1 Attachment(s)
January 31 Close Comments
The table below shows the performance of breakouts since the beginning of the rally. The Follow-Through Day was December 20. What we like to see is many stocks showing 20-25% profit or more giving us a chance to meet normal profit targets for a purchase. Only INVN meets this requirement. The rest of the stocks are trying to get there. In a normal CANSLIM rally we should have already seen a sizeable fraction of the stocks in this harvestable position. It appears to me that the indices are looking more like a good rally than the action of stocks with good fundamentals. So this is a tradeable rally so far but one in which it looks like the profit target should be lowered to the 10-15% range instead of the usual 20-25% range. This also would require a change in stop loss on a position to 1/3 of the profit target to keep the risk/reward in the correct relationship.
Even with many earnings estimates having been lowered prior to the current earnins season, the earnings beat rate has been below recent history. I noticed the comment about the Baltic Dry Shipping Index which seems ominous that we could be headed into a worldwide slowdown. I don't know what is levitating this market but just keep watching price and volume.
The Market School Exposure Count is +5 (fully invested), the distribution count on the NASDAQ is +1 (very light).
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Stalling on Tu, Jan 31, 2012 ??
Hi Mike,
I was wondering if you could check my work here.
I think Tu (Jan 31) may have been a stalling day on $COMPQ in the Exposure Model based on the rules you provided (perhaps I miss applied them). If there was stalling, I take that its the first stall day in the count and is counted, thus this stall day plus the Th, Jan 26 Distribution Day would bring the Distribution Count to 2?
Here is my analysis (I have restated the rules to make it easier for me to quickly conclude a day is not stalling, thus helping me more quickly analyze suspect say - or, so I hope):
1. Any close >= to +0.40% is NOT stalling; even if there is a severe reversal after a morning gap up.
YES
2. Any close < 0% is NOT stalling (maybe a DD, need to check, but not stalling).
YES
3. Volume is > 95% of previous, else NOT stalling.
YES
4. At least 1 or 2 previous days have a positive close of >= +0.2% (porosity threshold). Thus, if 2 previous days are NEG, then NOT stalling.
Fri, Jan 27, $COMPQX +0.4%
5. Near a intraday price high: (i) intraday high is >= the 2 previous days's intraday highs, or (ii) intraday high is >= the previous days's high & w/n 3% of 25 day intraday high
YES
6. % close in range test: (i) % range > 80%, then NOT stalling, (ii) % range < 50% stalling, else 2 special cases, (a) 50% < % range < 65%, apply special test #1 (narrow range stalling), or (b) 65% < % range < 80%, apply special test #2.
% Range = 48%
Thanks,
Shawn