ftp.xmission.com

home *** CD-ROM | disk | FTP | other *** search

/ ftp.xmission.com / 2014.06.ftp.xmission.com.tar / ftp.xmission.com / pub / lists / canslim / archive / v02.n397 < prev next >

Wrap

Internet Message Format | 1998-09-29 | 40KB

From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #397 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Tuesday, September 29 1998 Volume 02 : Number 397 In this issue: Re: [CANSLIM] Volume Info. RE: [CANSLIM] Quiet [CANSLIM] Re. IBD And Its Archives [CANSLIM] Fed cuts rates a quarter point. [CANSLIM] "M"; Greenspan;etc. [CANSLIM] Re: canslim-digest V2 #396 Re: [CANSLIM] Not: delayed quotes nice web page Re: [CANSLIM] Not: delayed quotes nice web page [CANSLIM] Latin America & The "RATE CUT" ---------------------------------------------------------------------- Date: Tue, 29 Sep 1998 10:18:50 -0700 (PDT) From: dbphoenix <dbphoenix@yahoo.com> Subject: Re: [CANSLIM] Volume Info. <<Does anyone know of a source (preferably free) that provides realtime (or delayed) percent volume change from the previous day or from a moving average for the major indices (perhaps on an hourly basis)? I'd like to get an idea of how the volume during the day stacks up against the previous day or some average. The same info for particular stocks would be useful also. Thanks joe>> Bigcharts.com provides it from the previous day. - --Db _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Tue, 29 Sep 1998 10:21:11 -0700 From: mikelu <mikelu@foxinternet.net> Subject: RE: [CANSLIM] Quiet I'm 60% in. I bought half on Thursday and half yesterday. I just finished setting all my stops. Mike - -----Original Message----- From: Johan Van Houtven [SMTP:Johan.VanHoutven@ping.be] Sent: Monday, September 28, 1998 12:56 PM To: canslim@lists.xmission.com Subject: [CANSLIM] Quiet It is so quiet here, it is scarry... B^) P.S.: Chicken little here toke profits and is back to 100% cash. I wonder what our group members have and are doing protfoloio-wise... Johan Van Houtven / CLICK! N.V. - - - - ------------------------------ Date: Tue, 29 Sep 1998 12:50:32 EDT From: JANSI1AUG1@aol.com Subject: [CANSLIM] Re. IBD And Its Archives Canslim People, Recently I have been on jury duty, and now that I'm just getting my sea legs again here are some IBD articles with information I believe would be useful to those who didn't read the articles when they first came out, for one reason or another. (The first 3 articles, under "26 Weeks to Investment Success", you can obtain from IBD's Web site at http//www.investors.com/index.html;this is also in the University section of IBD on AOL [keyword: IBD]. On AOL you can also search for articles over a few years old, including the 4th article below. AOLites you might want to search using the words "investor's corner" [without the quotes). Unfortunately, IBD on the Net, to my knowledge does not offer a "Search" feature for old articles.) Q&A With William O'Neil Q&A With William O'Neil How To Buy At Just The Right Moment In the most recent installment of his investment series, William O'Neil talked about why a stock's volume is so important. This week, IBD's chairman and founder discusses how to interpret volume and price. When sound patterns emerge, it's time to buy. Q:As long as the fundamentals are solid, does it really matter when you buy a stock? O'Neil: We've all heard the saying, ''Timing is everything.'' This is just as true in the stock market as it is in life. Knowing the optimal time to buy and sell a stock is a valuable skill anyone can and should learn. In the next two installments, I'm going to show you how to read a stock's daily or weekly chart, which will give you a visual picture of how a stock's price and trading volume change over a period of time and lend key clues to its future performance. Charts are helpful because they communicate critical information about how a stock is acting in the real marketplace - information you would miss by concentrating on fundamentals alone. Charts are graphic depictions of historical price behavior. They allow you to identify current behavior in relation to a stock's recent history. On a chart's price line, each bar represents a day's (or week's) price action in terms of three variables. The top of the bar represents the highest price the stock traded for that day or week. The bottom of the bar marks the low. The horizontal intersecting slash shows where the stock closed for that period. At the bottom of the chart is a graphic depiction of the volume of shares that traded for that same period, daily or weekly. Q:But how do you make sense of all those bars and slashes? O'Neil: We've discussed the importance of volume. Now let's make the connection between volume and price. A constructive sign easily identified on a chart is increased volume with the price moving up. This generally indicates accumulation, or professional buying, of a stock. A sign of potential trouble, or distribution (professional selling), is increased volume as a stock drops in price. On the flip side, if the price is down but the volume is also down significantly, there may be little cause for worry in that the decreased volume shows the stock is not being heavily sold. However, like most things, it's not quite this simplistic. In the next installment, I will go over specific exceptions to these generalities. I use both fundamental and technical indicators, because there may be signals that appear in a chart, on the technical side, that may precede public or professional changes in the fundamentals. This is especially true when leading stocks hit their tops. During our 45-year study of the greatest stock market winners, in addition to looking at fundamental measurements, we studied the technical indicators of price and volume movements and patterns through studying charts on all the outstanding stocks. What I found in common was that price consolidation areas or specific types of ''base patterns'' formed in the price history. These bases were formed just before the stocks broke out into new high ground in price and then went on to make their biggest gains. Q:So what does a future big leader's chart ''base pattern'' look like just before it's ready to break out to a new high in price and advance 100% to 200% or more? O'Neil: There are three primary patterns. One of the most common is the ''cup with handle.'' It was named such because it resembles the outline of a coffee cup with a handle on the upper half of the cup (see graphic, Page A22). Shown is the general shape of the chart pattern. A to B is the left-hand declining part of the cup, B is the bottom rounding out process of the cup with the price going back and forth for a few weeks, and from B to C, the stock rallies back up in price to a point usually just below its old high. Then C to D to E forms the handle. The entire area from Point A to Point E is called the ''cup with handle.'' Also, as part of the study of these winners, I identified an optimal buy point, or ''pivot point,'' for a stock. How? This point, usually at the end of a sound basing area when the stock price ''breaks out'' into new high ground, is the point of least resistance. This means that at this point, the stock has its greatest chance of moving even higher based on its current and historical price and volume activity. In the ''cup with handle'' pattern shown, the correct time to buy the stock would be as soon as it trades one-eighth of a point above the peak price in the handle (CDE). While we call this a new high, it is actually a new high breaking out of the handle trading range, which is usually a little below the actual old high price at Point A. This gives you a slight jump or edge on the stock. Q:Why don't you just buy at the bottom of the cup? O'Neil: People often feel uncomfortable waiting for a specific buy point, especially because most of the time it is often at a higher price than the basing area. They ask: ''Why not buy earlier at a cheaper price in order to get a better deal? Why wait until it is up a few points higher before I buy?'' This concept seems contrary to how many of us operate. However, the objective is not to buy at the cheapest price. The objective is to buy at the right time - -the time in which the chances are greatest the stock will succeed. I found through our studies that a stock purchased at this correct ''pivot point,'' if all the other factors of stock selection are in place, will not go down 8% (your protective sell rule) and has the greatest chance of moving substantially higher. On the day the stock breaks out, its trading volume should increase at least 50% above its average daily trading volume. It is important to have big professional demand for your stock at this key buy point. Only IBD's unique stock tables show you each stock's volume percent change daily. On our chart, the dashed line from X to A is called the ''prior uptrend.'' Strong, healthy stocks show at least 30% price increases in their prior uptrend. A proper ''cup with handle'' must take at least seven or eight weeks to form (from Point A to Point E). Otherwise, it may be unsound and fail after its breakout. Some bases may actually be three, six or as many as 15 months in duration. Most decline 20% to 30% from their absolute peak to the low of the cup (from A to B). Handles can be a short one or two weeks or a number of weeks longer and need to drift downward along their lows or have a shakeout (break below a prior week's low in the handle). This serves the purpose of getting a needed pullback or price correction out of the way. Proper handles rarely pull back in price more than 10% or 15% and will usually show either a marked dry- up in volume near their lows, which means there is no more selling coming into the stock, or they will have several tight areas where the price varies only a tiny amount and for several weeks may close virtually unchanged in price. This is a constructive signal. Q:Seems clear in theory, but do actual stocks really form such patterns? O'Neil: Here's a classic example of a cup-with-handle pattern: Microsoft in January 1991, one week before it broke to new price highs and went on to more than double in price. Its EPS Rank was 99 and its Relative Price Strength rank was 96 at the time. Microsoft formed a 25-week base. It declined six weeks on the downside from Point A, moved back and forth along the low of the cup at B, then rallied up in November and then formed a very tight handle in the last five or six weeks. Note the handle is in the upper half of the overall pattern. I've placed arrows on six different weeks along the low and on the uptrend in the base where volume (shown on the bottom of the chart) increases from the week before with the price increasing. The two largest volume weeks were on big up weeks in price with the price closing at the peak for the week. Note also the extreme volume dry-up to the lowest level on the chart and the small price movement in late December and early January. Your buy point is the peak in the handle area in January. Again, this is not the lowest price, but the price at which your probability of being right is highest. That's why you wait for the stock to hit this price before you buy. Until you get used to it, it will seem scary, strange and hard to believe that the correct way to buy is to buy when a stock is around the highest point it's ever been. In fact, 98% of individual investors never buy this way, and that's why few will ever own, or fully capitalize on, the really big new winners that occur year after year. Next week I will discuss why buying stocks as they break out of bases into new high ground has proven to be a sound principle and why most investors will miss opportunities of a lifetime because of fear and habit. I will also review other common bases: the flat base and the double bottom. 09/11/98 21:48 Q&A With William O'Neil Q&A With William O'Neil How To Buy At Just The Right Moment Last week, William O'Neil began his discussion of how to spot sound price patterns, such as the ''cup with handle.'' In this installment, IBD's chairman and founder looks at other common bases. Why are they so important? Quality stocks typically form these same patterns before they go on to make big gains. Q:When did you realize the importance of reading charts? O'Neil: I first discovered how critical charts were in 1959, one year after I became a stockbroker. At that time, there was one specific mutual fund that happened to be outperforming all others. I got a weekly chart book and posted from prospectuses and quarterly reports where, price-wise, the fund purchased every new stock during the prior two years. I discovered something very important. What I learned was so startling, it simply changed my whole view about how to pick winning stocks. Every single one of the approximately 100 new stocks the fund purchased was bought only after it bolted into new high ground in price! For example, if a stock had fluctuated back and forth between $40 and $50 for three to six months, this No. 1 fund only bought when the stock made a new high at $51. Now let's stop and think about this concept for a moment. This idea of buying a stock at the highest price it has ever sold as it is coming out of a correct basing area (I talked about one common pattern, the ''cup with handle'' last week) seems ludicrous. After all, most of us were raised with the idea of getting a deal, a bargain. I'm here to shatter a common and comfortable misconception. What applies to buying a car or a dress works in the completely opposite way when dealing with stocks. You want stocks that have the greatest potential of moving even higher. So, you've got to ignore the erroneous old saying, ''buy low and sell high,'' and replace it with ''buy high and sell a lot higher.'' It's all a matter of perspective. Look back at a huge winner like Cisco Systems.csco From its original new-high pivot point of $30 in October '90 through today, it has increased an incredible 15,596%. The original pivot point was actually low. It simply seemed high because its price history was all that was known at that time. The incredible gains to come were not yet visible. Q:What are some other price patterns that emerge before stocks take off? O'Neil: In addition to the common ''cup with handle'' pattern, see page A5 for an example of a ''double bottom'' chart pattern with American Power Conversion.APCC American Power's 39-week pattern looks like a large letter ''W.'' The midpoint of the W at C should be below the high at point A, the beginning of the pattern. A to B is the first bottom in the letter W, B to C is the midpoint and C to D represents the second leg down and second bottom in the W. Normally, the second leg down will drop slightly below the absolute low of the first bottom at point B. This serves as a shakeout and helps scare out the last few weak holders. D to E is the last leg up in the W and E, F, and G forms a short handle. The correct buy point is at $22 at point G as the stock breaks through the peak price of the handle (point E). Note the high increase in weekly trading volume at the bottom of the chart when the stock moves up. The stock at the buy point had an Earnings Per Share rank of 99, a Relative Price Strength of 95, a return on equity of 53.8% and a 25% pretax profit margin. It advanced 800% in the following 22 months from point G, which at that time must have looked very high and scary. Notice also the big volume on the price run up from $18 to $22 at point C. One last observation: The last three weeks of December and the first week in January, the stock closed in a very tight range around $17 and the volume dried up to the lowest level in the entire base. Most people will never spot this, but it is usually a sign of professional accumulation (buying). Q:Any other price patterns to look for? O'Neil: Another common base is the flat base. It usually occurs after a stock has formed a ''cup with handle'' and has then continued to move up. Simply, the price pattern moves straight sideways and holds tight for at least five weeks and normally only corrects 8% to 12%. At the end of this type of pattern, a new pivot point is established, giving you an additional chance to buy. You want to buy a stock exactly at its pivot buy point as it breaks out of a sound pattern. Don't chase it up more than 5% past its pivot. If you do, you will be buying ''extended'' and your risk of being shaken out on a normal price correction or pullback will increase. Q:What are some mistakes you can make in reading charts, and are there ''faulty'' base patterns? O'Neil: 1. Short bases of one, two, three or four weeks in duration are very risky and usually fail avoid them. 2. Patterns that are abnormally wide or loose in overall appearance are more risky. It's safer to buy tighter, better contained patterns with less wild price fluctuations. 3. Stocks that shoot up straight from the bottom of a pattern into new highs without any pullbacks or handles are risky and frequently have sharp sell- offs. 4. A base breakout with no real increase in volume should be avoided. 5. Laggard bases. The last stock in a group to break out to a new high is weak and a laggard. It should be passed up. 6. Handle areas that are too wide and loose (down 20% to 30%) or handles that wedge upward along their lows rather than drifting down along the lows are faulty and frequently may fail. Once you learn to read a chart book and correctly recognize stocks with sound base patterns that are under accumulation (professional buying) and possess all of the fundamental earnings criteria we mentioned early in this series, your stock selection and performance should improve significantly. Next week, I will explore a list of important rules regarding charts I've learned through the years. Looking for a previous installment of William O'Neil's series: ''26 Weeks To Investment Success''? Just log on to to the World Wide Web and point your browser to www.investors.com. 09/18/98 21:05 Q&A With William O'Neil Q&A With William O'Neil How To Read Stock Charts Like A Pro In recent weeks, William O'Neil has explored common chart patterns, why buying stocks as they approach new price highs is a scary yet sound practice, and some common mistakes you may make when evaluating price patterns. In this final lesson about charts, IBD's chairman and founder discusses some of the finer points of chart reading and exceptions to a few of the rules he has covered. Q: Some charts look good, but not all stocks go on to make big gains. How do you tell the difference between a sound base and a faulty one? O'NEIL: The real value of charts is in evaluating a stock's activity in relation to its recent past - its environment or setting. With all the factors that can affect the market, from the Fed and interest rates to international markets and politics, a stock chart - with its relatively simple price and volume lines -represents actual performance of a stock in the marketplace. The PeopleSoft chart on Page A9 is a good example of how little details can make the difference between faulty bases prone to failure and sound bases that may be extremely profitable. Points A, B, and H in 1993 appear, at first glance, to be a ''cup with handle.'' However, the handle area from C to H is wedging up along the low points at D, E, F and G. Each point inches up a little higher along the low points. Most bases that do this will fail after they break out, which this one did at point H. Also note the weekly volume at the bottom of the chart was lower on the breakout week (H) than the prior week. This is another bad signal. The volume should increase on the breakout week. PeopleSoft built a second base from H to L. This time the handle area drifted down from J to K, which is better because it shakes out weak holders by undercutting the closing low prices of the prior few weeks. Handles, however, should not form in the lower half of the overall base, which this one did. Q: How do you measure to see if the handle is at the mid- to upper part of the base vs. the lower part? O'NEIL: Take the absolute high price 197/8 (H), and the absolute low in the base of 13 (I), which is an overall decline of 6 7/8 points. Now take the peak in the handle of 17 (J) and the low of the handle, 14 (K). The midpoint in the handle is 15. Now, is 15 closer to the 19 7/8 high or is it closer to the 13 low? It's only 2 points off the low and 4 7/8 points from the high. The midpoint of the handle is closer to the lower half, a weak sign indicating a faulty base that you would not want to buy when it tries to break out (L). Note also the enormous volume week at point X when PeopleSoft broke below its support price of 15 established two weeks earlier. It takes time to learn these intricacies. Even experienced chartists can get suckered into buying at points H and L. Q: Where does PeopleSoft set up properly? O'NEIL: The stock finally forms a third, more proper base, from L to M to P. The handle from N to O is a lot closer to the midpoint of the base. This base is much tighter and better contained than the first one. Four weeks down from point L, the stock breaks below its $16 support of two weeks earlier, but on rather small volume that is better than the enormous volume spike in base No. 2. Note also the big volume/price run-up in week Y, as well as the huge volume week at Z. At first glance you might misread this as a negative sign. It's actually a sign of major support buying. Here's how to interpret this action. For the two prior weeks, the stock closed down 11/4 to 11/2 points each week. The volume then surges, and the stock only closes down 1/8. I call this ''heavy volume without further progress on the downside.'' It's big institutional buying. Now you have two of the prior four weeks showing big volume support along the lows. The correct buy point in this base is 18 1/2. Observe the extreme volume dry- up the week before the breakout (no one is watching the dull activity - it's not so obvious). Next, the breakout week brings a large volume increase. This is the precise week where our sister company, William O'Neil + Co., recommended PeopleSoft to its institutional clients as a buy in August 1994. The Earnings Per Share rating then was 99 and the Relative Price Strength rating was 87. PeopleSoft's pretax profit margins were 23.5% and its prior five-year earnings growth rate was 163%. Additionally, management owned 50% of the stock, the P-E ratio was 45 times earnings (it later sold at over 100 times earnings), and the average daily volume was 142,000 shares. </qa>Q: What other tips can help you find sound bases? O'NEIL: Most successful stocks, as they make their way up in price, build a number of bases, each one a different ''stage'' base. The first time a correct base is formed (first stage), few people recognize it and generally it's a stock most investors have never heard of, so few buy it. A few people see the second base, but by the time the third and especially the fourth bases are formed on a stock's way up, it's so obvious, everybody sees it. Because the market moves to disappoint the masses and because most things that are obvious usually don't work, if you buy fourth-stage bases, you will be wrong 80% of the time. Chart price and volume action can frequently help you recognize when a stock has reached its top and should be sold - much sooner than negative changes in earnings signal a problem. For example, when the oil service stocks topped in October, most of them showed earnings up 100% or more and estimates were terrific for the next several quarters. But the price and volume action showed heavy distribution (professional selling). I scan a chart book of a couple thousand stocks each weekend looking for sound patterns and stocks that fit the CAN-SLIM formula discussed in my book, ''How To Make Money In Stocks.'' Look for a huge weekly volume spike on weeks of price increase once or twice in the past 12 months. A sound stock base should have more weeks in which the price is up on greater-than-average volume than weeks down on greater-than-average volume. There also should be some tight weeks that show little price change. Most big leaders after they break out will go up 20% in eight weeks or less. Sixty percent of the time, leaders will not pull back to the point of their pivot (or buy) price. Sometimes you can make an additional buy the first time a stock pulls back in price to its 10-week moving average line. I recommend you get a chart book, study it and you'll start to recognize patterns. You'll discover things you never knew before about stocks and how they behave. Cut out and save patterns of really great performing stocks, so you'll learn what to look for next time. History repeats itself in the market. Patterns that worked five, 10 and 15 years ago work just as well today because human nature never really changes. One place to start with charts is our Daily Graphs online product, found at www.dailygraphs.com. As you can see, market corrections are natural and normal; they help build another round of stock bases. Without corrections in the market, there would be a lot fewer ''cup and handle'' formations. It's the downturns that help create the left-hand side of the cup. It's really a matter of perception. With strict selling rules in place and a way to interpret what the general market is doing, you can afford to get out at the top and wait for a whole new round of future PeopleSofts to form. Looking for a previous installment of William O'Neil's series: ''26 Weeks To Investment Success''? Just log on to to the World Wide Web and point your browser to www.investors.com. 09/25/98 21:30 ou might call them ''muscle stocks.'' They're the issues that have the strength to break through what market technicians call ''overhead resistance.'' The term refers to a special market phenomenon that frequently comes into play following a massive market drop such as the Dow industrials' tumble from 9367 on July 20 to 7402 by Sept. 1. I N V E S T O R ' S C O R N E R When a stock trades at a higher price for some time and then falls below that level, many investors who bought high now have a loss - in some cases a big one. Human nature comes into play. Those investors in the red will be itching to sell to get even. When the stock tries to rally back it will often encounter selling pressure. A stock's ability to drive through that resistance says a lot about its strength. Some stocks will falter and fall back, while others will encounter only temporary problems. Some stocks that have recently shown their muscle are Legato Systems, Jack Henry & Associates, EMC Corp., MiniMed, Safeway and InterVoice. They're all leading issues with an IBD Relative Strength rank over 90. That means they've been outperforming at least 90% of all stocks. Take Legato Systems. The stock was trading in the high 40s in August. However, it fell to 34 1/2 in late August due to the sell-off that swept the market. But by the second week of September, Legato rallied back to its previous high near 50 and drove on to 55 5/8. The stock showed its mettle by overcoming resistance in the 40 to 46 area. A good way to spot ''overhead resistance'' is to study a stock chart. The key is to find a trading range the stock was in prior to its fall. In the case of Legato, it traded between 38 and 48 before getting knocked down to 34. When Legato moved back toward the lower part of its range, 38 was the key price to watch. That's where the ''get-even'' investors started to sell. But Legato drove right through 38. Only a few days later it gapped higher to 50 - -very impressive action for the stock. Cisco Systems, although a leader, did not fare as well. It traded in a range between 62 and 70. The market sell-off sent it tumbling to 54 3/8. It turned and rallied to 63 twice, but fell back each time. Most recently, it rallied a third time and got to 65, but once again was knocked back. It's a classic case of overhead resistance at work, hindering a stock from advancing. Cisco may eventually overcome the resistance, but for the time being it's having trouble. There are some helpful guidelines investors can follow. If a stock breaks below a basing area, the price at the lower part of the base becomes ''key resistance.'' When it rallies, you should watch if the stock is: * Turned back at resistance. * Penetrates resistance. * Drives through resistance quickly. There are other clues. The strength of the rally into resistance should be noted. If the stock advances into resistance and shows rising volume on up days, that's good. Legato did that. However, Cisco showed faltering volume on up days and it dropped back. The ability of the stock to penetrate deep into the upside resistance zone during its key rally is constructive. Again, Legato did that. In just five sessions, it moved through its resistance area of 38 to 48. Dell Computer did the same and so did IBM. Both stocks are now trading near the upper end of their recent trading ranges. They have the potential to break out. IBD readers can focus in on ''muscle stocks'' that are overcoming resistance by checking the issues making new highs. Another good tool are the charts of the ''Stocks In The News,'' as well as ''Your Weekend Graphic Review,'' which appears Fridays. IBD charts contain a Relative Strength line, a unique feature not found in any other daily publication. Portfolio manager Robert Wibbelsman of Strome Susskind Inc. in Santa Monica, Calif., says penetration of resistance formed by a stock's RS line is also a good signal of strength. The RS line is drawn from data taken from the price changes in a stock in relation to changes in the S&P 500. It's different from the Relative Strength rank, which ranges between 1 and 99. That rank is determined by a stock's performance relative to all other issues. ''In a market decline like we've had, many stock charts look ugly,'' Wibbelsman said. ''If a leading stock can rally and its RS line cuts through its RS line resistance pattern, that is a positive. It can be an advance signal the stock will eventually move through its price resistance. In some cases, a stock's RS line may even go to a new high, before its price goes through resistance.'' Jack Henry & Associates did just that. The stock shook out down to 38 on Sept. 1. But its RS line held close to a new high. The next session when the stock rose, Jack Henry's RS line made a new high. That showed the stock was strong. ''A stock's ability to rally through resistance and get back to its prior base shows it has vitality,'' said analyst Eugene Peroni Jr. of Janney Montgomery Scott Inc. in Philadelphia. ''When that occurs, prior resistance should act as support. It is encouraging that quite a few stocks have been able to get through resistance recently.'' //////////////////////////////////////////////////////////// Copyright (c) 1998 Investors Business Daily, All rights reserved. Investor's Business Daily - Investor's Corner (09/23/98) Stocks Show Their Mettle As They Break Resistance By Leo Fasciocco 09/24/98 08:15 jans - - ------------------------------ Date: Tue, 29 Sep 1998 11:25:36 -0700 From: "Ken Davidson" <davidson@silk.net> Subject: [CANSLIM] Fed cuts rates a quarter point. 9/29/98 14:20 est (2:15 p.m.est) The Fed decided to cut interest rates by a quarter point but left the discount rate alone. Before the release the market was relatively flat as anticipated. The Dow was up about +18.00 points, S&P 500 +4.00 points. It was no surprise to see the 30-year bond only up +1/32nd beforehand as bonds will get the biggest impact from a rate change. A few minutes after the release the Dow and S&P 500 are starting to sell off along with the 30-year bond after the news. One minute after the release the Dow was off -40.00 points, S&P 500 down -1.45 points and bonds started to flatten out. We will send out commentaries as the market moves along into the close to let you know what is happening. Ken - - ------------------------------ Date: Tue, 29 Sep 98 16:27:400 -0500 From: Jeffry White <jwhite@TJOSLIN.COM> Subject: [CANSLIM] "M"; Greenspan;etc. >Maybe, maybe not. During the last major correction, the retest from >the rally high was only 7%. There is no rule that says we must retest >the lows. >- --Db How in the world did you read what I called my "gut" feeling about retesting in the even of no rate cut with a "rule" about retesting the low? Maybe I need some time on the good doctor's couch, but the easier fix would be, perhaps, a more careful reading of a post before tossing in 2 cents. ;) Still looking for the top of the channel to establish a short (sorry, Frank, I couldn't hold onto the earlier position). Jeff - - ------------------------------ Date: Tue, 29 Sep 1998 18:58:36 EDT From: ScottS3500@aol.com Subject: [CANSLIM] Re: canslim-digest V2 #396 I just bought some more CPWR - - ------------------------------ Date: Tue, 29 Sep 1998 21:56:36 -0500 From: "John Adair, M.D." <xjadair@mail.brightok.net> Subject: Re: [CANSLIM] Not: delayed quotes nice web page This site looks attractive. Kansia has or had a site to get delayed intraday tickvolume and a lot of other data. they used The internet trader sortware. I cant reach the site now. Does anyone know what happened to this site. John Adair rolatzi wrote: > A very useful delayed quote, chart, delayed live transactions. Check > it out. > > http://www.quote.com/cgi-bin/jchart-form?genApplet=yes > > _________________________________________________________ > DO YOU YAHOO!? > Get your free @yahoo.com address at http://mail.yahoo.com > > - - - ------------------------------ Date: Tue, 29 Sep 1998 21:56:36 -0500 From: "John Adair, M.D." <xjadair@mail.brightok.net> Subject: Re: [CANSLIM] Not: delayed quotes nice web page This site looks attractive. Kansia has or had a site to get delayed intraday tickvolume and a lot of other data. they used The internet trader sortware. I cant reach the site now. Does anyone know what happened to this site. John Adair rolatzi wrote: > A very useful delayed quote, chart, delayed live transactions. Check > it out. > > http://www.quote.com/cgi-bin/jchart-form?genApplet=yes > > _________________________________________________________ > DO YOU YAHOO!? > Get your free @yahoo.com address at http://mail.yahoo.com > > - - - ------------------------------ Date: Wed, 30 Sep 1998 01:06:47 -0400 From: "Frank V. Wolynski" <Wolynski@MindSpring.Com> Subject: [CANSLIM] Latin America & The "RATE CUT" Latin American Companies See Little Help From U.S. Fed Rate Cut Caracas, Sept. 29 (Bloomberg) -- Latin American companies say an expected U.S. interest rate cut intended to shore up the global economy will offer them little relief against cheap Asian imports, soaring borrowing costs and slumping demand. While financial markets rallied in recent days as traders bet the Fed's move will ease a credit crunch in emerging markets, stocks and bonds slipped today amid companies' pessimism about their prospects. ``Demand for steel is not going to rise tomorrow if the Fed cuts rates,'' said Othon Diaz, head of investor relations at Mexican steel-maker Hylsamex SA. Executives and analysts have scaled back their growth forecasts in recent weeks as an investor exodus from emerging markets following Russia's August debt default and currency devaluation prompted a credit crunch that crushed the region's financial markets. Concerns that slowdowns in the biggest export markets for U.S. manufacturers rattled stock investors and stoked concerns that the U.S. economic expansion may be running out of gas. That led to speculation that Fed policy-makers would cut their target overnight lending rate to banks by 50 basis points to 5 percent. `Entrenched' At the same time, multi-lateral lending agencies such as the International Monetary Fund would orchestrate a credit line for Latin America's debt-strapped governments. While those moves would ease companies' borrowing costs -- since U.S. rates are benchmarks for global lending rates -- it will do little to solve slumping commodities prices and narrow government budget deficits -- such as Brazil's $57 billion shortfall. ``The region's problems are entrenched in the local economies,'' said David Sekiguchi, a Latin American fixed income analyst with J.P. Morgan & Co. in New York. Latin America's economy, which grew by 5.2 percent last year, may slump to a 1.9 percent growth rate next year, said David Anthony, a Latin American economist with the Economist Intelligence Unit. He's cut his forecast for 1998 growth to 2.7 percent from 5 percent. And some, such as J.P. Morgan & Co. forecast a contraction of up to 2 percent next year in Brazil, the region's biggest economy. Companies throughout the region are battening down the hatches, expecting demand to continue to fall even as the Fed prepares to cut rates. Setbacks Tubos de Acero de Mexico SA, the country's only seamless steel pipe maker, yesterday ordered an eight-day shut-down at one of its mills for late October following a similar shut-down just weeks ago. The company's exports slumped 3.6 percent in the first half, and sales are expected to slump further in the second half. The company said that could prompt even more shut-downs. Archer Daniels Midland Co., a U.S. agriculture company, said today that Venezuela's economic and political woes have prompted it to call off its planned purchase of the food operations of International Multifoods Corp. in that country. Borrowing costs for companies and consumers have soared as governments struggled to lure investment and shore up their currencies. In Venezuela, borrowing costs have touched 80 percent, and in Brazil and Mexico they've topped 40 percent. In Argentina, some banks have cut off loans, to hoard cash. Bankers in the region -- who have scaled back lending in recent weeks as rates have soared -- aren't likely to let down their guard and step up lending if the Fed cuts rates. ``Absolutely not,'' said Miguel Ignacio Purroy, a director at Banco del Caribe, Venezuela's sixth-largest bank. Sales in interest rate-sensitive industries in the region are being punished as the high rates keep would-be buyers away. MasterCard Venezuela Inc. said last week it has slashed its 1998 sales target by 18 percent to $1.4 billion as high rates -- which are almost double the inflation rate in Venezuela -- take their toll. Lower Borrowing Costs While companies said they do not expect a Fed rate cut to bolster their sales in coming months, they expect a cut in U.S. rates to lower their borrowing costs. SA Importadora y Exportadora de la Patagonia, an Argentine supermarket chain, said it hopes its short-term borrowing rates will ease after having risen some 300 basis points recently to a range of 10 to 11 percent. The company could use the help. It has seen sales drop 5 percent so far this month as the Argentine economy has begun to slow. ``The second half of this year and 1999 look bleak for Latin American economies,'' said the E.I.U.'s Anthony. - - ------------------------------ End of canslim-digest V2 #397 ***************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.