Re: [CANSLIM] Economic recovery

From: "Tom Worley" <stkguru@netside.net>
Subject: Re: [CANSLIM] Economic recovery
Date: Thu, 27 Dec 2001 20:56:10 -0500

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Hi Spencer,

I get to work until past 4 PM on New Year's Eve almost every year before the
wisdom of the exchanges decided a long time ago to give the procrastinators
every last minute to make a tax related decision. I never understood it, if
someone couldn't decide by 12/30, how was he any better off on 12/31?? So
while everyone else gets off at 2 PM or so, I and our trading desk will not.

That's pretty much how I see the period between Christmas and New Year's,
tax related transactions, almost all of which will be selling transactions,
with maybe a few buys to cover shorts. Some sales will be for profits, in
most cases taking advantage of the 20% or so gain since 9/11. Some sales
will be for losses, in many (most??) cases to create a loss for the tax year
(up to $3000 to write off against ordinary income). I always anticipated a
weak market during this time period, and when I handled clients always
started working with them on their tax situation in late November. That way,
they could sell something for a loss, and still buy it back right now during
a weak market, and not violate the 30 day wash rule.

There will still be the rare opportunity to make money, even really short
term (I bought OHB for my VR fund on the open Monday, trade settles tomorrow
and I am up 66% already!!). But I don't expect to find good gems that break
out well during the second half of December, there is just too much selling
that has little if anything to do with the individual stock's fundies or
performance.

- ----- Original Message -----
From: <Spencer48@aol.com>
To: <canslim@lists.xmission.com>
Sent: Thursday, December 27, 2001 12:37 PM
Subject: Re: [CANSLIM] Economic recovery

> Tom:
>
>      Each of the last two down days showed heavier volume than each of the
> previous 3 up days in the last week.  Moreover, the minute up day Monday
> indicates to me that the mkt. that day was churning, and yesterday's nice
> move was made on light volume.
>
>      I tend to usually disregard volume during the interim period between
> Christmas and New Year's, unless it seems to be saying something.  And now
it
> does:  In this market at this time, I view it the way some see volume
during
> the market's daily opening, ie. as emotionally-laden volume that is
> uninformed and hopeful.  Add to this that fund management money is still
on
> holiday (as detected by the lack of volume), and it doesn't seem as if
there
> is any intensity of belief (as defined by volume) in the Transp. Index.
>
>       So what will the Transp. Index do?  To me it looks as if it will
finish
> filling the gap, and probably will go several % points above last weeks
high
> point.  But then, I believe, it seems to weak to continue rising.
>
>       What do you  think?
>
> jans
>
>
>
> In a message dated 12/27/2001 6:45:04 AM Eastern Standard Time,
> stkguru@netside.net writes:
>
> << For those looking for a simple picture of the US economy, you need look
no
> further than the Dow Jones Transportation Index. I have usually found this
> gives a pretty accurate picture of whether economic activity is increasing
or
> decreasing.
>
>  No surprise, with airlines comprising 31% of this index, it took a huge
gap
> down after 9/11. But since then it has been slowly recovering, has
virtually
> filled in the gap down, and is nearly back to its level before the
attacks.
> And that's without complete recovery by the airlines, indicating other
parts
> of the transportation system are well above early September.
>   >>
>
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