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Issue No. 60 – January 9, 2006 Prescott, Arizona Systems@WiserTrader.com

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1.0 Trading

      Are the major averages engaged in a premature breakout or something more substantial?

1.1 Breakout

      A 2 year chart for the S&P 500 Index in Figure 1 shows the index protruding less than 1% above the upper trend line of a rising wedge formation, closing last week at 1,285.  The first 4 trading days of 2006 were substantially better than 2005. 

FIGURE 1

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      This is a statistically interesting time.  It has been observed that when the first 5 trading days of January have been up, the index has gained an average of about 13% for the year.  The rule has held up about 85% of the time.  However, in midterm election years, such as the current one, the rule has held only 43% of the time. 

      A more robust rule, developed by Yale Hirsch in 1972, states that as the month of January goes, so goes the year.  This rule has better than 90% accuracy.  When the S&P January gain was around 3.6% or more, the rule has been accurate 100% of the time over the last 50 years. 

      However, the price of oil is rising once again and, by short term measures, the market is overbought.  The recent tendency for traders to sell into strength should not be overlooked.  Should the index fall back into the rising wedge formation, it would be bearish for the near term.  For now though, volume is higher than average and market breadth is good. 

1.2 Filter Studies

      Continuing with filter performance studies, the latest 1 year period is shown at the bottom of Table 1.  Details of the filters can be found on the web site. The objective of this portion of the analysis is to find the right parameter that describes how S&P 500 performance affects profits for the previous year.  Currently we are tracking filter performance with the previous month’s average index value relative to its mean 200 day simple moving average (SMA) for the previous month.  The correlation is promising.

Table 1

1 Year Filter Performance versus the S&P 500 Index

Using No Trailing Stop

Year Ending	Prior Year S&P 500	Prior Month Avg. S&P 500 Relative to its Mean 200 Day SMA	Growth $15-$40 Filter	Growth >$40 Filter	Absolute Value Filter	Relative Value Filter
9/02/05	9.4%	+2.5%	60.1%	40.7%	19.3%	50%
9/30/05	8.6%	+2.3%	25.4%	61.4%	12.3%	24.1
11/04/05	8.0%	-0.6%	8.2%	14.8%	4.4%	-0.6%
12/02/05	6.2%	+2.9%	24.6%	9.6%	17.0%	34.7%
01/06/06	8.2%	+4.5%	39.8%	50.3%	27.8%	28.3%

      As the index pulls away from its 200 day SMA, stocks are affected favorably.  As the index moves toward its 200 day SMA, stocks are affected adversely.  A more detailed look at this is obviously needed.

      It still amazes me how the previous month’s index activity has such a strong impact on a full year’s profits.  Clearly this is showing us the importance of an ability to anticipate the behavior of the S&P 500 Index.  The study will continue at 1 month intervals.

2.0 Market Analysis

      The fact that the anticipated repeat of the January 2005 sell off did not occur was met with relief.  The Fed’s December FOMC minutes, indicating a lower certainty of further rate increases, provided a rosier outlook for the economy in general and for stocks in particular.  A lower cap on interest rates increases the value of stocks and options in valuation models.

      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	1.7%	2.3%	-1.5%	0.1%	0.9%
NASDAQ	2.2%	4.5%	-2.0%	-0.1%	-0.2%
S & P 500	2.1%	3.0%	-1.6%	0.1%	0.6%
Russell 2000	1.5%	3.9%	-1.9%	0.5%	-0.8%
GLD, GOLD	2.5%	4.1%	2.9%	0.1%	-4.4%
RKH, Banking	1.4%	2.2%	-2.3%	0.0%	1.5%
IYT, Transportation	2.2%	0.2%	-1.7%	2.7%	1.0%
SMH, Semiconductors	4.5%	8.2%	-3.1%	-0.6%	0.3%
BBH, Biotechnology	-0.8%	0.5%	-2.0%	2.3%	-1.5%
IYR, Real Estate	2.4%	4.8%	-1.8%	-1.1%	0.6%
OIH, Oil	4.9%	8.7%	-2.5%	1.4%	-2.3%
XLE, Energy	3.2%	6.3%	-1.8%	0.4%	-1.4%
XLU, Utilities	0.6%	2.5%	-1.4%	-1.5%	1.0%
XLB, Materials	3.9%	3.7%	-0.8%	2.4%	-1.4%
XLI, Industrial	1.0%	1.1%	-1.3%	0.5%	0.7%
XLK, Technology	0.8%	5.3%	-2.3%	-0.8%	-1.1%
XLV, Healthcare	4.4%	2.6%	-1.8%	1.9%	1.6%
XLF, Financials	1.8%	2.5%	-1.6%	0.7%	0.3%
XLP, Consumer Staples	0.6%	0.9%	-1.6%	-0.5%	1.9%
XLY, Consumer Discretionary	-0.1%	2.1%	-1.3%	-1.0%	0.1%

            Market sentiment is shown in Table 2B.

Table 2B

Market Sentiment

Sentiment Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	11.0	12.1	10.3	< 20	> 50
VXN ***	15.0	14.3	13.6	< 30	> 70
Put/Call Ratio	0.583	0.503	0.514	< 0.6	> 0.7
%Bulls - %Bears	32.0%	39.6%	34.0%	> 29%	< 20%
**   Below 20 day SMA = Buy signal. *** Above 20 day SMA = Sell signal.

      Figure 1 compares index tracking stocks for the major averages with key ETF’s and Sector SPDR’s.

FIGURE 1

Table 2C

Market Summary

 Major Indices 
 For the Past Week:
 Dow Jones     2.3%
 NASDAQ        4.5%
 S&P500 Index  3.0%
 Russell 2000  3.9%
 
 
 30 Year Bond 4.565%
 10 Year Note 4.379%
 
 
 Leading Industries
 For the Past Week:
 Internet 
 General Mining 
 Gold Mining 
 Oil Equipment & Services 
 Oil Equipment, Services & Dis 
 Telecommunications Equipt 
 Mining 
 Semiconductors 
 Platinum & Precious Metals
 Technology Hardware & Equipt          
 
 Lagging Industries
 For the Past Week:
 Railroads 
 Industrial Transportation 
 Home Improvement Retailers 
 Broadline Retailers 
 Footwear 
 Delivery Services 
 Distillers & Vintners 
 Real Estate 
 
 Leading Industries
 For the Past Month:
 Gold Mining 
 Internet 
 Mining 
 Tires 
 Pharmaceuticals 
 Mortgage Finance 
 General Mining 
 Oil Equipment & Services 
 Airlines 
 Oil Equipment, Services & Dis 
 
 Lagging Industries
 For the Past Month:
 Mobile Telecommunications 
 Home Improvement Retailers 
 Food Retailers & Wholesalers 
 Travel & Tourism 
 Specialty Retailers 
 Food & Drug Retailers 
 Computer Services 
 Drug Retailers 
 Clothing & Accessories 
 Recreational Services              
 
 Crude Oil $64.21
 
 Gold for the past 30 days:
 USD    +4.80%
 CAD    +5.54%
 CHF    +1.29%
 GBP    +2.66%
 EUR    +1.03%
 JPY    -0.97%

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	6.0%	1.4%	4.3%	2.7%	1.6%	2.6%	-2.0%
Cash Rich Companies	7.5%	0.3%	8.2%	-0.2%	1.0%	5.6%	1.7%
Price to Free Cash Flow	11.3%	2.6%	7.1%	10.1%	-0.3%	-1.7%	-0.7%
Growth Momentum Stocks	12.1%	1.3%	3.3%	4.3%	-1.4%	1.0%	-0.4%
Lynch Stocks	29.0%	0.7%	7.5%	3.9%	-0.7%	1.4%	2.7%
Buffett Stocks	19.0%	1.1%	2.5%	3.0%	-1.0%	0.8%	-0.2%
Graham Stocks	11.4%	0.9%	2.1%	2.8%	-1.5%	-1.3%	2.1%
Templeton Stocks	4.5%	-0.2%	-1.6%	0.1%	-0.9%	-1.1%	0.3%
Zweig Stocks	16.7%	1.1%	2.3%	3.8%	-1.7%	-0.3%	0.5%
Average Long Stocks	13.0%	1.0%	4.0%	3.4%	-0.5%	0.8%	0.5%

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
MMLP	11/25/05	0.0%	Martin Midstream Partners L.P.	Transportation	Water Transportation	-9.3%	-2.0%	-64	-98
CLRT	11/18/05	-2.4%	Clarient, Inc.	Technology	Scientific & Technical Instruments	-14.9%	-7.7%	-75	-77
XGEN	11/25/05	0.0%	Xenogen Corporation	Technology	Scientific & Technical Instruments	-10.0%	-8.6%	-76	-77
CRYO	11/25/05	0.0%	CryoCor, Inc.	Health Care	Medical Equipment & Supplies	-8.1%	0.7%	-72	-72
MEMY	12/30/05	-2.2%	Memory Pharmaceuticals Corp.	Health Care	Biotechnology & Drugs	-2.2%	-2.2%	-57	-57
SNSS	12/16/05	11.0%	Sunesis Pharmaceuticals, Inc.	Health Care	Major Drugs	0.0%	5.4%	-26	-26
VSTA	10/21/05	4.7%	VistaCare, Inc.	Health Care	Healthcare Facilities	-4.5%	8.1%	-12	-25
LXU	12/23/05	-1.7%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	-6.6%	1.5%	-25	-25
MEAD	12/23/05	8.8%	Meade Instruments Corp.	Technology	Scientific & Technical Instruments	-0.3%	4.4%	-35	-23
BDOG	12/16/05	10.9%	Big Dog Holdings, Inc.	Services	Retail (Apparel)	0.0%	10.4%	-20	-20
TRMA	01/06/06	0.0%	Trico Marine Services Inc	Energy	Oil Well Services & Equipment	0.0%	3.8%	-14	-20
CWEI	12/09/05	0.0%	Clayton Williams Energy, Inc.	Energy	Oil & Gas Operations	-0.8%	2.5%	-19	-19
MBRX	10/14/05	39.1%	Metabasis Therapeutics, Inc.	Health Care	Biotechnology & Drugs	0.0%	3.1%	-32	-12
MNKD	12/30/05	13.0%	MannKind Corporation	Health Care	Biotechnology & Drugs	-0.2%	13.0%	-5	-5
NXTM	01/06/06	0.0%	NxStage Medical, Inc.	Health Care	Biotechnology & Drugs	0.0%	8.7%	-6	0

      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	7.5%	Wesco Financial Corporation	Conglomerates	Conglomerates	-0.5%	-0.2%	-48	-54

      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	6.9%	FORD MOTOR	Consumer Cyclical	Auto & Truck Manufacturers	-0.1%	10.4%	-7	-14
PBR	11/25/05	15.7%	Petroleo Brasileiro S.A. (ADR)	Energy	Oil & Gas - Integrated	0.0%	9.9%	-8	-8

      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	45.1%	China Mobile (Hong Kong) Limited (ADR)	Services	Communications Services	-4.4%	2.1%	-34	-58
BTI	08/12/05	13.2%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-1.7%	1.2%	-62	-29
TMX	06/03/05	38.8%	Telefonos de Mexico, S.A. (ADR)	Services	Communications Services	-1.4%	4.0%	-16	-16
KOF	04/29/05	27.4%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	0.0%	7.7%	0	-1
TM	12/13/04	43.0%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	0.0%	2.5%	-12	-1
SKM	02/07/05	6.7%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	-7.0%	6.0%	-7	0

      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

Growth Momentum Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Weekly % Gain	%R1	%R2
GOL	12/16/05	-0.3%	GOL Linhas Aereas Inteligentes SA (ADR)	Transportation	Airline	-7.6%	-5.9%	-66	-83
PCU	12/02/05	4.2%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-6.2%	4.4%	-58	-56
ADTN	11/25/05	0.0%	ADTRAN, Inc.	Technology	Communications Equipment	-6.2%	1.0%	-80	-52
UNH	04/15/05	34.9%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-1.4%	1.2%	-73	-43
BEN	11/04/05	5.1%	Franklin Resources, Inc.	Financial	Investment Services	-2.2%	1.9%	-59	-35
ENDP	11/18/05	8.1%	Endo Pharmaceuticals	Health Care	Biotechnology & Drugs	-1.2%	5.8%	-2	-35
WSO	11/25/05	4.6%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	-4.7%	6.6%	-4	-22
AMTD	10/28/05	22.0%	Ameritrade Holding Corp.	Financial	Investment Services	-0.4%	4.2%	-16	-20
BJS	11/04/05	15.2%	BJ Services Company	Energy	Oil Well Services & Equipment	-1.2%	7.3%	-36	-16
CTX	11/18/05	0.3%	Centex Corporation	Capital Goods	Construction Services	-2.7%	3.5%	-17	-15
HCC	10/21/05	13.6%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	-6.0%	4.0%	-13	-14
LM	08/12/05	11.9%	Legg Mason, Inc.	Financial	Investment Services	-3.1%	2.0%	-88	-14
CHE	05/06/05	40.1%	Chemed Corporation	Services	Business Services	0.0%	9.5%	-13	-9
BHP	09/09/05	13.3%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	-0.1%	7.0%	-25	-8
ZIGO	12/09/05	-3.5%	Zygo Corporation	Technology	Semiconductors	-3.5%	3.9%	-13	-7
ET	10/21/05	24.7%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	0.0%	6.9%	-11	-7
OSK	03/12/05	17.6%	Oshkosh Truck Corporation	Consumer Cyclical	Auto & Truck Manufacturers	0.0%	4.0%	-5	-7
MOT	12/09/05	4.0%	Motorola, Inc.	Technology	Communications Equipment	0.0%	7.7%	-10	-6
VIP	12/09/05	5.0%	Vimpel-Communications (ADR)	Services	Communications Services	0.0%	6.9%	-8	-6
SYT	04/08/05	20.4%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	0.0%	3.3%	-13	-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
MIK	10/14/05	5.9%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-14.5%	-6.8%	-93	-87
NKE	09/23/05	5.6%	NIKE, Inc.	Consumer Cyclical	Footwear	-6.2%	-1.1%	-48	-84
PGR	12/27/04	38.1%	The Progressive Corp.	Financial	Insurance (Property & Casualty)	-6.2%	-0.4%	-59	-67
PSUN	12/09/05	-3.5%	Pacific Sunwear of CA	Services	Retail (Apparel)	-4.9%	-3.6%	-87	-55
FNF	10/21/05	2.3%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-5.4%	1.8%	-10	-42
RCII	10/21/05	17.3%	Rent-A-Center, Inc	Services	Rental & Leasing	-5.5%	0.5%	-41	-37
RI	09/02/05	24.9%	Ruby Tuesday, Inc.	Services	Restaurants	0.0%	4.2%	-67	-32
ABFS	04/29/05	41.5%	Arkansas Best Corporation	Transportation	Trucking	-2.0%	2.1%	-32	-29
BTI	12/30/05	1.2%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-0.7%	1.2%	-62	-29
HDI	10/14/05	6.0%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-6.5%	1.3%	-48	-27
DHI	10/21/05	20.1%	D.R. Horton Inc.	Capital Goods	Construction Services	-1.8%	4.3%	-22	-26
LNCR	12/27/04	3.3%	Lincare Holdings Inc.	Health Care	Healthcare Facilities	-5.4%	3.7%	-25	-25
RS	04/15/05	64.5%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-5.3%	3.3%	-22	-21
EASI	09/09/05	24.1%	Engineered Support System	Capital Goods	Misc. Capital Goods	0.0%	0.4%	-32	-19
STLD	12/16/05	6.8%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	0.0%	3.3%	-19	-19
CCRT	12/30/05	6.3%	CompuCredit Corporation	Financial	Consumer Financial Services	0.0%	6.3%	-10	-16
FOSL	12/02/05	12.6%	Fossil, Inc.	Consumer Cyclical	Jewelry & Silverware	-0.8%	6.1%	-2	-14
NUE	04/15/05	47.5%	Nucor Corporation	Basic Materials	Iron & Steel	0.0%	7.8%	-22	-12
ASH	10/28/05	19.8%	Ashland Inc.	Capital Goods	Construction Services	0.0%	10.7%	-29	-9
THO	04/15/05	55.7%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	0.0%	4.7%	-9	-7
TOL	12/16/05	-0.3%	Toll Brothers, Inc.	Capital Goods	Construction Services	-0.3%	7.5%	-17	-5
DSPG	02/07/05	7.2%	DSP Group, Inc.	Technology	Communications Equipment	-1.4%	7.3%	-11	-4
ACS	04/29/05	30.0%	Affiliated Computer Services, Inc.	Technology	Computer Services	0.0%	4.7%	-8	-2

      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
PGN	01/10/05	-1.4%	Progress Energy, Inc.	Utilities	Electric Utilities	-5.0%	-1.1%	-76	-72
UU	06/10/05	-3.0%	United Utilities PLC (ADR)	Utilities	Electric Utilities	-5.1%	0.6%	-76	-64
SRE	01/10/05	30.0%	Sempra Energy	Utilities	Natural Gas Utilities	-1.1%	4.8%	-26	-20
WPS	02/07/05	10.3%	WPS Resources Corp	Utilities	Electric Utilities	-4.6%	2.5%	-36	-20
ATG	10/21/05	7.8%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-1.9%	2.5%	-12	-19
OKE	11/11/05	3.6%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-1.0%	4.6%	-1	-10
UGI	12/30/05	3.6%	UGI Corporation	Utilities	Natural Gas Utilities	0.0%	3.6%	-34	-9
ATO	04/01/05	-0.5%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-9.9%	2.4%	-22	-8
WGL	12/23/05	0.8%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	0.0%	2.1%	-42	-4
KEP	01/10/05	67.7%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	0.0%	7.0%	-7	-2
CPK	05/06/05	18.5%	Chesapeake Utilities	Utilities	Natural Gas Utilities	-12.4%	0.6%	-56	0
PNW	01/10/05	-0.6%	Pinnacle West Capital	Utilities	Electric Utilities	-7.7%	3.6%	-36	0

      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
KSWS	12/30/05	-6.3%	K-Swiss Inc.	Consumer Cyclical	Footwear	-6.3%	-6.3%	-78	-96
LOW	11/18/05	-1.9%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-6.8%	-2.9%	-96	-92
EDMC	12/16/05	-1.8%	Education Management Corp	Services	Schools	-2.7%	-2.4%	-90	-90
MIK	12/30/05	-6.8%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-6.8%	-6.8%	-93	-87
WSM	09/02/05	11.9%	Williams-Sonoma, Inc.	Services	Retail (Specialty Non-Apparel)	-4.4%	-1.6%	-95	-79
CAKE	10/21/05	8.1%	The Cheesecake Factory Incorporated	Services	Restaurants	-3.2%	-0.9%	-75	-60
EWBC	12/30/05	0.9%	East West Bancorp, Inc.	Financial	Regional Banks	-0.7%	0.9%	-57	-53
CHD	11/18/05	-0.4%	Church & Dwight Co., Inc.	Consumer Non-Cyclical	Personal & Household Products	-1.9%	0.7%	-45	-51
MDC	12/30/05	4.1%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	-2.4%	4.1%	-22	-45
UNH	12/30/05	1.2%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	0.0%	1.2%	-73	-43
DGX	08/19/05	4.1%	Quest Diagnostics Incorporated	Health Care	Healthcare Facilities	-1.0%	1.0%	-58	-41
AMSG	10/14/05	-0.4%	AmSurg Corp.	Health Care	Healthcare Facilities	-5.9%	0.3%	-25	-39
SFG	05/27/05	33.7%	StanCorp Financial Group, Inc.	Financial	Insurance (Life)	-5.3%	0.4%	-46	-34
SNV	05/27/05	-6.3%	Synovus Financial Corp.	Financial	Regional Banks	-8.5%	1.5%	-33	-32
HHS	10/28/05	5.5%	Harte-Hanks, Inc.	Services	Printing & Publishing	0.0%	1.8%	-17	-29
GISX	12/30/05	2.8%	Global Imaging Systems, Inc.	Technology	Office Equipment	0.0%	2.8%	-31	-24
EASI	06/03/05	19.0%	Engineered Support System	Capital Goods	Misc. Capital Goods	0.0%	0.4%	-32	-19
CPS	05/27/05	12.0%	ChoicePoint Inc.	Services	Business Services	0.0%	0.8%	-2	-9
TOL	12/09/05	5.8%	Toll Brothers, Inc.	Capital Goods	Construction Services	-1.9%	7.5%	-17	-5

      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
ESI	11/04/05	-0.6%	ITT Educational Services	Services	Schools	-5.8%	-0.5%	-75	-62
POOL	06/10/05	7.0%	SCP Pool Corporation	Consumer Cyclical	Recreational Products	-7.9%	-1.6%	-100	-60
CERS	11/18/05	42.0%	Cerus Corporation	Health Care	Biotechnology & Drugs	-8.9%	1.7%	-55	-49
CAE	06/10/05	18.8%	Cascade Corporation	Capital Goods	Misc. Capital Goods	-7.0%	4.8%	-6	-36
BEN	10/28/05	10.6%	Franklin Resources, Inc.	Financial	Investment Services	-2.2%	1.9%	-59	-35
APA	12/23/05	-0.3%	Apache Corporation	Energy	Oil & Gas Operations	-1.1%	2.3%	-30	-30
JOSB	01/06/06	0.0%	Jos. A. Bank Clothiers, Inc.	Services	Retail (Apparel)	0.0%	10.2%	-6	-28
DHI	11/18/05	7.0%	D.R. Horton Inc.	Capital Goods	Construction Services	-1.8%	4.3%	-22	-26
EXP	10/28/05	20.7%	Eagle Materials, Inc.	Capital Goods	Construction - Raw Materials	-0.5%	1.6%	-18	-25
SM	10/21/05	25.9%	St. Mary Land & Exploration Co.	Energy	Oil & Gas Operations	-1.1%	8.3%	-18	-16
CTX	10/28/05	16.6%	Centex Corporation	Capital Goods	Construction Services	-2.7%	3.5%	-17	-15
SFY	10/14/05