The VRTrader.com VR Platinum Newsletter Monday 9/12/2005
"Tools for the High Performance Trader"
Copyright © 2005, All rights reserved.
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PORTFOLIO UPDATE | by Mark Leibovit
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VR Platinum Portfolio Update
Monday, September 12, 2005
Pre-Market
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LEIBOVIT FILES | by Mark Leibovit
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Leibovit Files
Monday, September 12, 2005
Opening Comments
Economic Data and events September 12-16:
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MONDAY, September 12:
Treasury auctions 3 & 6-month bills
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TUESDAY, September 13:
Producer Price Index (PPI) for August (8:30 am ET)
International Trade for July (8:30 am ET)
Weekly Chain Store Sales (8:55 am ET)
Treasury Budget Statement for August (2 pm ET)
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WEDNESDAY, September 14:
Retail Sale for August (8:30 am ET)
Industrial Production & Capacity Util. for August (9:15 am ET)
EIA Petroleum Status Report (10:30 am ET)
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THURSDAY, September 15:
Consumer Price Index (CPI) for August (8:30 am ET)
NY Empire State Index for September (8:30 am ET)
Business Inventories for July (8:30 am ET)
Weekly Initial Jobless Claims (8:30 am ET)
Philadelphia Fed Index for September (12 pm ET)
Weekly Money Supply (4:30 pm ET)
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FRIDAY, September 16:
Current Account Balance for Q2 (8:30 am ET)
U. of Michigan Consumer Sentiment Index for Sept. (9:45 am ET)
Quadruple Witching - options and futures expiration
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One of the bigger stories this past week was the relative strength in Gold bullion versus both Gold shares and Silver. As you know, Platinum subscribers are positioned in GLD and we're anticipating a breakout into new highs (above 46.00 which translates into bullion above $460.00). This occurred despite a rally in the Dollar and a decline in Crude Oil prices. Our objective is bullion at or above $500.00 in coming months, so let's see if we get a breakout confirmed by increasing volume both in GLD and the futures.
The story with the stock market remains the same. It's called the 'Wall of Worry'. Worry about Katrina, worry about Greenspan again raising interest rates on September 20, worry that a housing bubble is about to pop, worry about increasing fuel costs and its impact on all walks of our economy, and worry about a nuclear dirty bomb attack by terrorists (especially as we approach 9/11 - it has been rumored that there are between 20 and 20 such nuclear weapons already within our borders).
Despite these concerns stocks continue higher, especially (as reported) the broad-based New York Stock Exchange Index (which represents all securities on the Big Board) which moved again into new highs this past week. Critics, however, will correctly point out that the NYSI is heavily skewed toward preferred shares, ADRs, other interest rate related securites, closed-end funds, income trusts (particularly in the oil business), etc. which beat to a different drummer. Still, we've been seeing strength in other market indexes, so it's not a stand alone move on the part of the NYSI. In addition, though our Annual Forecast Model (VR Forecaster report) correctly pinpointed a summer high in late July for stocks, other cyclical work has been pointing to the possibility of rally into September which we've repeatedly mentioned herein. It is clear we're now experiencing that September rally which should be terminal for this leg of the bull market. A top is due over the next 2 to 10 trading days which should then lead into a somewhat significant market correction common this time of year. How high we will be is anyone's guess at this moment, but we would not discount the possibility we break out into new highs across the board just as we've seen in the NYSI before 'the fat lady sings'.
Bulls were hoping that Greenspan would react to both the reality of Katrina and jawboning at the White House and curb his maniacal interest rate increase program. We can't but help recall how Greenspan raised interest rates in August and September, 1987 just after he took office at time when it was the wrong thing to do! The result, of course, was the stock market crash in October. History has a perverse way of repeating itself and with Greenspan at the helm, our advice is not to throw caution to the wind.
We hope our Canadian clients had an opportunity to listen to Mark Leibovit's interview on the Michael Campbell show out of Vancouver Saturday morning. Michael asked whether we could read into the current market's action and extrapolate further out as how long or how high this bull market may continue. Ultimately, we look to the shorter term indicators, but are heavily influenced by our Annual Forecast Model. It is also true the market likes Republicans in the White House, so we think the market is probably okay until 2007. Worry that a Democrat would get into the White House in 2009 following the 2008 election would clear present some market risk in our view. Long term cycles seem to concur with this view, though some technicians worry about the culmination of the next four-year cycle low due between July, 2006 and March, 2007, depending on which market low you choose to measure from. We suspect the four-year cycle low would not be the terminal point to the current bull market which began March, 2003, but we will only know 'in the fullness of time' (thank you, Ed Hart)!
Back to the market, this Tuesday (possibly a 'Turnaround Tuesday') needs to be closely monitored. We also have a quadruple witching option expiration Friday. 'Weird Wally Wednesday' surprisingly has little negative impact on the market this past week. Perhaps too many people are following this event and the market is starting to discount it? Meanwhile, volume was positive last week, so we suspect except for the likelihood of a retracement by Tuesday, there is still more life to this rally within the context of the cycles previously mentioned. Breadth has been positive, but our proprietary measurements of breadth are still well behind where they were in July, so a negative divergence pattern has already formed, especially with regard to the Big Board. Negative divergences can last a while, so they are not necessarily short-term sell signals, but it is important to note them and then wait for downside volume confirmation and/or break of key support (between 1200 and 1216 in the S&P 500 Cash).
Stay tuned.
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WATCHLIST
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LONGS
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IWOV - Interwoven Inc 7.51
COMPANY PROFILE:
WHY WE LIKE IT:
IWOV formed a Positive VR on Aigust 17 after a two week pullback and it looks ready to mount a push higher.
Interwoven, Inc. provides enterprise content management (ECM) software and services. Its products enable businesses to create, review, manage, distribute, and archive critical business content, such as documents, spreadsheets, emails and presentations, as well as Web images, graphics, content, and applications code across the enterprise and its chain of customers, partners, and suppliers. Interwoven’s ECM platform consists of integrated software product offerings that deliver customers end-to-end content lifecycle management, including collaboration, email management, imaging, digital asset management, Web content management, document management, and records management. The company also offers professional services and strategic consulting services to the customers for the deployment of the software and the integration of the applications with third-party software. Interwoven’s products are deployed for business initiatives, such as Intranet management, marketing content management, collaborative portals, Web content management, records management, deal management, matter-centric collaboration, and content provisioning. It markets and licenses its software products and services through a direct sales force, as well as through technology vendors, professional services firms, and systems integrators in North America; and through its subsidiaries in Europe and Asia Pacific. The company was founded in 1995 and is headquartered in Sunnyvale, California.
POTENTIAL TRIGGER:
Buy at market with a stop below the July 15 low of 6.78. Looking for
9.50.
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DSX - Diana Shipping Inc 14.50
COMPANY PROFILE:
WHY WE LIKE IT:
DSX debuted trading in March and has increased the last couple of trading days (Aug 31 - Sep 1) on increasing volume after finding support at 13.50 on 8/29/05.
Diana Shipping, Inc., a holding company, engages in the ownership and operation of dry bulk carriers. The company’s dry bulk carriers transport iron ore, coal, grain, and other dry cargoes along worldwide shipping routes. It charters its vessels primarily to major trading houses, major producers, and government-owned entities. As of September 30, 2004, the company’s operating fleet comprised seven Panamax drDiana Shipping, Inc. and its subsidiaries engage in the ownership and operation of dry bulk carriers. The company’s dry bulk carriers transport iron ore, coal, grain, and other dry cargoes along worldwide shipping routes. The company’s dry bulk carrier fleet may be divided into four categories based on a vessel's carrying capacity, such as Capesize vessels that have carrying capacities of more than 150,000 dwt and generally operate along long haul iron ore and coal trade routes; Panamax vessels that have a carrying capacity of between 60,000 and 80,000 dwt and carry coal, grains, and to a lesser extent, minor bulks, including steel products, forest products and fertilizers; Handymax vessels have a carrying capacity of between 35,000 and 60,000 dwt and operate along a large number of geographically dispersed global trade routes mainly carrying grains and minor bulks; and Handysize vessels that have a carrying capacity of up to 35,000 dwt and carry exclusively minor bulk cargo. Diana Shipping charters its vessels primarily to major trading houses, major producers, and government-owned entities. As of September 30, 2004, the company’s operating fleet comprised seven Panamax dry bulk carriers, which had a combined carrying capacity of approximately 525,000 dead weight tons. Diana Shipping was founded in 1999 and is based in Athens, Greece.y bulk carriers, which had a combined carrying capacity of approximately 525,000 dwt. Diana Shipping, Inc. was founded in 1999 and is based in Athens, Greece.
POTENTIAL TRIGGER:
Buy at market with a stop below the August 1 low of 12.32. Target $20.
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SHORTS
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PKI - PerkinElmer Incorporated 20.03
COMPANY PROFILE:
WHY WE LIKE IT:
PKI is sitting right at support after a weak bounce attempt last week.
PKI gave a Negative Volume Reversal ™ signal on Friday, August 19 and encountered more selling on Monday, August 22. The sellers look ready to assume control on this one.
PerkinElmer, Inc. provides scientific instruments, consumables, and services to the pharmaceutical, biomedical, environmental testing, chemical, and general industrial markets worldwide. It designs, manufactures, markets, and services products and systems in three segments: Life and Analytical Sciences, Optoelectronics, and Fluid Sciences. The Life and Analytical Sciences segment provides drug discovery, genetic screening, and environmental and chemical analysis tools, including instruments, reagents, consumables, and services for daily applications in scientific research and clinical applications. Its products are offered under various brand names, including Wallac, Packard, NEN, AAnalyst, Clarus, OneSource, LABWORKS, Pyris, Spectrum, Optima, DELFIA, ImageTrak, UltraView, prOTOF, Victor, LANCE, ELAN, and ViewLux. The Optoelectronics segment provides digital imaging, sensor, and specialty lighting components used in the biomedical, consumer products, and other specialty end markets under the brand names Cermax, Heimann, ColdBlue, MultiBlue, Power Systems, Amorphous Silicon, and Reticon. The Fluid Sciences segment provides fluid control and containment systems for environments, such as turbine engines and semiconductor fabrication facilities under the brand names Belfab, Callisto, Centurion, U-Plex Seals, E-Seals, Rigid E-Seal Joints, and PressureScience. The company was founded in 1947 and is headquartered in Wellesley, Massachusetts. PerkinElmer, Inc. acquired Elcos AG in February 2005, which designs and manufactures custom light emitting diode and solutions for biomedical and
industrial applications.
POTENTIAL TRIGGER:
Sell short at market with a stop over the July 26 high of 21.60. Looking
for 18.
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Suggestions? Comments? on the newsletter service.
We would like to hear from each and everyone of
our subscribers. Our email is mark@vrsurvey.com.
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TIMER DIGEST MARKET SIGNALS
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For Tuesday, September 06, 2005
STOCKS: Bearish
BONDS: Neutral
GOLD: Bullish
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CURRENT PORTFOLIO
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Click here to see our Current Portfolio
http://www.vrtrader....lays/stocks.asp
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NEW PICKS
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Based on either Bullish or Bearish technical signals and the Volume Reversal™ methodology, these stock picks look primed to make a move. No trading system is 100% accurate and care should be taken to consider market conditions before entering any trade. Not all trades are suitable for all investors and each investor should consider their own risk profile before making a decision.
Format:
Symbol - Company Name
Buy @ = this is the strategic range picked by the VR staff.
Target: = estimated destination of equity during life of play.
Stop: = recommended* stop loss considering equity volatility.
*stop losses should be placed according to your own risk
tolerance.
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RISK MANAGEMENT STRATEGY
When a stock declines/rallies 1 point or more from the price at
which bought or sold short, we will raise/lower stop to cost. This
will limit the potential loss on a trade. For each additional 1
point move, a further adjustment is made.
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CURRENT BULLISH STOCK PICKS
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HIET - 1/28/2005 - Long @ 1.03 Target: 1.70 Stop: 0.30
MDM - 7/13/2005 - Long @ 2.55 Target: 3.50 Stop: 1.50
KO - 7/29/2005 - Long @ 44.25 Target: 48.50 Stop: 38.00
WEL - 8/2/2005 - Long @ 1.40 Target: 2.50 Stop: 0.98
AWA - 8/15/2005 - Long @ 6.90 Target: 9.00 Stop: 6.05
FRG - 8/23/2005 - Long @ 2.85 Target: 4.50 Stop: 1.85
DWA - 8/29/2005 - Long @ 26.05 Target: 32.00 Stop: 26.05
LOUD - 8/29/2005 - Long @ 1.06 Target: 1.55-1.65 Stop: 0.65
SIRI - 8/29/2005 - Long @ 6.68 Target: 7.70-7.90 Stop: 6.68
AEM - 9/1/2005 - Long @ 13.20 Target: 14.75 Stop: 13.20
CCJ - 9/1/2005 - Buy @ 47.00-47.50 Target: 60.00 Stop: 45.00
DROOY - 9/7/2005 - Buy @ 1.06-1.07 Target: 1.75 Stop: 0.60
SBL - 9/8/2005 - Buy @ 9.25-9.35 Target: 12.50 Stop: 8.25
SWC - 9/8/2005 - Long @ 8.43 Target: 11.00 Stop: 6.00
X - 9/8/2005 - Buy @ 41.90-42.00 Target: 50.00 Stop: 39.35
XOMA - 9/8/2005 - Buy @ 1.65-1.70 Target: 2.30 Stop: 1.40
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CURRENT BULLISH INDEX PICKS
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GLD - 9/2/2005 - Long @ 44.24 Target: 50.00 Stop: 42.80
DIA - 9/9/2005 - Long @ 106.73 Target: 108.00 Stop: 105.60
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CURRENT BEARISH STOCK PICKS
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N/A
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CURRENT BEARISH INDEX PICKS
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N/A
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EXITED BULLISH STOCK PICKS FOR THE PREVIOUS 30 DAYS
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SWC - Picked(7/6/2005): 7.44 Exited(8/17/2005): 8.19 Result: 0.75
AW - Picked(7/28/2005): 8.62 Exited(8/25/2005): 8.00 Result: -0.62
GOOG - Picked(7/29/2005): 27.30 Exited(8/22/2005): 35.00 Result: 7.70
GRA - Picked(8/3/2005): 8.61 Exited(8/17/2005): 9.25 Result: 0.64
AEM - Picked(8/4/2005): 12.85 Exited(8/17/2005): 13.10 Result: 0.25
GLG - Picked(8/4/2005): 18.15 Exited(8/15/2005): 19.15 Result: 1.00
this - Picked(8/10/2005): 25.75 Exited(8/22/2005): 25.91 Result: 0.16
IPIX - Picked(8/10/2005): 3.70 Exited(8/25/2005): 3.96 Result: 0.26
HMY - Picked(8/12/2005): 8.78 Exited(8/17/2005): 8.57 Result: -0.21
NEM - Picked(8/12/2005): 40.70 Exited(8/17/2005): 40.22 Result: -0.48
OZN - Picked(8/15/2005): 1.52 Exited(8/23/2005): 1.52 Result: 0.00
HMY - Picked(8/22/2005): 8.70 Exited(8/24/2005): 7.80 Result: -0.90
SFD - Picked(8/22/2005): 26.85 Exited(9/7/2005): 28.14 Result: 1.29
GD - Picked(8/23/2005): 116.10 Exited(8/26/2005): 115.15 Result: -0.95
GLG - Picked(8/23/2005): 19.08 Exited(9/9/2005): 21.00 Result: 1.92
UIS - Picked(8/23/2005): 6.53 Exited(8/26/2005): 6.70 Result: 0.17
HCA - Picked(8/24/2005): 49.90 Exited(8/26/2005): 49.90 Result: 0.00
IPII - Picked(8/24/2005): 17.70 Exited(8/31/2005): 24.68 Result: 6.98
GV - Picked(8/31/2005): 0.91 Exited(9/7/2005): 1.21 Result: 0.30
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EXITED BULLISH INDEX PICKS FOR THE PREVIOUS 30 DAYS
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GLD - Picked(8/1/2005): 43.11 Exited(8/17/2005): 43.95 Result: 0.84
RTH - Picked(8/10/2005): 101.96 Exited(8/16/2005): 99.20 Result: -2.76
SPY - Picked(8/10/2005): 124.28 Exited(8/16/2005): 122.35 Result: -1.93
SPY - Picked(8/31/2005): 122.20 Exited(9/6/2005): 122.66 Result: 0.46
DIA - Picked(9/1/2005): 104.79 Exited(9/6/2005): 104.98 Result: 0.19
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EXITED BEARISH STOCK PICKS FOR THE PREVIOUS 30 DAYS
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BCR - Picked(8/8/2005): 65.25 Exited(8/23/2005): 64.41 Result: 0.84
AZO - Picked(8/22/2005): 97.00 Exited(8/25/2005): 96.67 Result: 0.33
FD - Picked(8/22/2005): 72.28 Exited(8/25/2005): 71.23 Result: 1.05
RHAT - Picked(8/22/2005): 14.00 Exited(8/25/2005): 13.69 Result: 0.31
PGR - Picked(8/23/2005): 97.34 Exited(8/25/2005): 96.58 Result: 0.76
PAYX - Picked(8/26/2005): 33.99 Exited(8/29/2005): 33.99 Result 0.00
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EXITED BEARISH INDEX PICKS FOR THE PREVIOUS 30 DAYS
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TLT - Picked(8/10/2005): 91.57 Exited(8/23/2005): 94.16 Result: -2.59
SPY - Picked(8/16/2005): 122.17 Exited(8/18/2005): 122.51 Result: -0.34
XLE - Picked(8/16/2005): 49.57 Exited(8/17/2005): 48.00 Result: 1.57
MDY - Picked(8/23/2005): 128.64 Exited(8/25/2005): 128.60 Result: 0.04
SPY - Picked(8/23/2005): 122.15 Exited(8/25/2005): 121.31 Result: 0.84
DIA - Picked(8/29/2005): 103.45 Exited(8/31/2005): 104.17 Result: -0.72
SPY - Picked(9/8/2005): 123.75 Exited(9/8/2005): 123.36 Result: 0.39
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DISCLAIMER
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This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and staff of VRTrader.com may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. VRTrader.com staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to factors beyond our control.
Copyright © 2005 VRTrader.com.
