Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] A short ride
Date: Fri, 8 Mar 2002 09:18:59 -0600
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This is a multi-part message in MIME format. - ------=_NextPart_000_0032_01C1C682.47F0DC20 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Duke, Just a couple of misc. comments to add to your post: On gaps up---This is an excellent entry strategy when the stock gaps = open out of a base and on earnings news. The best way to catch them is = to know which stocks are basing, are due to announce earnings, then = place a buy stop-limit, or be ready to take action live on the B/O that = morning. In general, stocks that gap up on strong volume and earnings = news will continue that move, so I don't hesitate to take them even if = they are beyond the 5% of pivot rule if the stock has all the right = characteristics. (I picked up this trick from a '96 IBD article on gaps, = later reinforced by Gary Kaltbaum's gap strategy) On WON's 4% losses--at both the IBD seminars I attended, I remember = comments from WON and his presenters in which they noted that they were = able to spot whether a breakout was going to work almost immediately. = They are so good at reading Price/Volume action that they can know = whether they are wrong about a breakout long before it hits the 8% rule. = I've also heard this same comment from other CANSLIM-style hedge fund = managers such as Greg Kuhn, Tim Truebenbach and Kevin Marder. The second = thing they do is to set a sell rule that will not allow them *any* loss = once a stock has successfully broken out. So, if the stock breaks out = and then retraces on light volume to the pivot, fine. But if the = breakout succeeds and then begins to fail on high volume, they are out = long before it retraces and at the very least, out at purchase price. I = think these are subtleties lost when CANSLIMers automatically assume = that every purchase should be protected with *exactly* an 8% loss. I = think the sell rules are more complex than that, but that doesn't mean = they aren't consistent or repeatable. Katherine ----- Original Message -----=20 From: Duke Miller=20 To: canslim@lists.xmission.com=20 Sent: Friday, March 08, 2002 8:42 AM Subject: RE: [CANSLIM] A short ride Mike: If I may, some observations (albeit laced with a touch of cynicism, = which I hope is acceptable herein...in moderation, of course...). My recollection is, Mike, is to expect just that scenario you've = described below, but ONLY when it CLOSES at the BOTTOM of the fall on high = volume. Which poses a question: If it's noon, the stock is trading in the = bottom of it's range on high volume, should you sell? (Those of you who use = stops don't need to answer that...you're out already!) But what if it = rebounds an hour later, and subsequently closes down somewhat, but higher than = where it was at noon? Did I screw up selling too soon? The answer: See = tomorrow's chart, then decide! Then you'd find that what it did (pullback = slightly after breakout) was normal! "Remember when's" are more the rule than the exception these days. A = few recent examples: How many remember this one (from my notes at a seminar ten years ago): = "Only buy a stock after it CLOSES above its breakout on 150% or greater = volume. Then buy it at the next day's opening price." Hmm. I know the = volatile 90's necessitated a change, but the shakeouts I've encountered since January1 have caused me to reflect on this old rule. Then, just the other day, in Investor's Corner, "Only buy a stock = within 5% of its pivot point, unless it gaps up at the open." So if it gaps up = at the open is it okay to buy it if it's up 10% mid-day? I think I know the answer: Only if TOMORROW's says you should have. Then comes this a.m.'s Big Picture: "Defense contractors, home = builders and some retailers that defied the market's recent correction are too = extended above their prior bases to buy without risking a shakeout." I = distinctly remember a recent comment therein that these are the stocks to = consider, because they're done so well in a down market! You know, high = Relative Strength? Finally, and hopefully this is only bordering on blasphemy: Today's Investors Corner says: "IBD founder William O'Neil says he's right = only about half the time. The secret to his success? At an IBD advanced = seminar last year, O'Neil said he's kept his losses at an average of about 4%. = But when he finds a winner...." Excuse me, isn't 4% about half the 8% "insurance" he recommends? Could this be a misprint? I know this only proves we're all constantly developing our own = variances on a theme. It's like I told my wife this morning: "You know, I think = I'm going to get this whole process nailed down to perfection the day = before I leave this world!" Ain't hindsight a wonderful thing? Now where did = I put tomorrow's charts??? Happy hunting... Duke > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Mike Lucero > Sent: Friday, March 08, 2002 5:51 AM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] A short ride > > > I seem to remember an article where they said don't worry if a stock = falls > hard back toward it's pivot, even on increasing volume. Hmm. > > Mike > ----- Original Message ----- > From: "Bill Triffet" <btriffet@earthlink.net> > To: <canslim@lists.xmission.com> > Sent: Thursday, March 07, 2002 11:47 AM > Subject: Re: [CANSLIM] A short ride > > > Oops sorry Mike. I meant to get back to you. Thankfully Katherine > stepped up > to the plate with the article. > Btw, today's action confirms the failed breakout. Looked like a > great stock > at the time though... > > -Bill > > ----- Original Message ----- > From: "Katherine Malm" <kmalm@earthlink.net> > To: <canslim@lists.xmission.com> > Sent: Thursday, March 07, 2002 11:26 AM > Subject: Re: [CANSLIM] A short ride > > > Hi Mike, > > I've uploaded a copy of the article to: > > http://WallStreet-LLC.com/pub/BreakoutReversals030602.jpg > > Katherine > ----- Original Message ----- > From: Mike Lucero > To: canslim@lists.xmission.com > Sent: Wednesday, March 06, 2002 7:09 PM > Subject: Re: [CANSLIM] A short ride > > > What did it say? > ----- Original Message ----- > From: "Bill Triffet" <btriffet@earthlink.net> > To: <canslim@lists.xmission.com> > Sent: Wednesday, March 06, 2002 12:27 PM > Subject: Re: [CANSLIM] A short ride > > > UOPX sure looks like another example of today's Investors > Corner - Beware > Of > Reversal On Breakout. A tail with large volume. I got out as well. > > -Bill Triffet > > > ----- Original Message ----- > From: "Tim Fisher" <Tim@orerockon.com> > To: <canslim@mail.xmission.com> > Sent: Wednesday, March 06, 2002 9:37 AM > Subject: [CANSLIM] A short ride > > > > Well that was certainly a short ride with UOPX and POSS. > Makes me wonder > > whether this is a big cap rally now. All after I put in orders = for the > open > > today for NTBK and RBMG (neither of which is following suit, > thankfully). > > Anyway just really wanted to test the server since I don't > see any email > > from the group today. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_0032_01C1C682.47F0DC20 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 5.50.4807.2300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV>Hi Duke,</DIV> <DIV> </DIV> <DIV>Just a couple of misc. comments to add to your post:</DIV> <DIV> </DIV> <DIV>On gaps up---This is an excellent entry strategy when the stock = gaps open=20 out of a base and on earnings news. The best way to catch them is to = know which=20 stocks are basing, are due to announce earnings, then place a buy = stop-limit, or=20 be ready to take action live on the B/O that morning. In general, stocks = that=20 gap up on strong volume and earnings news will continue that move, so I = don't=20 hesitate to take them even if they are beyond the 5% of pivot rule = if the=20 stock has all the right characteristics. (I picked up this trick from a = '96 IBD=20 article on gaps, later reinforced by Gary Kaltbaum's gap strategy)</DIV> <DIV> </DIV> <DIV>On WON's 4% losses--at both the IBD seminars I attended, I remember = comments from WON and his presenters in which they noted that they were = able to=20 spot whether a breakout was going to work almost immediately. They are = so good=20 at reading Price/Volume action that they can know whether they are wrong = about a=20 breakout long before it hits the 8% rule. I've also heard this same = comment from=20 other CANSLIM-style hedge fund managers such as Greg Kuhn, Tim = Truebenbach and=20 Kevin Marder. The second thing they do is to set a sell rule that will = not allow=20 them *any* loss once a stock has successfully broken out. So, if the = stock=20 breaks out and then retraces on light volume to the pivot, fine. But if = the=20 breakout succeeds and then begins to fail on high volume, they are out = long=20 before it retraces and at the very least, out at purchase price. I think = these=20 are subtleties lost when CANSLIMers automatically assume that every = purchase=20 should be protected with *exactly* an 8% loss. I think the sell rules = are more=20 complex than that, but that doesn't mean they aren't consistent or=20 repeatable.</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=3Ddukemill@tampabay.rr.com = href=3D"mailto:dukemill@tampabay.rr.com">Duke=20 Miller</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, March 08, 2002 = 8:42=20 AM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] A short = ride</DIV> <DIV><BR></DIV>Mike:<BR><BR>If I may, some observations (albeit laced = with a=20 touch of cynicism, which I<BR>hope is acceptable herein...in = moderation, of=20 course...).<BR><BR>My recollection is, Mike, is to expect just that = scenario=20 you've described<BR>below, but ONLY when it CLOSES at the BOTTOM of = the fall=20 on high volume.<BR>Which poses a question: If it's noon, the = stock is=20 trading in the bottom of<BR>it's range on high volume, should you = sell? (Those=20 of you who use stops<BR>don't need to answer that...you're out = already!) =20 But what if it rebounds an<BR>hour later, and subsequently closes down = somewhat, but higher than where it<BR>was at noon? Did I screw = up=20 selling too soon? The answer: See tomorrow's<BR>chart, = then=20 decide! Then you'd find that what it did (pullback = slightly<BR>after=20 breakout) was normal!<BR><BR>"Remember when's" are more the rule than = the=20 exception these days. A few<BR>recent examples:<BR><BR>How many = remember=20 this one (from my notes at a seminar ten years ago): "Only<BR>buy a = stock=20 after it CLOSES above its breakout on 150% or greater volume.<BR>Then = buy it=20 at the next day's opening price." Hmm. I know the = volatile<BR>90's=20 necessitated a change, but the shakeouts I've encountered = since<BR>January1=20 have caused me to reflect on this old rule.<BR><BR>Then, just the = other day,=20 in Investor's Corner, "Only buy a stock within 5%<BR>of its pivot = point,=20 unless it gaps up at the open." So if it gaps up at the<BR>open = is it=20 okay to buy it if it's up 10% mid-day? I think I know=20 the<BR>answer: Only if TOMORROW's says you should = have.<BR><BR>Then=20 comes this a.m.'s Big Picture: "Defense contractors, home builders = and<BR>some=20 retailers that defied the market's recent correction are too = extended<BR>above=20 their prior bases to buy without risking a shakeout." I=20 distinctly<BR>remember a recent comment therein that these are the = stocks to=20 consider,<BR>because they're done so well in a down market! You = know,=20 high Relative<BR>Strength?<BR><BR>Finally, and hopefully this is only=20 bordering on blasphemy: Today's<BR>Investors Corner says: = "IBD=20 founder William O'Neil says he's right only<BR>about half the = time. The=20 secret to his success? At an IBD advanced seminar<BR>last year, = O'Neil=20 said he's kept his losses at an average of about 4%. But<BR>when = he=20 finds a winner...." Excuse me, isn't 4% about half the = 8%<BR>"insurance"=20 he recommends? Could this be a misprint?<BR><BR>I know this only = proves=20 we're all constantly developing our own variances on<BR>a theme. = It's=20 like I told my wife this morning: "You know, I think = I'm<BR>going to get=20 this whole process nailed down to perfection the day before I<BR>leave = this=20 world!" Ain't hindsight a wonderful thing? Now where did I = put<BR>tomorrow's charts???<BR><BR>Happy=20 hunting...<BR><BR>Duke<BR><BR><BR>> -----Original = Message-----<BR>>=20 From: <A=20 = href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis= sion.com</A><BR>>=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Mike = Lucero<BR>>=20 Sent: Friday, March 08, 2002 5:51 AM<BR>> To: <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= <BR>>=20 Subject: Re: [CANSLIM] A short ride<BR>><BR>><BR>> I seem to = remember=20 an article where they said don't worry if a stock falls<BR>> hard = back=20 toward it's pivot, even on increasing volume. Hmm.<BR>><BR>>=20 Mike<BR>> ----- Original Message -----<BR>> From: "Bill Triffet" = <<A=20 = href=3D"mailto:btriffet@earthlink.net">btriffet@earthlink.net</A>><BR>= >=20 To: <<A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= ><BR>>=20 Sent: Thursday, March 07, 2002 11:47 AM<BR>> Subject: Re: [CANSLIM] = A short=20 ride<BR>><BR>><BR>> Oops sorry Mike. I meant to get back to = you.=20 Thankfully Katherine<BR>> stepped up<BR>> to the plate with the=20 article.<BR>> Btw, today's action confirms the failed breakout. = Looked like=20 a<BR>> great stock<BR>> at the time though...<BR>><BR>>=20 -Bill<BR>><BR>> ----- Original Message -----<BR>> From: = "Katherine=20 Malm" <<A=20 = href=3D"mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>><BR>> = To:=20 <<A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= ><BR>>=20 Sent: Thursday, March 07, 2002 11:26 AM<BR>> Subject: Re: [CANSLIM] = A short=20 ride<BR>><BR>><BR>> Hi Mike,<BR>><BR>> I've uploaded a = copy of=20 the article to:<BR>><BR>> <A=20 = href=3D"http://WallStreet-LLC.com/pub/BreakoutReversals030602.jpg">http:/= /WallStreet-LLC.com/pub/BreakoutReversals030602.jpg</A><BR>><BR>>=20 Katherine<BR>> ----- Original Message = - -----<BR>> =20 From: Mike Lucero<BR>> To: <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= <BR>> =20 Sent: Wednesday, March 06, 2002 7:09 PM<BR>> Subject: = Re:=20 [CANSLIM] A short ride<BR>><BR>><BR>> What did it = say?<BR>> ----- Original Message = - -----<BR>> =20 From: "Bill Triffet" <<A=20 = href=3D"mailto:btriffet@earthlink.net">btriffet@earthlink.net</A>><BR>= > =20 To: <<A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= ><BR>> =20 Sent: Wednesday, March 06, 2002 12:27 PM<BR>> Subject: = Re:=20 [CANSLIM] A short ride<BR>><BR>><BR>> UOPX sure = looks=20 like another example of today's Investors<BR>> Corner - = Beware<BR>>=20 Of<BR>> Reversal On Breakout. A tail with large volume. = I got=20 out as well.<BR>><BR>> -Bill=20 Triffet<BR>><BR>><BR>> ----- Original Message=20 -----<BR>> From: "Tim Fisher" <<A=20 = href=3D"mailto:Tim@orerockon.com">Tim@orerockon.com</A>><BR>> = =20 To: <<A=20 = href=3D"mailto:canslim@mail.xmission.com">canslim@mail.xmission.com</A>&g= t;<BR>> =20 Sent: Wednesday, March 06, 2002 9:37 AM<BR>> Subject: = [CANSLIM]=20 A short ride<BR>><BR>><BR>> > Well that was = certainly=20 a short ride with UOPX and POSS.<BR>> Makes me = wonder<BR>> =20 > whether this is a big cap rally now. All after I put in orders = for=20 the<BR>> open<BR>> > today for NTBK = and RBMG=20 (neither of which is following suit,<BR>> = thankfully).<BR>> =20 > Anyway just really wanted to test the server since I = don't<BR>> see=20 any email<BR>> > from the group=20 today.<BR>><BR>><BR>><BR>> = - -<BR>> -To=20 subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>>= ; =20 -In the email body, write "subscribe canslim" or<BR>> =20 -"unsubscribe canslim". Do not use quotes in your=20 email.<BR>><BR>><BR>> -<BR>> -To=20 subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>>= ; =20 -In the email body, write "subscribe canslim" or<BR>> =20 -"unsubscribe canslim". Do not use quotes in your=20 email.<BR>><BR>><BR>><BR>><BR>> -<BR>> -To=20 subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>>= ; -In=20 the email body, write "subscribe canslim" or<BR>> -"unsubscribe=20 canslim". Do not use quotes in your=20 email.<BR>><BR>><BR>><BR>> -<BR>> -To = subscribe/unsubscribe,=20 email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>>= ; -In=20 the email body, write "subscribe canslim" or<BR>> -"unsubscribe=20 canslim". Do not use quotes in your = email.<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.<BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0032_01C1C682.47F0DC20-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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