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   Strategies & Market TrendsStrong Industry Groups - Strong Stocks


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To: Sam Raven who wrote (713)11/7/2001 11:13:36 AM
From: richardred
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Sam: On lasting long, I would agree. It might seem scary here , but in Japan it's a normal coarse. It takes a lot of stimulus there for people and business to spend their money. IMO-not so much over here. I think the 0% interest rates by the big autos are seeing consumer interest. Also refinancing and home equity loans for durable goods could help our economy. The statement "the long-term prospects for productivity growth and the economy remain favorable" worries me without a tax incentive package (accelerated depreciation)on capital equipment for business. IMO-the new spending can lead to productivity growth. This by the new equipment replacing less inefficient equipment, using less people. Without a business incentive of some kind. I see business delaying or spending less. We still also have the worry that another event,here or someplace (outside the U.S.)might destroy consumer confidence here and abroad.

Richardred

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To: richardred who wrote (714)11/7/2001 5:20:25 PM
From: Sam Raven
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I wonder if we are getting acclimated to the terrorist fears...I was thinking that when/if we get struck again the market will drop then recover as the fear becomes more manageable and people begin to wonder if the last one...is the last one....each time.

If the market climbs a wall of worry, it has a big wall <g>

Sam

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To: Sam Raven who wrote (710)11/7/2001 5:26:14 PM
From: Sam Raven
   of 1567
 
Things started slow, went hot with most alerted then, got cold....except for both energy stocks we watched today...and we traded neither. MRCY was my trade/loss on the day today... May try it again tomorrow.

Sam

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To: Sam Raven who started this subject11/8/2001 12:12:25 AM
From: Sam Raven
   of 1567
 
Despite the weak close Wednesday, the market internals continue to look strong. The screened stock ratio did weaken some, but at 13.1 to 3.8 favoring buying, it still looks good. But because the direction of the ratio reversed, I'd estimate risk has raised a notch to moderate. Also, I'm somewhat concerned at how much the companies rotated names in the screening, you notice there are very few repeats from yesterday.

The strong groups don't change fast, so they remain as they have the last few days. Energy stocks showed up in large numbers when I ran the screening and are worth keeping an eye on today.

Longs to watch: ARXX, BJ, BOBJ, CTX, CYTC, LLL, NE, PDS, STE and TOO.

Good Trading!!

Sam
savvy-trader.com

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To: Sam Raven who wrote (715)11/8/2001 12:16:26 AM
From: richardred
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It seems to be that way. Some short sellers are getting a little nervous. The market is supposed to be going down because we are in a so called recession, and in a war to boot. Earnings aren't great, sales are down or stagnant for the most part, and defense stock are retreating some also. When numbers are down, but stocks in general are moving higher. Its comes down to some plain old street smarts. That's why I have the most respect for investors who can make money in a down market. IMO- Its all about adjusting to market conditions.

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To: richardred who wrote (718)11/8/2001 8:29:04 PM
From: Sam Raven
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Richard,

>>IMO- Its all about adjusting to market conditions.<<

True.....what tools do you find most valuable to gauge when and where conditions have changed?

I access economic data, and go by the balance of buyers and sellers of my screenings, but I'm always open to new tools you might have?

Sam

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To: Sam Raven who wrote (717)11/8/2001 10:43:14 PM
From: Sam Raven
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Review of Thursday...

One of those occasions that every stock alerts but few remained green to the close,(remember risk had increased to moderate).

The oils, PDS and NE survived BOBJ and STE in medical equipment also held on, and we'll be watching STE again tomorrow. For ourselves, I traded and stopped out in ARXX.

Sam

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To: Sam Raven who started this subject11/9/2001 12:28:06 AM
From: Sam Raven
   of 1567
 
I reviewed the minutes from the October Federal Open Market Committee meeting to look for the differences in my view of the economy that would account for the Federal Reserves more aggressive reduction in interest rates than I expected.

After reading the minutes it appeared my view of the economy was very much in line with what the Federal Reserve was seeing. The difference is that the Federal Reserve Board see deeper cuts in interest rates having a larger short term effect than I believe. Also, I think it is a little short sighted not looking at how much and how fast they are going to have to take back the goodies when the economy turns up. Here is what was said to address this issue: "Monetary policy is a flexible instrument and, with inflation expectations likely to remain relatively benign, policy could be reversed in a timely manner later should stimulative policy measures and the inherent resiliency of the economy begin to foster an unsustainable pace of economic expansion."

I have to assume that, when in coming months, they say they are raising rates to be more inline with economic growth and inflation, the market will be understanding that we were in an unusual situation making interest rates spike down....an unusual amount.

Lastly, when in October they argue that they are decreasing rates more because; "the decline in stock market prices and the widening of risk spreads had damped the stimulative financial effects of the Committee's earlier easing actions" might apply to last October, but not this time around, when the stock market was higher than it was prior to September 11th. Anyway, I will continue to learn.... and provide them my views <g>.

For those interested in reading the Federal Open Market Committee meeting minutes, click on the following link: federalreserve.gov

Sam
savvy-trader.com

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To: Sam Raven who started this subject11/9/2001 1:02:00 AM
From: Sam Raven
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Thursday had mixed market internals and continued weakening in the screened stock ratio at 8.1 to 5.3 favoring buying. Again, the direction of the ratio is important as an oscillator. Risk remains moderate.

A few more companies off our Growth Stock Journal showed up on the screening, and are added to the watchlist today. DLX is one that made a new 52 week high today.

There is still strength in biotechs, medical equipment, select retail and more and more energy stocks.

Longs to watch: APC, CPRT, DUX, NBIX, NOI, PEP, SRNA, STE and TECD.

Good Trading!!

Sam
savvy-trader.com

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To: Sam Raven who wrote (719)11/9/2001 1:36:42 AM
From: richardred
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Sam:

I like to look for,(just like your subject board says strong industry groups)when conditions change. (Companies hitting new highs)Example- Defense companies when the event happened, and gold stocks. We are most likely in a recession, so I like groups that have proven over time to do well in a recession. (food & basic essentials). I'm also a volume watcher. I like to see when money flows into a stock on volume, and out. Block trades on up tick or down ticks. If your following them, you know what the average volume tends to be.

I also as you do, look at economic data. Retail Sales, Housing starts, durable goods, employment data, consumer price index. The index of leading economic indicators. If I remember right, 4 declines in a row, and it's an official recession. It's a lagging indicator, so I think economists don't commit themselves until it happens. Long ago, I used to look at the money supply M1 & M2, but now look at money flowing into mutual funds or out.

I haven't been college educated, Actually, I learned a trade (I'm a pressman). The Library was my place of study, looking over pieces of company reports,business news & data in print or person. I've been investing for 24 years now (started at 17) (now 41). You tend to develop some street smarts over this time period. I'm never afraid to go against the grain. This being analysts. I like to see what they are recommending & downgrading. As for specific stocks, I tend to pick each for different reasons. It might be earnings growth, takeover speculation, balance sheet, market share leadership,depressed market valuation,ect,ect.

I've learned, to be able to adjust to market conditions, you can't be afraid to take a profit instead of worrying how much you could have made. I like to get a profit locked up early on, so I have more leverage down the road if things get bad. I should also tell you I stay nearly 100% invested at all times. This makes me pay attention to what's going on. It leaves me at the mercy of the market, but also has me positioned when it's going up. This is why I have a diverse portfolio. A little bit of everything, but the $ allocation to specific stocks or peer groups is the most important for risk management. I also have long positions,and trading positions. Like my subject board says "I like to hear what everybody has to say, but I do what I think is right Myself" It's worked for me anyway.

I don't know if this give you anything new to look at, but I know the markets have changed so I need to be open to change to keep up, with the challenge.

"GOOD INVESTING TO YOU"

Rick

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