Re: [CANSLIM] M in Correction vs. Exit strategy

Duane,

You are correct that there is no iron clad rule to exit the market. What I
do has been changing over time.

Since last summer I adopted the following strategy:



When the market seems soft, I watch the leaders and if the leadership is
under attack I shift to aggressive selling mode.

When in this mode I sell any holding that violates the next down moving
average. I watch the 10-day, 20-day, 50-day and 200 day moving averages. So
as it turns out I sell most of my positions at the 10-day. I then set an
alarm to consider reentering the position if it regains that moving average
and everything else in the market seems okay. Sometimes is occurs that I
sell at the 10-day and reenter when the position finds support at the
50-day.



This strategy was designed to not give up gains, protect the down side and
allow for the upside incase the market weakness was short lived.



Mike Scott

Tarzana, CA

_____

From: canslim-bounces@???
[mailto:canslim-bounces@???] On Behalf Of Duane Runnels
Sent: Tuesday, May 27, 2008 7:59 AM
To: Canslim
Subject: [CANSLIM] M in Correction vs. Exit strategy



There is nothing that I'm aware of in canslim that says, "When M is in
Correction, sell all your holdings." I have exit strategies that generally
take me out during M in Correction. And sometimes when I gauge that we're
ready for a fall, I get out on the last distribution day of the rally,
sometimes anticipating it by bailing early in the am. For the last several
corrections I've noticed that once I've been stopped out on a couple of my
holdings, it's almost always correct to just sell the others too. Then if
they still meet my criteria later, I buy them back, sometimes before M in
Confirmed Rally.



It is my belief about the market that there is a time to be all time, partly
in, and a time to be out depending upon what size returns I can expect, i.e.
there are low risk periods and high risk periods. I prefer to be out
completely out (or short) during the periods when returns will be difficult.



What is your strategy for M in Correction?