From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2061 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Saturday, January 19 2002 Volume 02 : Number 2061 In this issue: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] [CANSLIM] Worley's Weekend Weeview ---------------------------------------------------------------------- Date: Sat, 19 Jan 2002 10:12:36 -0500 From: "Tom Worley" Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] This is a multi-part message in MIME format. - ------=_NextPart_000_004A_01C1A0D1.D171A6E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Katherine, My due diligence has been pretty superficial to date, mostly limited to = DGO and some news stories. Their earnings swings contributed to scaring = me out on the first trip with a loss, but I have not dug down deep = enough to explain the swings. Maybe Ian has gone deeper into the company? Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Saturday, January 19, 2002 9:48 AM Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] Hi Tom This is what I don't get, and I'm not trying to be = objectionable, just trying to find out how you'd get $.16/quarter given = the company's history. When I look at this, I see OK growth in revenues, = but the company continuously has good and bad quarters. I noticed in the = 10Q that they capitalize software development and then write it off in = chunks every so often (not uncommon) and it's possible that these = negative quarters every so often are related to that. I'm guessing if I = were to dig further into the financials I would get to know them better. = I know that they did an acquisition in 2000, and I'd assume that the = growth in EPS would be related. I look at Sept/Oct 99 and see really = nice quarters just like the last two we've seen recently, but they are = then followed by negative or so-so quarters. That raises red flags and = would lead me to question whether the growth pattern shown recently can = be projected into the future. Katherine GROWTH RATES=20 1 Year 3 Years 5 Years=20 Sales % -11.70 15.54 -14.53=20 EPS % NM NM NM=20 Dividend % NM NM NM=20 REVENUE=20 Quarters 1998 1999 2000 2001=20 MAR 8,343 12,988 13,334 14,295=20 JUN 10,850 15,401 13,741 17,392=20 SEP 12,385 15,381 12,858 18,516=20 DEC 13,484 15,496 12,399 =20 =20 Totals 45,062 59,266 52,332 50,203=20 Note: Units in Thousands of U.S. Dollars=20 =20 =20 EARNINGS PER SHARE=20 Quarters 1998 1999 2000 2001=20 MAR -0.070 0.010 0.050 -0.040=20 JUN -0.060 0.080 0.010 0.160=20 SEP 0.020 0.140 -0.020 0.230=20 DEC -0.030 0.210 -0.060 =20 =20 Totals -0.140 0.440 -0.020 0.350=20 Note: Units in U.S. Dollars=20 =20 ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Saturday, January 19, 2002 8:27 AM Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] Hi Katherine, I see 16 cents as easy based on the last 4 sequential quarters (last = two were 16 and 23 cents). Sales appear to be accelerating thru Q3, so = even a moderate slowdown in acceleration should still leave them well = over 16 cents/qtr. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Saturday, January 19, 2002 9:09 AM Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] Tom, Ian Just curious...where do you get $.16/Q EPS estimates? I took a = *very* quick glance at the last 10Q, are you basing this on the = acquisition in 2000? Katherine ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Saturday, January 19, 2002 12:25 AM Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] I agree, Ian. My second trip on this stock has nearly made up = the loss from the first voyage. Looks more promising now than the first = time I tried it. Sequential growth particularly impressive. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Ian=20 To: canslim@lists.xmission.com=20 Sent: Friday, January 18, 2002 8:01 PM Subject: Re: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] Thanks a lot for the chart analysis. The low volume during the = new high to $13.50, and the high volume/no progress days on 1/10, 1/11, = and 1/15 were the things that concerned me. I convinced myself that the = low-volume high was just a case of 'too much, too fast' off the $5 = October low. The recent high volume/no movement days are what concern = me. There shouldn't be much concern with P/E. The company claimed = that Q4 2001, and Q1 2002 were already filled with existing backlog, and = I figure that a minimum of $0.16 per Q is easy - so 4 months from now, = the ttm EPS will be at least $0.70 if not more, and the P/E at current = levels would be under 20. Given their industry group and recent growth = rate, a much higher price could easily be supported. But I would like to = see more signs of volume accumulation here.=20 After the next earnings report the IBD EPS ranking should go = over 85, and the RS is over 90 already, so it should start appearing on = IBD radar screens for the first time - including the weekend review. = Perhaps it will be a month or so before the next clear direction becomes = visible. Thanks again, Ian ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Friday, January 18, 2002 3:36 PM Subject: Re:ELTE (was [CANSLIM] Katherine-Opinion please?] Hi Ian, Your question has me wondering whether the sell rules that I = follow translate perfectly to thinly traded stocks. But I'll tell you = what I see and the way I would read it if I were to own it: -After the B/O at 7.13, stock moves up and consolidates for = about 5 weeks. This is a "valid" consolidation so that makes the = previous base low 8.01 which was printed on 11/23/01. -Just as a quick check for "overextension" that means that = the stock is 70% above the 200dMA (7.02), 15% above the 50dMA (10.43) = and 49.6% above the base low (8.01). It gets a yellow flag for being 70% = above the 200dMA according to WON's sell rule #34, but does not get a = red flag for the Rubberband Sell Rule. -After the consolidation and breakout 12/18 the stock has = started to show signs of stress. This could easily be market related, = but no way to tell. -1/2/02: New high on low volume. Red flag. -1/10/02 & 1/11/02- two days with little or no price = progress on high volume. Red flag. -With 1 yellow and 2 red flags I thought it worth doing a PE = Extension check. I've reconstructed the PE at the time of the B/O in = October using trailing EPS numbers for the prior quarters. That puts it = at $7.13/$.29 =3D 24.59. The extension warning would then be a forward = PE of 24.59*2.21=3D 54.3. Let's see. DGO doesn't have any estimates, = which means it isn't followed by enough analysts. I checked the internet = to see if I could find anything and ran across this EPS/Rev snapshot: = http://yahoo.marketguide.com/MGI/mg.asp?target=3D/stocks/companyinformati= on/highlights&Ticker=3DELTE I am alarmed by the essentially flat revenues over the last = 4 years, so I am going to go with the EPS estimates in my VectorVest = software which reads a measly $.02. That puts the current forward = looking PE at $11.98/$0.02 =3D 599! I'll have to mark that Red Flag. One note is that its industry is fairly healthy, = consolidating after rising, not overly extended and currently ranked in = the 2nd quartile. I'll let you take it from there! Katherine ----- Original Message -----=20 From: Ian=20 To: canslim@lists.xmission.com=20 Sent: Friday, January 18, 2002 4:40 PM Subject: [CANSLIM] Katherine - Opinion please? Would tuesdays distribution day for ELTE make you exit the = stock at this point? Do you have any other insights into the chart? I would appreciate your analysis - it is the one big = recent winner I am wondering what to do with. Based on all of my past = experiences, and knowing the companies outlook, my gut tells me that it = needs to consolidate here, but will run into the $20's by mid-year. But = I'd rather listen to the chart. I fear I've held it long enough that I = may be complacent. Thank you. Ian - ------=_NextPart_000_004A_01C1A0D1.D171A6E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Katherine,
 
My due diligence has been pretty superficial to = date,=20 mostly limited to DGO and some news stories. Their earnings swings = contributed=20 to scaring me out on the first trip with a loss, but I have not dug down = deep=20 enough to explain the swings.
 
Maybe Ian has gone deeper into the = company?
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com=
Sent: Saturday, January 19, = 2002 9:48=20 AM
Subject: Re: Re:ELTE (was = [CANSLIM]=20 Katherine-Opinion please?]

Hi Tom
 
This is what I don't get, and I'm not trying = to be=20 objectionable, just trying to find out how you'd get = $.16/quarter given=20 the company's history. When I look at this, I see OK growth in = revenues,=20 but the company continuously has good and bad quarters. I = noticed in the=20 10Q that they capitalize software development and then write it = off in=20 chunks every so often (not uncommon) and it's possible that = these=20 negative quarters every so often are related to that. I'm = guessing if I=20 were to dig further into the financials I would get to know them = better.=20 I know that they did an acquisition in 2000, and I'd assume that = the=20 growth in EPS would be related. I look at Sept/Oct 99 and see = really=20 nice quarters just like the last two we've seen recently, but = they are=20 then followed by negative or so-so quarters. That raises red = flags and=20 would lead me to question whether the growth pattern shown = recently can=20 be projected into the future.
 
Katherine
 
GROWTH RATES
1 Year 3 Years 5 Years
Sales % -11.70 15.54 -14.53
EPS % NM NM NM
Dividend % NM NM NM

REVENUE
Quarters 1998 1999 2000 2001
MAR 8,343 12,988 13,334 14,295
JUN 10,850 15,401 13,741 17,392
SEP 12,385 15,381 12,858 18,516
DEC 13,484 15,496 12,399
Totals 45,062 59,266 52,332 50,203
Note:  Units in Thousands of = U.S.=20 Dollars
 
EARNINGS = PER=20 SHARE
Quarters 1998 1999 2000 2001
MAR -0.070 0.010 0.050 -0.040
JUN -0.060 0.080 0.010 0.160
SEP 0.020 0.140 -0.020 0.230
DEC -0.030 0.210 -0.060
Totals -0.140 0.440 -0.020 0.350
Note:  Units in U.S.=20 = Dollars
----- Original Message -----
From:=20 Tom=20 Worley
Sent: Saturday, January 19, = 2002 8:27=20 AM
Subject: Re: Re:ELTE (was = [CANSLIM]=20 Katherine-Opinion please?]

Hi Katherine,
 
I see 16 cents as easy based on the last 4 = sequential=20 quarters (last two were 16 and 23 cents). Sales appear to be = accelerating=20 thru Q3, so even a moderate slowdown in acceleration should still = leave them=20 well over 16 cents/qtr.
 
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com= =20
Sent: Saturday, January 19, = 2002 9:09=20 AM
Subject: Re: Re:ELTE (was = [CANSLIM]=20 Katherine-Opinion please?]

Tom, Ian
 
Just curious...where do you get $.16/Q EPS estimates? I took = a *very*=20 quick glance at the last 10Q, are you basing this on the = acquisition in=20 2000?
 
Katherine
----- Original Message ----- =
From:=20 Tom=20 Worley
To: canslim@lists.xmission.com= =20
Sent: Saturday, January = 19, 2002=20 12:25 AM
Subject: Re: Re:ELTE (was = [CANSLIM]=20 Katherine-Opinion please?]

I agree, Ian. My second trip on this = stock has=20 nearly made up the loss from the first voyage. Looks more = promising now=20 than the first time I tried it. Sequential growth particularly=20 impressive.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message ----- =
From:=20 Ian
To: canslim@lists.xmission.com= =20
Sent: Friday, January = 18, 2002=20 8:01 PM
Subject: Re: Re:ELTE = (was=20 [CANSLIM] Katherine-Opinion please?]

Thanks a lot for the chart analysis. The = low volume=20 during the new high to $13.50, and the high volume/no progress = days on=20 1/10, 1/11, and 1/15 were the things that concerned me. I = convinced=20 myself that the low-volume high was just a case of 'too much, = too=20 fast' off the $5 October low. The recent high volume/no = movement=20 days are what concern me.
 
There shouldn't be much concern with P/E. = The=20 company claimed that Q4 2001, and Q1 2002 were already filled = with=20 existing backlog, and I figure that a minimum of $0.16 per Q = is easy -=20 so 4 months from now, the ttm EPS will be at least $0.70 if = not more,=20 and the P/E at current levels would be under 20. Given their = industry=20 group and recent growth rate, a much higher price could easily = be=20 supported. But I would like to see more signs of volume = accumulation=20 here.
 
After the next earnings report the IBD EPS = ranking=20 should go over 85, and the RS is over 90 already, so it should = start=20 appearing on IBD radar screens for the first time - including = the=20 weekend review. Perhaps it will be a month or so before the = next clear=20 direction becomes visible.
 
Thanks again,
 
Ian
 
 
 
----- Original Message -----
From:=20 Katherine Malm =
To: canslim@lists.xmission.com= =20
Sent: Friday, January = 18, 2002=20 3:36 PM
Subject: Re:ELTE (was = [CANSLIM]=20 Katherine-Opinion please?]

Hi Ian,
 
Your question has me wondering whether the sell rules = that I=20 follow translate perfectly to thinly traded stocks. But I'll = tell=20 you what I see and the way I would read it if I were to own=20 it:
 
-After the B/O at 7.13, stock moves up and consolidates = for=20 about 5 weeks. This is a "valid" consolidation so that makes = the=20 previous base low 8.01 which was printed on 11/23/01.
-Just as a quick check for "overextension" that means = that the=20 stock is 70% above the 200dMA (7.02), 15% above the 50dMA = (10.43)=20 and 49.6% above the base low (8.01). It gets a yellow flag = for being=20 70% above the 200dMA according to WON's sell rule #34, but = does not=20 get a red flag for the Rubberband Sell Rule.
-After the consolidation and breakout 12/18 the stock = has=20 started to show signs of stress. This could easily be market = related, but no way to tell.
-1/2/02: New high on low volume. Red flag.
-1/10/02 & 1/11/02- two days with little or no = price=20 progress on high volume. Red flag.
-With 1 yellow and 2 red flags I thought it worth doing = a PE=20 Extension check. I've reconstructed the PE at the time of = the B/O in=20 October using trailing EPS numbers for the prior quarters. = That puts=20 it at $7.13/$.29 =3D 24.59. The extension warning would then = be a=20 forward PE of 24.59*2.21=3D 54.3. Let's see. DGO doesn't = have any=20 estimates, which means it isn't followed by enough analysts. = I=20 checked the internet to see if I could find anything and ran = across=20 this EPS/Rev snapshot:
 
http://yahoo.marketguide.com/MGI= /mg.asp?target=3D/stocks/companyinformation/highlights&Ticker=3DELTE<= /A>
 
I am alarmed by the essentially flat revenues over the = last 4=20 years, so I am going to go with the EPS estimates in my = VectorVest=20 software which reads a measly $.02. That puts the current = forward=20 looking PE at $11.98/$0.02 =3D 599! I'll have to mark that = Red=20 Flag.
 
One note is that its industry is fairly healthy, = consolidating=20 after rising, not overly extended and currently ranked = in the=20 2nd quartile.
 
I'll let you take it from there!
 
Katherine
----- Original Message = - -----
From:=20 Ian=20
To: canslim@lists.xmission.com= =20
Sent: Friday, = January 18,=20 2002 4:40 PM
Subject: [CANSLIM] = Katherine=20 - Opinion please?

Would tuesdays distribution day for = ELTE make=20 you exit the stock at this point? Do you have any other = insights=20 into the chart?
 
I would appreciate your analysis - it = is the one=20 big recent winner I am wondering what to do with. Based on = all of=20 my past experiences, and knowing the companies outlook, my = gut=20 tells me that it needs to consolidate here, but will = run into=20 the $20's by mid-year. But I'd rather listen to the chart. = I fear=20 I've held it long enough that I may be = complacent.
 
Thank you.
 
Ian
- ------=_NextPart_000_004A_01C1A0D1.D171A6E0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Sat, 19 Jan 2002 10:22:24 -0500 From: "Tom Worley" Subject: [CANSLIM] Worley's Weekend Weeview This is a multi-part message in MIME format. - ------=_NextPart_000_0050_01C1A0D3.2FC2BE40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable RETAIL SALES Overall, December was better than expected, dropping only 0.1% instead = of the expected 1.2% and well ahead of November's 3% drop. But car sales = was again the big factor, taking that and auto parts sales out, the rest = of sales dropped 0.1% instead of an expected "unchanged". Saw another = mention that car sales may have been enough to keep Q4's GDP in positive = territory at CNN's Money/Economics site, but also again mentioning the = likelihood that all the zero financing deals "cannibalized" auto sales = in early 2002. Sales for all of 2001 were up 3.4% compared to 2000's = gain of 7.6%.=20 - -------------------------------------------------------------------------= - ------- ONE LINERS (or a little longer) Over $2.3 trillion now sits in money market accounts, twice what was = there 3 years ago. Corporate bond defaults have more than doubled. Per Moody's, last year = 253 companies defaulted on over $110 billion in debt. Enron is the = biggest bankruptcy in history, and its lenders are only now starting to = write off their loans to them. KMart is rumored to be on the verge of = filing bankruptcy. Banks are starting to write down their Argentina debt = due to the unlinking of the peso to the dollar, and the number of = bankruptcies occurring there. They finally resumed trading there, and = ended up over 11%. Is it coincidence that Arthur Andersen is Enron's consultant / advisor / = auditor, and was also doing some of the same for Sunbeam? (some Sunbeam = execs just settled a shareholder class action lawsuit for $15 million so = they can concentrate on defending themselves against fraud charges by = the SEC). Sure, I'll pay you guys $15 really big ones, but, hey, I'm = still not admitting I did anything wrong with the company financial = reports. Maybe we should be buying shares in companies making = shredders?? This is the third big financial scandal in recent years = involving Andersen, and now leading to cries from Congress for = governmental regulation of accounting firms. Great idea, let the = politicians who rarely can balance a budget, and invented the concept of = off-book accounting, regulate the accountants. The CPI in December benefited from falling energy prices and dropped = 0.2%, slightly better than expected. The core rate, without food and = energy, increased 0.1% as expected. For all of 2001, the CPI only gained = 1.6% while the core rate was up 2.7%. This increases the likelihood of a = Fed rate cut 1/30/02. Banks are setting aside funds for reserves against loan defaults at a = slower rate than defaults are occurring. Even though reserves increased = by 42% ($30.2 billion), defaults increased by 50% ($25.4 billion) in the = first nine months of 2001. This dropped the loan loss reserve ratio = (reserves divided by actual losses written off) to the lowest in 8 = years, from 170% to 129%. And that doesn't consider the rise in = non-performing loans (over 90 days past due, but not yet written off) = that rose from $48.8 billion to $59 billion. Part of my global perspective comes from monitoring how other markets = are doing around the globe. When I get home, I look to see how Asia is = doing, as that can influence European markets. When I wake in the = morning, I do the same, to see how Asia closed, and how Europe is = trading, as many large US stocks trade on European exchanges.=20 http://quote.yahoo.com/m2?u Some months ago, I noted that France's index (CAC 40) and Germany's = index (DAX) were almost tied, less than 100 points apart. Since then, = the DAX has clearly won the race, now nearly 700 points ahead. Because = of my mixed German and French ancestry (I even have a piece of the = Berlin Wall, and I definitely have the French ego), I have always taken = a strong interest in how these two countries are doing, and see them as = the key to European economic success. Consumer sentiment rose to 94.2 in January from 88.8 in December, = according to the University of Michigan's survey. Expected was 90. In December, the Current Conditions Index, measuring American's = perspective on their present financial state, dropped to 98.1 from 99.0 = while the Expectations Index leaped ahead to 91.7 from 82.3. Old news: trade gap narrowed more than expected in November, largely due = lower oil imports. Housing starts fell in December after the warm weather surge in = November, but building permits shot up, suggesting continued strength in = the housing industry. Economists expected permits to decline. New jobless claims fell to 384K from 398K. Economists expected it to = rise to 438K. Suggests the worst of the layoffs is behind us, but = overall unemployment still likely to remain high for several months even = as the economy recovers. - -------------------------------------------------------------------------= - ------- WORLEY'S WATCHLIST WANNABEES Although new highs have continued to beat new lows, the population of = stocks meeting my general criteria for this review seems to still be = stagnant. As always, Bx means a flat line "B"ase of "x" weeks duration. If I see a = specific basing formation (c&h, double bottom, LLUR, etc) I will say so. ACDO - B2 ACS - LLUR BBY - B4 BSYS - c&h, nicely formed 3 week handle on declining volume BVF - LLUR CRN - saucer DCOM - saucer DLX - LLUR ELTE - B4 FCN - LLUR GBCI - B4 GFF - B6 HCT - B3, I bailed too early on this one, low volume HRBT - B5 INDB - B3 MATW - B8 MCO - B5 MCRS - nice b/o from base on long handle, right at left rim of original = cup NVR - B6 PETM - LLUR SWTX - LLUR, low price URBN - B4 Happy Hunting, God bless America, and its military people, Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_0050_01C1A0D3.2FC2BE40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
RETAIL SALES
Overall, December was better than expected, = dropping only=20 0.1% instead of the expected 1.2% and well ahead of November's 3% drop. = But car=20 sales was again the big factor, taking that and auto parts sales out, = the rest=20 of sales dropped 0.1% instead of an expected "unchanged". Saw another = mention=20 that car sales may have been enough to keep Q4's GDP in positive = territory at=20 CNN's Money/Economics site, but also again mentioning the likelihood = that all=20 the zero financing deals "cannibalized" auto sales in early 2002. Sales = for all=20 of 2001 were up 3.4% compared to 2000's gain of 7.6%.=20
ONE LINERS (or a little=20 longer)
Over $2.3 trillion now sits in money market = accounts,=20 twice what was there 3 years ago.
 
Corporate bond defaults have more than doubled. = Per=20 Moody's, last year 253 companies defaulted on over $110 billion in debt. = Enron=20 is the biggest bankruptcy in history, and its lenders are only now = starting=20 to write off their loans to them. KMart is rumored to be on the verge of = filing=20 bankruptcy. Banks are starting to write down their Argentina debt due to = the=20 unlinking of the peso to the dollar, and the number of bankruptcies = occurring=20 there. They finally resumed trading there, and ended up over = 11%.
 
Is it coincidence that Arthur Andersen is = Enron's=20 consultant / advisor / auditor, and was also doing some of the same for = Sunbeam?=20 (some Sunbeam execs just settled a shareholder class action lawsuit for = $15=20 million so they can concentrate on defending themselves against fraud = charges by=20 the SEC). Sure, I'll pay you guys $15 really big ones, but, hey, I'm = still not=20 admitting I did anything wrong with the company financial reports. Maybe = we=20 should be buying shares in companies making shredders?? This is the = third big=20 financial scandal in recent years involving Andersen, and now leading to = cries=20 from Congress for governmental regulation of accounting firms. Great = idea, let=20 the politicians who rarely can balance a budget, and invented the = concept of=20 off-book accounting, regulate the accountants.
 
The CPI in December benefited from falling = energy prices=20 and dropped 0.2%, slightly better than expected. The core rate, without = food and=20 energy, increased 0.1% as expected. For all of 2001, the CPI only gained = 1.6%=20 while the core rate was up 2.7%. This increases the likelihood of a Fed = rate cut=20 1/30/02.
 
Banks are setting aside funds for reserves = against loan=20 defaults at a slower rate than defaults are occurring. Even though = reserves=20 increased by 42% ($30.2 billion), defaults increased by 50% ($25.4 = billion) in=20 the first nine months of 2001. This dropped the loan loss reserve ratio=20 (reserves divided by actual losses written off) to the lowest in 8 = years, from=20 170% to 129%. And that doesn't consider the rise in non-performing loans = (over=20 90 days past due, but not yet written off) that rose from $48.8 billion = to $59=20 billion.
 
Part of my global perspective comes from = monitoring how=20 other markets are doing around the globe. When I get home, I look to see = how=20 Asia is doing, as that can influence European markets. When I wake in = the=20 morning, I do the same, to see how Asia closed, and how Europe is = trading, as=20 many large US stocks trade on European exchanges.
http://quote.yahoo.com/m2?u
Some months ago, I noted that France's index = (CAC 40) and=20 Germany's index (DAX) were almost tied, less than 100 points apart. = Since then,=20 the DAX has clearly won the race, now nearly 700 points ahead. Because = of my=20 mixed German and French ancestry (I even have a piece of the Berlin = Wall, and I=20 definitely have the French ego), I have always taken a strong interest = in how=20 these two countries are doing, and see them as the key to European = economic=20 success.
 
Consumer sentiment rose to 94.2 in January from = 88.8 in=20 December, according to the University of Michigan's survey. Expected was = 90.
 
In December, the Current Conditions Index, = measuring=20 American's perspective on their present financial state, dropped to 98.1 = from=20 99.0 while the Expectations Index leaped ahead to 91.7 from = 82.3.
 
Old news: trade gap narrowed more than expected = in=20 November, largely due lower oil imports.
 
Housing starts fell in December after the warm = weather=20 surge in November, but building permits shot up, suggesting continued = strength=20 in the housing industry. Economists expected permits to = decline.
 
New jobless claims fell to 384K from 398K. = Economists=20 expected it to rise to 438K. Suggests the worst of the layoffs is behind = us, but=20 overall unemployment still likely to remain high for several months = even as=20 the economy recovers.
WORLEY'S WATCHLIST WANNABEES
Although new highs have continued to beat new = lows, the=20 population of stocks meeting my general criteria for this review seems = to still=20 be stagnant.
As always, Bx means a flat line "B"ase of "x" = weeks=20 duration. If I see a specific basing formation (c&h, double bottom, = LLUR,=20 etc) I will say so.
 
ACDO - B2
ACS - LLUR
BBY - B4
BSYS - c&h, nicely formed 3 week handle on = declining=20 volume
BVF - LLUR
CRN - saucer
DCOM - saucer
DLX - LLUR
ELTE - B4
FCN - LLUR
GBCI - B4
GFF - B6
HCT - B3, I bailed too early on this one, low=20 volume
HRBT - B5
INDB - B3
MATW - B8
MCO - B5
MCRS - nice b/o from base on long handle, right = at left=20 rim of original cup
NVR - B6
PETM - LLUR
SWTX - LLUR, low price
URBN - B4
 
Happy Hunting,
 
God bless America, and its military = people,
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
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