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<DIV><FONT color=#000000 size=2>All,</FONT></DIV>
<DIV><FONT color=#000000 size=2> What a week! I
was stopped out of my DELL position Monday. Then all H... broke loose
Thursday. I looked at the charts hard Thursday night and as I said in my
Friday post, thought that we had just experienced a blow-off bottom. Only
time will tell if that's true or not, but let me expand on my thinking a little
bit. A classic blow-off bottom is one in which the market reaches new lows
on extraordinary high volume, lots of new lows are reached, and everyone is
extremely negative and the market recovers rapidly from there. Looking at
the first condition, it's true that the DJIA didn't reached new lows but instead
bounced off the bottom of it's Horizontal Channel (HC). However, the DJIA
just represents 30 stocks, not the market. All the broad market indices
did reach new lows on the third highest volume day in history. There were
over 2200 new lows on the NASDAQ and over 1200 new lows on the NYSE. The
put/call ratio was at a multiyear high. Analyst's were dropping their
earnings estimates and bearish sentiment was high. To me the evidence
supported that Thursday was a blow-off bottom. The question then, was what
to do?</FONT></DIV>
<DIV><FONT color=#000000 size=2> I decided to take a
position in well know former market leaders that were still in a Short Term Down
Trend Channel (STDTC). However, since they were still in a STDTC, I would
protect myself with a close stop under the Thursday low and take a position only
half my normal size. Then when/if they broke out of the STDTC, I'd double
my position size. The stocks I picked were America On Line (AOL), Dell
Computer (DELL), CitiGroup (CCI - the newly merged combination of Traveler's
Group and CitiBank), and MicroSoft (MSFT). I opened a position in each
Friday morning. That left me with long stock positions in AOL, CCI, DELL,
EGGS, MSFT, NR, and SCH as well as the old TRV LEAPS which have been converted
to CCI LEAPS.</FONT></DIV>
<DIV><FONT color=#000000 size=2> Monday I'm going to add
the other half of the CCI position which did break out of its STDTC
Friday. Some of the others are also close to the top of their STDTCs and
I'll be adding to those positions when/if they break out during the week.
I also want to add another Fallen Angel, Christmas Special, or whatever you want
to call the low priced beaten down stocks. I narrowed my selection to
Cypress Semi (CY), Labor Ready Inc. (LBOR), and Oxford Health (OXHP) and finally
decide on CY mainly because I also had a MS buy signal for it.</FONT></DIV>
<DIV><FONT color=#000000 size=2> CCI at 35.4375 bounced
off the bottom of a long term up trend channel Thursday and gapped up on good
volume to break out of a STDTC Friday. Based on performa data, it hit an
all time high just under 70 on 4/6/98 then fell back and moved up again to set a
double peak just under 70 again on 7/21/98. From there it went into free
fall to a low of 28 1/2 on Thursday, but closed 4 points higher. So
Thursday and Friday were both up days on good volume. The Binary Wave
Composite just turned positive and QStick is still negative but rising.
The fundamentals are great with a PE of 11.8, price/sales of 0.89, ROE of 19%,
Debt/equity of 1.46, and annual sales growth of 72% and earnings growth of
33%. I'll add to my position Monday and leave my stop at 27 3/4 for
now. I'll change my stop to just under the new Short Term Up Trend Channel
(STUTC) just as soon as we get enough data to construct one.</FONT></DIV>
<DIV><FONT color=#000000 size=2> CY at 8.4375 is in a
Horizontal Channel (HC) with the top at 11 and the bottom at 5 1/2. It hit
a 52 week high of almost 19 on 9/5/97 then fell from there to a low of 5 1/2 on
9/1/98. From there it rose to break out of its Intermediate Term Down
Trend Channel in mid Sep and hit a peak of a little over 9 at the end of
September. It then fell to a low of 8.625 on Thursday and rose to its
current position Friday. I got a MS6.5 Tema PV Binary Wave, QStick buy
signal a little over a week ago. The fundamentals aren't as good on this
one but that's to be expected. The price/sales is at 1.48, the
debt/equity at 0.32. Earnings are negative and sales have
dropped. The good news is that the worst might be over and the sales drop
has flattened. I'll open a long position Monday. I'll set the target
at 18, just under last years high and, for now, will set the stop at 7 1/2 which
was the reaction low just prior to breaking out of the ITDTC. If we get a
move above 9 3/8, I'll construct a new STUTC and set the low just under
it.</FONT></DIV>
<DIV><FONT color=#000000 size=2> I'll send copies of the
CCI and CY GIF charts to everyone on the email list. If you aren't on the
list and want on, just yell.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000
size=2>JimG </FONT></DIV></BODY></HTML>
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From: Onno Goedknegt <goedkneg@xxxxxx>
Subject: Re: can metastock do flip flops?
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Ton, Gerhard, Guy and Martin, thanks for your help on this topic sofar...
But depite your help I didn't succeed in getting a binary wave.
Did you get one, Simon?
I would like to put a trading system into the INDICATOR BUILDER
and hope to see a BINARY WAVE...
For example (trading system):
ENTER LONG: RSI(14)<30 OR Mo(12)<90
ENTER SHORT: RSI(14)>70 OR Mo(12)>110
So I would like to put this into the INDICATOR BUILDER to get a BINARY WAVE.
When this trading system generates a BUY signal the BINARY WAVE should jump
to +1 (and stay there...) and only go back to -1 after getting a SELL signal
(and stay there...).
I hope you can help me out.
Thanks in advance for your help!
Cheers,
Onno
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