Go to Jeff Salisbury LWGate Home Page.From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Stop losses and DHI
Date: Sun, 8 Jun 2003 14:45:18 -0500
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Hi Jerome,
It looks like that long bar on 6/5/3 in the IBD charts is a bad data point.
Looking at an 15 minute intraday chart for 6/5, there's no low even close to the
20 mark.
Here's the daily chart showing the correct low for the day:
http://www.cwhcharts.com/katherine/DHI060603.JPG
As to your market manipulation question, I wish Tom were around, because he
could answer your question with authority. In general, I think the checks and
balances in place wouldn't allow the degree of pricing shenanigans you're
describing. Hopefully there is someone here on the list that can shed some light
on exactly how that would be so.
Katherine
-----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Jerome Buckmelter
Sent: Sunday, June 08, 2003 10:12 AM
To: 'CANSLIM LIST'
Subject: [CANSLIM] Stop losses and DHI
WON does not like stop losses, but says for those who cannot watch their
stocks, it's okay. But is it? What are the real pitfalls with stop losses? I
am concerned with what happened to DHI on Thursday. According to DGO, DHI
plummeted from 28.58 to 20.22, about $9 or 41%, in about one minute apparently,
then rebounded just as fast. I would think that everyone with a stop loss order
between $28.58 and $20.22 got shaken out. How can this happen? Could some
traders have conspired to sell a few stocks, i.e. place an ask, at an extremely
low price just to convert the stop losses to market orders, and then swoop in to
pick up the stock for cheap? Using DHI as an example, could a trader offer to
sell one share at $20.22, sell that share, and immediately follow up with market
order for 10,000 shares, which in turn would be purchased from anywhere between
20.22 and $28.58? Is this how the market works? Or is there some safe guards
preventing this? How else could the sudden and dramatic price plunge have
occurred with DHI? Thanks in advance for the education in this matter.
Jerome Buckmelter
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<DIV><SPAN class=3D203433819-08062003>Hi Jerome,</SPAN></DIV>
<DIV><SPAN class=3D203433819-08062003></SPAN> </DIV>
<DIV><SPAN class=3D203433819-08062003>It looks like that long bar on =
6/5/3 in the=20
IBD charts is a bad data point. Looking at an 15 minute intraday chart =
for 6/5,=20
there's no low even close to the 20 mark.</SPAN></DIV>
<DIV><SPAN class=3D203433819-08062003></SPAN> </DIV>
<DIV><SPAN class=3D203433819-08062003>Here's the daily chart showing the =
correct=20
low for the day:</SPAN></DIV>
<DIV><SPAN class=3D203433819-08062003><A=20
href=3D"http://www.cwhcharts.com/katherine/DHI060603.JPG">http://www.cwhc=
harts.com/katherine/DHI060603.JPG</A></SPAN></DIV>
<DIV><SPAN class=3D203433819-08062003></SPAN> </DIV>
<DIV><SPAN class=3D203433819-08062003>As to your market manipulation =
question, I=20
wish Tom were around, because he could answer your question with =
authority. In=20
general, I think the checks and balances in place wouldn't allow the =
degree of=20
pricing shenanigans you're describing. Hopefully there is someone here =
on the=20
list that can shed some light on exactly how that would be =
so.</SPAN></DIV>
<DIV><SPAN class=3D203433819-08062003></SPAN> </DIV>
<DIV><SPAN class=3D203433819-08062003>Katherine</SPAN></DIV>
<DIV><SPAN class=3D203433819-08062003></SPAN> </DIV>
<DIV><SPAN class=3D203433819-08062003></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>=20
owner-canslim@lists.xmission.com=20
[mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Jerome=20
Buckmelter<BR><B>Sent:</B> Sunday, June 08, 2003 10:12 =
AM<BR><B>To:</B>=20
'CANSLIM LIST'<BR><B>Subject:</B> [CANSLIM] Stop losses and=20
DHI<BR><BR></FONT></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">WON does not like stop =
losses, but=20
says for those who cannot watch their stocks, <SPAN =
class=3DGramE>it’s</SPAN>=20
okay.<SPAN style=3D"mso-spacerun: yes"> </SPAN>But is it?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>What are the real pitfalls =
with stop=20
losses? I am concerned with what happened to DHI on Thursday.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>According to DGO, DHI =
plummeted from=20
28.58 to 20.22, about $9 or 41%, in about one minute apparently, <SPAN =
class=3DGramE>then</SPAN> rebounded just as fast.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>I would think that everyone =
with a=20
stop loss order between $28.58 and $20.22 got shaken out.<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>How can this happen?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Could some traders have =
conspired to=20
sell a few stocks, i.e. place an ask, at an extremely low price just =
to=20
convert the stop losses to market orders, and then swoop in to pick up =
the=20
stock for cheap? <SPAN style=3D"mso-spacerun: yes"> </SPAN>Using =
DHI as an=20
example, could a trader offer to sell one share at $20.22, sell that =
share,=20
and immediately follow up with market order for 10,000 shares, which =
in turn=20
would be purchased from anywhere between 20.22 and $28.58?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Is this how the market =
works?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Or is there some safe guards =
preventing this?<SPAN style=3D"mso-spacerun: yes"> </SPAN>How =
else could=20
the sudden and dramatic price plunge have occurred with DHI?<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN>Thanks in advance for the =
education in=20
this matter. <o:p></o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: =
Arial"><o:p> </o:p></SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Arial">Jerome Buckmelter<SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: yes"> </SPAN><SPAN=20
style=3D"mso-spacerun: =
yes"> </SPAN><o:p></o:p></SPAN></FONT></P></DIV></BLOCKQ=
UOTE></BODY></HTML>
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