We broke days lows AH on S&P could get ugly tomorrow/Friday..
If you look at S&P futures the last hour we kept making lower lows and lower highs on the 5 minute chart..
I dont know how to post that chart but I was watching it on quote.com live charts..
Another scary article in tommorows IBD..
Investor's Corner
Thursday, August 16, 2001
Printer-Ready Version
Keep Powder Dry When Pickings Are Slim
By Jonah Keri
Investor's Business Daily
You’ve likely spent much of the past year painfully learning about the M in CAN SLIM.
M stands for market, the last leg of CAN SLIM’s seven-point system of buying winning stocks (detailed in “How To Make Money in Stocks”). In general, three out of every four stocks follow the market’s trend. So in a weak market, don’t jump in. Wait for a new bull rally.
Simple enough. But following the major indexes - the Dow, S&P 500 and Nasdaq - isn’t enough. False rallies and head fakes have been a dime a dozen in recent months.
--------------------------------------------------------------------------------
Image: Only A Few Good Stocks
--------------------------------------------------------------------------------
Want to find the best time to buy? Count the number of quality stocks nearly done building sound bases.
A healthy market yields a steady stream of great breakouts. Buoyed by many great technical and fundamental features, these stocks first set up in smooth cup-with-handle bases. Then they blast past their pivot points on a surge in volume.
If few great stocks are forming solid bases, you have no reason to look for new buys right away.
To track potential breakouts, build a watch list. Start by insisting on stocks with stellar earnings growth. Those making the list should also outperform the market. They should get a push from highflying industry peers. Institutions should be nabbing shares, pushing those stocks up near their highs.
IBD offers several building blocks for such a list. Every day, the Stocks In The News and Real Most Active columns highlight the best performers on the NYSE and Nasdaq. Your Weekend Review features stocks that share strong fundamentals and are near their highs. IBD’s Web site, investors.com, offers a stock screen and daily and weekly charts for subscribers to peruse.
IBD sister site dailygraphs.com lets you screen for watch list-worthy stocks. Simply select Daily Graphs lists, including the top 100 stocks rated by Earnings Per Share and Relative Price Strength. Export those lists to Microsoft Excel, then sift through each list to find those with the highest ratings in both fields.
We screened for stocks with EPS and RS Ratings of 80 or higher as of last week. Stocks on the list had to trade on average 300,000 shares or more a day and have a share price of at least 10. Industry Group RS, Accumulation/Distribution and Sales+Profit Margins+ROE ratings all had to be B or better. No stock could lie more than 25% off its high.
A total of 36 stocks met those criteria. But many of them had already broken out of bases and now stood more than 5% above their pivot points, too late to buy.
Only 11 of the 36 were still setting up in bases or within 5% of their pivots after breaking out. That’s an alarmingly low number, given the roughly 10,000 stocks traded on U.S. exchanges.
If you’re looking for a reason to sit tight, study the market and stay in cash, you’ve just found one. |
