______________________________________________________________________________
Issue No. 33 – July 4, 2005
Prescott, Arizona Systems@WiserTrader.com
______________________________________________________________________________
1.0
Trading
The newsletter is becoming
decidedly more data centric. Observations are provided on technical formations
for individual stocks and the overall market that indicate the likelihood of
certain price tendencies. This week once again the focus is on stock picking
data.
1.1 Filter Summary
As trend followers it
behooves us to become keen observers and followers of master traders. A performance
summary of filtering techniques for check lists and some of the master traders
we follow is given in Table 1A. Results for composite filters, formerly
referred to as advanced filtering, have been added as a regular feature in Section
3.
Table 1A
Stock Filter Summary
|
Filter
|
Avg. % Change Since Listed
|
Avg. % Change Friday
|
Past Month
|
Past Week
|
2 weeks Ago
|
3 Weeks Ago
|
4 Weeks Ago
|
|
Net Insider Buying
|
8.4%
|
-0.3%
|
7.7%
|
2.5%
|
-0.5%
|
4.8%
|
0.8%
|
|
Cash Rich Companies
|
5.6%
|
0.1%
|
2.0%
|
2.2%
|
-4.5%
|
2.9%
|
1.6%
|
|
Growth Momentum Stocks
|
9.0%
|
0.2%
|
4.3%
|
2.7%
|
-3.1%
|
4.3%
|
0.5%
|
|
Lynch Stocks
|
5.9%
|
0.6%
|
2.8%
|
0.6%
|
-1.5%
|
2.9%
|
0.8%
|
|
Buffett Stocks
|
14.6%
|
0.6%
|
3.2%
|
1.3%
|
-2.9%
|
4.0%
|
0.9%
|
|
Graham Stocks
|
10.7%
|
1.0%
|
4.1%
|
1.9%
|
-0.1%
|
1.1%
|
1.2%
|
|
Templeton Stocks
|
4.4%
|
0.5%
|
3.7%
|
1.3%
|
-2.1%
|
2.9%
|
1.6%
|
|
Zweig Stocks
|
6.5%
|
1.1%
|
5.6%
|
2.4%
|
-3.2%
|
4.6%
|
1.9%
|
|
Composite Filter Stocks
|
2.3%
|
0.6%
|
9.9%
|
2.3%
|
-1.3%
|
7.3%
|
1.5%
|
|
Average
|
8.1%
|
0.5%
|
4.2%
|
1.9%
|
-2.2%
|
3.4%
|
1.2%
|
© 2005 Desert Mountain Systems, 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. Desert Mountain Systems markets third party trading systems but has no other affiliation
with trading system companies.
2.0
Market Analysis
The Fed target overnight
rate was raised a quarter point to 3.25%. Although widely expected, it still
managed to get a downward reaction out of the market when the Fed did not
indicate that it is ready to stop rate increases. Good economic news was
provided in the form of an upward revised first quarter GDP from 3.5% to 3.8%
and a downward revised inflation figure from 3.2% to 2.9%. This, together with
lower unemployment claims and higher than expected manufacturing activity,
helped the market rise for the week. A pull back in treasuries and gold seem
to confirm positive market sentiment. Few earnings warnings are being seen as
we head into earnings season beginning late in the coming week.
Industry leaders in Table 2A
rank from highest to lowest. Relative strength is given in Table 2B and VTO
market sentiment in Table 2C.
Major Indices for the Week:
Dow Jones +0.1%
NASDAQ +0.2%
S&P500 Index +0.2%
Russell 2000 +2.0%
30 Year Bond 4.298%
10 Year Note 4.049%
Industry Leaders
For the Past Week:
Full Line Insurance
Distillers & Vintners
Trucking
Business Training & Employment
Consumer Finance
Marine Transportation
Transportation Services
Water
Tires
Home Construction
Industry Leaders
For the Past Month:
Exploration & Production
Oil Equipment & Services
Oil Equipment, Services & Dis
Water
Platinum & Precious Metals
Distillers & Vintners
Home Construction
Real Estate Holding & Develop
Coal
Oil & Gas
Crude Oil $58.75
Gold for the past 30 days:
USD +1.14%
CAD +0.76%
CHF +4.82%
GBP +3.75%
EUR +3.81%
JPY +4.32%
Table 2B
Relative Strength Index
|
|
5 Day RSI
|
|
DOW
|
Neutral
|
|
S&P
500
|
Neutral
|
|
NASDAQ
|
Neutral
|
Table 2C
VTO Report on Market Sentiment
Indicators
|
Sentiment Indicator
|
Value
|
Last Week
|
2 Weeks Ago
|
Complacent
|
Cautious
|
|
VIX **
|
11.40
|
12.18
|
11.48
|
< 20
|
> 50
|
|
VXN ***
|
14.27
|
15.30
|
14.63
|
< 30
|
> 70
|
|
Put/Call Ratio
|
0.554
|
0.578
|
0.533
|
< 0.6
|
> 0.7
|
|
%Bulls - %Bears
|
36.0%
|
33.7%
|
32.3%
|
> 29%
|
< 20%
|
|
** Below 20 day SMA = Buy signal.
***
Below 20 day SMA = Buy signal.
|
Taking a look from the top
down in Table 2D, energy, utilities, real estate and transports rose during the
week. Small caps outperformed large caps.
Table 2D
Index Tracking Stocks, Key
Industry ETF’s and Sector SPDR’s
|
|
1 month
|
1 wk ago
|
2 wks ago
|
3 wks ago
|
4 wks ago
|
|
SPY (S&P 500)
|
-0.5%
|
0.5%
|
-2.0%
|
1.0%
|
0.0%
|
|
DIA (DOW)
|
-1.5%
|
0.3%
|
-3.0%
|
0.8%
|
0.4%
|
|
QQQQ (NASDAQ 100)
|
-3.6%
|
-0.6%
|
-2.4%
|
0.9%
|
-1.4%
|
|
IWM (Russell 2000)
|
3.6%
|
2.8%
|
-2.8%
|
2.5%
|
1.1%
|
|
GLD, GOLD
|
1.3%
|
-2.7%
|
0.6%
|
2.4%
|
1.1%
|
|
RKH, Banking
|
-1.0%
|
-0.4%
|
-1.4%
|
1.3%
|
-0.6%
|
|
IYT, Transportation
|
-3.7%
|
2.6%
|
-5.2%
|
1.9%
|
-2.8%
|
|
SMH, Semiconductors
|
-3.0%
|
-0.9%
|
-1.0%
|
-0.5%
|
-0.6%
|
|
BBH, Biotechnology
|
-0.2%
|
0.6%
|
-2.2%
|
2.0%
|
-0.6%
|
|
IYR, Real Estate
|
3.6%
|
2.1%
|
-3.4%
|
2.7%
|
2.3%
|
|
OIH, Oil
|
7.9%
|
0.0%
|
-1.0%
|
4.7%
|
4.1%
|
|
XLE,
Energy
|
6.6%
|
1.1%
|
-2.0%
|
5.0%
|
2.4%
|
|
XLB,
Materials
|
-3.5%
|
-0.8%
|
-5.1%
|
2.4%
|
0.1%
|
|
XLU,
Utilities
|
4.5%
|
2.3%
|
0.8%
|
0.5%
|
0.8%
|
|
XLI,
Industrial
|
-2.4%
|
0.6%
|
-3.5%
|
0.7%
|
-0.2%
|
|
XLK,
Technology
|
-1.4%
|
-0.1%
|
-1.5%
|
0.6%
|
-0.4%
|
|
XLV,
Healthcare
|
-0.9%
|
-0.4%
|
-1.8%
|
1.7%
|
-0.4%
|
|
XLF,
Financials
|
0.8%
|
0.6%
|
-1.1%
|
1.0%
|
0.2%
|
|
XLP,
Consumer Staples
|
-2.2%
|
0.4%
|
-2.4%
|
-0.3%
|
0.1%
|
|
XLY,
Consumer Discretionary
|
-0.5%
|
0.1%
|
-2.5%
|
1.7%
|
0.3%
|
Figure 1 compares index
tracking stocks for the major averages with Sector SPDR’s. Figure 2 compares
index tracking stocks with key industry ETF’s and the five leading ETF’s for
the week. Key industry ETF’s 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 Real Estate are respective indicators for health of the currency
and the economy in general.
FIGURE 1
FIGURE 2
3.0 Procedure
The following watch lists contain
stock candidates for consideration. They are not necessarily trades. The “Reference”
is the date that a stock passed the indicated filter and was added to or
returned to the list. The “% Change” is how the price has changed since a
stock first passed the filter. Stocks that are down 10% or more after being
listed are removed. The “% from Max” is the percentage the price has declined
from the maximum price reached after a stock first passed the filter. 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 filters is available on the web site. Send an email
if you need more details.
Key
|
Passed
Recent Filter
|
|
Passed
Composite 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. These stocks should also appear in one of the master
trader screens or meet additional screening criteria before being given serious
consideration.
Table 3A
Net Insider Buying Check List
|
Stock
|
Reference
|
% Chg
|
Company
|
Sector
|
Industry
|
% from Max
|
|
ACAD
|
04/29/05
|
11.8%
|
ACADIA
Pharmaceuticals Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
-10.5%
|
|
AETH
|
06/17/05
|
3.1%
|
Aether
Systems, Inc.
|
Technology
|
Software
& Programming
|
-0.3%
|
|
AFT
|
05/20/05
|
-7.1%
|
Axesstel,
Inc.
|
Technology
|
Communications
Equipment
|
-10.8%
|
|
ASPV
|
05/27/05
|
9.3%
|
Aspreva
Pharmaceuticals Corporation
|
Health
Care
|
Biotechnology
& Drugs
|
-6.6%
|
|
ATPL
|
07/01/05
|
0.0%
|
Atlantis
Plastics, Inc.
|
Basic
Materials
|
Fabricated
Plastic & Rubber
|
0.0%
|
|
CRTX
|
07/01/05
|
0.0%
|
Critical
Therapeutics, Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
0.0%
|
|
FTD
|
04/08/05
|
-3.4%
|
FTD Group,
Inc.
|
Services
|
Retail
(Catalog & Mail Order)
|
-3.6%
|
|
FVRL
|
04/22/05
|
16.3%
|
Favrille,
Inc.
|
Health
Care
|
Biotechnology
& Drugs
|
0.0%
|
|
IPSU
|
05/20/05
|
-5.6%
|
Imperial
Sugar Company
|
Consumer
Non-Cyclical
|
Food
Processing
|
-9.4%
|
|
IRN
|
05/20/05
|
3.7%
|