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Frans,
Yes going long now with a stop under the low will give a good
reward/risk ratio, but I would put the stop under the channel instead
and then switch to a shorter term channel after we get enough data for
a good one. The dashed grey lines are actually a super long standard
deviation channel covering all the data I've loaded just to get a feel
for the real long term direction. The dashed purple lines are my long
term up trend channel. The dashed red and blue lines are my
intermediate and short term channels respectively except that I remove
the opposite side of the channel after a channel is broken just to
reduce chart clutter.
Jim
-----Original Message-----
From: derksenf <derksenf@xxxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Tuesday, September 15, 1998 5:45 PM
Subject: Re: Weekly Pick
>Hi Jim,
>
>See what you mean. Last 8 trading days are sidewards with rising
volume.
>Looks indeed like bottoming-out process.
>Probabilities for reaction are going up. Going long from this point
looks
>like a pretty low risk idea to me..., stop would be a little under
Sep. 11 low.
>What do you think?
>
>These 2 purple- and 1 grey lines I'm looking at, are these your
famous
>trend-channel lines?
>STDT, LTDT and MTDT ?
>
>Frans
>
>
>
>At 18:52 14-09-98 -0400, you wrote:
>>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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