Jim Goodman's "The Right Side of the PSYCLE sm"
Stocks/Industry Groups Timing Newsletter/Education service, issue # 19, dated: 10:00 am, PST, Monday, August 10, 1998

(Save all my Cumulative missives, for future reference and educational help....these each tend to run about 10-11 pages in length, printed out....a wealth of valuable info., please read my Entire letters. ....i.e., if you choose not to "do" Puts, or Options, (not the best approach, mind you), or if you are not "already long" those stock/puts positions/ideas listed, you may feel like ignoring some of the sections below--- but it is much better if you take the time to check ALL ideas shared herein....you can always also refer back to "the Guide" booklet, for more info./details....The process will become second nature to you quickly: buying long, and buying puts, FIRST, from Section (3), and also, from in sections (6) and (7) when those set up properly, cutting losses when stocks break patterns, etc. Plus, after reading a few NL's, you will already be aware of most stocks from the recent past, and, therefore, have the choice of not/watching them again, if you are not/are looking to trade those stocks, right ? This whole process should be labor of enjoyable fulfillment and learning, and not a chore, dig ? I just give you a lot more for your money....


If you are already knowledgeable about "PSYCLE sm" tenets, and/or just want the most current "actionable" stocks, go right to Section (3) First....then, to see longer lists, and potential ideas, go to sections (6) and (7)....of course, if you want to get the most, for the least, read everything....and, re-read the past NL's "commentary" items again (section (2) each time), to glean/learn more about the "feel" for probable tops and bottoms in things....

1) "PSYCLE SENSE sm":
This, my new newsletter (NL), and Educational services, are a "Continuation" of previously recommended stocks/ideas, for the benefit of the people who are also coming over from it's Previous incarnation, to also provide Them with a "seamless" transition, "on the fly", so to speak, but more, to show YOU, as Newer subcribers, all the Recently/ Past suggested ideas, which I shared with my L.T. followers, so that 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, as "lessons" and "proof". IMPORTANT: I assume all my valued subscribers have read all my past NL's....and, all my "essays".

Important: Remember, I am pretty Comprehensive, herein....I follow-up every idea mentioned, for your benefit....most other NL's leave you hanging, yes ? Know, that there are 3 (three) kinds of stocks listed herein: a) Stocks that can be taken advantage of, here and now, if right near given prices, b) Stocks which , if they get back to where they were when originally suggested, remain/become tradeable again, and, c) Stocks which "seem to be setting up as potential trades, possibly soon", and might also illustrate Industry Groups potentially shaping up, as Educational ideas....Try to "view" the past 1-year-back charts of all ideas, for best learning of patterns....all ideas are followed up till "sold" or "removed", for your benefit. Try to find charts which have 200 DMA 's.


FIRST: IMPORTANT--- until further notice, the online URL, to get all future NL's, will be, first, "the URL for my main web page", then add, each successive time, as a "suffix", a forward slash, then that date, then "letter.html" , ok ?, as in, " /80698letter.html ", " /81098letter.html " , " /81398letter.html "etc., got that ? every Mon., and Thu., after 11 am, PST, (2 pm, EST), for now....they may on occasional be available as early as 10 am, pst, if I can finish them earlier....Hope this helps. Obviously, only subscribers will get this 'code', and, down the road, I am examining changing this format, so non-subscribers cannot figure this out, etc. Gleaning the message, is much more important then the medium, yes ?

second: Please appreciate, how much time/effort I put in, to put ALL applicable staged stocks, long-side and put-side, which befit learnable, and actionable, "PSYCLE sm" patterns, into every single NL....Some times there will be fewer ideas, sometimes, more....whatever I find that best fits "PSYCLE sm" stages, which YOU can learn/take advantage of, for YOUR trading/educational benefit....again, the "Most Actionables, Now/Here", are in Section (3) each NL.

third, hope you notice, I have been putting more actual "learning items" into each NL....remember, even my EVB's are not "one-day bottoms"....EVB's can take days/weeks to form, and, as long as those issues do not form new Lows, those stocks remain aok....many EVB's may form "W" bottoms ahead, read section (6) below....also, note, due to recent cracks in many depresseds here, have either, cut Q, small losses in some (no harm, in a properly diversified portfolio, and , again, do NOT "worry/overemotionalize/extrapolate recent past perfomance forward forever PSY-chologically/make this a bigger occurance than it is", etc.), and took some stocks off pot. long buy list, as they broke potential patterns.... no biggie, yet is does make the potential buy lists smaller and more manageable here, yes ? Gosh,. I hope you cut long losses, and bought some PUTS, recently

fourth, Been telling you, this "Split" market, has now given us many more nice Put gains, but we are still playing close to the vest, meaning, keeping close stops, and NOT getting emotional nor excited, cutting Q, small losses, nor with big Puts winners, and am continuing to hold/raise some cash....But do notice, the many depr. issues I have you, which have NOT fallen....For the umpteenth time, "the market" is neither "the indexes", nor an important "thing" to even be concerned with....Note how, recently, the daily changes in "Averages" are often meaningless --- they often tell us NOTHING about what is really going on WITHIN the markets, do they ? Only by following all the individual stocks WITHIN, visually, can one come closer to knowing what is really happenening, and what best to do, yes ?

Important: Remember, again, as I told you, early in June, that any "new highs" in the DJIA and OTC, or other "indexes", were going to be quite UN-confirmed by the internals (A/D, and H/L figures), and hence, lead to our recent drops....And, you have now seen the recent corrections, as expected, in many extended stocks, that I gave you herein, yes ? (many stopping around their 200 DMA's, yes ?) Of course, I am also upset with even the small cut losses I gave out, among some depresseds....BUT--- and this is crucial: please do NOT "label" any corrections as possibly a "bear" market....who cares....just try to do what the "PSYCLE sm" says, and ignore "market talk"....and Re-read my booklets, as to why all "labelling" is Harmful to your psyche, and your performance....

Also, please do Not let any "Q, S, cut losses" among Longs recently, prevent you from taking advantage of present/future ideas....just a couple of bigger winners (some of which I have already given here, and will continue to give over time) will more than overcome a few very small cut losses among Puts/Longs, in the meantime....the Key, is not to quit prematurely, stay with the concept, learn the basic patterns, be patient, we have just started, and DO "something", diversified, w/close stops, which best fits your various situational accounts needs....Use this initial NL period, to LEARN as much as you can about my "PSYCLE sm", also read All my essays/booklets, and view/learn their patterns. IMPORTANT: Key: remember, all suggested ideas REMAIN buys near lows, or puts near highs, (only) as long as their patterns do remain intact, even if weeks or months pass !!! But when/if their patterns crack/break, they are removed very quickly, as you know....

Remember, we do NO "market average/index predictions," ever....but, I expect you to notice, for instance, when I add a lot more Puttables, or more Longs, as a template, for gleaning the tambor of the "overall market". When some depresseds began to crack, and added more Puts, that should have told you what was coming, yes ? Logical, relaxed, simple....

So, "pick your potion(s)," First, from Section (3) ---then from sections (6) and (7), long and/or short side, for cash, or on margin, or only L.T., in-the- money options where suitable, for your different accounts/needs. If you have never done Puts, this has been the time to Learn how to do so, using my "booklet/essay" on How to Properly Exploit Puts, benefitting you for the rest of your trading/ investing life, for when/the next intermediate S.T. top, which may next exist in the early Fall, after the rallies after this decline ?

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

a) Other recent Industry Group Comments: almost any depr. Tech. issue I have recently shared herein, was a S.T. Long Buy, near last Wed./Thur. lows, with close stops....while I am upset I actually missed a few (see below), it was so easy, Sentiment-fear-wise....there was so much fear....and we did catch some, in section (3) below...also, note, many EVB's will pop so quickly, as if in a "vacuum", towards their previously-broken-down-from levels, we will all miss buying "some"....but, no sweat, as we will still "catch" some Techs, near their lows, yes ? Also, as I teach, at times when the whole industry group gets whacked, some EVB stocks may make minor new lows, seemingly cracking the EVB low, shaking out the last scared holders, only to revalidate and rise S.T. in the vacuum I mentioned....if one misses some of them, and/or get whipsawed out of those, just LEARN the pattern, PSY-chologically, and know for next time....do not get upset....see, winners learn from patterns/misses, and take advantage of stocks still buyable here--- losers ruminate about the ones that get away, and fail to buy the other ideas remaining which are still buyable, dig ? Very recent examples would be, CUBE, CRUS, NSM, WDC, CY, which I did give you, specifically, herein, but failed to execute perfectly in reality....

also, note, I was, again, the first/only, to give out several Utilities as Puts right near recent tops....and, note, as with others I have given you here, many of their drops stopped right around their 200 DMA's....again, please learn that. Also, note, in my 8/3 NL here, I gave you a list of depr. Energy issues possibly close to bottoming (MDCO, ESV, PKD, PDE, CDG, EVI., PKD, APA, BNO, OIL, HLX, BDI., UTI.), and, soon, some Metals, including non-ferrous ? (see section (6) below).....also, some Rails, Papers, Chems., for EVB's, soon ? Please give them some time to bottom, and do not "chase up"....and, still, note, many depressed Asian closed-end mutual funds, have not formed new lows....even as the "news" reports get/remain bad/worse, yes ? Double-bottoms probable with them ahead.

b) We did get the expected/predicted "V.S.T. EVB's and dead cat bounces" Thurs./Friday....with a plethora of Puttables, and Indexes, stopping their declines right around their 200 DMA's....again, the DJIA, NASDAQ comp., S & P, etc., so far,. stopped right around their 200 DMA's....another perfect example of a S.T. low existing, right INTO a "fear" drop, as taught you in my booklets....it is CRUCIAL that one learn how to "buy into/after adversity", with close stops, and NOT allow recent past trade experiences to negatively affect our future decisions. ...please re-read my booklet on "Mastering Psychology and Sentiment"....I get real tired of weak traders who "don't buy the Next ideas that are set-up properly, because the last time didn't happen to work", dig ? Rise above the mediocre people, emotionally....By reading this, you are already above-average in this respect, yes ?

bottom line: in my new chartbooks, Sat./Sun., I see/saw a pleathora of potential EVB's, or , at least, a ton of stocks which have fallen to ridiculously oversold levels, S.T., but which have not yet formed perfect EVB's nor bases on cathartic volume yet....many Chem., Trans. (R.R.), Energy, Gold/Silver (some stocks, but NOT their cash commodities), Basic Inds. (Steel, Alum., Copper, etc.), issues, among them....as always, I will try my best to get more specific for you as they bottom up ahead, so you can take advantage....for now, most are listed in section (6) below, if you wish to view them....if not, wait till they show up in section (3), and just "do" section (3) stocks, in the meantime, right ?

c) CNBC, 8/7, 10:25 am, pst, big analyst for Awad & Assoc., calls Gap Stores, "a great co., a great co." (he said it twice), "clicking on all cylinders".... Gee, I recall just last year, most all Wall St. analysts were questioning GPS's future, fundamentally, yes ? So, let's see...they hated GPS at 18. then, because prospects were not so good, yet now, they love it, at 62., when prospects seem "great".....get it ? Let's see if GPS can make a new high....it ain't cheap.

d) with Ralph Acampora's "too late newly-bearish" reported call/announcement, last Tue. 10 am, and V.S.T. bottoms, and pops, since, perhaps he might become the "Elaine Garzarelli" of the industry, from here ? we shall see....oh, and, 8/7, CNBC, noon, pst, Ralph Block, another well-respected, L.T. technician, a recent correct bear, just turned bullish....meanwhile, a third technician pointed out similarities of recent highs/internals, with those of around the 1929, 1937, 1961, 1973, and 1987 tops....isn't this fun ?

e) 8/7, CNBC, 12:40 pm, pst, their poster boy reporter reported, "we have internet mania again....these stocks are cranking again today....AOL 110 up 5, LCOS 64 up 6, XCIT 45 up 3, YHOO 91 up 4...." huh ? The "mania" came and went, already....as I teach to notice, the Media continues to report a trend as "occuring/continuing", well AFTER it has ENDED, S.T., dig ? and, of course, he should have been reporting the bigger % bounces in many depr. Techs, yes ?

f) slight follow-up, Gaming stocks/Las Vegas: noticed last week, STN and BYD also fell anew, add to CIR, HLT, HET, being right near lows, and, Sunday, a friend who couldn't predict her way out of a paper bag, is thinking of moving to L.V., "because I can get a great job and buy R.E. so cheaply, and it's growing so fast"....famous last words ? we shall see....But, again, the time to have sold these stocks, and R.E. there, was a year ago. Down the road, takeovers may begin again in this Ind. Group, but the stocks still do not yet look bottomy. But the Media continues to report a "story whose time is past" as if it is "present." Because L.V. is a "sexy subject".....maybe they should be reporting budding lows in (boring) Basic Industries....they would be doing investors a better service, yes ?

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 Hypothetically closed-out trades, (always assumed to have been in Options, where applicable/suitable, and on margin where avaliable/ suitable, and on a cash basis where not, as per "PSYCLE sm" rules), and also try to view their 1-year-past price charts, to see the patterns, and where/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):
SOLD: bal. IHS (39 to 25+) for 275% Gain....bal. puts AWA (30+ to 21+) for 175% Gain....bal. puts CKR (44- to 32+) for Q 150% Gain....puts BCE (45- to 39+) for VQ 150% Gain....puts LAF (41+ to 35+) for % G....puts BNI. (105+ to 96+) for 75% G....puts HGR (21- to 16-) for 70% G....puts COFI. (35+ to 30-) for 66% G....puts CMS (45 to 41+) for VQ 55% G....puts DSL (35 to 30) for 55% G....and, longs, CREAF, NEO, VTO, EWS, X., and, puts BBY (51 to 44 to 52), LGTO, for Q, small losses....note, I gave you at least 41, quick, large % Puts Gains, specifically given you very recently here....

Note: had to cut some more quick, Small losses, in some more depr."Techs/ Asians", as their patterns seemed to have broken, balanced by recent large % Gains, in some similar issues, and gave you many More large Puts % gains, assuming you have properly diversified....When they break/broke below recent lows, as I teach in my booklets, we are OUT, the vast majority of the time....I just do NOT want any "bigger losses", right ? One can always get back in later....It is better to preserve capital, and one's PSY-chological health....as I say herein, some of these might still form lower bases, and/or double-bottom "W" formations ahead, which, when/if they occur, I will let you know, as usual...."PSYCLE sm" tip: remember, you are going to feel most negative, and scared, right near S.T. exhaustion bottoms, yes ? Like, early Wednesday, 5th, dig ?

and, while I still continue to give you many large % Puts Gains, even into a previously non-bearish market, any Puts "losses" have been each VERY small, each, as usual, by actually Viewing all past-year chart patterns on "Hypothetical completed" trades, you will hopefully "see" what we are looking for, to exploit, for probable declines....Remember, we "PSYCLE sm" traders have NO emotions, especially where cutting Q, Small losses are concerned....These very quick, very small losses we have taken are of no consequence, in the big picture....neither financially nor psychologically....You can always also go back and view previously "completed" trades from previous NL's, to "see/learn" more, and this also illustrates why one must Diversify, buying at least a Few suggested ideas, at all times, right ? we are in this for the long haul....this approach keeps you in the game, for when those big gainers occur for us...."just get close", as I teach.

* 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, dig ?)....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....


New Longs: (note, more/new names here): DANKY @ 8 5/8, ICST @ 12+, MSN @ 3/8, DIMD @ 5 3/4, BDT @ 14, OAKT @ 3.06, ALSC @ 2 11/16, GRO @ 15 1/8, BDE @ 2 5/16, TTX @ 2 3/16, CCH @ 5/16, WTT @ 2 5/16, GDC @ 3 9/16, SK @ 3 5/8, ACE @ 4 9/16, TOX @ 5/16, TPS @ 0.93, IP @ 42 3/4, CYMI. @ 15+, CCC @ 9 3/4, WRE @ 16 1/8, ADPT @ 11-, TMO @ 22, GML @ 13 1/8, SMSC @ 8 1/4, VVUS @ 6-, IOM @ 5, CDT @ 20- NN @ 20-, PNF @ 2 7/16, VOX @ 4+, ECO @ 2.06, SWW @ 5- ....note, the majority of long buys here are real cheapies...."buy low", right ? LEARN THIS: when I had been seeing fewer "quality" higher-priced stocks as buy patterns, and that should have told you something about "the market", in June, yes ?

some of these are "repeats"....some are New....and/but, Important: took, NTN, USI., Off pot. Long buys list, before "bt....Note, I try to give "something for every type of desire/ account/ objective", including real cheapies, and $ 5-10. stocks, and "big names" blue chips, for straight cash stocks, and marginables, Optionables, etc., so all my valued subscribers have choices, and for proper Diversification ---all still having similar, exploitable patterns, in each NL. Please re-read "the Guide" (green colored) to the NL, anytime.

Important: unless issues are listed specifically above, here in Section (3) in a NL, they may NOT be buys right here....remember, a valuable part of the "process", is that we have "actionable right near here now" stocks (Section (3)), and also, "watching for hopefully becoming ready to buy near lows in their depressed patterns soon" stocks (section (6))....Section (3) is for Now, Section (6) and (7) is for soon/later and learning....be sure to read the "BDG/EVB essay" (and all 6 booklets) offered....very inexpensive, yet extremely valuable for learning timing/patterns....I try to make this easy for you. Sec. (3) first.

New Puts: VRTS @ 56, CSCO @ 100-, CTL @ 50, FFC @ 152, UMG @ 48+, FORR @ 40-, AFC @ 68-, SEIC @ 75 1/2, CMGI. @ 89, DELL @ 109+, WCOM @ 53, PNU @ 48-, PE @ 30, LVLT @ 41, AEH @ 59, AVTC @ 25, NXCO @ 36-, (also re-view recent past lists, in this section)

some are new, some are repeats....and/but, took, EWG, GPS, 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 suggested stock will break its S.T. umbrella top, or depressed base/double-bottom/EVB pattern....I am assuming, if you View it's recent chart/action, before you consider buying any/those issues' Puts, you will see/know this, and therefore NOT buy that company's puts....this takes just 10 seconds each to check/do, and will keep you from buying Puts/Calls on issues which abort patterns....just trying to help....

....and/but, we just Missed, DANKY, WDC, NSM, FLH, MOPT, SEG, IRF, DMN, CPU, DBD, KLIC, MANU, EVV, as Longs near recent "EVB" lows, among stocks recently given you herein (also view charts of last list given here)....I will always tell you here, also when we "miss" actually catching suggested ideas , so you can "see" and LEARN the patterns, for your benefit/education. Am also, viewing all the charts of the puts/longs here which we just "missed", also tells us, the market is providing more tops/bottoms, at that time, right ? So this also helps us know the nature of the market at any given time....that's why it is important to consider ALL my output, each NL....the idea is to learn the patterns of previously done ideas, for the future....

As I said, it may still continue semi-rough for a while yet, in some long-side issues....Again, while the Media "worries" about "earnings" impacts of various crises, the STOCKS of the companies involved will likely Bottom, and rise, even as "lower financials" are announced, into fear, right ? So, we'll also be watching for this ahead....and, a few, small, cut losses will not hurt us much, regardless. And, by buying "some "PSYCLE sm" long-side stocks" down here, we should make some money regardless, soon, again, yes ?


 Remember, All previously mentioned ideas are Followed-up, for your Educational and trading 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):

* too late to buy here, up already, acting O.K., so stick around:
(Remember, we follow-up every single idea, previously Hypothetically "in long", where applicable): ALSC 3 5/8 up 1, ICST 14 1/2 up 2 3/4, BBA 6 3/4 up 1 1/4 (sos), ADPT 13 up 2 1/4, ACE 5 1/8 up 9/16, JBL 34 3/8 up 3 3/4, BDE 2 5/8 up 5/16, AMD 18 3/4 up 1 5/8, KLAC 32 5/8 up 3 1/4, UTR 16 up 2 (sos), GML 14 1/4 up 1 1/8, CYMI. 17 3/8 up 1, TMO 23 5/8 up 1 3/8, CDT 21 up 1 1/4, RYC 32 3/4 up 1, GDC 4, IP 43 3/4 up 1, CCC 10 1/4, SK 3 7/8, TPS 1 1/4, up/further, since last time here....Given recent action, that my concept has still given out several ideas which are UP into this, recently, is satisfying....I certainly hope you have properly cut quick small losers recently....obviously, I care, a lot, about your welfare, as you know, but I cannot be responsible if anyone out there, does not do actual trades properly.

and/but, then, QSII., RYC, TLK, CUM, PNF, TMO, pb (pulling back)....again, please do not be afraid of buying the "Real Depressed stocks", even in qualified plans/pensions accounts, with stops, diversified....and again, you must buy at least FEW, always diversifying, 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 ?" That is Impossible, and illogical, to expect anyone to be able to choose just 1 or 2, out of 2,000 issues....maybe 5 or 10, long-side, 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: ("sos") means "Sell On Strength" (on a bounce up towards where it broke down from)....("S") means Sell it here (if right at/near listed price level)

* and/but, these already assumed Longs, must strengthen,
and/or are sales on strength ("ms/sos"):
OAKT 3 1/2 up 1/2, THDO 3 7/8 up 3/8, WRE 17 up 1, HMY 14-, RFP, FTPS, CADA, WKGP, MATH, NETM, DIMD, AXC, ROC, PNF, ECO, BDT...

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

* too late to buy puts on now, but acting properly, stick around:
: Puttables specifically given you herein, which Are Falling/further: CMGI. -5, IHS -5 (S), DELL -2 1/2, PNU -2 1/2, FORR -2 1/4, UTX -2, AFC -2, BNI. -1 5/8 (S), SEIC -1 1/2, REP -1 1/4 (sowo), PAYX -1, AFC -1 1/4, LVLT -1, VCI., down/further, since last time here....(Important Note: ("sow") means, "Sell long puts On next Weakness, towards support"....("S") means sell the long Puts right near here)....I follow-up every idea mentioned, for your benefit....remember, these are NOT "overnite" puts as trades, they take a little time to fulfill, so have some patience, and no emotion, nor antsiness....let them do their thing....you MUST view the 200 DMA's of our Puttables declining, for potential support targets/ areas/prices....e.g., note, as I said above, some Utilities, Retails, Financials, Communications, Housing, stocks, are already near their 200 DMA's....

I gave you plenty of Puts winners, so far, lately, yes ? plenty more to come. ...remember, stocks often fall in 2 or 3 stages, even S.T., towards their 200 DMA. ...some people say it is Valuable, that my "PSYCLE sm" finds many winning puts at all, in this supposed "bull" market, which I do appreciate....

Important: Also, note, that, FILE, NWAC, SOTR, RCOT, RWAY, AZA, GWW, AWA, FINL, SGE, UNH, BLDPF, SPLN, ALK, SNPS, BBBY, BOOL, CKFR, CNET, RXSD, GNCI., SZA, WCII., ICIX, PFT, UHS, KMT, SDW, WLP, CMT, AJG, TMC, PFE, RNB, NFB, THI., IHS, ITW, PRI., HB, HH, all fell even further, some spectacularly, from where I specifically gave them all to subscribers, in previous NL's, near their highs.... in just 2-3 months, they were all real big puts gains....(some as the "second shoe, stage 6 drops (see today's, and Thursdays, Lesson, in section (8) below), as I teach, in my booklet "How to Properly exploit Drops, in Puts"), and, even DSL, SKO, ICI., which I gave you here, fell finally....please view their charts to "see" previously-formed top patterns if you wish....if you do not view previously successful patterns/charts, how are you going to learn for the future ?

Remember, as I have been saying in previous NL's, ""as in March/April, when we see more/better tops, WE will likely do much better than others, in Puts, at those times. We will will also have the money, and the emotional strength, to do so. Also, keep in the back of your mind, the continuing negative divergences between "the indexes" and "the 2,000 stocks within the markets", which, to me, begins to smack of a bigger top ahead (bigger drops than we have seen in recent years), maybe not as bad in degree as 1987, but at least similar in timing (and scope) ?"" Well, so far, right on, overall....With the first predicted drops from March, and now, the second predicted drops from June, and, likely, a third drop in the Fall coming....BUT--- we will NOT get "locked in" to any "scenario before the actual patterns unfold....we remain flexible....we will be there when the time comes, and there will be plenty of opportunities to Put more issues then....

(Important Note: ("sow") means, "Sell long puts On next Weakness, towards support"....("S") means sell the long Puts right near here)

* but, then, these, are acting too Strong, and/or are Bouncing, and/or must weaken anew, and/or are sales on pullbacks/weakness (sow): NOK/A +4, -3, CCU -3, GDYS -1 3/8, LVLT, NSPR, TCAT, MHK, MNMD, CAH, PAYX, USS, LGTO, MTC, DTE, VISX, RHI., PWJ, SYY, PE, Ford....of course, if you did not buy any Puts in these, in this section, near their recent highs, when I gave them out, you can choose not to view these/their charts, unless you want to see/learn their patterns, to make money on Drops the rest of your life....

....Remember, we either buy our Puts right up near each stock's high, or not at all....and, some of the issues listed herein, are from previously suggested newsletters, as I said....but you can still view their charts, to "see" previously formed/aborted "PSYCLE sm" patterns, to hopefully Learn from.

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:
Please be patient here, and, again, do not "force" trades, just because, PSY-chologically, you "want" to have "something" to buy long, here....do NOT be "antsy", relax....let the patterns come to YOU....but do buy "some things" here, with close stops....also, it may seem to be "a lot" of stocks to review here, especially in the next sections here....check those charts you choose to view, but the Key message, is to see how many ARE forming EVB's here, as a measure of "timing"....also, remember, we do NOT "chase up"....
bases, "techs": KLAC, JBL, BDE, NN,
bases, "health": VVUS, TOX, GFI.,
"in other industry groups": no great bases here, just EVB's: among depr. Farming /Fertilizer-relateds (GRO, RYC), Prec. Metals (CCH, CAU, GGO, ECO, SIL, HM), and, at some point, "Basic Inds." (CCC, PKX, PD, RLM), (but, Not if any of them make new lows here)....a potentially important occurance, economically, given internal market history....but, as I have been intimating, it is still just Not a "super great" long-side list, here, but, there are still plenty more EVB-type bounces still likely, to buy, regardless.

And, while some depresseds Are good for a shot here, w/close stops as usual, diversified, etc., do NOT expect as large rises this time, as when I gave them out late '97/early '98 (nor, from late '95 to early '96), because they do NOT have bases here, just some with good EVB's, as with the others....and, am I, again, the first to "see" budding EVB's in some depr. "Techs/Asians", "Basic Industries", "Health", "Farm/Fert.", and, some "Depressed Foreign Closed-End Mutual Funds" up ahead ?

and/but, Important: also, took these Off the pot. long Buy list, Before they might have been Hypothetically "bt.": NTN, USI., --- were taken Off....also see 2nd section of "EVB's", below). These/they just need more work, technically, first, and/or are still making new lows....as I have been saying, continuing to be a difficult time for the "long" side, so we hold more cash, and/or have more Puts....but 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".

* And, also, these are still, current, or, Potential, "EVB's", as "BDG's" (read that booklet):
IMPORTANT: remembering ONLY to buy near their recent Lows (do not "pay up" much off lows), as "EVB's", diversified, w/close stops below, added, ADPT, MANU, LRCX, IDPH, EFII., VOX, CPU, GGO, CFN, WWW, EWH, EVV, SWW, CAU, X., to, OAKT, CDT, GFI., IOM, GDC, MSN, IP, ICST, GML, ALSC, QSII., EXBT, TMO, TPS, KLAC, CYMI., GRO, VVUS, TTX, JBL, BDE, BIR, WTT, SK, NN, and, the stocks listed above....(note, some are double- bottoms, some have V.S.T. bases, but most are EVB's). also, Important note: some EVB stocks may form S.T. "W" double-bottom patterns down here....but, most EVB's are "V" patterns, on huge volume, but they also can be a "W"....watch for that....some just take a bit longer to form, as per my "BDG/EVB Booklet" examples....which is fine, since we are NOT doing "overnite" trades, right ? also note, some EVB's have been improved, from "watching" list, to the actual "EVB" list, yes ? Last, remember, we do NOT "chase up"....

and also Watching-- and this list is also growing --- added, some Oil. Svc., Energies, Golds ?, PETM, IFMX, KLIC, PRG, SIL, TMA, PFG, UNP, UCC, MBK, CYM, FWC, RLM, PHV, DBD, HPC, SIR, IKN, CD, PD, NA, to, DANKY, SMSC, MOT, MMG, HA, BRTL, WTT, DEN, PNF, TTT, MLR, DMN, IRF, LSI., as "EVB's", but Not just yet, as they all need more work, technically ....and/but, not when/if they make new lows.... also, some depr. Oil./Svc. stocks (MDCO, ESV, PKD, PDE, APA, RDC, CDG, MLR, EVI., BDI., UTI., OIL, BNO) seem close to ending their previously-predicted huge decline, but it may still be a bit early, for them, though....We shall see, and/but Only "if and when" these "set up" properly, technically, as buys, at some point (with the required high-volume catharsis, etc.)....but I am watching these all....but some are Not ready quite yet....especially those still hitting New Lows, as I said above....but, as I said above, some of these may/will form EVB "W" patterns ahead, which I will alert you to, if so....

7) other, still extended/potentially Toppy, "Puttables", near recent highs Only, 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: if they are already down appreciably from their highs, do NOT chase them down, right ?):
"Recent Puts Buys from Section (3)" above, plus:
added, OCENY, NXCO, QTRN, VRTS, AVTC, AMCC, NSIT, LAMR, AFC, CTL, GLX, LXK, FFC, UMG, WMX, AEH, to, CMCSK, AEOS, AMGN, BGEN, DELL, EAII., LHSG, MCIC, LVLT, LGTO, OVID, WCOM, ASO, NOK/A, COX, HMA, CMA, PNU, LEA, SHR, SVM, SDG, DL, TWMC, MEG/A, MNMD, DRTE, AHP, UCM, TWX, CSG, USS, RHI., POS, IAD, PSUN, PAYX, FORR, GTSG, FORE, VISX, DTE, MTX, VCI., YHOO, MTC, PE, and, again, the recently bought-puts-on stocks in section (3) above, the last few NL's, as Puttables, near their Highs, Only....some are "EVT's" ("Exhaustion V (hook) Tops", the opposite of EVB's, get it ?), some are double-tops....a little clearer, yes ?

Oh, and another Valuable Note: LEARN, that, normally, NO amount of "reported good news" (other than a bonifide takeover offer), can prevent a stock in S.T. stage 7, or stage 6, from falling/further....recent proof of this, lies in declines, not only in Energies, but in Financials, Retails, which fell recently, into higher earnings, dig ?

and/But, just Not yet, in: EWG, GPS (also see names of other "removed" stocks, in recent past NL's), all taken Off potential puts list, before "put".... remember, we do NOT buy puts, when/if issue is still making new highs....yes, we will miss "some" right near their tops, but by waiting for double-tops and/or umbrella tops to form better, we will have fewer small cut losses, and we will still catch plenty of Puts over time, with less stress....again, when/if an issue breaks out immediately after I add it, I remove it, period. You must please check the recent charts of all potential Puts ideas, which takes less than 10 seconds each, to make sure they have not broken out, before you get in.

again, The best Puttable Industry Groups Sectors, continue to be among extended Financials, Big-name, high-PE, Techs, Retails, Housing, Communications, Media, Consumer, Utility, Health....most, ONLY into a rally, right ? Interesting, the groups broadened before recent declines, dig ? Again, issues are quickly removed, when/if they break above their potential rolling top formations (as above)....If one properly diversifies, and only does L.T., in-the-money puts, this is not a problem....as you can see, I do "pull" stocks off lists quickly, when they break their patterns, and you should, too....we will catch plenty more VG puts in the months ahead for you (we already have, yes ?) Read my "essay" on "How to exploit the Downside in Puts" for deeper coverage, and info. on the Patterns, etc. (as with calls, and all options, min. L.T., in-the-money, diversified, ONLY).

8) "PSYCLE sm" Lesson for today:
Besides all the lessons you hopefully have gleaned from all my past NL commentaries above, and from my (six) "essays/booklets", the next Lessons to learn, are to memorize the specific characteristics of each, of the at-least 7 (seven) sequential stages in my "PSYCLE sm....so, starting 4 NL's ago, and each NL forward for a while, I will cover each sequential "PSYCLE sm" stage, one by one....this is very, valuable information--- here goes: to continue:

"PSYCLE sm" stage 5: "The Initial decline off the Top, which breaks the steep uptrend": Once a stock or Ind. Group has formed the at-least-semi-paraboilic stage 4 top, with "all the lights green", the Media, and the Financial Ind. reports, are, by nature, bullish, positive, and "the 95 %" are either ecstatic or bragging, with mass bullishness and much Media coverage, etc., after the formation of the EVT or hook, or rolling Top chart--- we get the unexpected initial decline. Unexpected by non-"PSYCLE sm" traders....

This decline, not only breaks the steep uptrend line formed by the recent stage 3 rise (which could have been a parabola, remember), it also is usually the largest correction since stage 2, for that stock....it is also accompanied by the famous-last-words/rationalization-covering-psychological-fear, of "I'm not worried ....it's only temporary", and, the, "when it rises back to it's high (or, "what I paid for it", hint, hint), I'll get another chance to sell it." Of course, one of two things will happen: either, it will not rise back up, and they will probably not sell it....or, when it gets back up there, they will, again, get excited/ greedy, and will also not likely sell it, anyway, dig ? The point again, is, that the stage 5 decline is NOT announced, and is RARELY accompanied by "bad news items" ---it is almost entirely a TECHNICAL move, period. Meaning, that no "fundamentalist" will EVER sell, near a high, in anything, but I digress....

Anyway, just as with the stage 2 rise often stopping around the still-falling 200 DMA, and the stage 2 pullback stopping around the still-rising 200 DMA, as support, the stage 5+ decline will also often stop, around the still-rising 200 DMA support, or around the previously-broken-above-price-level, which preceded the stage 3 rise to the stage 4 top, as you have heard me say in my NL's countless times, when I correctly predict S.T. drops for our Puts stocks....I hope this is clear....again, none of this is carved in stone, it is an art, not a science, but it has, and does work, Very often....and is easily learnable, if one wishes to learn the 7 stages/patterns....way more often than not, over decades of actual history. Eventually, the stage 5 low, may be broken below, and we then drop into stage 6, but that will be explained further next time here....Last, we neither know, nor plan for, whether or not the stage 5, initial drop, is going to be the beginning of a huge decline or not....we just want to catch the intial drop, in Puts, first....one thing at a time....therefore, note, as in section (5) above, many of my Puttables, have 2 (two) declining stages, stage 5, then stage 6.... one, breaks the steep uptrend line, and approaches the still-rising 200 DMA, and the next drop breaks the stage 5 low, at which point the decline gets "noticed", dig ?

So now you know about stages 1, 2, 3, 4, and 5, in my "PSYCLE sm", illustrated here for you....next time here, "PSYCLE sm" stage 6.
As I keep reiterating, It is also still better to 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, any small, cut losses, will be more than overcome by larger % Gains, over time, off those EVB lows, when one properly Diversifies....Similarly, it is better to TRY some "Puts/options" the opposite way, near their Highs only, when suitable, than to never do any....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 price moves....this is a Good thing. ...Also, try to learn about "baby-with-bathwater" selling action, like we had earlier 1998, with the Techs/Asians. The 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 (buy then ? a pun, get it ?), it is/will be too late....One must buy into NON-sexiness, NON-positiveness, into "fear", when the patterns are intact, right ? Also, buying Puts can be viewed as just plain intelligent/logical, as "insurance" or "protection, as well as for direct profit at times, yes ? March and June have proven that yet again.

*** So, again, 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....Section (3)....and, Sections (6) and (7) are also longer useable/learnable 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 5-10-15-20, maximum, 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 ?)