Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Homebuilders and stuff
Date: Thu, 16 May 2002 20:10:25 -0400
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This is a multi-part message in MIME format. - ------=_NextPart_000_008E_01C1FD15.B745A5A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Eric, on "M" and small caps, I would suggest that for those in them, = they should be sitting on decent profits by now. For the short termers, = the rally including the big caps, and more of the mid caps, presents an = ideal time to take profits on the small ones and move the money. - ----- Original Message -----=20 From: Eric Jaenike=20 To: canslim group ; Greg Denewiler ; Dale Dumaw ; Eric Jaenike ; Vitaliy = Katsenelson ; Trish McNamara ; Devin Linden=20 Sent: Thursday, May 16, 2002 4:28 PM Subject: [CANSLIM] Homebuilders and stuff A couple of points to note on the homebuilders (please note: I currently = have no position in them, but am keeping a close eye on them as a short, = so that's my bias): 1. The stocks have become a bit bifurcated. The weaker players in the = industry have not been performing well (CTX, BZH, DHI, LEN etc), while = the leaders have been doing well (RYL, NVR). I consider this to be an = early sign of weakness, not strength, as the laggards have stopped = performing. 2. HOV and WLS have clearly broken uptrend lines in the last week. KBH = and NVR appear poised to do the same. 3. Vice Chairman of Toll Brothers, Bruce Toll, filed to sell 1 million = of his 3 million shares. (For accuracies sake, in a press release he = stated he has sold only 700k, and has no intention of selling the rest. = Whatever.) . There was additional insider selling in CTX this morning as = well. This goes hand in hand with all the other recent insider selling. These stocks seem to be highly inversely correlated with strength in the = economy (via interest rates).=20 I would be extremely careful if I was long these stocks right now. (I = am, in fact, looking for short entry points. HOV on a bounce is probably = a good entry point. Anyone have feedback/ ideas on entry points?) ON M: I am somwhat skeptical of this recent rally. Following up on my previous = post on M, note the action on the Russell 2000 today (-1.2%), as well as = IJS (-2%). I don't consider this definitive by any means, but I don't = consider it bullish that the leading indices (small cap orientation) = have continued their underperformance. In evaluating this recent rally = off the lows, IMO there have been several yellow flags, including: 1. = The markets never really washed out, as indicated by price/volume action = or sentiment. 2. The amount the indices gave back last Thurs and Fri. = after the Wed. rally. I would prefer to see less retracement, which = would be a subtle indication of underlying strength. 3. The distribution = day last Friday. Volume upticked only slightly, but nonetheless I would = prefer not to see a day like that in a nascent rally. 4. The follow = through day was not as strong from a volume standpoint on the Nasdaq as = at first glance. Normalize WCOM volume and you wind up with a 2 billion = share day, not a 2.5 billion day. 5. Yesterday was a distribution day on = the NYSE indices. While the volume uptick was not that large, and a = giveback after such a large advance is to be expected, I would still = prefer not to see that action. Also, volume on the Nasdaq, while lower = than on Wed, was not as much lower as a quick glance might indicate = (again, based on a normalization of WCOM volume over Tues and Wed). 6. = Underperformance of the smaller cap indices. The large cap indices got = way oversold, and could be expected to bounce. The smaller cap indices = never got oversold, and so wouldn't benefit from an oversold bounce. = IMO, we are witnessing a large cap bounce that is masking weakness in = the markets that the smaller cap indices are revealing. Of course, individual stocks should be monitored based on their own = activity (ex. CCRN).=20 Eric - -------------------------------------------------------------------------= - ------- Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience - ------=_NextPart_000_008E_01C1FD15.B745A5A0 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 6.00.2716.2200" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial>Eric, on "M" and small caps, I would suggest = that for=20 those in them, they should be sitting on decent profits by now. For the = short=20 termers, the rally including the big caps, and more of the mid caps, = presents an=20 ideal time to take profits on the small ones and move the = money.</FONT></DIV> <DIV> </DIV> <DIV style=3D"FONT: 10pt arial">----- Original Message -----=20 <DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20 title=3Dericjaenike@yahoo.com href=3D"mailto:ericjaenike@yahoo.com">Eric = Jaenike</A>=20 </DIV> <DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20 href=3D"mailto:canslim@lists.xmission.com">canslim group</A> ; <A=20 title=3Ddenewiler@worldnet.att.net = href=3D"mailto:denewiler@worldnet.att.net">Greg=20 Denewiler</A> ; <A title=3Dddumaw@indra.com = href=3D"mailto:ddumaw@indra.com">Dale=20 Dumaw</A> ; <A title=3Dericjaenike@yahoo.com=20 href=3D"mailto:ericjaenike@yahoo.com">Eric Jaenike</A> ; <A=20 title=3DVitaliy.ima@usa.net href=3D"mailto:Vitaliy.ima@usa.net">Vitaliy=20 Katsenelson</A> ; <A title=3Dtrish@cherrycreekinvestmentadvisors.com=20 href=3D"mailto:trish@cherrycreekinvestmentadvisors.com">Trish = McNamara</A> ; <A=20 title=3Ddevinrrtc@aol.com href=3D"mailto:devinrrtc@aol.com">Devin = Linden</A> </DIV> <DIV><B>Sent:</B> Thursday, May 16, 2002 4:28 PM</DIV> <DIV><B>Subject:</B> [CANSLIM] Homebuilders and stuff</DIV></DIV> <DIV><BR></DIV> <P>A couple of points to note on the homebuilders (please note: I = currently have=20 no position in them, but am keeping a close eye on them as a short, = so=20 that's my bias):</P> <P>1. The stocks have become a bit bifurcated. The weaker players in the = industry have not been performing well (CTX, BZH, DHI, LEN etc), = while the=20 leaders have been doing well (RYL, NVR). I consider this to be an=20 early sign of weakness, not strength, as the laggards have stopped=20 performing.</P> <P>2. HOV and WLS have clearly broken uptrend lines in the last week. = KBH and=20 NVR appear poised to do the same.</P> <P>3. Vice Chairman of Toll Brothers, Bruce Toll, filed to sell 1 = million of his=20 3 million shares. (For accuracies sake, in a press release he stated he = has sold=20 only 700k, and has no intention of selling the rest. Whatever.) . There = was=20 additional insider selling in CTX this morning as well. This goes hand = in hand=20 with all the other recent insider selling.</P> <P>These stocks seem to be highly inversely correlated with strength in = the=20 economy (via interest rates). </P> <P>I would be extremely careful if I was long these stocks right now. (I = am, in=20 fact, looking for short entry points. HOV on a bounce is probably a good = entry=20 point. Anyone have feedback/ ideas on entry points?)</P> <P>ON M:</P> <P>I am somwhat skeptical of this recent rally. Following up on my = previous post=20 on M, note the action on the Russell 2000 today (-1.2%), as well as IJS = (-2%). I=20 don't consider this definitive by any means, but I don't consider it = bullish=20 that the leading indices (small cap orientation) have continued their=20 underperformance. In evaluating this recent rally off the lows, IMO = there have=20 been several yellow flags, including: 1. The markets never really washed = out, as=20 indicated by price/volume action or sentiment. 2. The = amount the=20 indices gave back last Thurs and Fri. after the Wed. rally. I would = prefer to=20 see less retracement, which would be a subtle indication of underlying = strength.=20 3. The distribution day last Friday. Volume upticked only slightly, but=20 nonetheless I would prefer not to see a day like that in a nascent = rally. 4. The=20 follow through day was not as strong from a volume standpoint on the = Nasdaq as=20 at first glance. Normalize WCOM volume and you wind up with a 2 billion = share=20 day, not a 2.5 billion day. 5. Yesterday was a distribution day on the = NYSE=20 indices. While the volume uptick was not that large, and a giveback = after such a=20 large advance is to be expected, I would still prefer not to see that = action.=20 Also, volume on the Nasdaq, while lower than on Wed, was not as much = lower as a=20 quick glance might indicate (again, based on a normalization of WCOM = volume over=20 Tues and Wed). 6. Underperformance of the smaller cap indices. The large = cap=20 indices got way oversold, and could be expected to bounce. The smaller = cap=20 indices never got oversold, and so wouldn't benefit from an oversold = bounce.=20 IMO, we are witnessing a large cap bounce that is masking weakness in = the=20 markets that the smaller cap indices are revealing.</P> <P>Of course, individual stocks should be monitored based on their own = activity=20 (ex. CCRN). </P> <P>Eric</P> <P><BR> <HR SIZE=3D1> <B>Do You Yahoo!?</B><BR><A=20 href=3D"http://rd.yahoo.com/welcome/*http://launch.yahoo.com">LAUNCH</A> = - - Your=20 Yahoo! Music Experience</BODY></HTML> - ------=_NextPart_000_008E_01C1FD15.B745A5A0-- - - - -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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