Saturday, October 31, 2009

What a ying yang market

Every weekend on Financial Tides I try to give an objective summary of what happened in the stock market during the past week. This week we had a ying yang market but unfortunately there was more yang than ying so we are down for the second straight week. As measured by the Value Line Index of 1700 stocks we were down 6.26% this week and 1.74% last week with an October loss of 5.31%.

Let's see how the market did using my standard market momentum criteria as found on BarChart:

Value Line Index - an index of 1700 stocks - trending downward but not to panic yet.
  • The Index was down 6.26% this week, down 1.74% last week and down 5.31% for the month.
  • The Index is tracking below its 20 & 50 day moving average but above its 100 day moving average.
  • The Index is off its market high on 10/19 by 9.13%

BarChart market momentum indicators - a review of approximately 6000 stocks - are they trading above or below their daily moving averages -- down but still above the 100 DMA

  • 20 DMA - 85% trading below their DMA
  • 50 DMA - 68% trading below their DMA
  • 100DMA - 67% trading above their DMA

Ratio of new highs to new lows for various periods -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- we are bearish for all 3 periods

  • 20 day new high/new low ratio -- 221/2265 = .10
  • 65 day new high/ new low ratio -- 107/710 = .15
  • 100 day new high/new low ratio -- 97/302 = .32

Summary -- We had a very bearish week and all my BarChart indicators show a very downward trend. Economists are saying the market is in recovery but we have had a 9.13% retraction of the stock market from our earlier high on 10/19. Many were expecting a 10% correction so I hope that is it. I'll be trimming my positions that fall below their 50 DMA but will not replace those positions until I see some market support.

On my Wall Street Survivor portfolio I have placed sell orders for ESC -- Emeritus and VRUS -- Pharmasset both trading below the 50 DMA. My portfolio in is dead last place in the competition. I purchased stocks that had a greater beta than the other players and the down market crushed me harder. Next month is another month.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please make a comment below or email

Disclosure: I do not hold positions in any of the stock mentioned in this blog at the time of publication

Friday, October 30, 2009

XLP - Consumer Staples Select Sector ETF

On Financial Tides sector ETF's pop up purely as a short term technical play. They are a way to take advantage of a sector that excels in the current market conditions. The Consumer Staples sector is presently that kind of sector.

On BarChart's ETF screener XLP -- Consumer Staple Select Sector ETF comes up as one of the most steadily rising ETF's. Recently XLP has hit 11 new highs in the last 20 trading sessions and 30 new highs in the last 100. A nice steady, consistent performer with a 65 day price appreciation of 10.05%, not bad in this ying/yang environment. BarChart rates XLP as a 65% BUY with 9 of the 13 technical indicators as BUY, 3 HOLDS and a single SELL.

Over on Motley Fool CAPs their members rate this stock as a 145 to 11 likelihood of outperforming the market and in this case I agree with the majority.

Recommendation: BUY XLP - Consumer Staple Select Sector ETF below 26.25 with a protective stop loss no higher than 25.50.

Jim Van Meerten is an investor who writes about financial matters here and on Financial Tides. Please make a comment below or email

Disclosure: At the time of publication I do not hold a position in XLP.

Financial Tides signature funds have another great quarter

A little over 5 years ago I began a fantasy portfolio on Marketocracy. I was in love with the stock market since I was 14 but because of positions held by either myself or family members I was unable to actually trade the way I wanted to. After seeing an article in Forbes -- Best of the Web about fantasy stock market simulation games I was hooked. In the same article they also recommended BarChart as a stock screener and technical analysis tool. I began trying all sorts of investing strategies, some worked for a while and some were total disasters from the start. I read the comments of other players, especially Marketocracy's M100 - their top of the line players and learned a lot from them. Finally I got into a groove and settled on not only my own stock picking strategy but my portfolio management strategy as well. It is very simple:
  1. Add to my portfolio stocks that are hitting new highs at least 50% of the time during the last 20 trading sessions. If there aren't any don't buy anything.
  2. Use BarChart's 13 technical analysis indicators to get a TA consensus about the stock. I don't know how to compute all of those indicators myself but if the stock isn't a buy on at least 80% of them I pass on the stock.
  3. Once in my portfolio I prune the stock if it fails to maintain a trading range above its 50 day moving average.

It sounds simple and as I shared my ideas on various Internet sites many, many people told me it wouldn't work. I now have 2 funds on Marketocracy that use these principles: VMNHI - stocks hitting new highs and trading over 100K shares a day and VMSLO - stocks hitting new highs trading between 25K and 99K shares a day.

As a side note the VMSLO is the continuation of the Strategy Lab Open portfolio where I won that competition and got the opportunity to begin blogging for MSN's Top Stocks.

Here's the results as computed by Marketocracy against the other 81,00 portfolios they evaluate:

VMNHI - established 3/3/2005 - #50 out of 81,000 for the past 3 year period. This portfolio has been in the top 100 for various periods 8 times since inception. Since 3/3/2005 the return of the S&P 500 has been -2.98% but VMNHI's return was 53.14% beating the index by 56.12%

VMSLO - established 1/31/2008 ended the quarter beating 99.1% of the 81,000 other portfolios and has been in the top 100 3 times since its inception. Since 1/31/2008 the S&P 500 has returned -19.29% while the VMSLO has returned 48.70% beating the index by 67.99% for that period. My message is simple:

  • If you want to take charge of your own financial future read and share ideas with other successful investors -- read, listen, share and learn.
  • Find complete investing sites like MSN's Money Central and read all the various ideas from their contributors. It's amazing how often they differ. There are little jewels in almost every article.
  • Join several fantasy investing simulation sites like Wall Street Survivor, Marketocracy or Motley Fool CAPs, try out your hunches and learn and share ideas with the other participants.

I hope you all will test your ideas with fake money before you put your real bets down and each of you finds you own investing groove. Read, share, listen and learn.

Jim Van Meerten is an investor and writes on financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: I do not hold positions in any of the investment ideas I share on this site

Thursday, October 29, 2009

Famous Dave's - DAVE - is finger licking good

At Financial Tides we're a sucker of good Bar-B-Que and DAVE not only serves up a good brisket but is projected to serve up nice earnings growth. DAVE owns, operates and franchises barbecue restaurants and blues clubs. The company currently owns locations and franchises locations in Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Utah, Maryland and Virginia and has signed development agreements for an additional franchised locations. Its menu features award-winning barbecued and grilled meats, an ample selection of salads, side items, sandwiches and unique desserts.

Only one analyst, Mark Smith of Feltl & Co follows DAVE but with projected sales of 137M it has a lot of other fans. Mark rates the company a STRONG BUY with earnings growth of 24.5% this year and 14.8% next year.

BarChart rates DAVE an 80% BUY on a technical analysis basis. The company is selling for around 6.70 and Barchart has a support level of 6.46.

Recommendation: BUY Famous Dave's --DAVE-- below 6.75 with a protective stop loss at 6.00

Jim Van Meerten is an investor and writes about financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: I hold no position in Famous Dave's -- DAVE -- at the time of this publication.

Tyler Technologies - TYL - Growth in computer service might make TLY a winner

I think we all agree the economy though week is in recovery. Emerging companies will need help implementing their new computer systems and Financial Tides thinks Tyler Technologies - TYL - might be the on to help companies and governmental agencies with their IT implementations.

Per Yahoo Financial TLY provides integrated information management solutions and services for local governments in the United States, Canada, Puerto Rico, and the United Kingdom. The company's financial management systems include modules for general ledger, budget preparation, fixed assets, requisitions, purchase orders, bid management, accounts payable, contract management, accounts receivable, investment management, inventory control, project and grant accounting, work orders, job costing, GASB 34 reporting, payroll, and human resources. It also offers specialized products that automate various city functions, including municipal courts, parking tickets, equipment and project costing, animal licenses, business licenses, permits and inspections, code enforcement, citizen complaint tracking, ambulance billing, fleet maintenance, and cemetery records management, as well as provides utility billing solutions, student information systems, and applications to manage pension funds.

Tyler Technologies' courts and justice solutions comprise a suite of solutions to automate, track, and manage the law enforcement and judicial process, including court case management system, law enforcement system, prosecutor system, and supervision system. The company's property appraisal and tax solutions automate the appraisal and assessment of real and personal property, including record keeping, mass appraisal, inquiry and protest tracking, appraisal and tax roll generation, tax statement processing, and electronic state-level reporting.

Its public records and content management systems record, scan, and index information documents maintained at the courthouse, such as deeds; mortgages; liens; UCC financing statements; and vital records, including birth, death, and marriage certificates. The company also offers professional information technology and property appraisal outsourcing services. Tyler Technologies was founded in 1966 and is based in Dallas, Texas.

There are 5 analysts watching TYL including Banc of America and BB&T so the stock does have a major following. There are 4 STRONG BUY ratings and just 1 HOLD. Sales are expected to grow by 10.7% year over year and earnings estimates for next year are expected to grow by 18.1%. Nice numbers and they exceed expected growth in GDP.

On a technical analysis view BarChart rates this stock a 96% BUY with 12 of 13 TA indicators a BUY and only 1 HOLD. The stock has hit 16 new highs in the last 20 trading sessions and has had a 65 day price appreciation of 23.6%.

Summary: 4 out of 5 analysts rate TYL a STRONG BUY based on fundamental analysis and BarChart rates it a 96% BUY based on technical analysis.

Recommendation: BUY Tyler Technologies TLY around 19 with a protective stop loss of not less than 17.

Jim Van Meerten is an investor and writes on financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: I do not hold any positions in TYL - Tyler Technologies at the time of this publication.

Wednesday, October 28, 2009

Short Fund close outs

Covering some short positions:

MXB - MSCI Inc - buy to cover short position - trading above 50 DMA

ROS - OJSC Rostelecom ADS - buy to cover short position - trading above 50 DMA

ALPHA Fund deletions

more trimming on poor price performance:

ANEN - Anaren Inc - sell on poor price performance - below 50 DMA
CENT - Central Garden & Pet - sell on poor price performance - below 50 DMA

Sell USD - Ultra semiconductor ProShare ETF

Sell USD from my ETF portfolio on poor price performance - trading below 50 DMA

Strategy Lab portfolio deletions

More portfolio trimming based on poor price movement:

ADPI - American Dental Partners - below 50 DMA
AEPI - AEP Industries - below 50 DMA
MAIL - Incredimail - below 50 DMA

S&P 600 deletions

Time to trim on poor price support:

KID - Kid Brands - below 50 DMA
LAD - Lithia Motors - below 50 DMA
NSIT - Insight Enterprises - below 50 DMA

S&P 400 deletions

Time to trim on poor price performance:

HMA - Health Management Assoc - below 50 DMA
ROST - Ross Stores - below 50 DMA

S&P 500 fund deletions

Time to trim a few poor performers:

GNW -- Genworth Financial - price below 50 DMA
IGT -- Itl GAme Tech - price below 50 DMA
SLF -- Sunlife -- price below 50 DMA

Tuesday, October 27, 2009

MPS - MPS Group gets down to business

For years I've driven in I-95 through Jacksonville on my way to Florida and wondered about the Modis sign on a skyscraper in the distance. I found that Modis is a subsidiary of MPS Group which provides all kinds of business services. Today I have added MPS to my S&P 400 fund on Financial Tides.

Per Yahoo Finance MPS Group, Inc. provides staffing, consulting, and business solutions to various industries in the United States, Canada, the United Kingdom, continental Europe, Australia, and Asia. The company operates in two divisions, Professional Services and IT Services. The Professional Services division provides specialized staffing and recruiting in the disciplines of accounting and finance, law, engineering, healthcare, and property to companies and government agencies. This segment also offers technical and engineering strategic workforce solutions, such as on-site management consulting and in-house project services; and staffs temporary and full-time employees in attorney, paralegal, legal administrative, and legal secretarial positions. It also places temporary and full-time employees in accounting and finance, tax, and audit positions; and traveling healthcare professionals in the areas of nursing, physical and occupational therapy, and speech and language therapy. The IT Services division provides specialty staffing, consulting and business solutions, and marketing and creative solutions. This segment engages in the placement of IT contract consultants for IT project support and staffing; recruitment of full-time positions; and provision of on-site recruiting support for application development, systems integration, and enterprise application integration. It also specializes in Web design and development, application development, digital data management, business intelligence, infrastructure and security, and interactive marketing; and provides software-based workforce solutions. MPS Group, Inc. offers its services primarily under the Modis, Badenoch & Clark, Accounting Principals, Entegee, Special Counsel, Idea Integration, Soliant Health, and Beeline brand names. The company was formerly known as Accustaff Incorporated and changed its name to MPS Group, Inc. in 2002. MPS Group, Inc. was founded in 1992 and is headquartered in Jacksonville, Florida.

Outsourcing of business services is big business these days and MPS is one of the biggest. 12 analysts follow the company and 3 presently rate it a buy or strong buy. Earnings consensus is expected to increase from 10 cents a share this year to over 18 cent next year; an 80% increase.

On a Technical Analysis basis BarChart rates this stock a 96% buy with 12 of 13 indicators a buy and only one hold. The 6o% price increase in the past 65 days shows MPS is finally being recognized as a leader in its industry. 7 new highs in the past 20 days shows price appreciation still has room to grow.

Recommendation : BUY MPS -- MPS Group below 13.60 and keep a tight stop loss around 12.50.

Jim Van Meerten is an investor and writes on financial matters here and on Financial Tides. Please make a comment below or email to

Disclosure: I hold in my Marketocracy S&P 400 portfolio but have no actual positions in MPS at the time of this publication

Has Pioneer - PXD - run out of gas???

Gas and oil prices have been on a tear recently but just how far can they go? Pioneer Natural Resources -- PXD --is featured in Financial Tides as a pick of the day. According to Yahoo Financial : Pioneer Natural Resources Company engages in the exploration and production of oil and gas in the United States, South Africa, and Tunisia. It produces crude oil, natural gas, and natural gas liquids. The company primarily holds interests in the Spraberry field in the Permian Basin area; the Hugoton and West Panhandle fields in the Mid-Continent area; and the Raton field in the Rocky Mountains area. As of December 31, 2008, it had proved undeveloped reserves and proved developed reserves of approximately 246 million barrels of oil and natural gas liquids; and 1,064 billion cubic feet of gas. The company was founded in 1997 and is headquartered in Irving, Texas.

Of the 15 analysts following PXD 9 rate it a buy or strong buy. This year there is an estimate of a 12 cent loss but next year the company is expected to make 1.63 per share. A very nice increase. In the last 30 days 6 of the analysts have increased their EPS estimates for next year.

On a technical analysis basis BarChart rates PXD a 96% buy with 12 of 13 technical indicators a buy and only 1 hold. The stock has traded into 14 new highs in the last 20 session and has had a 75% price appreciation in the last 65 days.

What's not to like about the stock? With half of the analysts following PXD creating a BUY buzz mentality and the technical indicators show that the buzz in presently working, you should consider this stock.

Recommendation : Buy PXD - Pioneer Natural Resources around 45 with a protective stop loss no lower than 35. Be prepared to move that up on a weekly basis till the stock runs out of gas.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please comment below or an email to

Disclosure: I hold no position in PSD at time of this publication.

Look both ways -- Twice!

We are at a very pivotal time in the market. Half of the pundits are saying that we are headed higher and the other half thinks we are in for a big correction. What are we to do?

You know what to do, your Mom and Dad taught you before you were six. Always look both ways before you cross the road. That road is the stock market. Should you stay where you are and wait for the traffic to clear or is it now safe to go ahead and cross to the other side?

I look at the signs. Yesterday the ValueLine Index -- an index of 1700 stocks -- closed below its 20 day moving average. BarChart's market momentum showed 61% of the stocks closed below their 20 day moving averages. The ratio of stocks hitting 20 day new highs to 20 day new lows was 537/1066 = .5 , another sign for caution. No one will fault you for sitting out a day or two.

What is happening and where are we headed? The easiest way to explain where we are is to share with you my recent experience on a trip to Florida down I-95. Traffic would speed up and everyone was flying along above the speed limit. All of a sudden red tail lights flashed and everyone slammed on the breaks. This caterpillar or accordion effect happened over and over but there were no apparent accidents causing the slamming on of brakes. What's this got to do with the financial world? Let me explain.

Picture the financial world as 3 groups of cars: the stock market, the economy and company earnings. They are all traveling down the same highway in the same direction but occasionally they bunch up and the brakes get slammed on. You would think that drivers would not bunch up and everyone would just put the cars on cruise control at 70 and travel along like a train but that's not how the drivers think and neither do our 3 cars.

The stock market usually leads the way, it's a leading economic indicator, the economy is in the middle and earnings because they are reported after the fact usually follows the pack from behind. That's what is happening with our little convoy.

The stock market got too far out in front. The economy is trying to catch up and its leading economic indicators are catching up but its coincident indicators have been flat for 3 straight months. Earnings are being reported now and seem to be verifying that the stock market and economy are correctly headed higher. The stock market is slowing down and allowing the rest of the convoy to catch up. We will space out again in a week or two and the stock market will get out in front again.

On my Wall Street Survivor portfolio none of my stocks are trading below their 20 day moving average so I haven't trimmed out anything and I'm fully invested. I'll just stay on the curb right now, wait for the traffic to clear and be patient.

Jim Van Meerten is an investor and blogs on financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: I do not hold any stocks that are in my Wall Street Survivor portfolio at the time of this publication.

Monday, October 26, 2009

Deletions from Model Portfolios

These stocks deleted at the opening today:

BAMM - Books a Million - New High Fund below 50 DMA

DWA - Dreamwoeks Animation - S&P 400 Fund below 50 DMA

PLCM - Polycom - S&P 400 Fund below 50 DMA

STSA - Sterling Financial - Strategy Lab Fund - below 50 DMA

ASFI - Asta Funding - Strategy Lab Fund - below 50 DMA

GHI - Global High Income - Strategy Lab Fund - below 50 DMA

2/3's of all investment advice is wrong for you

On Financial Tides I try to bring you information you can use. Please click on this video I made on investment advice.

Jim Van Meerten