Go to Jeff Salisbury LWGate Home Page.From: "david frank" <camelot.homes@charter.net>
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Date: Fri, 6 Sep 2002 18:12:19 -0500
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Katherine, I am confused about this CSTR Thomson graph. It shows heavy =
institutional selling on 8/26/02. which was an nice low volume up day, =
and heavy institutional buying on 8/27/02, which was that heavy volume, =
gapped down day, losing up to 20%+. Are these graphs really helpful or =
am I missing it all. Thank you, dave
----- Original Message -----=20
From: Katherine Malm=20
To: canslim@lists.xmission.com=20
Sent: Thursday, September 05, 2002 9:27 AM
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
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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<DIV><FONT face=3DArial size=3D2>Katherine, I am confused about this =
CSTR Thomson=20
graph. It shows heavy institutional selling on 8/26/02. which was an =
nice low=20
volume up day, and heavy institutional buying on 8/27/02, =
which was=20
that heavy volume, gapped down day, losing up to 20%+. Are these graphs =
really=20
helpful or am I missing it all. Thank you, dave</FONT></DIV>
<BLOCKQUOTE dir=3Dltr=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=3Dkmalm@earthlink.net =
href=3D"mailto:kmalm@earthlink.net">Katherine=20
Malm</A> </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 9:27=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>
<DIV>Hi Sol,</DIV>
<DIV> </DIV>
<DIV>The I-Watch site is just a way of looking at institutional v. =
retail=20
buying and a summary of institutional buying vs. selling "interest." =
There's=20
really no direct correlation between what you see here and the actual =
volume=20
on the stock, but it does give a clue as to which direction the =
institutional=20
buyers are leaning. I've attached a quick mark up of the monthly =
summary so=20
you can see 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=20
interest is primarily buying interest. I only get nervous if most of =
the=20
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>=
=20
</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=20
my "favorites"=20
<P>Concrerning the failed b/o of CSTR from 8/16 until the stk =
broke=20
down all the action was on low volume so I'd think even though the=20
institutional vol. was 3:1 on 8/22 I probably wouldn't have thought =
it to be=20
distribution I would have thought it was just consolidation of=20
b/o on low vol. . Also, the monthly institutional 2:1 =
volume I=20
would have attributed to buying the b/o Obviously I missed =
something=20
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=20
like this that<BR>helps bring out the more subtle clues when =
making=20
buy/sell decisions. I've<BR>only recently gotten into the habit of =
looking=20
at hourly charts, as DGO<BR>didn't have this feature in the older =
version.=20
Your post is a great insight<BR>as to how this can be helpful as a =
sanity=20
check on price/volume action.<BR><BR>Here's a resource I use =
regularly=20
which also helps pick up on the more<BR>subtle aspects of =
buying/selling=20
in the market:<BR><BR>http://makeashorterlink.com/?J1B8643B1 =
(Thomspon=20
I-Watch, view 8/22)<BR><BR><BR>This shows the trend in =
institutional vs.=20
retail buying/selling over a<BR>period of time. The link above is =
for the=20
view on 8/22, where it's clear<BR>there's heavy sell interest by=20
institutions. (that day, about 3:1<BR>Institutions:Retail =
activity, and=20
2:1 for the month to that point.) Click to<BR>a monthly view and =
the heavy=20
sell interest shows up leading into the=20
gap<BR>down.<BR><BR>http://makeashorterlink.com/?N6C8523B1 (view =
to date,=20
1 month)<BR><BR>Katherine<BR><BR>----- Original Message =
- -----<BR>From:=20
"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=20
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.=20
I have noted before that big moves on high volume during<BR>| the =
day=20
seemed to be connected to some news or something, but was=20
afraid<BR>it<BR>| was just market makers or day trading. I can't =
get more=20
than 10 days ago<BR>at<BR>| BigCharts for a history on CSTR for =
the time=20
frame but I think I<BR>understand<BR>| that when you see a CWH =
pattern=20
within a 5 day then watch for a handle to<BR>| form or breakdown =
or up in=20
price with high volume. Do you look at<BR>BigCharts<BR>| for this =
intraday=20
charting and what is you setting preference, such as 5<BR>or<BR>| =
10 day/=20
1 hour or 15 min.? I had been getting my volume/price =
information<BR>|=20
each day from my telephone service with TD Waterhouse but it looks =
like<BR>your<BR>| intra-day charts work much=20
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=20
impending<BR>| > trouble on the daily chart until the stock =
broke=20
down.<BR>| > The intraday chart, however, telegraphed the bad =
news<BR>|=20
> well in advance.<BR>| ><BR>| > Like many other people, =
I too=20
cannot follow the market<BR>| > during the day and have to =
check charts=20
during the<BR>| > evening. When I have a position open, I check =
the<BR>| > chart every night with no exception.<BR>| ><BR>| =
> On=20
Thursday, Aug 22, when this rally was still<BR>| > advancing, I =
was=20
surprised that evening to see many<BR>| > bearish charts among =
the=20
leading stocks. For example,<BR>| > FCN had a deterioting =
relative=20
strength, CCR made a<BR>| > new high but its relative strength =
lagged,=20
DORL gapped<BR>| > to a new high but saw no progress in daily=20
price<BR>| > (distribution), and PIXR had formed an evening =
star<BR>|=20
> candlestick pattern. If one or two stocks were acting<BR>| =
>=20
poorly it probably wouldn't have bothered me so much.<BR>| > =
When most=20
of the leading stocks were showing signs of<BR>| > weakness the =
market=20
was in trouble. At that time I was<BR>| > long CCR, CSTR, DORL, =
NUTR,=20
and PIXR. My first<BR>| > decision was to sell CCR, DORL and =
PIXR at=20
the open<BR>| > next morning, and but to keep CSTR and =
NUTR.<BR>|=20
><BR>| > I changed my mind when I looked at the intraday =
chart<BR>|=20
> for CSTR. On the daily chart, CSTR had formed an<BR>| > =
impeccible=20
CwH base, with pp at 31.22. The breakout<BR>| > was on very =
good=20
volume, and reached a high of 34.2.<BR>| > Because of a little =
overhead=20
resistance (as mentioned<BR>| > by others), it was expected to =
form a=20
second handle<BR>| > before breaking out to new highs. This was =
also=20
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>| =
>=20
nothing extraordinary shown on the daily chart. I was<BR>| > =
several=20
times tempted to add shares when it pulled to<BR>| > low 32's =
but=20
thougt better of it. My plan was to add<BR>| > to my position =
when it=20
broke out of the second handle.<BR>| > I wasn't even thinking =
about=20
selling it before I<BR>| > looked at the intraday chart.<BR>| =
><BR>|=20
> I was alarmed by the intraday chart. On the intraday<BR>| =
> chart,=20
the consolidation between 32 and 34 showed up<BR>| > as a five =
day CwH=20
formation, with the appropriate<BR>| > volume actions (large =
volume on=20
left and right sides,<BR>| > dryups on bottom and in handle). =
Handle=20
high was 33.76<BR>| > which was the intraday high on Thursday.=20
Everything<BR>| > was great except for the last hour or so of=20
Thursday.<BR>| > Some heavy selling came in and broke the =
handle<BR>|=20
> formation (little did I know that the Off Wall Street<BR>| =
>=20
report was issued to its clients on that Thursday).<BR>| > WON =
told us=20
that heavy selling in handle was a sign of<BR>| > trouble, and =
a good=20
short can be entered when the<BR>| > handle low was broken as =
the=20
volume picked up. Of<BR>| > course he was refering to daily =
charts.=20
Intraday<BR>| > charts work the same way except its validity is =
much<BR>| > shorter in duration. If the market were healthy, =
I<BR>|=20
> probably would have expected CSTR to pullback and test<BR>| =
> the=20
pp and a decision could be made after the test.<BR>| > But with =
the=20
other leading stocks weakening, there was<BR>| > no question at =
that=20
point that CSTR was going to break<BR>| > below its pivot =
point. So I=20
decided to sell it the<BR>| > next morning along with the =
others for a=20
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>|=20
> As far as CVH was concerned, I ruled it out as a buy<BR>| =
>=20
candidate early on. There were several issues with<BR>| > CVH. =
First=20
was the lack of confirming strength in the<BR>| > group - =
although the=20
group ranking was high, other<BR>| > stocks in the group either =
didn't=20
have a proper base<BR>| > (SIE), or had a wide and loose base =
(MME). I=20
avoid<BR>| > groups like this. Second CVH was overowned by<BR>| =
>=20
institutions - over 90% of ownership. WON's rule was<BR>| > =
less than=20
50% institutional ownership. Third was a<BR>| > non-CANSLIM =
issue: CVH=20
was being investigated for<BR>| > overcharging government. =
Although it=20
was an old issue,<BR>| > as long as it remained unresolved, =
there could=20
always<BR>| > be surprises.<BR>| ><BR>| > One final note. =
I don't=20
think taking a 7% loss on<BR>| > every losing trade is ok. If =
one takes=20
a 7% loss in a<BR>| > string of 5 trades (a finite =
probability), that's=20
a<BR>| > third of capital lost - too much for any trading<BR>| =
>=20
method, considering how hard it is to have a 50%<BR>| > return =
(the=20
amount needed to come back). My<BR>| > understanding of it is =
that WON=20
didn't intend 7% to be<BR>| > where you place the stop order. =
Instead=20
it's the<BR>| > maximum allowable loss for a single trade. =
Usually=20
it<BR>| > should take a screwup to have a 7% loss. If one buys =
a<BR>|=20
> stock correctly, a 2-3% loss is achievable if the<BR>| > =
stock=20
fails. Sometimes one can even exit with a small<BR>| > profit =
if the=20
chart is read=20
correctly.<BR></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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