Go to Jeff Salisbury LWGate Home Page.From: Dave Stem <canslimdave2003@yahoo.com>
Subject: RE: [CANSLIM] Market Trend Charts
Date: Tue, 15 Jul 2003 20:12:58 -0700 (PDT)
Next Article (by Author): Re: [CANSLIM] Market Trend Charts "Gene Ricci"
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- --0-734456376-1058325178=:39267 Content-Type: text/plain; charset=us-ascii Pritish -- I agree with you exactly. IMHO it will take 14 years before the markets really break to a new high. Well, 11 counting the three we've just been through. In the 1968-82 period, the 1000 point barrier was called "The Graveyard in the Sky" because of all the rallies that failed at that point. I'm very interested in learning how to apply CANSLIM in such a range bound market. But I also want to trade with the idea in mind that I may well be wrong about my ideas on what the market will do. Therefore, I'm looking for buy/sell rules that work despite my opinions. For example, SELL if a stock breaks its 50 day moving average. On thing I have come up with is the idea of getting into the market one profitable trade at a time. Last year, I became convinced that a bull market was beginning and bought 6 different stocks on breakouts, convinced that surely 1-2 would remain above their 7-8% stop loss and therefore bail me out. Instead, the market turned sharply against me and I was quickly down 8+ % (because I bought some on margin). This year, when the market started looking good to me, I only put on one trade. Once that proved profitable, I raised my stop loss level to break even and put on a second trade. So, I've scaled my way into the market. I am hoping that approach will keep me from taking too big a hit if I am wrong about market direction in the future. Also, I am being vigilant about limiting my purchases so that if my 7% stop is hit, the loss is less than 1.5% of my total portfolio. Over and over in the Market Wizards books professional traders talk about keeping the risk on any individual trade to less than 2%. I don't think WON stresses this rule enough. Thanks for your post! Dave Pritish Shah <pshah@lason.com> wrote: Hi Kelly, I have been studying where I am making mistakes. A lot of my failures were bought when Nasdaq was touching the upper bollinger bands. Checkout the following chart. You will notice that Nasdaq is currently toying with the upper bollinger bands and has been bouncing from the 20dma. So the best time to buy would be when Nasdaq again touches 20dma and there are a flurry of breakouts. http://finance.yahoo.com/q?s=^IXIC&d=c&k=c3&a=vm,m26-12-9,ss,fs&p=m20,b&t=6m&l=on&z=l&q=b A lot of people have shown me charts that basically predict that the market will churn for the next few years and I believe that would be the trend. This is where CANSLIM can do much better than any other method of investing. Take a look at the following chart. You will notice that from 1937 to 1950 (13 yrs), the market was pretty much flat. From 1965 to 1983 also the market was flat. There was also a flat period before 1930 but that is not shown on the graph. http://finance.yahoo.com/q?s=^DJI&d=c&k=c3&p=&t=my&l=on&z=l&q=l Basically after every major rise, the market pauses for several years and then tries again. This has happened 3 times on DJI. Nasdaq is currently behaving exactly like DJI from 1930 to 1933. If it continues to behave like DJI, for next year and half, we are not going to go anywhere and then there will be a major move upwards. I am open for discussions but not flames please. Thanks, Pritish >>> kelly.short@fw.us.neoris.com 07/15/03 02:40PM >>> Gene, What was in your patriotic Wheeties this morning?! Thanks for the explanation though. Have you thought about a career in politics because that answer was perfectly on the middle ground. Okay, okay. I'll ride the trend. I'm just bitter: three of my recent BO purchases have gotten SARS and are in quarantine. I fear I may lose them to the "disease", or the hurricane, or whatever ailment is keeping them from soaring. That said- I did enjoy reading the information you passed along- thanks! Kelly - -----Original Message----- From: Gene Ricci [ mailto:genr@swbell.net] Sent: Tuesday, July 15, 2003 1:06 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Market Trend Charts Kelly, forgive the cliché......... "The trend is your friend". Now here's another profound statement "the trend is up until proven otherwise". Many indicators are showing overbought, but they can stay overbought for a long long time. Take last year, they stayed oversold for a long long time. Most likely there is a bit of consolidation going on .... but who knows which way the break will occur. One just has to decide at what point the trend has changed from up to down (or sideways). And at what point another breakout to the upside has occurred. Each person must decide this on his/her own. We were told that there would not be a post war rally - is that true? We were told the new dividend law would not affect stock prices - is that true? Although I don't see signs of a renewed bear.... I hear them in the background.... moaning and groaning as they try to save face after losing their butts.... shorting this year. I feel that the market has to continue its upward trend because the public wants it to (to say nothing about the administration). When I attend meetings, read user group email and talk to friends I'm reminded of the Statue of Liberty.... "give me your tired, your poor, your huddled masses yearning to breathe free" translated to: We're tired (poor management, manipulation, lies, cooked books), we're poor, your investors are yearning to once again believe!!!! ... kind of corny but what the heck! Gene - ----- Original Message ----- From: Kelly Short < mailto:kelly.short@fw.us.neoris.com > To: canslim@lists.xmission.com Sent: Tuesday, July 15, 2003 10:53 AM Subject: RE: [CANSLIM] Market Trend Charts Gene, Do you have any opinions to offer regarding this information? I see that many stocks are above their 50 and 200 dma and that RS lines are trending downward. However, most stocks seem to be trading between their upper and lower bands and money flow doesn't seem to indicate enormous swings either way. Do you think the market is a) absorbing a recent run-up b) peaking before a short term decline towards a resistance point, or c) giving the bear market pundits fuel for the flames (e.g. forecasting a major decline)? I'd be interested to hear what you have to say. Thanks. Kelly - -----Original Message----- From: Gene Ricci [ mailto:genr@swbell.net] Sent: Monday, July 14, 2003 7:19 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Market Trend Charts May be of interest to you. Gene Charts have been updated through today (7/14) http://www.sectorrotationfund.com/MarketTrends.htm Duke Jones, CMT www.longboatglobal.com www.sectorrotationfund.com - --------------------------------- Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! - --0-734456376-1058325178=:39267 Content-Type: text/html; charset=us-ascii <DIV>Pritish -- </DIV> <DIV> </DIV> <DIV>I agree with you exactly. IMHO it will take 14 years before the markets really break to a new high. Well, 11 counting the three we've just been through. In the 1968-82 period, the 1000 point barrier was called "The Graveyard in the Sky" because of all the rallies that failed at that point. </DIV> <DIV> </DIV> <DIV>I'm very interested in learning how to apply CANSLIM in such a range bound market. But I also want to trade with the idea in mind that I may well be wrong about my ideas on what the market will do. Therefore, I'm looking for buy/sell rules that work despite my opinions. For example, SELL if a stock breaks its 50 day moving average. </DIV> <DIV> </DIV> <DIV>On thing I have come up with is the idea of getting into the market one profitable trade at a time. Last year, I became convinced that a bull market was beginning and bought 6 different stocks on breakouts, convinced that surely 1-2 would remain above their 7-8% stop loss and therefore bail me out. Instead, the market turned sharply against me and I was quickly down 8+ % (because I bought some on margin). </DIV> <DIV> </DIV> <DIV>This year, when the market started looking good to me, I only put on one trade. Once that proved profitable, I raised my stop loss level to break even and put on a second trade. So, I've scaled my way into the market. I am hoping that approach will keep me from taking too big a hit if I am wrong about market direction in the future. </DIV> <DIV> </DIV> <DIV>Also, I am being vigilant about limiting my purchases so that if my 7% stop is hit, the loss is less than 1.5% of my total portfolio. Over and over in the Market Wizards books professional traders talk about keeping the risk on any individual trade to less than 2%. I don't think WON stresses this rule enough.</DIV> <DIV> </DIV> <DIV>Thanks for your post!</DIV> <DIV> </DIV> <DIV>Dave<BR><BR><B><I>Pritish Shah <pshah@lason.com></I></B> wrote:</DIV> <DIV> <BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid; WIDTH: 100%"> <META content="MSHTML 6.00.2800.1170" name=GENERATOR> <DIV><FONT face=Arial>Hi Kelly, <BR><BR>I have been studying where I am making mistakes. A lot of my failures were bought when Nasdaq was touching the upper bollinger bands. Checkout the following chart. You will notice that Nasdaq is currently toying with the upper bollinger bands and has been bouncing from the 20dma. So the best time to buy would be when Nasdaq again touches 20dma and there are a flurry of breakouts. <BR><BR><U><A href="http://http://finance.yahoo.com/q?s=^IXIC&d=c&k=c3&a=vm,m26-12-9,ss,fs&p=m20,b&t=6m&l=on&z=l&q=b">http://finance.yahoo.com/q?s=^IXIC&d=c&k=c3&a=vm,m26-12-9,ss,fs&p=m20,b&t=6m&l=on&z=l&q=b</A></U> <BR><BR>A lot of people have shown me charts that basically predict that the market will churn for the next few years and I believe that would be the trend. This is where CANSLIM can do much better than any other method of investing. <BR><BR>Take a look at the following chart. You will notice that from 1937 to 1950 (13 yrs), the market was pretty much flat. From 1965 to 1983 also the market was flat. There was also a flat period before 1930 but that is not shown on the graph. <BR><BR><U><A href="http://http://finance.yahoo.com/q?s=^DJI&d=c&k=c3&p=&t=my&l=on&z=l&q=l">http://finance.yahoo.com/q?s=^DJI&d=c&k=c3&p=&t=my&l=on&z=l&q=l</A></U> <BR><BR>Basically after every major rise, the market pauses for several years and then tries again. This has happened 3 times on DJI. <STRONG><U>Nasdaq is currently behaving exactly like DJI from 1930 to 1933.</U></STRONG> If it continues to behave like DJI, for next year and half, we are not going to go anywhere and then there will be a major move upwards.</FONT></DIV> <DIV><FONT face=Arial></FONT> </DIV> <DIV><FONT face=Arial>I am open for discussions but not flames please.</FONT></DIV> <DIV><FONT face=Arial></FONT> </DIV> <DIV><FONT face=Arial>Thanks,</FONT></DIV> <DIV><FONT face=Arial>Pritish<BR></FONT></DIV> <DIV><BR>>>> kelly.short@fw.us.neoris.com 07/15/03 02:40PM >>> <BR>Gene, <BR><BR>What was in your patriotic Wheeties this morning?! Thanks for the explanation though. Have you thought about a career in politics because that answer was perfectly on the middle ground. <BR><BR>Okay, okay. I'll ride the trend. I'm just bitter: three of my recent BO purchases have gotten SARS and are in quarantine. I fear I may lose them to the "disease", or the hurricane, or whatever ailment is keeping them from soaring. <BR><BR>That said- I did enjoy reading the information you passed along- thanks! <BR><BR>Kelly <BR><BR>-----Original Message----- <BR>From: Gene Ricci [<U> <A href="mailto:genr@swbell.net]">mailto:genr@swbell.net]</A></U> <BR>Sent: Tuesday, July 15, 2003 1:06 PM <BR>To: <U><A href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A></U> <BR>Subject: Re: [CANSLIM] Market Trend Charts <BR><BR><BR>Kelly, forgive the cliché......... "The trend is your friend". <BR><BR>Now here's another profound statement "the trend is up until proven otherwise". <BR><BR>Many indicators are showing overbought, but they can stay overbought for a long long time. Take last year, they stayed oversold for a long long time. Most likely there is a bit of consolidation going on .... but who knows which way the break will occur. One just has to decide at what point the trend has changed from up to down (or sideways). And at what point another breakout to the upside has occurred. Each person must decide this on his/her own. <BR><BR>We were told that there would not be a post war rally - is that true? <BR>We were told the new dividend law would not affect stock prices - is that true? <BR><BR>Although I don't see signs of a renewed bear.... I hear them in the background.... moaning and groaning as they try to save face after losing their butts.... shorting this year. <BR><BR>I feel that the market has to continue its upward trend because the public wants it to (to say nothing about the administration). When I attend meetings, read user group email and talk to friends I'm reminded of the Statue of Liberty.... <BR><BR>"give me your tired, your poor, your huddled masses yearning to breathe free" <BR><BR>translated to: <BR><BR>We're tired (poor management, manipulation, lies, cooked books), we're poor, your investors are yearning to once again believe!!!! ... kind of corny but what the heck! <BR><BR>Gene <BR><BR><BR><BR><BR>----- Original Message ----- <BR>From: Kelly Short <<U> <A href="mailto:kelly.short@fw.us.neoris.com">mailto:kelly.short@fw.us.neoris.com</A></U> > <BR>To: <U><A href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A></U> <BR>Sent: Tuesday, July 15, 2003 10:53 AM <BR>Subject: RE: [CANSLIM] Market Trend Charts <BR><BR><BR>Gene, <BR><BR>Do you have any opinions to offer regarding this information? I see that many stocks are above their 50 and 200 dma and that RS lines are trending downward. However, most stocks seem to be trading between their upper and lower bands and money flow doesn't seem to indicate enormous swings either way. Do you think the market is a) absorbing a recent run-up b) peaking before a short term decline towards a resistance point, or c) giving the bear market pundits fuel for the flames (e.g. forecasting a major decline)? I'd be interested to hear what you have to say. Thanks. <BR><BR>Kelly <BR><BR>-----Original Message----- <BR>From: Gene Ricci [<U> <A href="mailto:genr@swbell.net]">mailto:genr@swbell.net]</A></U> <BR>Sent: Monday, July 14, 2003 7:19 PM <BR>To: <U><A href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A></U> <BR>Subject: [CANSLIM] Market Trend Charts <BR><BR><BR>May be of interest to you. <BR><BR>Gene <BR><BR><BR><BR>Charts have been updated through today (7/14) <BR><BR><U><A href="http://www.sectorrotationfund.com/MarketTrends.htm">http://www.sectorrotationfund.com/MarketTrends.htm</A></U> <BR><BR>Duke Jones, CMT <BR><U><A href="http://www.longboatglobal.com/">www.longboatglobal.com</A></U> <BR><U><A href="http://www.sectorrotationfund.com/">www.sectorrotationfund.com</A></U> <BR><BR><BR><BR><BR></DIV></BLOCKQUOTE></DIV><p><hr SIZE=1> Do you Yahoo!?<br> <a href="http://pa.yahoo.com/*http://rd.yahoo.com/evt=1207/*http://promo.yahoo.com/sbc/">SBC Yahoo! DSL</a> - Now only $29.95 per month! - --0-734456376-1058325178=:39267-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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