Go to Jeff Salisbury LWGate Home Page.From: "inderjit" <inderjit@adelphia.net>
Subject: RE: [CANSLIM] Opportunity Cost
Date: Sun, 29 Jun 2003 10:50:42 -0400
Previous Article (by Author): Re: [CANSLIM] Brokerage Firms Kent Norman
Top of Thread: RE: [CANSLIM] Opportunity Cost "Katherine Malm"
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Katherine, you have very good handwriting! Inderjit - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Friday, June 27, 2003 9:34 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Opportunity Cost Hi Harold, RE: "How long is an intermediate term base?" The distinction between short, intermediate, and long term time periods themselves is sometimes fuzzy. The most common descriptions are that short term is a few days to a few weeks. Intermediate term is a few weeks to a few months. Long term is longer than that. When it comes to intermediate term bases, this time period is very clear, however, as there are very specific guidelines for the typical bases we see. The shortest is the flat base at 5 weeks. Other typical bases are generally 6-7 weeks. Here are some notes that I've put together on CANSLIM-intermediate term bases (still handwritten, as my technical writer got married and moved to Idaho about 5 years ago): Some notes on types of intermediate term bases (Note, these are better viewed by downloading to your computer and then using an image viewer, as they are blown up beyond full screen size): http://www.cwhcharts.com/katherine/TypesOfBases.JPG http://www.cwhcharts.com/katherine/MiscBasesCharacteristics.JPG http://www.cwhcharts.com/katherine/CwHBaseCharacteristics.JPG http://www.cwhcharts.com/katherine/HandleCharacteristics.txt http://www.cwhcharts.com/katherine/High+StdHandleR1.JPG Notes on the basing process and technical signs of a healthy base: http://www.cwhcharts.com/katherine/BasingProcess.JPG http://www.cwhcharts.com/katherine/QualitiesGoodBase.JPG http://www.cwhcharts.com/katherine/TechWarningSignsBasing.JPG http://www.cwhcharts.com/katherine/HealthyRisingStock.JPG re:"May I ask what data service you use to alert you to short candidate price action, or in general? Real time?" and "Finally, anything you can say about short candidate mining techniques that won't give away the store?" I use spreadsheet calculations that I've set up based on price/volume action to find candidates, then use the alerts system available in Scwhab's StreetSmartPro to monitor action. Generally, all the same technical warning signs of failing basing action or failing action after a long or sudden rise are prime candidates for shorting. That means you can use all the same technical sensibilities you have developed on the long side to find short bait. As shorting is off topic for the CANSLIM list, I'll leave the discussion there. TradingMarkets.com is a terrific resource for short term techniques, both long and short. re: "Can you point me to an example of a pullback to logical support and at what point you might commit?" There are two prime candidates for pullback entries: (1) A stock which has recently broken out and has pulled back on light volume to within 5% of its original pivot. This can happen because the stock itself is pausing to gather steam for the next move up and/or because the market itself is pausing to gather steam. Those are generally good things to see after big runs up, because it shows sellers aren't that anxious to sell into the rise. (2) A stock which has been on a good run and is pulling back on light volume to a logical area of support such as an upward trend line, well defined by a channel (Tom used to call this a LLUR), or a stock that pulls to the intermediate term 50 day moving average on light trade. Generally, if its within about 5% of that MA, then it's prime territory. With pullback techniques, you have to be *very* good at reading the technical action of the stock and the market because you have to be able to distinguish between "benign" and "malignant" <g> pullbacks when you take on this type of risk. Katherine - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Harold Josephson Sent: Friday, June 27, 2003 1:33 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Opportunity Cost Hi Katherine, As always, thanks for the informative reply. How long is an intermediate term base? May I ask what data service you use to alert you to short candidate price action, or in general? Real time? Can you point me to an example of a pullback to logical support and at what point you might commit? Finally, anything you can say about short candidate mining techniques that won't give away the store? Thanks Harold - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Thursday, June 26, 2003 4:19 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Opportunity Cost Hi Harold, Yes, as I am a purist CANSLIM investor when making long trades, I look for intermediate term bases and proof that the stock is breaking above the resistance at the pivot set for each particular style of base. I also buy on pullbacks when it's appropriate, as a pullback to logical support when technicals are favorable is a valid entry point as well. Over the years, this has proved to be an extraordinarily profitable methdology for me, so I know from experience that it works. I discontinued using Vectorvest for long positions last Fall after joining Mike Gibbons at cwhcharts.com. Though, until fairly recently, I was still using it for finding positions for shorting (not a CANSLIM methodology). As I've developed a methodology using paricular price action that is more than sufficient for finding candidates, I no longer need it for that, either. I used to use VV for mining for stocks, after beating it into submission for use as a CANSLIM mining tool. There, I'd look for particular technical action to determine whether the stock was showing some recent oomph to the upside. VV has a proprietary indicator called RT, relative timing, which acts as a summary proxy for technical action. If you can imagine a rubberband attached to a 13 week EMA, RT is an indicator that tells whether the price is above or below the EMA and how far it is stretched from that line. Values are then set from 0 = high velocity (stretch) to the downside, to 1 = neutral, to 2 = high velocity (stretch) to the upside. Unfortunately, VV doesn't contain actual fundamental data (they use proprietary proxies again), so it required that I use DGO for both preponderance of evidence fundamental evaluation and, at the same time for determining an entry point. The process that I used for determining fundamental health is now reflected in our site's CEF (Canslim fundamental evaluation score). Our methodologies at cwhcharts.com are significantly superior, as we don't use proxies for basing action, but instead use computer algorithms to search for actual basing patterns, so you can probably see why VV is no longer a necessary tool for me. Katherine - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Harold Josephson Sent: Thursday, June 26, 2003 4:34 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Opportunity Cost Hi Katherine, Do you buy only breaking out or likely to breakout stocks? Some time back, you mentioned VectorVest. How do you use it? Thanks Harold Harold Josephson Tel: 323.850.1333 Fax: 323.512.8968 hj@hjosephson.com - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Thursday, June 26, 2003 3:09 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] Opportunity Cost Hi Scott, This used to be a problem for me, but several years ago, I buckled down and set a very clear set of guidelines for mining, buying and selling stocks. When I sell, I do a post analysis to determine what I did right and what I did wrong. That helps me continuously improve both my process and my execution and removes the emotional elements from the trade itself. At that point, the market knows and remembers nothing of what I did on the previous trade, so I figure both the pocketed money and the mental effort is best spent on the next trade. Katherine - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Logan, Scott L. Sent: Thursday, June 26, 2003 3:50 PM To: 'canslim@lists.xmission.com' Subject: [CANSLIM] Opportunity Cost I just make a great gain on a stock after being out of the market for a while. My problem is that the thoughts of "what if" keep popping up in my mind. Does any one else have a problem with letting go after selling a stock? Emotions need to be excluded from the process... Thanks, Scott - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
Previous Article (by Author): Re: [CANSLIM] Brokerage Firms Kent Norman
Top of Thread: RE: [CANSLIM] Opportunity Cost "Katherine Malm"
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