Comments on The dk Report: IBD100 Strikes Again

deborah...it sounds heretical to say now, but I in...

2007-07-29T17:31:00.000-07:00

deborah...it sounds heretical to say now, but I invested for almost ten years without studying charts. I was a fundamentally-based investor, and only became interested in TA in the 90's. Fundamentals can take you a long way as an investor...but TA helps too!

bullish jim...yes, stocks with superb fundamentals tend to trade in similar ways...hard to say what's going to happen with this group if the pullback continues...

beam...thanks for the info on PDP. It's an interesting proxy for leadership, and as I'm sure you know tracks the Dorsey-Wright Technical Leaders Index. Here's a pdf of the Dorsey-Wright component stocks, which is a good watchlist. Lots of differences with the IBD100 though. Nice mention, beam...thanks.

dk:Please change 200MA to 50MA in my previous post...

2007-07-29T11:20:00.000-07:00

dk:

Please change 200MA to 50MA in my previous post. Thanks.

A good proxy of IBD 100 is PowerShare DWA technica...

2007-07-29T09:16:00.000-07:00

A good proxy of IBD 100 is PowerShare DWA technical leaders portfolio PDP. This is a momentum index. Look at the following chart. Notice during March connection, it didn't close down 10MA. But this time it broke down both 10MA and 200MA quickly.
http://stockcharts.com/h-sc/ui?s=pdp&p=D&yr=1&mn=0&dy=0&id=p64159415518

Great analysis, dk.I've noticed that the IBD 100 i...

2007-07-29T06:37:00.000-07:00

Great analysis, dk.

I've noticed that the IBD 100 is basically a sector in and of itself. These stocks, which represent every imaginable industry, often have a tendency to move in tandem regardless of what their individual market sectors are doing. It's obviously partially due to the stocks all being high beta but that's not the whole story by any means. When a lot of these stocks bounce, they will obviously be a very good place to be. That said the bloodshed may not be over for them.

Good post...I don't do the chart stuff although I ...

2007-07-28T15:36:00.000-07:00

Good post...

I don't do the chart stuff although I am interested in learning more about it. I study the financial reports, but I think the chart stuff is probably good for telling you better entry and exits when you do find something you like.

JL...glad you enjoy the posts. I was ultra busy o...

2007-07-27T09:36:00.000-07:00

JL...glad you enjoy the posts. I was ultra busy on a project back in Feb and wasn't posting then. However, the IBD100 had a horrendous day on Feb 27, down 5.8% on similar internals and distribution. However, unlike this selloff, there was scant follow-through. Right on cue, the market recovered at the 200-day and matched to new highs. This time has been different.

Regarding trades, I eat my own cooking. If you read between the lines, it's pretty clear what I'm up to. I watch volume very closely, and hold pullbacks in stocks if their volume is light, but (usually) sell on any distribution. Because of this, I was in 55% cash by Tuesday's close, opening trades in SKF and TWM as well. On Thursday's selloff my main portfolio ticked up 0.5%, reflecting the hedge. It's up today as well.

Hope this helps.

Sam...I too have noticed the shift from value to growth, which plays into the strength in tech that can be seen everywhere. After a 7-year hiatus, the next leadership cycle could easily prove to be technology.

DK,I came across your blog a couple of weeks ago a...

2007-07-27T08:04:00.000-07:00

DK,

I came across your blog a couple of weeks ago and I find it very good. I have been watching the ratio of the Russell 1000 Growth Index to the Russell 1000 Value Index here in July. It has broken through it's downtrend line going back to 2003. It is well below the mean ratio of .9568 (going back to inception). I think this mixes well with your comments about the strength of biotech, etc. in recent days. This bodes well for the market if the ratio gains further traction.

Appreciate your work.

OK thanks. I find your recent posts about the beha...

2007-07-27T07:59:00.000-07:00

OK thanks. I find your recent posts about the behavior of the IBD 100 very interesting. I'm always looking for an overall Market indicator. I usually can make big moves over weeks or months in a bull market but unfortunately give back 30-50% of the gains in a very short period of time when the market turns viciously on the IBD stocks. I'm always looking for a "Take some profits signal" that is somewhat reliable. I find it a very thin line between "Let your profits run" and "Take some profits".I notice you wrote the other day "WITHOUT FAIL" on your IBD 100 posts about when they fall hard the market soon follows. Is it safe to say that when you see one of these down days (what happened 7/24) you quickly raise serious amounts of cash? Do you sell most of your holdings? What types do you hold on to? Also, you mentioned that the China meltdown on 2/27 did not have such violent IBD 100 declines, but I don't see in the archives posts on that day. Can you post performance figures for that day so I can see how the IBD 100 performed on that day? sorry for such a long post, but your material is fascinatiNG to me. - JL

Hi anon...It's a hand-crafted process - lol. I bu...

2007-07-27T07:06:00.000-07:00

Hi anon...It's a hand-crafted process - lol. I build the portfolio in a tracker, but also as a Stockcharts list. The SC list allows me to gather detailed data, though it's captured by hand.

David - How do you monitor the IBD 100? Every week...

2007-07-27T06:21:00.000-07:00

David - How do you monitor the IBD 100? Every week I put the current portfolio into Yahoo and can very easily see the daily change. But how do you figure the internals (# of distribution days, # of stocks trading below 20 day MA)? Do you just go one by one through the charts or do you have software to figure this out?

Thanks