RE: [CANSLIM] IBD just looking at IBD 100?

Ian,
Follow-through days are only a piece of the puzzle to a new sustainable
rally. Stocks breaking out of sound bases also has to happen. Without stocks
breaking out of sound bases the market can't go very far, or at least it
never has. Another poster said a FTD is just a FTD, he is right. Leadership
breaking into new high ground from sound bases is what makes a rally
sustainable.

If you go back to the last bear market you will see many rallies off the
bottom only to be greeted by fresh selling. One or maybe two of those bear
market rallies was tradeable. One of those rallies saw the NASDAQ rise over
50%. The rest were opportunities to lose money for CANSLIM types. I went
back and counted the number of follow-through days in the last bear
recently, I think the count was six or eight on the NASDAQ only. I don't
remember exactly now. We had days with a plus six-percent move on the NASDAQ
in 2002. It was volatility to the extreme. I don't see anything in the
current off-the-bottom move that is any different than what we experinced in
2001 and 2002. Most of the stocks on the IBD-100 are old tired prior leaders
with broken bases. The bizare FTD that you mentioned also showed very little
leadership with sound bases. No leadership led to a failed rally. The set up
back then was better than now. Be careful.

What is missing right now is that no discernable leadership has appeared.
What that is moving, is off the bottom. People can make money there. There
are many kinds of investing and being nimble with off-the-bottom rallies is
one way. It isn't CANSLIM but so what. Go for it if you know how to do it.
For example puting your money in housing or Citibank (C) a week or so ago
could have made you some money. That kind of investing requires a different
discipline and set of rules to live by.

We on this group are CANSLIM investors and so here we are mostly in cash
except for those who are adept at shorting. My focus will remain on the
IBD100 and the 85-85 lists waiting for leadership to form up. I can't see
any yet. When it does those stocks will appear on those places. I don't have
a crystal ball but I am not expecting that to happen until next fall. It
could be wore than that as the entire banking system could fail as well as
the fiat paper money system. I lived through the last bear and I remember
getting sucked in when I shouldn't too many times. I may enter a bear market
rally if something sets up. Until then my shorting watch list is quite full
waiting for proper set ups to form. They set up with rallies just like the
one we are having.

Mike Scott

Tarzana, CA


-----Original Message-----
From: canslim-bounces@???
[mailto:canslim-bounces@???]On Behalf Of IAN ST. MARTIN
Sent: Sunday, February 03, 2008 11:36 AM
To: Canslim@???
Subject: [CANSLIM] IBD just looking at IBD 100?


Last November when IBD declared a bizarre FTD, the only thing that went up
was the IBD 100. It seemed to me to be quite a change of course for them,
somewhat ignoring the major indices.

Now, they only seem to be looking for strength in the IBD 100, and not
finding it, and ignoring index surges this past week.

But wasn't the isolated IBD 100 strength late last year just a case of a
very thin market - the vast majority of names were downtrending or flat,
with just a small number of momentum names putting in a blowoff top?

And don't new bulls have their own new stocks - so wouldn't it make sense
that the IBD 100 is weak, even if last week really did see a tepid 8th day
FTD?

Opinions?
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