Deepak,
We had a day-8 follow through on the Dow Jones and Russell 2000 indexes on
3/20. That day was an options expiration day which normally drives volume
high. If the Dow with just 30 stocks was the only index that showed the
follow through I would be quite circumspect about the prospects of this
rally. The Russell 2000 though is a much broader index. The small cap index
is where you would expect leadership to form in a new bull market. So it is
possible we are out of the gate, I don't know. What every rally needs to
succeed is leadership. I would find the rally suspect if it only includes
the old leadership like Oil stocks, POT, RIMM, APPL, etc. Right now it kind
of looks that way so caution is warranted. Watch the small cap indices if
they assert continued leadership we may be in for a ride. If the
transportation index remains in leadership then, well yuck. Track breakouts
and monitor them for success.
Some recent breakouts include: MANT, MT, X, NKE, URBN, LKQX, MA, MCRS, KEX,
HIS, LNN, CSX and PRGO.
I suspect that GS and LEH have put bottoms in; I read this by the way in Gil
Morale's Web Letter. Financials is where one would expect growth in a low
interest rate environment. HCBK is an example of a financial company that is
not exposed to the sub prime mess. It has already made a move up from a
consolidation but may offer a future entry. You may not like the
fundamentals but in the current interest rate environment you might suspect
upside surprises.
V could set up in the future, much too early now by a couple of weeks. Look
at VMW week of 9/14/07. If V sets up with a three-week short little flag
like VMW did and then breaks above it might be considered. Buying IPOs is
difficult and they don't usually give you the standard entry opportunities.
GOOG represents a classic IPO entry on the week of 9/17/2004. It was buyable
on 9/15/2004; look at it on a daily chart and you will see a small "U-Turn"
base of a little more than three weeks duration. The buy point of GOOG was
113.58. If you go back to Bill O'Neil's book and read up on the features of
a High Tight Flag base you have what you need to analyze an IPO base. The
IPO base should resemble the flag and is missing the flag pole.
Mike Scott
Tarzana, CA
-----Original Message-----
From: Deepak Kapur [mailto:kapur@???]
Sent: Wednesday, March 26, 2008 1:00 PM
To: mike@???
Subject: Re: [CANSLIM] Gil Morales and Joe Burns web letter
Hi Mike,
Good to see an email from you. What is your prognosis of the market?
Thanks and regards,
Deepak
Mike Scott wrote:
> Gil Morales and Joe Burns have a new Web Letter that just went live today.
> www.gilmoreport.com cost is $499.95 per year or 49.95 per month.
>
>
> Mike Scott
>
> Tarzana, CA
>
>
>
>
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