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Steven,
Thanks for the interesting post. I've never paid much attention to
chart patterns except for the trends. That's because every time I try to
call a turn, I'm usually wrong <G>. However, I'm usually right following
the trends. Also, I never get hurt too much as long as I abandon ship when
the trends are broken.
In this case, I was stopped out of two stocks and some of the indices I
follow did break their trends. That's why I'm cautious right now. I'm not
scared enough to dump my remaining long positions, but I do move my stops up
as soon as the up trends allow it. I'm also concerned enough that I won't
enter any new long positions until it looks like the market has resumed its
up trend. On the other hand, I won't enter any short positions unless the
NASDAQ, SPX, and NYA also break their up trends.
I guess you could classify me as a cautious bull that could be
converted <G>.
Jim
-----Original Message-----
From: Steven Buss <sbuss@xxxxxxxxxxx>
To: Metastock-list <metastock-list@xxxxxxxxxxxxx>
Date: Sunday, October 26, 1997 11:33 AM
Subject: Re: Weekly Stock Watch and Topping Patterns
>Jim,
>
>I've appreciated your sharing with all of us your thoughts. Thought I'd
try
>to summarize my view of an alternative approach.
>
>In the last two weeks there was a brief discussion on the metastock list
>about the relative value of "charting" vs. "harder indicator" based
>approaches. I'm sure both are valuable.
>
>But I think one of the values of charting has been illustrated recently in
>market action. As you note, many major indices have broken trend support
>levels of one kind or another. But there may well be something more going
>on. When you look at the major indices they all, to one degree or another,
>look very much like the tops depicted and described in all the classic
>technical analysis texts.
>
>I performed an interesting exercise over the weekend. I loaded and printed
>all the S&P industry indices and have gone over them one by one. Many,
>maybe even more than 50% (I didn't count), show the same kind of potential
>topping patterns, albeit at varying stages. This is a multi-hour exercise
>but one of, if not the, most valuable exercises I've performed in a many
>months. To get a quick sense of how valuable this might be, look at the
>Philadelphia Semiconductor Index chart (SOX). If that wasn't a train wreck
>waiting to happen I don't know what was.
>
>Now, it's also clear that this could be a bear trap. (Does anyone know the
>stats on this. My sense is that when you see a clear topping pattern in so
>many major and industry indices as well as individual equities that the
odds
>are heavily weighted toward the topping patterns being important
indicators.
>Is this true? Thoughts?) There are certainly things the market could do
>that would convince me that we weren't at the beginnings of a major
downturn
>at least for many individual equities. (Classic stuff like higher highs
and
>higher lows.)
>
>But if we assume that the dominance of topping patterns is very likely to
>result in continued drops in prices, it seems to me that one has to be
>especially careful being long anything as you suggest. Early last week, I
>bought puts on stocks with topping patterns within industries with topping
>patterns. I'm even for the week. Mine didn't drop (yet I hope).
>
>
>Steven Buss
>Walnut Creek, CA
>sbuss@xxxxxxxxxxx
>
>-----Original Message-----
>From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
>To: wayne walusiak <waynewal@xxxxxxxxxxxxxxx>; Vitaly Larichev
><vitaly@xxxxxxxxxxxxx>; Vincent <vmw.sr@xxxxxxxxxxxxxxxx>; Vilas Boas
><vilasboa@xxxxxxxxxxxx>; Tom Barry <tombarry@xxxxxxx>; Tom
><TOM9641@xxxxxxx>; Thurl C. Van Kirk <tvk2@xxxxxxxx>; Steven Buss
><sbuss@xxxxxxxxxxx>; spaman <spaman@xxxxxxxxx>; Shag Johnson
><John.Ben@xxxxxxxxxxxxxxx>; Sam Crowe <ASAMCROWE@xxxxxxxxxx>; Robert Hughes
><magick@xxxxxxxxxxxxxxx>; Robert C. Richmond <rcrich@xxxxxxxxxxxx>; Richard
>Linxwiler <rlinx@xxxxxxxxxxxxxx>; Raymond Hodge <RPHODGE@xxxxxxxxxxx>;
ramon
>P slupsky <zzorro@xxxxxxxxxxxxx>; Quinton E. Collins <quint@xxxxxxxxxxxxx>;
>Privite Investor <private-investor@xxxxxxx>; Peter Rodriguez
><peter.rodriguez@xxxxxxxxxxxxxxx>; PDEE <PDEE@xxxxxxx>; Ned
><ned@xxxxxxxxxxxxxx>; MR PAUL R CAMILLERI <FVNG78A@xxxxxxxxxxx>; Monika &
>Michael Liew <mliew@xxxxxxxxxxxxxxxxxxx>; Michael Smith
><msmith.brightnotes@xxxxxxxxxxx>; Michael Liew <MAL2@xxxxxxxxxxxx>; Michael
>Hall <epitrope@xxxxxxxxxxx>; Michael Arnoldi <marnoldi@xxxxxxxxxx>; Mark
>Johnson <johnson_m@xxxxxxxxxxxxx>; Mark Fauber <MFauber@xxxxxxx>; Marc
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Peterson
><lpeter@xxxxxxxxxx>; L. A. Baker <louab@xxxxxxxxxxxxx>; Kevin Sturgeon
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><jwargo@xxxxxxx>; John Manasco <manasco@xxxxxxxxxxxx>; John Cuomo
><jcuomo@xxxxxxxxxxxxxxxxxxxxxxxxxxx>; John Bois <JBois@xxxxxxx>; John &
>Paula <jhl3@xxxxxxxxx>; Jim DeWilder <jdewilder10151@xxxxxxxxxxxxxx>; Jim
>Barone <Wooglinx@xxxxxxx>; Jerry Medlin <jmedlin@xxxxxxxxxxxxx>; Jeff
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><surfingrincon@xxxxxxxx>; James H. Shaddy <jshaddy@xxxxxxxxxx>; James A.
>Deni <JDENI@xxxxxxxxxxxxxxxx>; jack velte <jackv@xxxxxxxxxxx>; J. Stephen
>Jones <jsjones@xxxxxxxx>; J. Carlos <areia@xxxxxxxxxxxxxxx>; Iris Brown
><irisb@xxxxxxxxxxx>; Hugo Noomen <100413.2325@xxxxxxxxxxxxxx>; Herb
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>Harlin A. Friedman <hafstrat@xxxxxxxxxxxxxxx>; Guy Gordon
><gordon@xxxxxxxxxxx>; Gunter <GUNTERE@xxxxxxxxxx>; Gitanshu Buch
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>Frank B. Gaylord <fbg@xxxxxxxxxxxxxx>; Francois Martin
><francoisma@xxxxxxxxx>; fletch <fletchmo@xxxxxxx>; Ed Schwab
><edschwab@xxxxxxxxxxxxxxxxxx>; Ed Hancock <ehancock@xxxxxxxxxx>; Drew
>Hawkins <dhawkins@xxxxxxxxxxxx>; Don Hodges <dhodges@xxxxxxxxxxxxxxxx>; Doc
>Amin <amin@xxxxxxxxxxxxx>; Dick Jurgens <dickj@xxxxxxxx>; Denis Trover
><dtrover@xxxxxxxxxxxxx>; David Kohn <dnkohn@xxxxxxxxx>; David Castley
><David.Castley@xxxxxxxxxxxxxx>; Dave Zawicki <JohnZGalt@xxxxxxxxxxxxxxxx>;
D
>J Hadley <animal@xxxxxxxxx>; Craig Camp <CCAMP@xxxxxxx>; Cliff Frish
><cbfrish@xxxxxxxxxxxxxxxx>; Claude Baruch <ClaudB@xxxxxxx>; Christopher J.
>Lewis <katlewis@xxxxxxxxxx>; Chip Anderson <chipa@xxxxxxxxxxxxxxx>; Carole
>Frohardt <cfro@xxxxxxxxxxxxxxxxxxx>; Carlos D. Thomason
<deant@xxxxxxxxxxx>;
>Bob Fulks <bfulks@xxxxxxxxxxx>; bill bolumen <bolumen@xxxxxxxxxxxxxxxx>;
>Bill <WPhill9611@xxxxxxx>; Bart Waller <bartco95@xxxxxxxx>; Al Dharsee
><Dharsee@xxxxxxx>; Harley D. Meyer <Harley.D.Meyer-2@xxxxxxxxxx>
>Date: Saturday, October 25, 1997 9:26 PM
>Subject: Weekly Stock Watch
>
>
>>All,
>> I'm sure you've noticed that I'm sticking with stock watch, not stock
>>pick <G>. It looks like I was wrong on switching back toward larger cap
>>stocks. Friday, both CUBE and CPQ closed below my stop and I'll close
>those
>>positions Monday. I don't mind taking the profits in CUBE, but don't like
>>the quick loss in CPQ. However, it now looks like CPQ will head back to
>the
>>bottom of its intermediate term up trend channel at 56. I still like CPQ
>>and want to get back in, but will wait for it to test the bottom of the
>>intermediate term channel.
>> Looking at the indices, both the DJIA and the OEX broke through the
>>bottom of my up trend channels, while the NYA, SPX, RUT, and NASD are
still
>>in their up trend channels. That indicates to me that my move back to the
>>larger caps was premature and also we are still in danger of an overall
>down
>>trend. I don't think that will happen but I've been wrong before and will
>>be wrong again <G>. Anyhow, the prudent thing to do here is to build up
>>some buying power and watch for a few days at least.
>> I did want to identify a strong stock in a strong group to test the
>>waters with if it looks like the up trend is going to continue. After
>>looking for strong industry groups, I finally decided on the oil drilling
>>group which has done good for quite a while and shows no sign of slowing
>>down. I then looked at some analyst stories and liked what I saw about
>>Rowan Companies (RDC). While RDC is in both offshore and land drilling as
>>well as heavy equipment manufacturing and transportation, the real story
is
>>deep water drilling. The rates for deep water drilling are exploding and
>>RDC has most of the new capacity coming on line in the next few years.
>>Their earnings are already turning up with last quarters earnings being
>over
>>50% of the previous quarters and more than double the quarterly earnings a
>>year ago. With a lock on deep water drilling, the earnings should
>>accelerate even more from here.
>> RDC at 39.312 is slightly below mid channel of an Intermediate Term
Up
>>Trend Channel (ITUTC) with the top at 45 and the bottom at 35 1/2. There
>>was a MetaStock RSquared, S/C,MFI system test buy signal in late May and
>>the stock has been moving up strongly ever since with only one sideways
>move
>>to the bottom of the channel in July and August followed by another strong
>>up move in September and August. In October, RDC did move down and
>sideways
>>to its current mid channel position. RSquared and S/C indicate a strong
>>trend in progress, but the money flow did drop in August and September and
>>has leveled off in October. The fundamentals are excellent except for PSR
>>which is at 5.06 and higher than I would like. However, this is offset by
>>the potential for large earnings gains. The Debt/Equity is 0.48, there is
>>over 30% insider ownership, and revenues have been growing at over 20% per
>>year. In a perfect world, I'd like further movement towards the bottom of
>>the channel before entering. However, I'll also enter if it breaks out
and
>>the market looks like it is resuming its upward move. I'll keep the email
>>list posted.
>> RDC.GIF attached.
>>
>>Jim
>>
>>
>>
>
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