Non-Trending Filters

Choppiness and volatility ruled the week. Action was a result of the conflicting forces of fears over rising inflation and the benefit of still strong earnings growth. Slower economic growth is widely expected, but the uncertain degree of the slowdown is causing stock market turbulence. About one-third of the S&P 500 companies reported this week, and the trend is excellent. Operating earnings in aggregate are on track for 12% growth. That compares with expectations of 7% growth just a few weeks ago. First quarter earnings are coming in well above expectations, and guidance for the second quarter has been encouraging. For the week, stocks were up. Next week brings even more reports, with plenty of big names on tap. There are no inflation reports, and no major economic reports.

The 5 day RSI for the DOW, S&P500 and the NASDAQ are neutral. The 5 week RSI for S&P500 is neutral and for the Dow and NASDAQ are oversold. Other sentiment indicators are given in Table 3.

Table 3

VTO Report on Market Sentiment Indicators

Sentiment Indicator	Value	Last Week	2 Weeks Ago	Complacent	Cautious
VIX	15.38	14.53	12.62	< 20	> 50
VXN	19.04	18.01	16.96	< 30	> 70
Put/Call Ratio	0.669	0.698	0.550	< 0.6	> 0.7
%Bulls - %Bears	21.5%	17.2%	18.7%	> 29	< 20

3.0 Procedure

The following watch lists contain stock candidates for consideration. They are not necessarily recommended trades. The “Reference” is the date that a stock was added to the list. The “% Change” is how the price has changed since a stock was added to the list. Stocks that are down 10% or more after being listed are removed. The “% of High” is the last price relative to the maximum price reached after a stock was added to the list. 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.

Key

Passed Recent Filter

Companies that have experienced net insider buying, within the past 6 months of 5% or more of issued stock, are listed in Table 3A. FVRL and TRCA declined more than 10% since being listed.

Table 3A

Net Insider Buying Stock Filter as of 04/23/05

Stock	Reference	% Chg	Company	Sector	Industry	% of High
CTRX	04/08/05	-7.5%	Cotherix, Inc	Health Care	Biotechnology & Drugs	89.0%
FTD	04/08/05	-5.2%	FTD Group, Inc.	Services	Retail (Catalog & Mail Order)	94.7%
INHX	04/08/05	2.6%	Inhibitex, Inc.	Health Care	Biotechnology & Drugs	96.9%
IPSU	04/08/05	0.8%	Imperial Sugar Company	Consumer Non-Cyclical	Food Processing	100.0%
ITMN	04/08/05	-3.5%	InterMune, Inc.	Health Care	Biotechnology & Drugs	96.5%
MERCS	04/08/05	-5.1%	Mercer International Inc.	Basic Materials	Paper & Paper Products	94.9%
MWY	04/08/05	-7.9%	Midway Games Inc.	Technology	Software & Programming	90.3%
OSHC	04/08/05	-1.3%	Ocean Shore Holding Co.	Financial	S&Ls/Savings Banks	98.6%
THLD	04/08/05	-9.6%	Threshold Pharmaceuticals, Inc.	Health Care	Biotechnology & Drugs	90.4%
VSTA	04/08/05	-0.1%	VistaCare, Inc.	Health Care	Healthcare Facilities	95.7%

Companies with net cash positions that comprise at least 40% of their share price are listed in Table 3B. WZEN declined more than 10% since being listed.

Table 3B

Capital Rich Companies Filter as of 04/23/05

Stock	Reference	% Chg	Company	Sector	Industry	% of High
ACP	04/08/05	-3.2%	American Real Estate Partners, L.P.	Services	Casinos & Gaming	95.5%
ADZA	04/08/05	-1.9%	Adeza Biomedical Corporation	Health Care	Biotechnology & Drugs	97.5%
CDCO	04/08/05	-5.6%	COMDISCO HLDG CO INC	Services	Rental & Leasing	94.4%
INCX	04/15/05	7.7%	Interchange Corporation	Services	Advertising	99.6%
NCTY	04/08/05	7.2%	The9 Limited	Services	Business Services	99.2%
SWIR	04/08/05	-2.5%	Sierra Wireless, Inc. (USA)	Technology	Communications Equipment	93.5%
VNUS	04/08/05	-9.3%	VNUS Medical Technologies, Inc.	Health Care	Medical Equipment & Supplies	90.2%
WSC	04/08/05	-5.4%	Wesco Financial Corp.	Conglomerates	Conglomerates	93.4%

For the screen in Table 3C, the number of selections is reduced by eliminating stocks having P/E’s greater than 30. ELK, TDY, USNA and WFR were unlisted due to price declines.

Table 3C

Growth Momentum Watch List as of 04/16/05

Stock	Reference	% Chg	Company	Sector	Industry	% of High
CRAI	03/18/05	-4.0%	Charles River Associates Incorporated	Services	Business Services	94.5%
FPIC	04/08/05	-9.4%	FPIC Insurance Group, Inc	Financial	Insurance (Property & Casualty)	90.6%
KBH	01/10/05	6.0%	KB Home	Capital Goods	Construction Services	86.4%
OSK	03/12/05	-2.9%	Oshkosh Truck Corporation	Consumer Cyclical	Auto & Truck Manufacturers	92.4%
SYT	04/08/05	-2.4%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	96.3%
UNH	04/15/05	-2.2%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	97.8%
WOS	04/01/05	0.3%	Wolseley plc (ADR)	Capital Goods	Misc. Capital Goods	97.2%
ZNT	04/15/05	0.2%	Zenith National Insurance Corp.	Financial	Insurance (Property & Casualty)	95.2%

For the Peter Lynch screen in Table 3D, the number of selections is reduced by eliminating stocks having P/E’s greater than 30. BLSC, NL, SHI and VCP were removed due to price declines.

Table 3D

Peter Lynch Value Watch List as of 04/23/05

Stock	Reference	% Chg	Company	Sector	Industry	% of High
CAJ	01/31/05	-0.9%	Canon Inc. (ADR)	Technology	Computer Peripherals	96.0%
CHL	03/18/05	-0.9%	China Mobile (Hong Kong) Limited (ADR)	Services	Communications Services	98.1%
CSLMF	12/13/04	-3.6%	Consolidated Mercantile (USA)	Basic Materials	Containters & Packaging	90.8%
GMK	04/01/05	-7.3%	Gruma S.A. de C.V. (ADR)	Consumer Non-Cyclical	Food Processing	92.7%
KEP	12/13/04	6.3%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	96.0%
LFL	12/13/04	22.6%	Lan Airlines S.A. (ADR)	Transportation	Airline	96.2%
MBT	01/10/05	1.0%	Mobile TeleSystems OJSC (ADR)	Services	Communications Services	85.4%
MKTAY	04/15/05	3.1%	Makita Corporation (ADR)	Consumer Cyclical	Appliances & Tools	100.0%
NOLD	12/13/04	64.8%	Noland Company	Capital Goods	Misc. Capital Goods	100.0%
PCU	12/13/04	23.2%	Southern Peru Copper Corp (USA)	Basic Materials	Metal Mining	87.6%
SKM	02/07/05	-5.3%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	88.3%
TKS	04/15/05	-2.2%	Tomkins plc (ADR)	Conglomerates	Conglomerates	96.8%
TM	12/13/04	-3.4%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	88.5%
TMIC	03/25/05	-8.1%	Trend Micro Incorporated (ADR)	Technology	Software & Programming	91.0%
VLCCF	12/13/04	19.7%	Knightsbridge Tankers Limited	Transportation	Water Transportation	100.0%
YPF	04/15/05	9.6%	YPF Sociedad Anonima S.A. (ADR)	Energy	Oil & Gas Operations	100.0%

The filter for Warren Buffet style stock picking in Table 3E 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. HOV was removed due to a declining price.

Table 3E

Warren Buffett Value Watch List as of 04/23/05

Stock	Reference	% Chg	Company	Sector	Industry	% of High
ABFS	04/15/05	-0.3%	Arkansas Best Corporation	Transportation	Trucking	95.9%
CACH	04/15/05	-0.7%	Cache, Inc.	Services	Retail (Apparel)	96.4%
COLM	01/10/05	-7.4%	Columbia Sportswear Company	Consumer Cyclical	Apparel/Accessories	90.3%
DHI	04/15/05	8.7%	D.R. Horton Inc.	Capital Goods	Construction Services	99.0%
DSPG	02/07/05	1.5%	DSP Group, Inc.	Technology	Communications Equipment	97.0%
ELBO	01/31/05	56.9%	Electronics Boutique Holdings Corp.	Services	Retail (Technology)	99.3%
HDI	04/15/05	2.0%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	98.4%
HELE	04/15/05	4.1%	Helen of Troy Limited	Consumer Cyclical	Appliances & Tools	98.4%
LNCR	12/27/04	-1.2%	Lincare Holdings Inc.	Health Care	Healthcare Facilities	93.3%
NUE	04/15/05	8.9%	Nucor Corporation	Basic Materials	Iron & Steel	99.2%
PGR	12/27/04	8.1%	The Progressive Corp.	Financial	Insurance (Property & Casualty)	99.2%
RS	04/15/05	5.1%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	99.4%
STLD	04/15/05	4.8%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	97.8%
THO	04/15/05	5.2%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	96.8%
VLCCF	02/21/05	6.4%	Knightsbridge Tankers Limited	Transportation	Water Transportation	100.0%

The stocks from Benjamin Graham’s style of utility investing are listed in Table 3F. A requirement was added to include only those stocks having a PE of 17 or less. PGN was removed temporarily due to unavailability of data.

Table 3F

Benjamin Graham Utility Watch List as of 04/23/05

Stock	Reference	% Chg	Company	Sector	Industry	% of High
ATO	04/01/05	0.1%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	97.5%
KEP	01/10/05	14.8%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	96.0%
NFG	04/08/05	0.6%	National Fuel Gas Co.	Utilities	Natural Gas Utilities	99.8%
OKE	04/15/05	3.7%	ONEOK, Inc.	Utilities	Natural Gas Utilities	100.0%
PGN	01/10/05	-5.7%	Progress Energy, Inc.	Utilities	Electric Utilities	92.4%
PNW	01/10/05	-1.2%	Pinnacle West Capital	Utilities	Electric Utilities	96.9%
SRE	01/10/05	10.2%	Sempra Energy	Utilities	Natural Gas Utilities	94.5%
WPS	02/07/05	3.3%	WPS Resources Corp	Utilities	Electric Utilities	97.2%

4.0 Results

This section lists historical results of stock and options trades.

4.1 Option Trades

Table 4A

Closed Option Trades

Stock	Buy Date	Buy Price	Last	Action	P/L(%)	Option
URBN	11/23	11.50	$9.00	Sold 11/30	-21.7%	URQ FG JUN 35.00 CALL
TXU	11/23	11.30	$6.30	Sold 12/2	-44.2%	TXU DK APR 55.00 CALL
USG	11/23	8.40	$12.80	Sold 12/15	52.4%	MAY 25.00 CALL
ADSK	12/20	8.20	$9.20	Sold 12/23	12.2%	ADQ GN JUL 70.00 CALL
MON	12/20	3.80	$4.80	Sold 12/23	26.3%	MON GJ JUL 50.00 CALL
POT	12/20	7.00	$8.00	Sold 12/23	14.3%	POT FP JUN 80.00 CALL
TXI	12/20	5.50	$9.00	Sold 12/23	63.6%	TXI GL JUL 60.00 CALL
AET	1/7	5.70	$7.10	Sold 01/19	24.6%	AET GX JUL 135.00 CALL
CLF	1/7	7.30	$9.20	Sold 01/19	26.0%	CLF GJ JUL 50.00 CALL
MTH	1/21	6.80	$9.20	Sold 02/01	35.3%	MTH FZ JUN 62.50 CALL
BZH	1/31	13.70	$17.30	Sold 02/01	26.3%	BZH HJ AUG 150.00 CALL
KBH	1/31	9.20	$11.10	Sold 02/01	20.7%	KBH GU JUL 110.00 CALL
BHP	1/28	2.25	$2.70	Sold 02/01	20.0%	BHP HE AUG 25.00 CALL
X	1/25	5.30	$4.90	Sold 02/02	-7.5%	X GK JUL 55.00 CALL
SFI	1/24	0.75	$0.30	Sold 02/04	-60.0%	SFI PH APR 40.00 PUT
EBAY	2/7	6.80	$5.60	Sold 02/08	-17.6%	XBA SO JUL 75.00 PUT
CCJ	2/4	6.60	$10.20	Sold 02/11	54.5%	CCJ IG SEP 35.00 CALL
MON	2/4	8.00	$8.20	Sold 02/15	2.5%	MON GJ JUL 50.00 CALL
TOL	1/2	7.10	$7.30	Sold 02/17	2.8%	TOL IR SEP 90.00 CALL
BZH	2/9	14.60	$16.90	Sold 02/17	15.8%	BZH HN AUG 170.00 CALL
KBH	2/7	11.10	$10.40	Sold 02/18	-6.3%	KBH GC JUL 115.00 CALL
VLO	2/24	6.98	$8.70	Sold 03/02	24.6%	VLO IN SEP 70.00 CALL
TXU	2/25	3.55	$4.70	Sold 03/04	32.4%	TXU GP JUL 80.00 CALL
SWN	3/3	6.50	$5.00	Sold 03/11	-23.1%	SWN IL SEP 60.00 CALL
GM	3/9	2.20	$5.80	Sold 03/17	163.6%	GM UZ SEP 32.50 PUT
VLO	3/17	6.60	$7.50	Sold 03/18	13.6%	YGY AP JAN 80.00 CALL
BHP	2/24	2.25	$2.40	Sold 03/22	6.7%	BHP HF AUG 30.00 CALL
QQQQ	3/29	1.05	$0.85	Sold 03/31	-19.0%	QQQ RJ JUN 36.00 PUT
TNX	3/14	6.80	$4.80	Sold 04/07	-29.4%	TNX LI DEC 45.00 CALL
PCO	3/17	5.00	$6.50	Sold 04/12	30.0%	PCO IL SEP 60.00 CALL
VLO	4/4	10.30	$11.10	Sold 4/11	7.8%	YGY AP JAN 80.00 CALL
AAPL	4/12	4.40	$2.25	Sold 4/14	-48.9%	QAA GV JUL 42.50 CALL

Average fractional profit for 32 trades, F_P = 12.44% per trade.

Fraction of trades chosen in the correct direction, F_C = 68.80%

Average fractional gain for 22 winning trades, F_G = 30.7% per trade.

Average fractional loss for 10 losing trades, F_L = -27.8% per trade.

The dollar profit goal D_G is set equal to the average capital used per trade C such that
N = 1 / F_P = 8 becomes the average number of trades to earn the average traded amount.

The Profit Factor for the trading system, F_G F_C / [F_L (1 - F_C)] = 2.07
Gross Profits divided by Gross Losses (includes 1% commission)

4.2 Stock Trades

Table 4B

Closed Stock Trades

Stock	Ref Date	Ref. Price	Last	Action	P/L(%)	Status
TXU	11/22/04	63.98	$82.75	Long	29.3%	Closed 04/14
SID	12/20/04	18.49	$21.95	Long	18.7%	Closed 04/08
AET	01/03/05	61.40	$71.24	Long	16.0%	Closed 04/14
AAPL	01/10/05	34.48	$37.26	Long	8.1%	Closed 04/14
TS	01/10/05	46.61	$54.89	Long	17.8%	Closed 04/14
MDRX	02/07/05	11.25	$13.50	Long	20.0%	Closed 04/14
VLO	02/07/05	58.26	$72.18	Long	23.9%	Closed 04/14
PCO	02/14/05	53.51	$57.49	Long	7.4%	Closed 04/14
BYD	02/18/05	49.96	$54.38	Long	8.8%	Closed 04/14
RETK	03/04/05	8.49	$11.25	Long	32.5%	Closed 04/12
WDC	04/09/05	13.78	$12.67	Long	-8.1%	Closed 04/14
ISRG	04/15/05	47.92	43.15	Long	-10.0%	Closed 04/22

Average fractional profit for 12 closed trades, F_P = 13.72% per trade.

Fraction of trades chosen in the correct direction, F_C = 83.3%

Average fractional gain for 10 winning trades, F_G = 18.26% per trade.

Average fractional loss for 2 losing trades, F_L = -9.0% per trade.

The dollar profit goal D_G is set equal to the average capital used per trade C such that
N = 1 / F_P = 7.3 becomes the average number of trades to earn the average traded amount.

The Profit Factor for the trading system, F_G F_C / [F_L (1 - F_C)] = 5.68
Gross Profits divided by Gross Losses (includes 1% commission)

5.0 Conclusion

Comparison between advisories and major indices since the beginning of the year 2005:

Stock Advisory +11.7%

Options Advisory +11.8%
DOW: -5.8%

NASDAQ: -11.2%
S&P500: -4.9%

Russell 2000 -9.5%

Appendix

Investment Conference Schedule

Below are links to conference registration sites where you can sign up.

05-02-05 Chicago, IL "2005 Healthcare M&A & Corporate Development"
05-03-05 Acapulco, Mexico "SRI Conference on Foreign Investment Opportunities in Mexico's New Consumer and Small Business Lending Industry "
05-04-05 Atlanta, GA "Global Debt Collection Summit"
05-11-05 Minneapolis , MN "Medtech Investing Conference (4th Annual)"
05-11-05 New York, NY " IIR's Inaugural Forum on IP Rights Protection in Financial Services - Strategies for Building Patent Portfolios and Managing IP Risk "
05-17-05 London, United Kingdom "Corporate Venturing & Spinouts Conference "
05-17-05 New York, NY "Hedge Funds Regulation and Compliance 2005 - Gain Advanced Operational, Legal and Accounting Strategies to Achieve full Compliance in Today's Regulatory Environment "
05-23-05 New York, NY -Both professional and sophisticated private investors meet with the world's leaders in gold, silver, precious metals, copper and oil and gas exploration and production "New York Institutional Gold Conference"
06-01-05 San Francisco, CA "Venture Capital Investing Conference"
06-12-05 Vancouver, BC "World Gold, PGM & Diamond Investment Conference" Resource Investment Conferences featuring small cap opportunities in gold, diamonds, oil & gas, industrial and emerging growth situations are being presented in Canada. Pre-registration is complimentary to: investors who are clients of sponsoring firms which include discount and full service brokerage houses; subscribers of participating newsletters, sponsoring media and sponsoring internet investment services; shareholders of participating exhibitors; accredited investment advisors and investors who take an interest in managing their own personal portfolios.
09-07-05 Las Vegas, Nevada "Gold and Precious Metals Investment Conference" The gold and metal resource market has demonstrated its strength and longevity, achieving sustained growth and multi-decade highs in the last year. Explore the shining prospects of gold, silver, copper, uranium and other fast-rising commodities. Realize your full potential in this sustained bull market, with Natural Resources the clear profit leaders.
09-29-05 Las Vegas, Nevada "Tradestation World Users Conference" Trade Station World Conference and Expo, the premier conference for TradeStation users, is coming to the Venetian Hotel in Las Vegas, September 29 - October 2, 2005. Here's where you learn about how to design your personal trading strategies, and to test those strategies against historical data.
10-02-05 Toronto, Ontario "Toronto Resource Investment Conference"
10-30-05 New Orleans, LA "New Orleans Investment Conference"
11-10-05 Millbrae, CA "Biotech Investing Conference" Continuing advances in genomics, proteomics and enabling technologies makes the Biotech sector a favorite among private equity investors and venture capitalists. The Biotech Investing Conference is an industry gathering of the leading private equity investors, venture capitalists, biotech companies, pharmaceutical companies, corporate investors and institutional investors.
11-27-05 San Francisco, CA "Gold and Precious Metals Conference"
Both professional and sophisticated private investors meet with the world's leaders in gold, silver, precious metals, copper and oil and gas exploration and production. The Natural Resource industry's newest opportunities are presented, together with educational seminars, executive panels and investment workshops led by top finance specialists, economic analysts and newsletter editors. Admission is complimentary with pre-registration.

Conference Search

By Date, Category, Country and Organizer
By Topic and Region
Financial reporting and corporate news - "Corporate News Announcements"

Description	(1) Stock Candidate	(2) Down-market	(3) Stock Candidate
Option Purpose	Buy Calls	Buy Puts	Write Covered Calls
Stock Purpose	Long Positions	Short Positions	Long Positions
Market direction	Up, Sideways	Down, Sideways	Up, Sideways
Price	> $50	> $30	< $20
12 m EPS growth	> 80%	< 20%	> 80%
Relative Strength	26 wk >90%	26 wk < 20%	26 wk >90%
Price within	5% of 52wk high	5% of 52 wk low	5% of 52wk high
Exchanges	NASDAQ, NYSE	NASDAQ, NYSE	NASDAQ, NYSE

1.0 Trading

1.1 Filters

Trade Entry

Trade Exit

Modification for Non-Trending Conditions