Registered User
Joined: 9/21/2005
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Not a big fan of the business model, but isn't this stock oversold by any objective measure?
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Registered User
Joined: 1/28/2005
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Remember "Overbought and Oversold" are emotional and
not necessarily subject to "objective measures".
Thanks
diceman
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Registered User
Joined: 9/21/2005
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True, I guess you would be taking a shot in the dark to call the bottom on something like this. Maybe you could scale in or just buy a long-term call and be patient.
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Registered User
Joined: 9/21/2005
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Dice, good call. Look what the stock did today. Just for the sake of argument if you were going to trade this one long (for a multi-week or month trade) what would you be looking for?
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Registered User
Joined: 1/28/2005
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It would have to stop falling.
(that may sound simple but most have trouble
doing it)
There is the feeling that "I must be in at the bottom".
Why?
Look at the move from 2/26/03 to 5/10/06
up 657%.
(you had plenty of profit and years to get in)
The current sell-off is -64% from the top.
The last sell of was -90% 5/18/00 to 3/04/03
If you started getting your feet wet at -64% 6/11/02.
You would not have been back to even until 9/20/04.
Not to mention spending a miserable amount of time
with a big loss or not knowing if it will ever turn again.
Not my cup of tea.
Notice the years of rally followed by years of sell-off
followed by years of rally. (now we are in the sell-off
mode again)
All you are really seeing is the big cycles unfolding.
Thanks
diceman
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Registered User
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I know something of this company having studied their business model and of course shopping at their stores. Its interesting to me both as a stock trade and business in general. From a business in general perspective, I can't say the outlook is too rosey. However, from a trade perspective, its amazing how many consecutive days it has closed down. Glad I am not having to suffer through this kind of daily erosion. I wonder if the big boys are jumping ship a little at a time.
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Registered User
Joined: 1/28/2005
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Just a guess.
If the big boys believe housing is a problem.
That will make the consumer feel weak.
Coupled with job loss in a recession.
They may not go to Circuit City to buy their
goodies any more.
Thanks
diceman
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Registered User
Joined: 5/1/2007
Posts: 158
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QUOTE (diceman) It would have to stop falling.
...
Thanks
diceman
and CC shows no sign of support here. Nada. Nil. Zilch. Of course, it could be up 10% tomorrow, but some would take that as an entry point to short.
Since its 2 1/2 day 10%+ rally at the beginning of July, it (and many others) have just been sliding away. Reminds me of that old Chevy commercial -
"Like a rock..."
Thomas
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Registered User
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15 days in a row down! Ending today. Glad I am not in the stock - prolonged painful slide. That will be the last time I attempt to declare a bottom.
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Registered User
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Posts: 566
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Diceman, it stopped falling today. Your thoughts?
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Registered User
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It would require much more than one day.
Notice:
Nov 06
Late DEC06 to Feb 07
MAR07
Mid MAY07
There are always "bounces". But is still hasnt broken
a major downtrend.
I would need to see something like early 03.
Thanks
diceman
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Registered User
Joined: 1/28/2005
Posts: 6,049
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One more thing. notice the diceman
indicator is at a peak.
Probably indicating a reduction in volatility is due.
Until the down trend is broken. It would probably
make more sense to look for shorts and a low
diceman value.
See:
10/31/06
12/11/06
2/23/07
4/25/07
6/19/07
(HNC/Diceman decision points
upside down)
Thanks
diceman
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Registered User
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Do you use the Diceman for timing your shorting? How do you ID stocks good downtrend stocks like Circuit for potential shorting purposes?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I typically don't short.
Except for some very short term special
situations.
My analysis of the 2000/2002 bear scared
the daylights out of me.
Most of my systems were destroyed by adding
shorts.
(you would think it would work well in a bear)
The diceman indicator is still very interesting to me.
I've been busy with other things and have only mildly
looked at it.
My guess is its best use (for my tastes) will be on a weekly
time frame.
(to indicate longer term volatility expansion)
The main reason I mentioned that is because I knew you
were familiar with it.
After all. In the original HNC/Diceman we look for
short-term averages above long-term. Then look
for decision points.
There seems to be no reason that logic cant be
reversed.
(ST below LT then look for decision points)
Thanks
diceman
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Registered User
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Look at the volume bars from recent week or two of trading. Maybe it was a bottoming area afterall. Dont see any MACDH support though.
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Registered User
Joined: 9/21/2005
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CC also is an interesting reverse HNC/diceman so thought I would paste it in. Of course easier to spot in hindsite but seems to have some merit.
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Registered User
Joined: 9/21/2005
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Same story for MNI. I wonder if there is a good way to scan for these.
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Registered User
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Posts: 6,049
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"I wonder if there is a good way to scan for these."
-------------------------------------------------------------------------------------
Obviously you could use all the averages in the HNC/Diceman
scan but its probably not necessary.
---------------------------------------------------------------------------
One idea would be to use:
AVGC15<AVGC60
(this would generally indicate when the short-terms are
under the long-terms)
Combine that with a decision point filter.
Diceman<1
-------------------------------------------------------------------------
Together it would look like this:
((ABS(XAVGC3-XAVGC8)+ABS(XAVGC5-XAVGC8)+ABS(XAVGC10-XAVGC8)+ABS(XAVGC12-XAVGC8)+ABS(XAVGC15-XAVGC8))/XAVGC8)*100<1ANDAVGC15<AVGC60
-------------------------------------------------------------------------
One other point. It may look unnatural to see the diceman
at a low. When shorting. To put it "in sync" with the way
we think. It would probably be more natural to "flip it"
when shorting and plot:
Diceman * -1
(your short signal would be when it is at a peak and
turns down thru its 5 period mav)
(I'm talking about the plot only and not the equation above)
Thanks
diceman
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Registered User
Joined: 5/1/2007
Posts: 158
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CC made a playable bottom last Friday. But I am a "swing" trader, in for 1-10 days. CC, AMD, and similar stocks (also currencies) are multi-year swings.
When I get to 25K, I will become a day trader. And at about $1 million, I can look at CC etc as plays. But I reopened my options account a couple weeks ago - sent in $200 and already have my first comma. No, I've never had two comma, but that's because I wise-guyed myself and broke system. Was going to buy CFC today when down $1.90 - will take that trade in a heartbeat as soon as I can day trade again.
I closed my puts today as DJ hit 13000 and NASDAQ touched under 2500. Will re-examine towards end of trade today.
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Registered User
Joined: 9/21/2005
Posts: 566
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Dice,
I am little confused by your answer.
Are you suggesting adding, AVGC15<AVGC60 to the diceman and treating it as a single scan?
Can you clarify,
"Combine that with a decision point filter. Diceman<1"
How would you this translate into easyscan? or just use as a stand alone filter?
Thanks
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Registered User
Joined: 1/28/2005
Posts: 6,049
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They don't have to used together.
(or at all)
My understanding was you wanted some type
of scan for an "inverted"(for shorts) HNC/Diceman.
That would involve some type of fast/slow moving
averages and the diceman indicator.
-----------------------------------------------------------
Remember what we are trying to do.
Longs: find strength then a "decision point".
Shorts:find weakness then a "decision point".
---------------------------------------------------------
Obviously there are many ways to define this.
For simplicity I chose 2 moving averages instead
of all of them.
I arbitrarily selected diceman indicator <1 (a low value) as a decision
point.
--------------------------------------------------------
Thanks
diceman
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hey guys - great thread. I traded CC at the late May bounce. I was a system trade that catches bounces and at the time it was looking good. Up 7.5% on my day of entry. then it started to roll and I got out. It's been heading down ever since. Looking at cc here reminds me of my new saying -- created after months and months developing reversal systems.
Don't try and catch a falling knife...until it sticks in the ground!
It might sound stupid but it has kept me out more than my fair share of stupid trades. What do I mean by stuck in the ground? Here's CC today...
....heading down...increasing volume. Looks like it migt be putting in a tight double bottom. And trading more than 50% off it's 250 days (stocks in this area have produced a great return over the last 10 years believe it or not). Is it reversing...or just basing before continuing lower?
There is no way to know. You could buy here and place your stop just below the recent low. that would protect you -- but not from a massive gap down (been there -- done that -- don't want to go through it again)
Or you could wait for the knife to stick in the ground! then just casually stroll over and pick it up. Which is what I did with the QID -- the leveraged short QQQQ fund. It had been trading lower since its launch...but as the market approached overbought QID stuck in the ground, reversed, and created an excellent buy opportunity -- which is what I did.
http://i75.photobucket.com/albums/i318/davidjohnhall/qid8-15-07.jpg
Another way i determine if the knife has stuck is the use of price channels. Sick of buying reversals that continued down with me onboard, I backtested the use of price channels and discovered I only gave up a tiny profit and a massive amount of risk.
Now i wait for the 20 day max close to be broken before buying and sell if price drops below the 10 day max c. Like this...
http://i75.photobucket.com/albums/i318/davidjohnhall/qidchannels.jpg
Works for me -- and keeps me on the right side of reversals. Anyway, thanks for letting me share. I've really enjoyed reading this post.
David
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Posts: 566
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This would be an interesting time to buy because the logical point to place your stop is close by. But you have to think everyone has placed their stops there so it would be easy for the stock to get pushed down a little further, take out the stops, and then probably move higher...
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Registered User
Joined: 1/28/2005
Posts: 6,049
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You make a lot of good points davidjohnhall.
Better to have the falling knife stick in the ground
than in your hand.
Thanks
diceman
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Registered User
Joined: 9/21/2005
Posts: 566
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catching a falling knife is something I have tried usually regretted. I guess the alternative is some kind of Tobydad bottom fishing approach. CC has continued its slide...
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Registered User
Joined: 9/21/2005
Posts: 566
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wow - take a look at TWTR.
Electronics retailing can be a harsh biz.
I guess in comparison, CC is doing pretty well.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hey everyone. Couple other things to look for that i forgot to mention last night... 1) climactic sell-off. The last hangers on finally concede. 2) Followed by dried up volume. 3) A very high ADX reading also helps (over 50). The more grim looking the better. Also helps if the stock plunging below the 50% was a prior market leader. Like ESI was going into a market correction in early '04. Lost 50% pf it's value in a coule months, stuck in the ground, and shot back up over 40%. One word of caution - I've backtested these trades meticulously over the last 10 years. The average run or bounce is between 10 and 28%. I'd suggest a trailing stop anywhere over 10%.
http://i75.photobucket.com/albums/i318/davidjohnhall/reversal1a.jpg
http://i75.photobucket.com/albums/i318/davidjohnhall/reversalb.jpg
P.S. Tons of reversal bars today. Anyone looking for a bounce tomorrow. Covered my QID position based on the reversal activity this afternoon.
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Registered User
Joined: 9/21/2005
Posts: 566
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WOW, is all I can say on how this stock has fallen. Please ignore any posts above by Jcfla7 discussing going long this stock - he briefly confused CC with another stock that had a reason to go higher - other than it had gone down so far. Gonna have to re-read some Diceman posts to get my head on straight.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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hi jc -- nothing wrong with seeing a stock and liking it and then having it do exactly the opposite of what you thought it was going to do. Happens to me all the time. As I said in an earlier post, one way to prevent buying reversals too early is to incorporate channels into your method. By using a breach of the 20 day max close as my entry I was kept happily out of cc.
Although now it is setting up another of my criteria -- a gap down and sell climax. I will post some of these examples shortly.
Good luck.
David
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Registered User
Joined: 9/21/2005
Posts: 566
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Hey David,
Would you explain what you meant by this: 'By using a breach of the 20 day max close as my entry I was kept happily out of cc.' I want to be sure I understand. I know what a channel is and am assuming you mean a channel low based on a 20 day period? but would appreciate any extra info.
By the way, will look forward to seeing some of you gap down sell climax examples coming up...
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Registered User
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Posts: 6,049
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Thats why I not a fan of overbought/
oversold.
Sometimes they keep going.
Thanks
diceman
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hey JC,
On this type of trade I mean a breach of the highest close over the last 20 days as depicted by the green line in the middle window of the cc chart from my earlier post. On that type of reversal that occurs without a gap I would wait for either the high to penetrate the ceiling or for a close above it. I can't say which because that's based on gut feel at the time it's happening. I have backtested both methods and find each close as far as profitability. In earlier posts I mentioned a breach of the 5 day ceiling for aggressive entries, but with the market the way it is right now I would suggest against that idea.
As I also mentioned earlier, here are some sell climaxes with which I also use channels for entry.
The first thing I look for is a significant gap down below the maxh250*.50 line on very heavy volume. From there I let price action determine the entry as the volatility settles. With the gap trade I look for a breach of the 10 day channel (why all the different channels? -- believe it or not, after backtesting the channel widths I came to the conclusion that different trades fare better with different channel widths. For the gap it's 10 days). When price CLOSES above I go long the next morning.
Here are some visuals...The first two are taken from a CHS trade in 06, the second is from a BZH trade earlier this year and the last is an AMD trade from 06. They highlight the sell climax trade perfectly.
But as you can see it's a scary trade to engage in and a few weeks ago produced some nasty entries along with some profitable ones.
My favorite thing about these charts? The simple reliance on price and volume. I've just read and re-read an article on Dan Zanger who turned 11k into 18 mil at the end of the bull 90's relying only on price and volume. Nicolas Darvas became famous the same way. I simply like the clutter free thought process.
David John Hall
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