Re: [CANSLIM] M

From: Eric Jaenike <ericjaenike@yahoo.com>
Subject: Re: [CANSLIM] M
Date: Fri, 22 Nov 2002 07:44:37 -0800 (PST)
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In saying "well", I am referring to "well" relative to the move in the indices as well as relative to the universe of canslim stocks that have broken out, i.e. the best of the breakouts.
In a bull run, you're going to see lots of breakouts. Some of those breakouts will work "well", in that they have strong price appreciation, tepid pullbacks, etc. In other words, really strong canslim breakouts. Others will work fine, in that they hold above their breakouts, move up, etc, but don't act as well as the former category.
For the purposes of the post, I was using "well" to mean this best of the best group. So, for example, TSCO has acted OK, in that its above its breakout, etc, but it hasn't acted "well" in that it dropped below its pivot (albiet slightly), and there have been some p/v yellow flags, etc.
Also for the purposes of the discussion, I am excluding stocks like UNTD, which I believe is the combo of the old Netzero and Juno. While it certainly is a canslim/turnaround type stock, I am excluding it from the list, because I excluded that type of stock from the previous runs' lists, and I want to be consistent across comparisons. That is not to say it is not a playable stock, but merely that for comparison purposes, I don't want to include it.
In sum, for the move we've had in the indices, the doing "well" list, which I take as a barometer of market health, seems awfully thin. The point I was trying to make is simply that the market in general is not as strong as the move in the indices would indicate.
Hope that provides some clarity.
Eric
 
 Katherine Malm <kmalm@earthlink.net> wrote:Hi Eric, A question for you--I noticed in your list of stocks that are "working" that there were many CANSLIM quality growth stocks that *have* been working and demonstrating leadership noticeably missing from your list. When you look at market health, how are you defining the candidates you consider to be CANSLIM stocks? Katherine ----- Original Message ----- From: Eric Jaenike To: canslim@lists.xmission.com Sent: Thursday, November 21, 2002 4:02 PMSubject: Re: [CANSLIM] M

I think this market is not nearly as strong as the indices make it appear. While it clearly has a bid under it, the very fact that people are questioning whether it is real or not says something. 
Market leadership is firmly rooted in the SOX right now, the playground of the beta chasers, and I think that is pulling the market along with it. While there certainly is playable strength in the market, I think a true bull run would display much better leadership. We are up 32% on the Nas from the October low, and 21% on the S&P. That is a long way to go without clear, assertive leadership. Consider also that we are now above 50% bulls. 
I can find only a handful of stocks that have broken out and really performed well. These include VRNT IDXX BSX ELAB TEVA LCI ATRS IGT PIXR. (These are only the ones I have on my own lists. There are, of course, others, such as ISSX, but for the purposes of this discussion, I am excluding them as not pure, traditional CANSLIM). Contrast these with the runs in stocks such as KLAC, INTC, VSEA, AMAT, LRCX, QLGC, etc. 
It seems I am having to work far to hard to find the leadership in this market for this to be the solid bull run the indices would have us believe. 
Most recently, there have been runs in the real speculative dogs, such as PUMA AKAM INKT LOOK ARBA LEXR OPWV RSAS CELL WGRD TIVO. I consider that to also be a sign that this run is getting old. 
As I watch this run, I am constantly reminded of last year's 4Q. I think this run still has legs, but I would pay very close attention to my longs. 
Eric 

 kentuna <kentuna@cox.net> wrote: Katherine,I know this has been discussed before, but would you kindly define small cap and large cap again. What is the actual criteria that is used.Thanks----- Original Message ----- From: Katherine Malm To: canslim@lists.xmission.com Sent: Thursday, November 21, 2002 2:04 PMSubject: Re: [CANSLIM] M
Hi Ian, Just a quick note... re your comment "It is also baffling to me that the sectors that stand to benefit the most from coming increases in government spending - the defense and security sector - are watching this action from the sideline as well."  I noticed SFNT powering ahead today. I've also noticed that money is definitely coming *out* of the safe-haven defensive issues such as healthcare/hospitals, etc. In general, I see far more breakouts than I've seen since last year, so all together, still looks promising to me. Katherine----- Original Message ----- From: Ian To: canslim@lists.xmission.com Sent: Thursday, November 21, 2002 3:23 PMSubject: [CANSLIM] M
Is anyone else finding any "NEW" winners emerging from this buying frenzy? It seems to me that several recent rally leaders are rolling over ugly today - HITK, LCI, ACET - while the indices power ahead, propelled by the most heavily shorted isues. It is also baffling to me that the sectors that stand to benefit the most from coming increases in government spending - the defense and security sector - are watching this action from the sideline as well. So am I mising the new leaders of the bull, or is this just shot-term traders using liquidity to squeeze heavily shorted positions? Opinions? Whither 'M'? Ian

Eric JaenikePresidentVector Investment Management303-300-2961


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<P>In saying "well", I am referring to "well" relative to the move in the indices as well as relative to the universe of canslim stocks that have broken out, i.e. the best of the breakouts.
<P>In a bull run, you're going to see lots of breakouts. Some of those breakouts will work "well", in that they have strong price appreciation, tepid pullbacks, etc. In other words, really strong canslim breakouts. Others will work fine, in that they hold above their breakouts, move up, etc, but don't act as well as the former category.
<P>For the purposes of the post, I was using "well" to mean this best of the best group. So, for example, TSCO has acted OK, in that its above its breakout, etc, but&nbsp;it hasn't acted "well" in that it dropped below its pivot (albiet slightly), and there have been some p/v yellow flags, etc.
<P>Also for the purposes of the discussion, I am excluding stocks like UNTD, which I believe is the combo of the old Netzero and Juno. While it certainly is a canslim/turnaround type stock, I am excluding it from the list, because I excluded that type of stock from the previous runs' lists, and I want to be consistent across comparisons. That is not to say it is&nbsp;not a playable stock, but merely that for comparison purposes, I don't want to include it.
<P>In sum, for the move we've had in the indices, the doing "well" list, which I take as a barometer of market health, seems awfully thin. The point I was trying to make is simply that the market in general is not as strong as the move in the indices would indicate.
<P>Hope that provides some clarity.
<P>Eric
<P>&nbsp;
<P>&nbsp;<B><I>Katherine Malm &lt;kmalm@earthlink.net&gt;</I></B> wrote:
<BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid">
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<DIV>Hi Eric,</DIV>
<DIV>&nbsp;</DIV>
<DIV>A question for you--I noticed in your list of stocks that are "working" that there were many CANSLIM quality growth stocks that *have* been working and demonstrating leadership noticeably missing from your list. When you look at market health, how are you defining the candidates you consider to be CANSLIM stocks?</DIV>
<DIV>&nbsp;</DIV>
<DIV>Katherine</DIV>
<DIV>&nbsp;</DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> <A title=ericjaenike@yahoo.com href="mailto:ericjaenike@yahoo.com">Eric Jaenike</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, November 21, 2002 4:02 PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] M</DIV>
<DIV><BR></DIV>
<P>I think this market is not nearly as strong as the indices make it appear. While it clearly has a bid under it, the very fact that people are questioning whether it is real or not says something. 
<P>Market leadership is firmly rooted in the SOX right now, the playground of the beta chasers, and I think that is pulling the market along with it. While there certainly is playable strength in the market, I think a true bull run would display much better leadership. We are up 32% on the Nas from the October low, and 21% on the S&amp;P. That is a long way to go without clear, assertive leadership. Consider also that we are now above 50% bulls. 
<P>I can find only a handful of stocks that have broken out and really performed well. These include VRNT IDXX BSX ELAB TEVA LCI ATRS IGT PIXR. (These are only the ones I have on my own lists. There are, of course, others, such as ISSX, but for the purposes of this discussion, I am excluding them as not pure, traditional&nbsp;CANSLIM). Contrast these with the runs in stocks such as KLAC, INTC, VSEA, AMAT, LRCX, QLGC, etc. 
<P>It seems I am having to work far to hard to find the leadership in this market for this to be the solid bull run the indices would have us believe. 
<P>Most recently, there have been runs in the real speculative dogs, such as PUMA AKAM INKT LOOK ARBA LEXR OPWV RSAS CELL WGRD TIVO. I consider that to also be a sign that this run is getting old. 
<P>As I watch this run, I am constantly reminded of last year's 4Q. I think this run still has legs, but I would pay very close attention to my longs. 
<P>Eric 
<P>
<P>&nbsp;<B><I>kentuna &lt;kentuna@cox.net&gt;</I></B> wrote: 
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<DIV><FONT face=Arial size=2>Katherine,</FONT></DIV>
<DIV><FONT face=Arial size=2>I know this has been discussed before, but would you kindly define small cap and&nbsp;large cap again. What is the actual criteria that is used.</FONT></DIV>
<DIV><FONT face=Arial size=2>Thanks</FONT></DIV>
<BLOCKQUOTE dir=ltr style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> <A title=kmalm@earthlink.net href="mailto:kmalm@earthlink.net">Katherine Malm</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, November 21, 2002 2:04 PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] M</DIV>
<DIV><BR></DIV>
<DIV>Hi Ian,</DIV>
<DIV>&nbsp;</DIV>
<DIV>Just a quick note... re your comment "It is also baffling to me that the sectors that stand to benefit the most from&nbsp;coming increases in government spending - the defense and security sector - are watching this action from the sideline as well." 
<DIV>&nbsp;</DIV>
<DIV>I noticed SFNT powering ahead today. I've also noticed that money is definitely coming *out* of the safe-haven defensive issues such as healthcare/hospitals, etc. In general, I see far more breakouts than I've seen since last year, so all together, still looks promising to me.</DIV>
<DIV>&nbsp;</DIV>
<DIV>Katherine</DIV></DIV>
<BLOCKQUOTE dir=ltr style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> <A title=ianstm@shaw.ca href="mailto:ianstm@shaw.ca">Ian</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, November 21, 2002 3:23 PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [CANSLIM] M</DIV>
<DIV><BR></DIV>
<DIV><FONT size=2>Is anyone else finding any "NEW" winners emerging from this buying frenzy?</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>It seems to me that&nbsp;several recent rally leaders are rolling over ugly today - HITK, LCI, ACET - while the indices power ahead, propelled by the most heavily shorted isues.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>It is also baffling to me that the sectors that stand to benefit the most from&nbsp;coming increases in government spending - the defense and security sector - are watching this action from the sideline as well.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>So am I mising the new leaders of the bull, or is this just shot-term traders using liquidity to squeeze heavily shorted positions? Opinions? Whither 'M'?</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>Ian</FONT></DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE><BR><BR>
<ADDRESS>Eric Jaenike</ADDRESS>
<ADDRESS>President</ADDRESS>
<ADDRESS>Vector Investment Management</ADDRESS>
<ADDRESS>303-300-2961</ADDRESS>
<P><BR>
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