ParkTwain's Parlor

I eliminate different groups of stocks for different reasons but with the same intent: to increase the chance of finding a stock with a minimum of extraneous influences that could be "drags" on the ability of the shares to increase quickly after all-time-high resistance has been surpassed.

No foreign companies: no need to allow for currency risk or political/regulatory acts of a foreign sovereign, unforeseen effects of U.S. foreign policy acts/decisions

No banks, REITs, insurers, utilities: typically slow pps gainers, heavily regulated businesses, banks highly reactive to Fed policy and actions

No mines or metals: closely tied to an associated commodity's price, which itself can be tied to extraneous factors, such as foreign political acts/accidents/incidents/currency panics. To play these stocks I am in effect playing a commodity (a foreign-dominated commodity would be the worst case) but doing so indirectly. (I would rather play a commodity directly, in those markets.) I could also use this reasoning to disqualify metal-forming businesses (steel mills, canning companies, wire manufacturers, etc.) and even any oil/NG-related company. Practically speaking, I almost never trade any oil company shares due to their extreme sensitivity to geopolitical events. (My trades can run from a few days to a few weeks.) During CY2005, I traded only two stocks, FTO and CHK, in the oil/NG sectors; made good $$$ on FTO but lost $$$ (October) on CHK.

[New-born baby]

Quick list of new all-time high breakout plays that meet my preferred criteria ( no foreign companies, no banks, no REITs, no mines or metals, no utilities, no acquisition targets),

ParK"
Would you please comment on why you eliminate these groups? Esp. "no mines or metals." Thanks!

<< Dave...Tell me who's long list did good today?... >>

None that I know of. That's why I wanted to know how Park's list did; the criteria choices looked interesting and I was thinking of replicating them.

[IIC]

Nice looking list. How did it do today?

Dave...Tell me who's long list did good today?...His list was 10/47/1...But the IIC 100 was 10/89/1...And since the IIC 100 is the standard for which all other lists are measured...Guess he did OK today...Anyway, the way I look at it is days like this create opportunties...Doug

Nice looking list. How did it do today?

[Websman]

Park, the more I read your stuff, the more impressed I am, especially considering your huge returns last year.

Keep up the great posts! I'll be watching and learning. Heck I may even find a few things to help tweak my VTP.

Quick list of new all-time high breakout plays that meet my preferred criteria (w/in 105% of brkout pivot, uptrending RSI > 65, PEG ratio under 2.0 and closer to 1.0 the better, over 5.00/sh, >50K avg daily vol, no foreign companies, no banks, no REITs, no mines or metals, no utilities, no insurers, no acquisition targets), using 2/2/06, 2/3/06, and 2/6/06 data:

AATI, ACAD, ADS, AL, ALB, AMD, AP*, ASTE, AWGI
BLDR
CAKE, CENX, CPD
DSW
EEFT, EGY, EVST, EW
FORM*, FUL
GVA
HURN
IFS, ILMN*, IVAC*
KAR
LMT, LRCX*
MEOH, MGLN, MIC, MWIV
NMTI
PAAS, PDE, PH, PPCO, PTIE
RDC, RESC, ROC, RSTI
SBUX, SIMO, SMDI*, SPSX, STLD
TCC, TLF, TSCO, TXCO, TYL
UTIW
VAL
WAB, WHR, WLL
YMI*

*=exceptions to the criteria

I'll rank these and others later this week.

Nice points found in:
"Classical Charting Principles: An 'Edwards and Magee' Approach to Trading Futures Markets" (Richard Brandt, 1989)

http://www.charttricks.com/Resources/Articles/Peter%20Brandt%20MTA%201989%20May.pdf

//
1. Charting is more of an art than science. Successful chart interpretation takes time, study and effort.

2. Charts can be misread, much in the same way as a Wave Count can be prostituted.

3. Charting is a TRADING TOOL, not a means for price forecasting. People who use chart books to make grand economic forecasts are in dangerous territory. Charts should be used for timing trading maneuvers, not for formulating fundamental opinions.

4. Even the most well-defined and seemingly perfect chart pattern is subject to failure.

5. Not every market, all of the time, can be understood using classical chart principles. The real danger is trying to fit a chart interpretation to all markets all of the time. More often than not, a given market will defy classical charting principles.

6. It is very easy to over analyze a chart. The temptation for a novice chartist is to keep studying a chart until something is made of it. The mentality is one of ... "there has got to be something on this chart and I have to find it." My experience is that chart patterns pop off the page; that legitimate chart patterns will find us. We don't need to find them. My rule is that if I have to spend over 15 seconds on a chart, it is time to turn the page.
//

Here are some articles related to Peter Brandt's (chart-oriented commodity trader) use of classical chart patterns.

"Classical Charting Principles: An 'Edwards and Magee' Approach to Trading Futures Markets" (1989 article, 26 pages) (VERY GOOD!)

http://www.charttricks.com/Resources/Articles/Peter%20Brandt%20MTA%201989%20May.pdf

Here is Brandt's own book:

http://books.global-investor.com/books/3808.htm?ginPtrCode=00000&identifier=

Available here:

http://www.rb-trading.com/books.html

"Best Way to Trade [Futures Markets] with Limited Capital" (Bruce Babcock)

http://www.rb-trading.com/article8.html

"Role of Classical Chart Patterns" (Dan Chesler)

http://www.performancetrading.it/Documents/DanVolatility/DnV_Role.htm

This is part of a longer article that can also be found in PDF format here:

http://www.charttricks.com/Resources/Articles/Chesler_article.pdf

[IIC]

Found at amazon.com, an illustrated edition ("coffee table" book), including the original artwork found in the Saturday Evening Post, of Lefevre's Reminiscences of a Stock Operator" with a foreword by Wm. O'Neill and commentary by financial historian Charles Geisst.

http://www.amazon.com/gp/product/047...tpwwwwillco-20

Park...just a reminder...My b-day is April 9th...Doug

Found at amazon.com, an illustrated edition ("coffee table" book), including the original artwork found in the Saturday Evening Post, of Lefevre's Reminiscences of a Stock Operator" with a foreword by Wm. O'Neill and commentary by financial historian Charles Geisst.

http://www.amazon.com/gp/product/0471678767/ref=ase_httpwwwwillco-20/102-2148488-4672151?s=books&v=glance&n=283155&tagActionCode=httpwwwwillco-20

HOWEVER, this might be the coolest stuff I read all this week, the MIT master's thesis of Pasha Roberts (whose father is Lawrence Roberts http://www.ziplink.net/~lroberts/, one of the true actual inventors of the internet) that was published in 2003.

"Information Visualization for Stock Market Ticks: Toward a New Trading Interface" (83 pages)
(The good stuff starts on PDF page 36.)

http://lineplot.com/expertise/Thesis.pdf

Later, Pasha Roberts helped to start a company called Lineplot Productions (http://lineplot.com/index.html) to do video visualizations of dynamic market data. At this website, click on the "Gallery" link, then click to watch the 60-second video.

Pasha Roberts was at one time a grad student under Andrew W. Lo at MIT. You should also be aware of what Lo is doing at MIT (http://web.mit.edu/alo/www/). Notice on Lo's home page that he has co-authored at least one paper with Brett Steenbarger, a psychology professor who also consults to traders and in all his free time maintains a couple of very interesting websites (http://www.brettsteenbarger.com/).

[IIC]

3.) Don't force a trade where there is none, be patient. Don't trade out of boredom.


I did this today...didn't work...But no harm(well a bit)...no foul...Still a very good week...Good advice...Doug

[RL]

Park you are just fantastic with all your Info, sure glad you started posting regularly.YOU AR THE MAN

[skiracer]

[...]*

* the link was broken and the original message has been deleted. Karel

Well Park there is another site that I have added to my favorites. Looks like alot of good reading there. Another good one. Thanks. How and where do you find these little gems? Do you sleep?