Sunday, October 26, 2008

Stocks for the week of Oct 27

These are the stocks that are passing at least three of my five filters, for the week of October 27. There were no IBD Supply/Demand stocks this week. There were only two IBD top-ranked stocks.

SymbolTop RankedZacks PEG SuppDem VLIBD Stock checkup
AMED 11 1A+
CLHB 11 1A+
EZPW111  A
GWR 11 1A
JOSB 11 1A
MATK 11 1A
PRGO 11 1A
ARO 11 1A-
BIG 11 1A-


Perrigo Company (PRGO) is back on the core list. It develops and manufactures OTC and prescription pharmaceuticals, as well as nutritional supplements.

Core list (with n of 10 weeks passing):

SymbolPassing weeks Earnings
ARO10Earn 3-Dec
FLIR9 
EZPW9Earn 6-Nov
CELG8 
AMED8Earn 28-Oct
WAB7 
URBN7Earn 13-Nov
OSIP6 
AXYS5 
MANT5Earn 29-Oct
VMI5 
PRGO5Earn 6-Nov

moving down this week
moving up this week
new this week

The Market remains in Red Light mode according to the 1-2-3 model. The Inflation Model has remains at a negative two inflation stars ("deflation").

I thought that the S&P might fall beneath its average P/E of 17.0, but it bounced off of 17.1 and has headed back up to 19.30. Markets continue to struggle and certain sectors are looking more appealing. I have been looking at mining and metals stocks trading below book value. I still haven't seen the technical indicators showing a real strength here, so I am willing to wait.

Some of you have asked where I am putting my money since I have been emphasizing the short side of things. Let me start with the one that didn't work out: Exxon/Mobil. My calls evaporated along with fears of an even higher oil market. The one that did work out was puts on Simon Property Group. I sold puts when the underlying was at $90, and it had the nerve to rise to $93. This stock was bound to fall, though, because it is a Real Estate Investment Trust (REIT) in California commercial real estate. I figured last fall that it would fall because of falling California real estate prices, as well as eroding business margins. It's down to $54.

Have the markets fallen enough, so that they are ready to rise again? I'm going to wait until the charts tell me that this is so. I might still come in too early or too late, but I believe that we normal mortals with no psychic abilities may be able to profit when a trend has reversed and is well underway.

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