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Frans,
You're on the list, I'll send chart by separate message. You
right, I do wrestle with all of that <G>. Richard Arms invented
Equivolume Charting back in the early 60s. In equivolume and
Candlevolume charts, the width of the box is a function of volume.
Therefore a wide box means lots of volume. A series of wide squat
boxes in a sideways type pattern mean that a lot of volume isn't
moving the market and therefore there is a good probability that the
existing short term trend is about to reverse. The reversal is
confirmed by a series of tall boxes in the opposite direction. TRV
boxes in the last week have that "typical equivolume reversal
pattern", now if we can just get that series of tall narrow up boxes
<G>.
Jim
-----Original Message-----
From: derksenf <derksenf@xxxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, September 14, 1998 2:40 AM
Subject: Re: Weekly Pick
>Hi Jim,
>
>Always love to read your comments.
>The ideas are pretty consistent.
>And I "smell" your wrestling with moneymanagement. (How much (%) in
shares,
>how much (%) in this specific stock. Shall I go big into this one or
shall I
>scale in. Take all profits/loss or scale out? etc.)
>Admire your guts, especially your taking long positions in what
"everybody"
>percepts as a downmarket. You must really trust yourself and your
>indicators. I like that.
>
>You wrote: "a typical Equivolume reversal pattern"
>Please explain...
>
>And please put me on your list.
>
>Trade cool,
>
>Frans
>
>
>At 13:53 12-09-98 -0400, you wrote:
>>All,
>> The market did move up yesterday and I did open my DELL
position at 56
>3/8. So far so good, now if it will just follow through <G>. I took
a long
>look at the indices last night and they are acting right for my
theory. To
>expand it a little, I believe the DJIA is trying to set up a volatile
>sideways or horizontal channel trading range between 7500 and 8000.
The
>DJIA is not near the bottom of any of my trend channels but both the
OEX and
>SPX are bouncing off the bottom of long term channels. There is ,
however,
>some support for the DJIA near 7500 from the Jan lows and resistance
above
>8000 from last falls highs. Looking at the daily action, the DJIA
has
>tested the 7500 level three times in the last two weeks so it does
look like
>a bottoming action. With the volatility we have seen, I fully expect
>another test of the 8000 level soon. However, this is still a
somewhat
>tenuous theory and a long way from reality. I will commit to
positions to
>play the theory, but want to do so more cautiously then usual with
very
>close stops. That means any stock I pick must be close to the bottom
of the
>channel since I set my stops under the channel and preferable has
just
>bounced up a little. Also I'm only going to play the large market
leaders
>in groups I'm interested in.
>> Even with the large DELL position and my normal size RDC
position, I'm
>still over 50% cash and want at least one more position to play the
bounce
>I'm hoping for. I think the brokers and financial service groups
have been
>over punished and over sold lately so that's the group for this weeks
pick.
>I narrowed my list to Schwab and Travelers Group (TRV) and decided on
TRV
>since it is so over sold and since Sandy Weill always bounces back.
I only
>wish I had ridden his coat tails more in the past <G>. TRV is going
to be
>the true financial services giant when the merger with Citicorp is
completed.
>> TRV at 40 7/8 broke out of a Short Term Down Trend Channel
Friday on
>good volume. It's also in a Long Term Up Trend Channel (LTUTC) with
the top
>at 80 3/8 and the bottom at 38. It peaked at 73 3/8 on 4/6/98 and
then went
>into a four month CANSLIM cup type formation but failed to breakout
in Jul
>and then went into a tail spin to a low of 36.4375 Friday morning
before the
>good up move. Looking at the chart, the last week shows a typical
>Equivolume reversal pattern with TRV bouncing off the bottom of the
LTUTC
>twice on high volume. It closed at the lows on the first bounce, but
closed
>at the highs yesterday. The Support/Resistance and CMO indicators
look like
>the beginning of a reversal pattern. The fundamentals are better
than ever
>with the PE at 12.1, price/sales at 1.1, return on equity at 17.5%, 5
yr.
>revenue growth rate at 49% and 5 yr. earnings growth rate at 19%.
TRV just
>kept growing while the stock price dropped. That's why I think it's
so over
>sold and such a bargain right here. I'll take a long position at
Monday's
>open, set my target just under the top of the LTUTC at 80 and my
mental stop
>just under it at 37 3/4. I'd like to hang on to this one as a long
term
>core position if it will let me so I'll wait until a good short term
up
>trend channel forms before moving my stop up to it.
>> I'm sending a TRV.GIF chart to everyone on my email chart list.
If
>you're not on the list, and want on, just yell.
>>
>>Jim
>><!DOCTYPE HTML PUBLIC "-//W3C//DTD W3 HTML//EN">
>><HTML>
>><HEAD>
>>
>><META content=text/html;charset=iso-8859-1
>http-equiv=Content-Type><!DOCTYPE HTML PUBLIC "-//W3C//DTD W3
>HTML//EN"><!DOCTYPE HTML PUBLIC "-//W3C//DTD W3 HTML//EN"><!DOCTYPE
HTML
>PUBLIC "-//W3C//DTD W3 HTML//EN">
>><META content='"MSHTML 4.72.3509.100"' name=GENERATOR>
>></HEAD>
>><BODY bgColor=#ffffff>
>><DIV><FONT color=#000000 size=2>All,</FONT></DIV>
>><DIV><FONT color=#000000 size=2> The market
did
>move up
>>yesterday and I did open my DELL position at 56 3/8. So far so
good, now
>>if it will just follow through <G>. I took a long look
at the
>>indices last night and they are acting right for my theory. To
expand
>it a
>>little, I believe the DJIA is trying to set up a volatile sideways
or
>horizontal
>>channel trading range between 7500 and 8000. The DJIA is not
near the
>>bottom of any of my trend channels but both the OEX and SPX are
bouncing
>off the
>>bottom of long term channels. There is , however, some support
for the
>>DJIA near 7500 from the Jan lows and resistance above 8000 from last
falls
>>highs. Looking at the daily action, the DJIA has tested the
7500 level
>>three times in the last two weeks so it does look like a bottoming
>action.
>>With the volatility we have seen, I fully expect another test of the
8000
>level
>>soon. However, this is still a somewhat tenuous theory and a
long way
>from
>>reality. I will commit to positions to play the theory, but
want to
>do so
>>more cautiously then usual with very close stops. That means
any stock I
>>pick must be close to the bottom of the channel since I set my stops
under the
>>channel and preferable has just bounced up a little. Also I'm
only going
>>to play the large market leaders in groups I'm interested in.
>></FONT></DIV>
>><DIV><FONT color=#000000 size=2> Even with
the large
>>DELL position and my normal size RDC position, I'm still over 50%
cash and
>want
>>at least one more position to play the bounce I'm hoping for.
I think
>the
>>brokers and financial service groups have been over punished and
over sold
>>lately so that's the group for this weeks pick. I narrowed my
list to
>>Schwab and Travelers Group (TRV) and decided on TRV since it is so
over
>sold and
>>since Sandy Weill always bounces back. I only wish I had
ridden his coat
>>tails more in the past <G>. TRV is going to be the true
financial
>>services giant when the merger with Citicorp is
completed.</FONT></DIV>
>><DIV><FONT color=#000000 size=2> TRV at 40
7/8
>broke out
>>of a Short Term Down Trend Channel Friday on good volume. It's
also in a
>>Long Term Up Trend Channel (LTUTC) with the top at 80 3/8 and the
bottom at
>>38. It peaked at 73 3/8 on 4/6/98 and then went into a four
month
>CANSLIM
>>cup type formation but failed to breakout in Jul and then went into
a tail
>spin
>>to a low of 36.4375 Friday morning before the good up move.
Looking
>at the
>>chart, the last week shows a typical Equivolume reversal pattern
with TRV
>>bouncing off the bottom of the LTUTC twice on high volume. It
closed at
>>the lows on the first bounce, but closed at the highs
yesterday. The
>>Support/Resistance and CMO indicators look like the beginning of a
reversal
>>pattern. The fundamentals are better than ever with the PE at
12.1,
>>price/sales at 1.1, return on equity at 17.5%, 5 yr. revenue growth
rate at
>49%
>>and 5 yr. earnings growth rate at 19%. TRV just kept growing
while the
>>stock price dropped. That's why I think it's so over sold and
such a
>>bargain right here. I'll take a long position at Monday's
open, set my
>>target just under the top of the LTUTC at 80 and my mental stop just
under
>it at
>>37 3/4. I'd like to hang on to this one as a long term core
position
>if it
>>will let me so I'll wait until a good short term up trend channel
forms before
>>moving my stop up to it. </FONT></DIV>
>><DIV><FONT color=#000000 size=2> I'm sending
a TRV.GIF
>>chart to everyone on my email chart list. If you're not on the
list, and
>>want on, just yell.</FONT></DIV>
>><DIV><FONT color=#000000 size=2></FONT> </DIV>
>><DIV><FONT color=#000000 size=2>Jim </FONT></DIV></BODY></HTML>
>>
>
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