Back to 90% invested

[Mike]

The rally in the NASDAQ if it maintains at least a 1.25% gain today will signal a B7 Accumulation Day buy signal.
This equates to 90% exposure. I bought GNC bringing my exposure to 90%

[slgerritz]

The rally in the NASDAQ if it maintains at least a 1.25% gain today will signal a B7 Accumulation Day buy signal.
This equates to 90% exposure. I bought GNC bringing my exposure to 90%

Hi Mike

Is there a book I can get that outlines the signals in the CAN SLIM method you use, B7, etc.? Also do you ever go to the Palos Verdes HGSI seminars?

Stephen

[Mike]

Hi Mike

Is there a book I can get that outlines the signals in the CAN SLIM method you use, B7, etc.? Also do you ever go to the Palos Verdes HGSI seminars?

Stephen

Stephen,

There is no published source for the CANSLIM Market School Exposure Model. The only way to get full exposure is to attend Market School training offered by Investors Business Daily. The Market School is highly recommended. If you go back to around October 24 and later last year you should find a thread I started about the Market School model where I describe each buy and sell rule and the general approach the model uses. I describe it well enough to follow what I am saying in later messages when I say we got a B7 Accumulation Day signal for example. There are 10 market buy signals and 12 market sell signals. When the buy switch goes on with a B1 buy signal, each buy and sell signals are accumulated (summed, sell signals are minus 1 signals) to produce an exposure count from usually from 0 to +5. The exposure levels are then: 0 = cash, 1 = 30%, 2 = 55%, 3 = 75%, 4 = 90%, 5 = 100%. Sometimes (like now) the exposure count is allowed to accumulate to +7 as we are in what we call a Power Trend. Power Trends are exceptionally powerful uptrends. Essentially the model looks at price and volume of the NASDAQ and the 50-day simple and 21-day exponential moving averages. The exposure count increases as the evidence of a sound rally builds up. The exposure reduces when evidence of topping or corrective action happens. We just increased from a +3 to a +4exposure level today. The market went into a confirmed rally on December 20 last year and we have been long in the market ever since, most of the time spent at full (100%) exposure.

I go to the HGSI Saturday meetings that happen once per month in Palos Verdes. There will be one this comming Saturday from 1-5PM.

[slgerritz]

Stephen,

There is no published source for the CANSLIM Market School Exposure Model. The only way to get full exposure is to attend Market School training offered by Investors Business Daily. The Market School is highly recommended. If you go back to around October 24 and later last year you should find a thread I started about the Market School model where I describe each buy and sell rule and the general approach the model uses. I describe it well enough to follow what I am saying in later messages when I say we got a B7 Accumulation Day signal for example. There are 10 market buy signals and 12 market sell signals. When the buy switch goes on with a B1 buy signal, each buy and sell signals are accumulated (summed, sell signals are minus 1 signals) to produce an exposure count from usually from 0 to +5. The exposure levels are then: 0 = cash, 1 = 30%, 2 = 55%, 3 = 75%, 4 = 90%, 5 = 100%. Sometimes (like now) the exposure count is allowed to accumulate to +7 as we are in what we call a Power Trend. Power Trends are exceptionally powerful uptrends. Essentially the model looks at price and volume of the NASDAQ and the 50-day simple and 21-day exponential moving averages. The exposure count increases as the evidence of a sound rally builds up. The exposure reduces when evidence of topping or corrective action happens. We just increased from a +3 to a +4exposure level today. The market went into a confirmed rally on December 20 last year and we have been long in the market ever since, most of the time spent at full (100%) exposure.

I go to the HGSI Saturday meetings that happen once per month in Palos Verdes. There will be one this comming Saturday from 1-5PM.

Thanks Mike.

I really appreciate your efforts to help us become better investors.

I live in Oregon, but just bought a vacation place in Cathedral City. Maybe I could drive over to attend a monthly meeting some time.

I have one more question. Do you use a particular method for protecting positions, such as using a certain stop or another rule based method?

Stephen

[Mike]

Thanks Mike.

I really appreciate your efforts to help us become better investors.

I live in Oregon, but just bought a vacation place in Cathedral City. Maybe I could drive over to attend a monthly meeting some time.

I have one more question. Do you use a particular method for protecting positions, such as using a certain stop or another rule based method?

Stephen

Stephen,

I do not use stop orders. All selling of positions are based on sell rules. The sell rules can be seen is some of the presentation material that I have made as sticky notes at the top of the Forum. I don't recal which presentation starts the discussion of sell rules, probably around the third one. The primary sell rules look like this:

!. Sell all positions that drop 7 to 8% below your purchase cost.
2. Sell positions that exhibit the largest down volume since the beginning of its advance (initial first-stage breakout)
3. Sell positions that break above a long-term upper trend line. An upper trend line should be drawn on a weekly chart with log price scale. A properly drawn trend line should touch at three or more places spaced months apart.
4. Sell stocks that are exhibiting a climax run. A climax run needs to be at least 18-weeks from a first or second stage base breakout or 9 weeks beyond a later stage base breakout.
5. Sell positions that can not hold the 50-day moving average line, give positions that stay within a few percent of the 50-day line 5 or more weeks to recover the 50-day line before selling.
6. Normally take profits once the position is up 20-25% above a proper base breakout buypoint. If the stock is up 20% or more in three weeks or less, hold this position until at least the 8th full week after the breakout. At that point a decision can be made to hold the position longer or sell. This rule is intended to get you beyond a normal pullback that occurs in powerful stocks.
etc...