Jim Goodman's "The Right Side of the PSYCLE sm"
Stocks/Industry Groups Timing Newsletter/Education service, issue # 20, dated: 10:00 am, PST, Thursday, August 13, 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 " , " /81798letter.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....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, have lead to our recent predicted drops....And, you have now seen the recent corrections, as expected, in many extended stocks, that I gave you herein, yes ? (many stopping, at least initially, 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 have added a lot more Puttables, or a lot more Longs, as a template, for gleaning the tambor of the "overall market". When some depresseds began to crack, and I have added more Puts, that should have told you what was coming, yes ? Logical, relaxed, simple....watch those 200 Day Moving Averages (200 DMA's)....

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: among the list of depr. Energy Services/Drilling issues bottoming, APA, HLX, TDW, PDE, made new Lows, and were Removed, from pot. list, so far....and/but, added, SDC, RDC, ATW, to, MDCO, PKD, EVI., PKD, BNO, ESV, OIL, BDI., UTI., which do remain ON the list, and, I think, Tues. 12th, we saw S.T. "PSYCLE sm" bottom, worth dipping toes into some OIl. Svcs., with close stops only, as below in Section (3)....we shall see....and, soon, some Metals, including non-ferrous ? (see section (6) below) ....also, some Papers, Chems., Alums., also EVB's, soon ? Please give them some time to bottom, and do not "chase up"....and, again, NOT when/if the make new lows....oh, and, CDG just got a takeover bid already....see how cheap some of these might be ? and, Last, I viewed a chart of the PHLX Gold/Silver stock Index, and, shows a potential double-bottom, soon, and also, late 1992, check it out.

IMPORTANT: enough depr. Techs. have bases (!) recently, and others herein have nice enuf EVB's, to warrant dipping toes Long into some, as well, see Section (3) again, and section (6)....we missed some, but caught many others for you.... also note, many Asian stocks we have been following, broke Tues., so had to either cut for small losses, and/or remove almost All of them, from our "watch to buy" lists....again, NO commentary necessary, NO "scenarios", just removed, NO emotion, NO looking back....but the Asian closed-end funds, and TLK ?, are forming expected double-bottoms ahead ? also, note, I was incorrect/early on the depr. "farming/ fertilizer" issues, and, in recent days, have taken all off pot. but list for now

b) CNBC, 8/12 at 11:22, their "poster boy" showed charts of COMS and CPQ, comparing, saying, "3 Com never moves off its bottom at all....and looks much worse than Compac"....if you get the chance view both 1-year-past charts, and see that, although I have NO formal "PSYCLE sm" opinion on either here, COMS looks more bottomy, and that his statement on COMS is factually false, and CPQ is no longer cheap, and has resistsnce not much higher than recently, yes ? see it ? So, likely he will, again, be wrong, and one wants mabye to go opposite his opinion ? As I teach at length in my "Media" booklet, reporters tend to favor stocks which "have been stronger", vs. stocks which are down now, and "may in the future outperform".

c) a rare, beautiful piece, USA today, 8/12, p. 13 A, titled, "When market falls, media stoke investors' fears": sites studies done by Univ. professors, illustrating exactly what my "PSYCLE sm" has been saying, and taking advantage of, and/or ignoring, for decades: that, instead of just reporting items, the Media sensationalizes, misleads, overreports, slants, agendizes, etc., often incorrectly and/or needlessly, just to "create/get a reaction" from readers/listeners....and, while You also know this, from knowing me, I am trying to show you (here, and in my educational booklets) how NOT to let 95 % of "stuff" into the decision-making side of your brain. in the first place. The article's conclusion: "This reflects a lack of understanding on the part of reporters.... it's really malice." (that's a quote, gang). Exactly as I have taught you, financial reporters are shockingly uneducated and unaware in the areas of which they report. We will continue to take advantage of the more powerful "PSYCLES sm" which exist, in chart and behavior patterns.

d) brief commodity/El NIno follow-up: Tue. 11th, CNBC, reported "Record Crops Expected", in Corn, and Soybeans, in U.S. and South America....even with the "heat", El Nino, La Nina, etc. Hmmmmm, seems I have been, for over a year now, been receiving those come-on mailers from crook-newsletters, pitching much HIGHER commodity prices supposedly due to such supposed weather conditions, yes ? Yet, as I have said here before, and in my booklet on "Scenarios" written in April 1998, NO such direct "linkage" exists in historical fact....Fundamentals do NOT affect stocks anywhere nearly as much as anyone has ever suggested ! But I have been proving that for decades. "IF" such supposed conditions "were" of D.U.F.P.P.V., then how come many commodities have been FALLING, or at least, not rising, "into" such supposed "bad" weather ? I'd say "stop the insanity", but we need "the 95 %" to believe such things, so we can sell our stocks/commodities to them near highs, and buy stocks/commodities from them, near lows, yes ?

e) the pattern of Behavior never chages: all day long, on CNBC, Tue. 11th, people are now, only AFTER price drops, "finding reasons why" some stocks "should" have fallen recently, dig ? Only NOW, they find reasons, why something that just happened, should have happened ! huh ? Such comments are useless, yes ? And these people get paid for such drivel....Learn How to read Media messages !

f) remember when I listed DEN @ 1 3/4, RFP @ 2 1/2, FTPS @ 1 1/2, here, as risky, cheapie potential "takeover" ideas, with close stops below ? Well, we "sold" DEN around 3 1/2 already (nice), and, just this week, "bought" it back at 1 7/8 again, but FTPS broke when NETM broke, and on RFP the jury is still out, but is just not that good-looking, since both their takeover companies stocks' have fallen....the "supposed" takeover price on DEN was/is supposedly over $ 4. cash+, by December, but, if it was so obvious/easy, then why was DEN below $ 2. again this week ? caveat emptor. That's why we always use stops, and diversify, dig ?

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):
puts Ford (60 to 50+) for VQ 111% Gain....puts REP (57+ to 49+) for VQ 100% Gain....puts VCI. (40 to 34+) for VQ 75% G....and, longs, LQ, VVUS, EXBT, MATH, BDT, TMO, BMC, SWW, PNF, GRO, and puts, NSPR, PWJ, AEH, AFC, PE, for VQ, very small losses....note, I have now given you at least 48, quick, large % Puts Gains, specifically, very recently here (with a very few VQ, VS puts losses).

Note: as I say above, 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 a ton of 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, and, Tuesday, 11th, dig ?

Remember, you can always also go back and view 1-year-past charts, of previously "Hypothetically completed" Puts trades from previous NL's, to "see/learn" more, and this also illustrates why one must Diversify, buying at least a Few suggested ideas, and at least "some" Puts, at all times, right ? we are in this for the long haul....my 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): LRCX @ 17+, BIR @ 9 7/16, MSN @ 3/8, DIMD @ 5 3/4, ESV @ 12 1/8, EVI. @ 23-, CUM @ 50, RLM @ 50+, FWC @ 14-, CFN @ 19-, SIL @ 8 7/8, BDI. @ 4 9/16, RN @ 23-, ATW @ 23+, JBL @ 30-, OAKT @ 3, ALSC @ 2 11/16, BDE @ 2 5/16, TTX @ 2 3/16, CCH @ 3/16, WTT @ 2 5/16, GDC @ 3 9/16, SK @ 3 9/16, TOX @ 5/16, TPS @ 0.93, IP @ 42 3/4, GML @ 13-, SMSC @ 8 1/4, MLR @ 6 3/8, NN @ 19, IOM @ 5, DEN @ 1 7/8, BLM @ 3.06, CCC @ 9 11/16, GML @ 13-....note, the majority of long buys here are still 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 ?

also note, some of these are some are New....and some are "repeats".... and/but, Important: took, WWW, EVV, UNP, EWH, PD, GRO, 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 over $ 20. stocks, and "big names" blue chips-- for straight Cash, and/or on Margin, and/or Options, etc., so that 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 the "Downside" booklet (and all 6 booklets) offered....very inexpensive, yet extremely valuable for learning timing/patterns....I try to make this easy for you. But, always start, with Section (3), here, first.

New Puts: CGX @ 59, GDYS @ 28-, TCAT @ 62, COX @ 49, MNMD @ 52, LXK @ 70+, VRTS @ 57-, CSCO @ 100-, FFC @ 152, UMG @ 48+, FORR @ 40-, SEIC @ 75 1/2, CTL @ 50, DELL @ 109+, WCOM @ 53, PNU @ 48-, LVLT @ 41+, SPLS @ 33-, DTE @ 41+, MNMD @ 53, COX @ 49, AVTC @ 26- (also re-view recent past lists, in this section)

as with the Long side, some are new Puttables, some are repeats....and/but, took, DRTE, AEOS, LAMR, NXCO, AVTC, 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 its depressed double-bottom/ EVB/base pattern....I am assuming, if you actually have Viewed it's recent chart/ action, BEFORE you consider buying any/those issues as Longs or Puts, you will see/know this, and therefore NOT buy that company's stock....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 you further here....

....and/but, we just Missed, TWMC, SCMM, EAII., BBY, SWY, GLX, SDG, EE, as Puts near their recent highs, and, PETM, MANU, KLIC, MOT, CPU, FLH, NTN, TMA, TXB, PFG, 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, once they bottom, right ? And, as we have already seen, twice, since March, stocks of "growing fast" companies, will still FALL, at times, when they form "PSYCLE sm" tops, even as higher "eps" are announced....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....check them briefly, to see if any YOU own, are listed....if you do not own any of them, then concentrate on Sections (3) and (6) and (7) below.

4) Already given out in previous NL's, assumed Hypothetical "Long-side" positions:(issues moving since last time, worthy of following-up, and 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 mentioned, assumed Hypothetically "in Long", where applicable): DEN 2 1/2 up 3/4, NN 23 up 4 1/4, DANKY 10+ up 1 5/8, LRCX 19+ up 1 3/4, BDI. 5 1/4 up 3/4, RYC 33 up 3 1/4, ICST 15+ up 1 1/2, RLM 54 3/8 up 3 7/8, ESV 13 up 1, CFN 20 1/4 up 1 1/2, AMD 19 up 1, EVI. 24 1/2 up 1 5/8, FWC 14 5/8 up 7/8, ADPT 13 1/2, UTR 16 3/8 (sos), RN 23 5/8, 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/properly, and/or Bought soem depresseds this week....

and/but, then, KLAC 29, 31+, 29, JBL 32 3/8 up 2, DANKY, LRCX, CYMI., QSII., LIPO, CUM, GML, 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 2,500 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, THDO, HMY, RFP, FTPS, CADA, WKGP, NETM, DIMD, AXC, ROC, ECO, WRE, BDT, GDC, CCC, NN...

5) Already given out in previous NL's, assumed Hypothetically long "Puts" positions:
(issues moving since last time, worthy of following-up, still in these long 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: TCAT -7 3/4, CMGI. -8, VISX -7, NOK/A -6, LVLT -4, GDYS -3 1/2, WCOM -3 1/2, CGX -3 1/2, AVTC -3 1/4, VRTS -2 3/4, DELL -3, CSCO -3, FFC -3, UTX -3, NSIT -2 1/2, SEIC -2, MTX -2 1/2, CTL -2 1/2, WHIT -2 1/4, FORR -2, USS -2, PNU -2, RHI. -2, PAYX -1 1/2, CTAS -1 1/2, SPLS -1 3/4, AHP -1 1/2, REP -1 (S), PACC -1, HHS -1, COX -1 1/2, LXK -1 3/8, BPOP, SVM, DL, F. (S), 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 down, near their 200 DMA's....

I have given you plenty of Puts winners, so far, lately, yes ? Likely plenty more to come....remember, stocks often fall in 2 or 3 stages, even S.T., towards their 200 DMA....that's anorther reason why we ONLY buy L.T., in-the-money options, where suitable....some people say it has been quite Valuable, that my "PSYCLE sm" found many winning puts at all, in this supposed "bull" market (which, as I said, may have ended in March/April ?), which I do appreciate....hey, most NL's and analysts and people never ever buy Puts at all ! Yet people continue to listen to/buy their output.

Important: Also, note, that, SGE 10+ down 14, CKFR 12. down 12, wow, FILE, NWAC, SOTR, RCOT, RWAY, AZA, GWW, AWA, FINL, SGE, UNH, BLDPF, SPLN, ALK, SNPS, BBBY, BOOL, SPOT, CNET, RXSD, GNCI., SZA, WCII., ICIX, PFT, UHS, KMT, SDW, DEX, CCE, PFE, WLP, CMT, AJG, TMC, RNB, NFB, MTX, 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 how to do this for the future ?

Remember, as I have been saying in previous NL's, (quote) ""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): CAH -3 1/2, MNMD -1, HHS +1, ABS -1, VRTS, GDYS, CCU, LVLT, SPLS, NSIT, MHK, LGTO, MTC, DTE, RHI., SYY, CGX, WHIT, PNU, BBY, UTX, PAYX, AHP, COX, CMCSK, UCM, ED....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....note, some bounces occuring, as/when stocks approach their 200 DMA's

....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": JBL, BDE,
bases, "health": TOX, GFI.,
"in other industry groups": no great bases here, just EVB's: among depr. Prec. Metals (CCH, GGO, SSC, SIL, HM), and, at some point, "Basic Inds." (CCC, PKX, FWC, CUM, RLM, UCC, IP), (but, again, 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.": WWW, EVV, UNP, EWH, PD, GRO, USI., CD --- 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".

also, note, adding more "quality, over $ 15-20. names" finally, to potential Long Buy lists...

* 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., KLIC, VOX, CPU, GGO, CFN, MLR, RLM, BYD, DLW, VOL, to, OAKT, CDT, GFI., IOM, GDC, MSN, IP, ICST, GML, ALSC, QSII. TPS, CYMI., TTX, DEN, 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, instead, 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. (see above, section (2)), Golds ?, WCS, PAIR, TXB, ARW, PETM, PRG, TMA, PFG, UCC, TRA, HPC, FWC, MBK, SIR, EY, ODETA, LXR, IIF, to, BLM, PHV, DBD, IKN, DANKY, SMSC, MOT, CAU, MMG, HA, BRTL, DMN, CCH, IRF, LSI., IKN, as "EVB's", but Not just yet, as they all need more work, technically....and/but, not when/if they make new lows....as I said above, some of these may/will, instead, form EVB "W" double-bottom 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, AMZN, COX, to, QTRN, VRTS, AVTC, AMCC, CTL, GLX, LXK, FFC, NSIT, UMG, WMX, CMCSK, AMGN, BGEN, DELL, EAII., LHSG, MCIC, LGTO, OVID, WCOM, ASO, COX, HMA, LEA, SHR, SVM, SDG, TWMC, MEG/A, MNMD, AHP, UCM, TWX, CSG, USS, RHI., POS, PSUN, BBY, PAYX, FORR, GTSG, FORE, VISX, DTE, MTX, YHOO, MTC, 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: DRTE, AEOS, LAMR, NXCO, (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 5 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 6: the "Confusion/I don't get it" stage of the decline: as extended stocks break the initial steep uptrend, falling towards their 200 DMA's, with little worrying from "the 95 %", stage 6, represents the breaking of/below the low price levels in stage 5....this break can be termed, either, the "second shoe, measured move" drop down, a price drop, roughly equal in length, to the stage 5 drop off the stage 4 high-- or, the "I don't get it....the fundmanetals are still in force, higher earnings, no bad news, etc.....why is the stock still falling ?" stage, dig ?

Obviously, "the stock" knows things, which all the overpriced Media, Analysts, Wall Streeters, Insiders, etc. do not, right ? I mean, it IS falling, regardless of anyone's opinions, yes ? Often, the stage 6 drop can react all the way back down towards the stage 2 high, or even below that level....An important occurance in stage 6, is when "the 95 %", in their lack of proper perspective (re-read my booklet on "scenarios/linkages"), only see the recent drop, as "look, it's getting cheap now, compared to its recent-past high", when, if fact, if those lazy people just took 10 seconds to view that stock's past 1-3 year chart, they would very likely see that that stock, even at the stage 6 low, is STILL, way up, from its all-time low, of just 2 or 3 years ago, dig ? Think about that....i.e., the stock may be down from 70., to 40., but is used to be 5., dig ? An important element, is that we must hear professionals and other people actually "question" the logic of the decline, got that ? Remember "how people are" psychologically....

Anyway, also, always in stage 6, we normally finally hear/read the first inklings of "worse fundamentals" (note, such items are reported only AFTER the stock has ALREADY fallen a bunch, dig ?), as a necessary requirement of stage 6. ...and/but, also in stage 6, if the drop has been big enough, and that company's whole Industry Group looks similarly positioned, and all are finally forming a depressed base, with their stocks down, perhaps, at least min. 50-60-75 % off the highs, with a S.T. volume catharsis, and their "fundamentals/growth" still intact, often, stage 6 provides a S.T. Long Buying opportunity....if so, that bounce will occur, INTO "bad news", dig ? Last, when/if the company (and you know how much I hate fundamentals, but SOMETIMES they do matter, as in stage 6) really IS real good, financially, the stage 6 low will end the decline for a long while, and there will be no stage 7....in other words, in a "bull" market, many stocks will NOT fall back to their stage 1 lows from 2-3-years ago....of course, when/if buying in stage 6, we'd have a close stop anyway, right ?

The key, is not to buy too early, before any base forms, even in stage 6.... we don't "guess" (as with Oil Sevices and Metals, in recent months past). Eventually, when/if the stage 6 low is also broken, we will see the stage 7 catharsis, which I will cover next NL here....many times, the stage 6 decline will reach the breakout level from stage 1, but, again, we want to deal with TODAY's chart pattern, primarily.

So now you know about stages 1, 2, 3, 4, 5, and 6, in my "PSYCLE sm", illustrated here for you....next time here, "PSYCLE sm" stage 7.
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 in 1998, and, again, in August, 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 ?)