Wiser Trader Stocks and Options Newsletter

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Issue No. 70   March 20, 2006 Prescott, Arizona Systems@WiserTrader.com

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1.0 Trading

      How far can this rally go without the NASDAQ?

1.1 NASDAQ

        The DOW and the NYSE Composite have broken upward out of their two-year rising wedge patterns.  The S&P 500 and the Russell 2000 are both at the top of their two-year patterns as if ready to break out.  However, the NASDAQ continues to move sideways, as shown in Figure 1. 

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.

      Technology stocks represent the main providers of innovation and increased productivity.  The NASDAQ is not usually a follower.  Typically, it leads the direction of the major indices.  It remains to be seen whether it will make a dramatic move upward in the near future or serve as a moderating factor for the market as a whole.

2.0 Market Analysis

      Overall, it was a positive week with broad based gains.  Market sentiment is upbeat in the belief that the Fed will not raise rates too far, and endanger economic and earnings growth. 

      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 Housing 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%	1.8%	0.5%	-0.4%	-0.5%
NASDAQ Composite Index	1.1%	2.0%	-1.8%	0.7%	0.2%
NYSE Composite Index	1.6%	2.0%	-0.5%	-0.2%	0.2%
S & P 500 Index	2.2%	2.4%	-0.5%	-0.1%	0.4%
Russell 2000 Index	2.1%	2.7%	-1.6%	0.2%	0.8%
HGX, Phil. Housing Index	4.1%	7.4%	-2.2%	-3.1%	2.4%
IYR, Real Estate	7.2%	4.4%	2.7%	-0.6%	0.6%
GLD, GOLD	0.3%	2.4%	-4.4%	1.2%	1.2%
RKH, Banking	2.3%	2.0%	0.2%	-1.9%	2.0%
IYT, Transportation	3.7%	2.4%	-1.1%	1.5%	0.9%
SMH, Semiconductors	-6.2%	-1.1%	-5.3%	2.7%	-2.5%
BBH, Biotechnology	1.6%	3.8%	-1.5%	-1.4%	0.9%
OIH, Oil	3.4%	5.1%	-6.1%	2.2%	2.5%
XLE, Energy	1.2%	4.4%	-5.1%	0.9%	1.2%
XLU, Utilities	-0.5%	1.4%	-1.8%	-0.7%	0.7%
XLB, Materials	1.7%	2.8%	-1.4%	0.1%	0.2%
XLI, Industrial	3.8%	2.9%	0.3%	0.2%	0.4%
XLK, Technology	0.8%	1.8%	-1.3%	1.4%	-1.0%
XLV, Healthcare	0.1%	0.9%	0.2%	-1.0%	0.0%
XLF, Financials	2.1%	1.4%	0.4%	-1.1%	1.4%
XLP, Consumer Staples	1.4%	-0.8%	2.5%	-0.5%	0.2%
XLY, Consumer Discretionary	1.2%	2.0%	-0.4%	0.1%	-0.5%

Table 2B

Volatility

Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	12.1	11.9	12.0	< 20	> 50
VXN ***	15.4	17.6	16.3	< 30	> 70
**   Above 20 day SMA = Short-term sell signal. *** Below 20 day SMA = Short-term buy signal.

      Figure 2 compares the major averages with key ETF’s and Sector SPDR’s.

FIGURE 2

Table 2C

Market Summary

 Major Indices 
 For the Past Week:
 Dow Jones     +1.8%
 NASDAQ        +2.0%
 S&P500 Index  +2.0%
 Russell 2000  +2.7%
 NYSE          +2.4%
 
 30 Year Bond 4.717%
 10 Year Note 4.674%
 
 Leading Industries
 For the Past Week:
 Platinum & Precious Metals 
 Nonferrous Metals 
 Home Construction 
 Real Estate Holding & Develop 
 General Mining 
 Railroads 
 Business Training & Employment 
 Commercial Vehicles & Trucks 
 Exploration & Production 
 Industrial Engineering                   
 
 Lagging Industries
 For the Past Week:
 Nondurable Household Products 
 Automobiles 
 Household Goods 
 Consumer Finance 
 Marine Transportation 
 Trucking 
 Distillers & Vintners 
 Semiconductors 
 Publishing 
 Personal & Household Goods          
 
 Leading Industries
 For the Past Month:
 Platinum & Precious Metals 
 Steel 
 Consumer Electronics 
 Real Estate Investment Trusts 
 Real Estate Holding & Develop 
 Industrial Machinery 
 Coal 
 Defense 
 Industrial Metals 
 Industrial Engineering       
 
 Lagging Industries
 For the Past Month:
 Tires 
 Semiconductors 
 Gold Mining 
 Automobiles 
 Recreational Services 
 Specialized Consumer Services 
 Internet 
 Reinsurance 
 Medical Equipment 
 Aluminum                       
 
 Crude Oil $64.27
 
 Gold for the past 30 days:
 USD    +1.91%
 CAD    +0.67%
 CHF    +2.45%
 GBP    +2.15%
 EUR    +1.06%
 JPY    +2.34%

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 28-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.

      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. 

      A column labeled “Monthly % Gain” was added to show the inverse relationship between price action over the past month and the Williams %R.  The change from a 10-period Williams %R with a weekly percent change to a 28-period Williams %R with a monthly percent change was done to reflect a longer term view.

      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	11.1%	1.7%	9.2%	8.0%	-1.4%	1.8%	0.7%
Cash Rich Companies	1.0%	0.5%	-1.5%	1.0%	-2.4%	1.1%	-1.3%
Price to Free Cash Flow	6.2%	-0.4%	11.8%	1.6%	4.6%	4.8%	0.5%
Growth Momentum Stocks	14.0%	0.6%	4.7%	5.2%	-3.5%	0.9%	2.3%
Lynch Stocks	24.1%	0.0%	6.6%	1.6%	1.0%	1.1%	2.7%
Buffett Stocks	22.6%	0.5%	4.8%	2.1%	-0.5%	0.9%	2.2%
Graham Stocks	11.0%	0.1%	-0.3%	2.0%	-1.2%	-1.6%	0.6%
Templeton Stocks	5.8%	0.7%	2.5%	2.1%	-0.2%	-0.9%	1.6%
Zweig Stocks	13.2%	-0.3%	3.4%	2.4%	-1.4%	0.3%	2.3%
Average Long Stocks	12.1%	0.4%	4.6%	2.9%	-0.6%	0.9%	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	Monthly % Gain	%R1	%R2
NXTM	03/17/06	0.0%	NxStage Medical, Inc.	Health Care	Biotechnology & Drugs	0.0%	-4.3%	-85	-89
RGN	03/17/06	0.0%	RegeneRx Biopharmaceut.	Health Care	Biotechnology & Drugs	0.0%	-4.4%	-71	-71
FVRL	03/17/06	0.0%	Favrille, Inc.	Health Care	Biotechnology & Drugs	0.0%	15.5%	-45	-45
MBRX	03/10/06	0.0%	Metabasis Therapeutics, Inc.	Health Care	Biotechnology & Drugs	-0.8%	-0.4%	-41	-45
MMLP	11/25/05	0.0%	Martin Midstream Partners L.P.	Transportation	Water Transportation	-1.7%	6.9%	-33	-33
TXCC	03/10/06	24.6%	TranSwitch Corporation	Technology	Semiconductors	0.0%	17.0%	-6	-8
VSTA	10/21/05	16.8%	VistaCare, Inc.	Health Care	Healthcare Facilities	0.0%	10.3%	-4	-4
SNSS	12/16/05	46.5%	Sunesis Pharmaceuticals, Inc.	Health Care	Major Drugs	0.0%	35.4%	-2	-2
LXU	12/23/05	11.7%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	0.0%	6.6%	-1	-1

      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	Monthly % Gain	%R1	%R2
CLCT	03/10/06	0.1%	Collectors Universe, Inc.	Services	Business Services	0.0%	-10.5%	-82	-82
WSC	03/11/06	-0.1%	Wesco Financial Corporation	Conglomerates	Conglomerates	-0.1%	1.9%	-45	-45
EDGW	03/10/06	2.9%	Edgewater Technology Inc.	Technology	Computer Services	0.0%	3.9%	-28	-28

      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	Monthly % Gain	%R1	%R2
KWD	03/04/06	6.2%	Kellwood Company	Consumer Cyclical	Apparel/Accessories	-0.8%	11.8%	-6	-9

      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	Monthly % Gain	%R1	%R2
SKM	02/07/05	16.1%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	-4.7%	-1.3%	-69	-69
KOF	04/29/05	35.1%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	-1.0%	3.7%	-26	-26
TM	12/13/04	44.3%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	-0.5%	-0.3%	-9	-9
AZN	02/03/06	8.7%	AstraZeneca PLC (ADR)	Health Care	Major Drugs	-0.5%	12.9%	-9	-9
PKX	02/17/06	12.8%	POSCO (ADR)	Basic Materials	Iron & Steel	-0.4%	1.1%	-8	-8
BTI	08/12/05	27.4%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-0.2%	12.0%	-3	-3

      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	Monthly % Gain	%R1	%R2
LM	08/12/05	16.4%	Legg Mason, Inc.	Financial	Investment Services	-6.9%	-5.0%	-81	-81
UNH	04/15/05	21.6%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-11.1%	-2.3%	-53	-53
APC	02/10/06	0.0%	Anadarko Petroleum Corporation	Energy	Oil & Gas Operations	-2.8%	-1.1%	-42	-42
PCU	12/02/05	25.0%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-8.0%	4.2%	-44	-40
SYT	04/08/05	31.1%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	-4.1%	-2.1%	-32	-32
OVTI	03/17/06	0.0%	OmniVision Technologies	Technology	Semiconductors	0.0%	4.5%	-31	-31
WSO	11/25/05	16.0%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	-2.1%	3.1%	-30	-30
BHP	09/09/05	15.3%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	-8.2%	0.2%	-37	-27
BR	02/24/06	-1.0%	Burlington Resources Inc.	Energy	Oil & Gas Operations	-1.0%	1.0%	-25	-25
BEN	11/04/05	11.3%	Franklin Resources, Inc.	Financial	Investment Services	-2.0%	2.9%	-25	-25
AHC	02/03/06	0.0%	Amerada Hess Corporation	Energy	Oil & Gas - Integrated	-3.5%	2.7%	-22	-22
ENDP	02/17/06	9.9%	Endo Pharmaceuticals	Health Care	Biotechnology & Drugs	-1.5%	4.8%	-15	-18
DNR	03/03/06	-0.1%	Denbury Resources Inc.	Energy	Oil & Gas Operations	-0.1%	8.0%	-14	-14
CHB	02/17/06	3.3%	Champion Enterprises, Inc.	Capital Goods	Construction Services	-1.3%	3.3%	-12	-12
WCC	02/10/06	17.8%	WESCO International, Inc.	Technology	Electronic Instruments & Controls	-0.2%	12.0%	-8	-8
SM	03/17/06	0.0%	St. Mary Land & Exploration Co.	Energy	Oil & Gas Operations	0.0%	8.4%	-20	-6
CHE	05/06/05	51.6%	Chemed Corporation	Services	Business Services	0.0%	8.1%	-5	-5
GRMN	03/03/06	4.2%	Garmin Ltd.	Technology	Communications Equipment	0.0%	18.0%	-5	-5
UIC	03/17/06	0.0%	United Industrial Corp.	Capital Goods	Aerospace and Defense	0.0%	11.6%	-4	-4
ET	10/21/05	47.3%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	0.0%	8.7%	-2	-2
HCC	10/21/05	23.4%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	0.0%	2.4%	-2	-2

      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	Monthly % Gain	%R1	%R2
ANF	03/03/06	-3.9%	Abercrombie & Fitch Co.	Services	Retail (Apparel)	-3.9%	-12.0%	-91	-91
CCRT	12/30/05	-2.9%	CompuCredit Corporation	Financial	Consumer Financial Services	-10.8%	-6.6%	-90	-90
HDI	10/14/05	-0.6%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-12.3%	-6.0%	-82	-82
ABFS	04/29/05	31.7%	Arkansas Best Corporation	Transportation	Trucking	-8.7%	-2.3%	-71	-71
TBL	02/17/06	-1.5%	The Timberland Company	Consumer Cyclical	Footwear	-1.8%	-1.5%	-65	-65
KSWS	10/14/05	2.3%	K-Swiss Inc.	Consumer Cyclical	Footwear	-13.7%	1.0%	-62	-62
FNF	10/21/05	-0.4%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-7.9%	-3.7%	-62	-62
RCII	10/21/05	48.5%	Rent-A-Center, Inc	Services	Rental & Leasing	-7.8%	3.7%	-45	-60
NKE	09/23/05	5.1%	NIKE, Inc.	Consumer Cyclical	Footwear	-6.6%	0.6%	-53	-53
PCU	02/10/06	1.0%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-1.8%	4.2%	-44	-40
DSPG	02/07/05	9.0%	DSP Group, Inc.	Technology	Communications Equipment	-9.4%	3.0%	-36	-36
ACS	04/29/05	32.3%	Affiliated Computer Services, Inc.	Technology	Computer Services	-0.6%	1.4%	-33	-33
AH	02/03/06	14.8%	Armor Holdings, Inc.	Capital Goods	Aerospace and Defense	-1.9%	9.7%	-28	-28
UNT	03/03/06	-2.5%	Unit Corporation	Energy	Oil & Gas Operations	-2.5%	4.1%	-42	-25
THO	04/15/05	91.2%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	-3.5%	18.7%	-24	-24
AEOS	03/10/06	-1.9%	American Eagle Outfitters	Services	Retail (Apparel)	-2.7%	11.9%	-21	-21
ASH	10/28/05	25.5%	Ashland Inc.	Capital Goods	Construction Services	-0.8%	1.9%	-17	-17
RS	04/15/05	125.0%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-1.4%	4.1%	-14	-14
OXY	03/03/06	0.1%	Occidental Petroleum Corporation	Energy	Oil & Gas Operations	0.0%	5.6%	-9	-9
TOL	02/17/06	17.6%	Toll Brothers, Inc.	Capital Goods	Construction Services	0.0%	11.5%	-8	-8
MDC	01/20/06	1.4%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	0.0%	5.6%	-8	-8
NUE	04/15/05	102.2%	Nucor Corporation	Basic Materials	Iron & Steel	0.0%	19.6%	-6	-6
STLD	12/16/05	44.2%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	0.0%	10.3%	-4	-4
RI	09/02/05	38.4%	Ruby Tuesday, Inc.	Services	Restaurants	0.0%	6.6%	-4	-4
BTI	12/30/05	14.0%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-0.2%	12.0%	-3	-3
SCHN	02/10/06	12.8%	Schnitzer Steel Industries, Inc.	Basic Materials	Iron & Steel	0.0%	11.2%	-2	-2
CECO	02/17/06	5.4%	Career Education Corp.	Services	Schools	0.0%	3.5%	-2	-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	Monthly % Gain	%R1	%R2
CPK	05/06/05	16.2%	Chesapeake Utilities	Utilities	Natural Gas Utilities	-14.1%	-2.4%	-72	-72
VVC	03/03/06	0.4%	Vectren Corporation	Utilities	Natural Gas Utilities	0.0%	-1.3%	-73	-69
WPS	02/07/05	0.6%	WPS Resources Corp	Utilities	Electric Utilities	-13.0%	-2.4%	-63	-63
WGL	12/23/05	-0.5%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	-3.6%	-0.8%	-63	-63
PNW	01/10/05	-6.9%	Pinnacle West Capital	Utilities	Electric Utilities	-13.6%	-3.9%	-59	-59
SRE	01/10/05	30.7%	Sempra Energy	Utilities	Natural Gas Utilities	-3.1%	-1.3%	-55	-55
UGI	12/30/05	6.6%	UGI Corporation	Utilities	Natural Gas Utilities	-2.8%	-2.4%	-44	-49
KEP	01/10/05	76.6%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-4.1%	-2.6%	-33	-33
ATG	10/21/05	7.9%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-1.8%	2.1%	-37	-32
OKE	11/11/05	13.2%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-3.6%	0.3%	-27	-27
EON	03/10/06	3.8%	E.ON AG (ADR)	Utilities	Electric Utilities	-0.9%	2.6%	-15	-15
ATO	04/01/05	-0.3%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-9.7%	1.8%	-15	-15
UU	06/10/05	2.9%	United Utilities PLC (ADR)	Utilities	Electric Utilities	-0.2%	3.7%	-6	-6
PGN	01/10/05	2.6%	Progress Energy, Inc.	Utilities	Electric Utilities	-1.1%	1.6%	-3	-3

      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	Monthly % Gain	%R1	%R2
JBHT	02/03/06	-2.7%	J.B. Hunt Transport Services, Inc.	Transportation	Trucking	-12.1%	-9.0%	-87	-87
HHS	10/28/05	6.7%	Harte-Hanks, Inc.	Services	Printing & Publishing	-9.4%	-5.6%	-86	-86
HDI	02/24/06	-6.9%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-8.3%	-3.7%	-82	-82
DGX	08/19/05	3.8%	Quest Diagnostics Incorporated	Health Care	Healthcare Facilities	-3.6%	-1.8%	-56	-74
GTRC	03/03/06	-1.1%	Guitar Center, Inc.	Services	Retail (Specialty Non-Apparel)	-1.1%	-3.7%	-72	-72
AMSG	10/14/05	-3.6%	AmSurg Corp.	Health Care	Healthcare Facilities	-8.9%	5.3%	-55	-55
UNH	12/30/05	-8.8%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	-9.9%	-2.3%	-53	-53
GISX	12/30/05	3.9%	Global Imaging Systems, Inc.	Technology	Office Equipment	-2.3%	-0.1%	-43	-43
SNV	05/27/05	-4.6%	Synovus Financial Corp.	Financial	Regional Banks	-6.8%	-0.1%	-41	-41
DHI	03/03/06	5.7%	D.R. Horton Inc.	Capital Goods	Construction Services	0.0%	0.2%	-40	-40
PCU	02/10/06	1.0%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-1.8%	4.2%	-44	-40
ORLY	01/20/06	15.5%	O'Reilly Automotive, Inc.	Services	Retail (Specialty Non-Apparel)	-3.4%	6.8%	-38	-39
CPS	05/27/05	11.7%	ChoicePoint Inc.	Services	Business Services	-3.3%	-0.9%	-35	-35
MIK	12/30/05	-4.0%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-4.0%	6.3%	-23	-23
CAKE	10/21/05	6.9%	The Cheesecake Factory Incorporated	Services	Restaurants	-4.8%	2.0%	-53	-19
SFG	05/27/05	44.8%	StanCorp Financial Group, Inc.	Financial	Insurance (Life)	-0.5%	1.7%	-13	-14
LOW	11/18/05	4.1%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-1.1%	3.6%	-12	-12
TOL	03/03/06	6.0%	Toll Brothers, Inc.	Capital Goods	Construction Services	0.0%	11.5%	-8	-8
EDMC	12/16/05	23.6%	Education Management Corp	Services	Schools	-1.2%	13.7%	-8	-8
MDC	12/30/05	6.5%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	-1.2%	5.6%	-8	-8
CHD	11/18/05	10.9%	Church & Dwight Co., Inc.	Consumer Non-Cyclical	Personal & Household Products	0.0%	6.7%	-3	-3
JNJ	02/17/06	2.1%	Johnson & Johnson	Health Care	Major Drugs	0.0%	2.2%	-2	-2
WSM	09/02/05	11.9%	Williams-Sonoma, Inc.	Services	Retail (Specialty Non-Apparel)	-5.8%	6.7%	-2	-2
EWBC	12/30/05	4.8%	East West Bancorp, Inc.	Financial	Regional Banks	0.0%	7.7%	0	0

      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	Monthly % Gain	%R1	%R2
CRDN	08/19/05	74.0%	Ceradyne, Inc.	Capital Goods	Aerospace and Defense	-15.0%	-5.0%	-78	-78
HTLD	01/27/06	4.3%	Heartland Express, Inc.	Transportation	Trucking	-7.5%	-6.5%	-73	-73
MINI	03/03/06	-1.4%	Mobile Mini, Inc.	Services	Business Services	-5.1%	-2.7%	-66	-68
MDU	01/27/06	-1.2%	MDU Resources Group, Inc.	Utilities	Natural Gas Utilities	-5.2%	-2.6%	-56	-56
ORLY	03/10/06	0.7%	O'Reilly Automotive, Inc.	Services	Retail (Specialty Non-Apparel)	0.0%	6.8%	-38	-39
RDC	03/03/06	-0.9%	Rowan Companies, Inc.	Energy	Oil Well Services & Equipment	-1.8%	3.3%	-38	-38
STRA	01/13/06	9.1%	Strayer Education, Inc.	Services	Schools	-4.1%	-1.0%	-35	-36
ESI	11/04/05	6.3%	ITT Educational Services	Services	Schools	-2.5%	-1.0%	-31	-31
BR	12/02/05	21.7%	Burlington Resources Inc.	Energy	Oil & Gas Operations