Go to Jeff Salisbury LWGate Home Page.From: "Tom Worley" <stkguru@netside.net>
Subject: [CANSLIM] Worley's Weekend Weeview
Date: Sat, 29 Dec 2001 16:14:21 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_0022_01C19083.DFC54ED0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable This post comes to you live from my new Pentium PC. I did my part for = the economy this month, what have you done lately for it? Thanks to the = new technology, I will at least look at, if not consider, the past nine = months (instead of six) of the stock charts. CONSUMER SENTIMENT While there are various means to measure this so important indicator for = future economic activity, I like the ones that reflect actual major = purchases. Two months ago, we saw the effect on auto sales figures = responding to all the 0% interest deals. Already I have seen some = evidence that current car sales were cannibalized by that. This week, we = had several more indicators, including mortgage application activity for = home purchases and the Durable Goods Report. Despite increasing = unemployment (a lagging indicator), mortgage applications hit another = record high last week, up over 15% in the past four weeks. Disregarding = seasonal adjustments and using actual applications, it was up nearly = 45%. And this is despite a sharp drop in refinancing activity seen in = November, when rates bottomed. Undoubtedly, a good bit of this is people = anticipating rates going up further in the future, and locking in a deal = now. But combined with other indicators, it shows consumer confidence in = their employment future. Economists had expected the Consumer Confidence = Index to drop to 83.0 from 84.9, instead it jumped to 93.7, first = increase in six months.=20 - -------------------------------------------------------------------------= - ------- ECONOMICS Unemployment is rising, although less than expected, yet remains low = compared to other recessions. Latest figures show new claims increased = to 393K (400K was expected). But this is still well under the 4 week = moving average, a far more reliable indicator, which dropped to 413,250 = from 438,500. Continuing claims only gained slightly. Overall = unemployment is likely to continue rising from 5.7%, probably over 6%, = during the next several months. I actually found an economist who agrees = with me that the 4th Quarter may not show negative GDP, thus defying the = traditional definition of a recession (despite the dweebs from Nat'l = Bureau of Economic Research who declared recession started in March = because that's when the growth slowed/stopped (but didn't go negative = until the third quarter). Given recent economic reports, I think it now = unlikely that the Feds will cut the rates again at the March meeting. = They may even signal an end to rate cutting by removing the bias left on = at the December meeting, to my surprise. - -------------------------------------------------------------------------= - ------- HOUSING SALES AND DURABLE GOODS Sales of new homes jumped 6.4% in November while existing home sales = increased 0.6%, both exceeding expectations (especially the new home = sales). Existing home sales are expected to exceed the record set in = 1999. Existing sales represent over 80% of all home sales. On the other = hand, new home purchases likely create more immediate purchasing = activity. Meanwhile, following the strong 12% gain in durable goods = sales in October (largely due to sweet deals on cars), this Index = dropped 4.8% in November. But excluding the highly volatile = transportation orders (which dropped 48%, who's buying a plane right = now?), the core index increased 1.1%. Excluding defense goods, it went = up 2.8%. - -------------------------------------------------------------------------= - ------- RECESSION, THE ECONOMY, AND WHAT THE FUTURE MAY HOLD Recession, what recession? NBER said last month that, oh, by the way, = the recession actually started back in March even though we didn't go = negative on growth until the third quarter. Gee, slipped right by us, = didn't it? Now, looks to me like the economy has already bottomed, and = may prove my bold forecast of a positive GDP for the fourth quarter = (made months ago right here) prove accurate. NBER is going to look = pretty funny if, in six months or so, they are forced to announce that = the recession actually ended only a month after they found it. Granted, = the fears of inflation because of a record 11 rate cuts by the Feds have = proven unfounded so far. Granted, a dramatic drop in energy has helped = both fight inflation, and spur the economy (certainly much more so than = any actions by Congress). And we cannot forget the drop in the yen, = lowering the relative cost to us of any products imported from Japan. = With the 6% production cut in crude oil production now set to start Jan = 1, 2002 by OPEC, and increasing business activity likely to create = increased energy demand, our days of cheap oil appear to be quickly = ending. But if OPEC keeps the valves partially closed too long, I = suspect they will lose the support of the non-OPEC producers, who will = be quick to crack the valves open and take advantage of rising prices. = So, WHERE DO YOU INVEST FOR 2002?? Read a very interesting report from = Sam Stovall, a strategist at Standard & Poors, that studied what sectors = or types of stocks did the best following the end of recession. In = particular, studied the past three recessions (1980, 1982, 1990) and = found that stocks gained 21% in the first 6 months from the bottom (he = picks 9/21/01 as the bottom) and 30% for the first year. He also points = out that the place to be is in growth (vs value) stocks where the = performance was 21% for value, 23% for the S&P500, and 26% for growth in = the first 6 months. Looking further, he found that the performance was = 46% for the Russell 2000 and 47% for the NASDAQ Composite for six = months. For the first full year after a recession, he found that the = growth was 29% for value stocks, 33% for S&P500, 36% for growth stocks, = and for R2000/Naz a whooping 66/67%. Technology won out in every one of = the past three recoveries from recession. Given how battered technology = has been in the past 18 months, I see no reason for a different result = this time. I think I will keep playing my small caps, and try again to = hit my goal of 100% overall in a single year, I gotta be able to beat an = index by at least half, or I should retire. - -------------------------------------------------------------------------= - ------- WORLEY'S WATCHLIST WANNABES Looks like the population of stocks I will be reviewing shrunk during = this past week. As always, my shorthand is Bx to mean a flat line "B"ase = of "x" weeks duration. If I see a specific pattern, such as a C&H, = double bottom, LLUR, etc, I will say so. RAT =3D Resuming A Trend, CAT = =3D Continuing A Trend. AMWD - c&h?? ANSS - B2+ APOG - B3, in my VR fund APPB - B3+ ASCA - high handle on the cup?, just under pivot ASFI - B2+, EPS under 80, low volume, in my VR fund BBY - high handle BIOA - RAT volatile LLUR?, B3+ BVF - B3 CACI - B3 CAKE - B3 CDWC - B4 CECO - weak triple bottom, at pivot, B4 CEDC - now that I sold in my VR Fund, it's CAT volatile LLUR CVBF - LLUR DKWD - RAT LLUR DLX - what a pretty CAT LLUR FCN - LLUR FRED - CAT/RAT LLUR GISX - forming a new handle?, in my VR fund HRBT - saucer? IDPH - double bottomed c&h, handle 6 weeks old, holiday volume decline ISLE - B4, in my VR fund, strong earnings JNC - another pretty CAT LLUR, but earnings forecast weak MATW - CAT LLUR NFI - LLUR, strong earnings NTBK - cup, no handle, strong earnings PBY - B3+ PENN - B2 PER - RAT LLUR PETM - LLUR POSS - B2, in my VR fund RYAAY - B7, an airline with strong earnings AND sales??, and a good = chart too?? TIER - B2 TTIL - high handle?, in my VR fund Happy Hunting, God bless America, and its military people, Tom Worley stkguru@netside.net - ------=_NextPart_000_0022_01C19083.DFC54ED0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2712.300" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3DArial size=3D2>This post comes to you live from my new = Pentium PC.=20 I did my part for the economy this month, what have you done lately for = it?=20 Thanks to the new technology, I will at least look at, if not consider, = the past=20 nine months (instead of six) of the stock charts.</FONT></DIV> <DIV><FONT face=3DArial size=3D2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=3DArial size=3D2><STRONG>CONSUMER = SENTIMENT</STRONG></FONT></DIV> <DIV><FONT face=3DArial size=3D2>While there are various means to = measure this so=20 important indicator for future economic activity, I like the ones that = reflect=20 actual major purchases. Two months ago, we saw the effect on auto sales = figures=20 responding to all the 0% interest deals. Already I have seen some = evidence that=20 current car sales were cannibalized by that. This week, we had several = more=20 indicators, including mortgage application activity for home purchases = and the=20 Durable Goods Report. Despite increasing unemployment (a lagging = indicator),=20 mortgage applications hit another record high last week, up over 15% in = the past=20 four weeks. Disregarding seasonal adjustments and using actual = applications, it=20 was up nearly 45%. And this is despite a sharp drop in refinancing = activity seen=20 in November, when rates bottomed. Undoubtedly, a good bit of this is = people=20 anticipating rates going up further in the future, and locking in a deal = now.=20 But combined with other indicators, it shows consumer confidence in = their=20 employment future. Economists had expected the Consumer Confidence Index = to drop=20 to 83.0 from 84.9, instead it jumped to 93.7, first increase in six = months.=20 <HR> </FONT></DIV> <DIV><FONT face=3DArial size=3D2><STRONG>ECONOMICS</STRONG></FONT></DIV> <DIV><FONT face=3DArial size=3D2>Unemployment is rising, although less = than=20 expected, yet remains low compared to other recessions. Latest figures = show new=20 claims increased to 393K (400K was expected). But this is still well = under the 4=20 week moving average, a far more reliable indicator, which dropped to = 413,250=20 from 438,500. Continuing claims only gained slightly. Overall = unemployment is=20 likely to continue rising from 5.7%, probably over 6%, during the next = several=20 months. I actually found an economist who agrees with me that the 4th = Quarter=20 may not show negative GDP, thus defying the traditional definition of a=20 recession (despite the dweebs from Nat'l Bureau of Economic Research who = declared recession started in March because that's when the growth=20 slowed/stopped (but didn't go negative until the third quarter). Given = recent=20 economic reports, I think it now unlikely that the Feds will cut the = rates again=20 at the March meeting. They may even signal an end to rate cutting by = removing=20 the bias left on at the December meeting, to my surprise. <HR> </FONT></DIV> <DIV><FONT face=3DArial size=3D2><STRONG>HOUSING SALES AND DURABLE=20 GOODS</STRONG></FONT></DIV> <DIV><FONT face=3DArial size=3D2>Sales of new homes jumped 6.4% in = November while=20 existing home sales increased 0.6%, both exceeding expectations = (especially the=20 new home sales). Existing home sales are expected to exceed the record = set in=20 1999. Existing sales represent over 80% of all home sales. On the other = hand,=20 new home purchases likely create more immediate purchasing activity. = Meanwhile,=20 following the strong 12% gain in durable goods sales in October (largely = due to=20 sweet deals on cars), this Index dropped 4.8% in November. But excluding = the=20 highly volatile transportation orders (which dropped 48%, who's buying a = plane=20 right now?), the core index increased 1.1%. Excluding defense goods, it = went up=20 2.8%. <HR> </FONT></DIV> <DIV><FONT face=3DArial size=3D2><STRONG>RECESSION, THE ECONOMY, AND = WHAT THE FUTURE=20 MAY HOLD</STRONG></FONT></DIV> <DIV><FONT face=3DArial size=3D2>Recession, what recession? NBER said = last month=20 that, oh, by the way, the recession actually started back in March even = though=20 we didn't go negative on growth until the third quarter. Gee, slipped = right by=20 us, didn't it? Now, looks to me like the economy has already bottomed, = and may=20 prove my bold forecast of a positive GDP for the fourth quarter (made = months ago=20 right here) prove accurate. NBER is going to look pretty funny if, in = six months=20 or so, they are forced to announce that the recession actually ended = only a=20 month after they found it. Granted, the fears of inflation because of a = record=20 11 rate cuts by the Feds have proven unfounded so far. Granted, a = dramatic drop=20 in energy has helped both fight inflation, and spur the economy = (certainly much=20 more so than any actions by Congress). And we cannot forget the drop in = the yen,=20 lowering the relative cost to us of any products imported from Japan. = With the=20 6% production cut in crude oil production now set to start Jan 1, 2002 = by OPEC,=20 and increasing business activity likely to create increased energy = demand, our=20 days of cheap oil appear to be quickly ending. But if OPEC keeps the = valves=20 partially closed too long, I suspect they will lose the support of the = non-OPEC=20 producers, who will be quick to crack the valves open and take advantage = of=20 rising prices. So, WHERE DO YOU INVEST FOR 2002?? Read a very = interesting report=20 from Sam Stovall, a strategist at Standard & Poors, that studied = what=20 sectors or types of stocks did the best following the end of recession. = In=20 particular, studied the past three recessions (1980, 1982, 1990) and = found that=20 stocks gained 21% in the first 6 months from the bottom (he picks = 9/21/01 as the=20 bottom) and 30% for the first year. He also points out that the place to = be is=20 in growth (vs value) stocks where the performance was 21% for value, 23% = for the=20 S&P500, and 26% for growth in the first 6 months. Looking further, = he found=20 that the performance was 46% for the Russell 2000 and 47% for the NASDAQ = Composite for six months. For the first full year after a recession, he = found=20 that the growth was 29% for value stocks, 33% for S&P500, 36% for = growth=20 stocks, and for R2000/Naz a whooping 66/67%. Technology won out in every = one of=20 the past three recoveries from recession. Given how battered technology = has been=20 in the past 18 months, I see no reason for a different result this time. = I think=20 I will keep playing my small caps, and try again to hit my goal of 100% = overall=20 in a single year, I gotta be able to beat an index by at least half, or = I should=20 retire. <HR> </FONT></DIV> <DIV><FONT face=3DArial size=3D2><STRONG>WORLEY'S WATCHLIST=20 WANNABES</STRONG></FONT></DIV> <DIV><FONT face=3DArial size=3D2>Looks like the population of stocks I = will be=20 reviewing shrunk during this past week. As always, my shorthand is Bx to = mean a=20 flat line "B"ase of "x" weeks duration. If I see a specific pattern, = such as a=20 C&H, double bottom, LLUR, etc, I will say so. RAT =3D Resuming A = Trend, CAT =3D=20 Continuing A Trend.</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>AMWD - c&h??</FONT></DIV> <DIV><FONT face=3DArial size=3D2>ANSS - B2+</FONT></DIV> <DIV><FONT face=3DArial size=3D2>APOG - B3, in my VR fund</FONT></DIV> <DIV><FONT face=3DArial size=3D2>APPB - B3+</FONT></DIV> <DIV><FONT face=3DArial size=3D2>ASCA - high handle on the cup?, just = under=20 pivot</FONT></DIV> <DIV><FONT face=3DArial size=3D2>ASFI - B2+, EPS under 80, low volume, = in my VR=20 fund</FONT></DIV> <DIV><FONT face=3DArial size=3D2>BBY - high handle</FONT></DIV> <DIV><FONT face=3DArial size=3D2>BIOA - RAT volatile LLUR?, = B3+</FONT></DIV> <DIV><FONT face=3DArial size=3D2>BVF - B3</FONT></DIV> <DIV><FONT face=3DArial size=3D2>CACI - B3</FONT></DIV> <DIV><FONT face=3DArial size=3D2>CAKE - B3</FONT></DIV> <DIV><FONT face=3DArial size=3D2>CDWC - B4</FONT></DIV> <DIV><FONT face=3DArial size=3D2>CECO - weak triple bottom, at pivot,=20 B4</FONT></DIV> <DIV><FONT face=3DArial size=3D2>CEDC - now that I sold in my VR Fund, = it's CAT=20 volatile LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>CVBF - LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>DKWD - RAT LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>DLX - what a pretty CAT = LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>FCN - LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>FRED - CAT/RAT LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>GISX - forming a new handle?, in my VR=20 fund</FONT></DIV> <DIV><FONT face=3DArial size=3D2>HRBT - saucer?</FONT></DIV> <DIV><FONT face=3DArial size=3D2>IDPH - double bottomed c&h, handle = 6 weeks=20 old, holiday volume decline</FONT></DIV> <DIV><FONT face=3DArial size=3D2>ISLE - B4, in my VR fund, strong=20 earnings</FONT></DIV> <DIV><FONT face=3DArial size=3D2>JNC - another pretty CAT LLUR, but = earnings=20 forecast weak</FONT></DIV> <DIV><FONT face=3DArial size=3D2>MATW - CAT LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>NFI - LLUR, strong = earnings</FONT></DIV> <DIV><FONT face=3DArial size=3D2>NTBK - cup, no handle, strong = earnings</FONT></DIV> <DIV><FONT face=3DArial size=3D2>PBY - B3+</FONT></DIV> <DIV><FONT face=3DArial size=3D2>PENN - B2</FONT></DIV> <DIV><FONT face=3DArial size=3D2>PER - RAT LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>PETM - LLUR</FONT></DIV> <DIV><FONT face=3DArial size=3D2>POSS - B2, in my VR fund</FONT></DIV> <DIV><FONT face=3DArial size=3D2>RYAAY - B7, an airline with strong = earnings AND=20 sales??, and a good chart too??</FONT></DIV> <DIV><FONT face=3DArial size=3D2>TIER - B2</FONT></DIV> <DIV><FONT face=3DArial size=3D2>TTIL - high handle?, in my VR = fund</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Happy Hunting,</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>God bless America, and its military=20 people,</FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV> <DIV><FONT face=3DArial size=3D2>Tom Worley</FONT></DIV> <DIV><FONT face=3DArial size=3D2><A=20 href=3D"mailto:stkguru@netside.net">stkguru@netside.net</A></FONT></DIV> <DIV><FONT face=3DArial size=3D2></FONT> </DIV></BODY></HTML> - ------=_NextPart_000_0022_01C19083.DFC54ED0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". 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