CANSLIM & Momentum Investing 01 (May 08 - Jul 09)

Re: CANSLIM & Momentum Investing

Postby millionairemind » Thu Jun 18, 2009 9:22 am

0.2% down on heavier volume is considered a distribution day.
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Re: CANSLIM & Momentum Investing

Postby Aspellian » Thu Jun 18, 2009 9:29 am

Thanks!

what then is the trigger point for a confirmed downtrend? 4-5 days of distribution? or a % down day (heavy vol) after 4 days distribution is logged?

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Re: CANSLIM & Momentum Investing

Postby millionairemind » Thu Jun 18, 2009 11:02 am

Typically a 3-5 day of distribution within a 2-3 week period calls the top.

However, just like a follow thro', you need a BIG JERK downwards on high volume and price decline.

Also, the leaders group must show breakdown from their trends. As per all rallies, if the leaders group does not lead, the rally can't go very far. Leaders are like generals in a battle, they are the ones spotting the best earnings multiples and earnings growth and the best sponsorship.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: CANSLIM & Momentum Investing

Postby Aspellian » Fri Jun 19, 2009 11:28 am

Hi MM,

A typical signal (before market turned down), will be "market uptrend under pressure". From your experience, do you usually get out when this signal is triggered? instead of waiting till "market in correction" upon a BIG JERK downwards, which by then market will have dropped 10% or more from the top.

you mentioned before that seldom does market uptrend survived 2 "under pressure" periods. i am just fine-tuning my rules as to when i should get out of market, before market turned (under pressure) or only when market turned (day when market in correction).

i will think a risk management rule is to sell 30% to 50% when one sees signs that market is under pressure but leave the remainder to ride out further upsides (eg. current rally with 2 market uptrends).
when one sees the 2nd under pressure signal, sell all and wait.

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Re: CANSLIM & Momentum Investing

Postby millionairemind » Fri Jun 19, 2009 3:48 pm

Hi A,

You got to weigh pros and cons. If you already made 50% return and uptrend under pressure, is it worth it to hold out for another, say 5% more return???

One can sell half and then the other half when market breaks. I never bothered to buy at the bottom or sell at the top (cos I not so smart lah). As long as we capture the majority of the uptrend when longing, or downtrend when shorting, that is already more than enough to make a decent living.

Paiseh, it's the (school) holidays and market is in a state of coma, so I'm not watching market most of the time this month and reply is late at times.. :P
Cheers,
mm
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Re: CANSLIM & Momentum Investing

Postby Aspellian » Fri Jun 19, 2009 7:03 pm

Thanks MM, understand what you mean. to get the trend 50% right is already more than half the battle won! i can only imagine how much you earned during this latest run-up.

From your 4yrs + experience using M directions, is it often that there are 2 stages of "uptrend under pressure" before market direction gives way? or usually it is only 1 stage of pressure and very seldom the market passes through 2 stages.

Dun feel paisei of late replies, the fact that you reply already veery good!! :P
your lifestyle is one that i aspire to be (more time for family, society and for self-learning). that is why i keep on asking you so much questions!!!! i am the one that should say PAISEH :oops:

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Re: CANSLIM & Momentum Investing

Postby millionairemind » Fri Jun 19, 2009 7:19 pm

haha A bro, if you only know all the dumb and stupid mistakes I have made and continue to make, then you laugh until your front teeth drop out... from :mrgreen: to this :lol:

Usually market breaks when rally is under pressure for the first time. Only twice in the last four years have I seen the market breaking after two almost back to back "rally under pressure". Once back in June/July 2007 and now (not broken yet). Maybe this one will be the exception, will not break.. haha...

However, my own collected data don't go back long enough to know if there is a third "rally under pressure" some where in the past.

You can wait till market breaks and then start shorting.. but the meat will be less.. or take the risk and short when market rally's under pressure. Either way, make sure you have a stop loss in what ever you do.

Or rather, don't short lah... just wait to go long.. enough to make decent living too.. :P
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: CANSLIM & Momentum Investing

Postby Aspellian » Tue Jun 23, 2009 9:19 am

Good morning MM bro!

Thanks for your previous posts, your so-called "dumb and stupid mistakes" probably a result of your highest standard and not dumb-dumb per-say.

you haven heard of MINE "dumb and stupid" (which is well-documented in this forum!! :oops: )

just to continue on with the topic of shorting when the market breaks. Usually what is the trigger point whereby you close all your short positions?

is it:
a) certain targeted % gain is reach?
b) when market have a sharp reversal in high volume and start counting down on follow-through days?
c) or others?

if it is (b), usually what's your experience of follow-through days working? i remembered you mentioned follow-throughs only worked 2/3 of the time, is that right? do you mean to say that even when there's confirmed follow-throughs - but the rally breaks down shortly after (eg. within the week)?

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Re: CANSLIM & Momentum Investing

Postby millionairemind » Tue Jun 23, 2009 9:39 am

Hi A Bro,

I am not good with shorts (cos' I am very tall haha.. lousy joke... but seriously, I am a tall dude), so I just target a certain %tage which I will take profit. I make most of my profits on the long side...

Another point on shorting, when market breaks, the market will typically drop a few days before attempting a rally. That is when I usually will close my positions when my target is hit.

Yes, follow thro's do fail. See my posting on Jan 29 and Jan 30.

viewtopic.php?f=65&t=1679&start=100

Hope this helps.

Cheers,
mm
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: CANSLIM & Momentum Investing

Postby winston » Tue Jun 23, 2009 9:46 am

Hi A,

I prefer to short stocks where their fundamentals are detiorating and where they have a chance of going to zero.

Shorting index stocks and government linked stocks are very dangerous.

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Winston
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