Tuesday, April 1st, 2008 FEEL FREE TO PRINT THIS REPORT
- Daily Before the Bell Report -
Today's TSM Set Ups | Trader's Corner | Open Positions | | Weekly TSM Picks | Day Trading (AAPL) | TSM Performance | Biweekly Folio Trades | Home Comments or Questions (TSM Service, Methodology, Performance or Your Success Stories) Here
Day Trading (AAPL) | TSM Performance | Biweekly Folio Trades | Home
Comments or Questions (TSM Service, Methodology, Performance or Your Success Stories) Here
New to TSM Methodology?
...Here's how I suggest that you use it
Find a road map here to the TSM Methodology, as well as the results achieved to date.
Daily Market Update
...General market analyzed daily in the Monday-Friday Daily Edition
S&P Held Its Fall Monday at the support of its falling 20-day moving average. The S&P closed +0.44 percent above its 20-day moving average. Fourteen of this week's 173 TSM stocks made 21-day highs today, while 70 of 173 traded within 10 percent of their 52-week high. Earnings continue to come in {reporting Tuesday 4/01/08 ()}. One-hundred-two TSM trades this quarter returned 21.5 percent while the S&P fell -9.92 percent. Find more info on TSM's latest quarter and its 18 quarter summary here.
Update S&P 500 daily chart
Day trading analysis
...Trading stocks intraday
Daily After Hours Analysis of AAPL Day Trades Here. Find trading maxims that have been developed to give an intra-day trading edge: Intra-day moves are far larger than inter-day moves; ~80% of the time, either the high or low of the day is made in the 1st hour of trading; Following a 70-period CCI minimum (on 1 minute chart) and close above 10-period moving average, trading 15 to 19 cent "wiggles" is a profitable strategy; Presently, 80% of the past trading days have made both a $1 higher high and a $1 lower low than the prior day's close; The the high and low close made in the first hour act as areas of support and resistance, especially the first test.
Find trading maxims that have been developed to give an intra-day trading edge:
Intra-day moves are far larger than inter-day moves;
~80% of the time, either the high or low of the day is made in the 1st hour of trading;
Following a 70-period CCI minimum (on 1 minute chart) and close above 10-period moving average, trading 15 to 19 cent "wiggles" is a profitable strategy;
Presently, 80% of the past trading days have made both a $1 higher high and a $1 lower low than the prior day's close;
The the high and low close made in the first hour act as areas of support and resistance, especially the first test.
Folio trades
...20-50 Stocks picked every other week for our small account "Folio" trades
Small Account Folio Trading Here
At the request of subscriber questions concerning how one would trade a small account (say $7,548 to initially fund the account) using the TSM approach, I have created a Folio (foliofn.com) to trade a subset of the weekly TSM picks (those with the strongest fundamentals, good value left and earnings revision fuel). This account will be traded every Monday in the morning trading window. Picks and account balance will be updated biweekly on the weekend. After 61 weeks this Folio stands at $8,344: TSM Folio up +10.55 percent and the S&P down -7.52 percent over.
...Long/Short positions for the current quarter (complete and active)
Previous picks still in play with updated trade management criteria: - Profitable Trade: sell at 1/2 position at 1st target sell point (usually at buy point +5 percent) to ensure profitability; hold 2nd half of position until 2-day trailing stop (minimum low of prior two days) or appropriate technical stop is hit (stops adjusted daily); - Loss Trade: sell 1/2 position at technical stop-loss point, then the 2nd 1/2 at the 7.5 percent max-loss point (stops not adjusted daily);- Mixed Results Trade (sell first 1/2 position at loss & second 1/2 at profit): sell first 1/2 position at initial technical stop-loss point, then after second 1/2 position becomes profitable sell when appropriate technical stop is hit (stops adjusted daily). These fundamentally sound stocks need room to run. Often they pullback to hit the 1st stop-loss point only to reverse and move much higher. This trade management strategy keeps one in the bullish trade and limits the downside to less than a 7.5 percent loss.
Previous picks still in play with updated trade management criteria:
- Profitable Trade: sell at 1/2 position at 1st target sell point (usually at buy point +5 percent) to ensure profitability; hold 2nd half of position until 2-day trailing stop (minimum low of prior two days) or appropriate technical stop is hit (stops adjusted daily);
- Loss Trade: sell 1/2 position at technical stop-loss point, then the 2nd 1/2 at the 7.5 percent max-loss point (stops not adjusted daily);
- Mixed Results Trade (sell first 1/2 position at loss & second 1/2 at profit): sell first 1/2 position at initial technical stop-loss point, then after second 1/2 position becomes profitable sell when appropriate technical stop is hit (stops adjusted daily).
These fundamentally sound stocks need room to run. Often they pullback to hit the 1st stop-loss point only to reverse and move much higher. This trade management strategy keeps one in the bullish trade and limits the downside to less than a 7.5 percent loss.
Trade Management Criteria for Recommended Trades
Find Complete Summary of 2003 to 2007 Trades here.
Over 18 Quarters (3rd Quarter 2003 through 03/31/08), 1826 TSM Picks (66.4% Winners) Returned +530.0% (S&P Gained 30.3%) {Hypothetical $35,000 Would Have Grown to $220,513 after 18 quarters}
Note, I don't make every one of these trades myself, though I do make many. Trade results are hypothetical, but I do actively trade the screened stocks for my own accounts (folios & TradeStation).
TODAY'S TSM SET UPS
...TSM longs and shorts meeting technical criteria for next day
TSM Trading Returns have been summarized from the last 17 quarters of forecasted stock picks. A $35,000 account on 9/15/03 would have grown to $181,554 over these quarters (a 419% return over a period the S&P returned 44.2%). On a quarterly basis, TSM trades averaged 101 half-position trades to completion over 7.3 days/trade, and in only one of the 17 quarters did the S&P outperform the TSM trading returns. Find more details here.
HLF--Herbalife Ltd.-- Long
Home Page | Fundamentals | MSN Stock Ranking | Schaeffer Research Daily Chart | Weekly Chart | Daily Point & Figure Chart | Option Greeks & Implied Volatility Company Profile: Herbalife, Ltd., a network marketing company, sells weight management, nutritional supplement, energy and fitness, and personal care products worldwide. It offers science based products in four principal categories: weight management, targeted nutrition, energy and fitness, and outer nutrition. The company's weight management product portfolio includes meal replacement shakes, weight-loss enhancers, appetite suppressors, and a range of healthy snacks. Its targeted nutrition products include dietary supplements, which contain herbs, vitamins, minerals, and natural ingredients that support well-being and long-term good health. Herbalife's energy and fitness products category includes energy and isotonic drinks to support a healthy active lifestyle. Its outer nutrition products include skin cleansers; toners; moisturizers and facial masks; shampoos and conditioners; anti-aging products; body-wash items; and a selection of fragrances for men and women. The company also sells literature and promotional materials, including sales aids, informational audiotapes, videotapes, CDs, and DVDs designed to support its distributors' marketing efforts, as well as start-up kits for new distributors. It sells its products in 65 countries through a network of approximately 1.7 million independent distributors, as well as through retail stores and sales force in China. Herbalife was founded in 1980 and is based in Grand Cayman, Cayman Islands. Company Fundamentals: HLF is a 2.95 billion market cap company. Its sector, Wholesale, and industry, is currently being accumulated by institutional investors (top 20 percent of all industries). Zacks ranks HLF a a1 ranked 2 four weeks ago). PEG ratios of 0.55 and 0.70 for the next two years reflect the value left in the price (read about the effectiveness of PEG ratios in forecasting value here , though it has increased 1.9 percent in value over the past six months (S&P 500 decreased -13.8 percent). Four valuation metrics forecast today's average value at 48.95. HLF reported earnings on 5/06/08. It is a member of four of the five TSM fundamentals screens but not a member of a Zacks earnings revision screen. Over the past two quarters, it has averaged a 6.5 percent positive surprise and produced a 27 31 31 41 (last quarter) percent year-over-year earnings growth and 11 14 11 19 (last quarter) percent year-over-year sales growth (producing 2.39 billion in sales this year). Its Price/Sales ratio now stands at 1.24, and it's currently trading at 94 percent of its 52-week high. Further, this year's earnings estimates have decreased their numbers by 3.1 percent from 3.20 to 3.30 in the past 90 days. Technicals: HLF is in pullback now, and we'll try to buy it at the 50 percent Fibonacci level. [03/31/08] HLF didn't hit our buy point today. Let's try to buy tomorrow in the $46.26 to $46.96 price range. URBN -- Urban Outfitters, Inc. -- Long Home Page | Fundamentals | MSN Stock Ranking | Schaeffer Research Daily Chart | Weekly Chart | Daily Point & Figure Chart | Option Greeks & Implied Volatility
Home Page | Fundamentals | MSN Stock Ranking | Schaeffer Research Daily Chart | Weekly Chart | Daily Point & Figure Chart | Option Greeks & Implied Volatility
Company Profile:
Company Fundamentals: HLF is a 2.95 billion market cap company. Its sector, Wholesale, and industry, is currently being accumulated by institutional investors (top 20 percent of all industries). Zacks ranks HLF a a1 ranked 2 four weeks ago). PEG ratios of 0.55 and 0.70 for the next two years reflect the value left in the price (read about the effectiveness of PEG ratios in forecasting value here , though it has increased 1.9 percent in value over the past six months (S&P 500 decreased -13.8 percent). Four valuation metrics forecast today's average value at 48.95. HLF reported earnings on 5/06/08. It is a member of four of the five TSM fundamentals screens but not a member of a Zacks earnings revision screen. Over the past two quarters, it has averaged a 6.5 percent positive surprise and produced a 27 31 31 41 (last quarter) percent year-over-year earnings growth and 11 14 11 19 (last quarter) percent year-over-year sales growth (producing 2.39 billion in sales this year). Its Price/Sales ratio now stands at 1.24, and it's currently trading at 94 percent of its 52-week high. Further, this year's earnings estimates have decreased their numbers by 3.1 percent from 3.20 to 3.30 in the past 90 days.
Technicals: HLF is in pullback now, and we'll try to buy it at the 50 percent Fibonacci level. [03/31/08] HLF didn't hit our buy point today. Let's try to buy tomorrow in the $46.26 to $46.96 price range.
URBN -- Urban Outfitters, Inc. -- Long
Company Profile: Urban Outfitters, Inc., a lifestyle specialty retail company, operates specialty retail stores under the Urban Outfitters, Anthropologie, Free People brands, and Terrain brands. Its retail stores offer fashion apparel, footwear, accessories, gifts and decorative items, furniture, books, candles and novelties, pillows and shower curtains, rugs, lighting and antiques, table top items, and bedding products. As of January 31, 2008, the company operated 122 Urban Outfitters stores of which 106 are located in the United States, 4 in Canada, and 12 in Europe; 2 Urban Outfitters Web sites and an Urban catalog; 108 Anthropologie stores; 15 Free People stores; and an Anthropologie Web site and a catalog. In addition, Urban Outfitters engages in the design, development, and wholesale distribution of young women's casual apparel, including tops, bottoms, sweaters, and dresses through approximately 1,700 department and specialty stores to approximately 1,500 specialty stores, department stores, and catalogs. The company was founded in 1970 and is based in Philadelphia, Pennsylvania.
Company Fundamentals: URBN is a 5.21 billion market cap company. Its sector, Specialty Retail, and industry, is currently being accumulated by institutional investors (top 32 percent of all industries). Zacks ranks URBN a a3 ranked 3 four weeks ago). PEG ratios of 0.92 and 0.96 for the next two years reflect the value left in the price (read about the effectiveness of PEG ratios in forecasting value here , though it has increased 41.5 percent in value over the past six months (S&P 500 decreased -13.6 percent). Four valuation metrics forecast today's average value at 71.90. URBN reports earnings on 5/08/08. It is a member of four of the five TSM fundamentals screens but not a member of a Zacks earnings revision screen. Over the past two quarters, it has averaged a 11.4 percent positive surprise and produced a 42 27 50 52 (last quarter) percent year-over-year earnings growth and 17 22 23 29 (last quarter) percent year-over-year sales growth (producing 1.83 billion in sales this year). Its Price/Sales ratio now stands at 2.84, and it's currently trading at 96 percent of its 52-week high. Further, this year's earnings estimates have decreased their numbers by 4.4 percent from 1.13 to 1.18 in the past 90 days.
Technicals: Monday, URBN followed through on Friday's bottoming at the support of its rising 20-day moving average. Note the bullish bottoming tail.
Trader's Corner
...TSM Education Center
Find Complete List of Other Trader's Corner Reports Here.
TSM METHOD RESULTS
...TSM forecasting results for past 17 quarters 2003-2008
Find a summary of the results generated from the 1826 TSM forecasted from the last 18 quarters 2003(4th quarter) through 2008 (1st Q) here.
TSM Trading Returns have been summarized for the 1st quarter of 2008, as well as totals for the last 18 quarters. In summary, a $35,000 account at the end of the 3rd quarter in 2003 would have grown to $220,513 over the next 18 quarters (a 530% return over a period the S&P returned 30.3%). On a quarterly basis, the TSM trades (averaging 101 position trades) returned 11.0% quarterly, the S&P 1.6%. Only one of the 18 quarters did the S&P outperform the TSM trading returns. This last quarter (1st quarter 2008) produced 72.6% winning trades. Obviously, short-term trading based on techno-fundamentals has worked well.
...100-150 new TSM stock group selected on the weekend for the next week's trading
A list of new TSM picks (accumulated from four fundamental, a value, and an earnings quality/revision screen) is published in Mondays TSM Report: 50 to 150 stocks with strong fundamentals, with projected quality earning’s performance (Zacks), and with remaining value (two year PEG ratios). This is the list that I search daily looking for those stocks giving strong technical signals, i.e., those stocks that are likely to make a bullish run over the next 1 to 10 days. During two quarters in 2006, for example, 174 picks (longs and shorts) were forecast in the daily TSM reports, each with their respective buy/short points and profit and loss targets: 164 (94.25%) gained at least $0.25, 152 (87.36%) gained at least $0.50, 140 (80.46%) gained at least $0.75, 129 (74.14%) gained at least $1.00, 99 (56.90%) gained at least $1.50, 76 (43.68%) gained at least $2.00, 52 (29.89%) gained at least $2.50, 32 (18.39%) gained at least $3.00 and 18 (10.34%) gained at least $3.00.
