[CANSLIM] Worley's Weekend Weeview - dedicated to the memory of those lost in the 9/11 attacks


From: "Tom Worley" <stkguru@bellsouth.net>
Subject: [CANSLIM] Worley's Weekend Weeview - dedicated to the memory of those lost in the 9/11 attacks
Date: Sun, 8 Sep 2002 07:22:17 -0400

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ECONOMICS
ISM (Institute for Supply Management, formerly NAPM) reported that its =
index slipped to 50.5, unchanged from July, and well under expectations =
of 51.8. While this is still technically growth (7th straight month over =
50, indicating expansion), it is still weak. And the New Orders Index =
component came in at 49.7%, down from 50.4%, while the employment index =
rose to 45.8% from 45.0% (indicating jobs are being lost, but at a =
slower rate, contradictory to Friday's Employment report from Commerce, =
who can we trust, business, or government??).

Construction spending was essentially unchanged in July after two =
straight months of declines (note that this is July data, what will =
August show in a month), primarily helped by data on single family homes =
(HOV lifted the whole sector with its astonishing earnings report this =
past week). But without the $1.7 billion boost in govt spending on =
construction, this would have made a third month of declines.

Commerce Dept reported that factory orders in July rose 4.7%, as =
expected. Note that this is stale data, and contrasts with the weak =
report for August from ISM. Inventories in July fell 0.1%, for the 18th =
month in a row. Worth noting that the new orders for durable goods, =
previously reported at up 8.7%, was revised up further to 9.2%.

Finally, to close out the weak week, ISM reports that service sector =
activity, which represents well over a third of the US economy, fell to =
50.9 in August from 53.1, well under expectations of growth to 54.0. =
Worth noting - the service sector represents 82% of all jobs in the USA, =
and this is the third month in a row where the rate of growth slowed =
(anything over 50 is expansion, or growth).=20
- -------------------------------------------------------------------------=
- -------

EMPLOYMENT / UNEMPLOYMENT
This was a confusing week on this most critical factor of the current =
economy, and one I suspect the Feds have been focusing on far more than =
usual. It started the week off with a report that current layoffs in =
August increased 46% (over 37,000) over those in July, a disturbing =
trend for an economy waiting for corporate spending to finally kick in. =
On Thursday, we see both WalMart and Target reporting slowing sales and =
below expectations (Target actually had declining same store sales), not =
a good sign for the service sector which has been gaining jobs from =
manufacturing. And we get the weekly new unemployment claims, down =
slightly from the prior week but still over 400,000 and well above =
expectations. Even the 4 week moving average of new claims hit 400K.  =
And Q2 Productivity was revised up to 1.5% from 1.1% as business still =
continues to squeeze more out of its employees (fear of losing their =
job, maybe?). Then Friday, we get the Commerce Dept report on employment =
for August, and it shows a surprising drop of 0.2% to 5.7% unemployment, =
with 39K jobs added (expected was an unchanged rate, and 30K jobs =
added). July's jobs added was revised sharply up to 67K jobs, so it =
looks like the increase in layoff announcements was covered at least. =
But with the estimate of lost jobs in 2001 ranging from 1.5 million to =
1.9 million, and using Commerce's latest two months total job growth of =
106K, it will only take another 28 months to regain the level of =
employment at the start of 2001, not counting what has been lost in =
2002.  Personally, I find the latest monthly Employment report from =
Commerce (despite it helping boost the market on Friday) as confusing =
and illogical. It includes details like 68K job drop in factory =
payrolls, 55K drop in retail payrolls, 41K new jobs added from =
government (some for airport security), an increase in the overall labor =
force of 226K, a huge increase of 429K in the number of people described =
as "employed" (where did that come from if only 39K jobs were created, =
and payrolls were falling??). Because the labor force data comes from a =
govt survey of households, and the payrolls data from a survey of =
businesses, can we trust the data? More importantly, will the FOMC trust =
the data at their Sept 24 meeting? Are people working, and continuing to =
claim unemployment as well? With an election coming, and after the =
scandals of Enron and Worldcom, and the disclosures of unethical conduct =
by wirehouse analysts, who can we trust anymore, government? business? =
anyone?=20
- -------------------------------------------------------------------------=
- -------

FOMC
The Feds meet again on 9/24, and until Friday's report the thinking was =
nearly 50:50 that they would lower rates at that meeting. There are a =
lot of important economic reports due out in the next two weeks, and =
could even be some important corporate preannouncements of Q3 earnings. =
Based on the past two months of economic reports in particular, and =
despite Friday's employment report, I think there is more than a 50% =
chance of a rate cut, at least 25 basis points (and I don't rule out 50 =
BP) at this meeting. The Feds are very "forward" looking, usually 9 =
months or more. And the data of the past two months, and the slippage in =
forecasts of future recovery both in the economy, employment, and =
corporate earnings, has to be falling well short of their models and =
expectations. We are very close to Q3's GDP slipping back into a =
negative figure (and future revision downward of Q2's weak 1.1%), and I =
see little evidence at this time that the Feds have any choice, despite =
the already record low rates.

- -------------------------------------------------------------------------=
- -------

WORLEY'S WATCHLIST WANNABES
This list is in no way intended to recommend any stocks to the group. It =
is a part of my regular assessment of the health of CANSLIM's "M" and, =
as the name implies, only intended to identify some stocks with =
constructive chart patterns that may be worth WATCHING and learning from =
(and of course doing your own due diligence). I am employed in =
Operations by a US Broker Dealer, however everything presented by me is =
strictly my own ideas and in no way should be taken to reflect the views =
or opinions of my employer.

I typically list stocks with both RS and EPS ranking of 80 or better, =
and try to exclude stocks undergoing any merger / acquisition / buyout =
scenario. I no longer will actively consider earnings forecast for this =
year and next due the confusing data presented by DGO. I do no other due =
diligence, that is your responsibility. I will note any CANSLIM patterns =
I see, such as c&h, double (or triple) bottoms, or flat bases (shown as =
Bx where "x" is the # of weeks, IMO). I will also note LLUR (Lower Left =
Upper Right) even though it is not exactly a CANSLIM pattern.

The population of stocks I am reviewing this weekend (in 20 seconds or =
less each) is once again on the decline.

APOL - channeling
BRKL - c&h
ERES - LLUR turned into a double bottom, handle forming
FBP - B4
FNFG - B3
FVB - high handle
GGC  - triple bottom, volume needs to decline in the handle
HBHC - LLUR
IBCP - poor c&h
IBKC - B5
NYCB - high handle
OSIS - small c&h below the high, EPS only 73
PORT - B6
SSNC - long consolidation, in my VR Fund
TRBS - B5
TTWO - b/o failed on over 4X ADV
WCNX - possible c&h
WM - B4
YDNT - possible c&h

Happy Hunting, may everyone remain safe and secure this week

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley

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<DIV><FONT face=3DArial><STRONG>ECONOMICS</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>ISM (Institute for Supply Management, formerly =
NAPM)=20
reported that its index slipped to 50.5, unchanged from July, and well =
under=20
expectations of 51.8. While this is still technically growth (7th =
straight month=20
over 50, indicating expansion), it is still weak. And the New Orders =
Index=20
component came in at 49.7%, down from 50.4%, while the employment index =
rose to=20
45.8% from 45.0% (indicating jobs are being lost, but at a slower rate,=20
contradictory to Friday's Employment report from Commerce, who can we =
trust,=20
business, or government??).</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Construction spending&nbsp;was essentially=20
unchanged&nbsp;in July after two straight months of declines (note that =
this is=20
July data, what will August show in a month), primarily helped by data =
on single=20
family homes (HOV lifted the whole sector with its astonishing earnings =
report=20
this past week). But without the $1.7 billion boost in govt spending on=20
construction, this would have made a third month of =
declines.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Commerce Dept reported that factory orders in =
July rose=20
4.7%, as expected. Note that this is stale data, and contrasts with the =
weak=20
report for August from ISM. Inventories in July fell 0.1%, for the 18th =
month in=20
a row. Worth noting that the new orders for durable goods, previously =
reported=20
at up 8.7%, was revised up further to 9.2%.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Finally, to close out the weak week, ISM reports =
that=20
service sector activity, which represents well over a third of the US =
economy,=20
fell to 50.9 in August from 53.1, well under expectations of growth to =
54.0.=20
Worth noting - the service sector represents 82% of all jobs in the USA, =
and=20
this is the third month in a row where the rate of growth slowed =
(anything over=20
50 is expansion, or growth).=20
<HR>
</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>EMPLOYMENT / =
UNEMPLOYMENT</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>This was a confusing week on this most critical =
factor of=20
the current economy, and one I suspect the Feds have been focusing on =
far more=20
than usual. It started the week off with a report that current layoffs =
in August=20
increased 46% (over 37,000) over those in July, a disturbing trend for =
an=20
economy waiting for corporate spending to finally kick in. On Thursday, =
we see=20
both WalMart and Target reporting slowing sales and below expectations =
(Target=20
actually had declining same store sales), not a good sign for the =
service sector=20
which has been gaining jobs from manufacturing. And we get the weekly =
new=20
unemployment claims, down slightly from the prior week but still over =
400,000=20
and well above expectations. Even the 4 week moving average of new =
claims hit=20
400K. &nbsp;And Q2 Productivity was revised up to 1.5% from 1.1% as =
business=20
still continues to squeeze more out of its employees (fear of losing =
their job,=20
maybe?). Then Friday, we get the Commerce Dept report on employment for =
August,=20
and it shows a surprising drop of 0.2% to 5.7% unemployment, with 39K =
jobs added=20
(expected was an unchanged rate, and 30K jobs added). July's jobs added =
was=20
revised sharply up to 67K jobs, so it looks like the increase in layoff=20
announcements was covered at least. But with the estimate of lost jobs =
in=20
2001&nbsp;ranging from 1.5 million to 1.9 million, and =
using&nbsp;Commerce's=20
latest two months total job growth of 106K, it will only take another 28 =
months=20
to regain the level of employment at the start of 2001, not counting =
what has=20
been lost in 2002.&nbsp; Personally, I find the latest monthly =
Employment report=20
from Commerce (despite it helping boost the market on Friday) as =
confusing and=20
illogical. It includes details like 68K job drop in factory payrolls, =
55K drop=20
in retail payrolls, 41K new jobs added from government (some for airport =

security), an increase in the overall labor force of 226K, a huge =
increase of=20
429K in the number of people described as "employed" (where did that =
come from=20
if only 39K jobs were&nbsp;created, and payrolls were falling??). =
Because the=20
labor force data comes from a govt survey of households, and the =
payrolls=20
data&nbsp;from a survey of businesses, can we trust the data? More =
importantly,=20
will the FOMC trust the data at their Sept 24 meeting? Are people =
working, and=20
continuing to claim unemployment as well? With an election coming, and =
after the=20
scandals of Enron and Worldcom, and the disclosures of unethical conduct =
by=20
wirehouse analysts, who can we trust anymore, government? business? =
anyone?=20
<HR>
</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>FOMC</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>The Feds meet again on 9/24, and until Friday's =
report the=20
thinking was nearly 50:50 that they would lower rates at that meeting. =
There are=20
a lot of important economic reports due out in the next two weeks, and =
could=20
even be some important corporate preannouncements of Q3 earnings. Based =
on the=20
past two months of economic reports in particular, and despite Friday's=20
employment report, I think there is more than a 50% chance of a rate =
cut, at=20
least 25 basis points (and I don't rule out 50 BP) at this meeting. The =
Feds are=20
very "forward" looking, usually 9 months or more. And the data of the =
past two=20
months, and the slippage in forecasts of future recovery both in the =
economy,=20
employment, and corporate earnings, has to be falling well short of =
their models=20
and expectations. We are very close to Q3's GDP slipping back into a =
negative=20
figure (and future revision downward of Q2's weak 1.1%), and I see =
little=20
evidence at this time that the Feds have any choice, despite the already =
record=20
low rates.</DIV>
<DIV>
<HR>
</DIV>
<DIV></FONT><FONT face=3DArial><STRONG>WORLEY'S WATCHLIST =
WANNABES</STRONG></DIV>
<DIV>
<DIV><FONT face=3DArial>This list is in no way intended to recommend any =
stocks to=20
the group. It is a part of my regular assessment of the health of =
CANSLIM's "M"=20
and, as the name implies, only intended to identify some stocks with=20
constructive chart patterns that may be worth <STRONG><FONT=20
color=3D#ff0000>WATCHING</FONT> and learning from</STRONG> (and of =
course doing=20
your own due diligence). <FONT color=3D#0000ff><STRONG><EM>I am employed =
in=20
Operations by a US Broker Dealer, however everything presented by me is =
strictly=20
my own ideas and in no way should be taken to reflect the views or =
opinions of=20
my employer.</EM></STRONG></FONT></FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>I typically list stocks with both RS and EPS =
ranking of 80=20
or better, and try to exclude stocks undergoing any merger / acquisition =
/=20
buyout scenario. I&nbsp;no longer will&nbsp;actively =
consider&nbsp;earnings=20
forecast for this year and next due the confusing data presented by DGO. =
I do no=20
other due diligence, that is your responsibility. I will note any =
CANSLIM=20
patterns I see, such as c&amp;h, double (or triple) bottoms, or flat =
bases=20
(shown as Bx where "x" is the # of weeks, IMO). I will also note LLUR =
(Lower=20
Left Upper Right) even though it is not exactly a CANSLIM =
pattern.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>The population of stocks I am reviewing this =
weekend (in=20
20 seconds or less each) is once again on the decline.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV>APOL - channeling</DIV>
<DIV>BRKL - c&amp;h</DIV>
<DIV>ERES - LLUR turned into a double bottom, handle forming</DIV>
<DIV>FBP - B4</DIV>
<DIV>FNFG - B3</DIV>
<DIV>FVB - high handle</DIV>
<DIV>GGC&nbsp; - triple bottom, volume needs to decline in the =
handle</DIV>
<DIV>HBHC - LLUR</DIV>
<DIV>IBCP - poor c&amp;h</DIV>
<DIV>IBKC - B5</DIV>
<DIV>NYCB - high handle</DIV>
<DIV>OSIS - small c&amp;h below the high, EPS only 73</DIV>
<DIV>PORT - B6</DIV>
<DIV>SSNC - long consolidation, in my VR Fund</DIV>
<DIV>TRBS - B5</DIV>
<DIV>TTWO - b/o failed on over 4X ADV</DIV>
<DIV>WCNX - possible c&amp;h</DIV>
<DIV>WM - B4</DIV>
<DIV>YDNT - possible c&amp;h</DIV>
<DIV>&nbsp;</DIV></FONT></DIV>
<DIV><FONT face=3DArial>Happy Hunting, may everyone remain safe and =
secure this=20
week</FONT></DIV>
<DIV><FONT face=3DArial></FONT><IMG alt=3D"" hspace=3D0=20
src=3D"cid:00ba01c25729$fd5559a0$6501a8c0@TOMSBOX" align=3Dbaseline =
border=3D0></DIV>
<DIV><FONT face=3DArial>Tom Worley<BR></FONT><A=20
href=3D"mailto:stkguru@bellsouth.net"><FONT=20
face=3DArial>stkguru@bellsouth.net</FONT></A><BR><FONT face=3DArial>AIM: =

TexWorley</FONT></DIV></BODY></HTML>

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