Crossroads

Text Box: Wiser Trader Stocks and Options Newsletter
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Issue No. 59 – January 2, 2006 Prescott, Arizona Systems@WiserTrader.com

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1.0 Trading

Statistics on success and failure rates for chart patterns tell you how much weight should be given to their interpretation.

1.1 Crossroad

If your time horizon is a few years or so, we are in a bull market. Since spring of 2003, the S&P500 has risen about 50%, the DOW about 35% and the NASDAQ about 65%. A 2 year chart for the S&P 500 Index in Figure 1 shows the index at the top of a rising wedge formation. Charts for the NASDAQ Composite Index, the NYSE Composite and the Dow Jones Industrial

FIGURE 1

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Average are similar with very slight differences in shape details. Furthermore, Williams %R indicators for all of the indices are in an oversold condition. Is the market headed up or down?

In late November and mid December the S&P attempted to rise out of the channel but bounced off resistance in the 1270 range on lower than average volume. According to the Encyclopedia of Chart Patterns, by Thomas N. Bulkowski, 2^nd Ed., Wiley, New Jersey, 2005, volume is typically reduced for this type of overall chart pattern. If the S&P remains in the rising wedge pattern, the index can be expected to decline from its current level of 1248 and reach support in the 1200 to 1225 range within a few months.

The index bounced off resistance at the top of the channel in January 2005 in a similar manner. The short term decline was significant (2.5% indicated by the two red lines) and was accompanied with a drop in volume. In anticipation of a similar decline this January, traders have been reluctant to buy and volume began to decrease earlier in December. The fact that the four indices mentioned are all oversold indicates a near term, but short term, rise before heading lower.

A more bearish case would occur if the index broke out of the pattern below support on higher than average volume. Bulkowski’s historical stock data indicates that the average decline after a downward breakout in a bull market was 14%. For stocks that broke out of the formation downward in a bear market the average decline was 20%. After the decline, the average change after the trend ended was 53% in a bull market and 36% in a bear market. Within 30 days after a downward breakout, 63% of stocks pulled back to the level of the downward breakout.

Before a more bullish expectation is justified, the indices need to break out of their wedge shaped channels, moving upward with confirming higher volume. The fact that they are oversold implies they will make another run towards resistance very soon. Bulkowski’s historical data indicates that the average rise after an upward breakout in a bull market was 28%. For stocks that broke out upward in a bear market the average rise was 17%. After the rise, the change after the trend ended was -30% to -35%. Within 30 days after an upward breakout, 73% of stocks in a bull market and 66% of stocks in a bear market retraced to the level of the upward breakout.

All we can say with absolute certainty is that the market indices will not move in a straight line. They are oversold, indicating a short term rise. They are at the top of a rising wedge channel with lower than average volume, indicating a longer term decline. Notice that the narrowing of the channel requires an eventual breakout of some kind. A sideways breakout is not out of the question. As indices move toward support and resistance lines that form the channel boundaries, it would be prudent to watch the daily volume and be ready to trade accordingly.

2.0 Market Analysis

Major indices continued their sideways movement for yet another week. This consolidation still appears to be concern about the sell off with reduced volume that occurred a year ago last January. The inverted yield curve (2 year treasury interest rate higher than the 10 year) has many investors spooked, expecting an economic slow down at the least, if not a recession. Most will take a wait and see position for the first few trading days of the year. The absence of a sell off will be moderately bullish.

Key industry ETF’s in Table 2A are Biotech and Semiconductors which confirm the NASDAQ. Transportation confirms the Dow Jones Industrial Average according to Dow Theory. Banking and Financials are confirming indicators for the S&P 500. Gold and Real Estate are respective indicators for the inverse health of the currency (inflation) and the capacity for consumer spending.

Table 2A

Indices, Key Industry ETF’s and Sector SPDR’s

	1 month	1 wk ago	2 wks ago	3 wks ago	4 wks ago
Dow Jones Industrials	-1.5%	-1.5%	0.1%	0.9%	-0.9%
NASDAQ	-3.0%	-2.0%	-0.1%	-0.2%	-0.7%
S & P 500	-1.3%	-1.6%	0.1%	0.6%	-0.5%
Russell 2000	-2.5%	-1.9%	0.5%	-0.8%	-0.3%
GLD, GOLD	2.5%	2.9%	0.1%	-4.4%	4.1%
RKH, Banking	-1.1%	-2.1%	0.0%	1.5%	-0.5%
IYT, Transportation	1.4%	-1.3%	2.7%	1.0%	-0.9%
SMH, Semiconductors	-5.4%	-2.6%	-0.6%	0.3%	-2.5%
BBH, Biotechnology	-3.4%	-1.9%	2.3%	-1.5%	-2.3%
IYR, Real Estate	-2.5%	-1.3%	-1.1%	0.6%	-0.7%
OIH, Oil	0.4%	-1.8%	1.4%	-2.3%	3.3%
XLE, Energy	-1.2%	-1.3%	0.4%	-1.4%	1.3%
XLU, Utilities	-0.3%	-1.1%	-1.5%	1.0%	1.4%
XLB, Materials	0.8%	-0.6%	2.4%	-1.4%	0.3%
XLI, Industrial	-0.6%	-1.1%	0.5%	0.7%	-0.8%
XLK, Technology	-4.8%	-2.0%	-0.8%	-1.1%	-0.9%
XLV, Healthcare	1.9%	-1.6%	1.9%	1.6%	0.1%
XLF, Financials	-1.1%	-1.4%	0.7%	0.3%	-0.7%
XLP, Consumer Staples	-0.7%	-1.4%	-0.5%	1.9%	-0.7%
XLY, Consumer Discretionary	-2.6%	-1.1%	-1.0%	0.1%	-0.7%

3.0 Procedure

The following watch lists contain stock candidates for consideration. They are not necessarily trades. Categories include check lists for insider buying and cash rich companies, as well as, filters that employ stock picking methods used by master traders.

Current stock rankings are based on the degree to which stocks are overbought or over sold based on the 10-period Williams %R for the past two trading days. Two columns are labeled “%R1” and “%R2” with “%R2” indicating the Williams %R for the most recent trading day. Of course, values more negative than -80 are oversold and those less negative than -20 are overbought.

A column labeled “Weekly % Gain” was added to show the inverse relationship between price action over the past week and the Williams %R.

One should keep in mind that oversold stocks are not necessarily ready to move upward. They could very well be in a condition of continuous decline. The lists are meant to serve as a starting point for further due diligence.

The “Reference” is the date that a stock passed the indicated filter and was first added to or returned to the list. The “% Change” is how the price has changed since the reference date. Stocks that are down 10% or more after being listed are removed for a period of about two months. The “% from Max” is the percentage the price has declined from the maximum price reached since the reference date. Stocks that are down 8% from their highs after being listed are flagged in yellow. Stocks that are down 15% from their highs after being listed are removed for two months. More information on filters is available on the web site.

A performance summary of filtering techniques for check lists and master trader selection methods is given in Table 3A.

Table 3A

Stock Filter Summary

Filter	Avg. % Change Since Listed	Avg. % Change Friday	1 Month	1 Week Ago	2 weeks Ago	3 Weeks Ago	4 Weeks Ago
Net Insider Buying	3.4%	0.4%	3.2%	1.7%	1.0%	-0.7%	1.5%
Cash Rich Companies	3.8%	0.3%	4.7%	0.6%	3.2%	1.0%	-0.1%
Price to Free Cash Flow	0.7%	-0.2%	-1.9%	-0.3%	-2.1%	0.8%	-0.3%
Growth Momentum Stocks	7.5%	-0.7%	0.3%	-1.4%	1.0%	-0.4%	1.2%
Lynch Stocks	24.3%	-0.3%	1.7%	-0.7%	1.4%	2.7%	-1.8%
Buffett Stocks	15.5%	-0.8%	-1.2%	-1.0%	0.8%	-0.2%	-0.7%
Graham Stocks	8.2%	-0.1%	-0.5%	-1.5%	-1.3%	2.1%	0.1%
Templeton Stocks	3.7%	-0.6%	-2.2%	-1.0%	-1.2%	0.0%	0.0%
Zweig Stocks	13.8%	-0.3%	0.3%	-1.7%	-0.7%	0.8%	2.1%
Average Long Stocks	9.0%	-0.2%	0.5%	-0.6%	0.2%	0.7%	0.2%

Key

Passed Recent Filter

Price declined by half of stop loss setting

Oversold based on Williams %R (%R2 is most recent)

Overbought based on Williams %R (%R2 is most recent)

Companies that have experienced net insider buying within the past 6 months of 5% or more of issued stock are listed in Table 3B. These stocks should also appear in one of the master trader screens or meet additional screening criteria before being given serious consideration. This list is a mixture of stocks that are optionable and those that are not.

Table 3B

Net Insider Buying Check List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
MNKD	12/30/05	0.0%	MannKind Corporation	Health Care	Biotechnology & Drugs	0.0%	-5.1%	-88	-88
CRYO	11/25/05	0.0%	CryoCor, Inc.	Health Care	Medical Equipment & Supplies	-8.7%	-6.9%	-83	-83
MMLP	11/25/05	0.0%	Martin Midstream Partners L.P.	Transportation	Water Transportation	-7.5%	-2.6%	-100	-73
ULBI	12/02/05	-5.4%	Ultralife Batteries, Inc.	Technology	Electronic Instruments & Controls	-8.2%	-0.8%	-69	-64
VSTA	10/21/05	-3.1%	VistaCare, Inc.	Health Care	Healthcare Facilities	-11.7%	1.7%	-75	-58
MEAD	12/23/05	4.2%	Meade Instruments Corp.	Technology	Scientific & Technical Instruments	0.0%	4.2%	-52	-44
MEMY	12/30/05	0.0%	Memory Pharmaceuticals Corp.	Health Care	Biotechnology & Drugs	0.0%	2.7%	-41	-41
XGEN	11/25/05	0.0%	Xenogen Corporation	Technology	Scientific & Technical Instruments	-1.6%	-1.6%	-38	-38
TRMA	10/28/05	4.4%	Trico Marine Services Inc	Energy	Oil Well Services & Equipment	-2.8%	2.4%	-12	-36
LXU	12/23/05	-3.1%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	-7.9%	-3.1%	-30	-30
SNSS	12/16/05	5.3%	Sunesis Pharmaceuticals, Inc.	Health Care	Major Drugs	-1.2%	5.7%	-33	-28
MBRX	10/14/05	34.9%	Metabasis Therapeutics, Inc.	Health Care	Biotechnology & Drugs	0.0%	9.9%	-10	-28
BDOG	12/16/05	0.4%	Big Dog Holdings, Inc.	Services	Retail (Apparel)	-0.1%	2.4%	-21	-21
CLRT	11/18/05	5.7%	Clarient, Inc.	Technology	Scientific & Technical Instruments	-7.8%	8.3%	-20	-20
CWEI	12/09/05	0.0%	Clayton Williams Energy, Inc.	Energy	Oil & Gas Operations	-0.9%	1.9%	-19	-19
MTRX	10/14/05	11.8%	Matrix Service Company	Capital Goods	Construction Services	0.0%	7.8%	-9	-3

Companies with net cash positions that comprise at least 40% of their share price are listed in Table 3C. These stocks should also appear in one of the master trader screens or meet additional screening criteria before being given serious consideration. Again this list is a mixture of stocks that are optionable and those that are not.

Table 3C

Capital Rich Companies Check List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
WSC	07/01/05	7.7%	Wesco Financial Corporation	Conglomerates	Conglomerates	-0.2%	1.0%	-26	-29
HIH	12/23/05	0.0%	Highland Hospitality Corporation	Services	Hotels & Motels	0.0%	0.1%	-37	-25

Table 3D was added to contain companies having a low price to free cash flow (P-FCF) less than 5. Companies having P-FCF less than 10 are typically capable of financing the purchase of all their outstanding shares of stock.

Table 3D

Price to Free Cash Flow Companies Check List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
F	11/11/05	-3.1%	FORD MOTOR	Consumer Cyclical	Auto & Truck Manufacturers	-9.5%	-2.3%	-88	-90
UL	12/30/05	0.0%	Unilever plc (ADR)	Consumer Non-Cyclical	Food Processing	0.0%	-0.1%	-81	-54
PBR	11/25/05	5.3%	Petroleo Brasileiro S.A. (ADR)	Energy	Oil & Gas - Integrated	-2.9%	1.6%	-11	-5

For the Peter Lynch screen in Table 3E, the number of selections is reduced by selecting only optionable stocks having P/E’s less than 30.

Table 3E

Peter Lynch Value Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
CHL	03/18/05	42.2%	China Mobile (Hong Kong) Limited (ADR)	Services	Communications Services	-6.3%	-5.7%	-96	-86
SKM	02/07/05	0.6%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	-12.3%	-0.3%	-88	-76
BTI	08/12/05	11.8%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-2.9%	0.5%	-67	-64
KOF	04/29/05	18.3%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	-5.7%	-1.1%	-22	-45
TMX	06/03/05	33.5%	Telefonos de Mexico, S.A. (ADR)	Services	Communications Services	-0.4%	1.7%	-13	-21
TM	12/13/04	39.5%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	0.0%	0.9%	-4	-4

For the screen in Table 3F, the number of selections is reduced by selecting only optionable stocks having P/E’s less than 30.

Table 3F

Modified Growth Momentum Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
BEN	11/04/05	3.1%	Franklin Resources, Inc.	Financial	Investment Services	-4.1%	-2.6%	-89	-92
ADTN	11/25/05	0.0%	ADTRAN, Inc.	Technology	Communications Equipment	-7.1%	-6.5%	-87	-91
ET	10/21/05	16.7%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	-3.2%	-3.2%	-40	-90
CHE	05/06/05	28.0%	Chemed Corporation	Services	Business Services	-8.0%	-2.6%	-76	-81
ENDP	11/18/05	2.1%	Endo Pharmaceuticals	Health Care	Biotechnology & Drugs	-2.9%	-0.8%	-65	-76
WSO	11/25/05	-1.9%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	-10.6%	-2.6%	-59	-74
BJS	11/04/05	7.4%	BJ Services Company	Energy	Oil Well Services & Equipment	-6.7%	-2.5%	-86	-74
MOT	12/09/05	-3.5%	Motorola, Inc.	Technology	Communications Equipment	-3.8%	-3.8%	-59	-73
LM	08/12/05	9.7%	Legg Mason, Inc.	Financial	Investment Services	-5.0%	-1.7%	-39	-70
UNH	04/15/05	33.2%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-2.6%	-2.4%	-48	-69
PCU	12/02/05	-0.2%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-5.1%	-1.6%	-61	-68
AMTD	10/28/05	17.1%	Ameritrade Holding Corp.	Financial	Investment Services	-2.6%	-0.2%	-54	-54
OSK	03/12/05	13.0%	Oshkosh Truck Corporation	Consumer Cyclical	Auto & Truck Manufacturers	-2.8%	0.5%	-42	-40
VIP	12/09/05	-1.7%	Vimpel-Communications (ADR)	Services	Communications Services	-1.7%	0.2%	-11	-38
HCC	10/21/05	9.2%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	-9.7%	-0.3%	-26	-37
CTX	11/18/05	-3.1%	Centex Corporation	Capital Goods	Construction Services	-6.0%	1.0%	-47	-28
BHP	09/09/05	5.9%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	-2.4%	1.2%	-12	-25
ZIGO	12/09/05	-7.2%	Zygo Corporation	Technology	Semiconductors	-7.2%	0.1%	-84	-25
GOL	12/16/05	5.9%	GOL Linhas Aereas Inteligentes SA (ADR)	Transportation	Airline	-1.8%	-1.8%	-12	-24
SYT	04/08/05	16.6%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	0.0%	1.9%	-8	-3

The filter for Warren Buffet style stock picking in Table 3G is for the intermediate to long term. Two requirements were added. One was to include only optionable stocks in order to find LEAPS opportunities. The other requirement was to include only those stocks having a PE of 17 or less.

Table 3G

Warren Buffett Value Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
HDI	10/14/05	4.7%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-7.7%	-0.7%	-64	-98
DHI	10/21/05	15.2%	D.R. Horton Inc.	Capital Goods	Construction Services	-5.8%	-1.3%	-83	-95
TOL	12/16/05	-7.3%	Toll Brothers, Inc.	Capital Goods	Construction Services	-7.3%	-2.4%	-90	-93
PGR	12/27/04	38.7%	The Progressive Corp.	Financial	Insurance (Property & Casualty)	-5.7%	-2.1%	-82	-92
RS	04/15/05	59.2%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-8.3%	-3.1%	-76	-89
FNF	10/21/05	0.5%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-7.0%	-0.2%	-75	-76
RI	09/02/05	19.8%	Ruby Tuesday, Inc.	Services	Restaurants	-2.3%	-1.5%	-60	-76
MIK	10/14/05	13.5%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-8.3%	-0.6%	-63	-74
BTI	12/30/05	0.0%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	0.0%	0.5%	-67	-64
RCII	10/21/05	16.8%	Rent-A-Center, Inc	Services	Rental & Leasing	-6.0%	-0.7%	-81	-56
ABFS	04/29/05	38.5%	Arkansas Best Corporation	Transportation	Trucking	-4.0%	-4.0%	-32	-53
THO	04/15/05	48.8%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	-1.6%	-1.4%	-25	-50
LNCR	12/27/04	-0.4%	Lincare Holdings Inc.	Health Care	Healthcare Facilities	-8.7%	0.2%	-21	-49
NKE	09/23/05	6.8%	NIKE, Inc.	Consumer Cyclical	Footwear	-5.1%	-0.2%	-52	-46
EASI	09/09/05	23.7%	Engineered Support System	Capital Goods	Misc. Capital Goods	0.0%	0.2%	-49	-41
NUE	04/15/05	36.7%	Nucor Corporation	Basic Materials	Iron & Steel	-3.6%	-1.9%	-16	-39
CCRT	12/30/05	0.0%	CompuCredit Corporation	Financial	Consumer Financial Services	0.0%	-1.8%	-47	-39
ASH	10/28/05	8.2%	Ashland Inc.	Capital Goods	Construction Services	-1.6%	-1.4%	-25	-38
ACS	04/29/05	24.1%	Affiliated Computer Services, Inc.	Technology	Computer Services	-3.0%	-3.0%	-30	-34
PSUN	12/09/05	0.1%	Pacific Sunwear of CA	Services	Retail (Apparel)	-1.4%	-1.3%	-39	-34
DSPG	02/07/05	0.0%	DSP Group, Inc.	Technology	Communications Equipment	-8.1%	-0.1%	-41	-32
STLD	12/16/05	3.3%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	-1.9%	-1.4%	-28	-28
FOSL	12/02/05	6.1%	Fossil, Inc.	Consumer Cyclical	Jewelry & Silverware	-1.1%	4.2%	-15	-25

Stocks from Benjamin Graham’s style of utility investing are listed in Table 3H. A requirement was added to include only those stocks having a PE of 17 or less.

Table 3H

Benjamin Graham Utility Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
WPS	02/07/05	7.6%	WPS Resources Corp	Utilities	Electric Utilities	-6.9%	-2.2%	-92	-92
PNW	01/10/05	-4.0%	Pinnacle West Capital	Utilities	Electric Utilities	-10.9%	-2.8%	-98	-86
PGN	01/10/05	-0.3%	Progress Energy, Inc.	Utilities	Electric Utilities	-4.0%	-0.9%	-88	-86
UU	06/10/05	-3.6%	United Utilities PLC (ADR)	Utilities	Electric Utilities	-5.7%	-1.5%	-93	-82
OKE	11/11/05	-1.0%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-5.4%	-2.4%	-97	-79
SRE	01/10/05	24.0%	Sempra Energy	Utilities	Natural Gas Utilities	-5.6%	-0.7%	-92	-78
WGL	12/23/05	-1.3%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	-1.3%	-1.3%	-69	-76
UGI	12/30/05	0.0%	UGI Corporation	Utilities	Natural Gas Utilities	0.0%	-2.4%	-93	-74
ATG	10/21/05	5.2%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-4.3%	-0.4%	-61	-70
ATO	04/01/05	-2.9%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-12.1%	-0.8%	-74	-63
KEP	01/10/05	56.7%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-1.9%	-1.9%	-54	-63
CPK	05/06/05	17.8%	Chesapeake Utilities	Utilities	Natural Gas Utilities	-12.9%	0.0%	-59	-58

Optionable stocks from John Templeton’s style of investing are listed in Table 3I.

Table 3I

John Templeton Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
LOW	11/18/05	1.1%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-4.0%	-1.2%	-86	-98
LOW	11/18/05	1.1%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-4.0%	-1.2%	-86	-98
KRON	10/28/05	-6.0%	Kronos Incorporated	Technology	Software & Programming	-13.9%	-3.0%	-99	-98
DGX	08/19/05	3.0%	Quest Diagnostics Incorporated	Health Care	Healthcare Facilities	-2.0%	-1.7%	-78	-96
TOL	12/09/05	-1.6%	Toll Brothers, Inc.	Capital Goods	Construction Services	-8.7%	-2.4%	-90	-93
GISX	12/30/05	0.0%	Global Imaging Systems, Inc.	Technology	Office Equipment	0.0%	-2.2%	-93	-93
MDC	12/30/05	0.0%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	0.0%	-2.2%	-95	-92
EWBC	12/30/05	0.0%	East West Bancorp, Inc.	Financial	Regional Banks	0.0%	-0.8%	-80	-80
KSWS	12/30/05	0.0%	K-Swiss Inc.	Consumer Cyclical	Footwear	0.0%	-3.3%	-71	-79
MIK	12/30/05	0.0%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	0.0%	-0.6%	-63	-74
CAKE	10/21/05	9.0%	The Cheesecake Factory Incorporated	Services	Restaurants	-2.4%	-1.5%	-50	-74
HHS	10/28/05	3.6%	Harte-Hanks, Inc.	Services	Printing & Publishing	-1.6%	-1.6%	-43	-70
UNH	12/30/05	0.0%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	0.0%	-2.4%	-48	-69
SNV	05/27/05	-7.7%	Synovus Financial Corp.	Financial	Regional Banks	-9.8%	-1.1%	-65	-67
WSM	09/02/05	13.7%	Williams-Sonoma, Inc.	Services	Retail (Specialty Non-Apparel)	-2.9%	0.9%	-42	-63
CHD	11/18/05	-1.0%	Church & Dwight Co., Inc.	Consumer Non-Cyclical	Personal & Household Products	-2.5%	-1.2%	-42	-59
SFG	05/27/05	33.2%	StanCorp Financial Group, Inc.	Financial	Insurance (Life)	-5.7%	-0.2%	-67	-57
EDMC	12/16/05	0.6%	Education Management Corp	Services	Schools	-0.3%	-0.1%	-58	-45
EASI	06/03/05	18.6%	Engineered Support System	Capital Goods	Misc. Capital Goods	0.0%	0.2%	-49	-41
AMSG	10/14/05	-0.7%	AmSurg Corp.	Health Care	Healthcare Facilities	-6.2%	2.9%	-60	-33
CPS	05/27/05	11.1%	ChoicePoint Inc.	Services	Business Services	0.0%	1.5%	-3	-6

Optionable stocks from Martin Zweig’s style of investing are listed in Table 3J.

Table 3J

Martin Zweig Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
DHI	11/18/05	2.6%	D.R. Horton Inc.	Capital Goods	Construction Services	-5.8%	-1.3%	-83	-95
BEN	10/28/05	8.5%	Franklin Resources, Inc.	Financial	Investment Services	-4.1%	-2.6%	-89	-92
CRDN	08/19/05	43.4%	Ceradyne, Inc.	Capital Goods	Aerospace and Defense	-7.7%	-3.8%	-58	-86
CAE	06/10/05	13.3%	Cascade Corporation	Capital Goods	Misc. Capital Goods	-11.3%	-3.4%	-65	-77
POOL	06/10/05	8.8%	SCP Pool Corporation	Consumer Cyclical	Recreational Products	-6.4%	-1.9%	-100	-74
APA	12/23/05	-2.5%	Apache Corporation	Energy	Oil & Gas Operations	-2.5%	-2.5%	-73	-73
CERS	11/18/05	39.6%	Cerus Corporation	Health Care	Biotechnology & Drugs	-10.4%	-4.4%	-73	-71
SM	10/21/05	16.3%	St. Mary Land & Exploration Co.	Energy	Oil & Gas Operations	-8.6%	-3.2%	-77	-69
MCO	07/29/05	29.8%	Moody's Corporation	Services	Business Services	-1.4%	-1.1%

Sentiment Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	12.1	10.3	10.7	< 20	> 50
VXN ***	14.3	13.6	13.2	< 30	> 70
Put/Call Ratio	0.503	0.514	0.569	< 0.6	> 0.7
%Bulls - %Bears	39.6%	34.0%	37.2%	> 29%	< 20%
Above 20 day SMA = Sell signal. * Below 20 day SMA = Buy signal.