Jim Goodman's "The Right Side of the PSYCLE sm"
newsletter, issue # 2 ,dated: 10:00 am, PST, Monday, June 8, 1998

(Save all my Cumulative missives, for future reference and educational help....they tend to run about 5-6 pages in length.... please read my Entire letters....i.e., if you choose not to "do" Puts, or Options, or if you are not "already long" those stock positions/ideas listed, you may choose to ignore some of the sections below---but it is much better if you take the time to check ALL ideas shared....you can always refer back to "the Guide" booklet, for more info./details....this will all become second nature to you quickly)

1) "PSYCLE SENSE sm":
 Welcome....Again, I am "beginning" my new newsletter (NL), and educational services, as a "continuation" of previously recommended stocks/ideas for the benefit of the many valued people who are also coming over from it's previous incarnation, to provide Them with a "seamless" transition, "on the fly", so to speak....and Also, to show you NEW subcribers, all the Recently/past suggested ideas, I shared with my followers, so YOU can then also view their recent/past 1-year/2-year charts of, to "see" what we are trying to accomplish here, to further help you learn. Remember, all my NL's are Cumulative, and can/should be saved and reviewed, especially the "commentaries" areas, to glean the most value from my output, over time. IMPORTANT: I assume all my valued subscribers have read all my past NL's....and, eventually, all my "essays".



Note, already, seeing bounces off last Tuesday's intraday low: first, in some previously "put" issues which had approached previous S.T. support (and/or near their H & S necklines, and/or near their 200 day MA's), and second, among some oversold Techs, as expected....again, what to LEARN, is to rise above the "average person's" fear-near-short-term-lows, and BUY, long, at least "something" in depressed areas, where those stocks are near bases/support, and "the 95 %" are scared, right ? with close stops, diversified, one really has lower risk....

Anyway, after some bounces from here, there may still be more puttables, but we need to see better toppy patterns, on more extended stocks, before I get as bearish on those kinds of issues, as I was in March/April....also note, how, now, after many short-term (S.T.) drops, from March/April, only last week, the Media "discovered" a "potential" decline---late, as usual....and, from the day they "discovered" that, we saw decent bounces, UP...hah....this is as I teach in my "essays", how "the Media", and "the 95 %", tend to only "discover/realize" things, AFTER they have already occured to an extent, right ? They then "report" that, as supposed "news", but by the time they report it, it has already occured for many stocks, and we often go the Other way S.T., right ?

What is interesting, with This S.T. bottom, last week, is that it looks very much, technically, like several other S.T. bottoms, off similar S.T. toppy patterns, in many "blue chip/higher-priced" stocks, in recent years.....meaning, if one bought only high-priced, already-extended stocks (and WE do NOT, right ?), one would have to figure, even more or a rally lies immediately ahead. So, as you can see below, I had to cut and/or remove many potential Puttables, and even cut/sell a few more, for quick, small Puts losses....This should not confuse nor upset you....it is unlikely you were in any of those Puts anyway. S.T. "hook" top chart formations (read my "essay/booklet" on "Exploiting Puts, the Psycle Way") can sometimes become longer, rolling tops, and so I tend to cut/remove those issues from Puts lists, the moment they start back up, aborting their S.T. top pattern, because those are likely to become double-tops, or longer-tops, and why hold puts an extra month or two, during that period, when we can choose better stocks to exploit, Now, instead ?

Also, concurrently, viewing 2,500 individual stocks charts Sat./Sun., I found a plethora of "S.T. Bottoms" in all sorts of stocks, having nothing more in common, than their having a S.T. bottom chart pattern, as they just "look higher", but are NOT in perfect bases/saucers....I list them below, in section (6).... IMPORTANT: even those issues, fall into the same industry groups ("rotation", remember ?) as our other attractive long-side buyables....Again, "PSYCLE sm" traders are NOT overnite/day traders, nor 'scalpers' ....our general holding period is still at least several weeks, or a few months, so you do NOT want to be watching/hanging on every little move in indexes, which is, again, one reason why we Rarely watch the indexes....NO emotion, and No "news", into our brain....

So, while I am definitely trying to pick up some depressed bargains long, and catch some extended top formations in puts, here, I am still recommending holding above-avg. cash balances with good-sized accounts. Do NOT become scared/ emotional here, nor "try to guess bottoms on issues which are still making new lows" (i.e., people have been asking me about some Tech. stocks like, SYBS, ATML, PAIR, IDTI, IRF, IOM, etc., for weeks now, yet, even if they bounce, they do NOT yet have the proper "PSYCLE sm" stage 1 base formation, dig ?). Learn to let the decliners bottom, base, become "EVB's", or reach support levels, First ...and, as for Puts, selling those which fall towards their 200 DMA's, or below, for quick, nice % gains-- see section (3) below-- and look to buy more Puts, on further rallies towards highs, on issues herein which still show extended/umbrella top patterns....Important: also realize, that this whole Asian thing, should play out, as all previous "crises" have, like, Japan, Mexico, Canada, Silicon Valley, Europe/Berlin Wall, Russia, Middle East, etc., have/did, in recent past years, each of those providing us with nice depressed buys, into the "scary news", near their lows, dig ? The pattern/sequence is most always the SAME, each "crisis".... learn it.... Eliminating our emotional reactions, properly Diversifying, with stops, will protect us....oh, and do not be in a rush to do anything, nor "stretch," to "create" "wishful" trades, when/if the stock patterns of the issues you "hope" to trade,are just not ready yet, dig ? It's all about PSY-chology, historical pattern recognition, and action.

Conclusion: I am not going to fight the tape, nor force "puts", here, in issues which aborted S.T. top patterns last Thu./Fri., so am still leaning to the long-side, buying depresseds (note, some new "depressed Energy" ind. group issues, as longs, all-of-a-sudden, below), while also keeping an eye on many extended issues, which I hope will form broader/better tops into this rally....Use this initial NL period, to LEARN as much as you can about my "PSYCLE sm", also read all the booklets/ essays, and view/learn the patterns....

2) "What's been said, and What I've read":
a) L.A.Times, 6/1: a chart labelled "Long slide", attempted to "slant" a recent slight pullback in the NASDAQ index itself, from 1900, to 1747, from April, till last week, into a "Long slide"....gang, down 8 % is NOT "Long", nor is a 2-month drop, a "slide", dig ? b) a pie chart from the 6/1 USA today: they polled hundreds of "weather scientists/meteorologists", as to their opinion of whether the supposed "Global Warming" condition, "contributes to more frequent and severe El Ninos"....the results were all over the place, with NO definitve majority of opinion whatsoever ....meaning, from a "PSYCLE sm" p.o.v., even the "experts" have no idea, meaning, IGNORE them, and supposed-but-not-as-true-in-fact-as-assumed Global Warming/El Nino "linkages" to stocks prices....they have not been correct yet, with this story, for 2 years already, right ? c) the L.A. Times, 5/30: an article on St. John Knits Co./stock, reported "bad/worse" fundamentals/news, yet, the chart they showed of their stock price, had it barely unchanged in the recent past six months....not as their story inferred, dig ? meaning, again, that fundamentals, earnings, "linkages", etc., are much LESS of a factor, as future stock price predictors, than "the 95 %" believe....use the charts, and "contrarion" media and human behavior messages. d) hearing today 6/8, of the WFC merger, reminds me how I had a client who worked for Wells fargo, and, when WFC was $ 70., in 1992, he said everyone working there was scared WFC would "go under", "as all the reported news stories were saying then", because of all their "bad loans"....the "experts" were super- negative on WFC, and all other Calif. banks, then, remember ? (a similar situation then, also occured, with clients I had in the Aerospace, and Airline companies/ stocks, back then, and, as I teach to look for, and use, as "PSYCLE sm bottom confirmatory signs", all those stocks ROSE quite a bit thereafter, dig ?) Hopefully, this is the kind of "choosing/timing help" I can provide for you here, as you learn my concepts, over time....(br) As I cover at length in my Media, and Scenarios, "essays", the Media's members/sources, themselves, always tend to agendize, sensationalize, create, slant, and overreport all the wrong items anyway, at the wrong times, and, therefore, one should IGNORE 95 % of everything out there, which does NOT directly help predict future price moves in individual stocks....Again, as my "PSYCLE sm" teaches, the "S.E. Asia Crisis" may have worsened, or get still worse, monaterily, or from a "human interest" p.o.v., but many individual STOCKS of those companies, are ripe for a bounce already....I am trying to teach you how to do this....Please also try to learn about (and ignore) the "Words" reporters use (covered in my Scenarios, and Media, and Mastering Psychology "essays") which lead "the 95 %" to emote improperly, and act, when they should not....When the Media "creates" stories where none exist, and/or exaggerates to cause emotionalism, it wastes everyone's resources and time, and causes many people to "act" in an emotional manner, incorrectly, which doesn't help anyone.... so we mostly IGNORE them.... Also, remember my comments on assumed-but-incorrect "Linkages" in my last NL here. They always get people most bearish/scared, right near the lows....People are always looking back in hindsight, and wishing they bought the "crisis lows".

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) (Q = quick; i.e, less than 2 months holding period....VQ = very quick; i.e., less than 3 weeks holding period....re-read "the Guide" for how I derive the estimated % percentage Gains I show herein, on assumed closed-out trades, (always assumed to have been in Options, as per "PSYCLE sm" rules), and also try to view their 1-year-past price charts, to see the patterns, and where and when they were Hypothetically, originally "bought", longs near lows, puts near highs !!!)

* previously assumed long positions most recently SOLD (price changes from where/when originally recommended shown):
puts CMGI. (52 to 34) for Q 150% Gain....stk.on.mgn. QSII. (6 1/2 to 10 3/8) for 100% G....puts PFE (116+ to 103+) for VQ 75% Gain.. ..puts QWST (40 to 31) for Q 85% G....puts LEVL (32+ to 25) for Q 85% G....puts UNH (71 to 62+) for 80% G.... puts TXT (80 to 70) for Q 80% G....1/2 pos. puts OSSI. (39+ to 35-) for VQ 60% G.. ...puts PBI. (52- to 46+) for 75% G....puts LIN (34- to 29-) for VQ 66% G.... puts AZA (50- to 44-) for VQ 66% G....1/2 pos. puts USTR (65 to 55) for Q 66% G... puts MGR (60- to 55+) for 50% G....puts WCII. (41 to 36 to 40), CL (90 to 80 to 90), ERICY, QTRN, NFB, NOK/A, AGC, CCU, BNL, BJ, and, longs TPS, IRF, for Q, very small losses....

* 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, always diversifying, always with close stops below/above recent lows/highs): (if you are new to my 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, dig ?) again, the idea is to just get "real close' to listed prices when buying/selling issues given....do NOT worry about every 1/8 or 1/16...

New Longs: SPCT @ 16+, DIMD @ 7-, BBA @ 4 1/8, CNU @ 5.06, KEG @ 16+, GW @ 3 13/16, KNT @20 1/4, OXHP @16+, TLK @ 6+, WDC @ 15+, SGI. @ 11+, CY @ 8+, UBS @8 7/8, Z. @ 19+, MSN @ 7/16.... (important: removed KLB, PBY, from last NL, from buy list, Before "bt.". ...they are NOT ready yet....) Puts: TLC @ 28-, NFS @ 45, BUR @ 18-, GAC @ 44-, AEH @50+, .... ....and/but, just missed, none, as puts near their highs, and, IFMX, RBK, LSI., as longs, near recent lows....check their patterns also, to learn, for the next time. ....I will always tell you also when we "miss" actually catching suggested ideas, so you can "see" their patterns, for your benefit/education....obviously, recent "results/actions" are skewed towards the Puts side....the idea is to learn the patterns of previously done ideas, for the future.... as I said, many Techs WILL bottom at some point, and we will be there when they form better bases/"EVB's", but for some, just not yet.

Remember, all previously mentioned ideas are followed-up, for your educational benefit....

4) Already given out in previous NL's, assumed Hypothetical "Long-side" positions: (issues moving since last time, following-up, still long, unless otherwise noted): TLK 6.56 up 1/2,

* too late to buy here, up already, acting O.K., stick around:
SHM hit 1 3/4 up 7/16, SGI. 12 1/4 up 7/8, QSII. 10 5/8 (S), ISSI. 8, Z. 20, ....
note: ("sos") means "Sell On Strength"....("S") means Sell it (t)here....

* and/but, these already assumed Longs, must strengthen,
and/or are sales on strength ("ms/sos") :
MATH 4 up 1/2, DIMD 7 3/4 up 7/8, DGN 16+, LIPO, ELCO, OAKT, ESOL, OXHP, FTPS, NETM, WDC, ACE, AXC, UBS, KNT,....

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

* too late to buy puts on now, but acting properly, stick around:
ASGN -1 (points since last time), CCSC, MYG, LIN, IHS, down/further (since last time)....also, view chart of NWAC, which was a perfect Psycle Put I gave out, a while ago, in its umbrella top.(sow).
(note: ("sow") means, "Sell long puts On next Weakness, towards support".... * but, these, are acting too strong, and/or are bouncing, and/or must weaken/anew, and/or are sales on pullbacks: NATI. -1, PRMS, SPOT, SOTR, DELL, NSPR, HBOC, PMTC, BPOP, ZBRA, SNPS, CCSC, SBUX, FILE, FISV, WHIT, GWW, SGE, UHS, DNB, GRN, LEA, UMG, TEF, CSC, MAS, SGE, ASO, CDN, FNV, BBK, BBY, CVC, AGI., JCI., LCI., VIA, GIC, HB, LU, DL, CI.,....obviously, Thu./Fri./Mon. pops are threatening many "puts" patterns....if you are not already in any puts, just concentrate on the "newly bought" puts in section (2) here....and forget these in this section....
....remember, we either buy our puts right up near each stock's high, or not at all....and, most of the issues listed herein, are from previously suggested newsletters, as I said....but you can view their charts, to "see" previously formed/aborted "PSYCLE sm" patterns, to hopefully learn from.... and/but, removed these from pot. Put list, before "put": ERICY, QTRN, NEON, TKLC, COFI, AFCI, BSX, AFC, BBC, NYT, CCL, TYC, FNF, KO, (view their patterns to see what aborted Put patterns look like....

(again, I give you all these, so you can view "puts patterns aborted before positions were Hypothetically established" as well, for your learning/benefit)

6) other, still-Depressed, Long Buys, near their recent Lows Only, for potential rises towards resistance, always Diversified, w/close stops, when/if their basing patterns break down:
"techs": SPCT, DIMD, ISSI., IFMX, AXC, KNT, CY,
"health": OXHP, CCLR, LIPO, CNU, TOX, UBS,
"metals": CAU, BGO, RYO, CCH, (all Very Risky Cheapies in bases, so please be careful)
"energy": KEG, GW,
"in other industry groups": CTHR, TLK, MSN,
....and, I am also watching these, as potential buys, at some point ? CLCDF, MADGF, CEPH, SYQT, CADA, EMLX, WKGP, QDEK, FPAM, BDE, HLX, DGN, WDC, MLR, BBA, SEW, GFI., SGI., IIR, (some are potential basers, some are "EVB's" ("exhaustion V bottoms")....again, most are very depr. Techs., but, as I intimated, is just not a great "long-side" list, here, still, dig ?)
....and, note, some depr. Comp./Semis, like, CRUS, AMD, WDC, NSM, SGI., MU, etc., are back down approaching their previous support....I gave out all of them, last time, Dec./Jan., in beautiful (better) saucer bases then....see what they did from then, for your educational learning....they may all be decent here, near their recent lows as well, but not expecting as large rises this time....
....and, as per early commentary above, these have S.T. bottom formations, or "Exhaustion V Bottoms" (EVB's) regardless: ADPT, MRVC, VIAS, CHIR, PSSI., RLM, NEM, OEA, PLL, PKX, CDE, AAC, UST, TOY, CPU, CCA, APA, EX, AA....note, most of these are also, Healths, Metals, Techs, or Energy issues....group rotation, right ?
....IMPORTANT: and/but, took these off pot. long buy list, before "bt.": SAMC, MOT, MFN, KLB, PBY, HMY, SOC, AHG, VTR, VC...they need more work, first....

* also, these are current, or, Potential, "EVB's", as "BDG's" (read that booklet):
DANKY, SMOD, SAMC, MANU, RMDY, PSSI., REGI., CLCX, VIAS, VTR, GEN, FFS, CWC, MLR, KLB, IKN, AOI., IDX, VC ....we shall see if and when they "set up" properly, technically, as buys, at some point....I am watching these all....but not yet....

7) other, still extended/potentially Toppy, "Puttables", near recent highs Only, L.T., in-the-money puts Only, Diversified, w/stops if patterns abort to the upside, for potential drops towards 200 DMA:
"recent buys from section (3)" above, plus:
add, AEH, OMC, MHK, GVA, WTW, to, TLAB, CCSC, HBOC, PMTC, SEIC, INTU, ISYS, GPSI., FSA, UIS, GIC, DG, as Puttables, near their highs Only....note, a smaller list all-of-a-sudden, as I mention above....The best Puttable Ind. groups continue to be among extended Financials, Techs, Retails, Housing, Communications, stocks (again, the problem, as I begin my NL here, is that many have already dropped from their highs, and we never "chase" down in puts, once they are down from their highs)....and issues are quickly removed, when/if they break above their potential rolling top formations (as above).... I know sometimes this can be infuriating, but, if one properly diversifies, and only does L.T., in-the-money puts, this is rarely a problem....but I do "pull" stocks off lists when they break the patterns, and you should, too....we will catch plenty of VG puts in the months ahead for you....

8) "PSYCLE sm" Lesson for today:
Since these are my first NL issues, of many future "Lessons", initially, besides the lessons gleaned from my commentaries above, and from my 6 (six) "essays/booklets", I think the most immediate Lesson to learn, today, is that, as with all "crisis" or "bad news" depressed industry groups, the "bottom" in the Indonesia-type STOCKS, is likely to occur, BEFORE any hint of actual economic improvement occurs, or is reported by the always-late Media....I know this is difficult for even intelligent people to learn, but it is true, in historical fact, with many previous instances. I chose TLK, Telekom Indonesia, nyse, because it has the best-looking depressed "PSYCLE sm" base here (with a close stop if wrong, yes ?), and "seems" most way-out-there, which is what we want, near "crisis lows", dig ? Singer (SEW) also is pretty-much a S.E. Asia compnay....OH, and realize, while I prefer bases, when the "Media/Sentiment" signals are right (and they are close, now), one can even buy the EVB's among the S.E. Asia stocks, provided they exhibit the "cathartic volume" needed (read my "essay booklet" on that subject)....As usual, my "PSYCLE sm" is all alone (first ?) in going long any of those stocks here....We shall see.

Again, part of this whole process, is learning to CHANGE some of (y)our possibly incorrect/damaging behaviors/beliefs,to make this a simpler, and more effective way to predict and exploit future stock price moves, more often.... big changes do not come overnite, so try to enjoy this whole experience....

Oh, and as I show in the initial, commentary sections above, 95 % of everything, that 95 % of all people think/hope/believe might/do affect/help predict future stock price moves, DO NOT, and have rarely ever done so, historically, to any extent worthy of trying to use those items that way, in the first place....so one has to learn to IGNORE 95 % of things, and concentrate on the 5 % worth letting into one's decision-making, stock-picking brain (like, patterns of chart, media, and sentiment behaviors, "the PSYCLE sm way")....

And, if you are "new" to my NL, and need ideas to buy long, or put, stocks "now": as long as their current prices are right near those given in Section (3), that is where you find "do-able now" ideas....and, Sections (6) and (7) are also longer useable lists, when/if those issues might set up properly as longs/puts.... you can also always refer back to your "Guide" to my NL, which will have been sent to you soon after you subscribed....obviously, this NL is a "work in process", a true lifetime learning tool for you, and not an "overnite junk NL", and I want to do my best for you....we are just beginning, and you will be receiving a ton of useable, learnable, specific information from here, and in my "essays/booklets", and in future special reports....thanks again, and spread the word.

(Note: I share "so many" ideas herein, for two reasons: 1) to give you a more "Complete" picture of what is happening, worth knowing, and what might be done, and, 2) because some stocks/options given may be more "illiquid" than others, I share so many more, similarly positioned issues, so that more of my valued subscribers will be able to properly diversify, in various portfolios, for various objectives, etc. i.e., If I just gave out only a few stocks, some people would not be able to create Options Portfolios as easily, nor diversify properly, right ? Plus, by viewing many issues' patterns, you will learn that much more quickly, yes ? I share ALL applicable stocks ideas which befit different "PSYCLE sm" stages. But Only, maybe 5-10-15 stocks are "worth acting on" at any given time, as per section (3) above, and, in sections (6) and (7) if those issues are also properly set up, near their lows, right ?)