Go to Jeff Salisbury LWGate Home Page.From: "Curt Corley" <cjcorley@hiwaay.net>
Subject: RE: [CANSLIM] The ultimate "M" meter
Date: Thu, 22 Aug 2002 18:20:38 -0500
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It certainly wasn=92t my intention to do any commercial solicitation. I =
am
not -- in any way -- professionally affiliated with the products or
people that I mentioned earlier and could not benefit from endorsing
their products. I=92m a software engineer working on a missile defense
project for a major aeorospace-defense company. The sources I mentioned
were used as references only, because I like to back up my words with
examples and facts.=20
=20
You=92re right. I definitely did not catch the fact that commercial
solicitation is prohibited =96 especially since there have been numerous
references to commercial sources within the E-mails here in the last few
days, including IBD, Daily Graphs, HTTMIS, and links to cup-with-handle
sites. However, I=92m sorry that for the faux pas and will now explain
why I joined the group.
=20
I started getting interested in investments a few years back because of
my 401K account. Unfortunately, I bought into the hype that you should
buy indexed funds using dollar-cost averaging. Well, this worked for a
while, and I was satisfied with the results. However, when the bear
market started about 2 =BD years ago, I lost a considerable sum of =
money.
Whenever something goes sour, I don=92t cry about it. I analyze what =
went
wrong and figure out what I can do to correct the problem. So after
getting crushed at the onslaught of the bear market, I started studying
and reading everything I could get my hands on concerning investment and
trading of stock securities. Naturally, my enthusiasm boiled over into
the work place. I was talking to a coworker who is a diehard CANSLIM
advocate, so I bought the HTTMIS book. WON=92s book made a lot of sense
to me, and I decided to learn everything I could about CANSLIM. While
searching the internet for CANSLIM sites, I found this mailing list. =20
=20
I was initially offended to be accused of commercial solicitation (can
you blame me?). However, after getting over my initial reaction and
thinking things over from your point of view, there are no hard
feelings. I can understand your concern about the quality of this
mailing list. If people let salesmen get on the mailing list and start
pitching their products, the list would degenerate with spam. It has
been challenging enough to find enough time to read through the dozens
of good messages that I=92ve received every day so far. I respect your
assertiveness in ensuring the quality of this list. Thank you.
=20
From what I=92ve seen so far, you have some great advice on this mailing
list. I hope I too can contribute something useful in the future. =20
=20
Curt
=20
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley
Sent: Thursday, August 22, 2002 6:28 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] The ultimate "M" meter
=20
Curt, if you had lurked here more than a few days, you might have caught
the fact that commercial solicitation is prohibited.
=20
If that's not what you intended, then I suggest you introduce yourself
and tell us why you have joined our group.
=20
- ----- Original Message -----=20
From: Curt Corley <mailto:cjcorley@hiwaay.net> =20
To: canslim@lists.xmission.com=20
Sent: Thursday, August 22, 2002 3:16AM
Subject: [CANSLIM] The ultimate "M" meter
=20
I=92ve been lurking here for a few days, and I would like to put in my =
two
cents=92 worth about the question of whether we=92re in a bull or a bear
market. I=92d also like to give my personal opinion of what the =
ultimate
=93M=94 meter is. But first, I want to get some definitions down to =
make
sure we=92re speaking the same language here. I will use the =
definitions
that are put forth by the Dow Theory and which, IMHO, are best described
in the book =93Technical Analysis of Stock Trends=94 by by Robert
<http://www.amazon.com/exec/obidos/search-handle-url/index=3Dbooks&field-=
a
uthor=3DEdwards%2C%20Robert%20D./102-0711160-4510545> D. Edwards, John
<http://www.amazon.com/exec/obidos/search-handle-url/index=3Dbooks&field-=
a
uthor=3DMagee%2C%20John/102-0711160-4510545> Magee, W.
<http://www.amazon.com/exec/obidos/search-handle-url/index=3Dbooks&field-=
a
uthor=3DBassetti%2C%20W.%20H.%20C./102-0711160-4510545> H. C. Bassetti
(Editor). =20
=20
What=92s a bull/bear market?
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
In =93TA of Stock Trends,=94 the authors state that a primary trend is =
the
general direction of price movement over a year or more. A bull market
is a primary trend containing higher highs and higher lows in price. A
bear market is a primary trend containing lower highs and lower lows in
price. Within the primary trend are secondary trends. Secondary trends
last from 3 weeks to many months, and they do not (repeat not) qualify
as bear or bull markets. The secondary trends are merely the
corrections within a bull market and the rallies within a bear markets.
In addition to the primary and secondary trends, there are minor trends
that usually last less than 6 days and rarely as long as 3 weeks, but
they are of little importance here. The main thing that I would like to
get across is this: Using the definitions just described, you can=92t
talk about bear and bull markets unless you=92re talking about a time
frame of about a year.
=20
What do we use for an =93M=94 Meter?
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Now that the definitions are out of the way, we can talk about how to
get in and out of bull markets easily using our =93M=94 meter. If =
you=92re
having CWs (i.e., CANSLIM Withdrawals) during a bear market, you might
try CANSLIM=92ing during a rally within the bear market. You can use =
our
=93M=94 meter to detect rallies as well. The =93M=94 meter is so simple =
that I
feel like a few of you are not going to believe me and will tell me to
pack sand =96 but, oh well, here it goes. The =93M=94 meters are moving
averages. =20
For a good explanation as to why this works, visit
http://www.401k-maximizer.com/. =20
=20
How do we use the =93M=94 Meter?
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
The index you choose to graph will depend on the kind of security =
you=92re
investing in. For general growth stocks, the QQQ ticker symbol (NASDAQ)
is a good one to use. For especially small cap growth stocks, you can
choose one of the Russell indexes, such as the Russell 2000. To get a
feel for whether you=92re in a bull/bear market, plot the index against =
a
200-day moving average. To get a feel for whether you=92re in a
rally/correction, plot the index against a 50-day moving average. The
reasons we choose a 200-day average for bear/bull =93M=94 indicator are
because it is: (1) a length of time that approximates the number of
trading days in one year =96 the minimum time frame for a bull/bear
market, and (2) it is an indicator that is highly watched by many
elephants. The reasons we choose a 50-day average for the
rally/correction =93M=94 indicator are fairly the same: (1) it=92s a =
highly
watched indicator, (2) it is a time frame that makes a good compromise
between getting you in and out of a rally without whipsawing you in and
out.
=20
Defense of the =93M=94 Meter
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Try plotting a 3-year graph of QQQ against a 200-day EMA moving average.
Imagine yourself getting in on that market when the prices crossed above
the 200-day MA and getting out of the market when the prices crossed
below the 200-day MA. You might have gotten whip-sawed 3 or 4 times
between April and September of 2000 (allowing you to participate in the
rallies of June and August). But you would have stayed out of the bear
market since September.
=20
Are we still in a bear market?
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
Truth is: nobody knows yet, because enough time hasn=92t passed. =
That=92s
the way it goes. In a reversal like this, you never know whether it=92s
rally or the start of a new bull market until enough time has passed
(like the saying goes: Hindsight is 20/20). But whether we=92re truly =
in
a bull market or bear market is irrelevant to me. All I care about is
our meter. And the meter says this. Yesterday (Aug. 21) QQQ finally
crossed above the 50-day EMA, but it=92s still a long way from reaching
the 200-day EMA. I might get into stocks slowly and cautiously right
now, but I=92m certainly not ready to jump in with both feet.
=20
- -- Curt
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<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>It certainly wasn’t my =
intention to
do any commercial solicitation. I am not -- in any way -- professionally
affiliated with the products or people that I mentioned earlier and =
could not
benefit from endorsing their products.<span =
style=3D'mso-spacerun:yes'>=A0
</span>I’m a software engineer working on a missile defense =
project for a
major <span class=3DSpellE>aeorospace</span>-defense company.<span
style=3D'mso-spacerun:yes'>=A0 </span>The sources I mentioned were used =
as
references only, because I like to back up my words with examples and =
facts. <o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>You’re right.<span
style=3D'mso-spacerun:yes'>=A0 </span>I definitely did not catch the =
fact that commercial
solicitation is prohibited – especially since there have been =
numerous
references to commercial sources within the E-mails here in the last few =
days,
including IBD, Daily Graphs, HTTMIS, and links to cup-with-handle =
sites.<span
style=3D'mso-spacerun:yes'>=A0=A0 </span>However, I’m sorry that =
for the faux
pas and will now explain why I joined the =
group.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>I started getting interested in
investments a few years back because of my 401K account.<span
style=3D'mso-spacerun:yes'>=A0 </span>Unfortunately, I bought into the =
hype that
you should buy indexed funds using dollar-cost averaging.<span
style=3D'mso-spacerun:yes'>=A0 </span>Well, this worked for a while, and =
I was
satisfied with the results.<span style=3D'mso-spacerun:yes'>=A0 =
</span>However,
when the bear market started about 2 =BD years ago, I lost a =
considerable sum of
money.<span style=3D'mso-spacerun:yes'>=A0 </span>Whenever something =
goes sour, I
don’t cry about it.<span style=3D'mso-spacerun:yes'>=A0 </span>I =
analyze what
went wrong and figure out what I can do to correct the problem.<span
style=3D'mso-spacerun:yes'>=A0 </span>So after getting crushed at the =
onslaught of
the bear market, I started studying and reading everything I could get =
my hands
on concerning investment and trading of stock securities.<span
style=3D'mso-spacerun:yes'>=A0 </span>Naturally, my enthusiasm boiled =
over into the
work place.<span style=3D'mso-spacerun:yes'>=A0 </span>I was talking to =
a coworker
who is a diehard CANSLIM advocate, so I bought the HTTMIS book.<span
style=3D'mso-spacerun:yes'>=A0 </span><span =
class=3DSpellE>WON’s</span> book
made a lot of sense to me, and I decided to learn everything I could =
about
CANSLIM.<span style=3D'mso-spacerun:yes'>=A0 </span>While searching the =
internet
for CANSLIM sites, I found this mailing list.<span =
style=3D'mso-spacerun:yes'>=A0
</span><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>I was initially offended to be =
accused of
commercial solicitation (can you blame me?).<span =
style=3D'mso-spacerun:yes'>=A0
</span>However, after getting over my initial reaction and thinking =
things over
from your point of view, there are no hard feelings.<span
style=3D'mso-spacerun:yes'>=A0 </span>I can understand your concern =
about the
quality of this mailing list.<span style=3D'mso-spacerun:yes'>=A0 =
</span>If people
let salesmen get on the mailing list and start pitching their products, =
the
list would degenerate with spam.<span style=3D'mso-spacerun:yes'>=A0 =
</span>It has
been challenging enough to find enough time to read through the dozens =
of good
messages that I’ve received every day so far.<span
style=3D'mso-spacerun:yes'>=A0 </span>I respect your assertiveness in =
ensuring the
quality of this list.<span style=3D'mso-spacerun:yes'>=A0 </span>Thank =
you.<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>From what I’ve seen so far, =
you have
some great advice on this mailing list.<span =
style=3D'mso-spacerun:yes'>=A0=A0
</span>I hope I too can contribute something useful in the future.<span
style=3D'mso-spacerun:yes'>=A0 </span><o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Curt<o:p></o:p></span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p> </o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b> =
owner-</span></font><st1:PersonName><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'>canslim@lists.xmission.com<=
/span></font></st1:PersonName><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'>
[mailto:owner-</span></font><st1:PersonName><font size=3D2 =
face=3DTahoma><span
=
style=3D'font-size:10.0pt;font-family:Tahoma'>canslim@lists.xmission.com<=
/span></font></st1:PersonName><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'>] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Tom Worley<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> =
</span></font><st1:date
Month=3D"8" Day=3D"22" Year=3D"2002"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:
10.0pt;font-family:Tahoma'>Thursday, August 22, =
2002</span></font></st1:date><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'> </span></font><st1:time
Hour=3D"6" Minute=3D"28"><font size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;
font-family:Tahoma'>6:28 AM</span></font></st1:time><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'><br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
</span></font><st1:PersonName><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'>canslim@lists.xmission.com<=
/span></font></st1:PersonName><font
size=3D2 face=3DTahoma><span =
style=3D'font-size:10.0pt;font-family:Tahoma'><br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] =
The ultimate
"M" meter</span></font><o:p></o:p></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>Curt, if you had lurked =
here more
than a few days, you might have caught the fact that commercial =
solicitation is
prohibited.</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>If that's not what you =
intended,
then I suggest you introduce yourself and tell us why you have joined =
our group.</span></font><o:p></o:p></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>----- Original Message =
- ----- <o:p></o:p></span></font></p>
<div style=3D'font-color:black'>
<p class=3DMsoNormal =
style=3D'margin-left:.5in;background:#E4E4E4'><b><font size=3D2
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>From:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:cjcorley@hiwaay.net" title=3D"cjcorley@hiwaay.net">Curt =
Corley</a> <o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>To:</span><=
/font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:canslim@lists.xmission.com" =
title=3D"canslim@lists.xmission.com">canslim@lists.xmission.com</a>
<o:p></o:p></span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Sent:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:date
Month=3D"8" Day=3D"22" Year=3D"2002"><font size=3D2 face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial'>Thursday, August 22, =
2002</span></font></st1:date><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> </span></font><st1:time
Hour=3D"3" Minute=3D"16"><font size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;
font-family:Arial'>3:16AM</span></font></st1:time><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p></o:p></span></font></p=
>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Subject:</s=
pan></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> [CANSLIM]
The ultimate "M" meter<o:p></o:p></span></font></p>
</div>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p> </o:p></span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>I’ve been lurking =
here for a
few days, and I would like to put in my two cents’ worth about the
question of whether we’re in a bull or a bear market.<span
style=3D'mso-spacerun:yes'>=A0 </span>I’d also like to give my =
personal
opinion of what the ultimate “M” meter is.<span
style=3D'mso-spacerun:yes'>=A0 </span>But first, I want to get some =
definitions
down to make sure we’re speaking the same language here.<span
style=3D'mso-spacerun:yes'>=A0 </span>I will use the definitions that =
are put forth
by the Dow Theory and which, IMHO, are best described in the book =
“Technical
Analysis of Stock Trends” by </span></font><font size=3D2 =
face=3DVerdana><span
style=3D'font-size:10.0pt;font-family:Verdana'>by <a
href=3D"http://www.amazon.com/exec/obidos/search-handle-url/index=3Dbooks=
&field-author=3DEdwards%2C%20Robert%20D./102-0711160-4510545">Robert
D. Edwards</a>, <a
href=3D"http://www.amazon.com/exec/obidos/search-handle-url/index=3Dbooks=
&field-author=3DMagee%2C%20John/102-0711160-4510545">John
Magee</a>, <a
href=3D"http://www.amazon.com/exec/obidos/search-handle-url/index=3Dbooks=
&field-author=3DBassetti%2C%20W.%20H.%20C./102-0711160-4510545">W.
H. C. Bassetti</a> (Editor).</span></font><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><span =
style=3D'mso-spacerun:yes'>=A0
</span><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>What’s a bull/bear =
market?<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>In “TA of Stock =
Trends,”
the authors state that a primary trend is the general direction of price
movement over a year or more.<span style=3D'mso-spacerun:yes'>=A0 =
</span>A bull
market is a primary trend containing higher highs and higher lows in =
price.<span
style=3D'mso-spacerun:yes'>=A0 </span>A bear market is a primary trend =
containing
lower highs and lower lows in price.<span style=3D'mso-spacerun:yes'>=A0
</span>Within the primary trend are secondary trends.<span
style=3D'mso-spacerun:yes'>=A0 </span>Secondary trends last from 3 weeks =
to many
months, and they do not (repeat not) qualify as bear or bull =
markets.<span
style=3D'mso-spacerun:yes'>=A0 </span>The secondary trends are merely =
the
corrections within a bull market and the rallies within a bear =
markets.<span
style=3D'mso-spacerun:yes'>=A0 </span>In addition to the primary and =
secondary
trends, there are minor trends that usually last less than 6 days and =
rarely as
long as 3 weeks, but they are of little importance here.<span
style=3D'mso-spacerun:yes'>=A0 </span>The main thing that I would like =
to get
across is this:<span style=3D'mso-spacerun:yes'>=A0 </span>Using the =
definitions
just described, you can’t talk about bear and bull markets unless
you’re talking about a time frame of about a =
year.<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>What do we use for an
“M” Meter?<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Now that the definitions =
are out of
the way, we can talk about how to get in and out of bull markets easily =
using
our “M” meter.<span style=3D'mso-spacerun:yes'>=A0 </span>If
you’re having CWs (i.e., CANSLIM Withdrawals) during a bear =
market, you
might try CANSLIM’ing during a rally within the bear market.<span
style=3D'mso-spacerun:yes'>=A0 </span>You can use our “M” =
meter to
detect rallies as well.<span style=3D'mso-spacerun:yes'>=A0 </span>The
“M” meter is so simple that I feel like a few of you are not =
going
to believe me and will tell me to pack sand – but, oh well, here =
it
goes.<span style=3D'mso-spacerun:yes'>=A0 </span>The “M” =
meters are
moving averages.<span style=3D'mso-spacerun:yes'>=A0 =
</span><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>For a good explanation as =
to why
this works, visit <a =
href=3D"http://www.401k-maximizer.com/">http://www.401k-maximizer.com/</a=
>.<span
style=3D'mso-spacerun:yes'>=A0=A0=A0 =
</span><o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>How do we use the =
“M”
Meter?<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>The index you choose to =
graph will
depend on the kind of security you’re investing in.<span
style=3D'mso-spacerun:yes'>=A0 </span>For general growth stocks, the QQQ =
ticker
symbol (NASDAQ) is a good one to use.<span =
style=3D'mso-spacerun:yes'>=A0
</span>For especially small cap growth stocks, you can choose one of the
Russell indexes, such as the Russell 2000.<span =
style=3D'mso-spacerun:yes'>=A0
</span>To get a feel for whether you’re in a bull/bear market, =
plot the
index against a 200-day moving average.<span =
style=3D'mso-spacerun:yes'>=A0
</span>To get a feel for whether you’re in a rally/correction, =
plot the
index against a 50-day moving average.<span =
style=3D'mso-spacerun:yes'>=A0
</span>The reasons we choose a 200-day average for bear/bull =
“M”
indicator are because it is: (1) a length of time that approximates the =
number
of trading days in one year – the minimum time frame for a =
bull/bear
market, and (2) it is an indicator that is highly watched by many
elephants.<span style=3D'mso-spacerun:yes'>=A0 </span>The reasons we =
choose a
50-day average for the rally/correction “M” indicator are =
fairly
the same: (1) it’s a highly watched indicator, (2) it is a time =
frame
that makes a good compromise between getting you in and out of a rally =
without
whipsawing you in and out.<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Defense of the =
“M” Meter<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Try plotting a 3-year graph =
of QQQ
against a 200-day EMA moving average.<span =
style=3D'mso-spacerun:yes'>=A0
</span>Imagine yourself getting in on that market when the prices =
crossed above
the 200-day MA and getting out of the market when the prices crossed =
below the
200-day MA. You might have gotten whip-sawed 3 or 4 times between April =
and
September of 2000 (allowing you to participate in the rallies of June =
and
August).<span style=3D'mso-spacerun:yes'>=A0 </span>But you would have =
stayed out
of the bear market since September.<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Are we still in a bear =
market?<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>Truth is: nobody knows yet, =
because
enough time hasn’t passed. That’s the way it goes.<span
style=3D'mso-spacerun:yes'>=A0 </span>In a reversal like this, you never =
know
whether it’s rally or the start of a new bull market until enough =
time
has passed (like the saying goes: Hindsight is 20/20).<span
style=3D'mso-spacerun:yes'>=A0 </span>But whether we’re truly in a =
bull
market or bear market is irrelevant to me.<span =
style=3D'mso-spacerun:yes'>=A0
</span>All I care about is our meter.<span =
style=3D'mso-spacerun:yes'>=A0
</span>And the meter says this.<span style=3D'mso-spacerun:yes'>=A0
</span>Yesterday (Aug. 21) QQQ finally crossed above the 50-day EMA, but
it’s still a long way from reaching the 200-day EMA.<span
style=3D'mso-spacerun:yes'>=A0 </span>I might get into stocks slowly and =
cautiously
right now, but I’m certainly not ready to jump in with both =
feet.<o:p></o:p></span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>-- =
Curt<o:p></o:p></span></font></p>
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