Fallback

Wiser Trader Stocks and Options Newsletter

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Issue No. 65 – February 6, 2006 Prescott, Arizona Systems@WiserTrader.com

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1.0 Trading

After two attempts at a break out, the market fell back into its 2-year rising wedge pattern.

1.1 Another Fallback

Recent market performance is illustrated by the S&P 500 Index in Figure 1. In spite of previous positive sentiment and good volume, the rising wedge pattern continues to hold.

FIGURE 1

© 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.

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. One objective is to find a parameter that describes how S&P 500 performance affects profits for the previous year. Currently we are tracking filter performance with the average S&P 500 Index value relative to its mean 200-day simple moving average (SMA) for the previous month. The correlation remains 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%
02/03/06	6.1%	+4.2%	34.8%	60.7%	11.5%	34.3%

1.3 Trailing Stop Settings

Another aspect of the study involves determining whether applying a fixed trailing stop setting to all the stocks in a portfolio has an advantage. Gains shown in Table 1 are for the case where no trailing stop was used. Table 2 shows how typical profits increase as the trailing stop is widened from -10% to -100%, essentially no stop setting at all. One factor in such performance is that the S&P 500 has been in a bull market over the past year, all be it with a saw tooth rising wedge pattern. Another factor is the quality of the filters themselves.

Yet another aspect of the study is to determine whether a fixed trailing stop setting - X% can be improved upon by applying a trailing stop to each individual stock based on its highest percentage gain. The variable value applied to stocks individually is,

Variable trailing stop percentage = Highest_%Gain / 3 - X%.

This effectively tightens the trailing stop as the stock price rises in order to preserve gains. In no case is the trailing stop allowed to narrow to a value tighter than -10%. Ironically, for the 1-year time periods checked so far, not using a trailing stop has resulted in better performance. The effect this has had on the study is unclear. However, using the growth-momentum filter for stocks priced from $15 to $40, a variable trailing stop was clearly superior to a fixed trailing stop over the past year. A variable trailing stop applied to individual stocks improved profits by up to 9%, as shown in Table 2 (the yellow column). The improvement is more likely when the trailing stop setting is narrower than -35%.

Table 2

1-Year Performance

Growth Momentum Filter for Stocks Priced from $15 to $40

Variable Trailing Stop Fixed Trailing Stop

Nominal Stop Loss Setting (-X%)	Avg Gain Using Variable Stop	Avg. Month that stop was triggered	Percent stopped out	Percent that Gained	Avg Gain Using Fixed Stop	Avg. Month that stop was triggered	Percent stopped out	Percent that Gained	Variable %Gain vs Fixed %Gain
-10	-4.9%	2.4	87.5%	12.5%	-8.6%	3.3	100.0%	18.8%	3.7%
-15	14.0%	4.8	68.8%	31.3%	5.1%	4.7	87.5%	31.3%	8.9%
-20	17.4%	4.3	56.3%	43.8%	13.9%	4.7	75.0%	43.8%	3.5%
-25	14.6%	4.8	50.0%	50.0%	12.9%	4.7	68.8%	50.0%	1.7%
-30	14.4%	5.3	43.8%	50.0%	8.7%	6.6	56.3%	43.8%	5.7%
-35	25.6%	4.5	18.8%	62.5%	21.7%	5.8	31.3%	62.5%	3.9%
-40	24.2%	5.0	18.8%	62.5%	25.4%	7.0	18.8%	62.5%	-1.1%
-50	33.0%	2.0	6.3%	75.0%	32.0%	4.5	12.5%	68.8%	0.9%
-60	32.7%	4.0	6.3%	75.0%	30.6%	6.0	12.5%	68.8%	2.0%
-70	34.8%	none	0.0%	75.0%	32.8%	8.00	6.3%	68.8%	2.0%
-80	34.8%	none	0.0%	75.0%	34.8%	none	0.0%	75.0%	0.0%
-90	34.8%	none	0.0%	75.0%	34.8%	none	0.0%	75.0%	0.0%
-100	34.8%	none	0.0%	75.0%	34.8%	none	0.0%	75.0%	0.0%

Applying trailing stops to individual stocks may seem like many details to keep track of, but not really. The easiest way is to put the data and formulas in a spreadsheet that automatically updates values from Yahoo and MSN. Based on the kind of results above and growing confidence in the four filters, a wide variable stop loss setting is applied individually to stocks in the stock advisory portfolio.

2.0 Market Analysis

The market quickly concluded that another rate hike was likely at the March 28 FOMC meeting. Hopes have gone that the Fed might have reached the end of the tightening cycle. Concerns that the Fed will raise rates even past the March 28 meeting accelerated as January employment data showed a 0.4% increase in hourly earnings for the second month in a row. The unemployment rate also fell to 4.7% from 4.9% in December. This was combined with a 0.6% decline in fourth quarter productivity, which will fail to moderate any inflationary impact of rising wages. The market is obsessed with inflation and slowed earnings for the coming year.

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 Industrial Index	-1.5%	-1.0%	2.2%	-2.7%	0.0%
NASDAQ Composite Index	-1.9%	-1.8%	2.5%	-3.0%	0.5%
NYSE Composite Index	-1.7%	-1.5%	1.8%	-2.0%	0.2%
S & P 500 Index	-0.4%	-1.2%	2.5%	-1.5%	-0.1%
Russell 2000 Index	3.6%	-1.1%	3.9%	-0.5%	1.3%
GLD, GOLD	5.2%	1.6%	0.8%	-0.4%	3.2%
RKH, Banking	-2.9%	-2.1%	3.5%	-3.5%	-0.7%
IYT, Transportation	0.9%	-1.0%	3.8%	0.0%	-1.7%
SMH, Semiconductors	-6.4%	-3.0%	2.2%	-5.2%	-0.5%
BBH, Biotechnology	-2.4%	1.1%	-0.5%	-1.6%	-1.4%
IYR, Real Estate	1.1%	-1.3%	3.0%	-0.3%	-0.1%
OIH, Oil	6.9%	-2.2%	0.8%	6.6%	1.7%
XLE, Energy	3.3%	-2.5%	0.4%	3.6%	1.9%
XLU, Utilities	-1.6%	-2.3%	-1.0%	1.6%	0.1%
XLB, Materials	-1.0%	-1.6%	4.9%	-1.5%	-2.6%
XLI, Industrial	-1.1%	-0.6%	2.1%	-2.1%	-0.5%
XLK, Technology	-3.3%	-2.0%	2.1%	-3.9%	0.6%
XLV, Healthcare	-1.7%	-0.9%	1.0%	-1.5%	-0.3%
XLF, Financials	-2.7%	-1.8%	2.7%	-3.7%	0.2%
XLP, Consumer Staples	-1.1%	-1.3%	1.6%	-1.3%	-0.1%
XLY, Consumer Discretionary	-0.6%	-0.9%	1.5%	-1.8%	0.7%

Market sentiment is shown in Table 2B.

Table 2B

Market Sentiment

Sentiment Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	13.0	12.0	14.6	< 20	> 50
VXN ***	17.5	17.3	19.5	< 30	> 70
Put/Call Ratio	0.698	0.592	0.692	< 0.6	> 0.7
%Bulls - %Bears	26.8%	28.4%	34.4%	> 29%	< 20%
Above 20 day SMA = Short-term sell signal. * Above 20 day SMA = Short-term sell signal.

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

FIGURE 1

3.0 Procedure

The following watch lists contain stock candidates for consideration. They are not necessarily trades. Categories include checklists 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 checklists 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	12.4%	0.1%	15.3%	1.2%	2.2%	4.0%	6.7%
Cash Rich Companies	10.6%	0.3%	0.4%	6.1%	4.7%	-7.6%	-1.8%
Price to Free Cash Flow	2.2%	-1.7%	-0.6%	-4.3%	7.5%	-4.8%	1.3%
Growth Momentum Stocks	13.3%	-0.9%	3.9%	-1.4%	4.9%	-0.8%	1.3%
Lynch Stocks	23.2%	-0.7%	-2.1%	-0.9%	2.2%	-2.6%	-0.8%
Buffett Stocks	18.3%	-0.1%	3.2%	-1.1%	4.4%	-1.0%	1.1%
Graham Stocks	10.6%	-1.0%	-0.9%	-2.7%	0.9%	0.4%	0.6%
Templeton Stocks	1.8%	-0.1%	-0.9%	-0.4%	1.1%	-2.0%	0.5%
Zweig Stocks	21.2%	-0.1%	5.9%	-1.1%	4.2%	0.4%	2.4%
Average Long Stocks	12.6%	-0.5%	2.7%	-0.5%	3.6%	-1.5%	1.3%

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	-7.8%	-1.8%	-69	-80
CWEI	12/09/05	0.0%	Clayton Williams Energy, Inc.	Energy	Oil & Gas Operations	-6.1%	-2.7%	-56	-77
MBRX	10/14/05	49.7%	Metabasis Therapeutics, Inc.	Health Care	Biotechnology & Drugs	-3.4%	-1.3%	-59	-75
IDMI	01/20/06	-3.5%	IDM Pharma Inc.	Health Care	Biotechnology & Drugs	-3.5%	-1.7%	-43	-72
NTOP	01/20/06	-0.5%	Net2Phone, Inc.	Services	Communications Services	-1.5%	-1.5%	-50	-67
SNSS	12/16/05	-0.4%	Sunesis Pharmaceuticals, Inc.	Health Care	Major Drugs	-10.3%	0.4%	-68	-66
NXTM	01/06/06	-3.8%	NxStage Medical, Inc.	Health Care	Biotechnology & Drugs	-8.0%	5.2%	-29	-56
MNKD	12/30/05	57.3%	MannKind Corporation	Health Care	Biotechnology & Drugs	-3.8%	-1.6%	-42	-55
AMIC	01/13/06	-1.4%	American Independence Corp.	Financial	Insurance (Miscellaneous)	-2.3%	0.4%	-47	-49
BDOG	12/16/05	19.6%	Big Dog Holdings, Inc.	Services	Retail (Apparel)	-5.9%	5.4%	-58	-41
ISO	01/20/06	0.0%	ISCO International, Inc.	Technology	Semiconductors	-4.9%	-4.9%	-22	-33
TRMA	01/06/06	21.1%	Trico Marine Services Inc	Energy	Oil Well Services & Equipment	-3.1%	-1.1%	-22	-33
XGEN	11/25/05	0.0%	Xenogen Corporation	Technology	Scientific & Technical Instruments	-9.4%	1.8%	-43	-29
MEAD	12/23/05	24.0%	Meade Instruments Corp.	Technology	Scientific & Technical Instruments	-3.8%	3.8%	-26	-27
SOMX	01/13/06	44.7%	Somaxon Pharmaceuticals, Inc.	Health Care	Biotechnology & Drugs	0.0%	4.1%	-38	-18
EQS	01/13/06	0.0%	Equus II Incorporated	Financial	Investment Services	0.0%	5.8%	-63	-16
VSTA	10/21/05	9.5%	VistaCare, Inc.	Health Care	Healthcare Facilities	-0.6%	2.9%	-8	-16
LXU	12/23/05	6.0%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	0.0%	8.5%	-4	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
HRAY	01/27/06	-2.5%	Hurray! Holding Co., Ltd. (ADR)	Services	Communications Services	-8.2%	-2.5%	-88	-89
EXAR	02/03/06	0.0%	Exar Corporation	Technology	Semiconductors	0.0%	-1.4%	-54	-58
WSC	07/01/05	7.8%	Wesco Financial Corporation	Conglomerates	Conglomerates	-0.5%	0.9%	-25	-34
CLCT	01/27/06	12.6%	Collectors Universe, Inc.	Services	Business Services	0.0%	12.6%	-36	-25
HIH	01/20/06	8.6%	Highland Hospitality Corporation	Services	Hotels & Motels	-2.6%	-0.4%	-13	-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	3.6%	FORD MOTOR	Consumer Cyclical	Auto & Truck Manufacturers	-7.5%	-4.5%	-46	-83
TEO	02/03/06	0.0%	Telecom Argentina S.A. (ADR)	Services	Communications Services	0.0%	-5.7%	-61	-81
BBI	01/20/06	2.8%	Blockbuster Inc.	Services	Recreational Activities	-5.7%	-2.7%	-41	-53

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
AZN	02/03/06	0.0%	AstraZeneca PLC (ADR)	Health Care	Major Drugs	0.0%	-3.2%	-87	-85
TMX	06/03/05	25.0%	Telefonos de Mexico, S.A. (ADR)	Services	Communications Services	-11.3%	-3.7%	-54	-78
CHL	03/18/05	39.7%	China Mobile (Hong Kong) Limited (ADR)	Services	Communications Services	-8.0%	-4.1%	-38	-76
TM	12/13/04	36.9%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	-5.1%	0.2%	-79	-56
KOF	04/29/05	29.7%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	-1.3%	-1.0%	-24	-36
BTI	08/12/05	13.4%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-1.5%	2.4%	-19	-17
SKM	02/07/05	17.8%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	0.0%	3.0%	-9	-6

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
MOT	12/09/05	-9.6%	Motorola, Inc.	Technology	Communications Equipment	-13.7%	-5.9%	-69	-96
BJS	11/04/05	7.8%	BJ Services Company	Energy	Oil Well Services & Equipment	-13.9%	-9.1%	-90	-95
ZIGO	12/09/05	3.5%	Zygo Corporation	Technology	Semiconductors	-3.7%	-3.7%	-70	-93
BEN	11/04/05	5.4%	Franklin Resources, Inc.	Financial	Investment Services	-4.8%	-4.8%	-64	-92
HCC	10/21/05	12.9%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	-6.6%	-1.1%	-79	-89
AHC	02/03/06	0.0%	Amerada Hess Corporation	Energy	Oil & Gas - Integrated	0.0%	-3.5%	-66	-86
VIP	12/09/05	2.9%	Vimpel-Communications (ADR)	Services	Communications Services	-6.3%	-1.1%	-54	-79
CTX	11/18/05	-6.9%	Centex Corporation	Capital Goods	Construction Services	-13.0%	-5.5%	-87	-79
ADTN	11/25/05	0.0%	ADTRAN, Inc.	Technology	Communications Equipment	-11.2%	-2.8%	-41	-61
LM	08/12/05	21.0%	Legg Mason, Inc.	Financial	Investment Services	-2.7%	-1.2%	-41	-57
BHP	09/09/05	20.9%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	-3.7%	-3.3%	-42	-54
SYT	04/08/05	21.6%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	-2.7%	2.6%	-30	-51
GOL	12/16/05	9.3%	GOL Linhas Aereas Inteligentes SA (ADR)	Transportation	Airline	-5.1%	-4.4%	-37	-49
CHE	05/06/05	33.3%	Chemed Corporation	Services	Business Services	-6.1%	-2.0%	-27	-43
ET	10/21/05	29.1%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	-2.9%	-1.1%	-30	-35
EXP	02/03/06	0.0%	Eagle Materials, Inc.	Capital Goods	Construction - Raw Materials	0.0%	-4.2%	-39	-29
UNH	04/15/05	27.8%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-6.5%	1.8%	-48	-12
PCU	12/02/05	31.5%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-0.5%	9.6%	-6	-8
OSK	03/12/05	38.2%	Oshkosh Truck Corporation	Consumer Cyclical	Auto & Truck Manufacturers	-0.6%	11.3%	-3	-7
WSO	11/25/05	16.7%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	0.0%	1.1%	-27	-6

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
ABFS	04/29/05	33.6%	Arkansas Best Corporation	Transportation	Trucking	-7.4%	-1.4%	-79	-97
EOG	02/03/06	0.0%	EOG Resources, Inc.	Energy	Oil & Gas Operations	0.0%	-1.6%	-67	-84
LNCR	12/27/04	-1.6%	Lincare Holdings Inc.	Health Care	Healthcare Facilities	-9.8%	-3.5%	-79	-83
ASH	10/28/05	19.8%	Ashland Inc.	Capital Goods	Construction Services	-3.2%	-2.8%	-64	-83
CCRT	12/30/05	2.2%	CompuCredit Corporation	Financial	Consumer Financial Services	-4.7%	-0.8%	-72	-81
MIK	10/14/05	5.8%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-14.6%	-4.3%	-62	-80
HDI	10/14/05	6.6%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-6.0%	-4.0%	-81	-78
DHI	10/21/05	14.5%	D.R. Horton Inc.	Capital Goods	Construction Services	-14.2%	-7.5%	-82	-72
DSPG	02/07/05	10.3%	DSP Group, Inc.	Technology	Communications Equipment	-8.3%	-3.6%	-62	-72
SPF	02/03/06	0.0%	Standard Pacific Corp.	Capital Goods	Construction Services	0.0%	-7.1%	-49	-67
FNF	10/21/05	4.8%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-3.1%	-2.3%	-56	-65
MDC	01/20/06	-3.7%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	-3.7%	-1.8%	-83	-55
RCII	10/21/05	26.9%	Rent-A-Center, Inc	Services	Rental & Leasing	-0.9%	0.9%	-47	-54
APA	02/03/06	0.0%	Apache Corporation	Energy	Oil & Gas Operations	0.0%	2.9%	-40	-36
RI	09/02/05	31.9%	Ruby Tuesday, Inc.	Services	Restaurants	-1.8%	-1.8%	-29	-34
NKE	09/23/05	3.0%	NIKE, Inc.	Consumer Cyclical	Footwear	-8.5%	0.6%	-45	-32
RS	04/15/05	112.5%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-1.5%	1.1%	-16	-31
MTH	01/27/06	-1.1%	Meritage Homes Corporation	Capital Goods	Construction Services	-1.1%	-1.1%	-55	-30
NUE	04/15/05	69.4%	Nucor Corporation	Basic Materials	Iron & Steel	-3.4%	-3.4%	-33	-27
STLD	12/16/05	29.7%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	-4.0%	-0.9%	-21	-21
BTI	12/30/05	1.5%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-0.5%	2.4%	-19	-17
THO	04/15/05	61.7%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	0.0%	2.2%	-34	-17
PSUN	12/09/05	-0.4%	Pacific Sunwear of CA	Services	Retail (Apparel)	-1.9%	2.4%	-13	-16
ACS	04/29/05	31.2%	Affiliated Computer Services, Inc.	Technology	Computer Services	-1.2%	-1.2%	-9	-12
AH	02/03/06	0.0%	Armor Holdings, Inc.	Capital Goods	Aerospace and Defense	0.0%	7.9%	-26	-8

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
PNW	01/10/05	-4.3%	Pinnacle West Capital	Utilities	Electric Utilities	-11.1%	-5.2%	-85	-98
KEP	01/10/05	71.1%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-6.3%	-4.3%	-36	-98
OKE	11/11/05	0.1%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-8.3%	-4.0%	-78	-96
WPS	02/07/05	2.9%	WPS Resources Corp	Utilities	Electric Utilities	-10.9%	-7.5%	-83	-94
PGN	01/10/05	-2.7%	Progress Energy, Inc.	Utilities	Electric Utilities	-6.3%	-1.7%	-61	-83
SRE	01/10/05	30.1%	Sempra Energy	Utilities	Natural Gas Utilities	-2.5%	-2.5%	-62	-82
CPK	05/06/05	19.7%	Chesapeake Utilities	Utilities	Natural Gas Utilities	-11.6%	-0.4%	-65	-80
ATO	04/01/05	-3.0%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-12.3%	-0.9%	-74	-77
UU	06/10/05	0.3%	United Utilities PLC (ADR)	Utilities	Electric Utilities	-1.9%	-0.8%	-4	-58
ATG	10/21/05	7.5%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-2.1%	-1.8%	-62	-51
WGL	12/23/05	1.0%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	-1.3%	-1.2%	-16	-46
UGI	12/30/05	4.6%	UGI Corporation	Utilities	Natural Gas Utilities	-3.8%	-1.7%	-50	-38

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	2.2%	Williams-Sonoma, Inc.	Services	Retail (Specialty Non-Apparel)	-14.0%	-4.6%	-85	-94
GISX	12/30/05	1.3%	Global Imaging Systems, Inc.	Technology	Office Equipment	-4.6%	-1.9%