To produce the CANSLIM.net Mid-Day BreakOuts Report, at around mid-way through each trading day we screen the Leaders List database of high-ranked stocks, searching for possible buy candidates that are trading at or near their 52-week highs on above average volume. Regular readers have noticed that the screen parameters used to generate this report during each trading session are occasionally adjusted. Note that these adjustments are made so that the resulting report will do the best job possible of giving our loyal members a concise list of high-ranked leaders most worthy of closer attention. In recent weeks we had to lower the bar just to find a small handful of companies reaching our screeing criteria. Instead of limiting the screen results to show us a list of stocks trading within 5% of their 52-week highs (the usual setting), we included stocks trading with 10% of their 52-week highs in some of the most recent reports. The report yesterday showed stocks within 15%, and today's report including stocks within 20% of their 52-week highs turned up only one high-ranked company.
Taken in context along with the daily market commentaries provided in the CANSLIM.net After Market Update, we believe there has been a very clear message communicated to investors concerning the M criteria. Hopefully, you got it! If so, you reduced exposure and avoided being set back badly, saving yourself more than enough to justify the cost of your membership. If you didn't have the discipline to limit your losses and reduce your market exposure, you probably learned a painful lesson. Success is more likely when your trades are based upon what is actually happening, not based upon guesswork. The good news for all of us is that another bull market will eventually begin, offering us the opportunity to do an even better job of following the investment system's guidelines and generate above average returns.
During the first few months of a new bull market, members who continue reading the daily CANSLIM.net reports will notice the next crop of market leaders capable of producing the greatest gains. The most important thing to do, for the time being, is stay out of harm's way, preserving your capital and your confidence. We welcome your praise, criticism, suggestions, or feedback in general about the job we are doing.
Kenneth J. Gruneisen