WSW, Tuesday, 3 January 2012

General Comment

I have changed the format of these WSW postings. The “old” had a lot of embedded charts. The new has many of the charts embedded in “infrastructure postings” at the end of a link; with information about the individual tickers and how to read them.

Let me know if this ‘works for you’ or is a PITA.

Ideas of the Week

REITS, Oils, Oil Services, Tech Sector, broad market. All looking good to go. Palladium and selected base metals too.

Early indications of some potential life in the Emerging Markets and even the UK is showing a ‘buy’ indication.

Soon we’ll be back in the need to ‘race’ these against each other and see what is winning.

News Flow

Mostly it has been holiday pap with election build up and news about Iran sabre rattling. The Euro Crisis has dampened in the news, but is not gone. That Obama put off to this year his pending “request” for another $1.x Trillion has also been left in the background on news flow. This is likely to warm up some soon. Either as a ‘Republicans Vote To Hang Granny’ or as ‘Republicans Cave-Dollar Doomed!’ story depending on how the Democrats spin it.

So news to date has not been much, but is likely to become bad Real Soon Now. (A ‘term of art’ in Unix land meaning “Yes, I said I’d have it done, and I still might, and I’m going to tell you ‘soon’, but who knows when it will really be ‘real soon now’… ;-)

The “crawler” on Bloomberg had mention that the Greeks were saying that they might need to leave the Euro Zone if more money was not lent… a subtle threat to Germany and France… We’ll see how THAT goes.

Oh, and somewhere over $7 Trillion of Japanese, US, and “western” debt has to “roll over” this year. THAT will be fun to watch. At what rate? With what maturity? Will China and OPEC continue to loan at near zero rates (and negative real rates)? Add in the “couple of $Trillion every so often” that we are presently adding to the pot and maybe a $Trillion or so for the PIIGS and we’re looking at $10 Trillion. Heck, it could easily hit $Trillion / month. Somehow I have to think that’s gonna be a problem…

Other than China and Opec: WHO has the money?

Not Latin America. Not Africa (ex OPEC). Not Europe (they are busy with a PIIGS Problem). Not Russia (though better positioned than most). Not Japan (they are about to retire in droves and the globe is not buying products big right now). Certainly not the USA.

So either China and Opec ‘roll over the cash’, or we crank up the printing presses. “Watch this space” over the year as bond auctions proceed.

The folks on “Fast Money” are saying they don’t believe this ralley is long term good, so be careful with any trades. Australia started “day two” with a dip down, so we could find out that the first day was just a ‘one day wonder’. Selected positions can still fight a flat market, but it’s not a bull run yet and the news guys are also talking it flat…

Conclusions and Likely Actions

I’m looking to swing trades and a broad market “trend trade” as general themes. Ready to exit if we don’t break through the long term chart warning posture, ready to ‘hang in there’ if it turns to a ‘new bull run’ indication on that time scale too.

SOME early recovery plays look decent, but mostly the big dividends and deep discount materials look interesting. Rails too.

Pointer To Other Topics

Some general comments on how long term investing differs from trading and my thoughts on things to do for the long term investor, start with this page:

https://chiefio.wordpress.com/2011/06/12/lti-long-term-investing/

If you are expecting global warming stuff, it’s under the “AGW” categories in the right hand margin. Things specific to the NCDC data and GIStemp are under categories with those in their names.

This posting is about the other thing I do, looking at investment markets. Prior postings in this series are available here: https://chiefio.wordpress.com/category/wall-street-week/

Posts with some relevance to trades, but not in the format of a full WSW analysis, are available under this category:

https://chiefio.wordpress.com/category/economics-trading-and-money/

The “Infrastructure Charts” for stocks, bonds, commodities, etc are in the Stock Charts category:

https://chiefio.wordpress.com/category/stock-charts/

That is a bit of a play on words as “stock” can mean stock in a company, stock of goods, or as in photography, a set of standard images. To that extent, a chart of ‘the usual bond ETFs’ is something like a stock of goods, and a stock picture… ;-)

The Nature of the Charts Here

The charts in this posting, or the linked infrastructure postings, are usually live charts, so my comments will describe how it is now, but in a week it will be showing new data and a new week. If I capture a “static image” I usually label it as such. You can tell by looking at the date bars on the bottom of a graph.

I typically use the live charts since I think it is more important to be in touch with what the market is doing NOW than to preserve the historical chart, this is, IMHO, a reasonable choice. Just don’t be surprised if the chart I describe is not the one you see a few weeks from now! If you would like to see the historical chart, you may enter custom date ranges on the charting tool at www.bigcharts.com

Wall Street Week –
Tuesday, 3 January, 2012

Long Term Context

I’m promoting this chart to the top for a while, as it is now in control. Look closely at what it’s saying.

This is a very long duration chart (5 years) of NYSE. It will not change much from week to week (just one tick mark) so guides longer term attitude. During a new bull market, it can lag so much that you miss the best bits, so a ‘trend trade’ positive can be done until this one confirms.

5 Years, NYSE

5 years, NYSE

Price is still below the SMA lines. Bear Market, be out of stocks. For traders, you can trade-in and buy the dips, then ride them back up. At this point, that ‘dip’ has reached the SMA stack. Time for traders to step out, too. (At least on this time scale).

The SMA lines have now turned from a weave to an inverted order. Price under fastest-to-slowest Simple Moving Average. A confirmed Bear Market configuration. You can be short this market, very short this market, or neutral. To be long this market, you must work at some other very short time scale, such as 10 day hourly, but not at the time scale of investors. Not yet.

MACD is below zero and with ‘blue on top’. Indicating a ‘positive run’ underway, but inside a negative (below zero) context. Slow Stochastic has near the middle, but looking indecisive (top blue segment just a bit ‘sideways’).

We still have a ‘trade in swing trade’ indication, but in an overall bear market configuration. A ‘hard way’ trade (but can make money). Only do that trade on a faster chart. 1 year daily interval or even 10 day hourly interval charts.

This chart is TLT vs SPY, as the S&P 500 is the basic investment vehicle for most folks (unless you really want to pick sectors or individual stocks, you ought to start with a “SPY / Bond” oscillator, as on this long term chart. TLT is long term US Treasuries, so gives a good view of the major alternative where cash runs during times of doubt. If you plotted a line 1/2 between those two, you would get the performance of a portfolio that was 1/2 in each. A pretty good basic strategy for times that are hard to judge. They form a natural hedge pair during spikes, for example.

TLT vs SPY (20 year Treasury Bonds vs Stocks) with RSI, MACD and DMI

TLT vs SPY (20 year Treasury Bonds vs Stocks) with RSI, MACD and DMI

This chart continues to warn that Treasuries are a bit long in the tooth now and look to be hitting a lid on price rise. With $7 Trillion of ‘rollover’ coming, I’d step out.

If not stocks and not bonds, then what? (Note that on the 1 year chart stocks are having a ‘buy’ indicate for a ‘trend trade’ – just not yet in ‘buy and hold for years’ territory.)

Well, there are times when the right place to be is in cash, minimizing risk and preserving buying power. You can also look to early entry into depressed commodities and some commodity stocks. Also simply move to faster time scale trades. On the one year chart we have some “go ahead and buy” indications:

General Stock Markets Overview

The broad stock markets charts are here:

https://chiefio.wordpress.com/2011/12/15/global-stocks-survey/

SPY is in a ‘bull market’ posture on this time scale. So a ‘trend trade’ until the longer term chart also swaps to positive. You can be in for weeks to months, but be ready to leave as soon as the trend leaves. Some of the ‘variety markets’ around the world also look like they are reversing, but from a lower base point.

My general observation is just the the US S&P 500 looks a lot better than the European and Emerging markets (at this time…)

Yet even the EZU EU Stocks basket is showing signs of a ‘buy soon’ indicate and the UK Ticker is already indicating “ok to buy”:

UK vs other rising stock tickers

UK vs other rising stock tickers

EWU  -  UK ETF
QQQQ -  NASDAQ 100 ETF
SPY  -  S&P 500 Benchmark ETF
EWJ  -  Japan ETF
EWL  -  Swiss ETF

All of these have positive trade indicators (MACD ‘blue on top’ and above zero or very near it) with RSI showing ‘rising lows’ off of a ‘near 20’ range. DMI is a slower indicator so has not yet confirmed on them.

EEM, the emerging markets is not yet positive, but usually follows in just a little time. EWA, Australia is also not yet positive, but is likely a currency artifact. If IN Australia it is likely already a crossover ‘buy’ with many miners up today. A chart in the local currency would give clarity, but I don’t know of a site that lets me set the currency to local …

10 Day Hourly Fast Trader Chart

You can see the “pop” up at the open today. Not a big trend yet, but holidays are like this…

Eventually I’ll put this in a linked chart as well.

Trader Chart - Longs and Shorts of Index Funds  10 day hourly interval

Trader Chart - Longs and Shorts of Index Funds 10 day hourly interval

The Dollar Lately

Time to measure our Rubber Ruler.

The currency charts are now on the Bonds and Currencies chart here:

https://chiefio.wordpress.com/2011/12/20/bonds-overview-charts/

The US Dollar continues to be OK, the Euro is not. No particular currency standing out yet (not much changes from before the holidays until just after)

Were Bonds a good idea?

The bonds charts are now on the Bonds and Currencies chart here:

https://chiefio.wordpress.com/2011/12/20/bonds-overview-charts/

Bonds look like the run is over.

I’d stick with what I said last time: “Not a big hurry, so I’d clip any dividend payments before exiting a fund, but that rise in TLT over several months is not really sustainable long term, so will either go flat or roll down. No, not time to short, yet… Just that the panic run from the Euro to US Treasuries is likely slowing down now.”

WIP “World Inflation Protected” bonds fund looks like it’s bottoming. Present yield is 10.73% on the fund and prices are down. Nice bottom fish / value play from the looks of it. Has a nice mix of UK, France, Japan, S. Korea, Turkey, South Africa bonds (with an inflation ‘kicker’). I’d not bet big on it, but it looks like a reasonable place for 1/10 a portfolio or less.

World Inflation Protected Securities - 1 year daily

World Inflation Protected Securities - 1 year daily

That is the kind of chart you look for when ‘bottom fishing’.

Base Metals vs. Precious Metals

Precious metals:

https://chiefio.wordpress.com/2011/12/13/gld-gold-vs-silver-and-currencies/

Gold did a bit of a pop today, but that is in the context of a confirmed bear run in precious metals. Price below the SMA stack, MACD below zero with red on top. DMI with red on top. I’d wait for a confirmed bottom. Until then any rise is just a ‘head fake’ or traders returning from holiday re-establishing trading postures.

Silver had a significant pop today. It has some promising features in the chart, such as a ‘low’ about the same as the prior bottom (just before the Silver Bubble took off) It still has price below the SMA stack and MACD red on top and below zero, but it looks like a ‘crossover soon’ to blue on top and a potential for a trade higher. More risky than I like, but metals are often like that. China posted better than expected PMI Index (manufacturing picking up) so the industrial metals were the obvious play. I would like to see it have some ‘legs’ before jumping in.

SLV Silver ETF

SLV Silver ETF

Base Metals infrastructure chart posting is here:

https://chiefio.wordpress.com/2011/12/14/base-metals-vs-gold-and-silver/

Palladium is already in a ‘buy’ indication. MACD blue on top and crossing over zero. RSI rising from a low with higher lows. Price over the SMA stack. Nickle looking good too. Tin looks like a ‘buy soon’ indicate coming (that is, MACD looks about to cross over to blue on top). If you miss one metal from the set, you can hop on the next one to move…

PALL Paladium vs JJC Copper, JJN Nickel, JJT Tin

PALL Paladium vs JJC Copper, JJN Nickel, JJT Tin

So some industrial metals pickup, with more to come. That implies economic improvement and stocks to pick up ‘soon’.

What about Brazil? Also India and China.

Still not taking off.

Last time I’d said:

Oddly, looking rather like a bottom…

Still looks about the same, but we are getting some separation. IDX Indonesia and EWW Mexico looking like the best of the bunch, but still basically flat. Worth ‘watching the ripple’ to see if the bottom holds. I’ll leave this chart here for this posting, even though something very similar is in the link. Why? So it’s easy to keep an eye on IDX ;-) EWM – Malaysia looks interesting too, though it is not on the chart.

Brazil the EWZ ETF vs the BZF currency ETF

Brazil ETF vs Currency Race

EWZ  - Brazil
GLD  - Gold fund
BZF  - Brazilian Real currency
IDX  - Indonesia
FXI  - China
EWA  - Australia
EPI  - India - WIsdom Tree fund
EWC  - Canada
EWW  - Mexico
GUR  - Middle East Fund

Indicators still saying “stay out” for Brazil in general with ‘red on top’ (though weaving some) and MACD below zero; but with RSI having “lower lows” and with price weaving with the SMA stack in a bottoming weave, it looks like downside has stopped. Just a little ‘resolve to the upside’ and we’ll be good to go. Then again, with renewed active socialist action by their president it could just lay there…

Sectors

ETFs with Dividends

We looked at these a while ago. While a few of these, like utilities, sold down a bit in the rush to risk today, the charts continue to show good configurations.

https://chiefio.wordpress.com/2011/12/29/dividend-etfs/

Ag Commodities & Ag Related Companies

“FUD” a food basket and “JJG” a grain basket have both moved into positive indications and an ‘off the bottom’ movement.

https://chiefio.wordpress.com/2011/12/31/agriculture-stocks-and-commodities/

FUD "food" and JJG "gain" vs DBA an agriculture basket benchmark

FUD "food" and JJG "gain" vs DBA an agriculture basket benchmark

This would imply some of the food related industries could be interesting as well.

The ag inputs, MON MOS POT AGU, had some upward drift, and some of them have “blue on top” MACD to a swing trade, but not yet in ‘investable” ranges.

CZZ as a bottom fishing opportunity in Brazil looks OK for small sizes.

Transports

Generally looking good, especially rails. Ships lagging, but in a general run up they give a change to get on board late.

Air Cargo also looking good (but never own a passenger airline…)

https://chiefio.wordpress.com/2011/12/31/transports/

See the link for particular rails listed in the charts. Both the Candians and the American majors other than CSX are looking very nice.

Oil And Fuels?

The charts are here:

https://chiefio.wordpress.com/2012/01/01/oil-and-energy-stocks-and-etfs/

Oil topped $100 / bbl today and is showing a ‘risk on’ indication. Oil companies rising too, with XOM Exxon and CVX Chevron both leading. Several others in good positions too. Couple of postings back I said they were OK to buy, looks like that was a decent call.

In the oils services area, it too is taking off. FTK Flotek and PKD Parker Drilling in particular are on rocket rides. (Though that can’t go on forever, so faster trades on things on rocket rides, ok?)

REITS

Real Estate Investment Trusts look like they are all in nice upward runs, with dividends too ;-)

REITS Race

REITS Race

PEI  Pennsylvania Real Estate - Mall REIT (REMOVED to make better graph)
VTR  Ventas - sr. care, nursing homes, hospitals
PSA  Public Storage - junk storage units
BXP  Boston Properties - office REIT on BosWash corridor  
HCN  Health Care REIT -  extended care, senior care, medical offices
HCP  Health Care Properties - ex. care, senior living, Dr. offices
PCL  Plum Creek Timber - lumber and trees REIT
SPY  S & P 500 broad stock market benchmark
RPT  Ramco Mall REIT
PLD  Prologis - logistics 

Looks like the REITS are generally off and running too. Nice dividends, opportunity for inflation protection. What’s not to like?

Year In Review

So what did the wins and losses look like for the last year?

The “up / down raio” favors down. The best up is about the same as the best down, but the worst down was double the worst up. You needed to pick precisely to “win” and not just do broad market or random picks.

Winners were a fairly narrow set, with Pipelines as the number one. Gas distribution and “multiutilities” also in the list; so if you were not in that general ‘utilities and gas’ sector, you were missing out. I chose to mostly just sit out. Partly due to the distractions of a new job and doing a round trip to Florida, partly due to the belief that it would take very good and narrow picks to win. Given this list, I think that was an OK decision. Still, I left money on the table in pipelines, tobacco, Industrial Suppliers, restaurants and bars…

10 Best Performing Industries Industry Name 	Percent Change
Dow Jones U.S. Pipelines Index 	50.85%
Dow Jones U.S. Tobacco Index 	30.10%
Dow Jones U.S. Industrial Suppliers Index 	29.92%
Dow Jones U.S. Restaurants & Bars Index 	28.36%
Dow Jones U.S. Consumer Finance Index 	25.95%
Dow Jones U.S. Gas Distribution Index 	18.11%
Dow Jones U.S. Multiutilities Index 	17.98%
Dow Jones U.S. Gas Water & Multiutilities Index 	17.66%
Dow Jones U.S. Computer Services Index 	16.91%
Dow Jones U.S. Clothing & Accessories Index 	15.00%

10 Worst Performing Industries Industry Name 	Percent Change
Dow Jones U.S. Platinum & Precious Metals Index 	-51.15%
Dow Jones U.S. Coal Index 	-47.30%
Dow Jones U.S. Aluminum Index 	-41.56%
Dow Jones U.S. Nonferrous Metals Index 	-37.77%
Dow Jones U.S. Business Training & Employment Agencies Index 	-35.80%
Dow Jones U.S. Investment Services Index 	-35.14%
Dow Jones U.S. Full Line Insurance Index 	-34.51%
Dow Jones U.S. Auto Manufacturers Index 	-33.16%
Dow Jones U.S. Industrial Metals Index 	-32.35%
Dow Jones U.S. Airlines Index 	-32.19%

I avoided most of the Platinum drop, then suggested a “buy” a bit on the late end that was still too early. (In trading, “too early” is how you say “wrong”). I avoided some dramatic potential losses in coal, aluminum, metals in general, a variety of services and financials. Airlines? Um, does “never own an airline” sound familiar? ;-) And car companies? What, compete with the government in a socialized industry? No Way!

All in all, not too bad a choice. And it’s not like I was completely out. I had some high dividend things that were ‘utility like’ along with my perma-hold of BRKA.

But at this point it looks like markets are showing signs of life, so it is most likely time to get back into the game. With that, what’s it been like “lately”?

Monthly Running Stocks

Well, the “up / down ratio” is pretty poor. Glad to have sat out the last month.

So what “won” and “lost” over the last month? (though remember, they may not be the winners next month… it’s just to provide ‘context’).

One Month

10 Best Performing Industries Industry Name 	Percent Change 
Dow Jones U.S. Brewers Index 	7.27%
Dow Jones U.S. Internet Index 	6.94%
Dow Jones U.S. Diversified Industrials Index 	6.83%
Dow Jones U.S. Home Improvement Retailers Index 	6.68%
Dow Jones U.S. General Industrials Index 	6.01%
Dow Jones U.S. Residential REIT Index 	5.28%
Dow Jones U.S. Pipelines Index 	4.93%
Dow Jones U.S. Hotel & Lodging REIT Index 	4.86%
Dow Jones U.S. Restaurants & Bars Index 	4.71%
Dow Jones U.S. Building Materials & Fixtures Index 	4.65%

Not a lot of gain. Beer and Internet? REITS and Industrials we saw. The Holiday trade of hotels and restaurants too. Building materials? I wonder how much of that was just today… (I probably ought to have grabbed this image yesterday ;-)

How about the losers?

10 Worst Performing Industries Industry Name 	Percent Change (over time selected)
Dow Jones U.S. Coal Index 	-14.12%
Dow Jones U.S. Mining Index 	-14.10%
Dow Jones U.S. Gold Mining Index 	-13.79%
Dow Jones U.S. Aluminum Index 	-12.84%
Dow Jones U.S. Platinum & Precious Metals Index 	-11.06%
Dow Jones U.S. Basic Resources Index 	-8.65%
Dow Jones U.S. Consumer Electronics Index 	-8.27%
Dow Jones U.S. Real Estate Services Index 	-7.81%
Dow Jones U.S. Oil Equipment & Services Index 	-7.00%
Dow Jones U.S. Exploration & Production Index 	-6.57%

Many more chances to lose than to win. Mostly materials and some consumer electronics. Oil services took a dip (in an otherwise upward trend, if a young one). IF we are in the start of a real recovery, these will be areas that rise. Decent bottom fishing opportunities.

Weekly Wining and Losing Sectors

The best and worst of the week? Do they tell a different story on the short term trade?

Golly, even with the great day today in the mix, the last week of trading days has been pretty dismal. Only in the 1.x% range for the BEST bet sector? Glad I took the holidays off! We again see pipelines and Internet. Home Construction looks more like short covering to me. Things in the fractional percentage are basically random and have little information value. I don’t trade biotech as it is so R&D vs Govt Regulation driven.

10 Best Performing Industries Industry Name 	Percent Change (over time selected)
Dow Jones U.S. Home Construction Index 	1.72%
Dow Jones U.S. Internet Index 	1.60%
Dow Jones U.S. Mobile Telecommunications Index 	1.50%
Dow Jones U.S. Pipelines Index 	1.27%
Dow Jones U.S. Biotechnology Index 	1.24%
Dow Jones U.S. Paper Index 	0.76%
Dow Jones U.S. Forestry & Paper Index 	0.76%
Dow Jones U.S. Telecommunications Index 	0.74%
Dow Jones U.S. Fixed Line Telecommunications Index 	0.67%
Dow Jones U.S. Hotel & Lodging REIT Index 	0.66%

Dropping?

10 Worst Performing Industries Industry Name 	Percent Change (over time selected)
Dow Jones U.S. Platinum & Precious Metals Index 	-4.47%
Dow Jones U.S. Mortgage REIT Index 	-4.17%
Dow Jones U.S. Nonferrous Metals Index 	-3.81%
Dow Jones U.S. Mining Index 	-3.71%
Dow Jones U.S. Gold Mining Index 	-3.39%
Dow Jones U.S. Full Line Insurance Index 	-3.35%
Dow Jones U.S. Coal Index 	-3.30%
Dow Jones U.S. Electronic Office Equipment Index 	-3.18%
Dow Jones U.S. Industrial Metals Index 	-2.96%
Dow Jones U.S. Basic Resources Index 	-2.95%

Two or three times as hard down as up. Precious metals (Christmas Jewelry demand over?). Mortgages? Well duh. Metals and mining? Only lately showing a clear ‘off the bottom’ so being on a down dip during the “nobody buying everyone gone home” time is common. Insurance (hey, a financial) and office equipment would not have been on my potential buy list anyway. Then more materials.

There is a little bit of worry about the things down (materials) being rather like the things showing a bottom (base metals), so watch them closely…

I’m leaving in this chart from the prior posting list as they are still rising nicely. Looks like generally “good to go”:

Selected stocks and ETFs compared to SPY

Selected stocks and ETFs compared to SPY

IYJ  - Industrials ETF
IRT  - Retail ETF
SPY  - S&P 500 ETF your benchmark
PALL - Palladium physical metal ETF
IJT  - Small Cap Growth ETF
CBT  - Cooper Tire
GT   - Goodyear Tire and Rubber
HD   - Home Depot
LOW  - Loew's
PIR  - Pier 1 Imports

PIR one looks a bit tired to me, but several of the others have nice ‘lower left to upper right’ patterns. There is some momentum to find in those lists above…

I need to make a follow on chart from the newer lists.

Momentum Trades

First off, the caveat page. Know how to exit before you enter a momentum trade:

https://chiefio.wordpress.com/2011/10/26/when-momentum-fails/

This is NOT buy and hold investing, OK?

The general approach is to find lists of stocks going up, then look at their chart for ‘what is in a good configuration and likely to continue’, then wait for an entry. That last part can be particularly frustrating in stocks with a strong momentum as the ‘dips’ either never come, or come at the eventual blow off top of an exhausted big momentum run. So sometimes I’ll just ‘scale in’ to momentum stocks. Buy some each dip, and exit all of it on a topping indication.

This posting gives an overview of the method of picking:

https://chiefio.wordpress.com/2011/07/20/alpha-bubbles-and-lists/

A trial using the default days length setting didn’t return much of benefit. A nearly random result over a month or two. I’m going to try a 6 month and 1 month screen this time.

FINVIZ 6 month Bubbles chart provides a list of stocks that moved up over a 6 month period. I’ve selected some of them, randomly selecting from the top group and tossing out those with a big step up and flat or otherwise looking more ‘news driven’ to the chart.

FINVIZ Bubbles Momentum Chart 6 mos

FINVIZ Bubbles Momentum Chart

ARG  -  AirGas
VZ   -  Verizon
GOOG -  GOOGLE
ISRG -  Intuitive Surgical
FAST -  Fastenal Corp
KLAC -  KLA - Tencor
BMY  -  Bristol Meyers Squib
AAPL -  Apple Computers
WMT  -  WalMart
XOM  -  Exxon Mobile

I also tended to pick larger bubbles (as size does matter) and those on top of a pile. We’ll keep this chart here for a few postings and see how the 6 month screen does.

How did the 3 month version do?

I’m going to leave this chart up a while so we can watch how the 3 month chart did. These were picked about November(ish) so we’ll watch them for a few more months and see if a 3 month screen was predictive. Two of these tickers have the “shoot up mostly flat” of “merger news” and I’d screen those out if doing it again.

FINVIZ 3 Month Chart

FINVIZ 3 Month bubbles stocks

FINVIZ 3 Month bubbles stocks

GR   - Goodrich Corp
FFIV - F5 Networks
SNDK - Sandisk
RHT  - Red Hat
TSO  - Tesoro
EP   - El Paso
GWW  - WW Granger
KLAC - KLA Tencor
ORLY - O'Reilly Automotive Parts
FAST - Fastenal

One Month Screen

A one month scale.

Well, a somewhat more interesting set. Finding those quick off the bottom lately. We’ll see how they do over time:

FINVIZ 1 mo screen on 3 Jan 2011

FINVIZ 1 mo screen on 3 Jan 2011

GCI  -  Gannet Company
VMC  -  Vulcan Materials
CTAS -  Cintas Corp (Uniforms and entrance mats and such)
GE   -  General Electric
AMP  -  Ameriprise Financial
BBT  -  BB&T Corp (Branch Banking & Trust)
MAS  -  Masco
JPM  -  J.P.Morgan Chase Bank
WFC  -  Wells Fargo Bank
TAP  -  Molsen Coors Beer

Not sure financials would have been high on my list of things to look at, so this may be good for catching early turnarounds. A couple of building materials / construction companies too. Well, well see how it does. Chart looks interesting anyway.

Barchart Top 100 did?

How about the Barchart Top 100?

The top of their list last November, selected to a few and charted:

Barchart.com Top 100 top 10

Barchart.com Top 100 top 10

From the mid-December list, I selected 10 stocks. I started with the top, and took every tenth name, but skipping those that were already charted (two on the prior chart and FTK that we already picked on the Oils chart).

Barchart Top 100 December 2011 - 10 scaled picks

Barchart Top 100 December 2011 - 10 scaled picks

Sym 	Name 	                Weighted
                                Alpha 	        Last 	Change 	Percent High 	Low 	Time 	   
QCOR 	Questcor Pharmaceuti 	+176.54 	43.33 	-1.28 	-2.87% 	45.51 	42.84 	12/21/11 	   	   
PZZI 	Pizza Inn       	+149.30 	5.62 	+0.26 	+4.85% 	5.74 	5.39 	12/21/11	   
DPZ 	Domino's Pizza Inc 	+107.70 	33.60 	+0.12 	+0.36% 	33.72 	33.05 	12/21/11 	   	   
SPSC 	Sps Commerce     	+97.10 	26.86 	+0.62 	+2.36% 	27.89 	26.39 	12/21/11 	      
CONN 	Conn's          	+81.60 	10.26 	-0.93 	-8.31% 	11.12 	10.23 	12/21/11 	   	   
SURG 	Synergetics Usa 	+76.00 	7.24 	+0.12 	+1.69% 	7.27 	6.68 	12/21/11 	   	   
STMP 	Stamps.Com Inc. 	+68.80 	25.63 	-0.75 	-2.84% 	26.42 	24.95 	12/21/11 	   	   
ULTA 	Ulta Salon Cosmetics 	+64.00 	65.87 	-1.10 	-1.64% 	67.64 	65.04 	12/21/11 	      
USLM 	United States Lime 	+59.30 	59.63 	-0.44 	-0.73% 	60.30 	59.30 	12/21/11 	   
FEIC 	Fei Company     	+52.60 	40.86 	-0.18 	-0.44% 	41.26 	39.40 	12/21/11 	   

The list now? At the first trading day of 2012? Very similar to last time. It does not change fast as they look to use a 1 year interval for computing Alpha. Given that, I’m going to leave the two charts above as “all the charts for now”. Folks wanting to do more can pick some off of this list and track them, then report back.


Sym 	Name 	                Weighted
                                Alpha 	        Last 	Change 	Percent High 	Low 	Time 	  
SIMO 	Silicon Motion Techn 	+269.30 	20.80 	+0.32 	+1.56% 	21.30 	20.70 	01/03/12 	   
VRUS 	Pharmasset 	+207.70 	130.29 	+2.09 	+1.63% 	130.63 	128.03 	01/03/12 	   
EGAN 	Egain Comm Cp 	+171.10 	7.10 	+0.19 	+2.75% 	7.46 	7.01 	01/03/12 	   
SARA 	Saratoga Res Inc 	+160.70 	7.30 	unch 	unch 	7.59 	7.30 	01/03/12 	   
PCYC 	Pharmacyclics 	+159.60 	15.02 	+0.20 	+1.35% 	15.30 	14.94 	01/03/12 	   
EDAC 	Edac Technologies 	+159.10 	11.07 	+0.02 	+0.18% 	11.19 	10.99 	01/03/12 	   
GLNG 	Golar Lng Limited 	+149.80 	44.24 	-0.21 	-0.47% 	46.00 	44.00 	01/03/12 	   
LQDT 	Liquidity Services 	+146.70 	37.50 	+0.60 	+1.63% 	38.79 	36.49 	01/03/12 	   
ASUR 	Asure Software Inc 	+144.30 	6.88 	+0.51 	+8.01% 	7.00 	6.61 	16:00 	   
AETI 	American Electric 	+141.60 	5.19 	+0.11 	+2.17% 	5.19 	4.97 	01/03/12 	   
VHI 	Valhi 	+138.80 	62.01 	+1.54 	+2.55% 	63.09 	60.60 	01/03/12 	   
PATK 	Patrick Industries 	+137.00 	4.30 	+0.20 	+4.88% 	4.45 	4.10 	01/03/12 	   
ARIA 	Ariad Pharmaceutical 	+136.90 	12.27 	+0.02 	+0.16% 	12.65 	12.26 	01/03/12 	   
SPPI 	Spectrum Pharmaceuti 	+134.60 	14.71 	+0.08 	+0.55% 	14.98 	14.32 	01/03/12 	   
PHMD 	Photomedex 	+128.40 	14.42 	+1.52 	+11.78% 	14.50 	13.31 	01/03/12 	   
QCOR 	Questcor Pharmaceuti 	+128.38 	39.66 	-1.92 	-4.62% 	42.69 	38.60 	01/03/12 	   
LTS 	Ladenburg Thalmann 	+125.60 	2.46 	-0.02 	-0.81% 	2.55 	2.40 	01/03/12 	   
HSTM 	Healthstream 	+121.10 	17.76 	-0.69 	-3.74% 	19.33 	17.58 	01/03/12 	   
PZZI 	Pizza Inn 	+119.10 	5.51 	+0.01 	+0.18% 	5.61 	5.46 	01/03/12 	   
RGR 	Sturm Ruger & Compan 	+118.00 	34.14 	+0.68 	+2.03% 	34.54 	33.95 	01/03/12 	   
LBND 	DB 3X Long 25+ Year 	+109.80 	43.45 	-2.32 	-5.07% 	44.55 	43.40 	01/03/12 	   
FTK 	Flotek Industries 	+109.50 	10.52 	+0.56 	+5.62% 	10.55 	10.28 	01/03/12 	   
PKT 	Procera Networks 	+106.60 	15.64 	+0.06 	+0.39% 	16.25 	15.31 	01/03/12 	   
AKRX 	Akorn 	+106.00 	11.05 	-0.07 	-0.63% 	11.31 	10.91 	01/03/12 	   
TMF 	Direxion 30-Yr Treas 	+105.50 	68.37 	-3.15 	-4.40% 	69.65 	67.50 	01/03/12 	   
ELN 	Elan Corporation Plc 	+101.20 	13.46 	-0.28 	-2.04% 	14.10 	13.24 	01/03/12 	   
CONN 	Conn's 	+99.00 	11.65 	+0.55 	+4.95% 	12.18 	10.88 	01/03/12 	   
RIC 	Richmont Mines 	+98.38 	11.28 	+0.52 	+4.83% 	11.47 	11.13 	01/03/12 	   
DPZ 	Domino's Pizza Inc 	+94.90 	33.15 	-0.80 	-2.36% 	34.75 	33.09 	01/03/12 	   
ONTY 	Oncothyreon Inc . 	+88.50 	7.43 	-0.15 	-1.98% 	7.71 	7.41 	01/03/12 	   
STMP 	Stamps.Com Inc. 	+88.40 	26.26 	+0.13 	+0.50% 	27.09 	26.14 	01/03/12 	   
COG 	Cabot Oil & Gas Corp 	+86.10 	76.80 	+0.90 	+1.19% 	78.56 	75.60 	01/03/12 	   
MDF 	Metropolitan Health 	+85.20 	7.69 	+0.22 	+2.95% 	7.79 	7.64 	01/03/12 	   
KOG 	Kodiak Oil 	+83.00 	9.87 	+0.37 	+3.89% 	9.98 	9.70 	16:29 	   
NOIZ 	Micronetics 	+82.10 	7.60 	-0.32 	-4.04% 	8.33 	7.60 	01/03/12 	   
PSMT 	Pricesmart 	+81.89 	70.31 	+0.72 	+1.03% 	72.79 	69.61 	01/03/12 	   
STAA 	Staar Surgical Compa 	+81.40 	10.57 	+0.08 	+0.76% 	10.92 	10.40 	01/03/12 	   
ACFN 	Acorn Energy 	+80.90 	6.54 	+0.50 	+8.28% 	6.55 	6.11 	01/03/12 	   
MG 	Mistras Group Inc 	+80.20 	24.48 	-1.01 	-3.96% 	26.24 	24.35 	01/03/12 	   
ARSD 	Arabian American Dev 	+80.00 	8.39 	-0.09 	-1.06% 	8.75 	8.33 	01/03/12 	   
WINA 	Winmark Corp. 	+79.90 	58.60 	+1.23 	+2.14% 	59.73 	57.00 	01/03/12 	   
ADLR 	Adolor Corp. 	+79.10 	4.77 	+0.01 	+0.21% 	4.83 	4.67 	12/09/11 	   
EP 	El Paso Corp. 	+77.30 	26.50 	-0.07 	-0.26% 	26.97 	26.48 	01/03/12 	   
PVSA 	Parkvale Financial 	+77.30 	24.57 	-0.04 	-0.16% 	24.73 	24.10 	12/30/11 	   
ASPS 	Altisource Portfolio 	+77.10 	49.26 	-0.92 	-1.83% 	50.82 	49.18 	16:00 	   
SONO 	Sonosite 	+75.80 	53.85 	-0.01 	-0.02% 	53.98 	53.83 	01/03/12 	   
VPHM 	Viropharma Inc. 	+75.30 	27.99 	+0.60 	+2.19% 	28.79 	27.44 	01/03/12 	   
UBT 	Ultra 20+ Year Treas 	+75.20 	131.39 	-4.07 	-3.00% 	132.85 	130.68 	01/03/12 	   
ELGX 	Endologix Inc 	+75.10 	11.68 	+0.20 	+1.74% 	11.80 	11.57 	01/03/12 	   
VIDE 	Video Display Corp. 	+74.50 	6.06 	+0.06 	+1.00% 	6.14 	5.95 	01/03/12 	   
SPSC 	Sps Commerce 	+74.20 	25.00 	-0.95 	-3.66% 	26.47 	24.99 	01/03/12 	   
CYAN 	Cyanotech Corp. 	+73.90 	6.88 	-0.07 	-1.01% 	7.24 	6.62 	01/03/12 	   
MIND 	Mitcham Industries 	+73.80 	22.30 	+0.46 	+2.11% 	22.55 	22.06 	01/03/12 	   
GNRC 	Generac Holdings Inc 	+73.80 	28.07 	+0.04 	+0.14% 	28.82 	28.00 	01/03/12 	   
ISRG 	Intuitive Surgical 	+73.60 	471.71 	+8.70 	+1.88% 	473.93 	467.17 	01/03/12 	   
GNC 	Gnc Holdings Inc. 	+73.30 	28.41 	-0.54 	-1.87% 	29.34 	28.28 	01/03/12 	   
AGX 	Argan 	+73.00 	16.08 	+0.87 	+5.72% 	16.30 	15.42 	01/03/12 	   
JAZZ 	Jazz Pharmaceuticals 	+72.40 	38.59 	-0.04 	-0.10% 	39.47 	37.90 	01/03/12 	   
TNH 	Terra Nitrogen Compa 	+72.10 	172.82 	+4.90 	+2.92% 	173.53 	170.45 	01/03/12 	   
ALXN 	Alexion Pharmaceutic 	+71.90 	70.57 	-0.93 	-1.30% 	72.67 	70.14 	01/03/12 	   
CRIS 	Curis 	+71.70 	4.55 	-0.13 	-2.78% 	4.80 	4.36 	01/03/12 	   
ANLY 	Analysts Internation 	+71.70 	5.75 	+0.17 	+3.05% 	5.84 	5.55 	01/03/12 	   
WPRT 	Westport Innovations 	+71.60 	32.93 	-0.31 	-0.93% 	34.82 	32.70 	01/03/12 	   
MDW 	Midway Gold Corp. 	+70.90 	2.20 	+0.09 	+4.27% 	2.25 	2.15 	16:29 	   
PRIM 	Primoris Services 	+69.00 	15.19 	+0.26 	+1.74% 	15.34 	15.02 	01/03/12 	   
SMP 	Standard Motor Produ 	+67.80 	21.00 	+0.95 	+4.74% 	21.36 	20.45 	01/03/12 	   
IDIX 	Idenix Pharmaceutica 	+67.60 	7.35 	-0.10 	-1.34% 	7.75 	7.33 	01/03/12 	   
BGS 	B&G Foods Holdings 	+67.60 	23.53 	-0.54 	-2.24% 	24.60 	23.40 	01/03/12 	   
RNOW 	Rightnow Technologie 	+67.20 	42.74 	+0.01 	+0.02% 	42.78 	42.73 	01/03/12 	   
CLFD 	Clearfield 	+66.80 	7.47 	-0.14 	-1.84% 	7.79 	7.32 	01/03/12 	   
AEA 	Advance America Cash 	+66.20 	9.18 	+0.23 	+2.57% 	9.25 	9.10 	01/03/12 	   
SCSS 	Select Comfort Corp. 	+66.10 	22.15 	+0.46 	+2.12% 	23.39 	21.92 	01/03/12 	   
VICL 	Vical Inc. 	+65.90 	4.49 	+0.08 	+1.81% 	4.55 	4.43 	01/03/12 	   
KCI 	Kinetic Concepts 	+65.90 	68.47 	+0.01 	+0.01% 	68.50 	68.47 	11/04/11 	   
VRTS 	Virtus Investment 	+65.90 	77.50 	+1.49 	+1.96% 	77.50 	75.62 	01/03/12 	   
AMPE 	Ampio Pharmaceutical 	+65.80 	4.41 	+0.14 	+3.28% 	4.69 	4.20 	01/03/12 	   
CBST 	Cubist Pharmaceutica 	+65.60 	39.05 	-0.57 	-1.44% 	40.48 	38.79 	01/03/12 	   
CRBC 	Citizens Republic 	+65.40 	11.71 	+0.31 	+2.72% 	11.79 	11.40 	01/03/12 	   
HANS 	Hansen Natural Corp. 	+65.10 	92.50 	+0.36 	+0.39% 	94.69 	91.13 	01/03/12 	   
CBM 	Cambrex Corp. 	+64.80 	7.40 	+0.22 	+3.06% 	7.47 	7.30 	01/03/12 	   
IIN 	Intricon Corp. 	+64.20 	6.99 	+0.73 	+11.66% 	7.19 	6.40 	01/03/12 	   
FICO 	Fair Isaac And Compa 	+63.90 	36.61 	+0.77 	+2.15% 	37.66 	36.40 	16:52 	   
USLM 	United States Lime 	+63.90 	62.24 	+2.13 	+3.54% 	62.24 	61.13 	01/03/12 	   
SUSS 	Susser Holdings Corp 	+63.80 	21.95 	-0.67 	-2.96% 	22.97 	21.91 	01/03/12 	   
ECGI 	Envoy Capital Group 	+63.80 	1.93 	-0.02 	-1.03% 	1.94 	1.77 	12/21/11 	   
NUS 	Nu Skin Enterprises 	+63.50 	48.52 	-0.05 	-0.10% 	49.80 	48.45 	01/03/12 	   
RPTP 	Raptor Pharmaceutica 	+63.40 	6.40 	+0.14 	+2.24% 	6.44 	6.30 	01/03/12 	   
HITK 	Hi-Tech Pharmacal 	+63.20 	39.05 	+0.16 	+0.41% 	39.66 	38.71 	01/03/12 	   
TRLG 	True Religion Appare 	+63.00 	34.29 	-0.29 	-0.84% 	35.89 	33.92 	01/03/12 	   
BIIB 	Biogen Idec Inc 	+63.00 	113.50 	+3.45 	+3.13% 	115.01 	111.44 	01/03/12 	   
ABMD 	Abiomed 	+62.00 	18.25 	-0.22 	-1.19% 	19.09 	18.22 	01/03/12 	   
ADES 	Ada-Es 	+61.90 	22.49 	-0.15 	-0.66% 	22.89 	22.12 	01/03/12 	   
SIFY 	Sify Technologies 	+61.70 	4.30 	+0.28 	+6.97% 	4.40 	4.10 	01/03/12 	   
ACAT 	Arctic Cat Inc. 	+61.50 	22.06 	-0.49 	-2.17% 	23.50 	21.57 	01/03/12 	   
HS 	Healthspring 	+61.50 	54.61 	+0.07 	+0.13% 	54.74 	54.56 	01/03/12 	   
WLBPZ 	Westmoreland Coal 	+61.30 	26.49 	-0.51 	-1.89% 	26.97 	26.18 	12/27/11 	   
ZROZ 	Pimco 25+ Year Zero 	+61.10 	108.65 	-2.85 	-2.56% 	109.47 	108.13 	16:00 	   
BDCO 	Blue Dolphin Energy 	+60.90 	4.55 	+0.36 	+8.59% 	4.75 	4.28 	01/03/12 	   
OVRL 	Overland Storage 	+60.80 	2.69 	+0.19 	+7.60% 	2.72 	2.48 	01/03/12 	   
MSLI 	Merus Labs Internati 	+60.70 	1.90 	-0.02 	-1.04% 	1.92 	1.90 	12/30/11 	   

OK, that’s all the Mo’-MO I can do in this posting. Folks ought to mine the lists at those sites and chart up the candidates, then ‘vet’ them for things like, oh, over $2 price and not having flaky financials. Basically start with the bigger names that you know and avoid the strange names with penny stock pump and plunge behaviours. In any case, it does look like a good way to find individual names with some momentum behind them, and for the FINVIZ daily to find some bottoming reversals.

The Long Term Context

Nothing in this section has really changed. I’ve moved one of the charts from here to the top for a while, as we’re still in a negative long term context (though potentially near an inflection).

Here is another interesting chart where you can see how volatility spikes at market bottoms and drops lower during times of topping actions. It also has “momentum” on it which can act as a reminder of how much force a trend has, and which way. Slow Stochastic is better for a faster trade behaviour when ADX (of the DMI / ADX indicator above) is below 20 or so.

If this all looks like “too much”, just remember that you don’t need to look at more than the one basic chart. The rest of these indicators give more depth of insight into “why”, but not better answers as to when to be in stocks vs bonds.

SPY vs TLT with Slow Stochastic, Volatility (fast) and Momentum

SPY vs TLT with Slow Stochastic, Volatility (fast) and Momentum

Momentum saying to be ‘traded in’, while volatility is dropping low enough to be a worry “soon” and Slow Stochastic near a top (where it usually inflects) so still looking more like a ‘trade long – quick exit soon” than a ‘bias to in’.

VIX the Volatility Index

Volatility continues to drop off. Good in general, but can happen at market tops. Using options will be getting cheaper, but ETFs that hold options will be losing ‘volatility premium’.

Volatility Index and Related

Volatility Index and Related

VIX  - Volatility Index (not a ticker, you can't trade it)
VXX  - Short term VIX futures ETN (a ticker you can trade)
VXZ  - Medium term VIX futures ETN (a ticker you can trade)
FXY  - Japanese Yen
SH   - "Short" sell of SPY
SPY  - S&P 500 benchmark
IYT  - Transports, a leading sector
XHB  - Homebuilders, a leading sector and "canary" 
XRT  - Retail
Volatility Index and Related

Volatility Index and Related

You could make some money on volatility trades (VXZ and VXX), but it’s a dicey fast trade. A 6 month ‘close up’ shows recent trends. We’ve got some positive slope in the sectors shown (though hard to see as volatility is a wide swing ticker…)

Stock Indicators – what and how

When the long duration charts say “maybe making a top, but perhaps a ‘buy the dip’ moment”, I look at the faster charts and faster indicators and move to a faster time scale with faster trades. But I’m a trader.

For long term investors, you just ride the ride until the chart says “top is definitely in” and “buy the dip” until proven otherwise by a confirmed roll over (price below SMA stack). In general, I’d put very long term bias as “be in”. Trend is up, dip happened. Be in. But you just can’t ignore that the price plot looks very “rolled flat” at least… and we’re all waiting for DC and Germany to “make their moves”… So you must WATCH the chart each week, even if not acting to be out of the market yet.

If all this talk of indicators is leaving you wondering what the heck I’m talking about, hit the link in the heading of this paragraph and there is a bit of an explanation.

Click for Disclaimers, Disclosures, and Where To Get Charts

Remember that on any stock or ticker I say I’m looking at, you don’t just go buy it. You wait for a stock entry indication to get the best possible entry into the position.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Wall Street Week... and tagged , , , . Bookmark the permalink.

4 Responses to WSW, Tuesday, 3 January 2012

  1. adolfogiurfa says:

    Wall Street Stocks Exchange.
    Are there any real stocks or just a big Ponzi scheme?

  2. E.M.Smith says:

    @Adolfo:

    There are many real stocks. Most of them, in fact. Take PG, Procter and Gamble. Make most of the soap and such in the grocery store and pay over a 3% dividend with some inflation protection (as they will raise prices with inflation). Or SJW, a water company that serves San Jose California. Pays a 2.8% dividend and a very real infrastructure.

    Boring? Yup. But real and with real dividends… That, BTW, is one of the best ways to sort out the Ponzi and ‘all risk now reward’ companies. If they pay a dividend, they pretty much must have real income or are borrowing the money (and a quick check on debt/equity ratio flags that…)

    So if you are looking for a quick way to sort wheat from chaff: Positive dividends, history of dividend growth, low debt / equity ratio, PEG (price / earnings growth ratio) less than 2 and preferred close to 1. Do that, most of the crap is way far out of the net…

  3. E.M.Smith says:

    OK, updated with a new Mo’-Mo! section. It’s now ‘done’…

    Definite things that look like ‘doable’ trades, some even look investable (like REITS and high dividend stocks and ETFs), but for common stocks, be very careful…

  4. Bruce Ryan says:

    well, you could follow the charts or you could do the opposite of what I do.

Comments are closed.