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Gold/Mining/Energy : JAB International (JABI)

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To: Lawrence Burg who wrote (3044)	2/19/1998 11:18:00 AM
From: DDS-OMS	Read Replies (2) of 4571

Larry, Just a quick response now--will email later. The default RSI in WOW is 14 day--trading days--so is almost a 3 week oscillator. The last time it was below 30 for BCMD was Dec 96. Gives you an idea of how oversold BCMD is now. Try using an 8 day vs 14 day period for trading. Note the 8 day hasn't crossed above 30 yet. CCI--I prefer 13 day to the 14 day default--small difference. Also use wider parameters than the recommended +100 and -100 crossover as these whipsaw too much. Try +200 with a sell when it crosses below +100 and -150 with a cross above -100 for a buy. When applying CCI to any stock, look back over the last year or two and see how well it called price reversals AND how much of a time lag before price reversal after a buy or sell signal. Sometimes it is immediate--others as long as 4-5 days before price reverses. CCI is an excellent trading indicator--just be sure you know how to use it with each individual stock. Cant use it with cookbook parameters as can with RSI or Stochastics. One last caution--beware of apparent one day reversals when a stock is as oversold as BCMD is--it can resume its original trend very easily. I noticed Chicken Little's response to you couldn't resist another dig about how Jeffery and I were wrong on last call--talk about the pot calling the kettle black--this coming from a guy that was consistently wrong on multiple calls for 3 1/2 months. Typical response from one who has a preconceived bias and then seeks indicators that support his bias. Don't fall into that trap--let your TA be honest and say what it says--realizing you wont bat a 1000. One last thing--TA is made up of 2 basic groups of indicators--Trend Following and Oscillators. Do not use a Trend follower to confirm another Trend Following indicator and likewise dont use Oscillators to confirm other Oscillators. All of C.L.'s indicators mentioned are Trend Followers--no mention of Stochastics or RSI or any other oscillators. He is technically correct when he says an MACD is an oscillator--BUT it is an oscillator of 2 Moving Averages--which are the quintessential Trend Followers. All I'm saying is that if you use only Trend Followers or only Oscillators your results will be poorer than if you use a combination of both, i.e. use an oscillator to confirm trend followers and vice versa. Sorry, this was going to be short but didn't work out that way.

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