Go to Jeff Salisbury LWGate Home Page.From: "Gene Ricci" <genr@swbell.net>
Subject: [CANSLIM] Fw: M
Date: Mon, 11 Aug 2003 16:51:12 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_0161_01C36028.C582FC40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable DMC,=20 The two charts show that the market internals are weaker than the major = indexes are showing (NDX and SPX have not pulled back very much = price-wise). That says the small caps are weaker than the large caps. = If the big caps start giving it up, the indexes will fall like a rock. = On the flip side, one could interpret them in a contrary manner ...... = a lot of stocks have pulled back significantly and a little good news = could very well push the indexes higher because they are no longer = overbought. These are just another way to get a look at the market. Looking at the February-March sell off in the indexes, the two charts = did not confirm the price action. That suggested a rally... the powerful = rise came in late March and these charts confirmed the strength of that = rally. Right now we have a divergence but we don't really have the = confirming price action. So we have to use them as a warning. It says = it is a dangerous time to be long, that's all. The stochastic indicator is on all of my charts (default setup)... Gene Gene, I loved your pictures, but for the life of me I can't figure out how = to use them. I'm trying, though. When a large % of the components of = an index are over the 50 ma line, then that's bearish (likely to fall?)? = So if these % have crested and are falling, then it's not quite as = bearish (likely to fall) as before? I'm trying to parse it out, but it may just be beyond me. I barely = grasp the BPNDX things (where you take the stacks of names doing a P&F = chart bullish move and make histograms out of them, look for the rise = and the cresting), so this may completely stump me. In something like $NYA50R, let me go back to simplicity itself. When = I look at the daily chart for the NYSE I see an index which has risen = from 4400 to 5740 in 3 months or so, and seems to be selling off = (priceline). The 2 month trend in the price is down, and the shorter = moving averages are cutting down through the longer ones (the 10 is = below the 20, the 20 is below the 30, and all three are heading down = toward the 50 and the 200. This is very bearish to me. The fact that = 90% of the names used to be above the 50 ma and now its only 50 seems to = be counting the angels on the head of a pin since the index seems to be = heading south. The number of names above or below the 50 ma would seem = to be more dependent on where the index has been than where it might be = going. In this case, since the index has gotten smashed, all its moving = averages are unusually low and therefore easy to cross in both = directions. I don't know if it's overbought or oversold, I just think = it's going anti-north in the near term. Adding a stochastic off these percentage charts is just putting salt = in my wounds. An oscillator to read what is essentially an oscillator? Now, there may be some salvation on the weekly chart, or maybe not. Am I missing something here? DMC - ------=_NextPart_000_0161_01C36028.C582FC40 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">DMC, </FONT></DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">The two charts show that the = market=20 internals are weaker than the major indexes are showing (NDX and SPX = have not=20 pulled back very much price-wise). That says the small caps are = weaker=20 than the large caps. If the big caps start giving it up, the = indexes will=20 fall like a rock. On the flip side, one could interpret them = in a=20 contrary manner ...... a lot of stocks have pulled back = significantly and a=20 little good news could very well push the indexes higher because = they are=20 no longer overbought.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">These are just another way to = get a look=20 at the market.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS" size=3D2></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">Looking at the February-March = sell off in=20 the indexes, the two charts did not confirm the price action. That=20 suggested a rally... the powerful rise came in late March and these = charts=20 confirmed the strength of that rally. Right now we have a divergence but = we=20 don't really have the confirming price action. So we have to use = them as a=20 warning. It says it is a dangerous time to be long, that's=20 all.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">The stochastic indicator is on all of = my=20 charts (default setup)...</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT><FONT=20 face=3D"Comic Sans MS"></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">Gene</FONT></DIV> <DIV><FONT size=3D2></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <BLOCKQUOTE dir=3Dltr=20 style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; = BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <DIV style=3D"FONT: 10pt arial"> <DIV><FONT face=3DArial size=3D2>Gene,</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS" size=3D3></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>I loved your pictures, but for the = life of me I=20 can't figure out how to use them. I'm trying, though. When = a large=20 % of the components of an index are over the 50 ma line, then that's = bearish=20 (likely to fall?)? So if these % have crested and are falling, = then it's=20 not quite as bearish (likely to fall) as before?</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>I'm trying to parse it out, but it = may just be=20 beyond me. I barely grasp the BPNDX things (where you take the = stacks of=20 names doing a P&F chart bullish move and make histograms out of = them, look=20 for the rise and the cresting), so this may completely stump = me.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>In something like $NYA50R, let me go = back to=20 simplicity itself. When I look at the daily chart for the NYSE I = see an=20 index which has risen from 4400 to 5740 in 3 months or so, and seems = to be=20 selling off (priceline). The 2 month trend in the price is down, = and the=20 shorter moving averages are cutting down through the longer ones (the = 10 is=20 below the 20, the 20 is below the 30, and all three are heading down = toward=20 the 50 and the 200. This is very bearish to me. The fact = that 90%=20 of the names used to be above the 50 ma and now its only 50 seems to = be=20 counting the angels on the head of a pin since the index seems to be = heading=20 south. The number of names above or below the 50 ma would seem = to be=20 more dependent on where the index has been than where it might be = going. =20 In this case, since the index has gotten smashed, all its moving = averages are=20 unusually low and therefore easy to cross in both directions. I = don't=20 know if it's overbought or oversold, I just think it's going = anti-north in the=20 near term.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Adding a stochastic off these = percentage charts=20 is just putting salt in my wounds. An oscillator to read what is = essentially an oscillator?</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Now, there may be some salvation on = the weekly=20 chart, or maybe not.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Am I missing something = here?</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial = size=3D2>DMC</FONT></DIV></DIV></BLOCKQUOTE></BODY></HTML> - ------=_NextPart_000_0161_01C36028.C582FC40-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". 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