May 25, 2011
Welcome back! I looked into your membership history with CANSLIM.net and it seems that after your upgraded membership expired on 11/4/2010 you let nearly 6 months pass. We are very pleased that you chose to reactive your upgraded membership. Indeed, we expect that in the year ahead there will be many opportunities for you to benefit greatly from our service.
If you take time to scroll down through the dynamic archives of this year's mid-day and after market reports
(http://premium.canslim.net/Archives/2011/default.asp) these are some of the symbols of stocks that were highlighted in yellow earlier this year that you might not have read about.
OPEN at $74.05 1/05/11 subsequently traded as high as $118.66
PCLN at $427.20 1/05/11 subsequently traded as high as $561.88
ULTA at $36.32 on 1/06/11 subsequently traded as high as $56.87
TIBX at $24.35 on 2/01/11 subsequently traded as high as $30.75
LULU at $76.84 on 2/04/11 subsequently traded as high as $102.83
MG at $15.48 on 3/15/11 subsequently traded as high as $18.46
Other new or returning stocks which were highlighted in yellow this year included HS, RAX, ARUN, ORCL, UA, CRUS, BIDU, CMG, DECK, EBIX, JOBS, EZPW, AIXG, OPNT. In particular, GSIT and CTCT are two issues that were highlighted in yellow this year which can serve as examples of exactly why having a strict discipline of limiting losses at 7-8% is crucial to your success.
I understand that you are looking for actionable ideas under the fact-based system. If you simply looked at the Featured Stocks page for stocks currently highlighted in yellow, however, you might easily overlook some very important details concerning the market environment (M criteria) which have been covered in detail in the daily After Market Updates. Also, in the monthly newsletter, CANSLIM.net News May 2011 issue we included a comprehensive market commentary under the headline "Rally Continues; Worthy Targets Recently More Elusive". There was also an Editor's Letter under the headline "Read This, And Stay Out Of The Pool!". http://premium.canslim.net/Premium/cnn.aspx?D=050111 Since this was published, market conditions have only deteriorated.
One of the key concerns we have repeated in recent commentaries has been the poor performance in the financial groups ($XBD Broker/Dealer Index, and $BKX Bank Index) frequently highlighted in the Industry Group Watch section. They are considered reliable "leading indicators" and, as an example, our longtime members saw us call attention in the past as they both topped out and started getting into technical trouble earlier in 2007, well before the major averages topped out in October 2007 and then entered a Bear Market.
I am not saying that we are heading into another bear market now, but until the financials start acting better, history suggests that the major averages are prone to more severe downdrafts. Without an expansion in leadership (stocks making new 52-week highs) it is also difficult or impossible for the market to make a sustained advance. This is why the Market Commentary we publish each day emphasizes the number of high-ranked Leaders List stocks hitting new 52-week highs - to identify if there is a healthy crop of strong leaders or not!
When I was in the Certification program in May 2005 the market was in a correction after having enjoyed a better than 2-year rally from the March 2003 lows. The expert trainers said at the time, "The next confirmed rally with a follow-through day could always be just 4 days away."
Kenneth J. Gruneisen
Founder & Contributing Writer for CANSLIM.net