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Manu,

I don't know the way of the turtle you refer to, but I do like their crunchiness when one chews em <smile> ...

That said, and comoing from a 4 legged woodland wanderer who has an evil twin (IcySnarl) who lives on the darkside and has some experience going short ... I'd rather have a pack of wild manchilds sticking pointy sticks in my eyes than short based on BMWM charts ...

First off, the real magic of the BMWM has to do with the concurrent application of the CGAR charts and DD (due diligence). Next, its really the low lines (ie Klein -2 RMS lines) and the precendent of seeing a company’s price recover one or more in the past from such CAGR depths that is instrumental to the successes of the BMWM.

Just chk out the CAGR library of Klein … and you’ll wquickly find any number of companies that have prices stay on upper RMS lines for years at a time … or just reduce to gentler slopes vs falling prices. Heck, I think a reasonable argument might be offered that the blue chips that the BMWM CAGR curves target are more likely to go sideways than down, even at above average RMS lines.

That all said, I do think there might be a way for the careful shorter (vs the careless shorter who we don’t need to worry about as they won’t be with us very long <wicked lupine grin>) … namely, as a secondary confirmatory type signal …. Ie … ya see a price continuing to climb because of all sorts of hype (maybe a star CEO pumping things along?) while the fundamentals are heading south … and you strongly suspect some bad news rising …. Then maybe seeing gross overvaluation on a BMWM CAGR chart can confirm your suspicions that there MAY be a short play here …. But if the price is trending up (or even sideways) in an industry trending up, would you short it ?

Me thinks (on occasion and only as little as I can get way with <g>), that shorting against an industrial or individual company trend without sounds fundamental reasons (or insider info <g>) is like a wolf sticking their tongue out at the guy with the riflesights <smile>.

Maybe if one sees a SPIKE into nosebleed territory one might rationalize what goes up fast is likely to fall maybe faster … that might be another secondary type help … but a price that slowly rises to or has been staying at a higher RMS line for a while … <slow shake of an old wolven head> … Sorry, unless I am missing your point, I see this as a dangerous tact vs a potentially helpful tool.

The BMWM is many things, and the CAGR charts are wonderful for all sorts of purposes, but using the charts alone or even predominantly, as a signal for shorting …. Ahhh … caramba … way way too risky for even IcySnarl ……

Take care,
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