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The reason I'm VERY reluctant to talk about what I'm doing is because I
don't want to be responsible for what other people may do. I don't want to
have any kind of ethical responsibility to inform the list if I see that I'm
wrong on the industry and stock trend and get out of my position.
I also think that the specific trades that I'm up to are not of interest to
most members of the list. (That's why I've mostly only talked generally
about what I'm doing.) I already feel like I talk too much on this list.
But I've found that, like Jim Greening, I understand what I'm doing better
if I write about it.
Caveat emptor.
I've made a couple other commitments to the list for over the weekend. But
I'll try to make time to put on my smoking jacket <g> to list out the S&P
industry topping patterns that appear to be relatively new tops or are (as
yet) unrepentantly bullish. A stock that I've bought puts on today is Molex
(MOLX). It's in the Electrical Components industry (SPTKCD). My thought is
that Molex has just begun to break again. (Compare SPTKCD with SPFURN and
MOLX with MLHR.)
I'm not completely bearish. It was in the process of browsing the S&P
industry indices that I noticed the Biotechnology industry pattern and
looked for what was causing the recent strength in it. I'm long Amgen
(AMGN) calls today.
Now what will happen is that by writing about what I'm doing I've jinxed it
and the market will say that "Steve thinks he knows what he's doing and
needs to be taken care of today..." <g>
Steven Buss
Walnut Creek, CA
sbuss@xxxxxxxxxxx
-----Original Message-----
From: Ed Schwab <edschwab@xxxxxxxxxxxxxxxxxx>
To: Steven Buss <sbuss@xxxxxxxxxxx>
Date: Friday, November 14, 1997 5:21 PM
Subject: Re: Industry Index Topping Pattern Update
>Hi Steven,
>
> Your idea sounds like a good one. Would you be willing to disclose the
10
>industry patters to which you are referring? I'd like to check them out.
I'll
>be glad to share my opinion if you wish.
>
>Later,
>
>Ed
>
>----------------------------------------
>
>Steven Buss wrote:
>
>> I'm a newbie, but I've been buying (and quickly selling) puts according
to
>> the strategy I laid out in the note below. It has worked out for me
>> incredibly well (only because I've read the basic T/A texts and
understand
>> how option premium can change with daily stock price volatility; if you
>> haven't and/or don't, don't try it).
>>
>> A few times I've gotten depressed by the thought that there can't
possibly
>> be more stocks left that are a part of S&P industry indices that still
show
>> unrepentant or only recently confirmed tops that can be traded (i.e.,
>> shorted with long puts) for significant gain.
>>
>> I browsed the S&P industry indices again tonight. Amazing. There must
>> still be 10 industry patterns (i.e., about 10% of the total number of S&P
>> industry patterns) that are unrepentant (i.e., still bullish) or only
>> recently confirmed topping patterns.
>>
>> If you aren't making money some other way and if you haven't browsed
these
>> indices to discover the power of "turning to the short side" then you
>> should...<G>
>>
>> Steven Buss
>> Walnut Creek, CA
>> sbuss@xxxxxxxxxxx
>>
>> -----Original Message-----
>> From: Steven Buss <sbuss@xxxxxxxxxxx>
>> To: Metastock-list <metastock-list@xxxxxxxxxxxxx>
>> Date: Sunday, October 26, 1997 4:31 PM
>> 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
>> >Saegesser <mas@xxxxxxx>; Louis Phillips <KISBAR@xxxxxxxxxxxxxx>; L.
>> Peterson
>> ><lpeter@xxxxxxxxxx>; L. A. Baker <louab@xxxxxxxxxxxxx>; Kevin Sturgeon
>> ><sturgman@xxxxxxxxxxxxx>; Kenneth R. Lehr <kenlehr@xxxxxxxxxxxx>; John
>> Wargo
>> ><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
>> >Heebner <JWHnHotlanta@xxxxxxxxxxxxxxxx>; Jeff F. Brady
>> ><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
>> >Jorgensen <HJORGENSEN@xxxxxxxxxx>; Herb Carter
<carterh@xxxxxxxxxxxxxxxx>;
>> >Harlin A. Friedman <hafstrat@xxxxxxxxxxxxxxx>; Guy Gordon
>> ><gordon@xxxxxxxxxxx>; Gunter <GUNTERE@xxxxxxxxxx>; Gitanshu Buch
>> ><OnWingsofEagles@xxxxxxx>; GARY MONTGOMERY <Efficiency@xxxxxxxxxxxxxxx>;
>> >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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