Market creeps upward

Once on a week on Financial Tides I like to step back and block out all the hype that I read on the Internet and hear on the TV and decide for myself the state of the market and how I will invest during the coming week. I use technical factors that I mine from BarChart and use the same approach every week so I can have a consistent view of the market.

First I see what the Value Line Index did. I like the Value Line Index because it uses 1700 stocks making it much broader than the S&P 500 or the narrow Dow 30. Short term improvement this week.

• Index closed at 2184.48 -- up for the week by .30% and has had a 8.93% price appreciation for the last 65 days
• 9 of Barchart's 13 technical indicators signal buy for a 64% overall buy rating
• Short term rating 80%
• Mid term rating 75%
• Long term rating 67%
• Trend Spotter (TM) is still a sell but weakening
• The Index is almost back to its high for the year of 2239.69 made on 10/19

BarChart market momentum -- what percentage of stocks closed above their daily moving averages for various time periods -- almost 6000 stocks covered -- The majority of the stocks closed above their DMA for all 3 time periods reviewed.

• 20DMA -- 62.83% closed above
• 50DMA -- 61.42% closed above
• 100DMA -- 69.34% closed above

The ratio of stocks hitting new highs to new lows for various time periods -- 1.0+ bullish, 1.0 neutral, under 1.0 bearish -- Ratios for all 3 time periods show a positive market movement.

• 20 day new high/new low ratio -- 857/465 = 1.84
• 65 day new high/new low ratio -- 433/197 = 2.20
• 100 day new high.new low ratio -- 385/123 = 3.13

Summary: Analysis of all 3 indicators I use show a market that although almost flat for the current week is showing improvement and is about to break back through it's previous high for the year. I will trim stocks that do not maintain a closing above their 50 DMA and not be afraid to replace them this week. I'll stay fully invested.

Wall Street Survivor results: The 8 Top Stock columnist that give individual stock recommendations maintain model portfolios of those recommendation on Wall Street Survivor for a little friendly competition. The S&P was up .06% for the month and 5 of our 8 contributors have beaten that return. First place goes to Tobin Smith with a return of 3.97% and I came in third with a 3.19% return for the month.

Disclosure: I do not hold any positions in the stocks in my Wall Street Survivor portfolio

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

Put some FUN in your portfolio

On Financial Tides every once in a while we see a stock that is hitting new highs like crazy for no apparent reason. Sometimes that movement precedes a big press announcement; sometimes it precedes an acquisition announcement. You can never tell. This week when screening for stocks hitting new highs consistently on BarChart Cedar Fair LP -- FUN came up on the radar. FUN has had price appreciation on 14 of the last 20 trading sessions. The stock was having a difficult time earlier in the year and seemed to bottom out on 11/12 at 6.03 and has steadily move up by all most 50% since then. Something is going on here.

Cedar Fair, L.P. and its affiliated companies own and operate five amusement parks: Cedar Point, Knott's Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun/Oceans of Fun. The parks are family-oriented, with recreational facilities for people of all ages, and provide clean and attractive environments with exciting rides and entertainment. The company also owns and operates four hotel facilities. Cedar Point also owns and operates the Cedar Point Marina, one of the largest full-service marinas on the Great Lakes.

Although there is not a major Wall Street brokerage following the stock has 1 buy and 3 hold recommendations with no sells or under performs. Analysts expect the stock to have an increase in both sales and EPS and be profitable in the coming year. Paul Price a contributor to Seeking Alpha has done several recent articles on the stock and I'm linking his article --
Cedar Fair : Growth Opportunities in Amusements for your review.

Over on Wall Street Survivor the Survivor Sentiment is 5/5 with a fundamental rating of 4/5. On Motley Fool the CAPS members think the stock will out perform the market 314 to 72 with the All Stars agreeing 76/23. Of the Wall Street columnist only Cramer disagrees but he hasn't said anything about the stock since all the way back in January.

Recommendation: Although FUN seems to have support based on its fundamentals and is expected to make a profit, I'm adding this stock to my speculative Marketocracy VMSLO portfolio solely on its technical price movement alone. Something is going to happen and I'm hoping for another price kick upward. Buy around 9 but have a protective stop loss around 8 in case nothing happens. Revisit that stop loss on a weekly basis and move it up to protect your gains.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment here or email FinancialTides@gmail.com.

Disclosure: No positions in this stock at the time of publication

Mutual fund tax trap

This is not an article to tell you to sell all your mutual funds to avoid this tax trap. This is just a cautionary warning about how mutual fund dividends are taxed so you can have a plan before it's too late. Back when I prepared tax returns I always had clients that questioned why they had to pay taxes on the mutual fund dividends they reinvested when they had only owned the fund for just a few days and never received a check in the mail.

Mutual funds, investment companies and some holding companies all fall under a special IRS tax provision. If they do things properly, they are not taxed like a corporation but pass through their tax liabilities like a partnership. If at least once a year they pay out 90% all the net interest, dividend and trading profits they made during the past year they will not have to pay income taxes on those profits but instead pass through that liability to the owners of their shares.

It doesn't matter if you only owned the shares for just a few days, if you are the owner on the day they payout that dividend they pass through to you the tax liability. You will receive a statement telling you how much of the dividend is for interest, net short term and long term capital gains. If the fund you own hold bonds or real estate you may also be informed how much of the dividend is for tax exempt interest, taxable interest or even return of principal.

I know you usually buy a mutual fund to make your life simpler but at tax time it can make your life complicated. Do some planning now. Find out when the funds you own pays out that dividend and see how you will be taxed. After you receive the dividend there is not much you can do to avoid the tax liability.

I know some people who have owned a fund for the last 20 years and never sold it because it was a long term investment. Someone else prepares their tax returns and they never noticed that they paid taxes on these dividends year after year. They were under the false impression that they never paid taxes on their mutual fund gains until they sold them.

Before you start screaming that the tax code is unfair, I'll drop some more bombs on you. Most mutual funds turn their portfolios over several times a year. You may think you have a long term investment that will get long term capital gains treatments but look closely and you'll find out that most of the dividend was short term capital gains, taxed as ordinary income at your incremental tax rate.

Now the big bomb. They only get to pass through the net gains. If they had a net loss for the year, that net loss is carried forward not passed through to you.

In investing it's not how much you make that counts, it's how much to keep. How much do you get to keep after fees, taxes and inflation?

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

Small Israeli stocks are hot

On Financial Tides I have 2 model portfolios -- VMNHI which consists of larger companies with high volume and lots of following and VMSLO -- which holds thinly traded or low priced stocks that are very volatile and speculative. I had some room for a highly speculative stock so I used BarChart to find a stock that was speculative but hitting new highs on a regular basis. Nova Measuring Instruments -- NVMI --came up on my screening.

NOVA MEASURING -- NVMI --develops, produces and markets monitoring and measurement systems for the semiconductor manufacturing industry. The company has pioneered the Integrated Metrology concept and is now expanding its activities by developing Integrated Monitoring and Process Control systems for CMP, CVD, Photolithography and Etch manufacturing processes. The company's systems for CMP process control, delivering systems for CMP process control, delivering have measured more wafers than all other metrology companies combined.

This is a purely technical play but BarChart shows it has had price appreciation in 8 of the last 20 trading sessions and is 4 for the last 5. There has been a 136.67% price increase in the last 65 days. BarChart's technical indicators have buy indications on 12 of 13 indicators. In the last 100 days this stock has advanced to new highs 29 times and has never traded below its 50 day moving average in the last 6 months. A favorable and consistent price appreciation.

You will not find a lot of following out there but I'll refer you to 2 guys here on Seeking Alpha that have done extensive research and seem to agree that here is a hidden winner. Shlomi Cohen -- Niche Player Nove Rides Chip Production Recovery and The Inflection Point --
Nova Measuring Pullback Seems Overdue. Both articles give a great review of what the company does and why they think it will continue to do it well. My reading on the company is strictly in analyzing the price performance of the stock.

Recommendation: I've added this stock to my Marketrocracy VMSLO model portfolio around 4.90 with a suggested stop loss no lower than 3.5. This is a short term recommendation and long term investors might look for a pull back to accumulate more shares if they feel the long term prospect for this company warrant that.

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

Disclosure: No positions at the time of publication

E-Commerce is hot

On Financial Tides we look for stocks that should give you an immediate return and GSI Commerce fits the bill. It came up on my BarChart screening for stocks that continue to hit new highs. GSIC has had 13 price advances in the last 20 trading sessions and is 3 for 5 recently. It has enjoyed a 39.25% price appreciation in the last 65 days. BarChart's technical indicators are 12 out of 13 buys for an over all buy rating of 96%.

The company develops and operates e-commerce sporting goods businesses for specialty retailers, general merchandisers, Internet companies, and media companies under exclusive long-term agreements. The company enables its partners to capitalize on their existing assets to exploit the online opportunities in the sporting goods industry. The company's scalable business model takes advantage of its proprietary technology and product database, customer service capabilities, relationships with vendors,and centralized inventory management.

Wall Street like them too. Of the 21 analysts following the firm 17 have buys -- 4 holds and no under perform or sell signals from any of them. They predict a 29.5% increase in sales and 263.6% increase in the bottom line -- very optimistic!

Other sites like them too. Walls Street Survivor has a Survivor Sentiment rating of 5/5, fundamental of 5/5 and a technical rating of 5/5 -- you don't see that very often. Over on Motely Fool CAPS members think the stock will outperform the market by a vote of 128 to 33 with the All Stars in agreement 36 to 9. The Wall Street columnist Fool follows like it 17 to 1. The lone under perform was Jim Cramer. I don't often defend Cramer, not even against Jon Stewart but to be fair his sell signal was 3/22/2007 and he would probably change his mind if he revisited it.

This stock crosses my hurdles:

• Price appreciating in more than 50% of the recent trading sessions
• If Wall Street brokerages are following the stock -- no recent trash talking
• Other sites confirm my research

Recommendation: GSI Commerce -- GSIC looks like a buy around 24.75 with a stop loss of no less than 21.

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

Disclosure: No positions in this stock at the time of publication

Can Sprint finish the race??

On Financial Tides I try find stocks I think are the best to buy now but also report on some of the most popular issues. Sprint Nextel-- S has been on the volume leaders list recently. I'm going to look at Sprint's stats objectively:

• Has the stock been hitting new highs recently
• What do the technical indicators say
• If followed by Wall Street is there trash talking
• What is the consensus on other sites.

Sprint offers a comprehensive range of wireless and wireline communications services to consumer, business and government customers. The company is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international push-to-talk capabilities; and an award-winning and global Tier 1 Internet backbone.

BarChart reveals that S has had 7 price increases in the last 20 trading sessions and is 3 for 5 most recently. There has been a 48.56% price appreciation in the last 65 days. BarChart has this stock an overall 64% buy with the short term technical indicators giving it an 80% buy.

30 Wall Street brokerage firms follow the stock and although they estimate a 2.3 loss in revenue they feel the EPS will rise by 17.1%. Possible sign of losing market share but improved efficiencies. Of the 30 there are only 3 under perform or sells with 9 buys and 18 holds. The most recent recommendation is a buy from CitiGroup. There seems to be support on Wall Street to hold what you have and maybe even accumulate a little more. No real trash talking.

On Wall Street Survivor the Survivor Sentiment is 5/5, fundamental 4/5 and technical 3/4 - not over whelming but still positive.

Motley Fool CAPS members vote 1404 to 405 that the stock will outperform the market with the All Stars in agreement 307 to 98. The Wall Street columnist Foll follows like the stock 15 to 2.

My take is that if you have the stock there is no reason to sell at this time. Although it won't set the world on fire you might want to accumulate more as a long term investment. Trading around 4 at present short term traders should be out below 3.50 and no one should hold below 3.00.

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

Disclosure: No positions in this stock at the time of publication

Is Citi just a hope and a prayer?

CitiGroup - C has been one of the most actively traded stocks recently trading between 275 - 532 million shares a day. So much interest but it it all just a hope and a prayer? For the 2 people out there that don't know what Citi does it is a leading global financial services company, has some two hundred million customer accounts and does business in more than hundred countries, providing consumers, corporations, governments, and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, and Banamex.

When I step back and really look at how Citi has performed it has gone nowhere. According to BarChart the stock has advanced only 5 times in the last 65 days and then for only a .52% gain. Flat to say the least. BarChart's technical indicators have 12 of 13 signalling sell for an overall sell rating of 88%.

With stats like that why is everyone so high on this stocks? There are 20 Wall Street analysts following this stock and 17 have a hold or buy. Only 3 recommend a sell or under perform. Wall Street Survivor has a 5/5 Survivor Sentiment rating and over on Motley Fool the CAPS members are voting 7190 to 1756 that the stock will outperform the market. Even the All Stars vote 1328 to 438 and are in agreement with the 34 Wall Street columnists Fool follows who like it 32 to 2. How do you say self fulfilling prophesy?

I'm sorry but when I invest in the stock it has to be both popular and technically sound and I don't feel that way with Citi. I'm not sure which bank will perform best and survive in this recovery but there seems to be a lot of people that think Citi is the best. I'm going to be different and pass on this one.

If you just have to invest in a bank I'd go for a financially sound regional or if you can't make up your mind try an ETF like IShares Dow Jones US Regional Banks -- IAT

Jim Van Meerten is an investor who writes about financial matters here and on Financial Tides. Please leave a comment here or email FinancialTides@gmail.com.

Disclosure - no positions in this stock at time of publication

I'm high on Hong Kong Highpower

I had some room in my Marketocracy VMSLO model portfolio so I went on BarChart and started hunting for stocks trading below 100K shares a day that continue to hit new highs in this down day market. I came upon Hong Kong Highpower -- HPJ. The stock has hit 12 new highs in the last 20 sessions and is 5 for 5 recently. There has been a whopping 308.48% price appreciation in the last 65 days. BarChart's technical indicators have a 12 out of 13 buy signal for a 96% overall buy rating

HPJ develops, manufacturers and markets rechargeable Nickel Metal Hydride and Lithium-ion batteries and related products for use in a variety of electronic devices. The majority of Hong Kong Highpower's products are distributed worldwide to markets in the United States, Europe, China, Hong Kong, Southeast Asia and Taiwan. The way all these new electronic devices everyone wants eats batteries this company has the right products line.

There is only one Wall Street analyst, Rodman & Renshaw following this stock and they just initiated coverage in August. They predict great things with a 25.7% estimate on sales increase, 146.7% profit improvement for this year and a 13.5% EPS growth next year.

On other sites coverage is also thin with Wall Street Survivor giving the stock a 5/5 Survivor Sentiment rating and a 5/5 fundamental rating. Motley Fool CAPS has not begin covering this stock.

Recommendation: I'm adding Hong Kong Highpower -- HPJ to my speculative VMSLO model portfolio. It's trading around 6.70 and a protective stop loss of not less than 5 should be in place. Remember -- this is a speculative buy. There isn't a lot of following for this stock and it is thinly traded.

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

Are regional airlines different?

I had a little room in my Wall Street Survivor portfolio and this weekend I had determined I would still buy into this market so I went bargain hunting in these down days. I used Barchart to find which stocks were continuing to hit new highs even while the market was sliding backwards and came up with Linhas Aereas Inteligentes ( GOL ) a Brazilian ADR that is a regional airline. Before you start screaming that I'm a total idiot to consider any airline give my thinking a try. Airlines in the rest of the world are a little different that our airlines in the US. In countries like Brazil they is not an alternate transportation choice. For much of the country there is not a proper roadway or rail choice so air travel is the only choice. This airline moves people, cargo and mail bags so they are not as passenger dependent and ticket price sensitive like in the US. Competition also isn't as keen.

The stock has hit new highs in 14 of the last 20 trading sessions and is 5 for 5 more recently. There has been a 63.48% price appreciation in the last 65 days and BarChart's technical indicators have 12 of 13 buy signals for a 96% buy rating.

The 9 analysts following the stock look for a 26.2% increase in sales next year and a profit improvement of 136.8% this year. They have 4 buy, 4 hold and 1 sell recommendations. The lone sell was from Citi back in January and the stock has had good price appreciation since that date. The most current review is from Argus this August and they went from sell to buy.

On some other sites Wall Street Survivor Mark's checklist has a Survivor Sentiment rating of 5/5 and a fundamental rating of 4/5. Over in Motley Fool the members think the stock will out perform the market by a vote of 313 to 37 with the All Stars in agreement 97 to 10. The mixed review comes from the Wall Street columnists that Fool follows with a vote of 5 to 4. The 4 who say sell did so back earlier in the year and have not revisited their signal. The stock has had pretty good price appreciation since then so I'll discount those sell recommendations.

The stock has what I'm looking for:

• Hitting new highs in the current market at least 50% of the time
• If Wall Street brokerages are following the stock - no current trash talking
• The other sites do not have a major disagreement with my pick

Recommendation: I'm going to add Linhas Aereas Inteligentes (GOL) to my Wall Street Survivor portfolio around 15.78 with a protective stop loss no lower than 12.

Disclosure: I hold no positions in this stock at the time of publication

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

Is Corning glass transparent?

On Financial Tides I determined over the weekend I'd be a buyer this week. On BarChart I screened for the stocks hitting the most new highs and after a little more screening came up with a recommendation on Corning Inc. -- GLW. The stock has hit 12 new highs in the last 20 sessions and is recently 5 for 5 with a 32.56% price appreciation in the last 65 days. BarChart's technical indicators have 12 of 13 buy signals with a 100% short term rating and a 88% overall rating.

GLW creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets.

On Wall Street the 17 analysts who follow the stock give it 11 buy recommendations and there are no under perform or sell reports. They estimate a 30.1% increase in sales and an 18.3% improvement in EPS. That's pretty positive.

On other sites Wall Street Survivor has Mark's checklist giving it a 5/5 Survivor Sentiment rating , a 5/5 fundamental rating and a 5/5 technical rating for an over all rating of 94%

Motley Fool CAPS members think the stock will out perform the market 3245 to 81 with the All Stars in agreement 787 to 7 and the Wall Street columnists Fool follows at 22 to 1. The lone seller was Davenport and the stock has been up 135.14% since he recommended a sell.

This stock seems to meet my 3 criteria:

• Making new highs better than 50% of the time
• If followed by Wall Street brokerages - no recent sell recommendations
• Other sites agree with my recommendation

Recommendation: I'm adding Corning Inc -- GLW-- to my Marketocracy VMNHI portfolio around 18.62 with a protective stop loss no lower than 16.

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

Disclosure: I hold no positions in this stock at the time of publication

Verizon on the horizon

Over the weekend I determined that I'd be a net buyer into the market this week. I had some buying power in my Wall Street Survivor portfolio so I used BarChart to find what stocks were hitting new highs most frequently. After getting the top ten and doing some additional screening I decided to add Verizon (VZ) to my portfolio. Verizon is one of the largest providers of both wired and wireless communications.

During my BarChart screenings I determined VZ had hit new highs in 12 of the last 20 trading sessions and was 5 for 5 the past week. There has been a 16.17% price appreciation in the last 65 days. BarChart's technical indicators have buy signals on 11 of the 13 indicators and the sell is a long term indicator.

There are 32 Wall Street analysts following the stock and although they estimate only a .09% increase in sales and a 1.6% increase in earnings 16 still recommend you buy the stock. The only sell recommendation was made back in January and seems too old for me to consider.

I'm starting to like the Wall Street Survivor Mark's checklist which has a Survivor Sentiment rating of 5/5, fundamental rating of 4/5 and a technical rating of 5/5. Motley Fool CAPS members think the stock will out perform the market with a vote of 3386 to 198 with the All Star members in agreement with a vote of 847/38. Motley Fool follows some Wall Street columnists and they like the stock 32 to 1.

I'm the first to admit that I have no crystal ball and I don't have an original thought in my head. I've just developed a method to find stocks with a positive price momentum and a discipline to manage the portfolio I own. To be added to my portfolio a stock must:

• Hit new highs more than 50% of the time
• If followed by Wall Street Brokerage firms not have a majority of sell recommendations out there - trash taking by brokers usually means net sells
• Have some confirmation of my research by some of the other technical indicator sites I follow

Recommendation: Verizon Communications (VZ) meets my criteria and is being added to my Wall Street survivor portfolio around 33.15 with a protective stop loss of no lower than 30.

Disclosure: I own no positions in the stock at the time of publication.

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