank 70 and up, highlight up and coming Industries, add the stocks =
from "Where=20
the Big Money is Flowing" then one by one look at all the charts. =
It was=20
exhausting and incredibly time consuming. My conclusion after =
practically=20
loosing my eyesight (and my Saturdays) was that while the IBD is an =
incredible=20
resource for current news, information on companies, keeping tabs on the =
Market=20
and learning about CANSLIM, it's a lousy mining tool.</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>Once I'd figured that out, I set =
out to=20
instead devise a methodology that would let me mine for stocks that met =
the=20
minimum requirements for a CANSLIM-quality stock and were *just* =
beginning to=20
outperform and setup for a breakout. The goal was to own a stock before =
it=20
showed up in the IBD. Just as Bill suggested, seeing it in the IBD =
*after* I'd=20
found it was the ultimate test. Or, another way of saying it was that I =
didn't=20
want to see a single stock mentioned in the IBD that I didn't already =
know=20
about. For the most part, I think that implies that at the very =
least, one=20
needs some sort of technical software to do this. Many here use =
HGS/Quotes Plus=20
(QP2), DGO, Vectorvest and others to do this and each has their own =
particular=20
approach. But even with these tools, it still requires looking through a =
lot of=20
charts every day to make sure you're seeing the stocks *as* they set up. =
As I'd=20
rather be hiking the Grand Canyon or having a margarita by the pool, =
that time=20
spent motivated me to develop even better tools for finding stocks =
setting up=20
for a breakout, leading to my partnership with Mike at the cwhcharts.com =
site.=20
That means that there is a third alternative to sifting through the IBD =
or=20
through a lot of charts, and that is to let a computer do all that time=20
consuming work for you. Our approach is to let the computer =
find *all*=20
the non-laggard stocks currently setting up in cup with handle =
bases,=20
put them on a watchlist, and then let us know automatically if they are =
breaking=20
out above their pivots. Now *there's* an excuse to have another dip in =
the=20
pool!</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN> </DIV>
<DIV><SPAN class=3D125404003-03062003>Katherine</SPAN></DIV>
<DIV><SPAN class=3D125404003-03062003></SPAN><FONT face=3DTahoma =
size=3D2><SPAN=20
class=3D125404003-03062003><FONT face=3D"Times New Roman"=20
size=3D3> </FONT></SPAN></FONT></DIV>
<DIV><FONT face=3DTahoma size=3D2><SPAN=20
class=3D125404003-03062003> </SPAN>-----Original =
Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]<B>On=20
Behalf Of </B>Ann Hollingworth<BR><B>Sent:</B> Monday, June 02, 2003 =
9:01=20
PM<BR><B>To:</B> canslim@lists.xmission.com<BR><B>Subject:</B> Re: Re: =
[CANSLIM]=20
breakouts to come<BR><BR></DIV></FONT>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV><FONT face=3DArial size=3D2>Thanks, Bill, and Rolf, for the watch =
list ideas.=20
I may have to change the source of my minings.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>Ann<SPAN =
class=3D125404003-03062003><FONT=20
face=3D"Times New Roman" size=3D3> </FONT></SPAN></FONT></DIV>
<DIV><FONT face=3DArial size=3D2><SPAN=20
class=3D125404003-03062003></SPAN></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2><SPAN class=3D125404003-03062003>
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Rolf=20
Hertenstein<BR><B>Sent:</B> Monday, June 02, 2003 11:39 =
AM<BR><B>To:</B>=20
canslim@lists.xmission.com<BR><B>Subject:</B> Re: Re: [CANSLIM] =
breakouts to=20
come<BR><BR></FONT></DIV>
<DIV><FONT face=3DArial size=3D2>Hi Bill - Are you referring =
to IBD's Screen=20
of the Day?</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>I think in a recent discussion of the =
market, IBD=20
mentioned that further breakouts at this stage of this bull run =
(however long=20
it'll be) are more likely to be 'second rate'. The real leaders =
have=20
broken out and already have good gains. This won't stop me from =
looking=20
of course.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial =
size=3D2> Rolf</FONT> </SPAN></FONT></DIV></DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dbtriffet@earthlink.net =
href=3D"mailto:btriffet@earthlink.net">Bill=20
Triffet</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, June 02, 2003 =
12:22=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: Re: [CANSLIM] =
breakouts to=20
come</DIV>
<DIV><BR></DIV>I use WR as a confirmation that I bought right. I =
like to see=20
one of my buys show up there AFTER I've bought it. I also find those =
graphs=20
tend to be "Monday morning quarterbacking". I think it's IBD's way =
of=20
showing how you how a stock already broke out - not time to buy. I =
also find=20
many of them have broken out of upwards trending handles which is =
troubling=20
to me.<BR><BR>As far as the IBD100, I like to track #25-100 for =
increasing=20
strength and a proper entry points. By design, most of the top will =
be=20
already extended.<BR><BR>For list creation, I'd also do a quick scan =
of the=20
daily updated stocks featured on the IBD site for possible =
setup/entry=20
points.<BR><BR>Btw, the use of an offline charting tool such as =
Quotes Plus=20
is a real time saver when you need to look at lots of stocks for =
list=20
building. The charts pop up instantly allowing you to make quick end =
of day=20
scans. Doing it online - even with a highspeed connection is much =
slower=20
though you see them intraday.=20
=
<BR><BR>--<BR>Bill<BR><BR> <BR><BR>---------------------------------=
- --------------------------------<BR>I=20
was just going through the charts of IBD100 last night, and was=20
thinking<BR>the exact same thing. Are there any other lists of =
high=20
quality CANSLIM<BR>stocks that should be scanned to check for proper =
price=20
patterns?<BR><BR>Chris<BR> ----- Original Message ----- =
<BR> =20
From: Ann Hollingworth <BR> To: CANSLIM Listserv <BR> =
Sent:=20
Monday, June 02, 2003 4:28 AM<BR> Subject: [CANSLIM] breakouts =
to=20
come<BR><BR><BR> It seems to me, as I hunt through WR and =
IBD100, that=20
there are a lot of <BR>overextended stocks, and not to many on the =
right=20
side of their cup or<BR>ready to break out.<BR><BR> It would =
seem to=20
me that there could be two reasons for this:<BR><BR> 1. The =
rally is=20
going to wane.<BR><BR> 2. The WR and IBD100 do not produce =
stocks at=20
this state of their<BR>development.<BR><BR> Any=20
comments??<BR><BR> =
Ann<BR><BR></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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