Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Date: Thu, 5 Sep 2002 09:27:52 -0500
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Hi Sol,
The I-Watch site is just a way of looking at institutional v. retail =
buying and a summary of institutional buying vs. selling "interest." =
There's really no direct correlation between what you see here and the =
actual volume on the stock, but it does give a clue as to which =
direction the institutional buyers are leaning. I've attached a quick =
mark up of the monthly summary so you can see what I was looking at on =
the chart.=20
http://WallStreet-LLC.com/canslim/CSTRIWatch090402.jpg
The Institutional interest at 2:1 is actually a *good* thing if the =
interest is primarily buying interest. I only get nervous if most of the =
activity is institutional selling interest and/or most of the activity =
pushing the price up is retail.
Katherine
----- Original Message -----=20
From: Sol Mayer=20
To: canslim@lists.xmission.com=20
Sent: Thursday, September 05, 2002 9:01 AM
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Katherine=20
Firstly, thank you for your informative links almost everyone goes =
into my "favorites"=20
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.=20
Thanks=20
Katherine Malm wrote:=20
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"=20
To:=20
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"=20
| To:=20
| 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.
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<HTML><HEAD>
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<DIV>Hi Sol,</DIV>
<DIV> </DIV>
<DIV>The I-Watch site is just a way of looking at institutional v. =
retail buying=20
and a summary of institutional buying vs. selling "interest." There's =
really no=20
direct correlation between what you see here and the actual volume on =
the stock,=20
but it does give a clue as to which direction the institutional buyers =
are=20
leaning. I've attached a quick mark up of the monthly summary so you can =
see=20
what I was looking at on the chart. </DIV>
<DIV> </DIV>
<DIV><A=20
href=3D"http://WallStreet-LLC.com/canslim/CSTRIWatch090402.jpg">http://Wa=
llStreet-LLC.com/canslim/CSTRIWatch090402.jpg</A></DIV>
<DIV> </DIV>
<DIV>The Institutional interest at 2:1 is actually a *good* thing if the =
interest is primarily buying interest. I only get nervous if most of the =
activity is institutional selling interest and/or most of the activity =
pushing=20
the price up is retail.</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=3Dsmaye1211@yahoo.com href=3D"mailto:smaye1211@yahoo.com">Sol =
Mayer</A>=20
</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> Thursday, September 05, =
2002 9:01=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] CSTR CVH =
Failed=20
breakouts Post Analysis</DIV>
<DIV><BR></DIV>
<P>Katherine=20
<P>Firstly, thank you for your informative links almost everyone goes =
into my=20
"favorites"=20
<P>Concrerning the failed b/o of CSTR from 8/16 until the stk =
broke down=20
all the action was on low volume so I'd think even though the =
institutional=20
vol. was 3:1 on 8/22 I probably wouldn't have thought it to be =
distribution I=20
would have thought it was just consolidation of b/o on low =
vol.=20
. Also, the monthly institutional 2:1 volume I would have =
attributed to=20
buying the b/o Obviously I missed something can you clarify.=20
<P>Thanks=20
<P> <B><I>Katherine Malm <KMALM@EARTHLINK.NET></I></B>wrote:=20
<BLOCKQUOTE=20
style=3D"PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px =
solid">Hi=20
James,<BR><BR>I'll add to John's "thanks for a great post" as it's =
info like=20
this that<BR>helps bring out the more subtle clues when making =
buy/sell=20
decisions. I've<BR>only recently gotten into the habit of looking at =
hourly=20
charts, as DGO<BR>didn't have this feature in the older version. =
Your post=20
is a great insight<BR>as to how this can be helpful as a sanity =
check on=20
price/volume action.<BR><BR>Here's a resource I use regularly which =
also=20
helps pick up on the more<BR>subtle aspects of buying/selling in the =
market:<BR><BR>http://makeashorterlink.com/?J1B8643B1 (Thomspon =
I-Watch,=20
view 8/22)<BR><BR><BR>This shows the trend in institutional vs. =
retail=20
buying/selling over a<BR>period of time. The link above is for the =
view on=20
8/22, where it's clear<BR>there's heavy sell interest by =
institutions. (that=20
day, about 3:1<BR>Institutions:Retail activity, and 2:1 for the =
month to=20
that point.) Click to<BR>a monthly view and the heavy sell interest =
shows up=20
leading into the =
gap<BR>down.<BR><BR>http://makeashorterlink.com/?N6C8523B1=20
(view to date, 1 month)<BR><BR>Katherine<BR><BR>----- Original =
Message=20
-----<BR>From: "John Calkins" <JCALKINS@OLYPEN.COM><BR>To:=20
<CANSLIM@LISTS.XMISSION.COM><BR>Sent: Thursday, September 05, 2002 =
7:16=20
AM<BR>Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post=20
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=20
intraday charts before but didn't take them seriously<BR>| enough I =
guess. I=20
have noted before that big moves on high volume during<BR>| the day =
seemed=20
to be connected to some news or something, but was afraid<BR>it<BR>| =
was=20
just market makers or day trading. I can't get more than 10 days=20
ago<BR>at<BR>| BigCharts for a history on CSTR for the time frame =
but I=20
think I<BR>understand<BR>| that when you see a CWH pattern within a =
5 day=20
then watch for a handle to<BR>| form or breakdown or up in price =
with high=20
volume. Do you look at<BR>BigCharts<BR>| for this intraday charting =
and what=20
is you setting preference, such as 5<BR>or<BR>| 10 day/ 1 hour or 15 =
min.? I=20
had been getting my volume/price information<BR>| each day from my =
telephone=20
service with TD Waterhouse but it looks like<BR>your<BR>| intra-day =
charts=20
work much better.<BR>|<BR>|<BR>|<BR>|<BR>|<BR>|<BR>| ---- Original =
Message=20
-----<BR>| From: "James Bond" <JAMES_BOND_3RD@YAHOO.COM><BR>| To:=20
<CANSLIM@LISTS.XMISSION.COM><BR>| Sent: Tuesday, September 03, 2002 =
6:44=20
PM<BR>| Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post=20
Analysis<BR>|<BR>|<BR>| > CSTR presents an interesting example of =
the=20
importance<BR>| > of intraday charts. There is no clue of =
impending<BR>|=20
> trouble on the daily chart until the stock broke down.<BR>| =
> The=20
intraday chart, however, telegraphed the bad news<BR>| > well in=20
advance.<BR>| ><BR>| > Like many other people, I too cannot =
follow the=20
market<BR>| > during the day and have to check charts during =
the<BR>|=20
> evening. When I have a position open, I check the<BR>| > =
chart every=20
night with no exception.<BR>| ><BR>| > On Thursday, Aug 22, =
when this=20
rally was still<BR>| > advancing, I was surprised that evening to =
see=20
many<BR>| > bearish charts among the leading stocks. For =
example,<BR>|=20
> FCN had a deterioting relative strength, CCR made a<BR>| > =
new high=20
but its relative strength lagged, DORL gapped<BR>| > to a new =
high but=20
saw no progress in daily price<BR>| > (distribution), and PIXR =
had formed=20
an evening star<BR>| > candlestick pattern. If one or two stocks =
were=20
acting<BR>| > poorly it probably wouldn't have bothered me so =
much.<BR>|=20
> 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,=20
CSTR, DORL, NUTR, and PIXR. My first<BR>| > decision was to sell =
CCR,=20
DORL and PIXR at the open<BR>| > next morning, and but to keep =
CSTR and=20
NUTR.<BR>| ><BR>| > I changed my mind when I looked at the =
intraday=20
chart<BR>| > for CSTR. On the daily chart, CSTR had formed =
an<BR>| >=20
impeccible CwH base, with pp at 31.22. The breakout<BR>| > was on =
very=20
good volume, and reached a high of 34.2.<BR>| > Because of a =
little=20
overhead resistance (as mentioned<BR>| > by others), it was =
expected to=20
form a second handle<BR>| > before breaking out to new highs. =
This was=20
also noted<BR>| > by the issue of IBD the day after its breakout. =
It<BR>|=20
> consolidated between 32 and 34 the next 5 days, with<BR>| > =
nothing=20
extraordinary shown on the daily chart. I was<BR>| > several =
times=20
tempted to add shares when it pulled to<BR>| > low 32's but =
thougt better=20
of it. My plan was to add<BR>| > to my position when it broke out =
of the=20
second handle.<BR>| > I wasn't even thinking about selling it =
before=20
I<BR>| > looked at the intraday chart.<BR>| ><BR>| > I was =
alarmed=20
by the intraday chart. On the intraday<BR>| > chart, the =
consolidation=20
between 32 and 34 showed up<BR>| > as a five day CwH formation, =
with the=20
appropriate<BR>| > volume actions (large volume on left and right =
sides,<BR>| > dryups on bottom and in handle). Handle high was =
33.76<BR>|=20
> which was the intraday high on Thursday. Everything<BR>| > =
was great=20
except for the last hour or so of Thursday.<BR>| > Some heavy =
selling=20
came in and broke the handle<BR>| > formation (little did I know =
that the=20
Off Wall Street<BR>| > report was issued to its clients on that=20
Thursday).<BR>| > WON told us that heavy selling in handle was a =
sign=20
of<BR>| > trouble, and a good short can be entered when the<BR>| =
>=20
handle low was broken as the volume picked up. Of<BR>| > course =
he was=20
refering to daily charts. Intraday<BR>| > charts work the same =
way except=20
its validity is much<BR>| > shorter in duration. If the market =
were=20
healthy, I<BR>| > probably would have expected CSTR to pullback =
and=20
test<BR>| > the pp and a decision could be made after the =
test.<BR>| >=20
But with the other leading stocks weakening, there was<BR>| > no =
question=20
at that point that CSTR was going to break<BR>| > below its pivot =
point.=20
So I decided to sell it the<BR>| > next morning along with the =
others for=20
a small profit.<BR>| ><BR>| > I was kicking myself a few days =
later=20
when CSTR barely<BR>| > dipped below the pp and then rallied past =
my=20
sell<BR>| > price. But that lasted only one day. Thank =
goodness<BR>| >=20
the intraday chart gave me the only clue there was.<BR>| ><BR>| =
> As=20
far as CVH was concerned, I ruled it out as a buy<BR>| > =
candidate early=20
on. There were several issues with<BR>| > CVH. First was the lack =
of=20
confirming strength in the<BR>| > group - although the group =
ranking was=20
high, other<BR>| > stocks in the group either didn't have a =
proper=20
base<BR>| > (SIE), or had a wide and loose base (MME). I =
avoid<BR>| >=20
groups like this. Second CVH was overowned by<BR>| > institutions =
- - over=20
90% of ownership. WON's rule was<BR>| > less than 50% =
institutional=20
ownership. Third was a<BR>| > non-CANSLIM issue: CVH was being=20
investigated for<BR>| > overcharging government. Although it was =
an old=20
issue,<BR>| > as long as it remained unresolved, there could =
always<BR>|=20
> be surprises.<BR>| ><BR>| > One final note. I don't think =
taking=20
a 7% loss on<BR>| > every losing trade is ok. If one takes a 7% =
loss in=20
a<BR>| > string of 5 trades (a finite probability), that's a<BR>| =
>=20
third of capital lost - too much for any trading<BR>| > method,=20
considering how hard it is to have a 50%<BR>| > return (the =
amount needed=20
to come back). My<BR>| > understanding of it is that WON didn't =
intend 7%=20
to be<BR>| > where you place the stop order. Instead it's =
the<BR>| >=20
maximum allowable loss for a single trade. Usually it<BR>| > =
should take=20
a screwup to have a 7% loss. If one buys a<BR>| > stock =
correctly, a 2-3%=20
loss is achievable if the<BR>| > stock fails. Sometimes one can =
even exit=20
with a small<BR>| > profit if the chart is read=20
correctly.<BR></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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