ThorAss Posted March 8, 2003 Report Posted March 8, 2003 I've had success in the past with my primary scan engine (my Warp drive if you will). It relies heavily on the RSI(14 days) as an indicator and looking for a turn in stocks with the potential for big moves. And guess what? Lately the results have been mixed at best. So I thought I'd ask myself why? I believe I have the answer. The answer is that there is not a lot of stuff making a change in direction just now. Obviously some stocks are trending but the market as a hole is giving mixed signals on various timeframes. So it's up one day down the next as the robots and hedgehogs move the beans around on the plate. I just call it mindless volatility. One or more Stoolies has mentioned that even in Friday's market they made good coin and at least one attributed success to shorting fundamentally weak stocks. Good ... timing that is. I can guarantee that if you had run a scan on fundamentally overvalued stocks and shorted them in September and had held on for 2 months you would have looked like you belonged as the special guest at one of merciless' barbeques. However it is important to note that it is working now. It highlights at least a tremor of a movement away from stocks that are unlikely to deliver and away from risky investments. Money is being moved to "safer" investments. Some of this money is going in the Flight to Quantity. Money committed to "Tech" is running to Biotech and some Media. Stocks which continue to disappoint can expect to get pummelled now. A real bear market rally will occur when these tottering piles of Dung start to rise and seriously outperform the perceived safe haven stocks and when penny stocks become dollar stocks. That is not where we are. No we are in limbo and limbo is a place of uncertainty. Uncertainty leads to less desire to trade and lower volumes and inevitably lower prices. The boyz had a window in which to push prices up but I think it just slammed shut. I believe they're going to keep jammin' her for distributionary purposes but from ever lower levels. Thus I am now fully committed to shorting dung on jam jobs and reached for an old scan which combines technicals and fundamentals (my impulse drive.) I have arrived at 3 excellent candidates. The first two are semis. Both seem to be exhibitting that 2 peaks and a domed house that I noticed on SMH. In fact being already short the SMH means that either I should just let it ride where it is or move to these bad boys. Note the similarity between klic and spam, I mean klac and smh. The last one is one that comes up time and time again. Why do they love this stock? I honestly have no idea. But it certainly seems to be cracking. Advertising! About all the fooFURrah around here about who said what about who when and all that it reminds me of that scene from Monty Python's Life of Brian when all the terrorist groups are in the colosseum, The Judea's Peoples Front, The Popular Front of Judea etc and one of the terrorists said we have to remember who the enemy is. To which some bright spark says The Judean Popular Front? NO THE ROMANS. So remember kids, we are not each others enemies, we are your support group and that doesn't mean we're always going to support you. Know your real enemy, it's inside you. Well that and Elliott Waver's. :grin:
ThorAss Posted March 9, 2003 Author Report Posted March 9, 2003 Here's a classic from The Long and Short of It Archives. Short from Dec 4. Note the "Kiss of Death" on the way down. There's good money to be made here.
Guest Posted March 9, 2003 Report Posted March 9, 2003 Thor, during your Dec. 4th thread of possibles to short, I took many of them and overlayed their charts and found all to have about the same chart pattern. Even Robert Haft paralleled the techs you suggested. Unfortunately, I've never been good at posting charts from my MSN site but, I took nvls, klac, smh as well as sox and the one I am playing xlnx, and did the overlay from Jan. 10th through this past week. The charts were very similar again with xlnx having the best drop when the trend was down through Feb. 7th and ended up slightly higher than the others from Feb. 7th through this past Friday. This past week they all fanned out a bit with nvls having the best move down, xlnx the worst. Even so, their fan was fairly tight. I don't feel comfortable doing bios and pharmas. For me there are too many possible minefields my research could miss. Nonetheless, icos from Jan. 10th through this past Friday was by far the worst performer, i.e., the best short. At the point on Feb. 10th when the others started moving up it kept right on moving south. Had a small pop and then right on down again. A beautiful downward run. The comparision reconfirmed for me that xlnx was a good choice for the down move into November. My concern is that, while I am holding a profit, I may get stopped out if a sustained run whether it be a "war rally" or some other excuse were to occur and will be monitoring the situation closely. If I get stopped out, I will just wait and look for another point to reenter. You've made some great suggestions Thor. I'm glad you've resumed this sort of thread as you always give stoolies some great stocks to short.
ThorAss Posted March 9, 2003 Author Report Posted March 9, 2003 Thanks Mousey but who is Robert Haft? Whoever he is I'm sure he's not haft the man that you are even though you appear to be only haft man. :grin: I like to go after more than one target and try not to put all my eggs in one sucktor. That's why when I short I tabulate my shorts by suctor then if I fill the ledger that suctor gets dropped out of the scan. Certainly the drugs (bios) are problematic and I believe are subject to a great deal of scamming and stuff but the good ones can be very good and can make up for lots of small losses. Still I've often turned off the whole suctor. Other suctors to avoid shorting: Precious Metals, Petroleum, Food, Foreign banks. Maybe Aerospace. Talk about similarities, here's one we were losing hope that it would ever go down round about this time last year.
Guest Posted March 9, 2003 Report Posted March 9, 2003 Sorry Thor, it was the medical supplier, Henry Schein Inc. with the same chart. (Robert Half is some gazillionillionnare who owns or owned Dart Drugs. ) Things just haven't been the same since the labotomy. Things just haven't been the same since the labotomy. We discussed this months ago but, for stoolies who didn't see your December threads or have come on the site since then, I play a rather unorthodox game. My plan is to play a complete trend usually lasting around three months. I pick from sectors I think are real crappy, which are for me, the semi and chip sectors. I then, through a process, pick a stock that I play as a proxy for the sector as I feel I may do better that way than doing the SMH or the SOX as a whole. I pick one with one of the higher P/E's. I study it's pattern for the previous year. I look at it report dates and keep them in mind as they tend to game at or right after they report. I try to figure out as best I can the worst case scenario for the stocks I look at and see if it's worth the risk. I narrow it down to the one I think might give me the best bust for my buck. For example, klac was a semi finalist (no pun intended) this time around but, xlnx had a higher p/e and a slightly better, though very similar, drop in the past year's down market moves. The difference was miniscule (klac has been dropping a hair better of late). Then it comes down to a 200% entry and subsequent shorting as my margin buying power improves and enough of a gap has ocurred since the last pickup. I then unload if I have to if it rises to protect my profits on each hit. I screwed up a little this time due to this war/terrorism thing coming up each weekend and decided to stay pat. I might cover some of my position during the week depending on how it plays out for me. I usually unload the whole deal when I think the cycle is close to finishing it's run. As this bear has begun to enter a more tedious stage, I think your approach, doing multiple stocks in multiple sectors, is the more practical. I will probably start doing that on the next trend down after the summer runnup. When going long, I will probably continue with the single stock as proxy approach as I see the long trends as being explosive to the upside even though we are, and will continue to be, in a bear market for at least another year or two. I will make that choice when it closer to the time to do so.
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