-Fw: [CANSLIM] cup-without-handle; "tightness" questions

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: -Fw: [CANSLIM] cup-without-handle; "tightness" questions
Date: Tue, 13 Aug 2002 14:06:31 -0500

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Hi jans,

Just read through my response again and realized I'd chosen my words badly.
In the last paragraph, I was referring the "collective you" and not "you"
personally. Sorry about that!

Katherine

- ----- Original Message -----
From: "Katherine Malm" <kmalm@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Tuesday, August 13, 2002 1:52 PM
Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions


| Hi jans,
|
| That's my understanding as well. Can't recall if WON uses the term
| "churning" at the lows or not, but either way, I've read quite a few
| articles that indicate that may very well be a sign that the stock is
| refusing to go any lower. It's the clinical opposite of churning at the
| highs, were continued activity indicates that there are plenty of sellers
to
| match any eager new buyers. Another good sign of bottoming is a "tail up",
| where you have a large range day around the bottom on high volume, with
| price closing near the top of the range. There are plenty of those
examples
| at the September and July lows. (And by the way, the same "tail down" will
| often occur at a top, often times in conjunction with a climax top.)
|
| I think in general, that if you were to get in the habit of taking every
| chart and turning it upside down, you'd see the patterns to the upside and
| the downside are identical.
|
| Katherine
|
| ----- Original Message -----
| From: <Spencer48@aol.com>
| To: <canslim@lists.xmission.com>
| Sent: Tuesday, August 13, 2002 9:50 AM
| Subject: Re: [CANSLIM] cup-without-handle; "tightness" questions
|
|
| | Katherine:
| |
| |      Couldn't "churning" also identify a stock which has been weak (ie.
in
| a downtrend), but then does not make any more headway down-and does this
on
| heavy volume.  Wouldn't this indicate the end of the downtrend (or at
| least-the beginning of a consolidation, perhaps leading to the stock
| garnering strength?).
| |
| |      Moreover, as distribution (as you pointed out) is likely at the top
| (as indicated by the hi volume and stalling); wouldn't accumulation be
| likely at the churning point in the downtrend (ie. since the stock is not
| falling anymore and it is not doing it on hi volume-wouln't this signify
| that someone is buying up all the stock that someone else is selling)
| |
| |      I bring up this question because I'm not sure of the answer.  I
| thought WON has said (or perhaps it was in an IBD Investors Corner
article)
| that "churning" can take place on the upside (to indicate future weakness)
| or on the downside (to indicate future strength).
| |
| |      In any event, what is your experience or observation or comments
and
| conclusions on my churning conundrum.
| |
| |
| |                            jans
| |
| |
| | In a message dated Wed, 7 Aug 2002 11:33:26 AM Eastern Standard Time,
| kmalm@earthlink.net writes:
| |
| | > Long story short, churning/stalling is in reference to action *after*
a
| | > stock or index has been rising, nears its highs, then starts acting
odd.
| | > That is, large volume is no longer accompanied by significant upward
| price
| | > movement. In that sense, it is subtle distribution and is a
| | > sign that the
| | > stock may be topping and/or beginning a consolidating period
| |
| |
| |
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