Gary B. Smith Chats on Yahoo!

<I>TheStreet.com's</I> TA master talks about his career, <I>Episode I</I> and, uh ... oh yeah, charts.
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Gary B. Smith chatted on Yahoo! July 20 at 5 p.m. EDT.

Yahoomc:

Welcome to Yahoo! Chat

lpoynter_98:

Hello all, Gary's here and ready to go!

malcolm88 asks:

What do you think of Novellus?

gsmith4:

Yikes, after the last two days, I'd rather be short than long!

Jake45b asks:

Does a correction ruin a good chart(vrsn, vrio)?

gsmith4:

Well, it certainly can turn a good long into a good short fast enough.

Trench_rat asks:

One days like today with major point sell-off's in many tech stocks, are these down spikes an anomoly?...or are they taken as part of the individual stock chart? A rat notices that these "total market" affects seem to cause individual stocks to perform out of their trends. How do you read such things?

gsmith4:

Good question, Rat. I do go on a chart by chart basis. That said, there are now a lot of broken stocks.

Xabat77 asks:

What # day moving averages would you suggest with a volatile Tech stock?

gsmith4:

Well, if you mean to trade by, I still think a 50 DMA is fine. That, and a 20 DMA are pretty good.

dswtt asks:

Hi Gary, I was very interested in your "Go Dog Go" method in your last column, because I have had good success using that method. Regarding your entry method, do you use a market order the day after a "candlestick" that looks right, or do you use a buy stop set at a certain level?

gsmith4:

I actually use both. But more often than not a straight market order.

Eric99_55 asks:

Gary, thoughts on YHOO please?

gsmith4:

Broke below the 50 DMA today. Uh oh...

malcolm88 asks:

What's you take on FedEx?

gsmith4:

In the ditch for now.

Jake45b asks:

If we're in the midst of a correction are 5% stops the answer?

gsmith4:

Well, if we're in a correction, I'd go with 1% stops! But, who knows at this point. (My gut says this is the START of a correction, though.)

Ian_Toronto asks:

How did u get started?

gsmith4:

In trading? K - 12 of the School of Hard Knocks. Then Post Graduate School. Trust me, the tuition is a killer!

dj083 asks:

Is this job fun?

gsmith4:

All the jobs I do -- trading, writing, Mr. Mom, are a great deal of fun. On days like today, some more so, than others!

Trench_rat asks:

The chart of wireless tech provider CAMP seems to be in a powerful new up-trend. The 4 yr. chart shows a high of 45 and a low of 2 bucks. This turn around story seems to have recovered it's footing and is moving up in nice steps with pauses for some consolidation. How do you read this one?

gsmith4:

Still bullish, but a bit extended.

Jake45b asks:

MSFT closed past it's previous high is it still in position to stike the 20 point distance?

gsmith4:

Well, I don't know what you mean by the 20 point distance. In any event, I don't like the MSFT chart right now.

ashleyiii asks:

Gary, is AOL still in an up-trend?

gsmith4:

Hmmm, maybe not after today. See my column tomorrow!

anaroyada asks:

Gary, do you recommend Amazon at current prices?

gsmith4:

Nope.

mobygc52 asks:

What do you think of PIXT for the long term and why?

gsmith4:

Thin and cheap, but a slight pullback after the breakout. Not a bad looking chart for a quick trade if it breaks out. For the long term? Who know's?

WSBroker asks:

Does VRIO or PSIX look buy able into this sell-off?

gsmith4:

I'd rather play them short, to be honest.

Nsoap asks:

Buy, sell or hold yhoo today?

gsmith4:

I'd be a seller.

malcolm88 asks:

How did you like

Star Wars Episode I

?

gsmith4:

I liked it; didn't love it. Liked that

Hugh Grant

,

Julia Roberts

movie better.

lyncha00 asks:

Do you still trade with your partner?

gsmith4:

Nope. See my column of a few months ago.

ambyrwaves asks:

What does short a stock mean?

gsmith4:

Essentially to sell it without first owning it. But, see a good broker for complete definitions.

Trench_rat asks:

Rat has been on HLTH for months. After a head-fake off a pennant, and a good size "tanking" afterwards; she seems to have completed a double bottom and moved up today on huge volume in a "bloody" market.

gsmith4:

Yeah, but still has to fight through the 50 DMA. A push if you ask me.

cj96734 asks:

Do you have any thoughts on SEPR?In a nice trend.....down on low volume today.

gsmith4:

Actually, not a bad chart at all. Really refused to buckle today.

Gabie_22_F asks:

Should I choose stocks on fundamentals and use technical indicators (like MACD) mostly to choose buy and sell points?

gsmith4:

Sure, not a bad way to go. Of course, I don't use MACD, but combining Fundy and TA is just fine. See my latest "TF II" contest columns for more details.

WSBroker asks:

How low do you think PCLN will go?

gsmith4:

75 for starters.

derwent_jeffery asks:

Is this a mere dip where the market turns just to check where its coming from or the start of a correction?

gsmith4:

I guess it depends on your definition of "correction." I think the market has at least a few more down days left.

malcolm88 asks:

Gary, got an opinion on AXP?

gsmith4:

Nasty reversal today. But if it can hold at 130 or so, it could be fine.

anaroyada asks:

Gary, what do you think about the Jamaican stock exchange?

gsmith4:

Don't know anything about Jamica other than that's where Dr. No took place!

Trench_rat asks:

ATHM seems to be pulled by a "gravitational force" toward a double bottom at the 39-40 level right now. It appears that a bounce is in order at that bottom. How does this one look to GB?

gsmith4:

I would not count on a bounce.

Eric99_55 asks:

Gary, I am new to chart reading. Whats a head and shoulders mean?

gsmith4:

Boy, there's a question that demands a long answer. The best source, though: Edwards and Magee "Technical Analysis of Stock Trends." The bible of TA!

lyncha00 asks:

What about LU?

gsmith4:

PU!

bigcat567_1999 asks:

Anything good about ONSL?

gsmith4:

Sort of a bullish candle today, if I'm really pressed to find something good.

malcolm88 asks:

Long and Short on FTE?

gsmith4:

A new 6 month low today. The French haven't been the same since their countryman blew the British Open!

lyncha00 asks:

Any thoughts on KOPN?

gsmith4:

A big run the past few days, and only a mild pullback today. Not a bad chart.

jegpruitt asks:

Gary: I love Disney for the 5 - 10 year haul. According to the charts...is DIS an $18 stock or a $48 stock?

gsmith4:

In 5 or 10 years? I'd say a 48 stock. But, it'll probably see 18 between now and then.

malcolm88 asks:

Gary--what do you think of the Nasdaq chart?

gsmith4:

I shorted QQQ today if that tells you anything.

Trench_rat asks:

PRIA got shot in the abdomen today...do you see any hope of a quick rebound here?

gsmith4:

It's at its 50 DMA, so I'd say 50/50 odds it holds.

WSBroker asks:

Would you get into EXDS after correction and at what price?

gsmith4:

EXDS is funny. I shorted it at the open, but the gap down killed me. Had to cover at 120 and then went long at the same price. I'm still long, so please buy 1Million shares at the open tomorrow.

camphobo01 asks:

How about the recovery on NASC today

gsmith4:

Yep, not bad. Volatile thing, though.

Xabat77 asks:

Would you short the remaining summer movie schedule?

gsmith4:

Well, there's another Julia Roberts flick coming out., so that should be good. Probably do a buy-write!

falcomex asks:

I seem to remember reading that you limit your losses to about 4-5% on a trade? or less?. Do get sopped out often? And are you buying very selective charts close to support or breakout?

gsmith4:

I get stopped out about 30 to 40% of the time. And yes, I try to be as selective as possible.

nixnux asks:

Would you please be more specific about what you do not like about the MSFT chart.

gsmith4:

The gap down on heavy vol. The break of the trendline. The dark candle. That should cover it.

jegpruitt asks:

Gary: INKT is another of my favorites, is this a $70 stock or a $170 stock? (according to the charts, of course)

gsmith4:

70 before 170.

pmeeco asks:

Gary, How long after starting technical analysis was it before you felt comfortable trading off of your analysis?

gsmith4:

Great question. Sometimes I'm STILL not comfortable. However, I'd say about a year or so.

malcolm88 asks:

Do you trade the QQQ? Do you think now is a good time to short it?

gsmith4:

Yes, I shorted QQQ at the open this AM. Just had a feeling the market was sour. But, I covered at 117 or so. Would I short it again tomorrow? That depends on how I feel after looking at the charts tonight.

lyncha00 asks:

Hey Gary, how was the FOX show?

gsmith4:

We had a great time doing it, and I was very disappointed it didn't air. See my write-up on it in Wednesday's column.

Oschism asks:

Your take on the CAT chart? Love the column!

gsmith4:

Thanks, Osch. CAT is moving sideways not doing much. I'd wait for it to show its hand.

DarrillR asks:

Gary, which is better: watching a 50 day moving average or a 200?

gsmith4:

Depends on your time frame. For me, a 50 dma.

cj96734 asks:

Can you give me an idea of what your typical daily routine is with regards to your trading?

gsmith4:

In short: I take my kids to swim practice at 5:30 AM. When I'm there, I look over all the charts from my scans, and pick the ones I want to trade.

gsmith4:

When I get back, I then call or email my broker with my orders, and wait for my fills. Once I get those, my day is essentially done.

lyncha00 asks:

Have you done any fine-tuning to your strategy lately?

gsmith4:

On the setups and scans, not a thing. However, I have been playing with my money management. However, that's nothing new.

falcomex asks:

What were some of the setbacks and frustrations you went through in your early trading days?

gsmith4:

The same things I STILL go through: Fighting emotions. Not being relaxed. Forcing trades.

Jake45b asks:

Gary what # chart are you using with the Wordens?

gsmith4:

Do you mean release? I use the latest. If you mean zoom, I use zoom 4 or 5.

Trench_rat asks:

GB..these low volume sell off's are most disconcerting. When a stock ramps on millions of shares and tanks on a few hundred thousand share. How do you read such anomalies when trading or holding long?

gsmith4:

If it doesn't fall below the breakout day, I generally still like the chart. However, I would say many stocks today, had HIGH vol. sell offs.

malcolm88 asks:

If this is the start of a correction, where do you think nasdaq and DJIA will find support?

gsmith4:

I think so. Nasdaq at 2600 or so. Dow at 10800. For now. . .

dj083 asks:

How long have you been in business?

gsmith4:

Trading? Hmmm, well I've traded for 10 years or so. Writing? 4 years.

Oschism asks:

Your take on the TOM chart? too far, too fast?

gsmith4:

Going down for now...

Xabat77 asks:

What kind of an effect on the market would you anticipate if the China-Taiwan conflict heats up?

gsmith4:

Honestly, none. Biggest effect on the market is as always: greed and fear of making or losing money!

clcs33 asks:

Have you heard of a new start-up called NutBall.com?

gsmith4:

Boy, just when you think your old college roommate has gone away, well, there he is!

rtspin asks:

Gary, how do you come to the view that the market has a few more down days left?

gsmith4:

Yeah, absolutely. I am damn scared of my current longs right now. Wish I had a lot more shorts going.

Jake45b asks:

If the market quickly corrects 10% are the cup and saucer that was built before the correction still in working order?

gsmith4:

No, I think new patterns will have to be built.

Oschism asks:

Your take on DJT?

gsmith4:

Motley Fool is short them. So, I'd say go long!

bernardklein asks:

Gary, what do your think about James Cramer?

gsmith4:

I am truly fond of the man. Went out of his way early on to treat me first class as a contributor to TSC. Still does, in fact. I am damn grateful he started

TheStreet.com

King_Rat_I asks:

Is it too early to start investing in the Asian markets, I took a beating there once.

gsmith4:

Actually, maybe too late. A lot of stocks, (ie. HIT) have gone up a lot in the past few weeks. But, depends on your time frame.

Jake45b asks:

Is it time to short the DOT?

gsmith4:

Had a rough day for sure. I'd rather go after individual stocks, though.

malcolm88 asks:

How do you like JNPR ?

gsmith4:

Showed some resilience today. But, boy you need brass you-know-what's to trade it!

clcs33 asks:

I think Gary's goatee is much better than Cramer's. Any other votes out there?

gsmith4:

Small trivia: I had mine first!

vuwill2 asks:

Ralph Acompora with Prudential suggests that the DOW will top 12,000 by September and then drop in preparation of Y2K problems in the global market, what are you thoughts?

gsmith4:

I think Y2K is a joke. 12K by September. Depends how the next few weeks go.

lyncha00 asks:

How many people bit on your April Fools day bit? I did!

gsmith4:

I think I ended up sending off 900+ explanatory emails.

bigcat567_1999 asks:

The other chartist on

TheStreet.com

,

Helene Meisler

said she likes FDX, do you agree?

gsmith4:

I'm neutral on it. I think there are a lot easier long plays out there.

cthambone asks:

Do you think there is much upside for digital rivers?

gsmith4:

Plenty of upside. Will it get there soon. Only if the 50 dma holds.

bernardklein asks:

Gary, what do you think on PFE?

gsmith4:

Broke down today. Ouch.

pmeeco asks:

What are your favorite patterns?

gsmith4:

A breakout from congestion on high vol. The pattern to trade in my opinion.

camphobo01 asks:

I sold VRIO at 84 yesterday to buy NASC stupid or smart

gsmith4:

Smart.

dswtt asks:

Gary, When you look at a potential trade, how much weight do you put on the performance of the sector that the candidate belongs to? Example: If an individual chart looked good, but the sector the stock trades in looked weak, do you react to that?

gsmith4:

Nope. Heck, most of the times I don't even know what sector the stock is in!

kr_manju asks:

Your comments on COVD?

gsmith4:

Needs to hold at 58.

Jake45b asks:

Gary. Ever been to the Olympic pool in Ft Lauderdale?

gsmith4:

I haven't, but my wife has swam (swum?) there. But, we were just at the George Mason Univ. pool. Does that count?

uwill2 asks:

A lot of questions are surrounding Oracles future profitability, your thoughts?

gsmith4:

Two: I wish I was Larry Ellison's son. I wouldn't want to be long the stock anymore.

Jake45b asks:

How can I get the shows of "TheStreet.com" on

Fox

if I don't get Fox News?

gsmith4:

I believe it will be simulcast on

foxnews.com . Check it out!

uwill2 asks:

Gary, what lead you to a career in investing, and if you had to do it all over again, what if anything would you do differently?

gsmith4:

I'd buy 10000 shares of MSFT in 1978 and hold them! (As for my career, it sort of evolved from being a fundamental buy and holder, to light trading, to what I'm doing now.)

malcolm88 asks:

Will you be on the next Fox show?

gsmith4:

Yep. Looks like I'll be on most or all until they get sick of me.

Prof_Enrico_Fermi asks:

What does your wife think of that goatee?

gsmith4:

She encouraged me to grow it! Said without it I had a no chin!!

WSBroker asks:

Bush or Gore?

gsmith4:

Hobson's choice, huh.

George Bush

, I guess. I am damn sick of paying taxes! (not that GB will do anything about that!)

Trench_rat asks:

Did you like the flick

You've got mail

? It seemed an "AOL" inspired conspiracy. Rat

gsmith4:

It had Meg Ryan in it. Tough not to like that!

billandlisa8 asks:

Any new information on kmart/safeway merger?

gsmith4:

If so, they're not talking to me!

jegpruitt asks:

Gary: TYCO seems to be on everybody's blue chip buy list. Do the charts support this attitude?

gsmith4:

Sure does. Up again today. Wish to heck I had it!

camphobo01 asks:

Gary, DOC theory, how accurate %?

gsmith4:

I'd say about 70% win rate, if that's what you mean. Works pretty well, actually.

bigcat567_1999 asks:

Gary, Great call last time on PENN. Do you see any more upside potential? Thanks.

gsmith4:

Yep, but needs to break above 10

Oschism asks:

Your take on ACAI?

gsmith4:

Don't like it.

brada1979 asks:

Do you have an overall favorite stock?

gsmith4:

TSCM.

gsmith4:

Well, that's all the time I have. Remember, my column appears 5 days a week, and is always, well, brilliant!

gsmith4:

Also, watch "TheStreet.com" TV show on the

Fox News Channel

this Sat at 10:00 a.m. EDT. For every 5 people that watch, I get $1.

lpoynter_98:

Ok, Thanks for chatting with us today Gary.

gsmith4:

Thanks, Laura for helping me. And thanks Yahoo, for being Yahoo. And thanks all for your great questions! See you next month!