Re: RSR-Rubberband Sell Rule (was:[CANSLIM] hitk)

From: Davellil5@aol.com
Subject: Re: RSR-Rubberband Sell Rule (was:[CANSLIM] hitk)
Date: Thu, 30 Jan 2003 10:58:08 EST

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Katherine:

The logic of your rubber-band concept seems analogous to that of John 
Bollinger.  As you know, his system calculates a midline, ascending or 
descending, and parallel upper and lower limits.  The upper limit is the same 
distance above the midline as the lower limit is below it.  I think he uses 2 
sigmas (standard deviations) to get the limits.

He claims to have found that a stock approaching its upper limit is more 
likely to regress to the lower limit, than to go on rising.  And, vice versa. 
 This, of course, assumes that the stock is not about to break out or break 
down, but is moving between two slightly rising or descending limits.

Since we CANSLIM-er's make buy decisions on breakouts, I don't see the 
rubber-band or Bollinger idea being used for buy-decisions.  I can see this 
logic applying to sell-decisions, especially in spooky markets, like now.

Regards, Dave

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