Templates

Text Box: Wiser Trader Stocks and Options Newsletter
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Issue No. 61 – January 16, 2006 Prescott, Arizona Systems@WiserTrader.com

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1.0 Trading

Once the concept of the trading template is mastered, it becomes easier to develop a trading system of your own.

1.1 Trading Templates

A template is a procedure for applying technical indicators to trading stocks and options that have been selected by a filtering process. Each template exists for a specific technical formation and, together with a filtering process, forms the major portion of a trading system. Usually the simpler templates are, the easier they are to use. Simple templates have three parts, (1) recognition of a technical chart formation, (2) a trigger indicator that signals the condition for a trade and (3) a confirmation indicator that signals the timing for a trade. One type of trading system that makes the concept of templates easy to understand is that of a trend following system. The technical chart formation used in a trend following system is, as you might guess, trend identification. The acronym TTC is used to identify a trend-trigger-confirmation trading template. The key to understanding the use of a template is that its three components are applied sequentially because not all three components are likely to occur at the same time. This particularly applies to the trigger and confirmation. One will notice how the filter and the components of a template fit together to form a unified logical whole.

For a trend following system, growth-momentum stocks are selected using objective criteria to maximize the likelihood they will increase in price. To this end, the Cooper filtering criteria has been discussed frequently in this newsletter and is found on the website. This filter uses the fact that stocks selected are (a) the fastest rising stocks in the NASDAQ and NYSE, (b) are near their 52 week highs, (c) have superior earnings growth and (d) are in a leading industry. This filter sharply reduces the number of stocks under consideration. Selection of stocks priced at a minimum of $50 further guarantees that only top quality stocks are being considered.

© 2005 WiserTrader.com, LLC. Members of wisertrader.com are neither licensed brokers nor licensed advisors. Trades discussed represent recommendations made by the editor for the wisertrader.com portfolio. The newsletter and web site are for information only and should not be considered as personal advice. While it is believed that the posted information is factual, mistakes can be made in transcription. Investors should trade stocks only after verifying all information and consulting with a licensed broker or adviser. WiserTrader.commarkets third party trading systems but has no other affiliation with trading system companies.

Once a group of stocks has been identified, each stock is checked to see if it meets trend requirements. A refinement of the Cooper trend screen is to require that the 30 or 40 day simple moving average (SMA) has a prescribed minimum slope of say, 5% over a 4 week period or 0.25% from day to day. Alexander Elder defines an uptrend based on two successive MACD histogram bars increasing in height. When one’s trading time frame is a few days, a weekly MACD histogram is used. When the trading time frame is weeks, a monthly MACD histogram is used. Almost any trend identification system can be used as long as it matches the trading time frame and style of one’s trading. If the trend screening criterion is not met, the stock is eliminated for current consideration.

For stocks that passed the trend test, now is a most import screen that protects the trader from a basic fallacy of human nature. We are naturally attracted to rising prices and our first impulse is to buy a stock just because it is in an uptrend. But even when stocks are trending they tend to oscillate, within a range, on either side of a mean tendency. If we buy on the high side of a range, it makes us nervous when the stock moves toward the lower side of the range. Although it is still trending in the same direction, it is painful to experience such movement and it may force us out of the stock, only to watch it move upward again. For this situation we use an oscillating trigger to buy the stock when it is rising from the lower portion of the range. The 5 period slow stochastic and the 10 period Williams %R indicators are good for triggering a buy. Either oscillator indicates a buy trigger when it reaches an extreme oversold condition. The slow stochastic triggers a buy condition when it reaches a value of 20 or less and then begins to rise. The Williams %R triggers a buy condition when it reaches a value of -80. These two are not the only oscillating triggers that can be used. Both can be easily applied to stock charts, along with simple moving averages of any composition at Bigcharts.com.

But wait! Just because we have a trend and a trigger, it does not mean that it its time to trade. We need confirmation that it is time to trade by seeing the stock, and indeed the major averages, moving in the proper direction. Unless there is an exceptional news release, the majority of a stock’s price movement can be attributed to recent and current movement of the major averages. Remember that this is a trend following system and crowd psychology plays an important role. We want to trade with the market trend as much as possible. One Cooper confirmation waits for the stock price to rise above its 7 day SMA. When used with the Williams %R it is called a TTC-A template. Another Cooper confirmation waits for the fast MACD line to cross above the slow MACD line. When used with the slow stochastic it is called a TTC-B template. Alexander Elder’s confirmation waits for the price to move above the previous closing price on whatever time scale one is trading. His method is named the Triple Screen template. Remember that the confirmation comes sequentially after the trigger. Once the confirmation occurs, the trigger oscillator is most likely no longer in an oversold condition.

All of these templates rely on the concepts of trend, trigger and confirmation. Notice how the three elements, along with the filter, logically reinforce one another. Each template is simple and taken as a whole, quite elegant. These are just a few of the many templates in existence. Each of the 63 technical formations found in The Encyclopedia of Chart Patterns by Bulkowski has a trading template for buying, as well as, for selling. The logistics of combining elements of a trading system can vary widely in terms of ease of use, cost and speed. The 3 step sequential process of a using a template automatically reduces the number of stocks being considered for actual trades. After trading a dozen or so times with a standard template, it becomes apparent how it should be adjusted to fit your trading personality.

2.0 Market Analysis

The market again finds itself at the beginning of another earnings season. It is typically choppy for the first three weeks of earnings season without much direction. Expectations are for earnings to be up about 13% over the previous year but with lowered projections further earnings in 2006. Precious metals and energy can expect a near term rise due to geopolitical concerns and colder weather. This implies a flat to downward bias for the broader market.

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	0.8%	0.0%	2.3%	-1.5%	0.1%
NASDAQ	2.9%	0.5%	4.5%	-2.0%	-0.1%
S & P 500	1.6%	0.2%	3.0%	-1.6%	0.1%
Russell 2000	3.7%	1.3%	3.9%	-1.9%	0.5%
GLD, GOLD	10.7%	3.2%	4.1%	2.9%	0.1%
RKH, Banking	-0.8%	-0.7%	2.2%	-2.3%	0.0%
IYT, Transportation	-0.5%	-1.7%	0.2%	-1.7%	2.7%
SMH, Semiconductors	3.8%	-0.5%	8.2%	-3.1%	-0.6%
BBH, Biotechnology	-0.6%	-1.4%	0.5%	-2.0%	2.3%
IYR, Real Estate	1.7%	-0.1%	4.8%	-1.8%	-1.1%
OIH, Oil	9.2%	1.7%	8.7%	-2.5%	1.4%
XLE, Energy	6.6%	1.9%	6.3%	-1.8%	0.4%
XLU, Utilities	-0.3%	0.1%	2.5%	-1.4%	-1.5%
XLB, Materials	2.6%	-2.6%	3.7%	-0.8%	2.4%
XLI, Industrial	-0.2%	-0.5%	1.1%	-1.3%	0.5%
XLK, Technology	2.6%	0.6%	5.3%	-2.3%	-0.8%
XLV, Healthcare	2.4%	-0.3%	2.6%	-1.8%	1.9%
XLF, Financials	1.7%	0.2%	2.5%	-1.6%	0.7%
XLP, Consumer Staples	-1.3%	-0.1%	0.9%	-1.6%	-0.5%
XLY, Consumer Discretionary	0.4%	0.7%	2.1%	-1.3%	-1.0%

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	6.6%	1.0%	10.8%	5.1%	2.8%	0.7%	2.2%
Cash Rich Companies	0.0%	-0.9%	12.3%	-3.9%	8.9%	0.1%	7.2%
Price to Free Cash Flow	15.5%	-0.1%	12.0%	3.6%	10.1%	-0.3%	-1.7%
Growth Momentum Stocks	12.9%	-0.1%	4.9%	1.1%	4.3%	-1.4%	1.0%
Lynch Stocks	28.5%	0.3%	4.3%	-0.4%	3.9%	-0.7%	1.4%
Buffett Stocks	19.7%	0.0%	3.2%	0.5%	3.0%	-1.0%	0.8%
Graham Stocks	12.2%	0.2%	0.6%	0.6%	2.8%	-1.5%	-1.3%
Templeton Stocks	4.0%	-0.2%	-1.6%	0.1%	0.4%	-0.9%	-1.2%
Zweig Stocks	19.6%	0.4%	4.3%	2.8%	3.6%	-1.7%	-0.4%
Average Long Stocks	13.2%	0.1%	5.6%	1.1%	4.4%	-0.7%	0.9%

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
SNSS	12/16/05	4.9%	Sunesis Pharmaceuticals, Inc.	Health Care	Major Drugs	-5.5%	-5.5%	-92	-92
XGEN	11/25/05	0.0%	Xenogen Corporation	Technology	Scientific & Technical Instruments	-9.4%	0.7%	-75	-66
MEMY	12/30/05	-3.5%	Memory Pharmaceuticals Corp.	Health Care	Biotechnology & Drugs	-3.5%	-1.3%	-62	-63
NXTM	01/06/06	-3.8%	NxStage Medical, Inc.	Health Care	Biotechnology & Drugs	-8.0%	-3.8%	-57	-57
MMLP	11/25/05	0.0%	Martin Midstream Partners L.P.	Transportation	Water Transportation	-7.6%	1.9%	-46	-46
LXU	12/23/05	-3.9%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	-8.7%	-2.2%	-48	-39
VSTA	10/21/05	5.0%	VistaCare, Inc.	Health Care	Healthcare Facilities	-4.2%	0.3%	-33	-35
CLRT	11/18/05	2.4%	Clarient, Inc.	Technology	Scientific & Technical Instruments	-10.6%	5.0%	-42	-35
OTL	01/13/06	0.0%	Octel Corp.	Basic Materials	Chemical Manufacturing	0.0%	-0.9%	-30	-30
CRYO	11/25/05	0.0%	CryoCor, Inc.	Health Care	Medical Equipment & Supplies	-5.6%	2.6%	-24	-24
EQS	01/13/06	0.0%	Equus II Incorporated	Financial	Investment Services	0.0%	0.2%	-15	-22
SOMX	01/13/06	0.0%	Somaxon Pharmaceuticals, Inc.	Health Care	Biotechnology & Drugs	0.0%	26.9%	-21	-21
MEAD	12/23/05	9.5%	Meade Instruments Corp.	Technology	Scientific & Technical Instruments	0.0%	0.7%	-16	-16
AMIC	01/13/06	0.0%	American Independence Corp.	Financial	Insurance (Miscellaneous)	0.0%	5.2%	-13	-15
BDOG	12/16/05	12.8%	Big Dog Holdings, Inc.	Services	Retail (Apparel)	0.0%	1.7%	-13	-14
MBRX	10/14/05	54.3%	Metabasis Therapeutics, Inc.	Health Care	Biotechnology & Drugs	0.0%	10.9%	-9	-9
MNKD	12/30/05	28.9%	MannKind Corporation	Health Care	Biotechnology & Drugs	0.0%	14.1%	-4	-4
CWEI	12/09/05	0.0%	Clayton Williams Energy, Inc.	Energy	Oil & Gas Operations	0.0%	11.7%	-2	-2
TRMA	01/06/06	17.5%	Trico Marine Services Inc	Energy	Oil Well Services & Equipment	0.0%	17.5%	-2	-2

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	6.0%	Wesco Financial Corporation	Conglomerates	Conglomerates	-1.8%	-1.4%	-82	-82
CLCT	01/13/06	0.0%	Collectors Universe, Inc.	Services	Business Services	0.0%	-3.9%	-59	-59

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	7.3%	FORD MOTOR	Consumer Cyclical	Auto & Truck Manufacturers	-4.3%	0.4%	-31	-32
PBR	11/25/05	23.7%	Petroleo Brasileiro S.A. (ADR)	Energy	Oil & Gas - Integrated	-0.2%	6.9%	-11	-14

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
TM	12/13/04	39.0%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	-3.6%	-2.8%	-88	-90
TMX	06/03/05	35.2%	Telefonos de Mexico, S.A. (ADR)	Services	Communications Services	-4.0%	-2.6%	-66	-66
CHL	03/18/05	49.3%	China Mobile (Hong Kong) Limited (ADR)	Services	Communications Services	-1.6%	2.9%	-53	-58
BTI	08/12/05	11.1%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-3.5%	-1.8%	-55	-55
KOF	04/29/05	27.7%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	-1.2%	0.2%	-17	-20
SKM	02/07/05	8.8%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	-5.2%	2.0%	-2	-2

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
ENDP	11/18/05	1.1%	Endo Pharmaceuticals	Health Care	Biotechnology & Drugs	-7.6%	-6.5%	-95	-95
UNH	04/15/05	30.7%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-4.5%	-3.1%	-62	-62
CHE	05/06/05	32.9%	Chemed Corporation	Services	Business Services	-6.4%	-5.2%	-60	-60
BJS	11/04/05	13.5%	BJ Services Company	Energy	Oil Well Services & Equipment	-2.6%	-1.5%	-37	-53
GOL	12/16/05	-2.0%	GOL Linhas Aereas Inteligentes SA (ADR)	Transportation	Airline	-9.2%	-1.7%	-56	-51
SYT	04/08/05	19.9%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	-1.4%	-0.4%	-38	-49
PCU	12/02/05	5.8%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-4.8%	1.5%	-44	-45
BEN	11/04/05	7.5%	Franklin Resources, Inc.	Financial	Investment Services	-1.6%	2.3%	-35	-35
MOT	12/09/05	2.6%	Motorola, Inc.	Technology	Communications Equipment	-2.0%	-1.3%	-29	-31
BHP	09/09/05	13.6%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	-1.3%	0.3%	-19	-28
CTX	11/18/05	4.5%	Centex Corporation	Capital Goods	Construction Services	-2.3%	4.2%	-23	-23
VIP	12/09/05	9.8%	Vimpel-Communications (ADR)	Services	Communications Services	0.0%	4.5%	-23	-23
LM	08/12/05	17.5%	Legg Mason, Inc.	Financial	Investment Services	-1.7%	5.0%	-22	-22
ADTN	11/25/05	0.0%	ADTRAN, Inc.	Technology	Communications Equipment	-2.7%	3.7%	-20	-20
ET	10/21/05	25.0%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	-0.1%	0.2%	-13	-13
AMTD	10/28/05	26.5%	Ameritrade Holding Corp.	Financial	Investment Services	-0.4%	3.7%	-12	-13
OSK	03/12/05	21.3%	Oshkosh Truck Corporation	Consumer Cyclical	Auto & Truck Manufacturers	-0.2%	3.1%	-12	-12
ZIGO	12/09/05	2.8%	Zygo Corporation	Technology	Semiconductors	-0.3%	6.5%	-9	-11
HCC	10/21/05	16.8%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	-3.4%	2.8%	-11	-11
WSO	11/25/05	7.7%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	-1.8%	3.0%	-8	-9

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
NKE	09/23/05	6.1%	NIKE, Inc.	Consumer Cyclical	Footwear	-5.7%	0.5%	-70	-70
PSUN	12/09/05	-5.3%	Pacific Sunwear of CA	Services	Retail (Apparel)	-6.7%	-1.9%	-68	-68
ACS	04/29/05	26.5%	Affiliated Computer Services, Inc.	Technology	Computer Services	-2.7%	-2.7%	-56	-68
FOSL	12/02/05	9.2%	Fossil, Inc.	Consumer Cyclical	Jewelry & Silverware	-4.5%	-3.0%	-66	-66
NUE	04/15/05	42.4%	Nucor Corporation	Basic Materials	Iron & Steel	-4.1%	-3.4%	-54	-63
PGR	12/27/04	38.6%	The Progressive Corp.	Financial	Insurance (Property & Casualty)	-5.8%	0.4%	-60	-60
RS	04/15/05	68.8%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-3.4%	2.7%	-52	-56
RI	09/02/05	22.4%	Ruby Tuesday, Inc.	Services	Restaurants	-2.0%	-2.0%	-55	-55
BTI	12/30/05	-0.6%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-2.5%	-1.8%	-55	-55
LNCR	12/27/04	1.9%	Lincare Holdings Inc.	Health Care	Healthcare Facilities	-6.6%	-1.3%	-48	-48
MIK	10/14/05	8.1%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-12.8%	2.1%	-55	-47
HDI	10/14/05	7.4%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-5.2%	1.4%	-44	-44
STLD	12/16/05	6.2%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	-1.3%	-0.5%	-39	-39
EASI	09/09/05	24.8%	Engineered Support System	Capital Goods	Misc. Capital Goods	-0.6%	0.6%	-38	-38
TOL	12/16/05	1.0%	Toll Brothers, Inc.	Capital Goods	Construction Services	-5.4%	1.4%	-36	-36
THO	04/15/05	57.2%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	-2.2%	1.0%	-30	-32
FNF	10/21/05	3.1%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-4.7%	0.7%	-26	-26
DHI	10/21/05	29.9%	D.R. Horton Inc.	Capital Goods	Construction Services	-2.7%	8.1%	-21	-21
CCRT	12/30/05	6.1%	CompuCredit Corporation	Financial	Consumer Financial Services	-1.0%	-0.1%	-18	-18
ABFS	04/29/05	43.8%	Arkansas Best Corporation	Transportation	Trucking	-0.4%	1.6%	-14	-14
ASH	10/28/05	20.9%	Ashland Inc.	Capital Goods	Construction Services	-0.3%	0.9%	-8	-8
DSPG	02/07/05	7.8%	DSP Group, Inc.	Technology	Communications Equipment	-0.8%	0.6%	-7	-7
RCII	10/21/05	25.5%	Rent-A-Center, Inc	Services	Rental & Leasing	0.0%	7.0%	-1	-1

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	-2.6%	Progress Energy, Inc.	Utilities	Electric Utilities	-6.2%	-1.2%	-85	-85
PNW	01/10/05	-3.2%	Pinnacle West Capital	Utilities	Electric Utilities	-10.1%	-2.6%	-64	-76
ATO	04/01/05	-1.2%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-10.6%	-0.7%	-38	-49
UU	06/10/05	-1.9%	United Utilities PLC (ADR)	Utilities	Electric Utilities	-4.1%	1.1%	-40	-46
ATG	10/21/05	7.8%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-1.9%	0.0%	-35	-41
WPS	02/07/05	10.0%	WPS Resources Corp	Utilities	Electric Utilities	-4.8%	-0.3%	-32	-36
WGL	12/23/05	0.3%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	-0.5%	-0.5%	-28	-28
KEP	01/10/05	70.3%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-2.1%	1.6%	-27	-28
UGI	12/30/05	8.1%	UGI Corporation	Utilities	Natural Gas Utilities	-0.6%	4.3%	-22	-26
SRE	01/10/05	30.6%	Sempra Energy	Utilities	Natural Gas Utilities	-0.6%	0.5%	-13	-15
OKE	11/11/05	5.9%	ONEOK, Inc.	Utilities	Natural Gas Utilities	0.0%	2.3%	-6	-7
CPK	05/06/05	21.9%	Chesapeake Utilities	Utilities	Natural Gas Utilities	-9.9%	2.8%	-7	-7

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
WSM	09/02/05	10.3%	Williams-Sonoma, Inc.	Services	Retail (Specialty Non-Apparel)	-7.2%	-1.5%	-99	-99
EDMC	12/16/05	-3.1%	Education Management Corp	Services	Schools	-4.0%	-1.3%	-87	-85
DGX	08/19/05	1.6%	Quest Diagnostics Incorporated	Health Care	Healthcare Facilities	-3.3%	-2.4%	-83	-83
KSWS	12/30/05	-6.1%	K-Swiss Inc.	Consumer Cyclical	Footwear	-6.1%	0.2%	-82	-82
CAKE	10/21/05	6.2%	The Cheesecake Factory Incorporated	Services	Restaurants	-4.9%	-1.8%	-80	-77
AMSG	10/14/05	-2.4%	AmSurg Corp.	Health Care	Healthcare Facilities	-7.8%	-2.1%	-77	-77
SNV	05/27/05	-8.4%	Synovus Financial Corp.	Financial	Regional Banks	-10.5%	-2.2%	-76	-76
SFG	05/27/05	33.1%	StanCorp Financial Group, Inc.	Financial	Insurance (Life)	-5.7%	-0.5%	-68	-68
HHS	10/28/05	3.8%	Harte-Hanks, Inc.	Services	Printing & Publishing	-1.7%	-1.6%	-67	-67
CHD	11/18/05	-0.7%	Church & Dwight Co., Inc.	Consumer Non-Cyclical	Personal & Household Products	-2.1%	-0.3%	-60	-65
UNH	12/30/05	-1.9%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-3.1%	-3.1%	-62	-62
MIK	12/30/05	-4.8%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-4.8%	2.1%	-55	-47
EWBC	12/30/05	2.0%	East West Bancorp, Inc.	Financial	Regional Banks	-0.5%	1.1%	-34	-40
EASI	06/03/05	19.6%	Engineered Support System	Capital Goods	Misc. Capital Goods	-0.6%	0.6%	-38	-38
LOW	11/18/05	0.4%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-4.6%	2.4%	-40	-38
TOL	12/09/05	7.2%	Toll Brothers, Inc.	Capital Goods	Construction Services	-5.4%	1.4%	-36	-36
MDC	12/30/05	5.2%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	-2.5%	1.1%	-35	-35
SPF	01/13/06	0.0%	Standard Pacific Corp.	Capital Goods	Construction Services	0.0%	5.9%	-28	-28
GISX	12/30/05	5.2%	Global Imaging Systems, Inc.	Technology	Office Equipment	0.0%	2.4%	-12	-12
CPS	05/27/05	13.3%	ChoicePoint Inc.	Services	Business Services	-0.4%	1.1%	-10	-10

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
STRA	01/13/06	0.0%	Strayer Education, Inc.	Services	Schools	0.0%	-4.3%	-97	-97
ESI	11/04/05	-3.2%	ITT Educational Services	Services	Schools	-8.3%	-2.6%	-95	-95
EXP	10/28/05	18.5%	Eagle Materials, Inc.	Capital Goods	Construction - Raw Materials	-3.7%	-1.9%	-86	-86
POOL	06/10/05	7.4%	SCP Pool Corporation	Consumer Cyclical	Recreational Products	-7.6%	0.4%	-49	-49
MCO	07/29/05	35.7%	Moody's Corporation	Services	Business Services	-2.2%	1.2%	-33	-36
BEN	10/28/05	13.2%	Franklin Resources, Inc.	Financial	Investment Services	-1.6%	2.3%	-35	-35
BR	12/02/05	18.9%	Burlington Resources Inc.	Energy	Oil & Gas Operations	-0.1%	0.3%	-28	-33
APA	12/23/05	1.5%	Apache Corporation	Energy	Oil & Gas Operations	0.0%	1.8%	-19	-27

Sentiment Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	11.2	11.0	12.1	< 20	> 50
VXN ***	15.3	15.0	14.3	< 30	> 70
Put/Call Ratio	0.586	0.583	0.503	< 0.6	> 0.7
%Bulls - %Bears	34.7%	32.0%	39.6%	> 29%	< 20%
Above 20 day SMA = Short term sell signal. * Above 20 day SMA = Short term sell signal.