[CANSLIM] Worley's Weekend Weeview


From: "Tom Worley" <stkguru@bellsouth.net>
Subject: [CANSLIM] Worley's Weekend Weeview
Date: Sat, 21 Sep 2002 09:11:16 -0400

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ECONOMICS
The Treasury Secretary believes the economy is recovering, pointing out =
that interest rates at 40 year record lows are boosting the housing and =
auto industry. Commerce Dept reports that US retail sales jumped 0.8% in =
August, ignoring the fact that in June and July this figure grew 1.4% =
and 1.1% respectively. So while there is growth, the rate is slowing, =
and the trend is down on the very element that made the recession so =
mild and short. And business spending is not picking up as expected, =
despite a rise in capital spending in Q2. And the Administration is =
sticking to the 5.7% unemployment rate previously reported.=20

A war with Iraq is expected to cost the USA between $100 and 200 =
billion, roughly 1-2% of the GDP.  But the Treasury Secretary encourages =
us that we taxpayers may not need to spend this much "Importantly, the =
president hasn't said we're going to war. He said he's determined that =
there's going to be a regime change and so we'll see how this unfolds."=20

Of course, what's a few hundred billion more when we are already back =
into deficit spending?? And we can also throw in a hundred billion or so =
for the bailout of various Latin American countries already bankrupt or =
nearly so. Who cares if it will do nothing to fix the corruption that =
caused their problems in the first place? Through 11 months of this govt =
fiscal year, we already overspent the govt income by $255 billion. And =
less than two weeks from the start of the new fiscal year, Congress has =
yet to pass a budget for 2003. I was in govt service when the USA =
changed its fiscal year from ending June to ending September. Why the =
change? Congress kept complaining that there was not enough time to =
produce a complete budget, and they had to rush to get it done before =
summer recess. Their excuse now? They are back from summer recess and =
haven't had enough time for all their meetings and hearings. I'll bet if =
their paychecks stopped on Sep 30, and only resumed (and not =
retroactively) once the budget was completely done, then we might =
actually have an approved budget on Oct 1 each year.

Industrial production overall was reported on Tuesday as well below =
expectations, and a negative number to boot (not that takes much these =
days) completely offsetting the brief rally on news that Iraq agreed to =
an unconditional surrender, oops, I mean inspection for WMD (with many =
conditions to be announced). For August, the production was down 0.3% =
(expectations were for a rise of 0.2%) running at 76% of capacity, which =
was down 0.2% from July. The unexpected drop is blamed on auto =
manufacturers (production of cars and parts down 1.4%) as they clear out =
2002 models (gee, and the economists could not expect that and factor it =
into their expectations?? Isn't that, like, an annual event or =
something?). This was the first decline recorded in industrial =
production since Dec '01. Of course, they still have to explain the 0.5% =
drop in consumer goods production, and the 0.4% drop in business =
equipment production (also fell in July). Must be my old age, and short =
term memory loss, but I would have sworn these were the very things the =
Treasury Secretary, and economists, were pointing to as what would =
slowly take us out of recession. Even manufacturing production fell =
0.1%, and durable goods production was flat, both also the worst since =
Dec '01.

Trade gap fell in July more than expected due to strong growth in =
exports (fifth straight month, highest since June 2001 - credit to the =
weakening dollar). Totaled $34.5 billion vs 37.16 in June and =
expectations of a slight drop to 37 billion. Imports fell for the first =
time in six months, a possible signal of weakening consumer demand, but =
most likely much more a result of the heavy importing done over prior =
months due to worries of a longshoremen's union threatened strike.

Both overall and core CPI rates rose 0.3% in August, each 0.1% higher =
than expected and up slightly from July. Apparel prices and cost of =
energy were the two big contributors.

Housing starts for new homes fell to 1.609 million units in August, down =
from 1.645 million units in July (which was also revised downward) and =
well under expectations of 1.674 million units. Equally of concern, =
Building Permits also fell 2.5% to 1.669 million units from 1.712 =
million units (forecast was for a small rise to 1.674 million units). =
Last time starts declined for three months straight was mid year 2000. =
Single family homes were down 4.4% while multifamily units were up 8.2%. =
Biggest rise was over 9% in the Northeast, biggest fall was the Midwest =
at nearly 19%.

Initial jobless claims fell in the latest week to 424K, but still =
exceeded expectations of 414K. The 4 week moving average rose again, to =
418,500. Continuing claims rose 71,000, biggest increase since March.

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

JAPAN
Still the # 2 economy in the world, Japan continues to ride the back of =
the USA economy, hoping for our economic recovery to increase their =
exports (and our trade deficits) and pull them out of deflation and =
recession. In the latest two moves, first the govt plans to initiate a =
buyback of stock from their banks in order to give the banks more =
liquidity to clean up the hundreds of billions of dollars worth of bad =
loans. Of course, where does the Japanese govt get the cash? From =
selling govt bonds. And their deficit spending and national debt is =
already one of the worst globally. And for the first time in history, =
the latest monthly sale of JGB failed to be fully subscribed. The govt =
was not concerned, they will still get the money, because the banks and =
broker dealers doing the sale have to buy up the over $3 billion left =
over. Then again, I never did understand why anyone wanted a JGB with a =
1.2% yield. There is something seriously wrong with this picture, seems =
more like a shell game to me. And the US economic recovery is Japan's =
last gasp chance to avoid massive financial collapse and painful =
restructuring (and they are very pain averse when it comes to reform).
- -------------------------------------------------------------------------=
- -------

"M"
Basically, it's mighty ugly, and not getting better. Looking more and =
more like we will retest the July 24 lows, and paint a double bottom on =
most indexes by early October. With forward looking forecasts from =
corporations becoming more bearish lately, a recovery in corp profits in =
Q4 looks less likely. No one (but me) apparently thinks the Feds will =
cut rates next week, but more economists are starting to expect a cut =
before end of year.

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

WORLEY'S WATCHLIST WANNABES=20
This list is in no way intended to recommend any stocks to the group. It =
is a part of my regular personal 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 look at all charts that meet this general RS/EPS criteria, =
focusing on ones at or close to a new 12 month high. I consider all =
industry groups and prices, even those I will not consider for my =
personal investing. I no longer will actively consider earnings forecast =
for this year and next due the confusing data presented by DGO. I do no =
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. Rarely are any of these stocks of interest to me for my =
personal investing due size, price or industry group. I will note any =
stocks in which I have a current personal financial interest.

The population of stocks I am reviewing this weekend appears stable, and =
continues to be dominated by banks and other financial institutions.

BYD - high handle
CCDC - nano cap, under $12
COCO - B3, may be resuming its LLUR
COH - LLUR that turned into a c&h, volume declining
ERES - was a smooth LLUR, more volatile now that it has been =
"discovered"
ERIE - B7
INVN - fell back this week, but still looks to me like an early stage =
LLUR
MBFI - B5
MWRK - 2nd handle on the cup?
OSIS - 1st b/o from the c&h failed
PDCO - weak double bottom
PETM - another LLUR that turned into a c&h, this time with a high handle
PORT - B8
RINO - c&h
RMCI - low volume b/o below the high, doing a 2:1 split
TTWO - c&h
UCFC - saucer??
WCNX - deep c&h
WGBC - c&h

Happy Hunting, and good luck


Tom Worley
stkguru@bellsouth.net
AIM: TexWorley

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<DIV><FONT face=3DArial><STRONG>ECONOMICS</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>The Treasury Secretary believes the economy is =
recovering,=20
pointing out that interest rates at 40 year record lows are boosting the =
housing=20
and auto industry. Commerce Dept reports that US retail sales jumped =
0.8% in=20
August, ignoring the fact that in June and July this figure grew 1.4% =
and 1.1%=20
respectively. So while there is growth, the rate is slowing, and the =
trend is=20
down on the very element that made the recession so mild and short. And =
business=20
spending is not picking up as expected, despite a rise in capital =
spending in=20
Q2. And the Administration is sticking to the 5.7% unemployment rate =
previously=20
reported. </FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>A war with Iraq is expected to cost the USA =
between $100=20
and 200 billion, roughly 1-2% of the GDP.&nbsp; But the Treasury =
Secretary=20
encourages us that we taxpayers may not need to spend this much =
"</FONT><FONT=20
face=3D"Times New Roman">Importantly, the president hasn't said we're =
going to=20
war. He said he's determined that there's going to be a regime change =
and so=20
we'll see how this unfolds." </FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Of course, what's a few hundred billion more =
when we are=20
already back into deficit spending?? And we can also throw in a hundred =
billion=20
or so for the bailout of various Latin American countries already =
bankrupt or=20
nearly so. Who cares if it will do nothing to fix the corruption that =
caused=20
their problems in the first place? Through 11 months of this govt fiscal =
year,=20
we already overspent the govt income by $255 billion. And less than two =
weeks=20
from the start of the new fiscal year, Congress has yet to pass a budget =
for=20
2003. I was in govt service when the USA changed its fiscal year from =
ending=20
June to ending September. Why the change? Congress kept complaining that =
there=20
was not enough time to produce a complete budget, and they had to rush =
to get it=20
done before summer recess. Their excuse now? They are back from summer =
recess=20
and haven't had enough time for all their meetings and hearings. I'll =
bet if=20
their paychecks stopped on Sep 30, and only resumed (and not =
retroactively) once=20
the budget was completely done, then we might actually have an approved =
budget=20
on Oct 1 each year.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Industrial production overall&nbsp;was reported =
on Tuesday=20
as well below expectations, and a negative number to boot (not that =
takes much=20
these days) completely offsetting the brief rally on news that Iraq =
agreed to an=20
unconditional surrender, oops, I mean inspection for WMD (with many =
conditions=20
to be announced). For August, the production was down 0.3% (expectations =
were=20
for a rise of 0.2%) running at 76% of capacity, which was down 0.2% from =
July.=20
The unexpected drop is blamed on auto manufacturers (production of cars =
and=20
parts down 1.4%) as they clear out 2002 models (gee, and the economists =
could=20
not expect that and factor it into their expectations?? Isn't that, =
like, an=20
annual event or something?). This was the first decline recorded in =
industrial=20
production since Dec '01. Of course, they still have to explain the 0.5% =
drop in=20
consumer goods production, and the 0.4% drop in business equipment =
production=20
(also fell in July). Must be my old age, and short term memory loss, but =
I would=20
have sworn these were the very things the Treasury Secretary, and =
economists,=20
were pointing to as what would slowly take us out of recession. Even=20
manufacturing production fell 0.1%, and durable goods production was =
flat, both=20
also the worst since Dec '01.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Trade gap fell in July more than expected due to =
strong=20
growth in&nbsp;exports (fifth straight month, highest since June 2001 - =
credit=20
to the weakening dollar). Totaled $34.5 billion vs 37.16 in June and=20
expectations of a slight drop to 37 billion. Imports fell for the first =
time in=20
six months, a possible signal of weakening consumer demand, but most =
likely much=20
more a result of the heavy importing done over prior months due to =
worries of a=20
longshoremen's union threatened strike.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Both overall and core CPI rates rose 0.3% in =
August, each=20
0.1% higher than expected and up slightly from July. Apparel prices and =
cost of=20
energy were the two big contributors.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Housing starts for new homes fell to 1.609 =
million units=20
in August, down from 1.645 million units in July (which was also revised =

downward) and well under expectations of 1.674 million units. Equally of =

concern, Building Permits also fell 2.5% to 1.669 million units from =
1.712=20
million units (forecast was for a small rise to 1.674 million units). =
Last time=20
starts declined for three months straight was mid year 2000. Single =
family homes=20
were down 4.4% while multifamily units were up 8.2%. Biggest rise was =
over 9% in=20
the Northeast, biggest fall was the Midwest at nearly 19%.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Initial jobless claims fell in the latest week =
to 424K,=20
but still exceeded expectations of 414K. The 4 week moving average rose =
again,=20
to 418,500. Continuing claims rose 71,000, biggest increase since =
March.</DIV>
<DIV>
<HR>
</DIV>
<DIV><STRONG>JAPAN</STRONG></DIV>
<DIV>Still the # 2 economy in the world, Japan continues to ride the =
back of the=20
USA economy, hoping for our economic recovery to increase their exports =
(and our=20
trade deficits) and pull them out of deflation and recession. In the =
latest two=20
moves, first the govt plans to initiate a buyback of stock from their =
banks in=20
order to give the banks more liquidity to clean up the hundreds of =
billions of=20
dollars worth of bad loans. Of course, where does the Japanese govt get =
the=20
cash? From selling govt bonds. And their deficit spending and national =
debt is=20
already one of the worst globally. And for the first time in history, =
the latest=20
monthly sale of JGB failed to be fully subscribed. The govt was not =
concerned,=20
they will still get the money, because the banks and broker dealers =
doing the=20
sale have to buy up the over $3 billion left over. Then again, I never =
did=20
understand why anyone wanted a JGB with a 1.2% yield. There is something =

seriously wrong with this picture, seems more like a shell game to me. =
And the=20
US economic recovery is Japan's last gasp chance to avoid massive =
financial=20
collapse and painful restructuring (and they are very pain averse when =
it comes=20
to reform).
<HR>
</DIV>
<DIV><STRONG>"M"</STRONG></DIV>
<DIV>Basically, it's mighty ugly, and not getting better. Looking more =
and more=20
like we will retest the July 24 lows, and paint a double bottom on most =
indexes=20
by early October. With forward looking forecasts from corporations =
becoming more=20
bearish lately, a recovery in corp profits in Q4 looks less likely. No =
one (but=20
me) apparently thinks the Feds will cut rates next week, but more =
economists are=20
starting to expect a cut before end of year.</DIV>
<DIV>
<HR>
</DIV></FONT>
<DIV><STRONG><FONT face=3DArial>WORLEY'S WATCHLIST =
WANNABES</FONT></STRONG> </DIV>
<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 personal assessment of the health =
of=20
CANSLIM's "M" and, as the name implies, only intended to identify some =
stocks=20
with 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 look at all charts that meet =
this&nbsp;general&nbsp;RS/EPS=20
criteria, focusing on ones at or close to a new 12 month high. I =
consider all=20
industry groups and prices, even those I will not consider for my =
personal=20
investing. I&nbsp;no longer will&nbsp;actively consider&nbsp;earnings =
forecast=20
for this year and next due the confusing data presented by DGO. <FONT=20
color=3D#ff0000>I do no due diligence, that is your =
responsibility</FONT>. I will=20
note any CANSLIM patterns I see, such as c&amp;h, double (or triple) =
bottoms, or=20
flat bases (shown as Bx where "x" is the # of weeks, IMO). I will also =
note LLUR=20
(Lower Left Upper Right) even though it is not exactly a CANSLIM =
pattern. Rarely=20
are any of these stocks of interest to me for my personal investing due =
size,=20
price or industry group. I will note any stocks in which I have a =
current=20
personal financial interest.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>The population of stocks I am reviewing this =
weekend=20
appears stable, and continues to be dominated by banks and other =
financial=20
institutions.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>BYD - high handle</FONT></DIV>
<DIV><FONT face=3DArial>CCDC - nano cap, under $12</FONT></DIV>
<DIV><FONT face=3DArial>COCO - B3, may be resuming its LLUR</FONT></DIV>
<DIV><FONT face=3DArial>COH - LLUR that turned into a c&amp;h, volume=20
declining</FONT></DIV>
<DIV><FONT face=3DArial>ERES - was a smooth LLUR, more volatile now that =
it has=20
been "discovered"</FONT></DIV>
<DIV><FONT face=3DArial>ERIE - B7</FONT></DIV>
<DIV><FONT face=3DArial>INVN - fell back this week, but still looks to =
me like an=20
early stage LLUR</FONT></DIV>
<DIV><FONT face=3DArial>MBFI - B5</FONT></DIV>
<DIV><FONT face=3DArial>MWRK - 2nd handle on the cup?</FONT></DIV>
<DIV><FONT face=3DArial>OSIS - 1st b/o from the c&amp;h =
failed</FONT></DIV>
<DIV><FONT face=3DArial>PDCO - weak double bottom</FONT></DIV>
<DIV><FONT face=3DArial>PETM - another LLUR that turned into a c&amp;h, =
this time=20
with a high handle</FONT></DIV>
<DIV><FONT face=3DArial>PORT - B8</FONT></DIV>
<DIV><FONT face=3DArial>RINO - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>RMCI - low volume b/o below the high, doing a =
2:1=20
split</FONT></DIV>
<DIV><FONT face=3DArial>TTWO - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>UCFC - saucer??</FONT></DIV>
<DIV><FONT face=3DArial>WCNX - deep c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>WGBC - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Happy Hunting, and good =
luck</FONT></DIV></DIV></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial><IMG alt=3D"" hspace=3D0=20
src=3D"cid:002601c26170$5e664fb0$6501a8c0@TOMSBOX" align=3Dbaseline=20
border=3D0></FONT></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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