Wiser Trader Stocks and Options Newsletter

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Issue No. 83  July 3, 2006                             Prescott, Arizona                       Systems@WiserTrader.com

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1.0   Trading

     

      End of quarter window dressing by institutional money managers combined with an optimistic interpretation of FOMC comments concerning future rate hikes has led to a sizeable bounce in the major averages.

 

1.1 Bounce

 

      The S&P 500 bounced off its lower 2-year trend line on good volume last week, as seen in Figure 1A.  It rests just above its 200-day SMA (simple moving average).  Prospects for a summer rally are improving.  However, the markets will not settle down into a fixed trend until after about the 3rd or 4th week of earnings reports, which are just beginning. 

 

 

FIGURE 1A

 

 

© 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. 

   

 

   

1.2 Filter Studies

 

      Continuing with filter performance studies, the latest 1 year period is shown at the bottom of Table 1A.  Details of the filters can be found on the web site.  Currently we are tracking filter performance with the S&P 500 Index 30-day SMA relative to its 200-day SMA 1 month prior to the dates listed.  The ongoing hypothesis is that although stocks were selected a year ago, portfolio performance is strongly influenced by behavior of the S&P 500 within the past month.

 

 

Table 1A

1 Year Filter Performance Using No Trailing Stop

Year Ending

1 Year S&P500 Gain

Month Ago S&P 500

SMA 30 vs SMA 200

Growth $15-$40 Filter Gain

Growth >$40 Filter Gain

Absolute Value Filter Gain

Relative Value Filter Gain

9/02/05

9.4%

+2.8%

60.1%

40.7%

19.3%

50%

9/30/05

8.6%

+1.8%

25.4%

61.4%

12.3%

24.1

11/04/05

8.0%

-0.1%

8.2%

14.8%

4.4%

-0.6%

12/02/05

6.2%

+1.9%

24.6%

9.6%

17.0%

34.7%

01/06/06

8.2%

+4.1%

39.8%

50.3%

27.8%

28.3%

02/03/06

6.1%

+4.2%

34.8%

60.7%

11.5%

34.3%

03/03/06

5.7%

+3.5%

32.7%

26.4%

11.0%

29.7%

04/07/06

9.5%

+3.3%

25.2%

61.2%

16.1%

18.4%

04/28/06

13.2%

+4.0%

95.0% *

19.9%

12.2%

32.0%

06/02/06

7.7%

+3.8%

32.0%

7.1%

40.7%

85.0%

07/01/06

6.3%

+2.6%

28.5%

26.6%

10.5%

27.3%

* Only 2 stocks were filtered for this group

 

 

      The data continues to confirm that stocks selected by either filter do best when the S&P 500 remains several percent above its 200-day SMA for the most recent month.  The performance shown in Table 1A is for cases where no trailing stops were used.

 

 

1.3 Trailing Stop Settings

 

     Table 1B shows how profits changed as trailing stops are varied from -10% to -100%.  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. 

 

      Stocks were filtered 1 year ago.  In some cases, a fixed nominal 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.  The variable trailing stop percentage is not allowed to expand wider than -X% or any narrower than -10%.  Results depend on market behavior.  For this group of stocks, fixed and variable trailing stops gave similar results over the past year.  A slight improvement is more likely when the trailing stop setting is narrower than -35% in an up trending market. 

 

 

Table 1B

1-Year %Gains with Variable and Fixed Trailing Stop Settings

 

Absolute Value

Relative Value

Growth $15 to $40

Growth > $40

“X“ Nominal Stop Setting (%)

Variable Trailing Stop

Fixed Trailing Stop

Variable Trailing Stop

Fixed Trailing Stop

Variable Trailing Stop

Fixed Trailing Stop

Variable Trailing Stop

Fixed Trailing Stop

10

3.3%

3.3%

15.8%

15.8%

14.2%

14.2%

15.2%

15.2%

15

6.7%

6.7%

20.2%

20.2%

13.0%

13.0%

27.5%

26.2%

20

7.3%

7.3%

27.3%

20.2%

19.8%

19.8%

25.6%

26.3%

25

10.5%

10.5%

27.3%

20.2%

23.7%

22.2%

27.9%

28.1%

30

10.5%

10.5%

27.3%

20.2%

24.3%

26.1%

28.6%

28.4%

35

10.5%

10.5%

27.3%

27.3%

20.7%

20.7%

28.3%

27.9%

40

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

27.1%

26.7%

50

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

26.6%

26.6%

60

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

26.6%

26.6%

70

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

26.6%

26.6%

80

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

26.6%

26.6%

90

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

26.6%

26.6%

100

10.5%

10.5%

27.3%

27.3%

28.5%

28.5%

26.6%

26.6%

 

 

 

      Applying trailing stops to individual stocks is most easily done by putting the data and formulas in an Excel spreadsheet.  XLQPlus can then be used to retrieve stock prices automatically from Yahoo and MSN.  The spreadsheet then dynamically updates stop loss settings and when it is time to buy, hold or sell.  An automated spreadsheet named “Portfolio Tracking” that does this is now available as a free download at http://www.wisertrader.com/excel.php . 

 

 

 

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2.0 Market Analysis

 

      Recent FOMC statements are being interpreted optimistically by investors who now believe that future rate hikes have a low probability.  We have heard this before.  This, combined with end of quarter window dressing by large institutional investors, led to a sharp rise in the major averages on Friday.  Little notice is being made of the sharp down turn in the last hour of Friday trading because the major averages ended up for the day.  

 

      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

-0.9%

1.5%

-0.2%

1.1%

-3.2%

NASDAQ Composite Index

-2.1%

2.4%

-0.4%

-0.2%

-3.8%

S & P 500 Index

-1.4%

2.1%

-0.6%

-0.1%

-2.8%

NYSE Composite Index

-1.6%

3.1%

-0.1%

-0.4%

-4.1%

Russell 2000 Index

-1.7%

5.0%

-0.4%

-1.2%

-4.9%

HGX, Phil. Housing Index

-5.5%

1.6%

0.6%

-0.9%

-6.8%

IYR, Real Estate

0.4%

3.7%

-2.2%

-0.9%

0.0%

GLD, GOLD

-3.6%

5.6%

0.5%

-4.6%

-4.8%

RKH, Banking

-2.5%

2.3%

-1.2%

-2.5%

-1.1%

IYT, Transportation

3.4%

3.0%

2.8%

2.1%

-4.4%

SMH, Semiconductors

-4.9%

1.4%

-1.7%

1.3%

-5.9%

BBH, Biotechnology

-1.4%

3.5%

-2.0%

0.6%

-3.3%

OIH, Oil Infrastructure

-3.8%

6.1%

-0.9%

-0.2%

-8.4%

XLE, Energy

0.3%

6.3%

0.5%

0.6%

-6.6%

XLU, Utilities

-0.8%

2.0%

-1.4%

-1.1%

-0.2%

XLB, Materials

-2.2%

3.7%

1.1%

0.0%

-6.8%

XLI, Industrial

-1.6%

1.7%

-0.1%

1.3%

-4.4%

XLK, Technology

-1.8%

1.5%

-0.8%

1.3%

-3.7%

XLV, Healthcare

-2.1%

0.9%

-1.1%

-0.4%

-1.5%

XLF, Financials

-2.9%

2.3%

-0.6%

-2.7%

-1.7%

XLP, Consumer Staples

1.0%

1.6%

0.2%

-0.1%

-0.8%

XLY, Consumer Discretionary

-1.7%

1.6%

-0.8%

0.0%

-2.4%

 

 

 

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

 

 

Table 2B

Volatility

Indicator

Current

Last Week

2 Weeks Ago

Complacent

Cautious

VIX **

13.1

15.9

17.3

< 20

> 50

VXN ***

17.9

20.4

21.7

< 30

> 70

**   Below 20 day SMA = Short-term buy signal.

*** Below 20 day SMA = Short-term buy signal.

 

 

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

 

 

FIGURE 2A

 

 

 

 

 

 

 

 

Table 2C

Market Summary

 

Industries are listed according to the Yahoo Industry Classification System

 

 Major Indices 
 For the Past Week:
 Dow Jones      1.5%
 NASDAQ         2.4%
 S&P500 Index   2.1%
 Russell 2000   5.0%
 NYSE           3.1%
 
 30 Year Bond 5.186%
 10 Year Note 5.138%
 
 Leading Industries
 For the Past Week:
Silver
Toy & Hobby Stores
Steel & Iron
Metal Fabrication
Machine Tools & Accessories
Oil & Gas Equipment & Services
Copper
Aluminum
Oil & Gas Refining & Marketing
Independent Oil & Gas
  
 Lagging Industries
 For the Past Week:
Basic Materials Wholesale
Information Technology Services
Diversified Computer Systems
Drugs - Generic
Beverages - Wineries & Distillers
Education & Training Services
Semiconductor- Memory Chips
Medical Appliances & Equipment
Home Furnishing Stores
Auto Parts Stores
 
 Leading Industries
 For the Past Month:
Internet Information Providers
Regional Airlines
Major Airlines
REIT - Office
Drug Stores
Recreational Vehicles
Dairy Products
Telecom Services - Domestic
REIT - Hotel/Motel
Specialty Eateries
  
 Lagging Industries
 For the Past Month:
Asset Management
Home Furnishing Stores
Drugs - Generic
Auto Parts Stores
Computer Based Systems
Building Materials Wholesale
Basic Materials Wholesale
Printed Circuit Boards
Lodging
Department Stores
  
 Crude Oil $73.85
 
 Gold for the past 30 days:
 USD    -2.43%
 CAD    -1.33%
 CHF    -2.09%
 GBP    -1.39%
 EUR    -2.30%
 JPY    -0.86%

 

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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 Monday

1 Month

1 Week Ago

2 weeks Ago

3 Weeks Ago

4 Weeks Ago

Net Insider Buying

-0.9%

1.2%

-4.5%

-0.2%

-2.7%

0.9%

-2.4%

Cash Rich Companies

2.4%

-0.9%

-2.3%

-0.6%

0.7%

-2.6%

0.6%

Price to Free Cash Flow

-2.6%

0.1%

-8.3%

0.6%

-2.3%

-1.9%

-5.0%

Growth Momentum

3.1%

1.5%

3.3%

5.3%

3.4%

-0.6%

-4.6%

Lynch

15.1%

-0.6%

3.0%

4.0%

0.1%

3.2%

-4.0%

Buffett

9.2%

-0.2%

0.9%

1.8%

1.2%

0.9%

-2.9%

Graham

7.8%

0.5%

-0.4%

3.2%

-0.6%

-0.8%

-2.2%

Templeton

2.6%

-0.1%

-2.9%

1.5%

-1.4%

-0.3%

-2.8%

 Zweig

5.5%

0.4%

1.1%

3.7%

1.6%

-0.5%

-3.3%

Average

4.7%

0.2%

-1.1%

2.1%

0.0%

-0.2%

-3.0%

 

 

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

ACME

05/12/06

1.6%

ACME Communications, Inc.

Services

Broadcasting & Cable TV

-8.0%

1.4%

-85

-85

SGXP

06/09/06

-1.9%

SGX Pharmaceuticals, Inc.

Health Care

Biotechnology & Drugs

-7.0%

-15.3%

-69

-69

TRGT

06/02/06

-5.0%

Targacept , Inc.

Health Care

Biotechnology & Drugs

-5.6%

-5.0%

-68

-68

RGNC

05/26/06

-2.0%

Regency Energy Partners LP

Utilities

Natural Gas Utilities

-4.3%

-4.3%

-65

-65

APN

06/09/06

-6.0%

Applica Incorporated

Consumer Cyclical

Appliances & Tools

-8.3%

-2.6%

-65

-65

EQS

04/13/06

0.0%

Equus II Incorporated

Financial

Investment Services

-9.1%

-3.4%

-64

-64

MOCC

05/26/06

2.9%

Moscow CableCom Corp.

Services

Broadcasting & Cable TV

-3.0%

4.2%

-48

-48

FVRL

06/16/06

0.0%

Favrille, Inc.

Health Care

Biotechnology & Drugs

-3.5%

-7.9%

-45

-45

TWI

06/16/06

2.1%

Titan International, Inc.

Consumer Cyclical

Auto & Truck Parts

-2.2%

-3.5%

-30

-30

 

 

      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

ACTS

05/05/06

-5.0%

Actions Semiconductor Co., Ltd. (ADR)

Technology

Semiconductors

-12.1%

-2.8%

-75

-75

WSC

03/11/06

-4.4%

Wesco Financial Corporation

Conglomerates

Conglomerates

-6.4%

-2.6%

-33

-33

SCIX

04/07/06

16.7%

Scailex Corp., Ltd.

Technology

Computer Networks

-1.5%

-1.5%

-17

-17

 

 

      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

FIS

05/12/06

-4.8%

Fidelity National Information Services

Services

Business Services

-6.1%

-1.5%

-80

-80

FNLY

06/16/06

-4.9%

Finlay Enterprises, Inc.

Services

Retail (Specialty Non-Apparel)

-8.8%

-2.3%

-66

-66

RHD

06/09/06

1.8%

R.H. Donnelley Corp.

Services

Advertising

0.0%

5.5%

-32

-32

 

 

      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

CAE

04/21/06

-4.1%

Cascade Corporation

Capital Goods

Misc. Capital Goods

-6.9%

1.4%

-37

-37

BTI

08/12/05

25.8%

British American Tobacco (ADR)

Consumer Non-Cyclical

Tobacco

-2.9%

-1.3%

-22

-22

AZN

02/03/06

27.7%

AstraZeneca PLC (ADR)

Health Care

Major Drugs

0.0%

9.4%

-7

-7

PKX

06/16/06

10.9%

POSCO (ADR)

Basic Materials

Iron & Steel

-1.0%

2.6%

-6

-6

 

 

      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

MDR

05/12/06

-1.4%

McDermott International

Capital Goods

Construction Services

-2.0%

-1.5%

-23

-23

ENDP

02/17/06

10.7%

Endo Pharmaceuticals

Health Care

Biotechnology & Drugs

-1.3%

4.7%

-1

-1

KCS

05/12/06

0.0%

KCS Energy, Inc.

Energy

Oil & Gas Operations

0.0%

3.1%

0

0

 

 

      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

GTRC

06/30/06

0.0%

Guitar Center, Inc.

Services

Retail (Specialty Non-Apparel)

0.0%

-10.1%

-86

-86

FNF

10/21/05

6.4%

Fidelity National Financial

Financial

Insurance (Property & Casualty)

-10.5%

-7.0%

-78

-78

NKE

09/23/05

-0.3%

NIKE, Inc.

Consumer Cyclical

Footwear

-11.4%

-1.0%

-65

-65

ANF

03/03/06

-7.2%

Abercrombie & Fitch Co.

Services

Retail (Apparel)

-14.7%

-4.4%

-63

-63

MDC

06/30/06

0.0%

M.D.C. Holdings, Inc.

Capital Goods

Construction Services

0.0%

-6.4%

-56

-56

CCRT

12/30/05

-0.1%

CompuCredit Corporation

Financial

Consumer Financial Services

-8.6%

-0.7%

-35

-35

JBHT

03/31/06

15.6%

J.B. Hunt Transport Services, Inc.

Transportation

Trucking

-3.6%

-0.1%

-25

-25

AEOS

03/10/06

15.7%

American Eagle Outfitters

Services

Retail (Apparel)

-0.4%

5.0%

-23

-23

BTI

12/30/05

12.6%

British American Tobacco (ADR)

Consumer Non-Cyclical

Tobacco

-2.9%

-1.3%

-22

-22

KSWS

06/30/06

0.0%

K-Swiss Inc.

Consumer Cyclical

Footwear

0.0%

-1.3%

-19

-19

NUE

06/30/06

0.0%

Nucor Corporation

Basic Materials

Iron & Steel

0.0%

0.6%

-10

-10

OXY

03/03/06

7.9%

Occidental Petroleum Corporation

Energy

Oil & Gas Operations

-4.3%

1.6%

-9

-9

HDI

10/14/05

11.6%

Harley-Davidson, Inc.

Consumer Cyclical

Recreational Products

-1.6%

8.5%

-7

-7

STR

05/26/06

12.3%

Questar Corporation

Utilities

Natural Gas Utilities

-0.2%

4.9%

-4

-4

NAT

05/12/06

13.9%

Nordic American Tanker Shipping Limited

Transportation

Water Transportation

0.0%

12.1%

-3

-3

ABFS

04/29/05

59.2%

Arkansas Best Corporation

Transportation

Trucking

0.0%

14.6%

-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

UU

06/10/05

-2.0%

United Utilities PLC (ADR)

Utilities

Electric Utilities

-6.9%

-6.9%

-64

-64

OKE

11/11/05

26.5%

ONEOK, Inc.

Utilities

Natural Gas Utilities

-2.2%

-2.2%

-36

-36

OTTR

06/09/06

2.2%

Otter Tail Corporation

Utilities

Electric Utilities

-0.9%

-1.2%

-31

-31

PGN

01/10/05

-2.7%

Progress Energy, Inc.

Utilities

Electric Utilities

-6.3%

0.4%

-27

-27

WGL

12/23/05

-5.0%

WGL Holdings, Inc.

Utilities

Natural Gas Utilities

-7.9%

-1.1%

-24

-24

WPS

05/26/06

1.4%

WPS Resources Corp

Utilities

Electric Utilities

-0.9%

-0.9%

-21

-21

SRE

01/10/05

25.8%

Sempra Energy

Utilities

Natural Gas Utilities

-6.7%

-1.4%

-12

-12

UGI

12/30/05

19.5%

UGI Corporation

Utilities

Natural Gas Utilities

0.0%

2.1%

-7

-7

EON

03/10/06

4.6%

E.ON AG (ADR)

Utilities

Electric Utilities

-6.0%

0.0%

-6

-6

ATO

04/01/05

3.6%

Atmos Energy Corporation

Utilities

Natural Gas Utilities

-6.2%

2.5%

-6

-6

VVC

03/03/06

4.9%

Vectren Corporation

Utilities

Natural Gas Utilities

-0.9%

0.8%

-5

-5

ATG

10/21/05

15.2%

AGL Resources Inc.

Utilities

Natural Gas Utilities

0.0%

2.7%

0

0

 

 

 

      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

CHS

06/30/06

0.0%

Chico's FAS, Inc.

Services

Retail (Apparel)

0.0%

-12.5%

-86

-86

LOW

11/18/05

-8.0%

Lowe's Companies, Inc.

Services

Retail (Home Improvement)

-12.6%

-4.4%

-82

-82

CPS

05/27/05

4.2%

ChoicePoint Inc.

Services

Business Services

-9.8%

-8.3%

-80

-80

FLIR

04/28/06

-6.3%

FLIR Systems, Inc.

Capital Goods

Aerospace and Defense

-13.3%

-10.1%

-74

-74

LEN

05/19/06

-9.0%

Lennar Corporation

Capital Goods

Construction Services

-9.4%

-0.4%

-70

-70

EWBC

12/30/05

3.9%

East West Bancorp, Inc.

Financial

Regional Banks

-7.3%

-7.3%

-70

-70

JNJ

02/17/06

1.4%

Johnson & Johnson

Health Care

Major Drugs

-3.0%

-2.3%

-69

-69

BZH

06/16/06

-2.8%

Beazer Homes USA, Inc.

Capital Goods

Construction Services

-2.8%

-7.4%

-64

-64

MMM

05/12/06

-6.7%

3M Company

Conglomerates

Conglomerates

-7.3%

-4.7%

-62

-62

MDC

06/30/06

0.0%

M.D.C. Holdings, Inc.

Capital Goods

Construction Services

0.0%

-6.4%

-56

-56

GBCI

05/05/06

-5.1%

Glacier Bancorp, Inc.

Financial

Regional Banks

-5.1%

-2.4%

-40

-40

SPLS

05/26/06

1.7%

Staples, Inc.

Services

Retail (Specialty Non-Apparel)

-2.1%

1.0%

-38

-38

GISX

12/30/05

19.2%

Global Imaging Systems, Inc.

Technology

Office Equipment

-1.8%

-1.5%

-28

-28

JBHT

06/16/06

3.7%

J.B. Hunt Transport Services, Inc.

Transportation

Trucking

-1.6%

-0.1%

-25

-25

DGX

08/19/05

19.9%

Quest Diagnostics Incorporated

Health Care

Healthcare Facilities

0.0%

4.7%

-10

-10

CHD

11/18/05

9.1%

Church & Dwight Co., Inc.

Consumer Non-Cyclical

Personal & Household Products

-3.9%

1.2%

-9

-9

HDI

02/24/06

4.5%

Harley-Davidson, Inc.

Consumer Cyclical

Recreational Products

0.0%

4.3%

-7

-7

MIK

12/30/05

16.6%

Michaels Stores, Inc.

Services

Retail (Specialty Non-Apparel)

0.0%

5.9%

-2

-2

 

 

      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

STRA

01/13/06

7.2%

Strayer Education, Inc.

Services

Schools

-11.6%

-4.7%

-68

-68

ANF

04/13/06

-4.3%

Abercrombie & Fitch Co.

Services

Retail (Apparel)

-14.7%

-4.4%

-63

-63

SKIL

06/02/06

2.9%

SkillSoft Public Limited Company

Technology

Computer Services

-5.1%

2.9%

-58

-58

BTU

06/09/06

6.7%

Peabody Energy Corporation

Energy

Coal

0.0%

-14.1%

-53

-53

TMTA

06/02/06

10.8%

Transmeta Corporation

Technology

Semiconductors

-4.7%

10.8%

-38

-38

GS

06/16/06

4.5%

Goldman Sachs Group, Inc.

Financial

Investment Services

-1.2%

-2.4%

-30

-30

FSH

05/05/06

-0.9%

Fisher Scientific International Inc.

Technology

Scientific & Technical Instruments

-5.2%

-1.9%

-25

-25

ERF

05/05/06

3.5%

ENERPLUS RESOURCES FUND SR G TR UNITS

Energy

Oil & Gas Operations

-1.4%

-1.4%

-19

-19

ESI

11/04/05

11.3%

ITT Educational Services

Services

Schools

0.0%

1.1%

-10

-10

LSTR

02/10/06

9.8%

Landstar System, Inc.

Transportation

Trucking

-1.5%

2.4%

-9

-9

RRC

06/30/06

0.0%

Range Resources Corp.

Energy

Oil & Gas Operations

0.0%

2.3%

-5

-5

MRO

04/28/06

5.0%

Marathon Oil Corporation

Energy

Oil & Gas Operations

-0.3%

6.3%

-5

-5

SII

04/28/06

5.3%

Smith International, Inc.

Energy

Oil Well Services & Equipment

-0.3%

7.3%

-4

-4

CRDN

06/09/06

10.7%

Ceradyne, Inc.

Capital Goods

Aerospace and Defense

0.0%

9.8%

-4

-4

BSC

06/16/06

6.6%

The Bear Stearns Companies Inc.

Financial

Investment Services

0.0%

2.0%

0

0

HTLD

01/27/06

8.5%

Heartland Express, Inc.

Transportation

Trucking

-6.4%

3.2%

0

0

MDU

01/27/06

5.4%

MDU Resources Group, Inc.

Utilities

Natural Gas Utilities

-1.4%

0.3%

0

0

 

 

 

4.0           Results & Conclusions

 

      This section highlights trading performance.  Only a summary is provided here to save space.  Detailed lists of closed trades can be found on the portfolio page of the website.

 

 

 

Major Indices Year to Date

Relative to SMA 200

200 Day High Close

Relative to High

 

12/30/05

7/1/06

% Chg

07/01/06

Prior Week

DOW

10717.5

11,150.22

4.04%

2.19%

1.13%

11642.7

-4.23%

NASDAQ

2205.32

2,172.09

-1.51%

-2.51%

-4.75%

2370.88

-8.38%

S&P500

1248.29

1,270.20

1.76%

0.61%

-1.28%

1325.76

-4.19%

Russell 2K

673.22

724.67

7.64%

2.78%

-2.27%

781.83

-7.31%

NYSE

7753.95

8169.07

5.35%

2.87%

-0.08%

8646.96

-5.53%

Average

 

 

3.46%

1.19%

-1.45%

 

-5.93%

 

4.1 Options Trading

 

Average Profit per Trade 1.2%

 

Average Hold Time 2.7 days

 

 

4.2 Stock Trading

 

 

Stock Trading for 2006 ($10.5K Initial Capital)

Number of Closed trades in 2006 =

9

 

Av