[CANSLIM] Worley's Weekend Weeview


From: "Tom Worley" <stkguru@bellsouth.net>
Subject: [CANSLIM] Worley's Weekend Weeview
Date: Sat, 5 Oct 2002 13:32:45 -0400


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JAPAN
Busy week for Japanese banks, as the Cabinet reshuffling leaves them =
with a Finance Minister perceived as much more of a hard liner towards =
cleaning up the endemic problems of Japanese banking system. Indications =
are that he will accelerate the write off of bad loans, but unclear if =
he will make them follow more legitimate standards of recognizing what =
is a "bad loan" or in default. If so, likely to put a lot of banks, many =
small ones but likely some of the big ones as well, under capital =
requirements. Also likely to force a greater number of businesses into =
bankruptcy, with consequent layoffs. Also unclear what, if anything, may =
be done about the cultural problems that put the banks in trouble, both =
with risk assessment, early recognition of a troubled loan, and the =
practice of buying stock from a company you just loaned money to.  So =
far, doesn't look like they want to correct the structural problems, =
rather appear to be looking to inject public (e.g. taxpayer) money into =
the banks by buying back non-performing loans, or by buying part of =
their stock portfolio (above the market, no less). That won't fix the =
problem other than temporarily, and with the difficulty in selling last =
month's issue of govt bonds, may spell further trouble for a country =
already with one of the highest deficit spending and nat'l debt levels =
in the world. The weak US dollar, and the seaport closure on the West =
Coast, will also continue to hurt the Japanese export based economy. The =
"Iraqi War Premium", estimated at $8/barrel of crude oil, will also hurt =
their economy.
- -------------------------------------------------------------------------=
- -------

UNEMPLOYMENT
The rate of job cuts appears to be declining, only 70,057 cuts announced =
in September compared to August's 118,067, and down 72% from Sept 2001. =
Unfortunately, this still far exceeds the number of new jobs being =
created, as well as the numbers recorded during the last recovery from =
recession in 1990-91. But at least Labor Dept wants us to believe that =
overall unemployment declined from 5.7% to 5.6% despite this being a =
result of poor methodology of measuring this factor, and only reflects =
the ever increasing number of discouraged unemployed people simply =
dropping out of the labor pool and not looking for a job. In the same =
report Labor admits that instead of new jobs being created, a total of =
43,000 were eliminated. Jobs creation in August was revised upward to =
107K.  In the past week, both the ISM's manufacturing index (which =
declined) and the ISM's service index (which grew over expectations) =
showed that the loss of jobs in Sept was accelerating.

New unemployment claims rose 5,000 to 417K, remaining over 400K for the =
sixth straight week. The 4 week moving average rose to 423,000 which was =
the highest it has been in over 4 months. Continuing unemployment claims =
reached 3.68 million, highest since June.

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

"M"
Ugly, depressing, no end in sight, VIX high, even I can't be persuaded =
to buy anything (now THAT's bearish). Lots of cuts in forecasts, and =
warnings of shortfalls in Q3 results, and from major companies. And I =
cannot even vocalize a single reason why I would expect things to start =
getting any better this year. Even without the closure of the ports on =
the West Coast, I have lost faith that Q4 results will show any =
significant improvement. Consumer spending definitely looks to me to be =
weakening, and manufacturing spending is not increasing to pick up the =
slack. Retailers are heading for one of their worst Christmas shopping =
seasons, and the port closure may accelerate this. The Feds, thanks to =
Labor's bogus unemployment report, are now expected to wait until the =
Nov 6 meeting of FOMC to cut rates. But 11 cuts last year didn't make =
this a good economic year, and any further cuts now are likely to have =
even less of an impact. And with the rate already at a 41 year record =
low, there is not enough left for 11 more cuts, unless they do it 10 BP =
at a time. And all the major indexes were down for the week, something =
like six weeks in a row now, I think.

- -------------------------------------------------------------------------=
- -------
ECONOMICS
Consumer spending gained 0.3% in August, down from the 1% gain of July, =
while income gained 0.4% after being unchanged in July. Both had been =
expected to increase 0.5%. This data was further confirmed by chain =
store sales, down 0.8%, for the week ending 9/28, after dropping 1.7% =
the prior week. For the 4 week period ending 9/28, their sales were down =
0.7% from the prior month.

New construction spending for August fell 0.4%, a new six year low. The =
biggest drop came in nonresidential construction. A decline of 0.2% had =
been expected. It also declined in July (0.1%).

ISM reported Tuesday that manufacturing activity fell to 49.5% in Sept, =
down a full percent and well under expectations of a gain to 51%. First =
time in eight months that it declined, and also goes into the =
"contraction" side of the measure from expansion. This also confirmed =
the early indication of a decline shown by the Chicago Purchasing =
Managers index. While the new orders index gained to 50.2% from 49.7%, =
the employment index dropped to 44.9% from 45.8%.

TV ad sales are booming for the fall season with prices up 25 to 40% =
more than in May. Networks are even able to demand that advertisers buy =
time on the lower rated shows if they want to get time on the most =
popular prime time shows. Leading advertisers are automakers, phone =
companies and movie studios. How long until the print media can report =
the same success?

Factory orders were unchanged in August compared to expectations of a =
0.5% drop, and after an upwardly revised July figure of plus 4.4%. =
Without transportation orders (and I note that more recently one major =
airplane maker, Boeing??, cut its forecasts citing reduced prices due =
lower demand), the factory orders declined 0.1%. Machinery orders also =
dropped 2.3%, computer and electronics orders dropped 0.3%. Wonder what =
September report will look like??

ISM reports that September service sector growth jumped a full 3 =
percentage points to 53.9%, eighth straight month of growth, and well =
over expectations of a gain to 51.4%. As mentioned above, the rate of =
layoffs accelerated with the employment factor down to 46.6% from 47.3%, =
the 19th straight month of job losses.

Interesting that Alaska, which is about 67% dependent on supplies coming =
in by ship, was able to get its ports reopened because they have no rail =
line, and only one highway. Hawaii, 90% dependent on ship delivered =
supplies, is still closed down. Also interesting that in all ports, oil =
delivery remains unaffected. Even tho I dislike the longshoremen =
fighting the advance of technology (altho downloading data from one =
computer to another instead of "clerks" reentering it by hand is hardly =
"technology"), there might have been a chance of sympathy from me until =
I saw their average wages. Even working only 40 weeks, they average over =
$80K a year. About half work a full year, and average $106K. And these =
"clerks" that today do all this manual reentry of data, they make around =
$118K. Can I become a clerk?? Pleeezzzeeee??? Bet they don't take their =
work home at night and weekends, and work for free. Already, some =
companies are shutting down production (United Motor Manufacturing, =
largest car assembler on the West Coast, a GM/Toyota operation), and =
various groups are pressuring the President to invoke the cooling off =
provisions of Taft Hartley Act, which would get 80 days of open ports. =
Of course, last time Taft Hartley was used, everything shut right down =
again after the cooling off period ended. And the last time the ports =
were closed like this, it lasted 7 months, so the damage both to the US =
economy, as well as to Asian economies, especially our major trading =
(one way) partner of Japan, could be dramatic if this lockout continues =
indefinitely.

OECD reports that global economic growth is again slowing. Deutsche Bank =
cut its forecast for growth in Germany from 0.5% to only 0.1%. OECD cut =
growth in the USA by 0.5% and 0.3% overall for the eurozone.

- -------------------------------------------------------------------------=
- -------
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 is discouragingly =
small, but at least it will not take much time.

AG - interesting chart, maybe the best cup we can expect in today's "M", =
strong forecast
.
.
.
.
Happy Hunting, (just kidding, look below the signature block, thought =
you could use a smile after all the depressing and opinionated stuff =
above)


Tom Worley
stkguru@bellsouth.net
AIM: TexWorley

Here's a few more ideas:

AMGP - c&h
ANSI - c&h
AZO - c&h
BLUD - nice consolidation on a LLUR
CCCG - b/o, at the pivot?
CCE - b/o Wednesday, good volume, holding price so far
CENT - nice cup, can it last?
CPG - B7
CVBF - c&h
DL - c&h
ERES - LLUR
FCN - LLUR
HET - saucer
JCOM - rough B4
MBFI - B7
PDCO - c&h
PENN - c&h
PETM - nice c&h on an old LLUR
PORT - B10
UHS - cup
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<DIV><FONT face=3DArial><STRONG>JAPAN</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>Busy week for Japanese banks, as the Cabinet =
reshuffling=20
leaves them with a Finance Minister perceived as much more of a hard =
liner=20
towards cleaning up the endemic problems of Japanese banking system. =
Indications=20
are that he will accelerate the write off of bad loans, but unclear if =
he will=20
make them follow more legitimate standards of recognizing what is a "bad =
loan"=20
or in default. If so, likely to put a lot of banks, many small ones but =
likely=20
some of the big ones as well, under capital requirements. Also likely to =
force a=20
greater number of businesses into bankruptcy, with consequent layoffs. =
Also=20
unclear what, if anything, may be done about the cultural problems that =
put the=20
banks in trouble, both with risk assessment, early recognition of a =
troubled=20
loan, and the practice of buying stock from a company you just loaned =
money=20
to.&nbsp; So far, doesn't look like they want to correct the structural=20
problems, rather appear to be looking to inject public (e.g. taxpayer) =
money=20
into the banks by buying back non-performing loans, or by buying part of =
their=20
stock portfolio (above the market, no less). That won't fix the problem =
other=20
than temporarily, and with the difficulty in selling last month's issue =
of govt=20
bonds, may spell further trouble for a country already with one of the =
highest=20
deficit spending and nat'l debt levels in the world. The weak US dollar, =
and the=20
seaport closure on the West Coast, will also continue to hurt the =
Japanese=20
export based economy. The "Iraqi War Premium", estimated at $8/barrel of =
crude=20
oil, will also&nbsp;hurt their economy.
<HR>
</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>UNEMPLOYMENT</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>The rate of job cuts appears to be declining, =
only 70,057=20
cuts announced in September compared to August's 118,067, and down 72% =
from Sept=20
2001. Unfortunately, this still far exceeds the number of new jobs being =

created, as well as the numbers recorded during the last recovery from =
recession=20
in 1990-91. But at least Labor Dept wants us to believe that overall=20
unemployment declined from 5.7% to 5.6% despite this being a result of =
poor=20
methodology of measuring this factor, and only reflects the ever =
increasing=20
number of discouraged unemployed people simply dropping out of the labor =
pool=20
and not looking for a job.&nbsp;In the same report Labor admits that =
instead of=20
new jobs being created, a total of 43,000 were eliminated. Jobs creation =
in=20
August was revised upward to 107K.&nbsp; In the past week, both the =
ISM's=20
manufacturing index (which declined) and the ISM's service index (which =
grew=20
over expectations) showed that the loss of jobs in Sept was=20
accelerating.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>New unemployment claims rose 5,000 to 417K, =
remaining over=20
400K for the sixth straight week. The 4 week moving average rose to =
423,000=20
which was the highest it has been in over 4 months. Continuing =
unemployment=20
claims reached 3.68 million, highest since June.</FONT><FONT =
face=3DArial></DIV>
<DIV>
<HR>
</DIV></FONT>
<DIV><FONT face=3DArial><STRONG>"M"</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>Ugly, depressing, no end in sight, VIX high, =
even I can't=20
be persuaded to buy anything (now THAT's bearish). Lots of cuts in =
forecasts,=20
and warnings of shortfalls in Q3 results, and from major companies. And =
I cannot=20
even vocalize a single reason why I would expect things to start getting =
any=20
better this year. Even without the closure of the ports on the West =
Coast, I=20
have lost faith that Q4 results will show any significant improvement. =
Consumer=20
spending definitely looks to me to be weakening, and manufacturing =
spending is=20
not increasing to pick up the slack. Retailers are heading for one of =
their=20
worst Christmas shopping seasons, and the port closure may accelerate =
this. The=20
Feds, thanks to Labor's bogus unemployment report, are now expected to =
wait=20
until the Nov 6 meeting of FOMC to cut rates. But 11 cuts last year =
didn't make=20
this a good economic year, and any further cuts now are likely to have =
even less=20
of an impact. And with the rate already at a 41 year record low, there =
is not=20
enough left for 11 more cuts, unless they do it 10 BP at a time. And all =
the=20
major indexes were down for the week, something like six weeks in a row =
now, I=20
think.</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>
<HR>
ECONOMICS</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>Consumer spending gained 0.3% in August, down =
from the 1%=20
gain of July, while income gained 0.4% after being unchanged in July. =
Both had=20
been expected to increase 0.5%. This data was further confirmed by chain =
store=20
sales, down 0.8%, for the week ending 9/28, after dropping 1.7% the =
prior week.=20
For the 4 week period ending 9/28, their sales were down 0.7% from the =
prior=20
month.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>New construction spending for August fell 0.4%, =
a new six=20
year low. The biggest drop came in nonresidential construction. A =
decline of=20
0.2% had been expected. It also declined in July (0.1%).</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>ISM reported Tuesday that manufacturing activity =
fell to=20
49.5% in Sept, down a full percent and well under expectations of a gain =
to 51%.=20
First time in eight months that it declined, and also goes into the=20
"contraction" side of the measure from expansion. This also confirmed =
the early=20
indication of a decline shown by the Chicago&nbsp;Purchasing=20
Managers&nbsp;index. While the new orders index gained to 50.2% from =
49.7%, the=20
employment index dropped to 44.9% from 45.8%.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>TV ad sales are booming for the fall season with =
prices up=20
25 to 40% more than in May. Networks are even able to demand that =
advertisers=20
buy time on the lower rated shows if they want to get time on the most =
popular=20
prime time shows. Leading advertisers are automakers, phone companies =
and movie=20
studios. How long until the print media can report the same=20
success?</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Factory orders were unchanged in August compared =
to=20
expectations of a 0.5% drop, and after an upwardly revised July figure =
of plus=20
4.4%. Without transportation orders (and I note that more recently one =
major=20
airplane maker, Boeing??, cut its forecasts citing reduced prices due =
lower=20
demand), the factory orders declined 0.1%. Machinery orders also dropped =
2.3%,=20
computer and electronics orders dropped 0.3%. Wonder what September =
report will=20
look like??</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>ISM reports that September service sector growth =
jumped a=20
full 3 percentage points to 53.9%, eighth straight month of growth, and =
well=20
over expectations of a gain to 51.4%. As mentioned above, the rate of =
layoffs=20
accelerated with the employment factor down to 46.6% from 47.3%, the =
19th=20
straight month of job losses.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Interesting that Alaska, which is about 67% =
dependent on=20
supplies coming in by ship, was able to get its ports reopened because =
they have=20
no rail line, and only one highway. Hawaii, 90% dependent on ship =
delivered=20
supplies, is still closed down. Also interesting that in all ports, oil =
delivery=20
remains unaffected. Even tho I dislike the longshoremen fighting the =
advance of=20
technology (altho downloading data from one computer to another instead =
of=20
"clerks" reentering it by hand is hardly "technology"), there might have =
been a=20
chance of sympathy from me until I saw their average wages. Even working =
only 40=20
weeks, they average over $80K a year. About half work a full year, and =
average=20
$106K. And these "clerks" that today do all this manual reentry of data, =
they=20
make around $118K. Can I become a clerk?? Pleeezzzeeee??? Bet they don't =
take=20
their work home at night and weekends, and work for free. Already, some=20
companies are shutting down production (United Motor Manufacturing, =
largest car=20
assembler on the West Coast, a GM/Toyota operation), and various groups =
are=20
pressuring the President to invoke the cooling off provisions of Taft =
Hartley=20
Act, which would get 80 days of open ports. Of course, last time Taft =
Hartley=20
was used, everything shut right down again after the cooling off period =
ended.=20
And the last time the ports were closed like this, it lasted 7 months, =
so the=20
damage both to the US economy, as well as to Asian economies, especially =
our=20
major trading (one way) partner of Japan, could be dramatic if this =
lockout=20
continues indefinitely.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>OECD reports that global economic growth is =
again slowing.=20
Deutsche Bank cut its forecast for growth in Germany from 0.5% to only =
0.1%.=20
OECD cut growth in the USA by 0.5% and 0.3% overall for the=20
eurozone.</FONT></DIV>
<DIV><FONT face=3DArial>
<DIV><STRONG><FONT face=3DArial>
<HR>
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 is=20
discouragingly small, but at least it will not take much =
time.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV>AG - interesting chart, maybe the best cup we can expect&nbsp;in =
today's=20
"M", strong forecast</DIV>
<DIV>.</DIV>
<DIV>.</DIV>
<DIV>.</DIV>
<DIV>.</DIV>
<DIV>Happy Hunting, (just kidding, look below the signature block, =
thought you=20
could use a smile after all the depressing and opinionated stuff=20
above)</DIV></DIV></DIV></FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><IMG alt=3D"" hspace=3D0 =
src=3D"cid:00d001c26c95$37a3e510$6501a8c0@TOMSBOX"=20
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>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Here's a few more ideas:</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>AMGP - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>ANSI - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>AZO - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>BLUD - nice consolidation on a LLUR</FONT></DIV>
<DIV><FONT face=3DArial>CCCG - b/o, at the pivot?</FONT></DIV>
<DIV><FONT face=3DArial>CCE - b/o Wednesday, good volume, holding price =
so=20
far</FONT></DIV>
<DIV><FONT face=3DArial>CENT - nice cup, can it last?</FONT></DIV>
<DIV><FONT face=3DArial>CPG - B7</FONT></DIV>
<DIV><FONT face=3DArial>CVBF - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>DL - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>ERES - LLUR</FONT></DIV>
<DIV><FONT face=3DArial>FCN - LLUR</FONT></DIV>
<DIV><FONT face=3DArial>HET - saucer</FONT></DIV>
<DIV><FONT face=3DArial>JCOM - rough B4</FONT></DIV>
<DIV><FONT face=3DArial>MBFI - B7</FONT></DIV>
<DIV><FONT face=3DArial>PDCO - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>PENN - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>PETM - nice c&amp;h on an old LLUR</FONT></DIV>
<DIV><FONT face=3DArial>PORT - B10</FONT></DIV>
<DIV><FONT face=3DArial>UHS - cup</FONT></DIV></BODY></HTML>

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