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Short Form Buffalo Trader Bullish Reversal Report 10/21/2010

For the time being, this will be the new format, showing only the basic U.S. stock index momentum, the bullish reversals in ETFs and bullish reversals in stocks. I will periodically comment on major issues at critical times, but during the time I am attempting to build the algorithm required to download signals from almost 1300 stocks that I have built models for using NeuroShell Day Trader Professional, this is what I will leave you with. Most who have commented (and I have received, thankfully lots of comments with great appreciation to readers) want to see the reversals and not necessarily trade signals I generate. That makes life simpler for me, though at some point I will discuss methodology for building your own models. For now, I will present the data with little commentary. I will always respond to readers’ comments. This blog will steadily evolve as the time I have and the technology I use evolves. Thanks for your patience during this transition.

For 10/21/2010:

                                     $INDU      $SPX         $COMPQ     $RUT

Monthly Momentum   Pos            Pos              Pos              Pos

Weekly Momentum     Neg (OB)   Neg (OB)   Neg (OB)     Pos (OB)

Daily Momentum        Neg             Neg            Neg              Neg

N means neutral, Neg means negative, Pos means positive (OS) means oversold and (OB) means overbought. The value to price estimate (it is not a guarantee, only a cash flow based estimate) can be defined loosely as a multiplier of price. A number higher than one means the stock is undervalued using this model and a number less than one means the stock is overvalued.

Index and ETF I-shares Bullish Reversals (Note: to look up quotes for the Dow Indexes (starting with DJ or DW, add a dollar sign. No dollar sign is required for the ETFs beginning with other letters.) Today’s list includes only those ETFs with a 50-day moving average of daily volume greater than 100,000 shares:

Company Symbol Exch. Industry Sector
PwrShsAgricult DBA xA ETFs (Commdty)\Futures) ETFs
PwrShsDBBaseMtl DBB xA ETFs (Commdty)\Futures) ETFs
Pwrshs DB Oil DBO xA ETFs (Commdty)\Futures) ETFs
PwrShrsDBAgriDb DAG N ETFs (Commdty)\TotRtn) ETFs
DB Commodty DBC xA ETFs (Commdty)\TotRtn) ETFs
iPath DJAIGCom DJP xN ETFs (Commdty)\TotRtn) ETFs
Greenhaven Cont GCC A ETFs (Commdty)\TotRtn) ETFs
Rogers IntlComm RJI xA ETFs (Commdty)\TotRtn) ETFs
iShr IboxxHiYld HYG xA ETFs (FixedInc\Other) ETFs
Spdr LehHghYld JNK xA ETFs (FixedInc\Other) ETFs
iShr LehMBSFxd MBB N ETFs (FixedInc\Other) ETFs
PwrShs FnlPfd PGF xA ETFs (FixedInc\Other) ETFs
SPDR Lhmn Muni TFI A ETFs (FixedInc\Other) ETFs
iShrTIPS Bd Fd TIP xN ETFs (FixedInc\Other) ETFs
Global X Ch Cns CHIQ xN ETFs (Foreign\Country) ETFs
iShr MSJpn EWJ xA ETFs (Foreign\Country) ETFs
Global X Clmbia GXG N ETFs (Foreign\Country) ETFs
iPath India INP xN ETFs (Foreign\Country) ETFs
Direxion FinlBl FAS xN ETFs (Sector\Financial) ETFs
First Trst Finl FXO A ETFs (Sector\Financial) ETFs
iShr DJUSFi IYF xA ETFs (Sector\Financial) ETFs
iShr DJUSFin IYG xA ETFs (Sector\Financial) ETFs
KBW Insurance KIE xA ETFs (Sector\Financial) ETFs
Hldrs RegnlBnk RKH xA ETFs (Sector\Financial) ETFs
Vangd Fnl VFH xA ETFs (Sector\Financial) ETFs
S & P Fin’l XLF xA ETFs (Sector\Financial) ETFs
iShr DJUSRE IYR xA ETFs (Sector\RealEstate) ETFs
sTracks Hmbldrs XHB xA ETFs (Sector\RealEstate) ETFs
Hldrs Semicdtr SMH xA ETFs (Sector\Technology) ETFs
iShr GS Smcdtr SOXX O ETFs (Sector\Technology) ETFs
iShr DJUSTc IYZ xA ETFs (Sector\TelecomSvcs) ETFs
ProShrsUltSmcn USD xA ETFs (Specialty\Dividnd) ETFs
ProShrsUltFinl UYG xA ETFs (Specialty\Dividnd) ETFs
iShr SP500V IVE xA ETFs (US\LargeCap) ETFs
iShr Ru1000V IWD xA ETFs (US\LargeCap) ETFs
Vangd Value VTV xA ETFs (US\LargeCap) ETFs
Nuveen Build Am NBB N Market (ClsdEndFndsDom) Market

 

The stocks listed below are ranked by pattern bullish reversals based on a momentum indicator. Each stock by sector is listed with the cheapest stocks on a near-free-cash-flow value/price basis at the top, and more expensive stocks on that basis farther down each sector list (they are listed alphabetically):

Company Symbol Exch. Industry Sector
Wabco Hldgs WBC xN Auto & Truck (OEM) Auto & Truck
Ferro Corp FOE xN Building (Painting Prds) Building
Masco Corp. MAS xN Building (Products\Misc) Building
U S G Corp USG xN Building (Products\Misc) Building
Manitowoc Co MTW xN Diversified Companies Diversified Companies
United Therptc UTHR xO Drug (Biomedical\Genetic) Drug
Perrigo Co PRGO xO Drug (Generic) Drug
Novo NordskADR NVO xN Drug (Ethical) Drug
Genzyme Genrl GENZ xO Drug (Biomedical\Genetic) Drug
Valeant Pharm VRX xN Drug (Ethical) Drug
Sasol Ltd ADR SSL xN Energy (Coal) Energy
ResMed Inc. RMD xN Healthcare (Products) Healthcare
Pinnacle Ent PNK xN Leisure (Gaming) Leisure
Hancock J PfInm HPS N Market (ClsdEndFndsDom) Market
EatonVanceTxMgd ETY N Market (ClsdEndFndsDom) Market
EatonVanceTxMng EXG N Market (ClsdEndFndsFrgn) Market
Harvest NatRes HNR xN Petroleum (Intl Specialty) Petroleum
MV Oil Trust MVO N Petroleum (U S Royalty) Petroleum
McMoran Explr MMR xN Petroleum (U S Explr\Prod) Petroleum
Childrn’s Plce PLCE xO Retail (Apparel) Retail
Home Depot HD xN Retail (Building Products) Retail
Lowes Cos LOW xN Retail (Building Products) Retail
Petsmart Inc PETM xO Retail (Misc\Diversified) Retail
Lumber Liquidrs LL xN Retail (Building Products) Retail
TIM Particip TSU xN Telecomm (Cellular) Telecomm
J D S Uniphse JDSU xO Telecomm (FiberOptics) Telecomm
Crude Carriers CRU xN Transportation (Ship) Transportation

 

Stocks that almost passed the neural net screens but just missed: LOW, JDSU (though JDSU does not meet value criteria)

Note:  Stocks did indeed bounce but on relatively light volume. Retail, drugs, and building materials led the bullish reversals list, but with volume being light, one must question the strength of the rally given the overbought nature of U.S. equity indexes.  I will continue to look for opportunities as any correction ends. I still believe there will be some bargain hunting among institutional buyers as the year comes to an end. We simply have to wait for them to show up.

Though LOW was very close, it did not meet the minimum criteria of $1.60 profit/$1 loss and a 60% win ratio, so it does not pass. I will continue to look for opportunities as they arise. Patience needs to be maintained until we see a decent correction in the U.S. equities market.

Take care,

DBB

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