Re: [CANSLIM] IBD Weblink

From: Kent Norman <kent_norman@yahoo.com>
Subject: Re: [CANSLIM] IBD Weblink
Date: Fri, 11 Oct 2002 21:26:36 -0700 (PDT)

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Perhaps the "integrity cops" should monitor their own publications...

Kent

- --- Tom Worley <stkguru@bellsouth.net> wrote:
> and not the first time, nor will be the last, that IBD attempts to
> interpret and redefine what WON "really" meant. Would be interesting
> to know just how closely he monitors what his paper says in his name,
> and whether they are speaking for him, or for themselves and their
> interpretation.
> 
> ----- Original Message ----- 
> From: Chris Dempsey 
> To: canslim@lists.xmission.com 
> Sent: Friday, October 11, 2002 7:40 PM
> Subject: RE: [CANSLIM] IBD Weblink
> 
> 
> Excellent work. I agree with you.
> 
>  
> 
> -----Original Message-----
> From: owner-canslim@lists.xmission.com
> [mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
> Sent: Friday, October 11, 2002 6:09 PM
> To: canslim@lists.xmission.com
> Subject: Re: [CANSLIM] IBD Weblink
> 
>  
> 
> Hi jans & Mike,
> 
>  
> 
> I've read through the weblink a couple of times and gone back to my
> notes on C&H bases, handles, and HTMMIS. I think what's happened is a
> case of sloppy editing in the weblink. 
> 
>  
> 
> The left side of a cup is printed when the stock starts a correction
> after a prior uptrend of 30% or more. With APPX, that means that the
> left side of the cup is *not* the 52 wk high set on 1/4 (22.00) as
> they implied, but instead, is the high set on 3/15 (19.11). The left
> side starts on 3/15 because the rise from the low 2/8 (12.97) to the
> peak on 3/15 was (19.11-12.97)/12.97 = 47%, setting up the new
> correction and beginning of the cup. See an annotated chart at
> http://WallStreet-LLC.com/canslim/APPX101102.JPG
> 
>  
> 
> In HTMMIS, the wording WON uses to define the beginning of the handle
> and the pivot buy point is "most occur 5% to 10% below the former
> peak....and this is almost always somewhat below the base's actual
> high point." The key word to me is that they are identifying the
> start of the handle in relationship to the *base's* high point. There
> are a couple of examples to demonstrate that the left side of the
> base is not always the old 52 wk high. See for example, VRSN on p.
> 159 or PMCS on p. 162 of the new edition of HTMMIS.
> 
>  
> 
> Once the left side of the base is properly identified, then it's
> simply a matter of testing whether the handle is valid:
> 
>  
> 
> 1. Did it form within 5-15% of the base high? yes
> 
> 2. Did it form in the upper half of the base? yes
> 
> 3. Did it droop no more than 30% (that's a valid "bear market droop",
> though the norm is 10-20%)? yes
> 
> 4. Did it drift down on light volume? yes--though you could see the
> beginning of the breakout in the last day of the handle.
> 
> 5. Did it form above the 200 day MA? yes
> 
> 6. Was it at least 5 days long? yes
> 
> 7. Did volatility in the handle contract? debatable, though not
> exceedingly zig zaggish and handles will often have a big shakeout
> day
> 
>  
> 
> None of that's to say that the breakout won't fail, but I have to
> disagree with the weblink's analysis this time.
> 
>  
> 
> Katherine
> 
>  
> 


=====
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