Jim Goodman's "The Right Side of the PSYCLE sm"
Stocks/Industry Groups Timing Newsletter, and Education service
issue # 56, dated: 10:00 am, P.S.T., Thursday, Dec. 17, 1998


**** Overall comment: I told you not to give up on the Energy/Services stocks, even given their immediate pullbacks Thu., and please understand: my buys on them were mostly technical, and had ZERO to do with any potential Middle East stuff....have patience, with no "super-S.T. demands"....this is just another I.G., we have NO "scenario" about Oil & Gas prices....and we see more than a few of our Puttables are also dropping....But, this HAS meant some Q, small losses or whipsaws in some of our Longs....And, do not give up on the Internets, either.... We still have quite a SPLIT, frustrating market....I am trying to give Gains, in BOTH directions, simultaneously, for you....The current unusual, "extra" declines in some of the depresseds herein, should still provide us with nice Buys, soon, for tax-selling bounces, again, as usual, this time of year, ahead. And, the minor new highs in some extended stocks, are still likely to lead to broader top formations, and not new huge further rises....Remember, 95 % of all "year-ahead" predictions/comments you are going to hear from here, are going to be nothing more, than, the "we expect whatever has recently been happening, to continue for the foreseeable future forward"--- which is, as usual, a total waste of Media, and our, time....so, watch for that....and, if the chart patterns say so, look to do the opposite of what most of those analysts/ media/brokerage/$ mgrs./people predict, most of the time....Remember, these were all the people who were mostly wrong during the last year, and before....

PERSPECTIVE: Now, this will seem a bit weird, but, I still had to technically cut some Q, S losses in some Long-siders, when they did break their budding patterns, even though, in the Bigger Picture, many will end up just making minor new Lows on final tax-selling--- yet, still, some of those same stocks will become EVB buys soon, down here, soon, for nice bounces thereafter, anyway !!! Recall/view the Oil Services patterns, where they ended up forming 3 bottoms, in their base formations....Of course, many Dec./Jan. lows will mark THE bottoms on many of these same stocks....so, it is important to step back, and gain some larger perspective, especially at this time of year....with our Depresseds, allow for small tax-selling aberrations....but do notice the plethora of new, and repeat, Long-siders in Section (3) below....VIEW their charts, and physically "draw" the "left side of the lazy saucer" forming in many of our Depresseds, like the examples from within my Booklets, and you will "see" the pattern emerging in those....So, while we may get whipsawed out/in a couple, we WILL catch, and have already caught, many others, right near their lows, anyway.

Last, remember, each individual Industry Group, like "Energy" or "Internet" is just "just another I.G.": we never have any special or emotional attachments, to any one I.G. So you should be in at least a few issues, in a few different I.G.'s, minimum, at all times. You don't want to miss the other I.G.'s coming tax-selling bounces, like, depressed Metals, Techs, Healths, etc., by over- concentrating just on "what already just moved" in a couple of I.G.'s....Never "exclude" anything, if it fits a "PSYCLE sm" exploitable pattern.

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) cnbc, Tue. 15th, 8:30 am, Bob Pisani actually mentioned the 'triple-bottoms' among Oil Service stocks, but noted someone told him, BHI. had broken its potential support, as a potential "ominous sign"....yet, most have held, and Crude Oil itself has a 10-day base now, as of Tues., and, as you know, WE bought many Energies down here, and you saw what happened Tue./Wed....2) note the bounce in cash Silver contract, as I predicted here recently....3) also note how the Nikkei. Index has corrected, from its 200 DMA, as predicted....4) looks like I was wrong in some Steels, cut for Q,S losses, but most remain O.K., and rising....5) I read where, now, 70 % of the NASDAQ 100 Index, is comprised of only just a small number of BIG, hardware/software stocks, another reason why one has to view the many other stocks on the OTC, and Not just the few biggies ....6) as to Internets, while we had Q,S, losses in AMZN, AOL, and EBAY (balanced by our initial big Q gains in EBAY, XCIT, puts, and our recent huge long-side gains, in EGGS, BNYN, NETM, etc.), note how FEW others are making new highs in this bounce, YHOO, MSPG, XCIT, LCOS, etc., and, that some others were actually DOWN, on Wed., and/or have just been popping, so most are still showing Toppy patterns....I heard 2 reporters, Wed., say, "there is no ceiling in sight" ....seriously. They also did not point out the selectivity of this week's Internets pops. And, of course, you heard of the Oppenheimer analyst who just came out with a Buy on AMZN, with a $ 400. target. Yeah, right....

b) L.A. Times, 11/24, reported that (quote) "79 % of Americans believe the Media distorts the facts, and 71 % think the mainstream Media have sunk to the level of tabloids, and 67 % believe the Media have the same or lower moral standards than Bill Clinton." Hence, my "Psycle Sentiment Timing Concepts".

c) more incorrect/improper/misleading Media comments from "fundamentalists/ companies", etc., vs. illogical/contrary stock prices moves, etc.: 1) Tue. 15th, 8:50 am, CNBC's reporter, showing a very extended chart of PAYX, said, "you don't have to be a technician to see how great their stock chart looks right now from here, with its net income up 159 %"....yet, I see at least late stage 3 parabolic rise, diminishing, don't you ? ....2) cnbc's Bill Griffith (again), interviewing its pres., showing a 2 -year chart of OWC stock, actually said, "talk about volatility....wow" huh ? Check it out....OWC stock, has barely budged during that period....In fact it has only been between 30+ and 45-, over 2 years....if anything, that is the definition of NON-volatile, yes ? ....3) re: MAT & TLC: please view chart of MAT, the last 18 months or so....see the long umbrella "PSYCLE sm" top, followed by an initial, stage 5 drop as predicted in my NL's back then, then a stage 5 rally to its 200 DMA resistance, then another, stage 6, drop recently, breaking its stage 5 low ? this is one way, my concept is supposed to work.... 4) cool: MSFT buys millions of shares of QWST at $ 45.--- but it was only $ 13. last year, and 22. in the recent Fall, and yet they chose to pay 45.... I recently gave out QWST herein as a Put, at $ 45., and, so far, it is down.... gee, Bill Gates can still get my NL and Booklets real cheap.... 5) that $ 120. on NSOL, should be "it", for a long time.... 6) cnbc, Joe Kernan, Wed. 11:20, reported on one of my Puttables given recently herein, SEGU, which fell huge, so quickly, that we missed it, by a matter of minutes....but view its chart to see the pattern of many of our Puttables that work, for education's sake....

all day Wed., CNBC reported big "percentage" gains in "online/internet $$$ product sales", this season, over last year....well, duh ! Of COURSE, the raw "comparisons", by definition, MUST "look" high--- because they are being compared to much lower, beginning levels of such sales, on the internet, LAST year, right ? I mean, by "PSYCLE sm" nature, any "newish" enterprise, is going to show + 300 % sales gains, the first year or two, compared to very few slaes at the start.... This smacks, from a "PSYCLE sm" p.o.v., of a feeble attempt at somehow reconciling the ridiculous market values of those stocks, many of which are certainly showing very late stage 3, and/or stage 5, behavior....Meaning, even though I have had to take three Q,S losses, this IS definitely still a big top forming, among such stocks....I will try to catch more for you, when and if.

d) more late, Brokerage/NL writer/Analyst comments: 1) a story with a moral, I.B.D., 12/14: After writing a book on Warren Buffett's investment style, in 1995, that author began a Mutual Fund, which would supposedly mirror his tactics, stocks, etc....well, guess what happened ? yup, his MF has UNDER-performed, the S & P, lagging by 6.5 % in 1996, then another 4.2 % in 1997, before rising + 22. % in 1998, which is still nothing to brag about....Of further interest, his MF also vastly Under-performed vs. Berkshire H. stock, itself, the very vehicle he was trying to mimick (why ?) !!! He said one reason his MF did relatively worse, was that he, and Buffett, "refused" to ever buy a "Tech" stock....Once he added Techs, in 1998, his performance improved....moral: never eliminate ANY industry groups from your screen.... 2) Dec. '98 issue, "Bull & Bear" paper: had a big section, with Jim Dines recommending a ton of already-way-up-there Internet stocks as "buys now and forward", "with the unflinching intention of holding all of them for at least ten years" (oy), actually saying to buy them even at their recent highs, "doubling up on any substantial declines." Especially interesting, is the part where he refuses to sell any of them, even when correct, even in stage 4, with no trailing/stops, nothing....actually Welcoming "substantial declines"....Gang, that is NO way to trade/invest, begin to buy, and/or hold, anything....Where are the other NL writers who buy things cheap, like we do ? ....3) I missed which B-firm put out special new "buy" signals, on ORCL and RFMD and Nokia, on Mon. and Tues., way up here....where were these B-firms near the lows ?

4) KWHY-tv, 11/20, 2:15 pm, pst, Wade Cook (don't get me started on him and his output) actually said, (quote) "just buy options on DELL and MSFT, for the foreseeable future, and hang on for dear life"....That's it ? From there ? ....4) cnbc, Wed., 9:20 am, Morgan Stanley's Barton Biggs, stammering in a defensive posture, said he is still Bearish, as he was around the Fall lows, expecting "another leg down in the bear market".....what bear market ? ....5) cnbc's Bob Pisani, Wed., 10 am, said that one Money Mgr. he interviewed, said, "I can't believe I am paying these prices, for such overpriced stocks, but I have to...." .... and, 6) I have been hearing, way too often in recent days, how, supposedly, "the market's weakness is uncertainty based on the stuff going on with Middle East, Impeachment, Iraq, Interest Rates, the Euro, etc., and, will lead to new all-time highs, in a 'relief-afterwards-rally', from here." The problem is, I am hearing too many people saying this, as if it is a certainty....Sounds to me, from a "PSYCLE sm" p.o.v., like a lot of people "buying/holding extended stocks, just wishing and hoping, while crossing their fingers", vs. logical thought and reason based on actual chart and sentiment patterns...."Wag the Dog" notwithstanding....

7) remember, one of the best periods I and my "PSYCLE sm" have had, using my I.G. rotation, going opposite what the Media said, each step along the way, etc., was DURING the Gulf War, 1990 and 1991, for real....re-read my "handout" in my "Media" Booklet.... 8) cnbc, Wed., 12;30, Art Cashin, Paine Webber, finally showed chart of an already-down-a-bit potential double-top, after he did not predict it, in the big stock Indexes on the TV (maybe he read my NL), anyway, he then actually said (quote) "life is a somewhat analogous circumstance"....Huh ?

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"):
17 more Put Gains for you, and some losses: bal. puts MYL (35 to 27) for VVQ 111% Gain....bal. puts SUT (48 to 38+) for Q 111% Gain....1/2 pos. puts HB (60- to 51+) for Q 100% G....puts EGR (35 to 29+) for VQ 90% G....bal. puts NIS (34 to 28) for VQ 100 % G....bal. puts TLC (30 to 23+) for Q 80% G....1/2 pos. puts ROH (37+ to 30-) for VQ 100% G....bal. puts CCE (41+ to 33+) for Q 111% G....puts MUEI. (24- to 18+) for Q 111% G....bal. puts GD (61- to 52+) for VQ 111% G....bal. puts GAS (44+ to 40+) for Q 100% G....puts ASDV (38+ to 31+) for VVQ 100% G....puts OMC (56- to 49+) for VQ 90% G....bal. calls ROP (17- to 20-) for VQ 70% G....bal. puts ACXM (27+ to 22+) for 80% G....bal. puts TXT (78+ to 70+) for VQ 111% G....1/2 pos. puts GM (74 to 66+) for Q 100% G....bal. puts PG (92 to 85) for VQ 60% G....1/2 pos. calls DO (22+ to 26-) for VVQ 66% G....bal. puts EBAY (217 to 160 to 218), and, and longs, WLV (21 to 25 to 20), ATX/A, MIKE, ACLY, ICIX, FTR, FCX, SGE, BST, CTI., IO, and puts, AOL (95 to 82 to 96), AMZN, PGNS, CPRT, USCS, BGEN, GEOC, VOD, PVN, ECL, MLM, DV, for VQ, very small losses....

More larger % Puts Gains, overcoming, smaller % Puts losses....but too many Q,S, losses, Longside, lately....I am assuming you may have had ONE, Q,S, loss in ONE, Energy stock, and/or remain IN, or have Bt., at least one Energy Svc. stock, most recently, still....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 me. One key is to stay with it, and Buy the ideas that show stage 1, for tax-selling bounces at least.

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 revalidated, so we bought more/back....but those we 'sold' still should have been sold at those times.

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/revisited stocks here, and most are still pretty low-priceds):
(new ones) MLHR @ 20+, SAMC @ 6 11/16, VSNR @ 1 1/4, TLZ @ 4 5/16, ESOL @ 1 13/16, NOV @ 2 5/16, BDS @ 3 3/16, AAM @ 1 9/16, SDC @ 11++, TVX @ 1 7/8, CPU @ 12 3/4, PAH @ 7, AR @ 16, VTS @ 13, MIR @ 14-, 1/2 pos. BGO @ 13/16, 1/2 pos. ECO @ 1 15/16, SFSK @ 18, TEN @ 32+, BCP @ 5+, IT @ 19+,
(repeats) NE @ 12++, JBAK @ 4 3/8, PCTL @ 5 7/8, PAGE @ 5 11/16, PGO @ 12 5/8, TRMB @ 7+, CWC @ 7-, TBI. @ 7 1/4, TKOCF @ 1 5/16, PAIR @ 6 15/16, MAVK @ 5 7/16, ICA @ 4 11/16, MGN @ 2 5/16, NBR @ 12+, PVH @ 7-, CS @ 8+, IAIC @ 1 3/16, BLM @ 2.06, DX @ 4 7/16, GLDR @ 1, LTC @ 16+, FNL @ 5+, ZAP @ 7+, PRGO @ 8 7/16, ELCO @ 1 7/16, NBTY @ 5 7/8, PDE @ 7-, ESV @ 9, BS @ 7 9/16, PHYC @ 4 9/16, BEZ @ 19+, DO @ 23 1/8, IHSC @ 6.06, CHK @ 1 3/16, BEV @ 5 13/16, SIF @ 12-, FLC @ 8+, UPX @ 2.06, AZC @ 0.57, KRY @ 0.44, HBI. @ 5 3/8, MSN @ 0.41, VGZ @ 3/16, TOX @ 3/16, SSC @ 11/16, IIR @ 3 1/2, IPIC @ 3-, WLM @ 10+, TMA @ 8.06, GLM @ 9-, ZAP @ 7+, ATW @ 16+, HP @ 17++, UPX @ 2.06, MS @ 1.06, 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, CLCDF, PRD, SCS, IHS, VC, UPR, VPI., --- 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) CLX @ 114+, LSTR @ 40+, MKL @ 184,
(repeats) SNRZ @ 45+, QWST @ 45, PGNS @ 49-, EAT @ 26+, ATHM @ 70, RX @ 70, MFNX @ 60, ISCA @ 36-, PRGN @ 39, ZION @ 54+, QLGC @ 116+, PPDI. @ 28++, EFBI. @ 46+, BLS @ 90....and/but, remember, I/we have NO "market scenario", ever, as you know.... and, note, there have been too many minor breakouts all of a sudden, so I am taking more real small, quick Puts losses above, and NOT fighting the tape, in those stocks....

and/but, Took, NETA, NTAP, NSIT, SWX, ANF, AWS, WAT, 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", OMPT, DURA, SER, SWW, VRC, ENN, FGI., UTI., BDI., as Longs near very recent lows, and, MEDQ, SEGU wow, BCST, CDRD, CREE, SEIC, PSIX, FOE, 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 most recent price moves): TKOCF 1 3/4 up 7/16, UPX 2 1/2 up 1/2, MPS 15+ up 2 1/4, JBAK 5 1/8 up 7/8, PAH 8 3/4 up 1 7/8, GLM 11 up 2 1/4, SDC 14- up 2 3/8, MPN 6 3/8 up 1 3/8, RDC 11 1/2 up 1 3/4, PGO 14 1/2 up 2, COE 5 1/4 up 7/8, PDE 7 7/8 up 1, JOB 7 5/8 up 1 1/8, NE 15 up 2 5/8, HP 19 3/4 up 2 1/4, WFT 19 3/4 up 2 1/8, SIF 12 5/8 up 1, LPX 18+ up 1 1/8, MLHR 24 5/8 up 4 3/4, ESV 10 3/8 up 1 3/8, RON 27 5/8 up 3 5/8, DO 26+ up 2 1/8, HAL 34 1/2 up 2 1/2, PCTL 6 1/2 up 3/4, NBR 13 1/2 up 1, TEN 34 1/4 up 1 3/4, CMND 3 5/8, FNL 5 3/4, up/further, since last time here....

for the last time: also please see, FP 4-, KEP 22-, 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.... also, as I said recently, IBM, COMS, CSCO, ORCL, SUNW, INTC, etc., still look extended, like S.T. tops forming....

note: 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.

New Note: re: Oil Service stocks: please re-read Sec. 8 (stage 1 and stage 2 explanations) in the 12/7 and 12/10 NL's.....as to the expected potential rises among those we have caught, the best case, I think, would be an eventual rise towards their Oct. highs....please look at their charts....see, many Oil Service stocks still have overhanging Resistance near their Oct., and in some cases, Sept. bounce highs....Also, in a normal stage 1 characteristic, these stocks have their 200 DMA still-falling, not too much above their Oct. highs, dig ? In some cases, these two resistance levels may converge up there, providing they do rise up to there at all, after the big Pullbacks which are already occuring, Thu., got that ? That's all you have to see/know....hence, I do NOT expect huge gains in these.... maybe max. 50 % on a cash basis, from the lows (more if leveraged), like, a $ 9. stock rising towards the $ 15. area, maybe occuring in two phases from this week's lows....but it will take some time....and is still not a certainty....

and/but, then, seeing many pullbacks, like, ALL the Oil Service and Steel stocks, FLC 9 5/8 up 1 1/4, then 8 5/8, LTV 6 up 1, CEI. 24- up 1 1/2, ATW 18 up 2, VTS 14 3/8 up 1 5/8, SHG 5, PAH 7, AIN, NOI., ESOL, NX, NBR, HP, MGN, HMY, PAGE, PETC, PAIR, INPR, IPIC, TWA, RRC, TMA, JAMS, PCTL, SIF, BTC, LTC, RMDY, ZAP, TXB, DBRSY, BUR, HOC, SRR, UNO, GLT, MMG, TGX, HBI., TRMB, APFC, IHSC, OLN, ADM, RON, NBR, RDC, JBAK, MAVK, WEL, SUL, ELY, PDE, VTO, RYO, WLM, WFT, GGC, TBI., NGX, SSC, MCN, DAY, CCH, WTS, UPX, IIR, DX, OO, MS, NS, DO, NE, Z., 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"

* 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) NR 6 1/8 up 7/8, TBI. 8 up 1, MAVK 6 1/4 up 1, CWC 8 1/4 up 1 3/4, WKGP 2 5/8, ATW, RON, AEC, PHYC, PCMS, HMY, HBI., LTC, PCTL, JAMS, RDC, RRC, IAIC, VOX, BUR, SSC, NR, LWN, MCN, AZC, DBRSY, TMA, OLN, GGC, BEV, VDC, TGX, MCL, TRMB, FLC, JBAK, WLM, ADM, TOX, WIT, AMLN, AAC, NGX, SSC, LWN, BTC, ATV, VTO, WTS, VTS, WEL, ZAP, AZC, CAU, IIR, MS, OO, DX, 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: CGX -5, ATHM -4, RCGI. -3 1/2, QWST -3, XRX -3, ASGN -2 1/2, DELL -2, INTU -2, ROH -2, GD -2 (S), FDO -1 3/4, NDN -2, LBTYA -1 1/2, RMBS -1 1/2, LSTR -1 5/8, ASDV -1 1/2, XCIT -1 1/2, SNRZ -1 3/8, GE -1 1/2, VIA/B -1, JCOR -1, PPDI. -1, METZ -1, MYL -1 (S), UHS -1 (sow), TXT -1 (S), USW -1, CCE -1 (S), GVA -1, GNE -1, OMC -1, ITW -2, GM -1 (sow), MKL -8, CLX -1, UNPH, SCUR, ATHM, PHCC, OSSI. -1, FITB, ROH (sow), MUEI. (S), SWC, SBC, LIN, LOW, PGR, LFG -1, GAS (S), EGR (S), MMC, ASO -1, JCI. (sow), GD (S), HB -1 (sow), 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. Also, note, QTRN fell to 45, from 56, anyway.

* 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): RMBS +6, QLGC +6 1/2, SFXE, ELNK, MSPG -3, +5, JCOR +3, MDT +2, ITWO -2, YHOO +7, -5, +5, MFNX, HB -1 3/4 (sow), PRGN -1, FITB, ZION, JCI., UNPH -2, AEOS, GVA +1 1/2, PGR +8, PGNS, MDT +2, CTXS -3, XCIT, USW +2, GNE +4, PG -3, +2, LOW +1 1/2, RCGI. +1 1/2, LIN +1, PPL, INTU +2, SCUR, BLS -1, EFBI., SBC, EAT, GPU, CQ, BFO....See, many stocks, and Internets, must "follow-through", and break below recent lows, to warrant holding their Puts or shorts....


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, and they DO need more work, still)
Prec.Metals (add, TVX, to, TKOCF, BGO, ECO, GLDR, KRY, CCH, AZC, VGZ, RYO, DAY, CAU, all real cheapies, risky)
"Basic Inds." (Chem., Farm, Steel, Paper) (add, TEN, to, AR, FNL, BCP, BS, TFT, LTV, NX.... maybe "Copper" double-bottoms's, soon ?)
Energy/and Oil Svc. (add, NBR, to, WFT, RON, FGI., HP, TDW, ATW, VTS, NE, TBI., NOI., GLM, MHR, RDC, WEL, WLM, VRC, PDE, FLC, CHK, TRMB, near their recent lows, only)
Biotech/Health/Medical (add, DURA, NOV, to, PHYC, GNSA, SHG, VTS, TGX, LXR, TOX, ULB, MGL, HIV, CCLR, IPIC, BDR, TOX, MPN, TXB, MS)
Consumer/Retail/Apparel/Shoes (add, SAMC, PAR, to, PVH, PBY, SRR, SME, BBA, KFI., MSN, OO, UNO, BLM, GCO, HBI., Z.)
Capital Goods (LDW, HPH)
Hotel/Gaming/REIT (HET, MIR, SER, UDR)
Employment (OLS, JOB, MPS, RMDY, ESOL)
And, as I pointed out earlier here, some depressed R.E.I.T./Financials/Mtg.-type/ R.E., 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, PAH, UC, to, AAC, ALF, AEC, AML, AMMB, BNP, BOY, BRI., CPP, CMO, CRO, ENN, FBG, FCH, NDE, KPA, LTC, JPR, MAA, PMC, RFS, RWT, SIR, SPF, TMA, 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....have patience. But tax-selling bounces beacon, yes ?

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 as well), 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, to get to the Bigger Winners....Also note that many already popped stocks pulled back, after their recent/initial "dead-cat bounces". This is normal, and welcome. Hey, many formed better bases, double-bottoms, etc., right ?

and/but, Important: also, took these Off the pot. long Buy list, Before they might have been Hypothetically "bt.": CLCDF, PRD, SCS, IHS, VC, UPR, VPI., --- 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, SWW, to, those listed in section (3), and those just above here, plus, STRX, MANU, MLHR, SFSK, SIF, SAA, TMO, CQB, CYM, FAX, BDS, TLZ, UTI., INPR, OMPT, PCTL, NPSI., PAIR, GDC, LYO, CS, VSNR, BTC, PCMS, SYNT, IHSC, PCR, CFS, CPU, ALN, SEW, AFCI., LPX, BEZ, AGTX, CEXP, WKGP, MWY, JDAS, VDC, UPX, ZAP, CXI., ILX, TRMB, ELCO, LWN, BMC, CYI., ICA, VC, 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.) FITB, BBK, ZION, LFG, HIG, PGR, MSBC, ASO, CMA,
(comp./techs/s'ware) QLGC, RMBS, ALSI., DELL, BSYS, CTXS,
(retail) AEOS, LOW, NDN, FDO, LOW,
(telecom/commun.) add, LSTR, BEL, to, HBCCA, ATHM, USW, CVC, BLS, TEF, CDRD, LBTYA, QWST, MFNX, COX,
(medical/health/drug) PDX, RX, EL, PGNS, MDT, UNPH,
(food/bev.) PZZA, EAT, UFS,
(utilities) SWC, AYE, PE, PPL, METZ,
(internet) YHOO, BCST, LCOS, MSPG, PSIX, ECLP,
(others, misc.) CREE, CTSH, LLTC, PHCC, SEIC, MEDQ, VIA/B, FRX, CLX, HMK, MPO, ENE, EFX, SSP, LGTO, INSS, OSSI., OMC,
also watching: AGPH, TROW, NEON, PPDI., PGNS, GBLX, NLCS, NTLI., NSIT, and, 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.

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 4:

"PSYCLE sm" stage 4: "the whole TOP area"....Once a stock or I.G. has formed the "at least semi-parabolic" stage 3 rise, we begin to hear the normal comments abound, and the "it will never go down again"-type talk you are familiar with....I have found that hearing that, universally, from various Media, and unsophisticated , inexperienced people, who never bought anything when it was low, is one key to an impending Top, another being, huge trading volume, AFTER the huge rise, ON the "super-positive news/fundamentals". "The 95 %" are SUPPOSED to feel left out, and upset that they missed this huge rise, PSY-chologically....Those fortunate to be in it, are suppposed to be euphoric, questioning the sanity of anyone NOT in it up here....Re-read my Booklets on "Exploiting the Downside", and "Mastering Psychology", etc. Another help, is when we actually hear/know personally, people who are "just getting in", up here, people who have rarely been successful in their timing history before....Many such messages will be nice contrary signals ....and, of course, 95% of those 'late buyers' will end up NOT selling anywhere near the top, on hindsight, anyway. Remember, WE want to "just get close(r)", to potential tops, while removing the emotional needs/reactions....

O.K., now, there are, generally, 3 kinds of tops: the S.T. "EVT" ("Exhaustion V or hook Top"), the "M, double-top", and the "rolling, upside-down-open-umbrella" top....But, as I have said umpteen times, "the top" is a PROCESS, and NOT "one perfect moment" !!! It can take days, or weeks (and even months, which is rare) to form, depending on one's perspective and situational needs....I always also view the past-1-2-3-years price history, to see where other historical tops may have formed in that stock or group....Remember, ALL tops form WITH high relative Strength, a necessary requirement OF a top !!! (take that, stock-ers) Also, most tops are "stealth", that is, one doesn't notice it has just passed/occured, until the stock is already down a bit....Stocks must often go "neutral" first, they rarely reverse on a dime, unless with occasional parabolic EVT's, in which case, almost no one is going to catch the top, or even get close, anyway, so we don't worry about those stocks....Also, sometimes, there is an "overshoot" pop, a minor, final, new high (remember, an upside-down saucer, must, by definition, have a "new high" in its middle, right ?), to sucker-in the last "top buyers", before the end comes....But those are totally UNpredictable, and cause whipsaws for us at times, and we still prefer formations without such events occuring.

It also helps, as always, when other similar stocks in similar I.G.'s look toppy at the same time, of course....The "news/fundamentals" MUST be real good, for stage 4 to be in evidence....Stage 4 never occurs UNLESS we have mass reporting of positives....Once the "parabolic steep rise trendline" has been broken, we have a shot that stage 4 is in force....As you have seen, many stage 4 tops, turn into "M" double-tops, which is no biggie, since that gives us two opportunities to trade those, at times....Again, when/if in a potential double-top, the stock makes a new high on the second top, we cut the Q, S, loss and move on....Of course, when/if the "sentiment/excitement" is less, on the second top, that is another help in determining that/if the double-top will work, and when/if the trading volume is Lower on that second top, that also helps, dig ? But, if you put a gun to my head, I still favor the 4-8-week-type rolling tops, with L.T., in-the-money Puts ONLY, diversified, etc., with stops just above the recently-formed highs/pattern....One characteristic of stage 5, the initial dropp off the top, is that people who are long in stage 4, are NOT going to be worried yet....But more on stage 5, next time, here. Bottom line: having several Puttables at a time, with stops, and NO emotional needs, is better than just trying to choose one, or never doing Puts ever. One MUST have PUTS, now and then. Any "fears-of-putting" just because one has never done it, or is "just afraid of doing it, period" are illogical and unwarranted. ALL stocks, and groups, reach stage 4, and drop, at some point, whether on a S.T., or L.T. basis.

Last, some people try to catch stage 4 in "markets" or "indexes", which, as you know we rarely waste our time trying to do, because that is much more difficult, as many indexes are weighted towards a few stocks, and/or cross-currents among the stocks within indexes can cloud index movements, and we prefer to just find/choose the best charts WITHIN the index, instead of also being in the worst stocks in that index. Remember, we do NO "OEX" nor "index option" trading, even in puts. When a sub-index DOES look "stage 4-ish", we STILL prefer to buy Puts on those specific stocks which look the best as tops at those times. There are ALWAYS toppies, and bottomies, at every market level.

so, now you know the briefest basics of sequential stages 1, 2, 3, and 4, 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, and, the bigger the previous rise, the bigger the potential drop, when/if breaks the uptrend, which, I guess, is obvious ....Hey, you'd be surprised how few people, even pros, know about stage 1, or stage 4, 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 and 7 drops, but more on that later....The highest-reliability, reward/risk plays, are in stage 1 and 4, even with occasional stops triggered.

A final note: a stock can, of course, be in different stages, when viewed from a shorter-term or longer-term perspective....I use 1-year and 2-year charts, period, because we seek 1-2-3-month holds and moves, and NOT overnite, or daily or intraweek moves....But, ideally, stage 4 is a real extended Top, after a Huge %, at least semi-parabolic rise, and not just a range-move or a smaller % rise....as you will see, buying puts also, near stage 5 rallies, can provide a second chance, if the previous rise to stage 4, was huge enough.
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(r)", 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, then adding the "sentiment" nuances of each stage.

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.