Jim Goodman's "The Right Side of the PSYCLE sm"
Stocks/Industry Groups Timing Newsletter, and Education service
issue # 55, dated: 10:30 am, P.S.T., Monday, Dec. 14, 1998


**** Overall comment: Recently, I have been pointing out more negative S.T. activity in many indicators, specifically mentioning how similar the very recent patterns look(ed), to those, of March, and July....and Thu. 10th, began some drops in our Extendeds, giving us new Gains in the Put side of our still-Split market....Actually, the McLellan Summation Index itself (an internal A/D oscillator) has now formed a series of three, lower highs, going back to 1997, ad has the A/D lines....hmmmm....Perhaps my recent wariness, being careful, and not-liking many stocks, will be prescient again....and last, am seeing more of those "fakeout breakouts" I suggested would occur. See, though my "PSYCLE sm" never even tries to catch THOSE particular patterns/stocks as puts, our knowing that they occur, DOES help us with the Puttables we DO choose, in sec. (3) and (7)....and, as I said, it allows us to give some "leeway" when/if some issues have minor pops to new highs, while in 4-8-month only, in-the-money-only, diversified portfolios, of Puts, yes ? We can afford to stick around in our Options, with lower risk, and stress, than 95 % of other options traders....

Note all the drops out Puttables are having again....Of course, this also means we have had some Q, small losses in some of our Longs, mainly in the Energy area....Yet, soome of our depressed Energy, Health, and Metals stocks are popping, even as our Puttables are falling...SPLIT market, remember ? trying to give Gians, in BOTH directions, simultaneously, for you....Last, the current unusual declines in some of the depresseds herein, should provide us with nice buys, soon, for tax-selling bounces, again, as usual, this time of year, ahead. While i should not have to mention this yet again, watch the 200-DMA's on our Puttables, and/or the levels above which theyr broke out, leading to their recent highs, as S.T. support, on the way down, yes ?

note: While Online, it takes me maybe just 15-20 minutes to quickly, briefly VIEW charts of ALL the stocks I wish, first, from in section (3), for instance, then, sec. (6) and (7) if desired....obviously, narrowing your search to those issues which have your price/quality requirements, helps eliminate many, i.e., not doing any puts, or not wishing to even consider any real cheap stocks, or only doing options, or margin, eliminates large portions of my stocks shared herein ....saving you time....note, I also have been re-running the "7 stages of my PSYCLE" sequence, again, in section (8) below....began it, with 10/7 NL....

(note: I have recently shortened section 1 and 2 a decent amount....I am assuming you have completely read, and digested what was there, and in all my Booklets, and from earlier NL's....) If you are a "NEWER" Subscriber, please take the time to read ALL of the "wordy" parts of the NL, once or twice, anyway... If you are an "OLDER" Subscriber, of course, feel free to SKIP, to those NL sections you wish to glean your info. from. (Save all my CUMULATIVE letters, for future reference/educational learning/help)

*** If you are pressed for time, read section (2) to develop a "feel" for our Sentiment patterns--- and Section (3) always, while viewing the CHARTS....each NL tends to run about 10-12 pages, printed out....So much valuable info. in one place. Also, Obviously, when "more, or fewer" longs, or puts, are given herein, that also tells us more about "the internals, and likely future direction of the market", yes ? And, please, neither expect ME to stay "super hot" nor "super cold" forever. (and a helpful, quick "PSYCLE sm" note: obviously, "S.T." herein, means "short-term", i.e., weeks, and "L.T." means "long-term", i.e., months)

If you are not "already long" in the long/puts stocks listed, especially in sections (4) and (5), you may feel like ignoring some of the sections below--- feel free to do so--- but it is much better if you take the time to check ALL stocks mentioned herein....you can (and are expected to) also refer back to "the Guide" and my Booklets, for more info./rules, so I don't have to keep mentioning "basics" herein, that you should already know about....The process will become second nature to you quickly: buying longs, and/or puts, with close stops, diversifying, etc. Most, from Section (3), first....Some people ARE spending 2-4-6 hours a week with my NL's, others just 30-45 min. a week....I provide differing types of stocks and ranges, for differing situations/needs, types of investors/traders, to provide the most pertinent info., thorough choices,and proper DIVERSIFICATION....so, Learn first--- then put into practice, the long-existing, highly-reliable, repeating "patterns" I teach to recognize.

I assume you have read the "Significant Disclaimers" paragraph, under my main webpage logo...I cannot infer my future performance will always match my past track record, as each person will, obviously, have differing experiences with my output, and/or do/not do various things, properly/improperly, etc. Thanks for understanding. It is also assumed that you actually "view" 1-and-2-year past Charts of stocks, with their 200 DMA's, BEFORE you "do" anything for real, and that you are aware of their recent highs/lows, stops, resistance/support.

Assuming you are already knowledgeable about all "PSYCLE sm" tenets, and/or just want the most current "actionable" stocks, view stocks from Section (3) first --- then also, from within sections (6) and (7)....you are expected to know/see when those set up properly, also "Industry Group Rotation", always cutting losses when they break their patterns. Then, read Section (2) for "How (Not) to Use Media/Finl. Commentary, from a Psycle p.o.v."....After reading a few NL's, you will already be aware of most stocks from the/our recent past....This simple process should be labor of enjoyable fulfillment and learning, and not a chore, dig ? I give you a lot; whether you use it or not is up to you....Last, "follow-ups" of assumed Hypothetically already Long and Put ideas, are in sections (4) and (5)....of course, if you want to get the most, for the least, read everything....Reading my output can make you a lot more money than the time spent reading most papers, magazines, novels, other NL's, watching TV, etc.

1) "PSYCLE SENSE sm":
New Commentary: Although you know we NEVER try to "predict Indexes/averages/the market", here are my most Current "Market" Comments:

**** As predicted, still more stocks have been hitting resistance levels, double-tops, extended EVT areas, etc. Also, too many depresseds are pulling back, and/or must strengthen anew....Yet, I am finding more depressed future-buyables, among some "land-based" Industry Groups....The "PSYCLE sm" message, is that I recall similar cross-currents, this time of year, the last 3 Decembers....We did real well after each of those periods.

* KNOW THIS: I am pretty Comprehensive/Thorough, herein: There are 3 (three) kinds of stocks listed herein: a) Stocks that can be ACTED on, here/now, if still right near given prices in recent section (3)'s ....b) Stocks which, if they get back to the price where/when they were originally suggested, remain/become tradeable again, and/or, which "seem to be setting up as potential trades, possibly soon", and then might also illustrate "Industry Groups" potentially shaping up, and/or as Educational ideas, for YOUR benefit, in sections (6) and (7)....and, c) already assumed Long stocks, and/or puts, which are rising/falling, and are not buys/puts any more, but just "holds" or "underperformers", in sections (4) and (5)....All previous ideas are followed up, till "sold" or "removed from lists". Call me if you need some places to get charts on the web....Learn the staged Chart patterns, then add my "Media/Sentiment/Psychological" patterns, and voila....


Please appreciate, how much time/effort I put in, to put ALL applicable, staged, stocks, longs and puts, which fit learnable, and actionable, "PSYCLE sm" patterns, into each NL....Sometimes fewer, sometimes more....Whatever I find that best fits "PSYCLE sm" stages, which YOU can learn/take advantage of, for YOUR trading/educational benefit, I will put into each NL....again, the "Most Actionables, Now/Here", are in Section (3). And note, the "learning/feeling/sentiment" items, are in section (2).

2) "What's Been Said, and What I've Read":

a) Important Industry Group (Rotation) Notes: 1) new: "Semis" finally show potential double-tops....2) you have not turned off on our Energy Service stocks, just because we obviously, had to cut a few Q, S, losses in some Energies, most of those were "Explioration" companies, have you ? Remember, we assumed some would have slight breaks to new lows, buyable anyway--- then revalidate/rise into tax-selling-bounce season, so we're going to give them some "leeway", accepting a little extra risk in some of them....ditto with the depressed Golds, but we are Not going to fight the tape....As taught, it is cheap to get whipsawed occasionally, in and maybe out, and back in--- than to fight the tape, emotionally or not be in them at all....we want to be in at least ONE of them....Master your emotional needs....3) also, note bounces in some Steels....4) note how the DJ Trans. Avg. stopped right where it should have....see its congestion resistance aream, from in August ? ....5) also, some "Copper" and "Farm-oriented" stocks show potential double-bottoms ahead....as usual, I am the first/only guy even hinting at this....

b) 12/9, press release from analyst at Morgan Stanley DW, is real bullish on the "chip/semi." ind., and raised his "now very optimistic" price targets on, INTC, BRCM, TXN, RMBS, XLNX, LSCC, ALTR, MCHP, citing "the January effect"--- which is weird, because, these are all ALREADY way up, yes ? and any 'january effect' is primarily among depressed tax-selling issues, right ? But, remember, this comment is normal, late stage 3 behavior, dig ? We shall see....remember, herein, I gave out ALTR, MCHP, near their basing Lows, as "PSYCLE sm" buys....RMBS remains a Put for us....and I was wrong for Q, small loss, on BRCM, recently.... And, overall, my having added LLTC, CREE, QLGC, in sec. (7) below, and, AMD, TER, KLAC, etc. are also looking S.T. toppy/double-toppy, NOT low--risk-bottomy !!! They were cheap Sept./Oct., but now, beware....I love fading big, late B-firms, at times, as you know....

c) more incorrect/improper/misleading Media comments from "fundamentalists/ companies", etc., vs. illogical/contrary stock prices moves, etc.: 1) the last time here, I mentioned that H & Q, and PWJ, "S.T. top/late stage 4-type comments", on NSOL....well, by end of trading, that day, NSOL immediately fell, from 95+, to 86, then now is up to 113+....way too high, but we shall see....amazing....I'm stumped.... 2) you know how bearish I was, L.T., on Bonds, as when I previously called the top in Bonds herein, in an earlier NL....Well, recent Bonds sentiment indicators are as bullish as ever, matching those seen at the previous two Bond tops (I.R. lows), in April 1986, and Oct. 1993....one guy termed this as a "deflationary climax", and, recalled when Bonds were termed "certificates of confiscation" (I remember that, from when I was a L.T. broker), and he said, "Remember the people who were too scared to, and refused, to buy bonds at 15 % ? Today, they are locking in only 5 %, on margin.", dig ? ....3) I.B.D., Dec. 12 issue, headline, "Turnarounds Shaping Up Among Techs", is another "too late, watch for potential S.T. top" sign, from a "PSYCLE sm" p.o.v. ? They showed CPQ, MOT, INTC, TXN....well, we shall see, but, gosh, to "begin" to buy them "now" ? When already up 50-60-70 % recently, here ? Not me, and certainly not attractive compared to many other depressed stocks, for sure....Of interest, as I teach, they all have high Relative Strength now....Why not buy them when they were low ?

4) Neat: the "PSYCLE sm" works, even with a takeover: Mon. 14th, Mattel offers to t/o The Learning Co., one of my Puts herein....yet, TLC falls, from 30, to 24. ...view chart....5) meanwhile, cnbc, Mon. 14th, 9:40, Obrien/Bauman, showed ASO, FAM, OK, banks stocks, as pot. takeovers--- yet all have been on my Puts list herein, from their highs, and are down so far, regardless....see their charts ? For the umpteenth time: good technicals, beats any fundamentals, the vast majority of the time. Learn it, believe it, use it...."Fast Times"....

Mon. 14th, according to cnbc/wsj's Bob O'Brien/Larry Bauman, wasting everyone's time (again), actually said, that 1999 will be "less volatile, better, and will have less risk, with the Fed more accomodative, and more liquidity, than in 1998, with less worries about currency fluctuations, with no recession"....This means, we are more likely to have the Opposite kinds of year, right ? They also specifically suggested that the big, high Drug stocks would outperform, and Farm/Cap. Equip. would underperform--- again, the opposite of what my "PSYCLE sm" says, as well...See ? The Pattern characteristics never change.

d) more late, Brokerage/NL writer/Analyst comments: 1) a broker subscriber (thanks T.H.) specifically pointed out to me, how Munder Capital Mgmt., which came out with an all-Internet-stocks Mutual Fund, Aug. 1996, is really pushing now, with a nationwide "dog & pony show" pitching B-firms, which, he correctly surmised, is another "toppy" sign for them.... 2) JP Morgan, puts out new "buy" rec. on MSFT --- at 135 --- with a 12-mo. target of only (my term) 150....already up from 88. in Oct., anyway, note the small expectation....Many analysts do this (read my booklets on Media messages and Scenarios), just so they stay in the good graces of the companies who pay them tons of money to stay bullish after big rises, dig ? ....3) recently, Bloomberg, over two consecutive days, actually said: Mon. 11/30, "US stocks fall, led by computer makers, on earnings concerns." Then, Tue., 12/01, the same place, they said, "US stocks rise, led by computer shares, on earnings optimism." I am not kidding....amazing, huh....re-read my Media and Scenarios booklets.... 4) I did read an interesting, but also useless, comment of the kind fundamentalists historically make: It asked, "If tens of thousands of aircraft, energy, and file clerk workers are going to be thrown out of work soon, where will the Internet get its shoppers from ?" ....5) saw a neat chart of the PE ratio of the NASDAQ composite, since 1985, itself looking like a "PSYCLE sm" late stage 3 pattern, with its PE currently at 80, vs. 45 early 1991, and under 20, in 1985. I am not kidding, it seems ridiculous, but the NASDAQ itself put this chart out, with a current PE of 80 for the composite....certainly a S.T. top sign for the biggies on NASDAQ, yes ? ....6) I almost fell off my chair: Fri., 11th, just before the close, CNBC had the bearish-all-the-way-up Jerry Favors on (again, oy), and, at the beginning of the interview, he actually said he had just gone more Bullish !!! Then, of course, he showed a L.T. chart of his Put/Call ratio, which was still low, and Bearish....unbelievable....it would help, if YOU, reading this now, actually e-mailed CNBC, at "squawk@cnbc.com" and "powerlunch@cnbc.com", and "street@cnbc.com", telling them how decent I jave been, how interesting and personable, etc., vs. the boring, droners" in this industry, etc., suggesting they interview ME and my "PSYCLE sm" at some point, often, etc., instead of many of the people they seem to have on way too often....you have my personal thanks, if you could do this, briefly, for all of us....

7) You know how I detest most "linking", and, Friday the 11th, the T-Bond contract did finally fall enough (and I.R. rose enough) to break its recent uptrend (and downtrend)....Interesting more, that, according to Thu. 10th, L.A. Times, headline, the "Fed reports pace of growth slowing in several regions".... Their 1999 growth est. has been lowered, from + 3.7 %, to + 1.0. %....But, gee, if the economy worsens, wouldn't that be 'good' for I.R.'s and Bonds ? Yet, the T-Bond chart still shows a lower-high, from late Sept./early October, when I said herein, it was real UN-likely that we would see 4 % rates (when "the 95 %" were all over that expectation), remember ? Well, now T-bond rates are back over 5 %. ...So far, again, the chart technicals, wins out, over the assumed fundamentals.

8) unbelieveably, on cnbc, Mon. 14th, 9:50, Bill Griffith interviewed a useless M. Fund guy, and they actually said, (paraphrasing) "many investors already know much inside info. on companies in areas they are connected, and therefore, that's the only place where they should invest, and do best." Gang, that's one cornerstone of my "PSYCLE sm" ---in reverse....The histrorical fact has ALWAYS been, that people who "only" try to invest, trade, and concentrate on, I.G.'s which they "think" they know about, invariably buy high, fail to stop losses when wrong (because they are emotionally attached to that company, etc.), never buy near the lows (because "they know things are so bad", because they "know so much about the fundamentals, because they work there, and/or know someone who does, etc.", anyway, dig ?)....Plus, they MISS, tons of easier trades in all the OTHER I.G.'s they ignore, by not being Open-minded, but I digress....Do NOT "just" be in your "local" companies--- nor hold too much of the stocks of the company you work for, etc. Unless, of course, you ALSO know, and apply, the "PSYCLE sm" staged patterns, anyway. 'Nuff said, but it is pretty irresponsible and misleading, for Media people to say such a thing as these guys did. (boy, how many times have I said THAT before ?)

As you have seen the last several months, how much better one does, just "doing" the best individual stocks, technically/sentiment-wise, while ignoring, or going contrary to, 95 % of all Media messages, and "indexes/averages" comments, from the peanut gallery ? By just getting my output, alone, you do much better, and save time, by not having to "seek, and process" tons of other, useless info., anyway, and we also help remove potential emotional problems before they begin.

3) Most recent Hypothetical "PSYCLE sm" transactions, to be mimicked, and referred back to:
 Always remember to view "1-year-at-least past" charts of everything you can view, herein, along with their 200 day moving averages (DMA's), to "see/learn" the "PSYCLE patterns", and see where/when stocks in section (3) were Hypothetically bought near lows, and put near highs....note: (Q = quick; i.e, was less than 2-3 months holding period.... VQ = very quick; i.e., was less than 3-4 weeks holding period) also re-read "the Guide" for how I derive the estimated % percentage Gains I show herein, on assumed Hypothetically closed-out trades (always assumed to have been in Options, where applicable/suitable, and on margin where available/suitable, and on a cash basis where not, as per "PSYCLE sm" tenets)....and "bal." in section (3), means, "the balance" of assumed long positions, assuming a "1/2 and 1/2" sale....ans, "css" means "covered short sale", where no puts options existed....

* Previously assumed Long positions most recently SOLD (showing the actual price changes, in parentheses, from the price where/when originally recommended herein, to the price where very rently Hypothetically "sold"):
bal. stk.on.mgn. IKN (7- to 10+) for 90% Gain....1/2 pos. puts NIS (34 to 28) for VVQ 100% Gain....1/2 pos. puts MYL (35- to 28+) for VVQ 100% G....puts VNWK (36+ to 29+) for VVQ 90% G....1/2 pos. puts CCE (40- to 34+) for Q 90% G.... 1/2 pos. puts PG (91+ to 84-) for VQ 75% G....1/2 pos. puts UHS (54- to 46) for Q 75% G....1/2 pos. puts TLC (30 to 25) for VQ 75% G....1/2 pos. calls ROP (17- to 20) for 75% G....1/2 pos. calls OLN (26 to 30+) for 75% Gain....and, puts, CCIL, CBUK, and longs, WGR 7+ to 9+ to 7+, GRERF, CBRL, PSFT, MRVC, FEN, FTR, MLT, GLB, SOC, DHC, HXL, BHI., MT, for VQ, very small losses....Recent sales have "cleaned up/removed" many positions for us....more larger % Puts Gains, more than overcoming some smaller % Puts losses....but too many Q,S losses lately, anyway ....I am assuming each of you have had ONE, Q,S, loss in ONE, Energy stock, and/or remain IN, one Energy Svc. stock....Remember, a few real small Q losses will never hurt us much, financially nor psychologically, in the long run.... cutting Q, S losses will also keep us in the game, for the larger gains that follow....hey, I am upset with "any" losses....and no amount of Gains satisfy.

you know, I have always wondered how, many of the same people who rush to "deep discount, no-help brokers" to possibly save money (but many don't, but I digress), nevertheless, still refuse to cut occasional losses, because of transaction costs....huh ? Didn't they demand near-zero-cost trades, just so, when/if they HAD to cut a loss, and maybe get back in when/if that stock revalidated, their cost would be NOT a factor ? yet, most people still do not cut losses well/properly enough, and, often, end up with bigger losses....just a thought.

It is also nice to see so many of my previously-given long-side Winners, have pulled back/corrected since we 'sold' them herein for you....and we also accept that some "whipsaws" may occur with our Energy issues here, cutting losses, then some revalidate....but those we 'sold' still should have been sold.

NOTE: while all the $ under 10. stocks are listed here as "stocks on margin" ("stk.on.mgn."), if one Had bought L.T., in-the-money calls options, their % Gains would have been multiplied, higher, right ? We just prefer not to buy Calls on most stocks under $ 10., unless their patterns are phenomenal, as their options premiums tend to be too high, vs. just buying those stocks on Margin, with close stops, where suitable, instead, with less risk, and similar reward potential--- stocks themselves have no "premium", right ? and, of course, if one just bought longs for cash, and not on margin, the % Gains would be relatively smaller, though still excellent, for so short a time period, yes ?

* Newly/Additionally BOUGHT/Buyables, right near these prices only:
(either for Cash, especially in Pensions, and/or on Margin where suitable, and/or Only L.T., in-the-money Options, where suitable/ available, always Diversifying, always with close Stops below/above recent lows/highs): (note: If you are New to this NL, here are the most recent "Buyables/Puttables", long/short) (note: a " - " after a price, means "just under" that price....and, a " + " means "just over" that price....i.e., 16+ means, 16 to 16 3/8, and, 56-, means, 55 5/8 to 56, etc.)....again, the idea is to "just get real close" to my listed prices here, when buying long/selling/putting issues given....try NOT to worry about every 1/8 or 1/16....


**** Newly BOUGHT Long-side, for potential Rises: (note, many more/new names here):
(new ones) MIFGY @ 8 5/8, NBR @ 12 5/8, ATW @ 17, RON @ 22+, SIF @ 12, WFT @ 17, PVH @ 7-, HP @ 17+, CS @ 8+,
(repeats) ACLY @ 3 3/8, IAIC @ 1 3/16, BLM @ 2.06, AEC @ 12+, BTC @ 13-, GLDR @ 1, FNL @ 5+, PRGO @ 8 7/16, ICA @ 4 3/4, ELCO @ 1 11/16, NBTY @ 5 7/8, MIKE @ 18-, PDE @ 7-, ESV @ 9, BS @ 7 11/16, PHYC @ 4 11/16, BEZ @ 19+, DO @ 23+, CEI. @ 22+, IO. @ 7++, ICIX @ 17, IHSC @ 6.06, CHK @ 1 3/16, BEV @ 5 13/16, FLC @ 8+, UPX @ 2.06, AZC @ 0.57, LPX @ 17--, KRY @ 0.44, HBI. @ 5 3/8, MSN @ 0.41, VGZ @ 3/16, TOX @ 3/16, SSC @ 11/16, IIR @ 3 1/2, WLM @ 10+, LTV @ 5 5/16, TMA @ 8.06, WLM @ 10++, GLM @ 9-, ZAP @ 7+, RYO @ 5/8, CAU @ 0.31, AXC @ 7/8, NGX @ 7/16....most are still EVB's...."buy low", right ? Note, we are revisiting some "previously given/traded" issues, and a few whipsaws, back in....and, more importantly, that, now, AFTER recent rises, most "new buys" are real cheapies, and/or "laggards" with less "sexiness", dig ? What does THAT tell you ? also see the "just missed" issues, below...

NOTE: as I teach in the "green Guide" Booklet, you should already understand, that, very often, there is NOT "just one day" when my ideas become "long buys" or "long puts"....some stocks may hit around originally suggested prices, 2, 3, 4 times, etc., sometimes over a period of weeks, as they may form EVB's, double-bottoms and/or bases at times, right ? When/if they rise/ fall in between those times, I will follow-up those moves, in section (4) and (5) anyway....this is a Positive, a Benefit, for you....remember, I have subscribers who ARE already in stocks which have already moved before YOU noticed them herein, dig ? And there ARE many subscribers who ARE viewing MANY of the charts of the stocks herein, first....and there ARE many subscribers who DO want "longer, more thorough, teaching" NL's/items from me....

*** remember, all my given stocks REMAIN buyable/puttable, every time they hit originally suggested prices, unless/until they break their patterns....even if weeks pass by !!! This is covered in "the Guide" and herein, endless times.... "just get close", and do everything else properly: the stops, VIEWING the charts BEFORE acting, NOT forcing trades, and, of course, LEARNING the stages/patterns of price, ind. group, and sentiment/media patterns.

** Important: took, MLR, IMN, CMH, MKA, WEB, BIR, WS, IV, --- Off pot. Long buys list, before they might have been Hypothetically "bt." (as most all made quick, new lows....also recall the last few lists of stocks removed before "bt." here). Note, I try to give "something for every type of investing/trading desire/account/objective", including some real cheapies, some $ 5-10. stocks,some over $ 20. stocks, and some "names" blue chips--- either, for straight Cash, and/or on Margin, and/or L.T., in-the-money Options, etc., so that all my valued subscribers have Choices, and for proper Diversification --- all still having similar, exploitable patterns, in each NL.

**** Newly BOUGHT, long "PUTS", for potential Drops: (new ones) QLGC @ 115, QWST @ 45, PGNS @ 49-, FITB @ 69+, PHCC @ 36-, VIA/B @ 69+, AMGN @ 83+, ATHM @ 68-, USW @ 64+ NDN @ 43+, BLS @ 90-, SWC @ 37+, COX @ 60+, JCI. @ 58-, RX @ 70-,
(repeats) AMZN @ 222+, USCS @ 34, ITWO @ 27, BGEN @ 84+, LBTYA @ 42-, MFNX @ 60, QWST @ 44+, DELL @ 68+, BBC @ 32+, RCGI. @ 29+, VNWK @ 36+, NETA @ 52-, GEOC @ 29, ISCA @ 36-, INTU @ 65, LFG @ 61+, FDO @ 20+, MDT @ 70++, ASO @ 44, CMA @ 68, PRGN @ 39+, ZION @ 54+, FAM @ 44+, CGX @ 60+, PPDI. @ 28++, EFBI. @ 46+, TYC @ 68+, UFS @ 48, PVN @ 95+, MLM @ 49+, LIN @ 35, ECL @ 32+....and/but, remember, I/we have NO "market scenario", ever, as you know....and, note, too many minor breakouts all of a sudden, so am taking more real small, quick Puts losses above, and NOT fighting the tape....

and/but, Took, SBL, SCH, TLD, CE, Off pot. Puts list, before "put", as they aborted their patterns immediately (also see recent past issues taken off, here). IMPORTANT: sometimes, in the few hours after I send this NL to the web site, a stock might break its S.T. umbrella top, or its depressed EVB/base pattern....So I am assuming, you actually View their recent charts, BEFORE you consider buying any Longs or Puts, and you will see/know that the pattern is still O.K., and therefore buy/not buy them....this takes just seconds each to check/do, and will keep you from buying Puts/Calls on issues which abort budding patterns quickly after publication of my NL's.

....and/but, among stocks recently given you herein, in sections (6) and (7) below, we "just Missed", CBTSY, MANU, NPSI., IMRS, PGO, SPF, TEN, FGI., as Longs near very recent lows, and, VRTS, BCST, DLTR, NTAP, MAST, CDRD, ALSI., CPB, RBD, OSI., MPO, GCL, HMK, RBD, MR, MCD, CF, COF, BEL, AES, STI., OK, as Puts, near recent highs....as one of the few honest guys in this biz, I will always tell you here, also when we "miss" actually catching suggested ideas, so you can "view/see" and LEARN their charts/patterns, for your educational benefit. By viewing such charts, also tells us, whether the market itself is providing more bottoms/tops, at that time, right ? Another reason why it is important to consider ALL my output, each NL....Again, the idea is to learn the "Patterns" of previously "given/done" ideas, for YOUR future benefit.


All previously mentioned ideas are Followed-up here below, for your Educational/Trading benefit ....check these lists/issues briefly, to see if any YOU own, are mentioned....

4) Already given out in previous NL's, assumed Hypothetical "Long-side" positions:(issues moving since last time, worthy of following-up, and/or mentioning, because of recent price moves, and still remaining long in most of them, unless otherwise noted):

* too late to buy up here, up already, and/but acting O.K., so stay in these for now:

**** note: ("sos") means "Sell On Strength" (on a bounce up towards resistance, and/or where it broke down from)....("S") means Sell it here (if right at/near listed price level)

still giving you plenty of risers (note, these have always been listed, in order, from the biggest % moves, to the smallest important price moves): LXR 1 3/4 up 7/16, CMO 4 1/4 up 1 3/8, NBTY 6 3/4 up 1, MMG 5 up 1/2, NOI. 11 up 1, CS 8 5/8 up 5/8, RMDY 12 5/8 up 1 1/8, GLT 13 3/8 up 3/4, WFT 18+ up 1 3/8, ATW 18 1/2 up 1 3/4, NX 21 5/8 up 1 5/8, HP 18 3/4 up 1 1/2, RON 24+ up 1 5/8, MIFGY 9 1/8, CMND 3 1/2, ROP 20, up/further, since last time here....

also see, FP 4- up 2-, KEP 22- up 4, ADPT 20-, GAP 30, IDPH 43, UTR 18+, WCS 25+, RDRT 15- up 4, TER 43+, IFMX 8-, SYBS, higher....gave them all to you earlier, near their lows, herein....also, CTB, and many Japan, Paper, Bank, Insur., Bell Tel., stocks, hit their 200 DMA resistance levels, as predicted....

please appreciate, that I have subscribers who want "real quick and out" trades, and others, who want the "multi-month holds for bigger potential gains" trades....by VIEWING the "higher still" list above, you will hopefully learn better PERSPECTIVE in the overall chart patterns, and what can really be accomplished at times, if one lets them....another, of mnay reaons why we are so against "day-trading": why anyone would limit one's potential, and increase one's stress, on purpose, is beyond illogic.
and/but, then, seeing many pullbacks, like, PAGE 6 1/2 up 1/2, NS 7 3/4 up 7/8, FLC 9 3/8 up 1 3/8, PETC 9 3/8 up 1, HAL 32 5/8 up 2 1/4, NE 13 3/8 up 7/8, DO 24+ up 1, PAIR, INPR, IPIC, TGX, TWA, HMY, RRC, TMA, PCTL, LTC, RMDY, MIKE, PHYC, CWC, ZAP, TXB, DBRSY, BUR, HOC, SRR, UNO, GLT, LTC, HBI., TRMB, APFC, ATW, IHSC, ADM, JBAK, MAVK, LTV, WEL, WIT, SUL, ELY, PDE, ATX/A, VTO, RYO, "Steels", WLM, AXC, IHSC, GGC, TBI., NGX, SSC, MCN, DAY, CCH, WTS, WLV, UPX, IIR, DX, MS, Z., Oil Svcs., pb (pulling back)....some of these are also in "ms" list below.

again, please do not be afraid of buying the "Real Depressed Stocks", even in pension accounts, always diversifying, with close stops....Again, you Must buy at least a FEW, to increase your chances of being in the bigger movers.... Lesson: there is NO such thing as "but, Jim, which 1 or 2 are your favorites ?" It is impossible, and illogical, to expect anyone to be able to choose just 1 or 2, out of 2,500 issues ....maybe 5 to 10, long-siders, and also 5 to 10, put-siders, sometimes, but never just 1 or 2....One must also eliminate one's "PSY-chological need for excitement", and/or of "instant/S.T. gratification"

Note, growing list of "pb's" and "ms" issues....not a great sign.

* and/but, these already assumed Longs, are acting weaker S.T., and/or must strengthen,
and/or must strengthen "again/anew", and/or must "break above recent high or else", and/or are sales on strength ("sos") to/towards/near resistance:
(some of these are also in "pb" list above) WKGP 2 3/8 up 1/2, IKN 10 3/8 up 1 5/8 (S), PCMS 3 3/8 up 3/4, AXC 1.06 up 0.25, ICIX, HMY, HBI., LTC, PCTL, ACLY, CWC, BST, RDC, RRC, IAIC, VOX, SSC, NR, LWN, DX, MCN, AZC, DBRSY, PHYC, HBI., LTV, OLN, GGC, BEV, BST, CTI., VDC, GLM, MCL, TRMB, ATX/A, FLC, JBAK, WLM, ADM, TOX, CWC, WIT, AMLN, AAC, NGX, SSC, DEN, ATV, VTO, WLV, WTS, VTS, WEL, ZAP, AZC, AXC, RYO, CAU, TBI., IIR, MS, OO, IO., cheap Golds, all Energy/Svc./Expl., and Steels.

hopefully, you viewed the charts of those issues listed here last tifew times, which had risen from "PSYCLE sm" bases/db's, towards their 200 DMA's, to see/learn the patterns....if not, go back to last NL here, and do so

5) Already given out in previous NL's, assumed Hypothetically long "Puts" positions:
(issues moving since last time, worthy of following-up, still remaining long in these long Puts, unless otherwise noted):

* too late to buy puts on these now, but acting properly, stick around:
 Puttables specifically given you herein, many which are Falling/further, read list carefully today: MFNX -6 1/2, CTXS -6, AOL -6, USW -6, XRX -6, VNWK -5 (S), MSPG -5, QLGC -6, NIS -5 1/2 (sow), QWST -4 1/2, PVN -4, CL -3 1/2, BGEN -3 1/2, UNPH -3 1/2, VIA/B -4, DELL -3 1/2, CGX -3 1/2, BLS -3 1/2, CMA -3 1/4, JCOR -3, RMBS -3, MDT -3, VIA -3, MYL -3, GD -3, TYC -2 3/4, TXT -2 3/4, MFNX -2 1/2, ITWO -2 5/8, BBC -2 1/4, LBTYA -2 1/2, QWST -2, XCIT -2, CCE -2 1/2, CMA -2 3/4, TLC -3 (sow), COX -2 3/4, FDO -2 1/2, PRGN -2 1/4, FISV -2, ASO -2, OMC -2, FAM -2 1/4, LOW -2 1/4, ATHM -2, SBC -2, GM -2, RX -2, AMGN -1 7/8, LIN -1 7/8, COX -1 3/4, MSBC -1 5/8, PRGN -1 1/2, EFBI. -1 3/4, FTEN -1 1/2, FITB -1 1/2, MMC -1 1/2, NDN -1 1/2, BFO -1 5/8, GEOC -1 3/8, GVA -1 3/8, PHCC -1 1/4, SWC -1 1/4, D. -1 1/4, METZ -1, AEOS -1, EGR -1, ASO -1, PGR -1, LFG -1 1/4, MMC -1, SWX -1, ITW -1, PE -1, PZZA -1, ZION -1, ISCA, USTC -1 1/2, MUEI., MSBC, UFS -1, ECL, PPL, GAS, down/further, just since last time here....and also see 'bouncers' below. Note, we were the first/only, to catch some Golds, and Medicals, as Puts, near their recent highs, for you here.

* Note, how I, again, am giving you some Puttable stocks which are Falling, as most of "the market", and especially high-priced, name, quality-type stocks, rise, again....that I am among the very few, giving out ANY profitable puts, since early Sept. (and tons more, from March, and from July through Oct.) should be enough, yes ?

Note: these have always been listed, by "number of points falling", from most, to least...."(sow)" means, "Sell long puts On next Weakness, towards/near support"...."(S)" means sell/sold their long Puts right near here, and/or as in section (3) above....I follow-up every idea mentioned, for your benefit.... remember, these are NOT "overnite" trades, they take a little time to fulfill, so please have some patience, and no emotion, nor antsiness....let them do their thing....**** IMPORTANT, you MUST view the 200 DMA's of our Puttables, past and present, for their potential support targets/areas/prices....


* but, then, these, are acting too Strong, and/or are Bouncing, and/or must weaken anew, and/or are sales on pullbacks/weakness (sow): AMZN + 18, ELNK -6, MSPG -5, YHOO -4, +4, -7, +5, MFNX +2, BGEN +2, AOL +2, HB +2, ZION -1 1/4, JCI. -1, EGR (sow), UNPH +1, AEOS +2, EBAY, PGNS, XCIT, VOD +2, CGX, INTU, SCUR -1 1/4, SNRZ, ACXM, SNRZ, EFBI., EAT, PG, GPU, CQ -1 1/4, BFO +1, DV....See, many stocks, and Internets, must "follow-through", and break below recent lows, to warrant holding their Puts....


Remember, we either buy our Puts right up near each stock's high, or not at all....but you can still view their charts, to "see" previously formed/worked/aborted "PSYCLE sm" patterns, to hopefully Learn from.

6) Now--- Here are Other, still-Depressed, Long Buys, near their recent Lows Only, for potential Rises towards resistance, always Diversified (w/close stops, when/if their basing or "EVB" patterns break down):
Be patient here, and do not "force" trades, or overtrade, just because, PSY-chologically, you "want" to have "something" to buy long....do NOT be "antsy", relax....let the patterns come to YOU....also, there may seem to be "a lot" of stocks to review here, especially in the next two sections here....but that says how cheap many stocks have been at times, right ? Of course, near the highs in March, and July, this list was much smaller, yes ? It is logical and expected, after the recent mini-crash, That there have been/are more "EVB's", yes ? Also, remember, we do NOT "chase up"....only buy the ones You prefer to choose, which are still near their lows, with stops for protection.
"Potential Longs, by Industry Groups, for Rotation":almost no great Bases here, just many decent EVB's and double-or-triple-bottoms, (but, again, Not when/if any of these make new lows here, and, NOT if they are already "up", much, off lows, right ?):
NOTE: when there are more stocks listed in an I.G. here, that tells you I feel more strongly about that I.G., right ? Which, in turn, tells you a lot about how "the market" looks, sometimes....

Semis/Comp./Techs: please see "Techs", listed, in the "watching" section, just below.

new group, somewhat riskier, longer-term: (Y2K) "Year 2000": CMND, IMRS, UBIX, ACLY, IAIC, MIFGY, ZITL, some have long bases....
Prec.Metals (add, TKOCF, BGO, ECO, to, GLDR, KRY, CCH, AZC, VGZ, RYO, DAY, CAU, all real cheapies, risky)
"Basic Inds." (Chem., Farm, Steel, Paper) (add, FCX, to, FNL, BCP, WIT, BS, TFT, NX....maybe "copper" DB's, soon ?)
Energy/and Oil Svc. (add, WFT, RON, FGI., HP, to, TDW, ATW, VTS, VPI., NE, TBI., NOI., GLM, MHR, RDC, WEL, WLM, IIR, VRC, PDE, FLC, CHK)
Biotech/Health/Medical (PHYC, GNSA, VTS, TGX, LXR, TOX, ULB, MGL, HIV, CCLR, IPIC, BDR, TOX, MPN, TXB, MS)
Consumer/Retail/Apparel/Shoes (add, MIKE, PVH, to, PBY, SRR, SME, BBA, BUR, KFI., MSN, OO, UNO, SGE, BLM, GCO, HBI., Z.)
Capital Goods (ROP, CTB, LDW, HPH, HXL)
Hotel/Gaming/REIT (add, HET, to, MIR, SER, JAMS, UDR)
Employment (OLS, JOB, MPS, RMDY, ESOL)
And, again, as I pointed out earlier here, some depressed R.E./REIT/Financials/ Mtg.-type stocks, many with huge Insider Buying a while ago, some with very high "potential" dividends, may shape up ahead....watching, in no particular order, add, AMMB, AAM, NHR, BRE, UC, to, AAC, ALF, AEC, AML, AMMB, BNP, BOY, BRI., CBG, CPP, CMO, CRO, ENN, FBG, FCH, NDE, KPA, LTC, JPR, MAA, PMC, RFS, RWT, SIR, SPF, TMA, UDR, if you need some maybe's, on pullbacks only)

NOTE: as I said above, ON BIGGER PULLBACKS ONLY, stocks like our Farm./Chem/Fert., Golds, and Techs, may set up as depressed buys again, down the road....as always, I will let you know at that time....have patience.

And, as I have been saying here, even though I have given you a ton of quick 50-100% gains, since Sep./Oct., do NOT expect as large rises off bottoms, as when I gave out similar "EVB" Techs, in the late '97/early '98 period (nor, from the late '95 to early '96 period....I was first/only to do so near their lows at those times), because there are NOT many "true bases" here--- just some with good EVB's ....we accept occasional Q, small losses in some longs, w/close stops, along the way....Also note that many already popping/popped stocks are due to pull back, soon, after their recent/initial "dead-cat bounces". This is normal, and welcome.

and/but, Important: also, took these Off the pot. long Buy list, Before they might have been Hypothetically "bt.": MLR, IMN, CMH, WEB, MKA, BIR, PRD, WS, IV, --- were taken Off.... These/they just need more work, technically, first, and/or are still making new lows....we do NOT "Guess" at bottoms....we want only the EVB's, which set up properly....we MUST also see the cathartic/high volume, in "PSYCLE sm" stage 7", first.

* The stocks on this next list, are also, still, Current, or, Potential, "EVB's" ("exhaustion V bottoms"), read that Booklet !):
Remembering ONLY to buy near their recent Lows (do not "pay up" much off lows), as "EVB's", diversified, w/close stops....these, plus the stocks listed above, and the "Newly Boughts" in Section (3) above, comprise the "total" complete long-side buyable lists in today's market.

We are Also "Watching" --- as potential EVB's/bottoms, near recent lows ONLY: add, MANU, MLHR, SFSK, SIF, SAA, TMO, CQB, CYM, SCS, FAX, BDS, TLZ, UTI., AR, VC, to, those listed in section (3), and those just above here, plus, INPR, PCTL, NPSI., PAIR, GDC, NOV, LYO, IHS, CS, VSNR, ICIX, OMPT, BTC, PCMS, SYNT, STRX, IHSC, PCR, CFS, CPU, ALN, SEW, CLCDF, AFCI., LPX, BEZ, AGTX, CEXP, WKGP, MWY, JDAS, VDC, UPX, ZAP, CXI., ILX, TRMB, ELCO, LWN, BMC, CYI., ICA, IO., IT, still, most all as "EVB's" (again, note, most are "Techs", with some "Finls., Foreign, Health"), plus, the Value Line issues: NSANY, PRGO, DEMP, CEPH, GNSA, OFIS, BUNZ, SEW, TSA, MGN, COE)....some here, some Not just yet, as some still need more work, technically....and/but most, only on pullbacks towards lows....and/but, not any of these, when/if they make new lows or break budding bases/patterns....don't "force" trades....

**** The potential Longs above are chosen, First, by their EVB, or "base" technical chart patterns, then, I do do a "little Fundamentals research" on each, to make sure they are viable companies, with no "hidden time bombs"....Last, on some of these, you are going to have to stretch your time-frame out a bit, this time around, as some of these may, like after the last few mini-crashes, take weeks instead of days, months instead of weeks, to form any bases/EVB's, and/or rise, dig ?

7) other, still extended/potentially Toppy, "Puttables", near recent Highs Only, for potential Price Drops, using, Only, L.T., in-the-money Puts Only, Always Diversified, w/stops if patterns abort to the upside, for potential drops towards their 200 DMA's, or lower (NOTE: again, if they are already down appreciably from their highs, do NOT chase them down, right ?):

(re-read my "Downside/Puts" booklet) now, I add some more Puttables, again, after/into recent bounces:

Fuller, Potential Puts list, by Industry groups where practical, near their highs ONLY, do NOT "chase down":

note: this list supercedes all previous ones....these are the ONLY Puttables here, all others have been removed....
(banks/insur.) add, FITB, BBK, to, ZION, LFG, HIG, MLM, PGR, XRX, MSBC, ASO, PVN, CMA,
(comp./techs/s'ware) add, QLGC, USCS, to, RMBS, ALSI., DELL, BSYS, GEOC, NSIT, CTXS,
(retail) AEOS, LOW, NDN, ANF, FDO, LOW,
(telecom/commun.) add, HBCCA, ATHM, USW, CVC, BLS, SBC, TEF, to, CDRD, VNWK, LBTYA, QWST, MFNX, COX,
(medical/health/drug) add, AMGN, PDX, RX, to, EL, PGNS, MDT, UNPH, BGEN,
(food/bev.) PZZA, CCE, EAT, UFS,
(cap. goods) GE, CGX, TYC, JCI., GVA,
(utilities) add, SWC, AVE, to, PE, PPL, METZ,
(internet) BCST, LCOS, MSPG, PSIX, ECLP,
(others, misc.) add, CREE, CTSH, MAST, LLTC, PHCC, SEGU, SEIC, MEDQ, OSSI., VIA/B, LSTR, AWS, FRX, CLX, WAT, FOE, HMK, MPO, ENE, EFX, SSP, to, MSPG, SFXE, LGTO, ISCA, INSS, OSSI., OMC, NTAP, MLM, ECL,
also watching: AGPH, TROW, NEON, PPDI., RATL, PGNS, GBLX, NETA, NLCS, NTLI., Advertising stocks, on/into/after strength, soon ?

the Best Puttable Industry Groups: still, Extended Banks, Health/Medical/ Drugs, Insurance, Finance, Computers, Retails, Internets, Aero./Def., Food/Bev., High-PE techs, all types of Tele.-Commun., in no particular order, as the most probable Puttables, near their recent Highs ONLY, w/close stops above their patterns....also, note how we are revisiting some of our past Puttable stocks.... Also, extended Biotechs may be beginning their top process....but Utilities are a real mixed bag, sorry....Some are breaking patterns, others still toppy.

Last, FYI, these "big-name OTC extendeds" all look the same here, as potential fakeout-breakouts, but I am not formally recommending them for Puts quite yet: CSCO, CPWR, MNMD, MSFT, SUNW, VISX, VRTS, INTC.

8) "PSYCLE sm" Lesson for today:
Besides all the previous Lessons you have hopefully gleaned from all my past materials, NL's, ideas, and my (7) educational Booklets, I promised I would re-run "the seven sequential stages of my "PSYCLE sm"", so, starting 12/7, and for the next 7 NL's, here they are again: today, stage 2:

"PSYCLE sm" stage 3: "the occasional, often semi-parabolic (and, eventually, terminal) rise, accompanied by good/improving news/fundamentals": O.K., after the normal stage 2 pullback after the breakout of the EVB or base, the "late buyers" get frustrated (because they were not smart enuf to have bought near the lows before the breakout), and many of them sell--- at the bottom of stage 2--- Well, often enuf, especially in Bull markets, that Pullback gives US, the last opportunity (a "second chance", if you will) to Buy that stock, somewhere near the depressed base, dig ? last, the transition from stage 2 to stage 3, may be represented by a "halfway-trading-range", i.e., a flat, sideways period, which, if stage 3 IS ahead, will provide the 'launching pad'....In a bull market, for instance, "stock" buyers will only buy after the breakout above such a high-level consolidation, "on" new all-time highs....Of course, this has always begged the questions, 1) who does better: the person who bought near the lows, the all-time, multi-year depressed lows, or, the person who buys at several times that price, hoping for a stage 3 rise, when, historically, those kinds of people rarely sell near the highs anyway....but I digress....

From there, we have the chance for the "run to the top", at-least-semi- straight-up type rise you may be familiar with, in recent years, among many Techs, etc. Remember, 95 % never buy "low", and ONLY buy much higher, "on/after" the much/more better/good fundamentals/news that must, by nature, often accompany such moves....Most people also only buy "after breakouts", and not "before, while nothing seems to be happening"....YOU SHOULD KNOW, that, recent years' experience, of more stocks actually working, after breakouts, has been a rare occurance, historically, going back decades....The two problems with buying on/after a seeming breakout above the stage 2 high on a stock, are

a) if one is buying Only after good news/breakouts/high, one is much less likely to sell anywhere near the eventual top, because one will then be too excitied (read my Booklet on Mastering PSY-chology) waiting for more "bad" news to come out, and, of course, that will only be announced, AFTER that stock has already fallen a bunch off its highs, so again, one will be buying late, and selling late, only getting the "middle move, at most", missing the easiest money, from near both, the bottom, and the top, right ? and, b) often there is another pullback, in stage 3, and/or a "sideways consolidation" range-type period between stage 2 and stage 3, mentioned just above here, during which many people get frustrated (again) and sometimes sell due to anxiety, antsiness, and emotional impatience/demands....

Often, the stage 3 breakout does occur on High volume, and causes people to take notice....sometimes it is just a 'fakeout breakout', and stage 3 is SUPPOSED to be "super exciting", with better and better fundamentals/news/announcements, a sort of "all systems clear/go" period....the holders see only green lights ahead, "forever"....some people use trailing stops here, and are stopped out well before the top, and many actually buy on any S.T. pullbacks in stage 3, often missing it anyway, upset that they "missed it earlier", eventually buying all the way up, NEVER having VIEWED the actual price chart to 'see' how Low that stock was, just a few months, or a year or two ago, that same stock price was....Also, in the same manner that the stage 7 drop-to-the-EVB, underpriced/oversold that stock, in stage 3, the rise will normally "overshoot", that is, lead, by nature, to a "too high/ overbought" condition....last, one characteristic of stage 3, IS< that it often does not allow a "late buyer" to even get in, during the semi-parabolic rise.... this is all a normal part of the process....

The real key to knowing when the end of stage 3 is near, and stage 4 is coming, are, a) more and more bullish publicity, buzz, party talk, Media messages, articles, headlines, trumpeting "it will never go down again", etc., c) our knowing, that NO stock can rise much longer at that rate of ascent, physics, and that, FROM that lofty level, by definition, risk rises, the higher it goes, and that, FROM that lofty level, OTHER stocks, which are still near their lows, in "PSYCLE sm" stage 1 or 2, begin to have better reward/risk ratios, providing better places for one's money, than tempting logic/history/fate, in this stock, and, finally, d) observing the first correction that breaks the steep uptrend line formed in stage 3....

PSY-cholgically, a lot of this has to do with, 1) never viewing chart patterns before acting, and, 2) one's past trading experiences, memory, and self-esteem issues....Important, know that 95 % of even those people who HAVE been fortunate, whether through luck or skill, to have been in super-stage 3-risers, have NOT sold anywhere near the stage 4 highs....and most all Blue Chips, and even Techs, which have had super high % rises over long periods, have, historically had periods of correction, sideways, etc. moves, along the way, vastly lowering their overall rates of return....With those stockholders failing to take the maximum gains, or protect their previously-big-stage 3-gains, causing them to continue to hold those stocks, in the hope of "just to get back to where the high was", but, more on this, next time here, when I cover stage 4 = "the top"....

so, now you know the briefest basics of sequential stages 1, 2, and 3, in most all stocks' "PSYCLE sm"....oh, and, remember, everyone's perspective differs: stage 1 can be viewed as, say, only a 1-2-month basing/bottoming period after a big drop, if you are a S.T. trader, and/or, a 3-6-9-month basing period, if you are a longer-term investor....and last, a bigger previous drop, will normally lead to a bigger % rise, off the EVB/base low, which, I guess, is obvious....Hey, you'd be surprised how few people, even pros, know about stage 1, at all....hope this helped.

Remember, WE tend to ONLY trade long, from stage 1, into stage 2, with stops, and often miss potential stage 3 rises....and we try to Only get Puts at what we think might be a stage 4 top, with stops, and often miss stage 6 drops, but more on that later....The highest-reliability, reward/risk plays, are in stage 1 and 4.
As I have said here before, it is sometimes part of the 'saucer' bottom formation on many depressed stocks, that a "minor new low" be made, in the middle, or at the end, of the pattern.....This is done to "sucker/keep out", many holders/ buyers, so the smart money can get in (often, the market maker at the lows), at the best price....

IMPORTANT: people keep trying to "formula-ize/computerize" my "PSYCLE sm" process, which, as I keep saying, is a fruitless waste of your valuable time.... just get close, and do everything else correctly....The KEY is just plain learning the simple VISUAL chart patterns for each of the 7 sequential stages in my "logo chart" on my webpage and on the front of every Booklet.

As Repeated in Every NL:
As I keep reiterating, It is also still better most times, to, 1) buy "some" stage 1 "PSYCLE sm" stocks, in depressed or EVB chart patterns, when their "news seems so bad" but their patterns show EVB's (and have occasional, small, cut losses), than to never do that at all....Because, historically, and as you have seen herein, any small, cut losses, will be more than overcome by larger % Gains, over time, off those EVB lows, when one properly Diversifies....and, to, 2) TRY at least "some" "Puts/options" the opposite way, near their Highs only, when/where suitable, than to never do any Puts ever....always diversifying properly, with close stops....no emotion.

Remember, "PSYCLE sm" stocks tend to move much more INDEPENDENTLY of any/all "external" stuff, than "the 95 %" incorrectly believe....one does Not "need" "events" to happen, in order to exploit normal, probable stock price moves.... this is a Good thing....One Key is to have the strength to Buy, when there is a "scary story", provided the stock pattern is intact....Connectedly, realize, by nature, there is SUPPOSED to be no "sexiness" in stocks/groups, near their lows, in bases, nor EVB's....they only become "sexy", After they rise a bunch, right ? and, by then, it is/will be too late....One must buy into NON-sexiness, into NON-positiveness, into "fear", when the patterns are intact, right ? Also, buying PUTS options "the Psycle Way", can be viewed as just plain intelligent/ logical, and proper, as just "insurance" or "protection", as well as for direct profit at times, yes ? The March tops, and July tops, and drops, have proven that yet again.