RE: [CANSLIM] Another mystery plunge

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Another mystery plunge
Date: Fri, 25 Jul 2003 12:06:36 -0500

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Hi DMC,

While I fully understand that not all services and/or software packages are
for everyone, I believe that you have not accurately represented
BreakoutWatch when you suggest that it is a black box. In fact, the CE
scores are designed specifically to be transparent, something that is not
done with IBD's proprietary rankings such as SMR/EPS/AD/Timeliness, etc.
Stocks are not selected for inclusion on a watchlist based on CE scores,
instead this is based only on the price pattern of the stock.

I agree with you that TA systems cannot be fully tested, but that would hold
for the entire CANSLIM arsenal of intermediate term patterns and therefore
would assume that one should not or cannot trade these patterns at all,
whether one uses TC2000, metastock or any other technical analysis program.
A subscription to a combination of DGO/IBD/TC2000 would run you annually
$1000 for the full DGO package + $300 for IBD + $350 TC2000 (not sure of
exact number).  In the end, trading is about choices and services run the
full spectrum from the most generalized TA application plus fundamental
research (for full-bore analysis and an all-things-possible approach) to the
opposite end of the spectrum which includes stock picking services that hand
feed the user on what and when to buy and sell (for a highly specific
approach to a highly specific trading methodology). BreakoutWatch is at
neither end of this extreme spectrum. Each service has their place, each has
their tradeoffs, each has their strengths/weaknesses and each fits a
different sytle of user. That's why there are so many choices at each end
and throughout the entire spectrum.

Please see my separate posting with links to the CE score help file which
addresses your specific comment on the CET.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of DMC197807
Sent: Friday, July 25, 2003 10:30 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Another mystery plunge


Hong,

I'm not familiar with breakoutwatch.com's service (although I did just visit
their site).  It looks pretty pricey for something you can probably program
pretty well with TC2K and a subscription to IBD.  $900 per year for the
"platinum" service?

In general I don't think black boxes or canned trading systems work.  What
works is careful screening, careful analysis, disciplined trading and
disciplined money and position management.  Of  these four, the most
important are the latter two.

Academics (business schools) like to point out that no TA system has been
successfully backtested to perform over lengthy periods of time.  True
enough, because it is impossible to put in enough general market and proof
of trend indicators to reach a "scientific answer."  Further proof of
failure of black box systems was the LTCM debacle.  Also, as Steve Nison
likes to point out in analyzing candlesticks, unless you can define the
trend, you don't have a candlestick.

The big question here, the first question, is what is the condition of the
market.

Finally, as for the CET thing on OSTE, with a rating of 6.8 out of 7.0 and a
big plunge, what does that tell you about the infallibility of their rating
system?

DMC


- ----- Original Message -----
From: "Hong Hsu" <honghsu@bellatlantic.net>
To: <canslim@lists.xmission.com>
Sent: Friday, July 25, 2003 9:12 AM
Subject: Re: [CANSLIM] Another mystery plunge


>      DMC,
>
>     For OSTE, the total TA score  (CET) from breakoutwatch.com is 6.8
> out of 7.  With that score I will tend to believe it has solid TA.  Does
> it?   Maybe Katherine could share her insight.
>
>     -Hong
>
>
>
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