ST+Swing Stock Pick: Seabridge Gold Inc. (SA)

Well, as one might expect gold stocks are showing up on the short term chart and Seabridge Gold Inc. (Amex: SA) is the pick for tonight. You can expect this week to be highly volatile as the markets wait for any news of a possible plan passing to free up the credit markets. It was rather stunning to watch the markets sell off on lack of government action and oversight when the markets themselves normally loath such actions. Yet the freeze of the credit markets is already that bad. You can expect a number of companies both big and small that require short term credit to run their business to have a very tough time of it in the coming weeks. Payrolls are going to be missed, inventories are going to sit on the shipping platform as the buyers cannot fianice the purchase, and the longer this goes on more widespread the effects will be felt.



ST+Swing SA
Stock Rating: 0.25 (#45 or 2575)
Stock Slope: 0.01
Volatility: 57.04% (Max: 10.26, Min: -7.73)
Performance: 78.33%
Swing Time: 17.31% (5 Days into 29 Day Average)
Avg Trend Ends: 10/31/2008
Stop Loss: 16.00
Profit Limit: 28.00, or when ST Slope is Negative
Position: None, None Planned.

I cannot express enough that the risk of investing in these markets are just too large for the potential reward. Yes you could miss the 800 point up day that is coming when a plan is actually passed, but until the credit crunch is really and truly behind the market and the economy you will not be missing all that much in the grand scheme of things. The risk you are taking for that 800 point up day is another 20-30% or even more depending on just how bad things get.

Weekly Update: Making Sense of the Senseless

The short term sector view is showing the financial sector pushing to new high as well as a nice bounce in energy. The longer term view shows the continued gain in the financial sector and the continued fall in the energy sector. All this coming on the heals of a market that looks to be poised to open without a $700B deal on the table, even after one had been long expected over the weekend (and the reason this post was delayed).





The markets rallied into the close Friday as the market though the risk of not holding stocks on a potential deal was higher than not holding stocks. Of course now the markets are poised to open lower since a deal is not yet on the table. The question becomes where is the market going to go from here, and for that I believe it is all going to be about the economy.

What has been lost in all of this financial crisis is that we have a global economic downturn. The entire world economy is going into recession and this has been reflected for quite some time with the downturn in energy and commodity prices falling and their stocks getting hammered. At some point this vial of the financial termoil, that is blocking so many people's vision of what is truely going on, is lifted I don't see how the markets can rally.

Unless the $700B manages to jump start the world economy (The bill would likely have to be $7T in order to do that) then the stock markets should end up following energy down as the economic picture of a slowed world economy takes over. Sadly all the $700B is going to do is allow the banks to clean up the balance sheets and get back to the leverage values that they feel more comfortable with, and while it may free up lending for top ranked individuals and businesses, the money needed to grow and expand the economy (the risky loans) will stay frozen solid.

MLT+Vol Stock Pick: None

Once again there is just too many uncertainties hanging over the market to make a long term pick. GRNB and CFFN, both financial, stocks looked interested, but the risk of holding these stocks is just too high right now. The trend of market sell offs going into the close continues and will continue to do so aslong as these clouds of doom hang over the market and it becomes far to risky to hold stocks even overnight.

MT+Vol Stock Pick: Wright Medical Group Inc (WMGI)

Again, the clouds of uncertainty that are hanging over this market are just too great. You can expect the market to sell off into every close as the risk of holding stocks overnight is just too great right now until these uncertainties go away. The pick for today is Wright Medical Group Inc (Nasdaq: WMGI).



MT+Vol WMGI
Stock Rating: 0.34 (#41 of 2575)
Slope: 0.03
Volatility: 60.80% (Max: 3.07, Min: -1.89)
Performance: 86.69%
Swing Time: 62.55% (54 Days into 86 Day Average)
Avg Trend Ends: 11/6/2008
Buy: At Open Tomorrow (9/24/2008)
Stop Loss: 31.00
Profit Limit: Unknown, Sell when MT Slope is negative.
Position: None, None Planned

I'm sorry about the shortness of the posts recently, I'm just at a loss for words. The free markets aren't be allowed to work right now. Right now investing in the market is investing in a game where the rules could change and it is impossible to know the value of anything if you don't know the rules.

ST+Swing Stock Pick: Jos A. Bank Clothiers (JOSB)

Take a couple of aspirin and report back in a couple of weeks. The politicians are being politicians and now you can add the uncertainty of the purposed plan onto the uncertainty of the credit markets that is hanging over the head of the markets. The play here should be into hard assets, gold being the best bet, however it'll take another of couple of strong days for Gold to show up on the short term screen. This is no longer a free market and the rules of the trading can be changed at the drop of a hat depending upon how the market is reacting to news. Legal shorting is important for the stock market and when another 400 point down day comes across the wires I suspect they will suspend short selling all together. Just turn off the TV, stop visiting blog sites like this for a couple of weeks, and hopefully we still have free markets and capitalism when it is all said and done. Oh yeah, and the pick for today is Jos A. Bank Clothiers (Nasdaq: JOSB)



ST+Swing JOSB
Stock Rating: 0.37 (#38 of 2575)
Stock Slope: 0.07
Volatility: 59.32% (Max: 6.71, Min: -4.60)
Performance: 57.90%
Swing Time: 36.54% (10 days into 27 Day Avg)
Avg Trend End: 10/8/2008
Buy: At Open Tomorrow (9/23/2008)
Stop Loss: 33.80
Profit Limit: Unknown, sell when ST Slope is negative
Position: None, None Planned

I cannot really say this enough, you really should not be following my pics or anybody's picks for that mater given the current market. There is just too much risk out there and there will be little reward for the risks taken. This is largely an academic exercise at this point, though the quarter's end and resulting mathematical positions will likely leave me looking for the tums next week.

Weekly Update: $700 Billion...

The markets ended the week largely unchanged, down sharply at the start of the week only to rally strong as the government put forth a "plan" to save the countries financial assets. Sector wise was a mixed picture as the consumer and financial stocks dropped in the short term, but gained in the long term. The reverse was true for energy as it gained slightly in the short term and fell off a cliff in the longer term view. It would seem that energy, and the sign of ths slowing global economy, wants to drag the markets down. However, with the recent news the black cloud that has been having over the markets may be lifted and that will cause a short term move higher as some uncertainty is taken out of the markets.





I'm speechless, I really am. $700B to buy assets that will be worth next to nothing. $700B to bail out both companies and individuals who, most likely knowingly, took on too much risk. So, that's $700B to buy up toxic debt, $85B to loan to AIG, and up to $300B to Fannie and Freddie. This finacial crisis has now cost over $1 Trillion, that's Trillion with a T. This could end up being the largest transfer of wealth in the countries history, taking wealth away from the average american and giving it to finacial companies who took on too much risk so they could make a buck.

This isn't the only option, this debt is toxic not because it is worthless, it is toxic because banks do not know how much it is worth. The market could have sorted this mess out with the failure of a few more companies. The resulting firesale would have set a floor on the prices of these toxic assets and allowed everyone to correctly value them, allowing the strong to adjust their balance sheets while the week would have been under stress to raise capital. Yes it would have been painful, yes it would have been messy, but it wouldn't have put $1T worth of debt on the back of the taxpayers.

If the government wanted to do something, it should be looking to help the individuals that are causing these loans to be toxic, not help the corporations who were driven by greed to produce these toxic loans. Of course that wouldn't set a price floor on the assests, which is what is required.

In the end, this is what had to be done, but the long term cost will be left to time.

LT+Vol Stock Pick: None

There still are not any new stocks on the longest term view, and as such I cannot pick one. I'm going to hold off on any major market commentary until the weekend update as the late day market rally was based upon hope that action might be taken, we'll see what tomorrow brings.

MLT+Vol Stock Pick: Beacon Roofing Supply Inc (BECN)

Well, the bloodbath continues as fear begins to take hold of the markets and the dark cloud of not knowing how much things are wroth continues to hang over the market. The loan provided to AIG so it can sell it's assets in an orderly fashion means that the dark cloud is going to continue to hang overhead. While an AIG failure would have been bad and the fire sell of the assets would have hurt a great many people, it would have have at least allowed the healing process to start as we'd know what assets were worth when they had to be sold. Now, a band aid has been put on a ruptured artery and it is only going to delay the revaluation of assets that needs to happen. Until that day comes this market, and the financial system, will be unable to recover.

Of course once fear has gripped the markets, as the sharp rise in gold and the yield on short term Treasuries falling to near zero shows, it is likely too late to sell and too early to buy. However, there are still stocks moving up out there and some of the likely winners once the storm has cleared are starting to rise to the top of a longer term stock screen. The stock pick tonight from that list is Beacon Roofing Supply Inc (Nasdaq: BECN).



MLT+Vol BECN
Stock Rating: 0.52
Stock Slope: 0.10
Volatility: 78.43%
Performance: 3.61%
Swing Time: 63.42% (163 Days into 257 Day Average)
Avg Trend Ends: Early March 2009
Buy: At Open Tomorrow (9/18/2008)
Stop Loss: 15.10
Profit Limit: Unknown, Sell when MLT slop turns negative.
Position: None, None Planned

I don't think I have to tell you that investing long in any position is very risky business and should probably be avoided, but the point of this blog is to try and pick out likely winners over the coming weeks and months.

MT+Vol Stock Pick: Sun Healthcare Group (SUNH)

The market rallied today after the Fed stood firm on interest rates as it boosted confidence that the system was not as unhealthy as people feared. The reaction to the $85B emergency loan to rescue AIG will be a very interesting one to watch. I'm going to keep this blog post short as I'm unsure what these all means at this point, and it may take a few trading days to sort it all out. In the mean time the MT+Vol Stock pick on the day is Sun Healthcare Group (Nasdaq: SUNH).



MT+Vol SUNH
Stock Rating: 0.45 (#33 of 2575)
Stock Slope: 0.05
Volatility: 52.10% (Max: 4.74, Min: -4.36)
Performance: 98.83%
Swing Time: 57.34% (27 Days into 47 Day Average)
Avg Trend Ends: 10/14/2008
Buy: At Open Tomorrow (9/17/2008)
Stop Loss: 16.40
Profit Limit: 22.50, or when MT Slope is Negative
Position: None, None Planned

Picking this char because of the like bullish flag formation that has formed recently and looked poised to shoot higher in a very short period. Look for this stock to break above 18 and then move very quickly over 22.

ST+Swing Stock Pick: Buckle Inc (BKE)

The first pillar of the financial systems was allowed to crumble today as Lehman Brothers filed for bankruptcy and set the markets into a tailspin. Bear Sterns, Fannie and Freddie were all allowed to crack, but the government was quick to put speckle on the cracks and hold them up. Now the markets get to sit back, watch, and revalue all assets as the dominoes begin to fall. AIG and Washing Mutual appear to be the next likely pillars to fall or require propping up. The real issue here, and the one that nobody is talking about, is that debt does not go away it only gets transferred around. When a firm, or an individual, files for bankruptcy the value of the debt does not just vanish it gets transferred onto the backs of the creditors. As more and more companies falter or fail the obligations begin to outstrip available capital, causing a catastrophic chain of events: and that is exactly what the government has been trying to stop and what could have very well been started today. The fed meets tomorrow in what should be another interesting day.

For the record, the Noiseless Return market indicators have all been in sell mode for awhile, even with the strong bounce off of the lows several months back. So if you had been following the overall system you would have been out of the markets for all of this turmoil. However, this blog is about trying to bring you winning trades everyday, Monday through Thrusday, and the pick for today is Buckle Inc (NYSE: BKE).



ST+Swing BKE
Stock Rating: 0.49 (#17 or 2575)
Stock Slope: 0.03
Volatility: 62.25% (Max: 6.12, Min: -3.71)
Performance: 82.47%
Swing Time: 29.62% (11 Days into 37 Day Average)
Avg Trend Ends: 10/21/2008
Buy: At Open Tomorrow (9/16/2008)
Stop Loss: 54.00
Profit Limit: Unknown, Sell when ST Slope is Negative
Position: None, None Planned

It is very difficult to find winning stocks with an overall market envornment that we have now, but a quick scan of of the ST+Swing Stock Screener provided a number of stocks, many at or near 52 week highs. The trade stats look fairly good with very little downside risk as the stock has already had a partial pullback under the current conditions while still maintaing the uptrend. All the other indicators also look good and the trend should be new enough to make us some money.

Weekly Update: Decision Day is Approching

This week saw an upturn in the financial, consumer services and consumer good sectors; all pointing to signs of a potential recovery for the markets. On the other side Energy continues to fall and the short term damage is starting to drag down the longer term view. Of course, because of Lehman Brothers the world may end up looking very different come Monday. These moves in the sector averages and the news on Lehman Brothers has me believing that a day of decision is approaching for the markets: One that will see us starting a new bull or one that allows this bear to really sharpen its claws.





This week, and especially Monday, and even more especially if there isn't any last minute news, will be very interesting to watch. At some point a major financial firm is going to fail and the government cannot bail all of them out, nor should they. Risk and failure are all part of doing business and those are choices that a company should have to make and live with themselves. There has to come a time when you let the market work, and it seems that is finally what the government has decided to do with Lehman Brothers.

In many ways it will not be what happens to Lehman Brothers (unless there is yet another government bailout), but the market's reaction to it. As you can see from the financial sector average as a whole indicates the sector improved last week, however stocks like Lehman Brothers and AIG were absolutely hammered. If the damage largely stays contained to the stocks involved then we might see the basis for a new bull market forming.

However, I firmly believe that this crisis is not over and that we are just starting the process of unwinding the risk and writing down the value. All the financial institutions knew that their mortgage back securities were going to see write down after write down and many of them choose, like Merril Lynch did, to hide the debt on their balance sheets by converting it to a different type of debt. Indeed, it isn't going to be until firms start failing, both large and small, that we will know the true extent of the crisis and the damage.

In this way, reguardless of what happens to Lehman Brothers, the time for the markets to make a decision is now fast approching. Watch the news late Sunday, especially if Asia opens markedly lower, and into monday Morning. The markets are in for a wild day and week.

MLT+Vol Stock Pick: None

It was a rather wild day for the markets today, but at the close things were basically where they started. The market continues to search for a direction and for leadership, and right now it is finding neither of those things. Stocks, and the entire market, get pushed around on news that does not necessarily effect the larger picture which is why the market has seen so many one day pops to be followed the next day by an equal fall. Until a sector steps forward and decides to lead this markets, up or down, we will continue to see the powerful and violent moves continue.

The downside to the leaderless state of this market is that the Noiseless Return system cannot find new stocks to pick. This is especially true with the longer term views as they are slow to react to change. The inability to pick stocks before has been relegated to the long term, but today it has crept into the medium-long term. The sector data that I'll report over the weekend should be very interesting and should help indicate if any sector is going to try and lead, or if this leaderless market chop is going to continue.

MT+Vol Stock Pick: USA Mobility Inc (USMO)

As one would expect from a directionless market the one hit wonder that was yesterday was undone the very next day. The financial sector, who cheered the bailout today, resumed their fears about the credit and access to capital that so many companies require to stay afloat. In fact, in the short term, I predict that a number of smaller regional banks will end up being shut down because of the bailout of Fannie and Freddie just because they had so much invested in the preferred stock of those companies, and that capital is now basically worthless. Indeed, in the short and long term it may turn out that the bailout will end up doing more harm that it will solve. The fundamental issues are still facing this economy, and the credit markets, all that has changed is the goernment is now on the hook for the over $5 trillion in debt held by Fannie and Freddie. If 10% of that goes bad the bailout would match the current expected budget deficits. The MT+Vol Stock Pick for today is USA Mobility Inc (Nasdaq: USMO).



MT+Vol USMO
Stock Rating: 0.59 (#21 of 2575)
Stock Slope: 0.10
Volatility: 73.25% (Max: 10.14, Min: -3.70)
Performance: 15.60%
Swing time: 56.37% (73 Days into 130 Day Average)
Avg Trend Ends: 11/27/2008
Buy: At Open Tomorrow (9/10/2008)
Stop Loss: 10.70
Profit Limit: Unknown, well when MT Slope is Negative
Position: None, None Planned

Stock has been on a tear for a little over the past month and the uptrend seems to be resuming after a short pause. Watch for a breakout above $14 on higher than normal volume over then next 2 weeks to confirm that this trade. If the breakout above $14 happens on strong volume the stock should run to above $20 with relative ease.

ST+Swing Stock Pick: Collective Brands Inc (PSS)

There was little question about the market's move today after the government bailout of Fannie and Freddie, though many people were looking for a much stronger move. The problem is the bailout of the mortgage sector only reduced the risk that is currently hanging over the head of the market, but it didn't change the underlying weak global economic condition. Of course the bad debt is still there, it is not just back up by the millions and millions of tax payers in the US now, and you can now expect a number of the regional banks who had large stakes in the preferred shares of Fannie and Freddie to be in a major crunch of their own. In the end, this bailout will only lengthen the time required to get us over the crisis and that extra time will seem to soften the intensity. However, in the end the ending point will likely be the same. The ST+Swing stock pick for today is Collective Brands Inc (NYSE: PSS).



ST+Swing PSS
Stock Rating: 0.68 (#6 of 2575)
Stock Slope: 0.05
Volatility: 60.92% (Max: 5.89, Min: -3.78)
Performance: 22.40%
Swing Time: 10.77% (4 Days into 37 Day Average)
Avg Trend Ends: 10/23/2008
Buy: At Open Tomorrow (9/8/2008)
Stop Loss: 16.25
Profit Limit: 30.00

This chart has been on an absolute tear with eight very strong up day in a row causing the stock price to jump from the low $13 to up near $20. The stock should pause here for awhile before, hopefully, resuming it's up trend.

Weekly Update: Still in Search of a Leader

The sector averages had an interesting week, at least in the short term view as Energy got hammered while Financial, Consumer Services, Consumer Goods, and Media all rose sharply. However, none of these short term moves really translated into the longer term view as most sectors continue to hover around the 50% (neutral) ranking. This all goes back to the market searching for leadership, searching for an idea that works, searching for a direction. Energy had been leading the market, but the massive weakness in the short term has yet to spark enough damage to the sector on the longer term view to say, with any certainty, that energy will indeed lead the markets lower. However, that is exactly what I see happening moving forward and energy breaking under 40% on the longer term view would confirm that I am correct.





The market will continue to get pushed around based upon every little bit of news that comes out, good or bad. On days when there is no major news to speak of the traders will drive the market whichever way they can make the most money. This isn't a bull market, this isn't a bear market, it is a market in waiting. One that is waiting for something to happen, another shoe to drop in the credit crisis, oil to drop below $100, or it could just be waiting for time.

Eventually the time factor will be taken away as the market can only wait so long. In many ways the longer this sideways churn goes on, the stronger the case the Bulls can make that another shoe isn't going to drop, that eventually the economy will recover. Of course the market is many months away from being free of those worries if the news continues to come out underwhelming.

Which brings us back to where the markets have been for the past 3 weeks now; needing leadership. As I've said before, I believe that Energy is going to lead this market lower, and I'm holding true to that belief. The Financial sector showed signs of wanting to lead the market higher, however there wasn't enough momentum behind the move to truly establish leadership. Given enough time Financials may very well end up leading the charge higher, but the sector averages just don't support that theory right now. So, like the markets, I'll sit back and wait to see what the future holds.

LT+Vol Stock Pick: Hanger Orthopedic Group (HGR)

The markets got absolutely crushed today as weak economic news spread fears that a rebound was not going to happen in the second half of this year. Energy also got hit and the setup for a bear market, one that drags all stocks down with it, is being setup here. As I've been saying for awhile, there markets have had no reason to move higher, there are just too many questions out there, too many problems to worry about. The recent rally of the financial sector stood in the face of those worries and it might have made a believer out of some people, but not me. I always saw, and still see, energies fall as leading the market forward and until another leader steps forward I will continue to believe that energy will be the leader of this market. Not it the unlinked sense either, lower energy and energy stocks mean a lower market and higher energy and energy stocks mean a higher market. The notion that lower energy is good for the market smells and I don't buy it, and neither should you. The LT+Vol stock pick for today is Hanger Orthopedic Group (NYSE: HGR).



LT+Vol HGR
Stock Rating: 0.88 (#29 of 2575)
Stock Slope: 0.06
Volatility: 68.57% (Max: 7.77, Min: -3.56)
Performance: 87.55%
Swing Time: 66.67% (68 Days into 102 Day Average)
Avg Trend Ends: 10/22/2008
Buy: At Open Tomorrow (9/5/2008)
Stop Loss: 14.50
Profit Limit: 28.00 or when LT Slop is Negative
Position: None, None Planned.

I'm staying withing the current sector leader in Healthcare as it is one of the few sectors that is resilient to tough economic times. The trade setup and stock chart look decent though the stock could be in the process of forming a top here and the trend is more than half way finished. The wild daily swings in the stock also have me worried that this stock can get blown around like a feather on the traders whim, which likely means that even if this trade would be profitable it will likely get stopped out.

MLT+Stock Pick: Gartner Inc (IT)

Once again oil, and energy, traded to the downside today with both the market and oil staging a late day rally. Economic news continues to be weak and will continue to weigh on the market. There doesn't seem to be any reason for the market to rally or any reason for it to sell off at these levels, which is probably why he continue to see one hit wonders to by the up and downside. Until a new trend establishes itself it will be very difficult to call a direction to the market's action. The MLT+Vol stock pick for today is Gartner Inc (NYSE: IT).



MLT+Vol IT
Stock Rating: 1.15 (#4 of 2575)
Stock Slope: 0.06
Volatility: 56.63%
Performance: 94.46%
Swing Time: 20.43% (35 Days into 171 Day Average)
Avg Trend Ends: Early March 2009
Buy: At Open Tomorrow (9/4/2008)
Stop Loss: 23.10
Profit Limit: 31.50 or when MLT Slope is Negative
Position: None, None Planned

A solid pick, or so it seems, today. All the trading stats look good, but the swing timer could be off as the flipped to negative briefly before the most recent hard rally. Using a trend following and trend spotting system during market turns, or potential market turns, that the market is currently in can be very, very difficult. All the picks on this blog should be taken with a large grain of salt until some kind of trend forms.

MT+Vol Stock Pick: Powerwave Technologies Inc (PWAV)

Today's price action was a major reflection of what I have been talking about for awhile. The markets opened markedly higher under the euphoria of lower oil prices, but as the markets digested information that the global and local economies are weak the gains eventually turned into losses. As I've said before, lower energy prices are a sign of a fall off of global economic demand resulting from a weakening global economy. Something that isn't good for the start market and, at least for today, that prediction played itself out. The MT+Vol Stock pick for today is Powerwave Technologies Inc (Nasdaq: PWAV).



MT+Vol PWAV
Stock Rating: 0.56 (#22 of 2575)
Stock Slope: 0.09
Volatility: 74.88% (Max: 9.43, Min: -3.16)
Performance: 1.92%
Swing Time: 46.91% (81 Days into 173 Day Average)
Avg Trend Ends: 1/10/2009
Buy: At Open Tomorrow (9/3/2008)
Stop Loss: 4.45
Profit Limit: 7.80 or when MT Slope is negative
Position: None, None Planned

It is time to do a little bit of bottom fishing, and while I try to avoid recommending stocks that trade under $10 there are very slim pickings in the screens right now. This maker of wireless networks in a networking world that is trying to become more and more wireless everyday has been drastically underperforming the markets for a long time now as is evident by the poor performance rating. However, the chart has been in a nice uptrend since a double bottom established in April and the chart has looked solid since then and the medium term calculation has only picked up strength with each new trend high.