Go to Jeff Salisbury LWGate Home Page.From: Ian <ianstm@shaw.ca>
Subject: Re: [CANSLIM] for Short Selling
Date: Thu, 14 Aug 2003 09:45:47 -0700
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Hi DMC:
One thing I find a little ironic here is that most of the pundits (the ones that I come across anyhow, clearly a non-scientific sample size) appear to be bearish, because everyone is bullish. Doesn't that make everyone really bearish, allowing us to continue to climb the wall of worry?
Cheers,
Ian
----- Original Message -----
From: DMC197807
To: canslim@lists.xmission.com
Sent: Sunday, August 10, 2003 4:00 PM
Subject: Re: [CANSLIM] for Short Selling
Mighty quiet out there.
Further on the M! Thang, for those who are interested. Here is the Naz 100 bullish percentage index:
http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]dbclniay[de][pc13!c20!f][vc60][i]&pref=G
Most recently it was higher than it's been in relevant history (here, you can see it in the weekly):
http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]wbclniay[df][pc13!c20!f][vc60][i]&pref=G
Its recent rating of 91 is just astounding
Here's the Dow:
http://stockcharts.com/def/servlet/SC.web?c=$bpINDU,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G
And the BP for the SPX:
http://stockcharts.com/def/servlet/SC.web?c=$BPspx,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G
We are definitely picking up a unform pattern of highs not seen before (translation: everything is as bullish as possible, meaning there's just one way to go. if you can't get more bullish, it's the top).
While you have the SPX chart open, just look at the 3 previous spikes of 77 (April 2002), 59.80 (Aug 2002) and 68.40 (Dec. 2002), and look back to what the SPX did after those moments:
http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G
77 (April 2002)--SPX went from 1150 to 775 in 5 months.
59.80 (Aug 2002)--SPX went from 965 to 768 in 1.5 months
68.40 (Dec. 2002)--SPX went from 950 to 800 in 3 months.
Anyway, it's all very interesting to look at, isn't it? Elliot Wavers might see this overly bullish scenario as the setup for yet another 3-count wave down. I don't really subscribe to EW stuff, but, like FIbonacci and Gann, it's useful to at least think about. The last EW pattern, if you believe this stuff, took the SPX down from 1500 to 768, or a 50% retrace. This one, starting at 1015.40, could do some similar damage and take us down to 565-775 over a 12 month period. Some bearish reports I've see predict a SPX fall to the mid 600s before year end.
Otoh, we're in the 3rd political year, and 3 and 4 are notoriously good. And, if you do a big Fibo study on the SPX since its base in 1995 at about 440, we've already done a 38% retrace (back to the 62% line).
http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[h,a]mbclniay[pc13!c20!f][vc60][i][J15983278,Y]&pref=G
All things to think about on a nice, calm, summer Sunday's evening.
DMC
----- Original Message -----
From: WJH
To: canslim@lists.xmission.com
Sent: Sunday, August 10, 2003 10:00 AM
Subject: Fw: [CANSLIM] for Short Selling
Sounds interesting.
From: DMC197807
To: canslim@lists.xmission.com
Sent: Saturday, August 09, 2003 6:41 PM
Subject: Re: [CANSLIM] for Short Selling
Rolf & Mark,
My vote (if I get a vote) is why not discuss how to use canslim ideas to
generate potential shorts? It's not like this little epistolary group
hasn't gone off the track since I've been here (about 10 trading days), and
it's not like it takes a lifetime to figure out Canslim in any event. It's
really rather simple, and with the help of computers it's almost too easy.
The real difficulty lies in disciplining oneself to limit or get rid of
longs in sideways and topping markets, and be willing to reenter when the
market's correction has ended and stocks are ready to rise again. You can
find the names of candidates very easily for a little coin paid for a
subscription to IBD and/or a subscription to canslim.net.
For short discussions, let's just use the above referenced subject line
"Re: [CANSLIM] for Short Selling"
and the purists like Fanus et al (so far it seems to be all Fanus) can
either eyeball them and delete them, or even program their Outlook Express
to pre-delete all messages on the peripheral topic.
I think it would be helpful to understand what kind of screen would generate
the opposite of good longs in a bad market, if only for academic,
mind-sharpening purposes. After all, if in traditional canslim technique
you are looking for 1 or 2 stocks to buy per week in a good (M!) market,
then why not reverse the order in a bad (M!) market.
With that in mind, I'd like to explore what kinds of things people think
would indicate a dangerous market, knowing in advance that calling a top is
one of the hardest things to do BUT that falls tend to be so much more
precipitous than climbs that there's gold in those hills if you can time it
right and buy a put to get into position.
In any event, VTO has provided a very handy site with lots of sentiment
indicators:
http://www.vtoreport.com/sentiment/cot.htm
If you click on Sentiment and Bull/Bear you can see a very wide gap between
bullish and bearish advisors, the kind which indicates a correction is
coming. I'd say anytime you see a gap of 25% or more (with the bulls on
top) you are looking at a dangerous situation.
The Put/Call ratio has been very low and is now climbing. Again danger.
The VIX has been unnaturally low for a long time, another coiled spring.
For COTS, I prefer to use the Quasimodos.com site:
http://www.quasimodos.com/marketrider/technical.php
The articles are interesting, and to get the reports and COTs page, click
here:
http://www.quasimodos.com/marketrider/charts.php
You can't paste the sites, but the first 3 on the right, for the Dow, the
Naz and the SPX have a very interesting graphic display of the traders'
positions. I don't know exactly what the timing is on these but the smart
money seems to be betting against this market continuing, while the small
speculators keep piling on the positions. Good bull markets (like the one
we had from March to June) often begin with very small bars.
DMC
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<DIV><FONT size=2>Hi DMC:</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>One thing I find a little ironic here is that most of
the pundits (the ones that I come across anyhow, clearly a non-scientific
sample size) appear to be bearish, because everyone is bullish. Doesn't that
make everyone really bearish, allowing us to continue to climb the wall of
worry?</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Cheers,</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Ian</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2></FONT> </DIV>
<BLOCKQUOTE dir=ltr
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=dmc197807@comcast.net
href="mailto:dmc197807@comcast.net">DMC197807</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com
href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, August 10, 2003 4:00
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] for Short
Selling</DIV>
<DIV><BR></DIV>
<DIV><FONT face=Arial size=2>Mighty quiet out there.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Further on the M! Thang, for those who are
interested. Here is the Naz 100 bullish percentage index:</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><A
href="http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]dbclniay[de][pc13!c20!f][vc60][i]&pref=G">http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]dbclniay[de][pc13!c20!f][vc60][i]&pref=G</A></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Most recently it was higher than it's been in
relevant history (here, you can see it in the weekly):</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><A
href="http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]wbclniay[df][pc13!c20!f][vc60][i]&pref=G">http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]wbclniay[df][pc13!c20!f][vc60][i]&pref=G</A></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Its recent rating of 91 is just
astounding</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Here's the Dow:</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><A
href="http://stockcharts.com/def/servlet/SC.web?c=$bpINDU,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G">http://stockcharts.com/def/servlet/SC.web?c=$bpINDU,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G</A></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>And the BP for the SPX:</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><A
href="http://stockcharts.com/def/servlet/SC.web?c=$BPspx,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G">http://stockcharts.com/def/servlet/SC.web?c=$BPspx,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G</A></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>We are definitely picking up a unform pattern of
highs not seen before (translation: everything is as bullish as
possible, meaning there's just one way to go. if you can't get more
bullish, it's the top).</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>While you have the SPX chart open, just look at
the 3 previous spikes of 77 (April 2002), 59.80 (Aug 2002) and 68.40
(Dec. 2002), and look back to what the SPX did after those
moments:</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><A
href="http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G">http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=G</A></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>77 (April 2002)--SPX went from 1150 to 775 in 5
months.</FONT></DIV>
<DIV><FONT face=Arial size=2>59.80 (Aug 2002)--SPX went from 965
to 768 in 1.5 months</FONT></DIV>
<DIV><FONT face=Arial size=2>68.40 (Dec. 2002)--SPX went from 950
to 800 in 3 months.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Anyway, it's all very interesting to look at,
isn't it? Elliot Wavers might see this overly bullish scenario as the
setup for yet another 3-count wave down. I don't really subscribe to EW
stuff, but, like FIbonacci and Gann, it's useful to at least think
about. The last EW pattern, if you believe this stuff, took the SPX down
from 1500 to 768, or a 50% retrace. This one, starting at 1015.40, could
do some similar damage and take us down to 565-775 over a 12 month
period. Some bearish reports I've see predict a SPX fall to the mid 600s
before year end.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Otoh, we're in the 3rd political year, and 3 and
4 are notoriously good. And, if you do a big Fibo study on the SPX since
its base in 1995 at about 440, we've already done a 38% retrace (back to the
62% line).</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2><A
href="http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[h,a]mbclniay[pc13!c20!f][vc60][i][J15983278,Y]&pref=G">http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[h,a]mbclniay[pc13!c20!f][vc60][i][J15983278,Y]&pref=G</A></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>All things to think about on a nice, calm, summer
Sunday's evening.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>DMC</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<BLOCKQUOTE dir=ltr
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=hefner@swbell.net href="mailto:hefner@swbell.net">WJH</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com
href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, August 10, 2003 10:00
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Fw: [CANSLIM] for Short
Selling</DIV>
<DIV><BR></DIV>
<DIV>
<DIV>Sounds interesting.</DIV>
<DIV><FONT face="Comic Sans MS"></FONT> </DIV></DIV>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=dmc197807@comcast.net
href="mailto:dmc197807@comcast.net">DMC197807</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
title=canslim@lists.xmission.com
href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Saturday, August 09, 2003 6:41
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] for Short
Selling</DIV>
<DIV><BR></DIV>Rolf & Mark,<BR><BR>My vote (if I get a vote) is why
not discuss how to use canslim ideas to<BR>generate potential
shorts? It's not like this little epistolary group<BR>hasn't gone
off the track since I've been here (about 10 trading days), and<BR>it's
not like it takes a lifetime to figure out Canslim in any event.
It's<BR>really rather simple, and with the help of computers it's almost
too easy.<BR>The real difficulty lies in disciplining oneself to limit or
get rid of<BR>longs in sideways and topping markets, and be willing to
reenter when the<BR>market's correction has ended and stocks are ready to
rise again. You can<BR>find the names of candidates very easily for
a little coin paid for a<BR>subscription to IBD and/or a subscription to
canslim.net.<BR><BR>For short discussions, let's just use the above
referenced subject line<BR>"Re: [CANSLIM] for Short Selling"<BR><BR>and
the purists like Fanus et al (so far it seems to be all Fanus)
can<BR>either eyeball them and delete them, or even program their Outlook
Express<BR>to pre-delete all messages on the peripheral topic.<BR><BR>I
think it would be helpful to understand what kind of screen would
generate<BR>the opposite of good longs in a bad market, if only for
academic,<BR>mind-sharpening purposes. After all, if in traditional
canslim technique<BR>you are looking for 1 or 2 stocks to buy per week in
a good (M!) market,<BR>then why not reverse the order in a bad (M!)
market.<BR><BR>With that in mind, I'd like to explore what kinds of things
people think<BR>would indicate a dangerous market, knowing in advance that
calling a top is<BR>one of the hardest things to do BUT that falls tend to
be so much more<BR>precipitous than climbs that there's gold in those
hills if you can time it<BR>right and buy a put to get into
position.<BR><BR>In any event, VTO has provided a very handy site with
lots of sentiment<BR>indicators:<BR><BR><A
href="http://www.vtoreport.com/sentiment/cot.htm">http://www.vtoreport.com/sentiment/cot.htm</A><BR><BR>If
you click on Sentiment and Bull/Bear you can see a very wide gap
between<BR>bullish and bearish advisors, the kind which indicates a
correction is<BR>coming. I'd say anytime you see a gap of 25% or
more (with the bulls on<BR>top) you are looking at a dangerous
situation.<BR><BR>The Put/Call ratio has been very low and is now
climbing. Again danger.<BR><BR>The VIX has been unnaturally low for
a long time, another coiled spring.<BR><BR>For COTS, I prefer to use the
Quasimodos.com site:<BR><BR><A
href="http://www.quasimodos.com/marketrider/technical.php">http://www.quasimodos.com/marketrider/technical.php</A><BR><BR>The
articles are interesting, and to get the reports and COTs page,
click<BR>here:<BR><BR><A
href="http://www.quasimodos.com/marketrider/charts.php">http://www.quasimodos.com/marketrider/charts.php</A><BR><BR>You
can't paste the sites, but the first 3 on the right, for the Dow,
the<BR>Naz and the SPX have a very interesting graphic display of the
traders'<BR>positions. I don't know exactly what the timing is on
these but the smart<BR>money seems to be betting against this market
continuing, while the small<BR>speculators keep piling on the
positions. Good bull markets (like the one<BR>we had from March to
June) often begin with very small
bars.<BR><BR>DMC<BR></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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