[CANSLIM] Worley's Weekend Weeview


From: "Tom Worley" <stkguru@bellsouth.net>
Subject: [CANSLIM] Worley's Weekend Weeview
Date: Sat, 8 Mar 2003 19:04:34 -0500

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ECONOMICS
Another dismal week for economics reports, possibly beginning to show =
the true state of the US economy even without the influence of Iraqi war =
fears. For some time the market pundits have been saying the stock =
markets were disconnecting from the state of the economy because of the =
war fears, maybe the markets were more connected, and simply giving an =
advance forecast, to a greater degree than was being appreciated? Then =
again, maybe this time they will get it right when they tell us the =
economy will improve by mid-year, or at least by the second half of the =
year, or maybe next year.

Construction spending started the week off strong, showing a rise of =
1.7% for January and well ahead of expectations for a 0.5% gain. =
Residential construction directly contributed, hitting a new record =
high.

Auto makers led off with their share of dismal news, reporting flat to =
down sales figures for February. #1 in the industry is GM, which saw =
sales drop 19%. #2 Ford was flat for the month, while Chrysler saw a 4% =
decline. Both GM and Ford indicated they were cutting production from =
previously planned levels for the 2nd qtr (more layoffs coming?). =
Everyone blamed a decline in consumer confidence and the snowstorms.

Consumer spending in January also headed south, down 0.1% against =
expectations of a 0.1% rise. Personal income rose 0.3%, below =
expectations of a 0.4% rise. Reason for the decline in spending? Big =
fall in auto sales, wonder what February's report will look like?

In another bit of bad news, ISM reports that manufacturing activity =
continued slowing in February, coming in at 50.5 (barely in the =
"expansion" range), down from 53.9 in January and well under =
expectations of 52.0. The New Orders Index fell from 59.7 all the way =
down to 52.3, the Employment Index continued contracting, down from 47.6 =
to 42.8 (means rate of layoffs increasing). And warning of future =
problems with profits, the Prices Paid Index jumped from 57.5 to 65.5, =
largely due higher energy costs.

In slight contrast, the ISM report on the service sector slipped, but =
not as much, to 53.9, down from 54.5 but ahead of expectations of 53.0. =
However, even there the employment index slipped into contraction at 49 =
from January's 50.3. New orders index dropped to 53 from 56.2, while the =
Price Index rose to 60.9 from 57.0, showing that the service sector is =
still able to raise prices to keep up somewhat with higher costs.

Then in a separate poll, Commerce Department reports that in January =
manufacturing orders increased 2.1%. Hummmm, who do we believe, the =
govt, or the manufacturers?? Expectations were for a rise of 1.8%.

A total of 138,177 layoffs were announced in February, up 5% from =
January.

More talk of a pending rate cut by the Feds, most likely at the May or =
June meeting of FOMC. Nice summary of the influences on the economy, and =
likelihood of a rate cut, found at =
http://money.cnn.com/2003/03/04/news/economy/fed_cut/index.htm

Productivity for the 4th quarter 2002 was revised up to 0.8% from the =
original report of minus 0.2%. Productivity for the year was 4.8%, best =
since 1950. Maybe everyone left employed is scared of losing their job?? =
Unit labor costs were up 3.8% for the quarter, but down 1.9% for the =
year. Hourly compensation rose 4.6% in the 4th quarter, and 2.8% for the =
year.

Weekly report for new unemployment claims continued the litany of bad =
news, showing new claims jumping to 430,000 and the 4 week average =
shooting up from 400K to 408,750.

Rounding out the week with its "bad boy" report was the Employment =
report for February. While the rise to 5.8% unemployment was not =
surprising, the loss of 308,000 jobs (against an expectation of 8,000 to =
20,000 new jobs) was a shock. Market headed south, then recovered on =
news (still unconfirmed) that two of Osama's 23 sons had been captured. =
Nice to see that at least some now unemployed terrorists can find =
immediate new employment, as govt informers, even if it's not their job =
preference. The Govt couldn't explain the sharp loss of jobs, suggesting =
maybe, possibly, could be because of the callup of reservists for =
service in the Mid-East, thus losing their civilian paycheck. And, of =
course, the blizzards were blamed. The Govt also admitted that the =
February unemployment rate of 5.8% is not comparable to January's 5.7% =
because they tinkered with the numbers, just like they admitted last =
month that January's figures were not comparable to December's for the =
same reason. So, does this mean the real rate, that WOULD be comparable, =
is already over 6%?? And BLS (Bureau of Labor and Statistics) announced =
it expects to resume the layoffs report in late March or early April, =
suspended since December due lack of funding. Is it coincidence that the =
last time this report was suspended was also in a Bush administration =
(the father) in 1992 until 1994??
- -------------------------------------------------------------------------=
- -------

"M"
Another losing week for all indexes, second in a row, and continuing the =
slide below both the 50 and 200 dma. With the exception of the DJ =
Transportation Index, the rest are testing their July low, but so far =
volume remains light, and only time will tell if the October lows are =
replaced with new lows. The trend is your friend, and it's heading =
south, so "M" still says stay in cash if you can. In just one more sign =
of the poor economy, one sub-sector of the retail group is remaining =
strong, pawn shops. Check out PWN and FCFS (latter in my VR Fund). =
Transportation predictably being excessively affected by the increasing =
price of fuel, both airlines and trucking companies. Of course, all =
those pending or actual bankruptcies are not helping either. The =
consumer is also affected by the higher prices of gas, takes money away =
from discretionary spending, makes travel and vacations more expensive, =
and generally gives a real negative feeling about finances. Add to that =
the weak dollar, making imports more expensive, as well as any foreign =
travel, and there is plenty of reason to worry besides an upcoming war =
with Iraq.
- -------------------------------------------------------------------------=
- -------

JAPAN
Some things don't seem to change in this second largest economy in the =
world. Deflation, Recession, Unemployment, Bankruptcies, Conservative =
attitudes, reluctance and resistance to even admitting reality, much =
less invoking real change. Outcome predictable, especially with the =
price of energy still rising, and the dollar still weakening against the =
yen. Latest rally fails at a lower level than the last one, big losses =
in the Nikkei, hits and closes at a new 20 year (YEAR!!!!) low.=20
- -------------------------------------------------------------------------=
- -------

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, whether =
real money or virtual reality (VR).

The population of stocks I am reviewing this weekend continues to =
shrink, in line with market trends. Even looking at stocks moving above =
their 200 dma fails to produce more than a handful of candidates, and =
these are much more a value play than a momentum / fundamentals =
possibility.

ACET - approached the pivot on Friday from a double bottom
AGN - forming right side of cup (long term), breaking pivot on short =
term, volume low
APOL - at the pivot of a long trading range base
AVCT - handle forming?
BER - high handle on a decent cup
DAKT - early LLUR?
EBAY - LLUR beginning
ELTE - c&h, in my VR Fund
GAF - B8
HLTH - c&h
IMO - handle forming
NWSB - B6
OZRK - B7+
PORT - LLUR
SSYS - c&h, in my VR Fund

Happy Hunting, keep your power dry, "M" will turn in our favor, some day


Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
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<DIV><FONT face=3DArial><STRONG>ECONOMICS</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>Another dismal week for economics reports, =
possibly=20
beginning to show the true state of the US economy even without the =
influence of=20
Iraqi war fears. For some time the market pundits have been saying the =
stock=20
markets were disconnecting from the state of the economy because of the =
war=20
fears, maybe the markets were more connected, and simply giving an =
advance=20
forecast, to a greater degree than was being appreciated? Then again, =
maybe this=20
time they will get it right when they tell us the economy will improve =
by=20
mid-year, or at least by the second half of the year, or maybe next=20
year.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Construction spending started the week off =
strong, showing=20
a rise of 1.7% for January and well ahead of expectations for a 0.5% =
gain.=20
Residential construction directly contributed, hitting a new record=20
high.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Auto makers led off with their share of dismal =
news,=20
reporting flat to down sales figures for February. #1 in the industry is =
GM,=20
which saw sales drop 19%. #2 Ford was flat for the month, while Chrysler =
saw a=20
4% decline. Both GM and Ford indicated they were cutting production from =

previously planned levels for the 2nd qtr (more layoffs coming?). =
Everyone=20
blamed a decline in consumer confidence and the snowstorms.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Consumer spending in January also headed south, =
down 0.1%=20
against expectations of a 0.1% rise. Personal income rose 0.3%, below=20
expectations of a 0.4% rise. Reason for the decline in spending? Big =
fall in=20
auto sales, wonder what February's report will look like?</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>In another bit of bad news, ISM reports that =
manufacturing=20
activity continued slowing in February, coming in at 50.5 (barely in the =

"expansion" range), down from 53.9 in January and well under =
expectations of=20
52.0. The New Orders Index fell from 59.7 all the way down to 52.3, the=20
Employment Index continued contracting, down from 47.6 to 42.8 (means =
rate of=20
layoffs increasing). And warning of future problems with profits, the =
Prices=20
Paid Index jumped from 57.5 to 65.5, largely due higher energy=20
costs.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>In slight contrast, the ISM report on the =
service sector=20
slipped, but not as much, to 53.9, down from 54.5 but ahead of =
expectations of=20
53.0. However, even there the employment index slipped into contraction =
at 49=20
from January's 50.3. New orders index dropped to 53 from =
56.2,&nbsp;while the=20
Price Index rose to 60.9 from 57.0, showing that the service sector is =
still=20
able to raise prices to keep up somewhat with higher costs.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Then in a separate poll,&nbsp;Commerce=20
Department&nbsp;reports that in January manufacturing orders increased =
2.1%.=20
Hummmm, who do we believe, the govt, or the manufacturers?? Expectations =
were=20
for a rise of 1.8%.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>A total of 138,177 layoffs were announced in =
February, up=20
5% from January.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>More talk of a pending rate cut by the Feds, =
most likely=20
at the May or June meeting of FOMC. Nice summary of the influences on =
the=20
economy, and likelihood of a rate cut, found at <A=20
href=3D"http://money.cnn.com/2003/03/04/news/economy/fed_cut/index.htm">h=
ttp://money.cnn.com/2003/03/04/news/economy/fed_cut/index.htm</A></FONT><=
/DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Productivity for the 4th quarter 2002 was =
revised up to=20
0.8% from the original report of minus 0.2%. Productivity for the year =
was 4.8%,=20
best since 1950. Maybe everyone left employed is scared of losing their =
job??=20
Unit labor costs were up 3.8% for the quarter, but down 1.9% for the =
year.=20
Hourly compensation rose 4.6% in the 4th quarter, and 2.8% for the=20
year.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Weekly report for new unemployment claims =
continued the=20
litany of bad news, showing new claims jumping to 430,000 and the 4 week =
average=20
shooting up from 400K to 408,750.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Rounding out the week with its "bad boy" report =
was the=20
Employment report for February. While the rise to 5.8% unemployment was =
not=20
surprising, the loss of 308,000 jobs (against an expectation of 8,000 to =
20,000=20
new jobs) was a shock. Market headed south, then recovered on news =
(still=20
unconfirmed) that two of Osama's 23 sons had been captured. Nice to see =
that at=20
least some now unemployed terrorists can find immediate new employment, =
as govt=20
informers, even if it's not their job preference. The Govt couldn't =
explain the=20
sharp loss of jobs, suggesting maybe, possibly, could be&nbsp;because of =
the=20
callup of reservists for service in the Mid-East, thus losing their =
civilian=20
paycheck. And, of course, the blizzards were blamed. The Govt also =
admitted that=20
the February unemployment rate of 5.8% is not comparable to January's =
5.7%=20
because they tinkered with the numbers, just like they admitted last =
month that=20
January's figures were not comparable to December's for the same reason. =
So,=20
does this mean the real rate, that WOULD be comparable, is already over =
6%?? And=20
BLS (Bureau of Labor and Statistics) announced it expects to resume the =
layoffs=20
report in late March or early April, suspended since December due lack =
of=20
funding. Is it coincidence that the last time this report was suspended =
was also=20
in a Bush administration (the father) in 1992 until 1994??
<HR>
</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>"M"</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>Another losing week for all indexes, second in a =
row, and=20
continuing the slide below both the 50 and 200 dma. With the exception =
of the DJ=20
Transportation Index, the rest are testing their July low, but so far =
volume=20
remains light, and only time will tell if the October lows are replaced =
with new=20
lows. The trend is your friend, and it's heading south, so "M" still =
says stay=20
in cash if you can. In just one more sign of the poor economy, one =
sub-sector of=20
the retail group is remaining strong, pawn shops. Check out PWN and FCFS =
(latter=20
in my VR Fund). Transportation predictably being excessively affected by =
the=20
increasing price of fuel, both airlines and trucking companies. Of =
course, all=20
those pending or actual bankruptcies are not helping either. The =
consumer is=20
also affected by the higher prices of gas, takes money away from =
discretionary=20
spending, makes travel and vacations more expensive, and generally gives =
a real=20
negative feeling about finances. Add to that the weak dollar, making =
imports=20
more expensive, as well as any foreign travel, and there is plenty of =
reason to=20
worry&nbsp;besides an upcoming war with Iraq.
<HR>
</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>JAPAN</STRONG></FONT></DIV>
<DIV><FONT face=3DArial>Some things don't seem to change in this second =
largest=20
economy in the world. Deflation, Recession, Unemployment, Bankruptcies,=20
Conservative attitudes, reluctance and resistance to even admitting =
reality,=20
much less invoking real change. Outcome predictable, especially with the =
price=20
of energy still rising, and the dollar still weakening against the yen. =
Latest=20
rally fails at a lower level than the last one, big losses in the =
Nikkei, hits=20
and closes at a new 20 year (YEAR!!!!) low.=20
<HR>
</FONT></DIV>
<DIV><FONT face=3DArial><STRONG>WORLEY'S WATCHLIST =
WANNABES</STRONG></FONT><FONT=20
face=3D"Times New Roman"> </FONT></DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<DIV>
<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, whether real money or virtual reality=20
(VR).</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>The population of stocks I am reviewing this =
weekend=20
continues to shrink, in line with market trends. Even looking at stocks =
moving=20
above their 200 dma fails to produce more than a handful of candidates, =
and=20
these are much more a value play than a momentum / fundamentals=20
possibility.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>ACET - approached the pivot on Friday from a =
double=20
bottom</FONT></DIV>
<DIV><FONT face=3DArial>AGN - forming right side of cup (long term), =
breaking=20
pivot on short term, volume low</FONT></DIV>
<DIV><FONT face=3DArial>APOL - at the pivot of a long trading range=20
base</FONT></DIV>
<DIV><FONT face=3DArial>AVCT - handle forming?</FONT></DIV>
<DIV><FONT face=3DArial>BER - high handle on a decent cup</FONT></DIV>
<DIV><FONT face=3DArial>DAKT - early LLUR?</FONT></DIV>
<DIV><FONT face=3DArial>EBAY - LLUR beginning</FONT></DIV>
<DIV><FONT face=3DArial>ELTE - c&amp;h, in my VR Fund</FONT></DIV>
<DIV><FONT face=3DArial>GAF - B8</FONT></DIV>
<DIV><FONT face=3DArial>HLTH - c&amp;h</FONT></DIV>
<DIV><FONT face=3DArial>IMO - handle forming</FONT></DIV>
<DIV><FONT face=3DArial>NWSB - B6</FONT></DIV>
<DIV><FONT face=3DArial>OZRK - B7+</FONT></DIV>
<DIV><FONT face=3DArial>PORT - LLUR</FONT></DIV>
<DIV><FONT face=3DArial>SSYS - c&amp;h, in my VR Fund</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Happy Hunting, keep your power dry, "M" will =
turn in our=20
favor, some=20
day</FONT></DIV></DIV></DIV></DIV></DIV></DIV></DIV></DIV></DIV></DIV></D=
IV></DIV></DIV></DIV></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial></FONT><IMG alt=3D"" hspace=3D0=20
src=3D"cid:011101c2e5cf$773a36d0$6500a8c0@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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