All posts by Tate Dwinnell

Weekly/After Stock Market Review Archives

After Market Report – Intel Disappoints, Another Cisco Downgrade Too Much for Nasdaq

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::: Today’s Market Action :::

In a bit of reversal of fortunes, it was industries beaten down recently (oil, metals) that outperformed while the techs, led by an Intel earnings disappointment and another Cisco downgrade that provided the catalyst for some tech profit taking.  Actually it was a bit more than profit taking today as volume came in significantly higher than average and higher than yesterday.  While one day of distribution won’t derail a market rally, this most likely sets up at least a bit more selling in the coming days and the possibility of a retest of key support levels.  It won’t pay to panic at this point, but some caution should be exercised.

::: Major Indices Performance – The Numbers :::

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day Jan 17th 2007

Nasdaq: DOWN .74% today with volume 13% ABOVE average
Nasdaq ETF (QQQQ) DOWN .82%, volume 11% ABOVE average
Dow: DOWN .04%, volume 4% ABOVE the average
Dow ETF (DIA): UP .04%, volume 10% ABOVE the average
S&P ETF (SPY): UP .04%, volume 28% BELOW the average
Russell Small Cap ETF (IWM): DOWN .43%, volume 43% BELOW the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  Leading stocks didn’t not get dragged down with the Nasdaq today, an encouraging sign for the bulls.

Summary:

* Advancers led Decliners 213 to 211.
* Advancers were up an average of 1.21% today, with volume 6% ABOVE average
* Decliners were down an average of 1.43% with volume 1% BELOW average
* The total SI Leading Stocks Index was DOWN .1% today with volume 3% ABOVE  the average

::: Where’s the Money Flowing :::

Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF’s.  A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for guaging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Technology, Broker/Dealers, Retail, Heath Care Providers, Semis
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Natural Resources, Energy, Oil, Commodities

* Today’s Market Moving Industries/Sectors (UP):
Oil, Home Construction, Oil Services, Energy, Gold, Commodities

* Today’s Market Moving Industries/Sectors (DOWN):
Technology, Transports, Semis, Broadband, Retail

::: Stocks :::

Sorry, as much as I’d like to highlight a stock of the day today, there weren’t big moves in high quality stocks interesting enough to highlight here today.

Mail Bag

I Got a Flyer in the Mail, the Stock Looks Good. Your Thoughts?

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Question:

I got a flyer in the mail yesterday about ETLY:BB. What do you think of it?  It was from James L. Rapholz’s, "Economic Advice" newsletter.  Just wanted to know what you thought of it.

My Response:

Take that flyer or print out of any email promoting a stock and immediately use it for starting a fire (preferably in the fire place) or send it to the recycle bin.  These kinds of promotions are almost always pump and dump schemes.

Industry Spotlight

Legendary Oil Investor T. Boone Pickens Thirsty for Water Rights

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If legendary oil investor T. Boone Pickens is as successful investing in the water industry as he was investing in oil, it may pay to follow his lead.  I’ve written on more than one occasion here about the potential for investing in water companies in the next few years along with several others.  Chris Mayer of Daily Wealth recently wrote the following article about the emerging demand, shrinking supply of usable water and the profit potential of investing in water rights.

 

A Refreshing Idea
By Chris Mayer

He’s a member of the coveted Forbes 400 with an estimated net worth of over $2.7 billion. The Oklahoma native built a fortune on buried treasure – namely, oil and gas. He is the founder of Mesa Petroleum, which he started for $2,500. In its first year, it netted $435,000 in profits and eventually became a billion-dollar enterprise. He was also involved in a bunch of hostile takeovers of oil and gas companies – Gulf, Phillips, and Unocal.

Now 78, the old billionaire has a new buried treasure he’s accumulating – water rights.

Do you have a guess who this cagey guy is?

He’s T. Boone Pickens. Yes, that T. Boone Pickens. And he’s gobbling up water rights in Texas.

Pickens’ new company, Mesa Water, has been buying up ground water rights in Roberts County, Texas – 200,000 acres in all. He says that over a 30-year period, he expects to make more than $1 billion on his investment of $75 million. (Which means he’ll be able to buy himself a very nice present for his 108th birthday!)

Pickens wants to take the water from the Ogallala Aquifer and pump about 200,000 acre feet of groundwater annually to El Paso, Lubbock, San Antonio, or Dallas-Fort Worth – for a price, of course.

This price would depend on how far the water needs to go. El Paso would pay around $1,400 per acre foot, while Dallas would pay $800 and San Antonio more than $1,000.

Acre feet, by the way, is a common industry metric. Basically, an acre foot of water is the amount of water required to flood a plain of 1 acre to a depth of 1 foot. Generally speaking, 1 acre foot of water can support two families of four for one year.

Pickens has no qualms about charging people for water and has a ready quip for those who think it wrong to do so. “I know what people say – water’s a lot like air. Do you charge for air? ’Course not; you shouldn’t charge for water,” says he. “Well, OK, watch what happens. You won’t have any water.”

Of course, Pickens is right. Many others are coming to the realization that water is too cheap. Hence, water rights are a great buy today.

As an individual investor, you can’t trade water rights very easily. But you can invest in a company that owns almost as much water as Pickens does – and actually, the acre feet that this company owns are more valuable than what Pickens bought. MUCH more valuable…

I’m talking about PICO Holdings (PICO).

The Rio Grande isn’t as grande as it used to be, and the Colorado River now turns to dust before reaching the Gulf of California. The once-plentiful sources of water in the American West aren’t as plentiful as they used to be. So it’s little wonder that water rights are becoming a hot commodity.

I think the value of water rights in the West will continue to soar, which is why I’m fond of PICO Holdings (PICO). The company owns 134,130 acre feet of water rights in Nevada and Arizona, plus a small amount in Colorado. In the pipeline, so to speak, the company seeks approval for an additional 42,800 acre feet of water in its Nevada lands. The company is constantly looking to acquire new water rights. It does this by legally establishing water rights in property it already owns, or by purchasing outright already established legal water rights.

Of all the places to own water rights in this country, you could choose no better than Nevada and Arizona. That’s because these states have among the highest population growth rates in the country and, subsequently, also have among the highest new home construction – both are incredibly bullish for the value of water rights.

To give you some idea of the value, let’s look at recent transactions. Keep in mind, though, that like other types of real estate, these numbers are not comparable across the board. In other words, water rights closer to end-users are worth more than water rights that are far away. Also, senior water rights are the most valuable kind. In some cases, there are several water rights on the same water resource. In these cases, the most senior right is the most valuable – because in the event of drought, it’s the last water right to go.

With those caveats in mind, let’s look at a couple of transactions. In Nevada, Vidler and Lincoln County made a sale for 2,100 acre feet of water for a price of $7,500 per acre in October 2005. In Coyote Springs, also in Nevada, water rights sold for $6,050. In Arizona, Harquahala Valley water rights sold for $2,200 per acre foot.

That gives you a sense for the range. How high can prices go? Well, over the next few years, I wouldn’‘t be surprised to see water rights climb to $10,000 per acre foot in the arid states of Nevada, Arizona, and New Mexico.

But before getting too far ahead of ourselves, let’s take a look at PICO’s current value. Assuming a value of $3,500 per acre foot for its water rights, times 134,130 acre feet, you get about $469 million, which is greater than PICO’s current enterprise value. But this figure does not include the 42,800 acre feet in Nevada that PICO expects to obtain.

Another point I should make is that PICO also owns a storage facility capable of storing up to 1 million acre feet of water. Currently, the company is buying water and storing it. The company has stored the equivalent of about 90,000 acre feet of water. I haven’t counted any of this, which could bolster the valuation even further.

And of course, I haven’t said anything about its investment portfolio or land and other interests. But you can see the margin of safety in this stock.

Now let’s go back to those water rights for a minute. Based only on PICO’s existing water rights of 134,130 (and ignoring any rights that it expects to obtain), every $119 per acre/foot increase in the value of its holdings would add $1 per share to the value of PICO stock.

So if you start to play around with projections and make some upward adjustments on the value of water rights over the years – well, you can really get some ridiculous numbers. At $10,000 per acre foot, for example, PICO’s existing water rights would be worth $84 a share!

T. Boone Pickens thinks he’ll earn $1 billion on his $76 million investment – or basically 13 times his money. PICO – already in this business, with substantial expertise and a portfolio of more valuable water rights – could do even better.

—————————————————

Looking at the chart of PICO, it looks like water rights investing is crossing the radar of more investors.  The stock recently broke out from a one and a half year base to a new all time high.  The break out was accompanied by very good volume, indcating good momentum and strong potential for future gains in the relative short term.  However, I’m sure the positive Daily Wealth article had something to do with the recent surge.  This is a thinly traded stock and prone to big movements following an article from a popular newsletter like Daily Wealth.  What I’d do is look for the stock to digest these gains a bit and return closer to 36 – 37 before considering a position.

Weekly/After Stock Market Review Archives

Weekly Market Report – Bulls Still in Charge

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What a difference a week makes.  With a light economic calendar last week and earnings not yet in full force, I didn’t expect the market to make any significant moves.  However, a big plunge in crude helped fuel a break out from a 6 week consolidation in the Nasdaq as big money moved from oil and other commodities into technology related areas.  The bulls clearly remain in charge with key support areas still intact to begin the new year, but with earnings season beginning to ramp up this week and inflation data on Wednesday and Thursday, expect some volatile moves ahead. 

::: Model Portfolio Update :::

I mentioned in a previous report I would remain relatively cautious this month until the market reveals more clues about where it’s headed.  Following last week’s breakout I may begin getting aggressive again and leveraging with margin on the long side.  Last weeks was a relatively quiet one with one sale of a quick strike profit trade in RMKR for a loss.  I was playing ultra conservatively and anticipated a breakdown of the stock following a move below support of the 50 day moving average.  Of course in hind sight it was a bad move as the stock vaulted higher the very next day and hasn’t looked back.  It continues to look very bullish.  On the long side I initiated to new long plays, both of which are highly ranked and were bouncing off the 50 day moving average.  The positions are up 12% and 7% respectively in just the past week.  After 2 trading weeks, the Self Investors Model Portfolio has picked up where it left off in ’06 with a nice gain of 5.5%, compared to just 1% for the S&P 500.  I’m currently 91% long and 9% cash.

::: PinPoint the Highest Ranked Breakout Stocks in Just Minutes Each Day! :::

Want to take your trading to the next level?  SelfInvestors.com Premium members who have been following along with buy and sell alerts in the Model Portfolio most likely had a great year as the portfolio beat the pants off the market in ’06 with a very good 27.6% return.  In addition to alerting you to the best opportunities on the long side, short opportunities are used to make money during a downturn.  That’s just one of many premium features….

There are literally dozens of breakout stocks to watch every day.  How about a database of stocks all ranked according to fundamentals and technicals, complete with pivot points, earnings date, % change from breakout and moving averages, future earnings estimates and relative strength rating?  How about Stock Watch reports highlighting long and short opportunities for the coming week?  It will save you hours of research every week and drastically improve your results.

Try it out for yourself for 30 days!  Sign in to your account here: http://www.selfinvestors.com/amember/member.php and take advantage of the no risk trial.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Resorts & Casinos: 8.05%
2. Aluminum: 7.75%
3. Medical Practitioners: 7.35%
4. Home Furnishing Stores: 7.00%
5. Investment Brokerage: 6.80%
6. Personal Computers: 6.80%
7. Major Airlines: 6.45%
8. Broadcasting – Radio: 5.90%
9. Air Services – Other: 5.75%
10. Apparel Stores: 5.70%

– Top 10 Worst Performing Industries For the Week –

1. Major Integrated Oil & GAs: -1.50%
2. Music & Video Stores: -1.25%
3. Manufactured Housing: -1.05%
4. Long Distance Carriers: -1.00%
5. Diversified Communications Services: -.80%
6. Photographic Equipment & Services: -.75%
7. Farm Products: -.70%
8. Oil & Gas Refining & Marketing: -.60%
9. Electric Utilities: -.55%
10. Mortgage Investment: -.45%

– Top 5 Best Performing ETFs For the Week –
 
1. Ishares Broker Dealers (IAI) 6.00%
2. Templeton Dragon Fund (TDF) 5.95%
3. Turkish Invest Fund  (TKF) 5.00%
4. Ishares Silver (SLV) 4.95%
5. Ishares Realty (ICF) 4.85%

– Worst 5 Performing ETF’s –

1. US Oil Fund (USO)  -6.70%
2. HLDRS Utilities (UTH) -3.85%
3. Japan Small Cap (JOF) -1.95%
4. Latin America Discovery Fund (LDF) -1.80%
5. Ishares Commodity (GSG) -1.60%

:::  IPO’s Worth Watching for This Week :::

The IPO Calendar is typically quiet at the start of a new year – no IPO’s worth watching again for this week.

::: Upcoming Economic Reports (1/15/07- 1/19/07) :::

Monday:        Market Closed
Tuesday:       None
Wednesday:  PPI, Capacity Utilization, Industrial Production, Fed Beige Book, Crude Inventories
Thursday:      CPI, Building Permits, Housing Starts, Initial Job Claims, Philly Fed, Leading
                       Indicators
Friday:           Consumer Sentiment (prelim)

::: Notable Upcoming Earnings Reports I’ll Be Watching This Week :::

Tuesday: Ameritrade (AMTD), Intel (INTC), New Oriental Education (EDU)
Wednesday: Apple (AAPL), Lennar Corp (LEN), Southwest Airlines (LUV), Witpro (WIT)
Thursday: Meridian Biosciences (VIVO)
Friday: Citigroup (C), General Electric (GE), Motorola (MOT), Satyam Computer (SAY), Schlumberger (SLB)

::: Latest Blog Entries – In Case You Missed Them! :::

– SelfInvestors Blog –

1. After Market Report: That’s a Nasdaq Breakout; Stock of Day – Genentech (DNA)
http://investing.typepad.com/tradingstocks/2007/01/after_market_re.html

2. Top Stock Picks and ETF Trends for 2007 (video is a humorous reprieve from the typically dry market material, but perhaps a bit crass – you’ve been warned 🙂
http://investing.typepad.com/tradingstocks/2007/01/ill_be_back_soo.html

Weekly/After Stock Market Review Archives

After Market Report – That’s a Nasdaq Breakout; Stock of Day – Genentech (DNA)

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::: Today’s Market Action :::

For the second time in as many days, the Nasdaq led the way higher and ultimately broke out of a trading range as trading volume continues to come into this market.  Institutions are taking part and that can only mean more green into the foreseeable future.  To begin the year I was a bit concerned that we’d see a sell off similar to the way it played out last year, but every sell attempt to begin the year was met with stiff resistance from the bulls, leaving key support levels that I discussed in the Weekend Report intact.  With the Nasdaq break today and the S&P and Dow poised to do the same soon, the picture is decidedly bullish over the next few weeks.

::: Major Indices Performance – The Numbers :::

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day Jan 11th 2007

Nasdaq: UP 1.04% today with volume 13% ABOVE average
Nasdaq ETF (QQQQ) UP 1.03%, volume 59% ABOVE average
Dow: UP ..59%, volume 4% ABOVE the average
Dow ETF (DIA): UP ..45%, volume 13% BELOW the average
S&P ETF (SPY): UP .44%, volume 19% BELOW the average
Russell Small Cap ETF (IWM): UP .62%, volume 1% ABOVE the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  Today’s strength was confirmed by SelfInvestors Leading stocks.

Summary:

* Advancers led Decliners 320 to 103.
* Advancers were up an average of 1.85% today, with volume 12% ABOVe average
* Decliners were down an average of 1.54% with volume 49% ABOVE average
* The total SI Leading Stocks Index was UP 1.02% today with volume 21% ABOVE  the average

::: Where’s the Money Flowing :::

Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF’s.  A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for guaging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Technology, Retail, Heath Care Providers, Semis, Biotech (all of the sectors you want leading in a bull market!)
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Natural Resources, Energy, Oil, Gas

* Today’s Market Moving Industries/Sectors (UP):
Biotech, Broadband, Internet, Realty, Consumer Services

* Today’s Market Moving Industries/Sectors (DOWN):
Oil, Oil Services, Software, Commodiites, Energy

::: Stocks :::

The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation.  Today’s stock is Genentech (DNA), a leader in today’s hottest sector. 

ABOUT:  Genentech, Inc. (Genentech) is a biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. A number of the existing biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes multiple biotechnology products, and receives royalties from companies that are licensed to market products based on its technology. On December 8, 2006, Lonza Group AG acquired Genentech’s mid-scale mammalian biopharmaceutical production plant in Porrino, Spain.

FUNDAMENTALS:  A company that has posted outstanding profit growth of around 60% in each of the past few years.  Sales growth is equally impressive with growth in the 40 – 50% range.  Growth is expected to moderate some over the next couple years but remain strong at 20 – 30%.  Still very impressive for a company it’s size.  Margins and ROE (continuing to rise) are excellent. 

TECHNICAL:  With the stock going nowhere for the past year, the relative strength is poor.  I expect that to change in the coming months as the stock starts a new uptrend.  On both the daily and weekly charts, the stock has broken through key resistance levels while trading volume continues to rise.  Institutions are beginning to put money to work in DNA once again.  Next stop: $100

SELFINVESTORS RATING: With a total score of 47/60 (26/30 for fundamentals, 21/30 for technical), DNA is just considered an average breakout stock.  However, given the leader status in a growth industry and much of the low score due to the low RS rating which will improve quickly, it’s a worthy mention!

Disclaimer: The stock of the day is by no means a buy recommendation.  Please do your own research and make a personal decision based on your own tolerance for risk.

Stocks

Top Stocks and ETF Trends for 2007

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Tis the season for predictions and none are more critical to your financial future than those revealed by Wall St’s finest.  Hard hitting Street reporter Tyler (Heywood) of BigBigNews , who won’t stop at anything to get them revealing their best recommendations for the New Year.  Says Heywood, "Not everyone has a nose for picking stocks!"  Eat your heart out Jim Cramer.

On a more serious note Tom Lydon of ETFTrends.com has just written up a fantastic article taking a look at 10 big trends for ETFs in 2007.

1) Global ETF’s will continue to outperform their domestic counterparts
2)  Actively managed ETFs hit the marketplace with a thud
3) The ranks of ETFs will continue to explode
4) Fidelity finally joins the party
5) The emergence of emerging markets
6) Lower fed rates boost bond ETFs
7) ETFs get ready for retirement
8) The next big gold rush
9) Bear market ETFs
10) And in the truth is stranger than fiction category….

Check out the full article on ETF Trends

Weekly/After Stock Market Review Archives

Weekly Market Report – A Volatile Start As Market Approaches Key Support

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Afer a couple weeks of light holiday trading, the first trading week of the new year brought in volatility and a shift from commodities to tech as any oil, gold, silver and steel got hit hard.  To close out the week, downgrades in Motorola, Exxon and Dell fueled significant selling on Friday, but not heavy enough to indicate institutional selling.  There is enough downward momentum however to set up a test of key support levels this week- Nasdaq 2400, S&P 1400, Dow 12300 (the 50 day moving averages).  The Nasdaq remains the strongest of the two and managed to close in the upper half of its range on Friday.  With commodities getting hammered, The Dow and S&P were hit the hardest.  In a check of leading stocks Friday, they were hit fairly hard and remain on shaky ground.  The Self Investors Leading Stock Index fell 1.33% with volume 21% greater than the average.  With big gains in hand over the past several months and the market looking tired up at these levels, now is certainly not the time to get aggressive on either side of the market.  The economic calendar is light for the coming week and earnings won’t kick off in full force for another couple weeks.  Expect more volatile days ahead as the market bounces around key support.

::: Model Portfolio Update :::

Over the past few weeks I’ve been slowly getting off margin and locking in some hard earned profits on the long side – MVIS (38%), ININ (22%), NCTY (13%), ALY (13%) as well as on the short side – JBL (16%).  After a big run in the second half of last year, a new year marked a transition where the possibility of a correction from here increases.  While the major indices still have key support intact I’m playing cautiously now and have no problem sitting largely on the sidelines for most of January.  I will look to add a short position or two in the coming days. 

I was pleased with my results for 2006.  In a check of Model Portfolios tracked by Hulbert Financial, the SelfInvestors Model Portfolio would rank 32nd out of 680 portfolios tracked by the service for 2006 and right near the top for well diversified portfolios (many of the top performing Model Portfolio focus on one particular sector or country).  After a subpar year in 2005 when I just matched market returns I made some adjustments as well as focused more time on it.  Last year I probably spent too much time in building the site and adding features and not focusing enough time in research, reviewing trades, etc.  I focused much more of my attention to trading this year and tweaked my strategy by locking in profits sooner, adding versatility (ETF’s and Quick Strike Profit plays) and becoming more of a technical  trader.  To add some gusto to the portfolio, I added Quick Strike Profit plays in the latter half of the year.  These are swing type trades with explosive profit potential in a short time.  About 20% of the portfolio is allocated to such trades.  Microvision (MVIS), which I just sold for a 38% gain is prime example.  Also implemented toward the end of the year were ETF trades to take advantage of emerging markets.  For example I recently purchased the China Fund (CHN) and sold for a quick 20% profit.  For 2007, I expect to maintain this more versatile, shorter term strategy and believe gains will be even better than they were in 2006.  We shall see.  You’ll get the details of the triumphs and tribulations throughout the year here in the Weekly Report .. stay tuned!

::: PinPoint the Highest Ranked Breakout Stocks in Just Minutes Each Day! :::

Want to take your membership to the next level?  Premium members who have been following along with buy and sell alerts in the Model Portfolio most likely had a great year as the portfolio beat the pants off the market in ’06 with a very good 27.6% return.  In addition to alerting you to the best opportunities on the long side, short opportunities are used to make money during a downturn.  That’s just one of many premium features….

There are literally dozens of breakout stocks to watch every day.  How about a database of stocks all ranked according to fundamentals and technicals, complete with pivot points, earnings date, % change from breakout and moving averages, future earnings estimates and relative strength rating?  How about Stock Watch reports highlighting long and short opportunities for the coming week?  It will save you hours of research every week and drastically improve your results.

Try it out for yourself for 30 days!  Sign in to your account here: http://www.selfinvestors.com/amember/member.php and take advantage of the no risk trial.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Internet Info Providers – 4.45%
2. Major Airlines – 3.95%
3. Trucking – 3.60%
4. Personal Computers – 3.45%
5. Networking & Comm Dev – 3.31%
6. Rubber & Plastics – 2.65%
7. Biotechnology – 2.50%
8. Regional Airlines – 2.40%
9. Drugs – Generic – 2.15%
10. Diversified Communication Services – 2.10%

– Top 10 Worst Performing Industries For the Week –

1. Oil & Gas Equip & Services: -8.45%
2. Manufactured Housing: -8.00%
3. Industrial Metals & Minerals: -7.90%
4. Heavy Construction: -7.40%
5. Silver: -6.80%
6. Gold: -6.80%
7. Oil & Gas Drilling & Exploration: -6.45%
8. Gaming Activities: -6.05%
9. Oil & Gas Refining & Marketing: -5.75%
10. Steel & Iron: -5.50%

– Top 5 Best Performing ETFs For the Week –
 
1. Japan Small Cop (JOF) 4.85%
2. HLDRS Biotech (BBH) 2.95%
3. Ishares Malaysia  (EWM) 1.75%
4. HLDRS Internet (HHH) 1.55%
5. Latin America Discovery (LDF) 1.25%

– Worst 5 Performing ETF’s –

1. Templeton Russia & E. Europe (TRF)  -12.05%
2. Turkish Invest Fund (TKF) -10.65%
3. PowerShares Dynamic Oil (PXJ) -8.40%
4. Central Europe & Russia Fd (CEE) -8.20%
5. India Fund (IFN) -7.85%

:::  IPO’s Worth Watching for This Week :::

The IPO Calendar is typically quiet at the start of a new year – no IPO’s worth watching for this week.

::: Upcoming Economic Reports (1/8/07- 1/12/07) :::

Monday:        Consumer Credit
Tuesday:       None
Wednesday:  Trade Balance, Wholesale Inventories, Crude Inventories
Thursday:      Initial Jobless Claims, Treasury Budget
Friday:           Export/Import Prices, Retail Sales, Business Inventories

::: Notable Upcoming Earnings Reports I’ll Be Watching This Week :::

There is currently a problem with the script that displays earnings dates for the stocks in the databse so no calenar for this week.  I should be fixed in time for the next Weekly Review.

Weekly/After Stock Market Review Archives

Weekly Market Report – Bulls Win Tug-O-War

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After a few weeks of a bull/bear stalemate, the bulls won out on Thursday as the market surged higher out of consolidation.  Important moves such as the one on Thursday provide clues to future direction, at least in the short term.  Right now the market is indicating higher prices as we wind down ’06.  On the technical side, the Nasdaq continues to hover at the bottom of the upward channel, the S&P remains firmly entrenched in the upward channel, while the Dow is testing resistance of the upward trend line (but is probably just carving out a flatter upward trend).  It’s a fairly busy week before trading begins to wind down ahead of Christmas and New Years, particulary on Tuesday when the PPI and housing starts numbers are released.  Until next time, good trading!

::: Model Portfolio Update :::

Following last week’s Model Portfolio surge of 7%, it pulled back a bit this week and lost 2.5% due to a couple quick strike profit plays gone bad – in Cauity (CTTY), sold for a 8% loss and Trio Tech (TRT, sold for a 12% loss).  With the market breaking out of consolidation on Thursday 2 short positions were covered which combined for just a small loss – China Life (LFC) covered for  4% loss and Icon (ICLR) covered for a 3% gain.  I continue to use just a bit of margin and the portfolio remains dominated by long positions (currently about 80% long, 20% short.  The year to date performance stands at 24.6%.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Grocery Stores                                 5.25%
2. Office Supplies                                  4.00%
3. Drug Related Products                       3.60%
4. Foreign Regional Banks                     3.15%
5. Banks – Midwest                                3.07%
6. Internet Software & Services            3.00%
7. Cement                                                2.95%
8. Electronic Equipment                           2.80%
9. Housewares & Accessories              2.70%
10. Life Insurance                                   2.65%

– Top 10 Worst Performing Industries For the Week –

1. Building Materials                                   -5.40%
2. Electronics Wholesale                           -5.15%
3. Electronic Stores                                   -3.60%
4. Trucking                                                 -3.45%
5. Semiconductor – Memory                       -3.25%
6. Printed Circuit Boards                            -3.25%
7. Drug Delivery                                         -3.20%
8. Nonmetallic Minerals & Mining                -3.15%
9. Silver                                                      -3.00%
10. Metal Fabrication                                  -2.80%

– Top 5 Best Performing ETFs For the Week –
 
1. Turkish Invest Fund (TKF)                      6.45%
2. Templeton Russia Fund (TRF)                5.00%
3. Ishares China  (FXI)                                4.30%
4. Latin America Fund (LDF)                       3.65%
5. HLDRS Software (SWH)                         3.10%

– Worst 5 Performing ETF’s –

1. Ishares Silver (SLV)                                       -6.30%
2. Central Canada Fund (CEF)                            -2.75%
3. StreetTracks REIT (RWR)                               -2.50%
4. PowerShares Biotech (PBE)                          -2.15%
5. Ishares Tawain (EWT)                                   -2.05%

:::  IPO’s Worth Watching for This Week :::

1. Fuwei Films (FFHL): China-based developer of high-quality plastic film using the biaxial-oriented stretch technique for use in consumer-based packaging, imaging, electronics, and electrical industries and in magnetic products.  Set to start trading sometime this week.

2. Melco Entertainment (MPEL):  Hong Kong-based operator of casino gaming and entertainment resort facilities in Macau. The company’s subsidiary, MPBL Gaming, is one of six companies licensed to operate casinos in Macau. Melco PBL is a 50/50 joint venture between Melco and PBL. It is the exclusive vehicle of Melco and PBL to carry on casino, gaming machines, and casino hotel operations in Macau.  Trading set to start Tuesday.

3. Trina Solar (TSL):  China-based manufacturer of integrated solar-powered products. The company produces standard solar power modules built to general specifications or designed to fit customers’ specs.  Trading set to start on Tuesday

4. Universal Power Group (UPG):  Texas-based supply chain and third-party logistics service provider of batteries, related portable power products, and security products.  Trading set to start this week.

5. Solarfun Power Holdings (SOLF):  China-based manufacturer of photovoltaic (PV) cells and PV modules in China. Solarfun recently incorporated Shanghai Linyang to provide system integration services in China. In November, it won a competitive bid to provide a substantial majority of the PV modules to be used in a 1 MW solar power plant in Shanghai.  Trading set to start on Wednesday.

::: Upcoming Economic Reports (12/18/06- 12/22/06) :::

Monday:        None
Tuesday:       Housing Starts, Building Permits, PPI
Wednesday:  Crude Inventories
Thursday:      GDP (final), Initial Claims, Leading Indicators, Fed Minutes
Friday:           Durable Orders, Personal Income, Personal Spending

::: Notable Upcoming Earnings Reports I’ll Be Watching This Week :::

Monday: Oracle (ORCL)
Tuesday: Factet Research Systems (FDS), Morgan Stanley (MS)

::: Latest Blog Entries – In Case You Missed Them! :::

– SelfInvestors Blog –

None

** Anything you’d like to see in this report or have suggestions?  Just hit your reply button and respond.  I’m all ears!

Weekly/After Stock Market Review Archives

After Market Report – Breakout!; Stock of Day – Interactive Intelligence (ININ)

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::: Today’s Market Action :::

Eventually something had to give between the bull/bear tug-o-war and today it was clear that the bulls have won this battle.  Traders have been waiting patiently for any indication that we’ll see the Santa Claus rally this year and I think today we got confirmation that this market is heading higher at least over the next couple weeks.   All of the major indices broke out of tight consolidations today, with the Dow and S&P moving to new highs.  If there was a negative today, it was the performance of SelfInvestors Leading stocks, which did move up today with significant volume and lagged the price performances of the major indices.  Tomorrow morning we get the important CPI number.

::: Major Indices Performance – The Numbers :::

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day Dec 14th 2006

Nasdaq: UP .88% today with volume 13% ABOVE average
Nasdaq ETF (QQQQ) UP 1.12%, volume 1% BELOW average
Dow: UP .81%, volume 4% ABOVE the average
Dow ETF (DIA): UP .71%, volume 5% BELOW the average
S&P ETF (SPY): UP .88%, volume 8% BELOW the average
Russell Small Cap ETF (IWM): UP .41%, volume 4% ABOVE the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  On a day like today, you’d expect leading stocks to surge higher with heavy volume.. they did not.

Summary:

* Advancers led Decliners 267 to 125.
* Advancers were up an average of 1.52% today, with volume 10% BELOW average
* Decliners were down an average of 1.26% with volume 20% ABOVE average
* The total SI Leading Stocks Index was UP .64% today with volume 1% BELOW  the average

* Where’s the Money Flowing *

Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF’s.  A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for guaging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Home Construction, HomeBuilders, Health Care, Semis, Consumer Goods, Technology
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Broadband, Nanotech

* Today’s Market Moving Industries/Sectors (UP):
Fairly broad based rally today- Internet Infrastructure, Retail, Broadband, Oil & Gas, Semis

* Today’s Market Moving Industries/Sectors (DOWN):
None

** Stocks **

The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation.  Today’s stock is Interactive Intelligence (ININ), a stock that actually broke out of consolidation yesterday, but cleared multi year highs today.  Volume levels have indicated tremendous demand for this stock. 

ABOUT:  Interactive Intelligence, Inc. is a provider of software applications for contact centers with a presence in North America; Europe, the Middle East and Africa, and Asia/Pacific. The Company offers a software solution based on Microsoft Windows that resides on a customer’s server and uses an open Session Initiation Protocol (SIP) for voice over Internet protocol (VoIP) networking. This open approach typically results in lower overall costs for phone devices, system maintenance and customer networking. The Company’s software applications are also pre-integrated to many business applications, such as financial, customer relationship management (CRM) and enterprise resource planning (ERP) software, thereby automating and tracking business transactions to customer interactions.

FUNDAMENTALS:  A company that began to move rapidly toward profitability beginning in ’02 and reached that milestone for the first time in ’04.  2006 will end as a year of record growth.
Margins are solid and ROE is outstanding (both are rising rapidly).  I have found that one key element to the market’s biggest winners is rapidly rising margins & ROE, but there aren’t many companies that meet the criteria.  Management owns a significant portion of the company (30%) which is a big positive as well.

TECHNICAL:  The technical picture of ININ is just as good as the fundamental picture, if not better.  After busting out of a base at the end of October, the stock spent several weeks carving out a very bullish pennant formation, which it just broke out of.

SELFINVESTORS RATING: With a total score of 54/60 (26/30 for fundamentals, 28/30 for technical), ININ has been the highest rated candidate in the Breakout Watch for many weeks now and remains a holding in the SelfInvetors Model Portfolio.

Disclaimer: The stock of the day is by no means a buy recommendation.  Please do your own research and make a personal decision based on your own tolerance for risk.