Wiser Trader Stocks and Options Newsletter

______________________________________________________________________________

Issue No. 74 April 24, 2006 Prescott, Arizona Systems@WiserTrader.com

______________________________________________________________________________

1.0 Trading

The frequency of day-to-day changes in market direction is one measure of choppiness. By this measure, the market is naturally choppy about 56% of the time.

1.1 Market Character

Directional changes in the William %R are consistent with directional changes in the price of a stock or index. Until recently, I had defined choppiness based on the number of times the NASDAQ Williams %R crossed the neutral line (-50) within a 4-week period. Lately I have been looking at a broader measure of market character based on the average Williams %R for the NASDAQ, DOW, S&P 500, NYSE Composite and Russell 2000. This 5-index Williams %R is derived by adding the Williams %R for all five indices and dividing by five. It is believed that the average of the momentum indicators for all five indices better reflects the market compared to the indicator for a single index. The spread or “range” for the five individual values is also believed to play an important role. When choppiness is defined in terms of the tendency for this 5-index Williams %R to change direction on consecutive days, intuition says that a wider range of values for these five indicators should accompany a more choppy market. While the range is important for the size of a move, it appears to be inversely proportional to the likelihood of a change in direction.

Over the period from January 2004 to April 14, 2006, the 5-index Williams %R changed direction from day-to-day about 55.8% of the time. The market, defined in this case by the five indices, moved in the same direction for two or more days in a row only 44.5% of the time. The range of the 5 index values on any given day varied over that same period from 1 to 81 with an arithmetic average value of 25. Table 1 shows the percentage of day-to-day changes in direction of the 5-index Williams %R along with the previous day’s range. The highest percentage of day-to-day changes in direction was 17% when the previous day’s range was between 10 and 15 units. Half the changes in direction occurred on either side of a range of 20 units.

© 2006 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.

Therefore, a wider range for the five values of the Williams %R on any given day does not correlate well with a tendency for day-to-day reversals. Rather, it seems, when all five indicators have similar momentum, a reversal on the following day becomes more likely. This is counter intuitive and is likely to be different for larger, more prolonged changes. A histogram of the range on the day before a reversal is given in Figure1.

Table 1

Percentage of 5-Index Williams %R Changes in Direction

Based on the Previous Day’s Range

Williams % R Range	% of Changes in Direction	Williams % R Range Wider than	% of Changes in Direction
1 to 5	3.0%	5	97.2%
5 to 10	15%	10	82.2%
10 to 15	17%	15	65.0%
15 to 20	15%	20	50.3%
20 to 25	11%	25	39.4%
25 to 30	12%	30	27.5%
30 to 40	11%	40	15.9%
40 to 50	7%	50	9.4%
50 to 60	4%	60	5.0%
60 to 70	4%	70	0.9%
70 to 81	1%	80	0.63%

FIGURE 1

Table 2 provides a summary of the number of consecutive days the 5-index Williams %R moved in the same direction over the January 2004 to April 14, 2006 period. The 5-index momentum indicator varied from -1 to -99 with an arithmetic average of -43. We can see from the table that the market moved in the same direction for 2 or more consecutive days about 44.5% of the time.

Table 2

Consecutive Days that 5-index Indicator Moved in the Same Direction	Average Prior Day Range	Average Prior Day 5-Index Williams %R	No. of Events	Percent of All Days
0	24	-43	321	55.8%
2	24	-39	79	13.7%
3	25	-48	39	13.6%
4	29	-50	21	11.0%
5	28	-63	5	3.5%
6	11	-67	2	1.7%
7	28	-27	1	1.0%

Table 2 only provides average values for the 5-index indicator and range. Another picture can be gleaned from the chart in Figure 2 showing a more detailed relationship between the 5-index indicator and range on the day before a change in direction. Figure 2 illustrates how reversals are more likely when the range is small and the 5-index indicator is near an extreme above -20 or below -80. This greater likelihood of a reversal at the overbought and oversold extremes should be expected. The slightly greater tendency for a reversal when the indicator is overbought can be explained by noting that the market historically spends more time in that area, having a long term upward bias. Between -20 and -80, the likelihood of a reversal is less predictable.

FIGURE 2

Figure 2 has an interesting symmetry that will be discussed in the future. Keep in mind here that the discussion is about describing historical day-to-day changes in direction. We have not addressed prediction or the size of moves. Those are future studies. The first step towards a good model is a good description. Markets are characterized as trending, choppy or moving sideways depending on the period over which they are observed and the technical indicators being used.

If you have an interest in tracking the 5-index Williams %R and range, the charts in Figures 3 and 4 are one way to go. These 3-month charts are updated automatically and continuously in an Excel spreadsheet running XLQ-Plus. This spreadsheet, named Market Momentum, is available for download at http://www.wisertrader.com/excel.php .

FIGURE 3

FIGURE 4

2.0 Market Analysis

This week the market rose despite a rise in the CPI to about 0.7% above this time a year ago and a rise in the price of oil above $75 a barrel. About one third of S&P 500 companies have reported with 70% being above expectations. FOMC minutes gave encouraging news that the committee is mindful of over tightening. Ten-year bond yields remained steady at about 5%.

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	3.6%	-6.4%	1.0%	7.6%	1.8%
NASDAQ Composite Index	0.1%	-2.6%	2.9%	-2.6%	2.5%
NYSE Composite Index	0.6%	1.9%	0.2%	0.1%	-1.5%
S & P 500 Index	1.3%	0.7%	-0.6%	0.0%	1.2%
Russell 2000 Index	0.6%	1.7%	-0.5%	0.0%	-0.6%
HGX, Phil. Housing Index	2.5%	2.8%	-0.5%	0.5%	-0.2%
IYR, Real Estate	2.4%	2.8%	-0.7%	-1.2%	1.5%
GLD, GOLD	-1.5%	1.7%	-3.6%	2.3%	-1.7%
RKH, Banking	-1.8%	3.5%	-2.7%	-3.6%	1.1%
IYT, Transportation	13.4%	6.2%	1.6%	0.8%	4.3%
SMH, Semiconductors	0.7%	2.0%	0.0%	0.1%	-1.4%
BBH, Biotechnology	3.8%	1.2%	-0.9%	2.4%	1.0%
OIH, Oil	3.3%	1.7%	-0.2%	1.6%	0.3%
XLE, Energy	-5.5%	-2.7%	1.1%	-4.0%	-0.3%
XLU, Utilities	14.0%	7.3%	0.4%	2.7%	2.9%
XLB, Materials	10.9%	7.0%	0.8%	1.7%	1.0%
XLI, Industrial	-0.8%	3.3%	-1.4%	-0.5%	-2.1%
XLK, Technology	7.2%	4.4%	0.4%	1.4%	0.9%
XLV, Healthcare	3.6%	3.0%	-0.3%	0.4%	0.4%
XLF, Financials	-0.1%	-0.2%	-0.7%	0.5%	0.2%
XLP, Consumer Staples	-4.7%	0.5%	-0.8%	-2.2%	-2.1%
XLY, Consumer Discretionary	0.7%	2.0%	-0.3%	0.1%	-1.0%

The VIX and VXN volatility indexes are listed in Table 2B.

Table 2B

Volatility

Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	11.6	12.4	12.3	< 20	> 50
VXN ***	15.9	16.3	15.9	< 30	> 70
Below 20 day SMA = Short-term buy signal. * Below 20 day SMA = Short-term buy signal.

Figure 5 compares the major averages with key ETF’s and Sector SPDR’s.

FIGURE 5

Table 2C

Market Summary

Industries are listed according to the Dow Jones Classification System

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. The information is not meant to imply any endorsement or sponsorship by these 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	4.8%	0.3%	1.3%	1.7%	0.3%	-1.2%	0.4%
Cash Rich Companies	-0.2%	-0.1%	-0.9%	1.1%	-1.4%	-0.1%	-0.5%
Price to Free Cash Flow	14.6%	2.1%	9.7%	6.3%	-1.8%	-4.5%	10.5%
Growth Momentum Stocks	19.0%	0.4%	7.6%	4.6%	-0.1%	0.7%	2.1%
Lynch Stocks	28.2%	1.7%	4.1%	3.5%	-1.3%	0.0%	1.7%
Buffett Stocks	27.0%	-0.2%	4.2%	2.6%	-1.3%	1.1%	1.7%
Graham Stocks	14.7%	0.5%	1.8%	3.0%	-1.4%	0.5%	-0.4%
Templeton Stocks	5.2%	-0.5%	0.3%	1.8%	-1.6%	0.3%	-0.2%
Zweig Stocks	9.0%	-0.3%	5.2%	3.4%	-0.2%	0.7%	1.2%
Average Long Stocks	13.6%	0.4%	3.7%	3.1%	-1.0%	-0.3%	1.8%

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
RGN	03/17/06	0.0%	RegeneRx Biopharmaceut.	Health Care	Biotechnology & Drugs	-13.1%	-12.6%	-91	-91
TWI	04/21/06	0.0%	Titan International, Inc.	Consumer Cyclical	Auto & Truck Parts	0.0%	4.9%	-27	-27
EQS	04/13/06	0.0%	Equus II Incorporated	Financial	Investment Services	-2.4%	2.9%	-39	-47
MMLP	11/25/05	0.0%	Martin Midstream Partners L.P.	Transportation	Water Transportation	-2.2%	0.0%	-40	-40
NXTM	03/17/06	0.0%	NxStage Medical, Inc.	Health Care	Biotechnology & Drugs	-3.7%	-3.7%	-31	-31
CLRT	03/24/06	3.6%	Clarient, Inc.	Technology	Scientific & Technical Instruments	0.0%	1.8%	-39	-22
LXU	12/23/05	29.9%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	0.0%	13.8%	-3	-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	Monthly % Gain	%R1	%R2
SCIX	04/07/06	0.3%	Scailex Corp., Ltd. (USA)	Technology	Computer Networks	-0.5%	-1.0%	-56	-58
WSC	03/11/06	-0.8%	Wesco Financial Corporation	Conglomerates	Conglomerates	-1.2%	-0.8%	-50	-41

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
MOVI	03/24/06	22.9%	Movie Gallery, Inc.	Services	Recreational Activities	-4.0%	9.0%	-47	-40
KWD	03/04/06	17.6%	Kellwood Company	Consumer Cyclical	Apparel/Accessories	-1.7%	5.0%	-20	-17
LNX	03/31/06	3.2%	Lenox Group Inc.	Consumer Non-Cyclical	Personal & Household Products	0.0%	7.5%	-26	-9

For the Peter Lynch style 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
BTI	08/12/05	26.4%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-1.0%	2.4%	-18	-18
CAE	04/21/06	0.0%	Cascade Corporation	Capital Goods	Misc. Capital Goods	0.0%	-19.7%	-79	-79
PKX	02/17/06	24.7%	POSCO (ADR)	Basic Materials	Iron & Steel	-2.1%	3.2%	-16	-16
KOF	04/29/05	47.2%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	-0.1%	10.2%	-15	-15
TM	12/13/04	56.7%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	0.0%	8.6%	-6	-6
SKM	02/07/05	27.5%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	0.0%	11.3%	-5	-5
AZN	02/03/06	15.2%	AstraZeneca PLC (ADR)	Health Care	Major Drugs	0.0%	4.3%	-3	-3

For the Growth Momentum 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
SYT	04/08/05	27.3%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	-7.5%	-3.2%	-98	-98
ENDP	02/17/06	5.4%	Endo Pharmaceuticals	Health Care	Biotechnology & Drugs	-6.0%	-0.2%	-67	-67
BEN	11/04/05	6.3%	Franklin Resources, Inc.	Financial	Investment Services	-6.4%	-0.6%	-63	-63
WSO	11/25/05	9.1%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	-8.0%	-6.2%	-57	-57
HCC	10/21/05	25.1%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	-2.3%	1.3%	-35	-37
JEF	04/21/06	0.0%	Jefferies Group, Inc.	Financial	Investment Services	0.0%	15.4%	-20	-20
LM	08/12/05	15.1%	Legg Mason, Inc.	Financial	Investment Services	-8.0%	-1.0%	-34	-34
OVTI	03/17/06	11.3%	OmniVision Technologies	Technology	Semiconductors	-5.1%	0.4%	-30	-33
CHB	02/17/06	1.0%	Champion Enterprises, Inc.	Capital Goods	Construction Services	-3.5%	-1.6%	-32	-32
WCC	02/10/06	38.7%	WESCO International, Inc.	Technology	Electronic Instruments & Controls	-1.7%	16.3%	-13	-22
GRMN	03/03/06	16.2%	Garmin Ltd.	Technology	Communications Equipment	-2.3%	5.5%	-20	-22
GS	04/21/06	0.0%	Goldman Sachs Group, Inc.	Financial	Investment Services	0.0%	9.0%	-14	-16
UIC	03/17/06	16.2%	United Industrial Corp.	Capital Goods	Aerospace and Defense	-3.8%	12.2%	-19	-20
CHE	05/06/05	57.0%	Chemed Corporation	Services	Business Services	-0.5%	3.5%	-11	-13
RIO	03/31/06	6.6%	Companhia Vale do Rio Doce (ADR)	Basic Materials	Metal Mining	0.0%	14.2%	-12	-13
DNR	03/03/06	22.8%	Denbury Resources Inc.	Energy	Oil & Gas Operations	-3.0%	16.5%	-12	-12
BHP	09/09/05	45.4%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	-2.6%	22.7%	-10	-11
PCU	12/02/05	47.0%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-1.4%	24.4%	-8	-8
ET	10/21/05	54.2%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	0.0%	6.7%	-6	-7
SM	03/17/06	12.1%	St. Mary Land & Exploration Co.	Energy	Oil & Gas Operations	0.0%	10.7%	-4	-4
APC	02/10/06	0.0%	Anadarko Petroleum Corporation	Energy	Oil & Gas Operations	-0.1%	12.6%	-4	-4
AHC	02/03/06	0.0%	Amerada Hess Corporation	Energy	Oil & Gas - Integrated	0.0%	9.8%	-3	-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	Monthly % Gain	%R1	%R2
MDC	01/20/06	-8.4%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	-12.5%	-10.9%	-96	-96
ACS	04/29/05	22.0%	Affiliated Computer Services, Inc.	Technology	Computer Services	-8.4%	-4.7%	-89	-89
DHI	04/13/06	-1.9%	D.R. Horton Inc.	Capital Goods	Construction Services	-5.1%	-4.4%	-54	-89
NKE	09/23/05	2.2%	NIKE, Inc.	Consumer Cyclical	Footwear	-9.2%	-3.4%	-70	-70
DSPG	02/07/05	7.9%	DSP Group, Inc.	Technology	Communications Equipment	-10.2%	-2.6%	-67	-67
FNF	10/21/05	-4.0%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-11.2%	-2.7%	-66	-66
CECO	02/17/06	10.5%	Career Education Corp.	Services	Schools	-10.2%	-2.9%	-63	-63
RI	09/02/05	41.0%	Ruby Tuesday, Inc.	Services	Restaurants	-5.0%	1.7%	-53	-54
AH	02/03/06	21.0%	Armor Holdings, Inc.	Capital Goods	Aerospace and Defense	-5.3%	5.7%	-44	-46
TOL	02/17/06	15.3%	Toll Brothers, Inc.	Capital Goods	Construction Services	-4.2%	4.8%	-39	-39
RS	04/15/05	142.3%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-3.1%	4.1%	-33	-37
HDI	10/14/05	4.4%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-7.9%	0.5%	-37	-37
SCHN	02/10/06	29.2%	Schnitzer Steel Industries, Inc.	Basic Materials	Iron & Steel	-7.6%	-0.2%	-35	-35
TBL	02/17/06	-2.0%	The Timberland Company	Consumer Cyclical	Footwear	-2.2%	0.8%	-34	-34
KSWS	10/14/05	5.0%	K-Swiss Inc.	Consumer Cyclical	Footwear	-11.5%	-1.8%	-31	-31
JBHT	03/31/06	8.6%	J.B. Hunt Transport Services, Inc.	Transportation	Trucking	-1.3%	5.8%	-29	-29
THO	04/15/05	104.4%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	-1.6%	6.3%	-29	-29
RCII	10/21/05	60.3%	Rent-A-Center, Inc	Services	Rental & Leasing	-3.4%	3.6%	-27	-27
ASH	10/28/05	36.3%	Ashland Inc.	Capital Goods	Construction Services	-2.2%	5.6%	-23	-27
ANF	03/03/06	-2.1%	Abercrombie & Fitch Co.	Services	Retail (Apparel)	-2.1%	4.4%	-25	-25
NUE	04/15/05	132.6%	Nucor Corporation	Basic Materials	Iron & Steel	-4.4%	10.9%	-21	-24
ABFS	04/29/05	35.5%	Arkansas Best Corporation	Transportation	Trucking	-6.1%	4.3%	-20	-20
BTI	12/30/05	13.1%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	-1.0%	2.4%	-18	-18
UNT	03/03/06	4.1%	Unit Corporation	Energy	Oil & Gas Operations	-1.6%	1.8%	-18	-18
CCRT	12/30/05	2.4%	CompuCredit Corporation	Financial	Consumer Financial Services	-5.9%	10.4%	-16	-16
AEOS	03/10/06	6.2%	American Eagle Outfitters	Services	Retail (Apparel)	-1.2%	10.7%	-16	-16
EOG	04/13/06	7.5%	EOG Resources, Inc.	Energy	Oil & Gas Operations	-1.6%	7.5%	-19	-14
PCU	02/10/06	18.7%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	-1.4%	24.4%	-8	-8
STLD	12/16/05	84.4%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	0.0%	23.4%	-8	-8
OXY	03/03/06	12.6%	Occidental Petroleum Corporation	Energy	Oil & Gas Operations	0.0%	14.1%	-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	Monthly % Gain	%R1	%R2
PGN	01/10/05	-3.9%	Progress Energy, Inc.	Utilities	Electric Utilities	-7.4%	-5.7%	-78	-78
ATG	10/21/05	6.7%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-2.9%	-0.8%	-62	-62
WGL	12/23/05	-2.9%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	-5.9%	-3.3%	-60	-60
SRE	01/10/05	27.0%	Sempra Energy	Utilities	Natural Gas Utilities	-5.8%	-2.8%	-50	-50
ATO	04/01/05	-0.9%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-10.3%	0.8%	-26	-26
VVC	03/03/06	4.4%	Vectren Corporation	Utilities	Natural Gas Utilities	-1.5%	4.5%	-22	-22
KEP	01/10/05	86.8%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-0.5%	6.6%	-18	-18
UU	06/10/05	2.6%	United Utilities PLC (ADR)	Utilities	Electric Utilities	-0.5%	0.8%	-13	-13
UGI	12/30/05	8.2%	UGI Corporation	Utilities	Natural Gas Utilities	-1.3%	3.2%	-12	-12
OKE	11/11/05	24.1%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-1.0%	8.5%	-9	-10
EON	03/10/06	9.7%	E.ON AG (ADR)	Utilities	Electric Utilities	0.0%	7.8%	-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
MDC	12/30/05	-3.9%	M.D.C. Holdings, Inc.	Capital Goods	Construction Services	-12.5%	-10.9%	-96	-96
LOW	11/18/05	-4.0%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-8.8%	-4.4%	-94	-94
DHI	03/03/06	-1.0%	D.R. Horton Inc.	Capital Goods	Construction Services	-7.9%	-4.4%	-89	-91
CPS	05/27/05	9.0%	ChoicePoint Inc.	Services	Business Services	-5.7%	-0.9%	-82	-82
JNJ	02/17/06	-1.2%	Johnson & Johnson	Health Care	Major Drugs	-4.3%	0.8%	-72	-72
ORLY	01/20/06	12.8%	O'Reilly Automotive, Inc.	Services	Retail (Specialty Non-Apparel)	-5.6%	-2.2%	-70	-70
WSM	09/02/05	9.9%	Williams-Sonoma, Inc.	Services	Retail (Specialty Non-Apparel)	-7.5%	-1.2%	-63	-68
BBBY	04/07/06	-5.8%	Bed Bath & Beyond Inc.	Services	Retail (Specialty Non-Apparel)	-5.8%	-1.9%	-43	-60
CHD	11/18/05	8.7%	Church & Dwight Co., Inc.	Consumer Non-Cyclical	Personal & Household Products	-3.2%	-3.2%	-59	-59
COH	04/13/06	4.7%	Coach, Inc.	Consumer Cyclical	Apparel/Accessories	-0.4%	-1.1%	-55	-54
SNV	05/27/05	-6.1%	Synovus Financial Corp.	Financial	Regional Banks	-8.3%	-0.3%	-50	-50
HHS	10/28/05	6.8%	Harte-Hanks, Inc.	Services	Printing & Publishing	-9.3%	-1.5%	-50	-50
CAKE	10/21/05	3.9%	The Cheesecake Factory Incorporated	Services	Restaurants	-7.4%	-4.0%	-45	-45
TOL	03/03/06	4.0%	Toll Brothers, Inc.	Capital Goods	Construction Services	-4.2%	4.8%	-39	-39
HDI	02/24/06	-2.2%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-3.7%	3.5%	-37	-37
EWBC	12/30/05	9.6%	East West Bancorp, Inc.	Financial	Regional Banks	-2.2%	3.4%	-35	-35
DGX	08/19/05	9.7%	Quest Diagnostics Incorporated	Health Care	Healthcare Facilities	-0.7%	4.6%	-28	-28
AMSG	10/14/05	4.2%	AmSurg Corp.	Health Care	Healthcare Facilities	-1.6%	3.1%	-26	-26
MIK	12/30/05	5.4%	Michaels Stores, Inc.	Services	Retail (Specialty Non-Apparel)	-2.8%	-1.9%	-25	-25
GTRC	03/03/06	1.5%	Guitar Center, Inc.	Services	Retail (Specialty Non-Apparel)	-1.2%	4.0%	-19	-21
GISX	12/30/05	9.7%	Global Imaging Systems, Inc.	Technology	Office Equipment	-0.4%	4.9%	-15	-15
EDMC	12/16/05	25.7%