Go to Jeff Salisbury LWGate Home Page.From: "Pritish Shah" <pshah@lason.com>
Subject: RE: [CANSLIM] Market Trend Charts
Date: Tue, 15 Jul 2003 23:52:42 -0400
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Dave,=20 You asked a good question on how to make money in the range bound market. = There in lies the answer that I hope to use. If the stock market goes to = the bottom of the range, buy. If it goes to the top, lock in your profits = with a trailing stop so if a stock goes higher, we would still be in. I am hoping to purchase breakouts in the top 40 or 50 industries only and = want to do legwork before hand so I only have to make a "yes" or a "no" = decision when an alert occurs. I am still learning and the idea of "8% loss in a stock should not be = greater than 2% of total portfolio" is a great. So at minimum, I should = not invest more than 1/12th of my total portfolio in any individual stock. Pritish >>> canslimdave2003@yahoo.com 07/15/03 23:11 PM >>> Pritish --=20 =20 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. =20 =20 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. =20 =20 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). =20 =20 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. =20 =20 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. =20 Thanks for your post! =20 Dave Pritish Shah <pshah@lason.com> wrote: Hi Kelly,=20 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.=20 http://finance.yahoo.com/q?s=3D^IXIC&d=3Dc&k=3Dc3&a=3Dvm,m26-12-9,ss,fs&p= =3Dm20,b&t=3D6m&l=3Don&z=3Dl&q=3Db=20 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.=20 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.=20 http://finance.yahoo.com/q?s=3D^DJI&d=3Dc&k=3Dc3&p=3D&t=3Dmy&l=3Don&z=3Dl&q= =3Dl=20 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. =20 I am open for discussions but not flames please. =20 Thanks, Pritish >>> kelly.short@fw.us.neoris.com 07/15/03 02:40PM >>>=20 Gene,=20 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.=20 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.=20 That said- I did enjoy reading the information you passed along- thanks!=20= Kelly=20 - -----Original Message-----=20 From: Gene Ricci [ mailto:genr@swbell.net]=20 Sent: Tuesday, July 15, 2003 1:06 PM=20 To: canslim@lists.xmission.com=20 Subject: Re: [CANSLIM] Market Trend Charts=20 Kelly, forgive the clich=E9......... "The trend is your friend".=20 Now here's another profound statement "the trend is up until proven = otherwise".=20 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.=20 We were told that there would not be a post war rally - is that true?=20 We were told the new dividend law would not affect stock prices - is that = true?=20 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.=20 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....=20 "give me your tired, your poor, your huddled masses yearning to breathe = free"=20 translated to:=20 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!=20 Gene=20 - ----- Original Message -----=20 From: Kelly Short < mailto:kelly.short@fw.us.neoris.com >=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, July 15, 2003 10:53 AM=20 Subject: RE: [CANSLIM] Market Trend Charts=20 Gene,=20 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.=20 Kelly=20 - -----Original Message-----=20 From: Gene Ricci [ mailto:genr@swbell.net]=20 Sent: Monday, July 14, 2003 7:19 PM=20 To: canslim@lists.xmission.com=20 Subject: [CANSLIM] Market Trend Charts=20 May be of interest to you.=20 Gene=20 Charts have been updated through today (7/14)=20 http://www.sectorrotationfund.com/MarketTrends.htm=20 Duke Jones, CMT=20 www.longboatglobal.com=20 www.sectorrotationfund.com=20 - --------------------------------- Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! - - - -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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