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STOCK SCREENING: THE GOOD, THE BAD, AND THE UGLY

STOCK SCREENING: THE GOOD, THE BAD, AND THE REALLY UGLY

It is time to run a stock screen. I have been showing charts with one of my favorite indicators lately, a momentum indicator I call the M5Diff%. It is very useful in finding bottoms, tops -- ok, predicting bottoms and tops -- and is also useful as a momentum gauge: what's hot and what is not.

Today's screen shows 32 issues that had the greatest appreciation of the M5Diff% today, and the 32 issues that had the greatest M5Diff% depreciation also.

 

 

     

M5Diff %

 
 

TOP 32

M5Diff %

1 day change

 
         

1

FMCC

1,265.46

595.308

Freddie Mac Daily

2

FNMA

850.32

446.951

Fannie Mae Daily

3

IMMR

456.193

51.925

Immersion Robotics

4

RAVN

337.027

-24.095

Raven Industries

5

USDGBP=X

294.751

-2.628

US Dollar/British Pound

6

USDVND=X

252.226

-7.024

US Dollar/Vietnamese Dong

7

HPQ

250.81

7.204

Hewlett Packard Daily

8

AUDNZD=X

240.244

61.686

Australian Dollar/New Zealand Dollar

9

USDCAD=X

236.703

-23.06

US Dollar/Canadian Dollar

10

UUP

234.378

39.719

US DOLLAR INDEX BULLISH ETF

11

CNYCHF=X

230.48

-6.974

Chinese Yuan/Swiss Franc

12

EXM

215.289

28.122

Excel Maritime Carriers

13

SAI

215.074

16.404

SAIC Inc *

14

XOMA

214.967

-33.323

XOMA

15

HSIC

212.993

135.77

Henry Schein

16

THLD

211.588

-42.063

Threshold Pharma

17

Z

207.679

18.164

Zillow Inc

18

USDCHF=X

206.315

-5.399

US Dollar/Swiss Franc

19

FXP

205.74

23.373

Short FTSEChina Index ETF Daily

20

AFFX

201.338

-15.848

Affymetrics Inc.

21

AUDCAD=X

195.578

26.966

Australian Dollar/Canadian Dollar

22

VZ

192.425

11.137

Verizon Communications

23

BBY

191.431

8.148

Best Buy Daily

24

WPRT

189.465

-7.231

Westport Innovations

25

P

186.844

-30.462

Pandora

26

RRGB

184.059

6.396

Red Robin Gourmet Burgers

27

BA

183.161

-35.901

Boeing Daily

28

QLGC

182.221

-1.695

Q-Logic

29

CPHD

180.12

-1.896

Cepheid

30

IGOI

179.57

-18.773

I Go INC

31

NANO

178.055

-62.275

Nanometrics Inc

32

DRR

176.199

43.673

Short (Double Short) EURO ETF

 

 

     

M5Diff %

 
 

Bottom 32

M5Diff %

1 day change

 
         

32

X

-191.219

-10.419

US Steel Corp

31

IES.DE

-191.942

-54.67

Intesa San Paolo SA

30

1288.HK

-193.992

-80.279

Agricultural Bank of China LTD.

29

MT

-194.792

-44.786

Arcelor-Mittal Steel

28

3988.HK

-197.249

-86.236

Bank of China

27

EWM

-201.307

-36.037

Malaysia Index ETF

26

SCCO

-202.847

-48.976

Southern Copper

25

ECH

-203.593

-23.633

ENCANA CORP

24

HL

-206.156

25.035

Hecla Mining

23

KOL

-206.733

-25.474

Coal ETF

22

EURCNY=X

-208.801

15.636

Euro/Chinese Yuan

21

XME

-211.694

-19.402

Spider Mining Metals ETF

20

FXF

-213.061

-38.328

SWISS FRANC ETF

19

GGB

-220.754

-21.678

GERDAU S.A.

18

RBS

-223.222

-32.506

Royal Bank of Scotland Daily

17

EURARS=X

-224.713

23.147

Euro/Argentine Peso

16

ARNA

-227.522

-0.109

Arena Pharmaceuticals

15

JJC

-234.38

-72.19

Copper ETF

14

COW

-241.156

-46.96

Livestock ETF

13

UDN

-245.316

-43.175

US DOLLAR INDEX BEARISH

12

EURBRL=X

-255.871

-17.399

Euro/Brazilian Real

11

SNP

-258.645

-17.881

China Petrol & Chemical Co

10

BMI

-261.531

-63.121

Badger Meter

9

CAAS

-269.365

63.647

Chinese Auto Daily

8

PTR

-270.057

-27.895

PetroChina

7

LD

-276.719

-115.528

Lead ETF

6

1398.HK

-282.882

-70.335

Industrial and Commercial Bank of China

5

FXI

-286.771

-26.727

FTSE/XINHUA China 25 Index ETF

4

GBPCNY=X

-328.896

-7.734

British Pound/Chinese Yuan

3

ACH

-332.861

-71.16

Aluminum Corp of China

2

ULTA

-349.39

-1.079

Ulta Salon (Cosmetics)

1

EURCHF=X

-503.875

164.799

Euro/Swiss Franc

What catches my eye here? Well, the global economy is not doing very well in terms of stocks. They say: "Watch copper! As copper goes, so goes the economy."

Copper's not doing so well. Two copper stocks in the Bottom 32 -- JJC, Copper ETF, and SCCO, Southern Copper. Lead (NYSEARCA:LD) is also in the bottom 32; China Aluminum (NYSE:ACH); US Steel; Coal (NYSEARCA:KOL) is here also; Steel (NYSE:MT); Livestock (NYSEARCA:COW); global banks are here (Chinese and others); Chinese stocks are also in the bottom 32. The Euro is also taking up the bottom; and shorting the Euro is also in the Top 32 list.

The 'Industrial' stocks -- mining, metals, 'hard' economy measures -- are the 'really ugly' charts today. JJC, Copper, has fallen from 48 to 42 and seems to be nowhere near a bottom.

SCCO, Southern Copper, looks like the same chart.

KOL, Coal ETF, has dropped from 27 to 23 and is going lower.

BHP Billiton has fallen from 72 to 61. Is this the kind of action that makes 'experts' positive on the global economy.

ACH, China Aluminium Corp, is down from almost 14 to 10, and going lower.

Bank of China is in a free fall; and seems destined to fall more.

There are two numbers in these tables: the first number is today's M5Diff% reading; the second number compares today's M5Diff% with yesterday's number. Hecla Mining, and at least two Euro pair are down but up today. EuroCHF is at the very bottom of the list; but it bounced up from yesterday's even lower reading.

So, which stocks do we like from the Top 32? Which are the 'Good' stocks?

We like HP but would not buy it here -- too late for much of a rally -- although it looks very strong now. If we felt we were in a legitimate Bull Market we would choose HP here for certain. I think we are in a Bear Market until 2019 -- so stocks, which look fairly attractive now, will be cheaper later.

XOMA looks strong here as a speculative trade.

Verizon is attractive as a trade, even here.

When we looked at stocks that had a very high move from yesterday's M5Diff% indicator, we found some other interesting charts -- that is, using the second number in the table above.

Saint Jude Medical looks ready to rally.

EDU looks like it want to explode upward, although it has had a good move already and probably will pull back for a time.

NOG looks like it wants to go higher.

CDNS has a very negative differential -- and is an interesting short here -- although our indicators are generally still positive. Only M5Diff% is collapsing.

LuLuLemon seems ready to fall off the chart.

Still our favorite new shorts are actually longs: shorting the Euro (NYSEARCA:DRR) and China (NYSEARCA:FXP).

Best fortune,

Michael J. Clark, CGTS

Hanoi

cgts@mindspring.com