Quote Originally Posted by adam ali View Post
Thanks, Mike.

Are you suprised that Gil and Dr. K are still on the sidelines here? Is there a dichotomy in the CANSLIM community right now as to the market's direction and how to invest?
Adam, I am not really surprised. I believe Dr. K's market direction model would be on a buy signal today but he seems to have overridden the mechanical signal. IBD doesn't overide their mechanical model at least very often. We are supposed to do our own analysis. Having a follow-through day is part of the story. Having leading stocks breaking out of sound bases and moving up is the rest of the story. That is what is missing in today's market and IBD has said so. So IBD says we are in a confirmed rally (and the market is rallying) but they also say the leadership isn't there. We are supposed to then decide if we wish to enter the market or not on our own. Dr. K has basically said the same thing with an emphasis on the glass being half empty (or mostly empty).

I would suspect that some of the O'Neil money managers are in the market but not very far in. Bill tends to give his money managers hard upper bounds when the market looks like it does today. He may for example say: no more than 20% or 30% portfolio exposure. The follow-through day on 10/12 was controversial at best and it came on the $NYA which today is a lagging index. Yesterday's market action qualifies as a second FTD on much broader in scope and much more unambiguous. The leadership still isn't there so my conclusion is that we are experiencing another junk off the bottom rally. I hold partial positions in SBH and DLTR. I am also short FOSL. Pascal mentioned that FOSL may be a beneficiary of European bailouts, so my positon may overcome by events...