Schizophrenic Market

The markets are still choppy with major averages going up and down on alternate days. About 40% of the S&P 500 reported earnings this week. The numbers were good. It now appears that operating earnings for the S&P 500 in aggregate will be up about 13% for the quarter. That is above the 12% expected as of last week, and up from forecasts of just 8% at the start of the reporting season.

First quarter real GDP rose 3.1%. March durable goods orders dropped a surprising 2.8%. March personal income and spending were up solidly, but the price deflator rose 0.3%. Overall, the data did nothing to alleviate the fears that economic growth is slowing even while inflation is firming. Oil ended the week at $49.72, down from $55.39 at the start of the week.

Employment is to be reported on Friday and the Federal Reserve announces its stance on interest rates on Tuesday.

The 5 day RSI for the DOW, S&P500 and the NASDAQ are neutral. The 5 week RSI for S&P500 and DOW are neutral and for the NASDAQ is 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	15.31	15.38	14.53	< 20	> 50
VXN	18.54	19.04	18.01	< 30	> 70
Put/Call Ratio	0.738	0.669	0.698	< 0.6	> 0.7
%Bulls - %Bears	14.3%	21.5%	17.2%	> 29	< 20

15 Day Free Trial

- NO CREDIT CARD REQUIRED -

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 “% from Max” 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. More information on each of these filters is available on the web site. Send me an email if you need specific details of a filter.

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. CTRX and THLD declined more than 10% since being listed and were removed.

Table 3A

Net Insider Buying Stock Filter as of 04/30/05

Stock	Reference	% Chg	Company	Sector	Industry	% from Max
ACAD	04/29/05	0.0%	ACADIA Pharmaceuticals Inc.	Health Care	Biotechnology & Drugs	0.0%
CNST	04/29/05	0.0%	Constar International, Inc.	Basic Materials	Containters & Packaging	0.0%
FTD	04/08/05	-9.3%	FTD Group, Inc.	Services	Retail (Catalog & Mail Order)	-9.5%
FVRL	04/22/05	2.4%	Favrille, Inc.	Health Care	Biotechnology & Drugs	-4.9%
INHX	04/08/05	1.8%	Inhibitex, Inc.	Health Care	Biotechnology & Drugs	-3.9%
IPSU	04/08/05	-3.2%	Imperial Sugar Company	Consumer Non-Cyclical	Food Processing	-4.2%
IPXLE	04/29/05	0.0%	Impax Laboratories Inc.	Health Care	Biotechnology & Drugs	0.0%
ITMN	04/08/05	-1.8%	InterMune, Inc.	Health Care	Biotechnology & Drugs	-1.8%
MERCS	04/08/05	-7.8%	Mercer International Inc.	Basic Materials	Paper & Paper Products	-7.8%
MWY	04/08/05	-9.8%	Midway Games Inc.	Technology	Software & Programming	-11.6%
OSHC	04/08/05	-3.8%	Ocean Shore Holding Co.	Financial	S&Ls/Savings Banks	-3.9%
TRCA	04/29/05	0.0%	Tercica, Inc.	Health Care	Biotechnology & Drugs	0.0%
VSTA	04/08/05	-3.6%	VistaCare, Inc.	Health Care	Healthcare Facilities	-7.6%

Companies with net cash positions that comprise at least 40% of their share price are listed in Table 3B. INCX, SWIR and VNUS declined more than 10% since being listed and were removed.

Table 3B

Capital Rich Companies Filter as of 04/30/05

Stock	Reference	% Chg	Company	Sector	Industry	% from Max
ACP	04/08/05	-1.5%	American Real Estate Partners, L.P.	Services	Casinos & Gaming	-2.7%
ADZA	04/08/05	6.3%	Adeza Biomedical Corporation	Health Care	Biotechnology & Drugs	-1.5%
CDCO	04/22/05	-4.4%	COMDISCO HLDG CO INC	Services	Rental & Leasing	-4.4%
EXAR	04/29/05	0.0%	Exar Corporation	Technology	Semiconductors	0.0%
FDRY	04/29/05	0.0%	Foundry Networks, Inc.	Technology	Communications Equipment	0.0%
NCTY	04/08/05	10.2%	The9 Limited	Services	Business Services	0.0%
WSC	04/08/05	-0.5%	Wesco Financial Corp.	Conglomerates	Conglomerates	-1.8%
WZEN	04/22/05	-2.5%	Webzen Inc. (ADR)	Technology	Computer Services	-4.3%

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

Table 3C

Growth Momentum Watch List as of 04/30/05

Stock	Reference	% Chg	Company	Sector	Industry	% from Max
BDK	04/29/05	#DIV/0!	0	Consumer Cyclical	Appliances & Tools	0.0%
CRAI	03/18/05	2.4%	Charles River Associates Incorporated	Services	Business Services	0.0%
OSK	03/12/05	-4.8%	0	Consumer Cyclical	Auto & Truck Manufacturers	-9.4%
PTRY	04/29/05	0.0%	The Pantry, Inc.	Services	Retail (Grocery)	0.0%
SFY	04/22/05	-6.7%	Swift Energy Company	Energy	Oil & Gas Operations	-10.0%
SYT	04/08/05	-3.0%	0	Basic Materials	Chemical Manufacturing	-4.3%
TDY	04/29/05	0.0%	Teledyne Technologies Incorporated	Services	Business Services	0.0%
UNH	04/15/05	1.3%	UnitedHealth Group Inc.	Financial	Insurance (Accident & Health)	0.0%
WOS	04/01/05	-4.9%	0	Capital Goods	Misc. Capital Goods	-7.9%
ZNT	04/15/05	6.6%	Zenith National Insurance Corp.	Financial	Insurance (Property & Casualty)	-1.2%

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

Table 3D

Peter Lynch Value Watch List as of 04/30/05

Stock	Reference	% Chg	Company	Sector	Industry	% from Max
BLSC	04/22/05	0.5%	Bio-Logic Systems Corp.	Health Care	Medical Equipment & Supplies	-2.0%
CAJ	01/31/05	-1.0%	Canon Inc. (ADR)	Technology	Computer Peripherals	-4.2%
CHL	03/18/05	5.3%	China Mobile (Hong Kong) Limited (ADR)	Services	Communications Services	0.0%
CSLMF	12/13/04	2.6%	Consolidated Mercantile (USA)	Basic Materials	Containters & Packaging	-3.4%
GGB	04/22/05	-0.1%	Gerdau S.A. (ADR)	Basic Materials	Iron & Steel	-2.1%
KEP	12/13/04	10.2%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-0.5%
KOF	04/29/05	0.0%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	0.0%
MKTAY	04/15/05	8.6%	Makita Corporation (ADR)	Consumer Cyclical	Appliances & Tools	0.0%
NHY	04/29/05	0.0%	Norsk Hydro ASA (ADR)	Conglomerates	Conglomerates	0.0%
NL	04/22/05	-6.7%	NL Industries, Inc.	Basic Materials	Chemical Manufacturing	-8.4%
NOLD	12/13/04	66.0%	Noland Company	Capital Goods	Misc. Capital Goods	0.0%
PKX	04/29/05	0.0%	POSCO (ADR)	Basic Materials	Iron & Steel	0.0%
RD	04/29/05	0.0%	Royal Dutch Petroleum Company (ADR)	Energy	Oil & Gas - Integrated	0.0%
SC	04/29/05	0.0%	Shell Transport & Trading (ADR)	Energy	Oil & Gas - Integrated	0.0%
SHI	04/22/05	-3.6%	Sinopec Shanghai Petrochemical Co. (ADR)	Energy	Oil & Gas Operations	-3.6%
SKM	02/07/05	-3.5%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	-10.0%
TKS	04/15/05	-6.2%	Tomkins plc (ADR)	Conglomerates	Conglomerates	-7.2%
TM	12/13/04	-3.1%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	-11.2%
VLCCF	12/13/04	17.7%	Knightsbridge Tankers Limited	Transportation	Water Transportation	-5.6%
YPF	04/15/05	5.4%	YPF Sociedad Anonima S.A. (ADR)	Energy	Oil & Gas Operations	-7.5%

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.

Table 3E

Warren Buffett Value Watch List as of 04/30/05

Stock	Reference	% Chg	Company	Sector	Industry	% from Max
ABFS	04/29/05	0.0%	Arkansas Best Corporation	Transportation	Trucking	0.0%
ACS	04/29/05	0.0%	Affiliated Computer Services	Technology	Computer Services	0.0%
APPB	04/29/05	0.0%	Applebee's Int'l, Inc.	Services	Restaurants	0.0%
CACH	04/29/05	0.0%	Cache, Inc.	Services	Retail (Apparel)	0.0%
DHI	04/15/05	13.3%	D.R. Horton Inc.	Capital Goods	Construction Services	0.0%
DSPG	02/07/05	-3.9%	DSP Group, Inc.	Technology	Communications Equipment	-8.1%
ELBO	01/31/05	58.9%	Electronics Boutique Holdings Corp.	Services	Retail (Technology)	0.0%
HDI	04/15/05	2.7%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-0.9%
HELE	04/15/05	-0.5%	Helen of Troy Limited	Consumer Cyclical	Appliances & Tools	-5.9%
LNCR	12/27/04	1.5%	Lincare Holdings Inc.	Health Care	Healthcare Facilities	-4.2%
LXK	04/29/05	0.0%	Lexmark International, Inc.	Technology	Computer Peripherals	0.0%
NUE	04/15/05	4.7%	Nucor Corporation	Basic Materials	Iron & Steel	-4.7%
PGR	12/27/04	8.4%	The Progressive Corp.	Financial	Insurance (Property & Casualty)	-0.5%
RS	04/15/05	-1.7%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-7.9%
STLD	04/15/05	-4.4%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	-10.8%
THO	04/15/05	0.1%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	-7.9%
TLK	04/29/05	0.0%	PT Telekomunikasi Indonesia (ADR)	Services	Communications Services	0.0%
TSCO	04/22/05	-2.4%	Tractor Supply Company	Services	Retail (Home Improvement)	-4.4%
VLCCF	02/21/05	4.6%	Knightsbridge Tankers Limited	Transportation	Water Transportation	-5.6%

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.

Table 3F

Benjamin Graham Utility Watch List as of 04/30/05

Stock	Reference	% Chg	Company	Sector	Industry	% from Max
ATG	04/29/05	0.0%	AGL Resources Inc.	Utilities	Natural Gas Utilities	0.0%
ATO	04/01/05	-2.3%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-4.9%
CEG	04/29/05	0.0%	Constellation Energy Group	Utilities	Electric Utilities	0.0%
KEP	01/10/05	19.0%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	-0.5%
NFG	04/08/05	-4.7%	National Fuel Gas Co.	Utilities	Natural Gas Utilities	-6.8%
OKE	04/15/05	0.6%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-3.9%
PGN	01/10/05	-4.7%	Progress Energy, Inc.	Utilities	Electric Utilities	-6.7%
PNW	01/10/05	-2.8%	Pinnacle West Capital	Utilities	Electric Utilities	-4.7%
SRE	01/10/05	11.7%	Sempra Energy	Utilities	Natural Gas Utilities	-4.3%
WPS	02/07/05	2.6%	WPS Resources Corp	Utilities	Electric Utilities	-3.5%

4.0 Results

This section lists historical results of stock and options trades.

4.1 Stock Trades

Table 4A

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
WYNN	04/21/05	55.65	57.68	Short	-3.6%	Closed 04/26

Average P/L in 2005 = 12.4%

Number of Closed Trades in 2005 = 13

Hypothetical Profit at $1,000 per Trade = $1,609.33

4.2 Option Trades

Table 4B

Closed Option Trades

Stock	Buy Date	Buy Price	Last	Action	P/L(%)	Option
URBN	11/23/04	11.50	$9.00	Sold 11/30	-21.7%	URQ FG JUN 35.00 CALL
TXU	11/23/04	11.30	$6.30	Sold 12/2	-44.2%	TXU DK APR 55.00 CALL
USG	11/23/04	8.40	$12.80	Sold 12/15	52.4%	MAY 25.00 CALL
ADSK	12/20/04	8.20	$9.20	Sold 12/23	12.2%	ADQ GN JUL 70.00 CALL
MON	12/20/04	3.80	$4.80	Sold 12/23	26.3%	MON GJ JUL 50.00 CALL
POT	12/20/04	7.00	$8.00	Sold 12/23	14.3%	POT FP JUN 80.00 CALL
TXI	12/20/04	5.50	$9.00	Sold 12/23	63.6%	TXI GL JUL 60.00 CALL
AET	01/07/05	5.70	$7.10	Sold 01/19	24.6%	AET GX JUL 135.00 CALL
CLF	01/07/05	7.30	$9.20	Sold 01/19	26.0%	CLF GJ JUL 50.00 CALL
MTH	01/21/05	6.80	$9.20	Sold 02/01	35.3%	MTH FZ JUN 62.50 CALL
BZH	01/31/05	13.70	$17.30	Sold 02/01	26.3%	BZH HJ AUG 150.00 CALL
KBH	01/31/05	9.20	$11.10	Sold 02/01	20.7%	KBH GU JUL 110.00 CALL
BHP	01/28/05	2.25	$2.70	Sold 02/01	20.0%	BHP HE AUG 25.00 CALL
X	01/25/05	5.30	$4.90	Sold 02/02	-7.5%	X GK JUL 55.00 CALL
SFI	01/24/05	0.75	$0.30	Sold 02/04	-60.0%	SFI PH APR 40.00 PUT
EBAY	02/07/05	6.80	$5.60	Sold 02/08	-17.6%	XBA SO JUL 75.00 PUT
CCJ	02/04/05	6.60	$10.20	Sold 02/11	54.5%	CCJ IG SEP 35.00 CALL
MON	02/04/05	8.00	$8.20	Sold 02/15	2.5%	MON GJ JUL 50.00 CALL
TOL	01/02/00	7.10	$7.30	Sold 02/17	2.8%	TOL IR SEP 90.00 CALL
BZH	02/09/05	14.60	$16.90	Sold 02/17	15.8%	BZH HN AUG 170.00 CALL
KBH	02/07/05	11.10	$10.40	Sold 02/18	-6.3%	KBH GC JUL 115.00 CALL
VLO	02/24/05	6.98	$8.70	Sold 03/02	24.6%	VLO IN SEP 70.00 CALL
TXU	02/25/05	3.55	$4.70	Sold 03/04	32.4%	TXU GP JUL 80.00 CALL
SWN	03/03/05	6.50	$5.00	Sold 03/11	-23.1%	SWN IL SEP 60.00 CALL
GM	03/09/05	2.20	$5.80	Sold 03/17	163.6%	GM UZ SEP 32.50 PUT
VLO	03/17/05	6.60	$7.50	Sold 03/18	13.6%	YGY AP JAN 80.00 CALL
BHP	02/24/05	2.25	$2.40	Sold 03/22	6.7%	BHP HF AUG 30.00 CALL
QQQQ	03/29/05	1.05	$0.85	Sold 03/31	-19.0%	QQQ RJ JUN 36.00 PUT
TNX	03/14/05	6.80	$4.80	Sold 04/07	-29.4%	TNX LI DEC 45.00 CALL
PCO	03/17/05	5.00	$6.50	Sold 04/12	30.0%	PCO IL SEP 60.00 CALL
VLO	04/04/05	10.30	$11.10	Sold 4/11	7.8%	YGY AP JAN 80.00 CALL
AAPL	04/12/05	4.40	$2.25	Sold 4/14	-48.9%	QAA GV JUL 42.50 CALL
PCO	04/19/05	5.70	$13.20	Sold 04/25	161.6%	PCO IL SEP 60.00 CALL
VLO	04/19/05	8.80	$10.50	Sold 04/25	19.3%	YGY AP JAN 80.00 CALL
WYNN	04/21/05	6.40	$5.20	Sold 04/26	-18.8%	UWY UK Sep 55.00 PUT
WYNN	04/26/05	2.75	$2.20	Sold 04/28	-20.0%	UWY FL JUN 60.00 call

Average P/L in 2005 = 15.1%

Number of Closed Trades in 2005 = 29

Hypothetical Profit at $1,000 per Trade = $4,374.20

5.0 Conclusion

Performance since the beginning of 2005:

Average Profit Per Trade:

Stock Advisory +12.4%

Options Advisory +15.1%

Major Indices:

DOW: -6.8%

NASDAQ: -12.5%

S&P500: -5.7%

Russell 2000 -11.5%

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"

	Bullish		Neutral		Bearish
Consumer Spending			X
Economic Growth		X
Earnings	X
Inflation					X
Interest Rates				X

1.0 Trading

1.1 The Schizophrenic Market

FIGURE 1

Energy, the major exception, has undergone recent 10% swings in the price of oil. Nothing has done exceptionally well over the past month. Health Care, Financials, Consumer Staples and Utilities have held up better than other sectors.