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Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Date: Thu, 5 Sep 2002 07:01:41 -0700 (PDT)
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- --0-2032063560-1031234501=:10885 Content-Type: text/plain; charset=us-ascii Katherine Firstly, thank you for your informative links almost everyone goes into my "favorites" Concrerning the failed b/o of CSTR from 8/16 until the stk broke down all the action was on low volume so I'd think even though the institutional vol. was 3:1 on 8/22 I probably wouldn't have thought it to be distribution I would have thought it was just consolidation of b/o on low vol. . Also, the monthly institutional 2:1 volume I would have attributed to buying the b/o Obviously I missed something can you clarify. Thanks Katherine Malm wrote:Hi James, I'll add to John's "thanks for a great post" as it's info like this that helps bring out the more subtle clues when making buy/sell decisions. I've only recently gotten into the habit of looking at hourly charts, as DGO didn't have this feature in the older version. Your post is a great insight as to how this can be helpful as a sanity check on price/volume action. Here's a resource I use regularly which also helps pick up on the more subtle aspects of buying/selling in the market: http://makeashorterlink.com/?J1B8643B1 (Thomspon I-Watch, view 8/22) This shows the trend in institutional vs. retail buying/selling over a period of time. The link above is for the view on 8/22, where it's clear there's heavy sell interest by institutions. (that day, about 3:1 Institutions:Retail activity, and 2:1 for the month to that point.) Click to a monthly view and the heavy sell interest shows up leading into the gap down. http://makeashorterlink.com/?N6C8523B1 (view to date, 1 month) Katherine - ----- Original Message ----- From: "John Calkins" To: Sent: Thursday, September 05, 2002 7:16 AM Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis | Hi James, | | Thanks for your incredible responce to my Failed Breakout and Stops! I've | tried to look at the intraday charts before but didn't take them seriously | enough I guess. I have noted before that big moves on high volume during | the day seemed to be connected to some news or something, but was afraid it | was just market makers or day trading. I can't get more than 10 days ago at | BigCharts for a history on CSTR for the time frame but I think I understand | that when you see a CWH pattern within a 5 day then watch for a handle to | form or breakdown or up in price with high volume. Do you look at BigCharts | for this intraday charting and what is you setting preference, such as 5 or | 10 day/ 1 hour or 15 min.? I had been getting my volume/price information | each day from my telephone service with TD Waterhouse but it looks like your | intra-day charts work much better. | | | | | | | ---- Original Message ----- | From: "James Bond" | To: | Sent: Tuesday, September 03, 2002 6:44 PM | Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis | | | > CSTR presents an interesting example of the importance | > of intraday charts. There is no clue of impending | > trouble on the daily chart until the stock broke down. | > The intraday chart, however, telegraphed the bad news | > well in advance. | > | > Like many other people, I too cannot follow the market | > during the day and have to check charts during the | > evening. When I have a position open, I check the | > chart every night with no exception. | > | > On Thursday, Aug 22, when this rally was still | > advancing, I was surprised that evening to see many | > bearish charts among the leading stocks. For example, | > FCN had a deterioting relative strength, CCR made a | > new high but its relative strength lagged, DORL gapped | > to a new high but saw no progress in daily price | > (distribution), and PIXR had formed an evening star | > candlestick pattern. If one or two stocks were acting | > poorly it probably wouldn't have bothered me so much. | > When most of the leading stocks were showing signs of | > weakness the market was in trouble. At that time I was | > long CCR, CSTR, DORL, NUTR, and PIXR. My first | > decision was to sell CCR, DORL and PIXR at the open | > next morning, and but to keep CSTR and NUTR. | > | > I changed my mind when I looked at the intraday chart | > for CSTR. On the daily chart, CSTR had formed an | > impeccible CwH base, with pp at 31.22. The breakout | > was on very good volume, and reached a high of 34.2. | > Because of a little overhead resistance (as mentioned | > by others), it was expected to form a second handle | > before breaking out to new highs. This was also noted | > by the issue of IBD the day after its breakout. It | > consolidated between 32 and 34 the next 5 days, with | > nothing extraordinary shown on the daily chart. I was | > several times tempted to add shares when it pulled to | > low 32's but thougt better of it. My plan was to add | > to my position when it broke out of the second handle. | > I wasn't even thinking about selling it before I | > looked at the intraday chart. | > | > I was alarmed by the intraday chart. On the intraday | > chart, the consolidation between 32 and 34 showed up | > as a five day CwH formation, with the appropriate | > volume actions (large volume on left and right sides, | > dryups on bottom and in handle). Handle high was 33.76 | > which was the intraday high on Thursday. Everything | > was great except for the last hour or so of Thursday. | > Some heavy selling came in and broke the handle | > formation (little did I know that the Off Wall Street | > report was issued to its clients on that Thursday). | > WON told us that heavy selling in handle was a sign of | > trouble, and a good short can be entered when the | > handle low was broken as the volume picked up. Of | > course he was refering to daily charts. Intraday | > charts work the same way except its validity is much | > shorter in duration. If the market were healthy, I | > probably would have expected CSTR to pullback and test | > the pp and a decision could be made after the test. | > But with the other leading stocks weakening, there was | > no question at that point that CSTR was going to break | > below its pivot point. So I decided to sell it the | > next morning along with the others for a small profit. | > | > I was kicking myself a few days later when CSTR barely | > dipped below the pp and then rallied past my sell | > price. But that lasted only one day. Thank goodness | > the intraday chart gave me the only clue there was. | > | > As far as CVH was concerned, I ruled it out as a buy | > candidate early on. There were several issues with | > CVH. First was the lack of confirming strength in the | > group - although the group ranking was high, other | > stocks in the group either didn't have a proper base | > (SIE), or had a wide and loose base (MME). I avoid | > groups like this. Second CVH was overowned by | > institutions - over 90% of ownership. WON's rule was | > less than 50% institutional ownership. Third was a | > non-CANSLIM issue: CVH was being investigated for | > overcharging government. Although it was an old issue, | > as long as it remained unresolved, there could always | > be surprises. | > | > One final note. I don't think taking a 7% loss on | > every losing trade is ok. If one takes a 7% loss in a | > string of 5 trades (a finite probability), that's a | > third of capital lost - too much for any trading | > method, considering how hard it is to have a 50% | > return (the amount needed to come back). My | > understanding of it is that WON didn't intend 7% to be | > where you place the stop order. Instead it's the | > maximum allowable loss for a single trade. Usually it | > should take a screwup to have a 7% loss. If one buys a | > stock correctly, a 2-3% loss is achievable if the | > stock fails. Sometimes one can even exit with a small | > profit if the chart is read correctly. | > | > __________________________________________________ | > Do You Yahoo!? | > Yahoo! Finance - Get real-time stock quotes | > http://finance.yahoo.com | > | > - | > -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. - --------------------------------- Do You Yahoo!? Yahoo! Finance - Get real-time stock quotes - --0-2032063560-1031234501=:10885 Content-Type: text/html; charset=us-ascii <P>Katherine <P>Firstly, thank you for your informative links almost everyone goes into my "favorites" <P>Concrerning the failed b/o of CSTR from 8/16 until the stk broke down all the action was on low volume so I'd think even though the institutional vol. was 3:1 on 8/22 I probably wouldn't have thought it to be distribution I would have thought it was just consolidation of b/o on low vol. . Also, the monthly institutional 2:1 volume I would have attributed to buying the b/o Obviously I missed something can you clarify. <P>Thanks <P> <B><I>Katherine Malm <KMALM@EARTHLINK.NET></I></B>wrote: <BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid">Hi James,<BR><BR>I'll add to John's "thanks for a great post" as it's info like this that<BR>helps bring out the more subtle clues when making buy/sell decisions. I've<BR>only recently gotten into the habit of looking at hourly charts, as DGO<BR>didn't have this feature in the older version. Your post is a great insight<BR>as to how this can be helpful as a sanity check on price/volume action.<BR><BR>Here's a resource I use regularly which also helps pick up on the more<BR>subtle aspects of buying/selling in the market:<BR><BR>http://makeashorterlink.com/?J1B8643B1 (Thomspon I-Watch, view 8/22)<BR><BR><BR>This shows the trend in institutional vs. retail buying/selling over a<BR>period of time. The link above is for the view on 8/22, where it's clear<BR>there's heavy sell interest by institutions. (that day, about 3:1<BR>Institutions:Retail activity, and 2:1 for the month to that point.) Click to<BR>a monthly view and the heavy sell interest shows up leading into the gap<BR>down.<BR><BR>http://makeashorterlink.com/?N6C8523B1 (view to date, 1 month)<BR><BR>Katherine<BR><BR>----- Original Message -----<BR>From: "John Calkins" <JCALKINS@OLYPEN.COM><BR>To: <CANSLIM@LISTS.XMISSION.COM><BR>Sent: Thursday, September 05, 2002 7:16 AM<BR>Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis<BR><BR><BR>| Hi James,<BR>|<BR>| Thanks for your incredible responce to my Failed Breakout and Stops! I've<BR>| tried to look at the intraday charts before but didn't take them seriously<BR>| enough I guess. I have noted before that big moves on high volume during<BR>| the day seemed to be connected to some news or something, but was afraid<BR>it<BR>| was just market makers or day trading. I can't get more than 10 days ago<BR>at<BR>| BigCharts for a history on CSTR for the time frame but I think I<BR>understand<BR>| that when you see a CWH pattern within a 5 day then watch for a handle to<BR>| form or breakdown or up in price with high volume. Do you look at<BR>BigCharts<BR>| for this intraday charting and what is you setting preference, such as 5<BR>or<BR>| 10 day/ 1 hour or 15 min.? I had been getting my volume/price information<BR>| each day from my telephone service with TD Waterhouse but it looks like<BR>your<BR>| intra-day charts work much better.<BR>|<BR>|<BR>|<BR>|<BR>|<BR>|<BR>| ---- Original Message -----<BR>| From: "James Bond" <JAMES_BOND_3RD@YAHOO.COM><BR>| To: <CANSLIM@LISTS.XMISSION.COM><BR>| Sent: Tuesday, September 03, 2002 6:44 PM<BR>| Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis<BR>|<BR>|<BR>| > CSTR presents an interesting example of the importance<BR>| > of intraday charts. There is no clue of impending<BR>| > trouble on the daily chart until the stock broke down.<BR>| > The intraday chart, however, telegraphed the bad news<BR>| > well in advance.<BR>| ><BR>| > Like many other people, I too cannot follow the market<BR>| > during the day and have to check charts during the<BR>| > evening. When I have a position open, I check the<BR>| > chart every night with no exception.<BR>| ><BR>| > On Thursday, Aug 22, when this rally was still<BR>| > advancing, I was surprised that evening to see many<BR>| > bearish charts among the leading stocks. For example,<BR>| > FCN had a deterioting relative strength, CCR made a<BR>| > new high but its relative strength lagged, DORL gapped<BR>| > to a new high but saw no progress in daily price<BR>| > (distribution), and PIXR had formed an evening star<BR>| > candlestick pattern. If one or two stocks were acting<BR>| > poorly it probably wouldn't have bothered me so much.<BR>| > When most of the leading stocks were showing signs of<BR>| > weakness the market was in trouble. At that time I was<BR>| > long CCR, CSTR, DORL, NUTR, and PIXR. My first<BR>| > decision was to sell CCR, DORL and PIXR at the open<BR>| > next morning, and but to keep CSTR and NUTR.<BR>| ><BR>| > I changed my mind when I looked at the intraday chart<BR>| > for CSTR. On the daily chart, CSTR had formed an<BR>| > impeccible CwH base, with pp at 31.22. The breakout<BR>| > was on very good volume, and reached a high of 34.2.<BR>| > Because of a little overhead resistance (as mentioned<BR>| > by others), it was expected to form a second handle<BR>| > before breaking out to new highs. This was also noted<BR>| > by the issue of IBD the day after its breakout. It<BR>| > consolidated between 32 and 34 the next 5 days, with<BR>| > nothing extraordinary shown on the daily chart. I was<BR>| > several times tempted to add shares when it pulled to<BR>| > low 32's but thougt better of it. My plan was to add<BR>| > to my position when it broke out of the second handle.<BR>| > I wasn't even thinking about selling it before I<BR>| > looked at the intraday chart.<BR>| ><BR>| > I was alarmed by the intraday chart. On the intraday<BR>| > chart, the consolidation between 32 and 34 showed up<BR>| > as a five day CwH formation, with the appropriate<BR>| > volume actions (large volume on left and right sides,<BR>| > dryups on bottom and in handle). Handle high was 33.76<BR>| > which was the intraday high on Thursday. Everything<BR>| > was great except for the last hour or so of Thursday.<BR>| > Some heavy selling came in and broke the handle<BR>| > formation (little did I know that the Off Wall Street<BR>| > report was issued to its clients on that Thursday).<BR>| > WON told us that heavy selling in handle was a sign of<BR>| > trouble, and a good short can be entered when the<BR>| > handle low was broken as the volume picked up. Of<BR>| > course he was refering to daily charts. Intraday<BR>| > charts work the same way except its validity is much<BR>| > shorter in duration. If the market were healthy, I<BR>| > probably would have expected CSTR to pullback and test<BR>| > the pp and a decision could be made after the test.<BR>| > But with the other leading stocks weakening, there was<BR>| > no question at that point that CSTR was going to break<BR>| > below its pivot point. So I decided to sell it the<BR>| > next morning along with the others for a small profit.<BR>| ><BR>| > I was kicking myself a few days later when CSTR barely<BR>| > dipped below the pp and then rallied past my sell<BR>| > price. But that lasted only one day. Thank goodness<BR>| > the intraday chart gave me the only clue there was.<BR>| ><BR>| > As far as CVH was concerned, I ruled it out as a buy<BR>| > candidate early on. There were several issues with<BR>| > CVH. First was the lack of confirming strength in the<BR>| > group - although the group ranking was high, other<BR>| > stocks in the group either didn't have a proper base<BR>| > (SIE), or had a wide and loose base (MME). I avoid<BR>| > groups like this. Second CVH was overowned by<BR>| > institutions - over 90% of ownership. WON's rule was<BR>| > less than 50% institutional ownership. Third was a<BR>| > non-CANSLIM issue: CVH was being investigated for<BR>| > overcharging government. Although it was an old issue,<BR>| > as long as it remained unresolved, there could always<BR>| > be surprises.<BR>| ><BR>| > One final note. I don't think taking a 7% loss on<BR>| > every losing trade is ok. If one takes a 7% loss in a<BR>| > string of 5 trades (a finite probability), that's a<BR>| > third of capital lost - too much for any trading<BR>| > method, considering how hard it is to have a 50%<BR>| > return (the amount needed to come back). My<BR>| > understanding of it is that WON didn't intend 7% to be<BR>| > where you place the stop order. Instead it's the<BR>| > maximum allowable loss for a single trade. Usually it<BR>| > should take a screwup to have a 7% loss. If one buys a<BR>| > stock correctly, a 2-3% loss is achievable if the<BR>| > stock fails. Sometimes one can even exit with a small<BR>| > profit if the chart is read correctly.<BR>| ><BR>| > __________________________________________________<BR>| > Do You Yahoo!?<BR>| > Yahoo! Finance - Get real-time stock quotes<BR>| > http://finance.yahoo.com<BR>| ><BR>| > -<BR>| > -To subscribe/unsubscribe, email "majordomo@xmission.com"<BR>| > -In the email body, write "subscribe canslim" or<BR>| > -"unsubscribe canslim". Do not use quotes in your email.<BR>| ><BR>|<BR>|<BR>| -<BR>| -To subscribe/unsubscribe, email "majordomo@xmission.com"<BR>| -In the email body, write "subscribe canslim" or<BR>| -"unsubscribe canslim". Do not use quotes in your email.<BR><BR><BR>-<BR>-To subscribe/unsubscribe, email "majordomo@xmission.com"<BR>-In the email body, write "subscribe canslim" or<BR>-"unsubscribe canslim". Do not use quotes in your email.</BLOCKQUOTE><p><br><hr size=1><b>Do You Yahoo!?</b><br> <a href="http://rd.yahoo.com/finance/mailsig/new/*http://finance.yahoo.com">Yahoo! Finance</a> - Get real-time stock quotes - --0-2032063560-1031234501=:10885-- - - - -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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