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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: M. Marquette who wrote (9092)	12/30/1997 1:14:00 AM
From: Praxis	Read Replies (1) \| Respond to of 9285

I submit COSFF for the short list: recent- 1 3/4 predict- 1/2 This is a no-brainer, debt servicing is eating revs alive, which by the way are plummeting. No focus, no plan...mgmt is bailing out(Cowpland dumped $20 mil worth before announcing huge loss), top mgmt defections, this company could be gutted just like Gandalf, also nobody like the new release of Coreldraw.

To: M. Marquette who wrote (9092)	12/30/1997 3:29:00 AM
From: Jon Tara	Respond to of 9285

Interestly, the XCIT/LCOS spread has been discussed on the LCOS thread. I decided to play around a bit and built some composites with Metastock. I'd appreciate some help from anyone who has done TA on composites. The results may not be what you'd expect. I build three composites - XCIT/LCOS, YHOO/LCOS, and YHOO/XCIT. Note that I did these all using division rather than a point spread. Because of this, I scaled my charts using a linear scale rather than the usual semi-log. The XCIT/LCOS spread is basically trendless over time. While it is in a "buy" area of the trading range, it is also over-bought. (This is where I could use some composite TA help - are stochastics useful?) The YHOO/LCOS spread has somewhat of an upward trend over time, but it near the top of a recent trading range, and overbought. The YHOO/XCIT spread has a bit more of a trend than the YHOO/LCOS spread, and has just pulled back from a new high (currently 2.4, was as high as 2.7x). It is just coming off of oversold. This all suggests a few things: 1. LCOS may actually not be a bad trading buy right here. This would be a contrarian play vs. the very negative sentiment I see on the LCOS thread. 2. If you want to play a spread, the YHOO/XCIT spread appears to be technically the most attractive right now. Perhaps a refinement would be long YHOO and XCIT and short LCOS? (All in appropriate ratios, of course.) It may also suggest a legging-in strategy. Do the YHOO/XCIT spread right now, adding the LCOS short later. Of course, this begins to suggest something more simple, such as long IIX, short LCOS, or simply short LCOS. :) I did a bit more twiddling, adjusted ratios to current prices so that I could add and subtract rather than divide, and I must say the YHOO/XCIT spread looks nice. From October to present, you would have made about $30 on the YHOO-XCIT spread, or $30 only holding YHOO! (And remained flat holding XCIT.) So, you could have had the protection of the spread "for free", not giving up any profit whatsoever. (Of course, this is pretty "woulda shoulda" since it is adjusted to get the dollar ratio to 1.0 as of today...)