Re: [CANSLIM] IBD Weblink

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] IBD Weblink
Date: Fri, 11 Oct 2002 22:43:55 -0400
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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 -----=20
From: Chris Dempsey=20
To: canslim@lists.xmission.com=20
Sent: Friday, October 11, 2002 7:40 PM
Subject: RE: [CANSLIM] IBD Weblink


Excellent work. I agree with you.

=20

- -----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

=20

Hi jans & Mike,

=20

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.=20

=20

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 =3D 47%, setting up the new correction and =
beginning of the cup. See an annotated chart at =
http://WallStreet-LLC.com/canslim/APPX101102.JPG

=20

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.

=20

Once the left side of the base is properly identified, then it's simply =
a matter of testing whether the handle is valid:

=20

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

=20

None of that's to say that the breakout won't fail, but I have to =
disagree with the weblink's analysis this time.

=20

Katherine

=20

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<DIV><FONT face=3DArial>and not the first time, nor will be the last, =
that IBD=20
attempts to interpret and redefine what WON "really" meant. Would be =
interesting=20
to know just how closely he monitors what his paper says in his name, =
and=20
whether they are speaking for him, or for themselves and their=20
interpretation.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dcdempsey@houston.oilfield.slb.com=20
href=3D"mailto:cdempsey@houston.oilfield.slb.com">Chris Dempsey</A> =
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
 </DIV>
<DIV><B>Sent:</B> Friday, October 11, 2002 7:40 PM</DIV>
<DIV><B>Subject:</B> RE: [CANSLIM] IBD Weblink</DIV></DIV>
<DIV><BR></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><SPAN class=3DEmailStyle17><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt">Excellent=20
work. I agree with you.<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal><SPAN class=3DEmailStyle17><FONT face=3DArial =
color=3Dnavy=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: =
12.0pt"><![if =
!supportEmptyParas]><![endif]>&nbsp;<o:p></o:p></SPAN></FONT></SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DTahoma =
color=3Dblack=20
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: =
Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B> <A =

href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis=
sion.com</A>=20
[mailto:owner-canslim@lists.xmission.com]<B><SPAN style=3D"FONT-WEIGHT: =
bold">On=20
Behalf Of </SPAN></B>Katherine Malm<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> Friday, October 11, 2002 =
6:09=20
PM<BR><B><SPAN style=3D"FONT-WEIGHT: bold">To:</SPAN></B> <A=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [CANSLIM] IBD=20
Weblink</SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt"><![if =
!supportEmptyParas]><![endif]>&nbsp;<o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">Hi =
jans &amp;=20
Mike,</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black">I've read through=20
the weblink a couple of times and gone back to my notes on C&amp;H =
bases,=20
handles, and HTMMIS. I think what's happened is a case of sloppy editing =
in the=20
weblink. </SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">The =
left side of=20
a cup is printed when the stock starts a correction after a prior =
uptrend of 30%=20
or more. With APPX, that means that the left side of the cup is *not* =
the 52 wk=20
high set on 1/4 (22.00) as they implied, but instead, is the high set on =
3/15=20
(19.11). The left side starts on 3/15 because the rise from the low 2/8 =
(12.97)=20
to the peak on 3/15 was (19.11-12.97)/12.97 =3D 47%, setting up the new =
correction=20
and beginning of the cup. See an annotated chart at <A=20
href=3D"http://WallStreet-LLC.com/canslim/APPX101102.JPG">http://WallStre=
et-LLC.com/canslim/APPX101102.JPG</A></SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">In =
HTMMIS, the=20
wording WON uses to define the beginning of the handle and the pivot buy =
point=20
is "most occur 5% to 10% below the former peak....and this is almost =
always=20
somewhat below the base's actual high point." The key word to me is that =
they=20
are identifying the start of the handle in relationship to the *base's* =
high=20
point. There are a couple of examples to demonstrate that the left side =
of the=20
base is not always the old 52 wk high. See for example, VRSN on p. 159 =
or PMCS=20
on p. 162&nbsp;of the new edition of HTMMIS.</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black">Once the left=20
side of the base is properly identified, then it's simply a matter of =
testing=20
whether the handle is valid:</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">1. =
Did it form=20
within 5-15% of the base high? yes</SPAN></FONT><FONT =
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">2. =
Did it form in=20
the upper half of the base? yes</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">3. =
Did it droop=20
no more than 30% (that's a valid&nbsp;"bear market droop", though the =
norm is=20
10-20%)? yes</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">4. =
Did it drift=20
down on light volume? yes--though you could see the beginning of the =
breakout in=20
the last day of the handle.</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">5. =
Did it form=20
above the 200 day MA? yes</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">6. =
Was it at=20
least 5 days long? yes</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: black">7. =
Did volatility=20
in the handle contract? debatable, though not exceedingly zig zaggish =
and=20
handles will often have a big shakeout day</SPAN></FONT><FONT =
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black">None of that's to=20
say that the breakout won't fail, but I have to disagree with the =
weblink's=20
analysis this time.</SPAN></FONT><FONT color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; COLOR: black">Katherine</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
color=3Dblack size=3D3><SPAN style=3D"FONT-SIZE: 12pt; COLOR: =
black"><![if !supportEmptyParas]><![endif]>&nbsp;</SPAN></FONT><FONT=20
color=3Dblack><SPAN=20
style=3D"COLOR: black; mso-color-alt: =
windowtext"><o:p></o:p></SPAN></FONT></P></DIV></BODY></HTML>

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