Go to Jeff Salisbury LWGate Home Page.From: "Dave Squires" <dcsquires1@home.com>
Subject: Re: [CANSLIM] stacking the odds in my favor-buying before the pivot point
Date: Fri, 21 Dec 2001 10:16:43 -0600
Previous Article (by Subject): RE: [CANSLIM] KKD MNTG "Cefaloni, John L Jr. [AMSTA-AR-WEA]"
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>>I still think that these things could be done with stop-limit orders =
for entry and therefore wouldn't require screen-sitting all day long.<<
I agreed. I have said this many times before on this and other CS lists. =
While I am skeptical about stop limits I think stop market orders placed =
after the first 15-30 minutes will cover people who can't watch the =
screen all day or set alarms. CS requires very good timing and buying =
the next day is often a recipe for a stop out on any normal pullback or =
pivot test. I believe most serious IT traders are now buying before the =
breakout as it has become a very obvious point. Still in a good market =
with quality leadership the handle high pivot will work fine. If you =
don't have constant access to the market buying before the break can be =
dangerous because you don't know the volume situation and you are =
technically buying the top of a trading range, which is a dangerous =
entry if a breakout does not result.=20
DSquires
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Friday, December 21, 2001 9:07 AM
Subject: Re: [CANSLIM] stacking the odds in my favor-buying before the =
pivot point
Good question, Warren. It is at this very spot where "theory" and =
"practice" meet that the individual has to apply some reasonable =
assumptions, analytical tools, and executable steps. A fancy way of =
saying, "I know that price has a probability of moving up when demand =
outstrips supply, and I can use chart patterns to identify that point." =
But....for each person, that "point" may be a little different. I think =
that's what Tom has been referring to in his own posts. He has a comfort =
with microcaps and under-followed stocks in general, so he has adjusted =
his entries to match the typical behavior of these stocks. As I have =
become more comfortable with technical patterns and more confident in my =
own candidate selection process, I have modified these entries a bit. I =
am much more willing to take entries on patterns other than the =
traditional C&H or flat base near old highs. I control risk by =
decreasing my lot size and then adding to positions as the stock =
continues to show strength and then pulls back to the intermediate term =
trend. That's not to say I don't have to pull the plug every now and =
then, and then possibly re-enter when the smoke clears. But that's about =
personal style in the spirit of CANSLIM and in the spirit of "the =
balance between supply and demand." In general, I still think that these =
things could be done with stop-limit orders for entry and therefore =
wouldn't require screen-sitting all day long. I have the luxury of being =
at home all day as well, but I really don't find it interesting to =
"watch" the market. I let my alarms tell me when/if the time is near, =
then place a market order when it's right. Again, personal style, but =
not a requirement.
Katherine
----- Original Message -----=20
From: Warren Keuffel=20
To: canslim@lists.xmission.com=20
Sent: Friday, December 21, 2001 8:47 AM
Subject: Re: [CANSLIM] stacking the odds in my favor-buying before =
the pivot point
Katherine,
This is the Theory, and it is Good. But in Practice, being able to
identify the B/O and get in before it is too extended is where the
rubber really meets the road. Hence, I am starting to favor an =
earlier
entry (and I believe Tom mentioned that he does this as well) =
because
IMHO only those glued to their screens all day long, with =
sophisticated
alarms, etc. can react quickly enough to act at the ideal entry =
point.
Maybe it's not as hard as I make it out to be, but I have not had =
many
successes with ideal entry points, and I work from home so am seldom =
far
from my computer. How about you? Are you able to repeatably time =
your
entries optimally?
Warren
Katherine Malm wrote:
<snip>
> (1) The idea behind waiting for a good stock to form a solid base =
and
> then break out on volume is to identify that magical point at =
which
> Demand outstrips Supply and Price is pushed higher--essentially =
the
> old Supply/Demand curve from economics class. Assuming the lion's
> share of sellers have been exhausted and the stock is one that =
people
> would wish to own, the theory is that any additional demand for =
the
> stock will push the price further. In order for the Price to =
continue
> on, the underlying fundamentals that create value in the company =
have
> got to be sound. So from this point of view, waiting for the B/O =
is
> stacking the odds in your favor.
<snip>
-
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<BODY bgColor=3D#ffffff>
<DIV> >>I still think that these things could be done with =
stop-limit=20
orders for entry and therefore wouldn't require screen-sitting all day=20
long.<<</DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>I agreed. I have said this many times =
before on=20
this and other CS lists. While I am skeptical about stop limits I think =
stop=20
market orders placed after the first 15-30 minutes will cover =
people who=20
can't watch the screen all day or set alarms. CS requires very good =
timing and=20
buying the next day is often a recipe for a stop out on any normal =
pullback=20
or pivot test. I believe most serious IT traders are now buying before =
the=20
breakout as it has become a very obvious point. Still in a good market =
with=20
quality leadership the handle high pivot will work fine. If you don't =
have=20
constant access to the market buying before the break can be dangerous =
because=20
you don't know the volume situation and you are technically buying the =
top of a=20
trading range, which is a dangerous entry if a breakout does not result. =
</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>DSquires</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=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=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</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>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, December 21, 2001 =
9:07=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] stacking =
the odds=20
in my favor-buying before the pivot point</DIV>
<DIV><BR></DIV>
<DIV>Good question, Warren. It is at this very spot where "theory" and =
"practice" meet that the individual has to apply some reasonable =
assumptions,=20
analytical tools, and executable steps. A fancy way of saying, "I know =
that=20
price has a probability of moving up when demand outstrips supply, and =
I can=20
use chart patterns to identify that point." But....for each person, =
that=20
"point" may be a little different. I think that's what Tom has been =
referring=20
to in his own posts. He has a comfort with microcaps and =
under-followed stocks=20
in general, so he has adjusted his entries to match the typical =
behavior of=20
these stocks. As I have become more comfortable with technical =
patterns and=20
more confident in my own candidate selection process, I have modified =
these=20
entries a bit. I am much more willing to take entries on patterns =
other than=20
the traditional C&H or flat base near old highs. I control risk by =
decreasing my lot size and then adding to positions as the stock =
continues to=20
show strength and then pulls back to the intermediate term trend. =
That's not=20
to say I don't have to pull the plug every now and then, and then =
possibly=20
re-enter when the smoke clears. But that's about personal style in the =
spirit=20
of CANSLIM and in the spirit of "the balance between supply and =
demand." In=20
general, I still think that these things could be done with stop-limit =
orders=20
for entry and therefore wouldn't require screen-sitting all day long. =
I have=20
the luxury of being at home all day as well, but I really don't find =
it=20
interesting to "watch" the market. I let my alarms tell me when/if the =
time is=20
near, then place a market order when it's right. Again, personal =
style, but=20
not a requirement.</DIV>
<DIV> </DIV>
<DIV>Katherine</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=3Dwkeuffel@xmission.com =
href=3D"mailto:wkeuffel@xmission.com">Warren=20
Keuffel</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> Friday, December 21, =
2001 8:47=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
stacking the=20
odds in my favor-buying before the pivot point</DIV>
<DIV><BR></DIV>Katherine,<BR><BR>This is the Theory, and it is =
Good. =20
But in Practice, being able to<BR>identify the B/O and get in before =
it is=20
too extended is where the<BR>rubber really meets the road. =
Hence, I am=20
starting to favor an earlier<BR>entry (and I believe Tom mentioned =
that he=20
does this as well) because<BR>IMHO only those glued to their screens =
all day=20
long, with sophisticated<BR>alarms, etc. can react quickly enough to =
act at=20
the ideal entry point.<BR><BR>Maybe it's not as hard as I make it =
out to be,=20
but I have not had many<BR>successes with ideal entry points, and I =
work=20
from home so am seldom far<BR>from my computer. How about =
you? =20
Are you able to repeatably time your<BR>entries=20
optimally?<BR><BR>Warren<BR><BR>Katherine Malm=20
wrote:<BR><BR><snip><BR><BR>> (1) The idea behind =
waiting for=20
a good stock to form a solid base and<BR>> then break out on =
volume is to=20
identify that magical point at which<BR>> Demand outstrips Supply =
and=20
Price is pushed higher--essentially the<BR>> old Supply/Demand =
curve from=20
economics class. Assuming the lion's<BR>> share of =
sellers=20
have been exhausted and the stock is one that people<BR>> would =
wish to=20
own, the theory is that any additional demand for the<BR>> stock =
will=20
push the price further. In order for the Price to continue<BR>> =
on, the=20
underlying fundamentals that create value in the company =
have<BR>> got to=20
be sound. So from this point of view, waiting for the B/O is<BR>> =
stacking the odds in your =
favor.<BR><BR><snip><BR><BR><BR><BR>-<BR>-To=20
subscribe/unsubscribe, email "<A=20
=
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
the=20
email body, write "subscribe canslim" or<BR>-"unsubscribe =
canslim". Do=20
not use quotes in your =
email.</BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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