RSchuler conversation #2 Part 5:
Tiric: You have to realize that even though the VIMUT now exists (it came into existence 3 weeks ago), there is nothing to say (yet) that it will break down any time soon)
RSchuler1: ok. Something to keep our eye on then...
Tiric: MIMDT's can last for years before they are broken to the upside.
RSchuler1: really? I was taken back when you pointed that one out to me on <some> chart we were looking at then stretched quite a bit of time
Tiric: Like I said in the e-mail to Scott & Sergio, " A type of line that had not existed has been established and that line will now always be there. Just as a line is created that I call a mountain in the middle major downtrend will continue into the future, the line that I call a valley in the middle will continue into the future. When you know what to look for, you are at an advantage."
RSchuler1: excellent point
Tiric: The troubling thing is, that line now exists. All lines are eventually broken.
Tiric: Troubling if you are stuck in a "long" frame of mind.
RSchuler1: yeah. I think it's good for people to understand how to play both sides though.
Tiric: Well actually not all lines...just the pivotal ones.
Tiric: IBM is a perfect example of pivotal lines and how they are always broken...one direction or the other.
RSchuler1: IBM? I don't think I've ever looked at that chart.
Tiric: WMT and HDI too.
RSchuler1: Waste Management? No wait. That's WMX...
Tiric: Walmart
Tiric: Harley Davidson
Tiric: Each chart has its own "personality" Studying the longterm chart gives you insight.
RSchuler1: Walmart...Boy.. I'd like to go back 15 years and make that transaction...
RSchuler1: ok.. I'm learning Doug. I'
Tiric: There's too many people looking at 2 yr charts.
RSchuler1: The first thing I do is look at AS LONG a chart as I have data for (don't know if that's the right approach)
Tiric: If you know what you're looking for, long term charts are the only approach.
Tiric: Myron found some stuff on the long term charts of stocks he had been following that really opened his eyes.
RSchuler1: Someday, I'll be able to say that "I know exactly what I'm looking for", but not just yet.. :^P
RSchuler1: It's going to take a lot of practive
RSchuler1: errr..practice
Tiric: PGDCEB's are the safest plays right now.
Tiric: BIME had approx 20% gap Oct. 13, then a slow decline but seems to have
hit bottom today on huge volume today followed by a slight rise.
RSchuler1: I didn't understand that one in the meeting. I have it written down, but I don't got it "upstairs"
Tiric: Ok, here goes.
RSchuler1: Lemme have it
Tiric: When a stock gaps down approx. 30 % you start to track it.
RSchuler1: ok
Tiric: Do you understand what a "gap" is?
RSchuler1: Yup. Gap: An opening price which is above/below the previous days close due to MM buying/selling during off market hours
RSchuler1: close?
Tiric: Correct.
Give it 3 weeks or more after the gap down. That's where the PG comes in>> Post Gap.
RSchuler1: ok
RSchuler1: Now where is the DEAD CAT?
Tiric: Dead Cat bounce is what many people focus on but that's speculative.
RSchuler1: i.e. very little (if any) increase
Tiric: Correct. Very very short term and extremely uncertain.
RSchuler1: ok
Tiric: Now, the PGDC trends down for several weeks.
RSchuler1: ok
Tiric: There will always be a day after 3 or more weeks that the stock hits an intraday low that is THE lowest since the day it gapped down. It has to. That's obvious.
RSchuler1: ok
Tiric: The requirements that make that day a buy are that it must be a post gap low on higher volume than at least each of the 3 or more previous days while closing above (not on) the low of that day.
Tiric: So XYZ corp gaps down from 18 to 12 one day.
RSchuler1: ok
Tiric: Over the next 3 or more weeks XYZ drifts down on steadily lower volume to an intraday low of 9 7/8 while closing at 10 that day.
RSchuler1: got it
Tiric: The next day, XYZ drops to 9 1/2 intraday but closes at 9 7/8 on 187,000 shares.
Tiric: You look at the chart and find that 187,00 shares is the largest volume in the last 4 days.
Tiric: Buy XYZ
RSchuler1: Bring out the checkbook
Tiric: Xaktlee
RSchuler1: ok. I'll need to review that a few more times after tonight, but that is a perfect explanation. Thanks.
RSchuler1: Now I get to create a new rschuler/tiric .txt file as memiors of the evening (postarity, you know)
Tiric: hehehehehe!
Tiric: Oh, that's spelled posterity
RSchuler1: Oh yeah. It must be getting late
RSchuler1: hehe whoops
Tiric: Since I'm involved, I wouldn't want it spelled incorrectly. >>gg<<
Tiric: Have a good weekend. I have to get some work done now. yikes!!
RSchuler1: <G> Ok Doug. I'll help keep your name kleen. Uhh.. clean. :)
RSchuler1: ok Take care. Thanks and I'll talk to you later
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