Go to Jeff Salisbury LWGate Home Page.From: "Gene Ricci" <genr@swbell.net>
Subject: Re: [CANSLIM] Market Trend Charts
Date: Wed, 16 Jul 2003 15:39:57 -0500
Previous Article (by Date): RE: RE: [CANSLIM] Market Wizards "David Taggart"
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This is a multi-part message in MIME format. - ------=_NextPart_000_04E4_01C34BB0.82DF37A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Tomas, the 2% is RISK, not the amount of the stock purchase. He's going to use 1/12 of his portfolio for each purchase. If I get time later this evening I'll send you an example. Let me add that CS is good for selecting stocks to buy . <- period=20 Not known, in any of the circles that I frequent, for money management. Gene ----- Original Message -----=20 From: Tomas=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, July 16, 2003 12:56 PM Subject: RE: [CANSLIM] Market Trend Charts One comment on the 2% comment. The whole idea using CS is to win big when you are right, as stated by WON. So, with only an investment of 2%, how do you win BIG even if the one stock went up 100%? Of course, you can pyramid up. But if you do that then that stock/investment will be more then 2% of your portfolio. I understand that capital preservation is very important, but I 2% is a bit much or too little. You have to put a lot of eggs in one basket to win big, right? That 2% rule sounds like diworsification. just my $.02 tomas --- Pritish Shah <pshah@lason.com> wrote: > Dave,=20 >=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. >=20 > 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. >=20 > 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. >=20 > Pritish >=20 >=20 > >>> 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.=20 > 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.=20 > 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 >=20 > Pritish Shah <pshah@lason.com> wrote: > Hi Kelly,=20 >=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 >=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 >=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 >=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 >=20 > = http://finance.yahoo.com/q?s=3D^DJI&d=3Dc&k=3Dc3&p=3D&t=3Dmy&l=3Don&z=3Dl= &q=3Dl >=20 >=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 >=20 >=20 > >>> kelly.short@fw.us.neoris.com 07/15/03 02:40PM > >>>=20 > Gene,=20 >=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 >=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 >=20 > That said- I did enjoy reading the information you > passed along- thanks!=20 >=20 > Kelly=20 >=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 >=20 >=20 > Kelly, forgive the clich=E9......... "The trend is > your friend".=20 >=20 > Now here's another profound statement "the trend is > up until proven otherwise".=20 >=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 >=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 >=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 >=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 >=20 > "give me your tired, your poor, your huddled masses > yearning to breathe free"=20 >=20 > translated to:=20 >=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 >=20 > Gene=20 >=20 >=20 >=20 >=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 >=20 >=20 > Gene,=20 >=20 > Do you have any opinions to offer regarding this > information?=20 =3D=3D=3D message truncated =3D=3D=3D __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_04E4_01C34BB0.82DF37A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2800.1106" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3D"Comic Sans MS">Tomas, the 2% is RISK, not the amount = of the=20 stock purchase.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS">He's going to use 1/12 of his = portfolio for=20 each purchase. If I</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS">get time later this evening I'll send = you an=20 example.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS">Let me add that CS is good for = selecting=20 stocks to buy <FONT size=3D7>.</FONT><FONT size=3D3>=20 <- period</FONT></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">Not known, in any of the circles that = I=20 frequent, for money management.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS">Gene</FONT></DIV> <BLOCKQUOTE=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV> <DIV=20 style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: = black"><B>From:</B>=20 <A title=3Dtomas986@yahoo.com = href=3D"mailto:tomas986@yahoo.com">Tomas</A> </DIV> <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A = title=3Dcanslim@lists.xmission.com=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= </DIV> <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Wednesday, July 16, 2003 = 12:56=20 PM</DIV> <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] Market = Trend=20 Charts</DIV> <DIV><BR></DIV>One comment on the 2% comment. The whole idea = using<BR>CS=20 is to win big when you are right, as stated by WON.<BR> So, with = only an=20 investment of 2%, how do you win BIG<BR>even if the one stock went up=20 100%? Of course, you<BR>can pyramid up. But if you do that = then=20 that<BR>stock/investment will be more then 2% of = your<BR>portfolio. I=20 understand that capital preservation is<BR>very important, but I 2% is = a bit=20 much or too little.<BR><BR>You have to put a lot of eggs in one basket = to=20 win<BR>big, right? That 2% rule sounds like = diworsification.<BR><BR>just=20 my $.02<BR>tomas<BR><BR>--- Pritish Shah <<A=20 href=3D"mailto:pshah@lason.com">pshah@lason.com</A>> wrote:<BR>> = Dave,=20 <BR>> <BR>> You asked a good question on how to make money = in<BR>>=20 the range bound market. There in lies the answer<BR>> that I hope = to use.=20 If the stock market goes to the<BR>> bottom of the range, buy. If = it goes=20 to the top,<BR>> lock in your profits with a trailing stop so if = a<BR>>=20 stock goes higher, we would still be in.<BR>> <BR>> I am hoping = to=20 purchase breakouts in the top 40 or<BR>> 50 industries only and = want to do=20 legwork before<BR>> hand so I only have to make a "yes" or a = "no"<BR>>=20 decision when an alert occurs.<BR>> <BR>> I am still learning = and the=20 idea of "8% loss in a<BR>> stock should not be greater than 2% of=20 total<BR>> portfolio" is a great. So at minimum, I should = not<BR>>=20 invest more than 1/12th of my total portfolio in any<BR>> = individual=20 stock.<BR>> <BR>> Pritish<BR>> <BR>> <BR>> >>> = <A=20 = href=3D"mailto:canslimdave2003@yahoo.com">canslimdave2003@yahoo.com</A> = 07/15/03=20 23:11 PM >>><BR>> Pritish -- <BR>> <BR>> I = agree with=20 you exactly. IMHO it will take 14<BR>> years before the = markets=20 really break to a new high.<BR>> Well, 11 counting the three = we've=20 just been<BR>> through. In the 1968-82 period, the 1000 = point<BR>>=20 barrier was called "The Graveyard in the Sky"<BR>> because of all = the=20 rallies that failed at that<BR>> point. <BR>> = <BR>> I'm=20 very interested in learning how to apply CANSLIM<BR>> in such a = range bound=20 market. But I also want to<BR>> trade with the idea in mind = that I=20 may well be wrong<BR>> about my ideas on what the market will do. = <BR>>=20 Therefore, I'm looking for buy/sell rules that work<BR>> despite my = opinions. For example, SELL if a stock<BR>> breaks its 50 day = moving=20 average. <BR>> <BR>> On thing I have come up with is = the=20 idea of getting<BR>> into the market one profitable trade at a = time.=20 <BR>> Last year, I became convinced that a bull market was<BR>>=20 beginning and bought 6 different stocks on<BR>> breakouts, = convinced that=20 surely 1-2 would remain<BR>> above their 7-8% stop loss and = therefore bail=20 me<BR>> out. Instead, the market turned sharply against = me<BR>>=20 and I was quickly down 8+ % (because I bought some<BR>> on = margin). =20 <BR>> <BR>> This year, when the market started looking = good=20 to<BR>> me, I only put on one trade. Once that proved<BR>> = profitable, I raised my stop loss level to break<BR>> even and put = on a=20 second trade. So, I've scaled my<BR>> way into the = market. I am=20 hoping that approach will<BR>> keep me from taking too big a hit if = I am=20 wrong<BR>> about market direction in the future. = <BR>> =20 <BR>> Also, I am being vigilant about limiting my<BR>> purchases = so that=20 if my 7% stop is hit, the loss is<BR>> less than 1.5% of my total=20 portfolio. Over and over<BR>> in the Market Wizards books=20 professional traders<BR>> talk about keeping the risk on any = individual=20 trade<BR>> to less than 2%. I don't think WON stresses = this<BR>>=20 rule enough.<BR>> <BR>> Thanks for your = post!<BR>> =20 <BR>> Dave<BR>> <BR>> Pritish Shah <<A=20 href=3D"mailto:pshah@lason.com">pshah@lason.com</A>> wrote:<BR>> = Hi Kelly,=20 <BR>> <BR>> I have been studying where I am making mistakes. = A<BR>>=20 lot of my failures were bought when Nasdaq was<BR>> touching the = upper=20 bollinger bands. Checkout the<BR>> following chart. You will notice = that=20 Nasdaq is<BR>> currently toying with the upper bollinger bands = and<BR>>=20 has been bouncing from the 20dma. So the best time<BR>> to buy = would be=20 when Nasdaq again touches 20dma and<BR>> there are a flurry of = breakouts.=20 <BR>> <BR>><BR><A=20 = href=3D"http://finance.yahoo.com/q?s=3D^IXIC&d=3Dc&k=3Dc3&a=3D= vm,m26-12-9,ss,fs&p=3Dm20,b&t=3D6m&l=3Don&z=3Dl&q=3Db= ">http://finance.yahoo.com/q?s=3D^IXIC&d=3Dc&k=3Dc3&a=3Dvm,m2= 6-12-9,ss,fs&p=3Dm20,b&t=3D6m&l=3Don&z=3Dl&q=3Db</A><= BR>>=20 <BR>> <BR>> A lot of people have shown me charts that = basically<BR>>=20 predict that the market will churn for the next few<BR>> years and = I=20 believe that would be the trend. This is<BR>> where CANSLIM can do = much=20 better than any other<BR>> method of investing. <BR>> <BR>> = Take a=20 look at the following chart. You will notice<BR>> that from 1937 to = 1950=20 (13 yrs), the market was<BR>> pretty much flat. From 1965 to 1983 = also the=20 market<BR>> was flat. There was also a flat period before = 1930<BR>> but=20 that is not shown on the graph. <BR>> <BR>><BR><A=20 = href=3D"http://finance.yahoo.com/q?s=3D^DJI&d=3Dc&k=3Dc3&p=3D= &t=3Dmy&l=3Don&z=3Dl&q=3Dl">http://finance.yahoo.com/q?s=3D= ^DJI&d=3Dc&k=3Dc3&p=3D&t=3Dmy&l=3Don&z=3Dl&q=3D= l</A><BR>>=20 <BR>> <BR>> Basically after every major rise, the market = pauses<BR>>=20 for several years and then tries again. This has<BR>> happened 3 = times on=20 DJI. Nasdaq is currently<BR>> behaving exactly like DJI from 1930 = to 1933.=20 If it<BR>> continues to behave like DJI, for next year and<BR>> = half, we=20 are not going to go anywhere and then there<BR>> will be a major = move=20 upwards.<BR>> <BR>> I am open for discussions but not = flames=20 please.<BR>> <BR>> Thanks,<BR>> Pritish<BR>> = <BR>>=20 <BR>> >>> <A=20 = href=3D"mailto:kelly.short@fw.us.neoris.com">kelly.short@fw.us.neoris.com= </A>=20 07/15/03 02:40PM<BR>> >>> <BR>> Gene, <BR>> <BR>> = What=20 was in your patriotic Wheeties this morning?!<BR>> Thanks for the=20 explanation though. Have you thought<BR>> about a career in = politics=20 because that answer was<BR>> perfectly on the middle ground. = <BR>>=20 <BR>> Okay, okay. I'll ride the trend. I'm just bitter:<BR>> = three of my=20 recent BO purchases have gotten SARS and<BR>> are in quarantine. I = fear I=20 may lose them to the<BR>> "disease", or the hurricane, or whatever = ailment=20 is<BR>> keeping them from soaring. <BR>> <BR>> That said- I = did enjoy=20 reading the information you<BR>> passed along- thanks! <BR>> = <BR>>=20 Kelly <BR>> <BR>> -----Original Message----- <BR>> From: Gene = Ricci [=20 <A href=3D"mailto:genr@swbell.net">mailto:genr@swbell.net</A>] = <BR>> Sent:=20 Tuesday, July 15, 2003 1:06 PM <BR>> To: <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= =20 <BR>> Subject: Re: [CANSLIM] Market Trend Charts <BR>> <BR>> = <BR>>=20 Kelly, forgive the clich=E9......... "The trend is<BR>> your = friend".=20 <BR>> <BR>> Now here's another profound statement "the trend = is<BR>>=20 up until proven otherwise". <BR>> <BR>> Many indicators are = showing=20 overbought, but they can<BR>> stay overbought for a long long time. = Take=20 last<BR>> year, they stayed oversold for a long long time.<BR>> = Most=20 likely there is a bit of consolidation going on<BR>> .... but who = knows=20 which way the break will occur.<BR>> One just has to decide at what = point=20 the trend has<BR>> changed from up to down (or sideways). And at=20 what<BR>> point another breakout to the upside has = occurred.<BR>> Each=20 person must decide this on his/her own. <BR>> <BR>> We were told = that=20 there would not be a post war<BR>> rally - is that true? <BR>> = We were=20 told the new dividend law would not affect<BR>> stock prices - is = that=20 true? <BR>> <BR>> Although I don't see signs of a renewed = bear....=20 I<BR>> hear them in the background.... moaning and groaning<BR>> = as they=20 try to save face after losing their<BR>> butts.... shorting this = year.=20 <BR>> <BR>> I feel that the market has to continue its = upward<BR>>=20 trend because the public wants it to (to say nothing<BR>> about the = administration). When I attend meetings,<BR>> read user group email = and=20 talk to friends I'm<BR>> reminded of the Statue of Liberty.... = <BR>>=20 <BR>> "give me your tired, your poor, your huddled masses<BR>> = yearning=20 to breathe free" <BR>> <BR>> translated to: <BR>> <BR>> = We're=20 tired (poor management, manipulation, lies,<BR>> cooked books), = we're poor,=20 your investors are<BR>> yearning to once again believe!!!! ... kind = of=20 corny<BR>> but what the heck! <BR>> <BR>> Gene <BR>> = <BR>>=20 <BR>> <BR>> <BR>> ----- Original Message ----- <BR>> From: = Kelly=20 Short <<BR>> <A=20 = href=3D"mailto:kelly.short@fw.us.neoris.com">mailto:kelly.short@fw.us.neo= ris.com</A>=20 > <BR>> To: <A=20 = href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>= =20 <BR>> Sent: Tuesday, July 15, 2003 10:53 AM <BR>> Subject: RE: = [CANSLIM]=20 Market Trend Charts <BR>> <BR>> <BR>> Gene, <BR>> <BR>> = Do you=20 have any opinions to offer regarding this<BR>> information? = <BR>=3D=3D=3D message=20 truncated = =3D=3D=3D<BR><BR><BR>__________________________________<BR>Do you=20 Yahoo!?<BR>SBC Yahoo! DSL - Now only $29.95 per month!<BR><A=20 href=3D"http://sbc.yahoo.com">http://sbc.yahoo.com</A><BR><BR>-<BR>-To = subscribe/unsubscribe, email "<A=20 = href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In= the=20 email body, write "subscribe canslim" or<BR>-"unsubscribe = canslim". Do=20 not use quotes in your email.<BR></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_04E4_01C34BB0.82DF37A0-- - - - -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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