Go to Jeff Salisbury LWGate Home Page.From: "Kelly Short" <kelly.short@fw.us.neoris.com>
Subject: RE: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Date: Mon, 9 Sep 2002 09:14:52 -0500
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Katherine,
=20
What a great service! I can't believe it's free. I also can't believe =
it's not butter! (Whew! Did SBUX give me a quad this morning?)
- -----Original Message-----
From: Katherine Malm [mailto:kmalm@earthlink.net]
Sent: Friday, September 06, 2002 6:18 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
Hi Dave,
=20
Ah...and therein lies the rub..... WON talks about institutions "handing =
off stock at the top"... I think that's what the I-Watch chart =
demonstrates. See the price action on the stock leading into 8/26? =
During that time, there was a lot of institutional sell interest. On the =
gap down day and for a few days after, the institutions were sending out =
buy interest messages. If nobody were buying, the price would've dropped =
like a stone and never recovered. No way to tell *who* the sellers and =
buyers were, but shares were certainly changing hands.
=20
Just as a "disclaimer" of sorts, the I-Watch site only shows buy and =
sell interest messages, so it's not going to be a completely accurate =
picture of the activity. It's good enough to give clues, however and so =
I find it useful. Here's the link that gives a full explanation of the =
indicators and how to use them: =
http://iw.thomsonfn.com/iwatch/help/iw_advantages.htm
=20
Katherine
- ----- Original Message -----=20
From: david frank <mailto:camelot.homes@charter.net> =20
To: canslim@lists.xmission.com=20
Sent: Friday, September 06, 2002 6:12 PM
Subject: Re: [CANSLIM] CSTR CVH Failed breakouts Post Analysis
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 <mailto:kmalm@earthlink.net> 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,
=20
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
=20
http://WallStreet-LLC.com/canslim/CSTRIWatch090402.jpg
=20
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.
=20
Katherine
- ----- Original Message -----=20
From: Sol <mailto:smaye1211@yahoo.com> 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.
_____ =20
For your protection, this e-mail message has been scanned for viruses.=20
Visit us at http://www.neoris.com/=20
_____ =20
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<DIV><SPAN class=3D617441314-09092002><FONT face=3DArial color=3D#0000ff =
size=3D2>Katherine,</FONT></SPAN></DIV>
<DIV><SPAN class=3D617441314-09092002></SPAN> </DIV>
<DIV><SPAN class=3D617441314-09092002><FONT face=3DArial color=3D#0000ff =
size=3D2>What a=20
great service! I can't believe it's free. I also can't believe it's not =
butter!=20
(Whew! Did SBUX give me a quad this morning?)</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
size=3D2>-----Original Message-----<BR><B>From:</B> Katherine Malm=20
[mailto:kmalm@earthlink.net]<BR><B>Sent:</B> Friday, September 06, =
2002 6:18=20
PM<BR><B>To:</B> canslim@lists.xmission.com<BR><B>Subject:</B> Re: =
[CANSLIM]=20
CSTR CVH Failed breakouts Post Analysis<BR><BR></FONT></DIV>
<DIV>Hi Dave,</DIV>
<DIV> </DIV>
<DIV>Ah...and therein lies the rub..... WON talks about institutions =
"handing=20
off stock at the top"... I think that's what the I-Watch chart =
demonstrates.=20
See the price action on the stock leading into 8/26? During that time, =
there=20
was a lot of institutional sell interest. On the gap down day and for =
a few=20
days after, the institutions were sending out buy interest messages. =
If nobody=20
were buying, the price would've dropped like a stone and never =
recovered. No=20
way to tell *who* the sellers and buyers were, but shares were =
certainly=20
changing hands.</DIV>
<DIV> </DIV>
<DIV>Just as a "disclaimer" of sorts, the I-Watch site only shows buy =
and sell=20
interest messages, so it's not going to be a completely accurate =
picture of=20
the activity. It's good enough to give clues, however and so I find it =
useful. Here's the link that gives a full explanation of the =
indicators and how to use them: <A=20
=
href=3D"http://iw.thomsonfn.com/iwatch/help/iw_advantages.htm">http://iw.=
thomsonfn.com/iwatch/help/iw_advantages.htm</A></DIV>
<DIV> </DIV>
<DIV>Katherine</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=3Dcamelot.homes@charter.net=20
href=3D"mailto:camelot.homes@charter.net">david frank</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>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, September 06, =
2002 6:12=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] CSTR =
CVH Failed=20
breakouts Post Analysis</DIV>
<DIV><BR></DIV>
<DIV><FONT face=3DArial size=3D2>Katherine, I am confused about this =
CSTR=20
Thomson graph. It shows heavy institutional selling on 8/26/02. =
which was an=20
nice low volume up day, and heavy institutional buying on =
8/27/02,=20
which was that heavy volume, gapped down day, losing up to 20%+. Are =
these=20
graphs really 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=20
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=20
9:27 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] CSTR =
CVH=20
Failed 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."=20
There's really no direct correlation between what you see here and =
the=20
actual volume on the stock, but it does give a clue as to which =
direction=20
the institutional buyers are leaning. I've attached a quick mark =
up of the=20
monthly summary so 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=20
pushing 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=20
Mayer</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
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=20
9:01 AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] =
CSTR CVH=20
Failed breakouts Post Analysis</DIV>
<DIV><BR></DIV>
<P>Katherine=20
<P>Firstly, thank you for your informative links almost everyone =
goes=20
into my "favorites"=20
<P>Concrerning the failed b/o of CSTR from 8/16 until the =
stk=20
broke 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=20
to be distribution I would have thought it was just=20
consolidation of b/o on low vol. . Also, the =
monthly=20
institutional 2:1 volume I would have attributed to buying the =
b/o =20
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=20
info like this that<BR>helps bring out the more subtle clues =
when=20
making buy/sell decisions. I've<BR>only recently gotten into =
the habit=20
of looking at hourly charts, as DGO<BR>didn't have this =
feature in the=20
older version. Your post is a great insight<BR>as to how this =
can be=20
helpful as a sanity check on price/volume =
action.<BR><BR>Here's a=20
resource I use regularly which also helps pick up on the=20
more<BR>subtle aspects of buying/selling in the=20
market:<BR><BR>http://makeashorterlink.com/?J1B8643B1 =
(Thomspon=20
I-Watch, view 8/22)<BR><BR><BR>This shows the trend in =
institutional=20
vs. retail buying/selling over a<BR>period of time. The link =
above is=20
for the view on 8/22, where it's clear<BR>there's heavy sell =
interest=20
by institutions. (that day, about 3:1<BR>Institutions:Retail =
activity,=20
and 2:1 for the month to that point.) Click to<BR>a monthly =
view and=20
the heavy sell interest shows up leading into the=20
gap<BR>down.<BR><BR>http://makeashorterlink.com/?N6C8523B1 =
(view to=20
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=20
7:16 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=20
the intraday charts before but didn't take them seriously<BR>| =
enough=20
I guess. I have noted before that big moves on high volume =
during<BR>|=20
the day 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=20
more than 10 days ago<BR>at<BR>| BigCharts for a history on =
CSTR for=20
the time frame but I think I<BR>understand<BR>| that when you =
see a=20
CWH pattern within a 5 day then watch for a handle to<BR>| =
form or=20
breakdown or up in price with high volume. Do you look=20
at<BR>BigCharts<BR>| for this intraday charting and what is =
you=20
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=20
telephone service with TD Waterhouse but it looks =
like<BR>your<BR>|=20
intra-day charts work much =
better.<BR>|<BR>|<BR>|<BR>|<BR>|<BR>|<BR>|=20
---- Original Message -----<BR>| From: "James Bond"=20
<JAMES_BOND_3RD@YAHOO.COM><BR>| To: =
<CANSLIM@LISTS.XMISSION.COM><BR>|=20
Sent: Tuesday, September 03, 2002 6:44 PM<BR>| Subject: Re: =
[CANSLIM]=20
CSTR CVH Failed breakouts Post Analysis<BR>|<BR>|<BR>| > =
CSTR=20
presents an interesting example of the importance<BR>| > of =
intraday charts. There is no clue of impending<BR>| > =
trouble on=20
the daily chart until the stock broke down.<BR>| > The =
intraday=20
chart, however, telegraphed the bad news<BR>| > well in=20
advance.<BR>| ><BR>| > Like many other people, I too =
cannot=20
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=20
the<BR>| > chart every night with no exception.<BR>| =
><BR>| >=20
On Thursday, Aug 22, when this rally was still<BR>| > =
advancing, I=20
was surprised that evening to see many<BR>| > bearish =
charts among=20
the leading stocks. For example,<BR>| > FCN had a =
deterioting=20
relative strength, CCR made a<BR>| > new high but its =
relative=20
strength lagged, DORL gapped<BR>| > to a new high but saw =
no=20
progress in daily price<BR>| > (distribution), and PIXR had =
formed=20
an evening star<BR>| > candlestick pattern. If one or two =
stocks=20
were acting<BR>| > poorly it probably wouldn't have =
bothered me so=20
much.<BR>| > When most of the leading stocks were showing =
signs=20
of<BR>| > weakness the market was in trouble. At that time =
I=20
was<BR>| > long CCR, CSTR, DORL, NUTR, and PIXR. My =
first<BR>| >=20
decision was to sell CCR, DORL and PIXR at the open<BR>| > =
next=20
morning, and but to keep CSTR and NUTR.<BR>| ><BR>| > I =
changed=20
my mind when I looked at the intraday chart<BR>| > for =
CSTR. On the=20
daily chart, CSTR had formed an<BR>| > impeccible CwH base, =
with pp=20
at 31.22. The breakout<BR>| > was on very good volume, and =
reached=20
a high of 34.2.<BR>| > Because of a little overhead =
resistance (as=20
mentioned<BR>| > by others), it was expected to form a =
second=20
handle<BR>| > before breaking out to new highs. This was =
also=20
noted<BR>| > by the issue of IBD the day after its =
breakout.=20
It<BR>| > consolidated between 32 and 34 the next 5 days, =
with<BR>|=20
> nothing extraordinary shown on the daily chart. I =
was<BR>| >=20
several times tempted to add shares when it pulled to<BR>| =
> low=20
32's but thougt better of it. My plan was to add<BR>| > to =
my=20
position when it broke out of the second handle.<BR>| > I =
wasn't=20
even thinking about selling it before I<BR>| > looked at =
the=20
intraday chart.<BR>| ><BR>| > I was alarmed by the =
intraday=20
chart. On the intraday<BR>| > chart, the consolidation =
between 32=20
and 34 showed up<BR>| > as a five day CwH formation, with =
the=20
appropriate<BR>| > volume actions (large volume on left and =
right=20
sides,<BR>| > dryups on bottom and in handle). Handle high =
was=20
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=20
handle<BR>| > formation (little did I know that the Off =
Wall=20
Street<BR>| > report was issued to its clients on that=20
Thursday).<BR>| > WON told us that heavy selling in handle =
was a=20
sign of<BR>| > trouble, and a good short can be entered =
when=20
the<BR>| > handle low was broken as the volume picked up. =
Of<BR>|=20
> course he was refering to daily charts. Intraday<BR>| =
> charts=20
work the same way except its validity is much<BR>| > =
shorter in=20
duration. If the market were healthy, I<BR>| > probably =
would have=20
expected CSTR to pullback and test<BR>| > the pp and a =
decision=20
could be made after the test.<BR>| > But with the other =
leading=20
stocks weakening, there was<BR>| > no question at that =
point that=20
CSTR was going to break<BR>| > below its pivot point. So I =
decided=20
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=20
later when CSTR barely<BR>| > dipped below the pp and then =
rallied=20
past my sell<BR>| > price. But that lasted only one day. =
Thank=20
goodness<BR>| > the intraday chart gave me the only clue =
there=20
was.<BR>| ><BR>| > As far as CVH was concerned, I ruled =
it out=20
as a buy<BR>| > candidate early on. There were several =
issues=20
with<BR>| > CVH. First was the lack of confirming strength =
in=20
the<BR>| > group - although the group ranking was high, =
other<BR>|=20
> stocks in the group either didn't have a proper base<BR>| =
>=20
(SIE), or had a wide and loose base (MME). I avoid<BR>| > =
groups=20
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=20
old issue,<BR>| > as long as it remained unresolved, there =
could=20
always<BR>| > be surprises.<BR>| ><BR>| > One final =
note. I=20
don't think taking a 7% loss on<BR>| > every losing trade =
is ok. If=20
one takes a 7% loss in a<BR>| > string of 5 trades (a =
finite=20
probability), that's a<BR>| > third of capital lost - too =
much for=20
any trading<BR>| > method, considering how hard it is to =
have a=20
50%<BR>| > return (the amount needed to come back). My<BR>| =
>=20
understanding of it is that WON didn't intend 7% to be<BR>| =
> where=20
you place the stop order. Instead it's the<BR>| > maximum =
allowable=20
loss for a single trade. Usually it<BR>| > should take a =
screwup to=20
have a 7% loss. If one buys a<BR>| > stock correctly, a =
2-3% loss=20
is achievable if the<BR>| > stock fails. Sometimes one can =
even=20
exit with a small<BR>| > profit if the chart is read=20
=
correctly.<BR></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE>
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<P>Visit us at <A =
href=3D"http://www.neoris.com/">http://www.neoris.com/</A>=20
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