North of the Blue
...the key to stock analysis 
North of the Blue Executive Newsletter
Issue: # 17 January 6, 2010
Celebrate Ethical Wins ... Celebrate Tradition ... Celebrate Life ...
Use North of the Blue ... the key to stock analysis
Greetings!

Happy New Year to all of our clients,
 
This is the year when you join us and watch your investments go "North of the Blue".  What can this mean to you?  Would you be interested in North of the Blue if I told you that by focusing on a single, high quality stock all through 2009 and following our North of the Blue Basic Rule (NOTB BASIC RULE) investors earned 76% on their money.  Every $10,000 invested yielded $17,600!
 
This gain is good but we could have done better by adding a single, simple directive to our basic rule, giving us our North of the Blue Basic Rule with Early Sell Modification.  Adding our Early Sale Rule to our basic rule jumps our earning power to 117.6% with NO increase in risk!  That means you would have gotten $2,176 back.  Look below at "Rules and Modifications". 
 
Can we promise that you will do the same in 2010?  NO, of course not.  As the lawyers say, past performance is no guarantee of future performance.  But, if we do this year after year, and we have, we can certainly make the future look more certain.
 
Dick Brenneke
January 6, 2010
503-233-9452 or 503-233-9452
Portland, Oregon 97202
 
North of the Blue
   ... Checking on our work
January 6, 2010
 
ETF Accyract at 100% 
We made two mistakes recently that help to illustrate what we can and cannot do for you.
 
We can tell you what our rules say and what they mean when applied to specific stocks.  We cannot tell you where to place you own money. We are not investment advisors nor are we stock brokers.  We are only interested in providing you and those like you with the best possible investment strategies.  This is why we refer to our product as North of the Blue, your key to stock analysis.
 
 More contact is now available through Twitter.  Follow us on www.twitter.com/northoftheblue
.
Economic Overview
January 6, 2010 
 The Picture of ProfitI am amazed by how many market analysts tell us that "the economy hit bottom [in 2009] and investors began anticipating a recovery."  That sums up so much of what I read.  When pressed for reasons, I don't hear any. Do you?
 
 Job loss is still in double digits.  Year end retail sales results, while not final, are not looking very promising.  The deficit soars through record numbers.  I could go on and so could you.  The bottom line is that I don't yet see a reason to be happy with the stock market.
 
One of the ways to use North of the Blue is to use it as an integrated stock analysis tool.  Used alone, the panel with stock prices, support and resistance levels and red extreme caution jail bars are hard to integrate into your buying and selling decisions.  However, when combined with the other two panels you can see how the system comes together.
 
Look first at the price, then at the strength and finally at the volume supporting that strength.  Now remember that the only reason stocks go up is because more people want to buy the stock than want to sell the stock.  The reality that results from this philosophy is what North of the Blue brings you.
 
More next week.
 
 
 
Rules
... Modifications and out of this world gains with very little risk.
January 6, 2010
The Picture of Profit
 
STOCK:  ABX
PERIOD:  January through December 2009.
NUMBER OF BUYS AND SELLS:  6
GAINS: 76%, 117,6% and 214.9% depending on which of the following rules is used.
RULES USED:
  1. Rule 1:  North of the Blue Basic Rule: 
    GAIN:  plus 76%.  $10,000 grows to $17,160. 
    RISK is almost zero.
  2. Rule 1a:  North of the Blue Basic Rule with Early Sell: 
    GAIN:  plus 117.6%.  $10,000 grows to $21,760. 
    RISK:  Increase in risk is nearly zero.
  3. Rule 1b:  North of the Blue Basic Rule with Early Buy and Early Sell:
    GAIN:  plus 214.9%.  $10,000 grows to $31,490. 
    RISK:  Increase in RISK:  moderate with the risk declining as the Upward Price and High Price Strength remain close together and reach 90%.
 
No magic, no slight of hand, just a solid stock and easy to understand charts and rules.
This article is a repeat of one I wrote before.  I put it in again, in somewhat revised form, not because I'm out of ideas but because it goes to the very heart of North of the Blue. It demonstrates that North of the Blue does not depend on a single rule but instead builds on a single very simple rule to generate unbelievable profits.  "Unbelievable" that is until you put the money into your bank account.
 
This year I will do the same thing.  I'll report the results of my investing each week.  I'm starting with enough money to buy 100 shares of a single stock in January 2010.  I will focus on that stock.  (We will still carry our Buy-Watch, Portfolio Holdings and Cash in the Bank Portfolios).  We are doing this to highlight my personal investment philosophy, to earn money and to demonstrate the power of North of the Blue.  There will be no jumping around nor will there be the slight of hand that many stock analysis programs specialize in.  One stock for one year with weekly reports that you can track in our program.  Subscribe to North of the Blue and follow along.
 
The core rule here is that you have to live with my timing and interpretations.  I'll do my best to keep you advised of my progress either in these weekly newsletters or by Twitter.  In depth analysis can be found on our web site.  Click on any underlined words to see the link.  This demonstration provides you with information about what makes North of the Blue, the key to stock analysis, unique.
 
In 2009 I did the same thing when I selected Barrick Gold Corp (ABX).  I used ABX because it demonstrates my point easily and quickly.  I began my demonstration in January of 2009 and ended it in December of 2009. 
 
You can follow along by using our program and the Channel Analysis charts.  To begin type "ABX" in the "Symbol" window and then press "Enter" or click on the "Show" button at the top of the screen.  You will see the ABX chart for the last eight months.
 
Since we want to start our analysis with January of 2009 and just under nine months are shown on the chart we need to reset the date to earlier in the year so that January is included.  Enter the date "06/01/2009" and then click on the "Show" button.  Now we can see the period that includes the first few months of 2009 and the last few months of 2008.
 
We are particularly proud of our "sell" rules.  They took nearly two years of programming by two very experienced programmers.  Now they work as well as the "buy" rules.
 
Here are the rules and their results.
 
Rule 1:  North of the Blue Basic Rule (NOTB BASIC RULE) states:  A stock should be bought when its price is increasing up through our Blue Moving Average (NOTB-BMA) and sold when its price is declining through our NOTB-BMA. 
 
By following our NOTB BASIC RULE you or any other investor would have bought and sold ABX six times in the last year.  The gain for 2009 was 76%.
 
As you can see, using the NOTB BASIC RULE leaves a considerable amount of money on the table.  We do not capture this money because we wait for the sell half of the NOTB BASIC RULE to complete.
 
In order to recoup more of the gain without adding any risk we modify our NOTB BASIC RULE by adding to it our Early Sell Rule.  The Early Sell Rule states that a stock should be sold when its High Price Strength and Upward Price Strength drop below 85%.  We usually incorporate this as an confirming or auxiliary rule.  Here's the complete rule:
 
Rule 1a:  North of the Blue Basic Rule with Early Sell states: A stock should be bought when its price is increasing up through our Blue Moving Average (NOTB-BMA) and sold when its price is declining through our NOTB-BMA OR when its High Price Strength and Upward Price Strength drop below 85%.  
Changing 85% to 90% can often cause users to sell when a stock is just undergoing a small correction.  Using this rule the gain for our ABX buys and sells would allow us to pocket 117.6% in 2009.  $10,000 invested now yields $21,760 for the year. Note that we have not increased our risk because we have sold while the stock was still North of our Blue Moving Average.
 
In order to capture price gains before the stock price reaches the North of the Blue Moving Average we introduce a final modification of our NOTB-BASIC RULE.  The rule now provides more accurate (and more risky) early buying as well as early selling.  Here's the complete rule:
 
Rule 1b:  North of the Blue Basic Rule with Early Buy and Early Sell states:   A stock should be bought when its price is increasing up through our Blue Moving Average (NOTB-BMA) OR when its High Price Strength and Upward Price Strength join or nearly join and leave a severely oversold Red Zone, turn sharply up and climb through 50%and sold when its High Price Strength and Upward Price Strength drop below 85%. 
 
Here are the details of the transactions for the year. 
ABX Barrick Gold 2009
North of the Blue Rule
North of the Blue Rule with Early Sell
North of the Blue Rule with Early Buy and Early Sell
Period 1
36.7%
48%
135.2%
Period 2
8.5%
18.5%
25.4%
Period 3
5.3%
5.3%
5.3%
Period 4
6.7%
9.2%
136.3%
Period 5
12.3%
14.2%
18%
Period 6
6.5%
22.4%
35.7%
Total Gain
76%
117.6%
214.9%

Buy-Watch List January 6, 2010

 
Buy - Watch Stock Date Entered Pull the
Trigger
JCG J Crew Group BW:  1/6/10 $44.46 Watch for stock to cross North of the Blue's Blue Trend Line going up then buy.  A real "maybe" but worth waiting to see the outcome short term.
VIP  Open JT Stock Company Vimpel Commun Buy:  1/5/10 at $18.92 Current $20.17 plus 6.60%  2 days Crossed North of the Blue's Blue Trend Line going up then buy. Still a good buy.
CYD China Uchai Intl Buy:  1/5/10 at $15.53. Current $17.10 gain 10.10% Strong trend. Touched Blue Moving Average now going back above.  Still a good buy.
CISG Cininsure Ads Buy:  1/6/10 at $21.40 Stock just went above North of the Blue's Blue Trend Line going up.Volume above average. Strength going up nicely.
LL Lumber Liquidators Holdings  BW:  1/6/10 at $26.21. Watch for stock to cross North of the Blue's Blue Trend Line going up then buy. Especially watch strength indicators.
SHY - iSHARES LEHMAN TREASURY BOND FUND 1 - 3 YEARS 10/20/09 Used as an account in which to park funds for maximum security and yield.
TLT - iSHARES LEHMAN TREASURY BOND FUND 20+ YEARS 10/20/09 Used as an account in which to park funds for maximum security and yield.
 
Also check "DickPicks" in your "DicksPicks"List in our program.
 
 
 
Current Portfolio Holdings
January 6, 2010
Stock Dates Bought/Sold Reason(s) for Action Taken
TLEO - Taleo Corp CL A BW: 12/07/09
Buy:  12/22/09 at $22.20.
Sell: 1/5/10 at $24.34. Gain 9.63% in two weeks (annualized 346%)
 Watch for stocks to leave Red Zone in top panel and for stochastic strength measures to climb past 50%.  Moved to Portfolio Holdings.  Should have been bought on December 22.
ATPG - ATP Oil and Gas CP BW:  12/17/09
Buy 12/17/09 at $17.64.  Current 1/6/10 $20.57. Plus 16.61% in 3 weeks.  (annualized 282%)
 Moved to Portfolio Holdings.  Should have been bought December 17.
HAL Halliburton BW:  12/17/09
 
Buy: 12/31/09 at $29.99. Current: plus 8.77% in 7 days (annualized 457%)		 Watch for stock to cross North of the Blue's Blue Trend Line going up then buy.
OXY Occidental Petroleum BW:  12/17/09
Buy: 12/22/09 at  80.37.  Current: $83.49 plus 3.88% in three weeks.
 Watch for stock to cross North of the Blue's Blue Trend Line going up then buy. Waiiting for strength lines to catch up to price.
APA - Apache BW:  12/17/09
Buy: 12/17/09 at 99.59. 
Current:  $105.73.  Up:  6.17% 
 Buy when North of the Blue.  Watch for decline in stochastic panel.
IYT - iShares Dow Jones Transportation Buy Watch: 11/3/09;
Buy 11/5/09 at $52.21.  Current $75.49.  Up 44.59%.		 11/17/09 hold with caution.
BRY - Berry Petroleum Buy 12/18/09 at $27.89
Current: $30.76. Up 11% 
 12/18/09 went North of the Blue.  Hold with caution.
DVN - Devon Energy Corp Buy 12/18/09 at $69.26
Sell 1/6/10 at $76.42.  Up 10.34%.
 12/18/09 went North of the Blue.
EEE - Everegreen Energy Buy 12/18/09 at $0.31 
Current: $0.65 Up 109.67
 12/18/09 coming up on Blue. Everyone needs a laugh now and then. I'm still laughing.  Patience is paying off.
KWK - QuickSilverResources Buy 12/17/09 at $14.55. 
Current:  $16.11 Up 10.86%.
 12/17/09 went North of the Blue.
OIS - Oil STS International Buy 12/18/09 at $37.92 
Current;  $41.60 Up: 9.70%
 12/18/09 went North of the Blue.
PQ - Petroquest Energy Buy 12/18/09 at $6.04 
Sell:  12/28/09 at $6.83. Up 13.08%
 12/18/09 went North of the Blue. Sold when fell below 85%
PTEN - Patterson Utilities Energy Buy 12/18/09 at $15.48
Sell:  12/28/09 at $16.22.  Up 4.78%.
 12/18/09 went North of the Blue.
UPL - Ultra Petroleum Buy 12/17/09 at $49.65.
Sell: 12/238/09 at $53.49. Up 7.73%
 12/17/09 went North of the Blue.
NEU - NewMarket Corp

Buy Watch: 10/27/09
Buy: 11/2/09 at $91.10
Sell: 12/29/09 $118.38. Up 29.68%

12/17/09 hold.  Sell because stochastics fell below 85%
TOTAL Average Gain  12.88%
 
 
Gains & Losses:  Current Cash in the Bank Portfolio
... Where the real profit is

Cash in the Bank "Portfolio"
January 6, 2010
PQ - Petroquest Energy Buy 12/18/09 at $6.04 
Sell:  12/28/09 at $6.83. Up 13.08%
 12/18/09 went North of the Blue. Sold when fell below 85%
PTEN - Patterson Utilities Energy Buy 12/18/09 at $15.48
Sell:  12/28/09 at $16.22.  Up 4.78%.
 12/18/09 went North of the Blue.
UPL - Ultra Petroleum Buy 12/17/09 at $49.65.
Sell: 12/238/09 at $53.49. Up 7.73%
 12/17/09 went North of the Blue.
NEU - NewMarket Corp

Buy Watch: 10/27/09
Buy: 11/2/09 at $91.10
Sell: 12/29/09 $118.38. Up 29.68%

12/17/09 hold.  Sell because stochastics fell below 85%
SWN Southwestern Energy BW:  12/17/09
Buy: $12.17 at $44.30
Sell:  12/29/09 at $50.74 GAIN 14.54%
 Watch for stock to cross North of the Blue's Blue Trend Line going up.  Stock rolled over and fell to 85%.
DUK - Duke Energy Buy 11/20/09 at $16.05. 
 
Sell 12/1/17 $17.52 up 9.15%		 Sell 12/17/09 stochstics fell below 85%
UNP - Union Pacific Corp Buy Watch: 11/3/09;
Buy 11/9/09 at $61.04.
 
Sell:  12/14/09 Up 65.40 up 7.14%.
 Sell 12/14/09 stochastics fell below 85%.
FDX - Federal Express Buy Watch: 11/3/09;
Buy 11/9/09 at 77.02; Sell 12/17/09 $87.10.  Up 13.08%. 		Sell 12/17 stochastics fell below 85%
JNJ - Johnson & Jonhson  11/12/09
Bought 11/12/09 at $60.14.
 
Sell:  64.78.  Up 7.71%
 Sell 12/17 stochastics fell below 85%
CSX - CSX Corp

Buy Watch: 11/3/09
B: 11/3/09 at 45.10

 Sell: 12/17/09 49.35 up 9.42%
 Sell 12/17/09 stochastics below 85%
MED - Medifast, Inc. Buy Watch: 10/28/09
Buy 10/29/09 at 20.26
 
Sell: 12/17/09 33.05 up 63.12%.
Sell 12/17/09 stochastics trending downward.  I have made enough so don't get greedy.
CAT - Caterpillar, Inc. Buy Watch: 10/20/2009
Buy 11/04/09 at $56.10
Sell 11/16/09 at $60.90.  Up 8.55% in 12 days.
 Strength lines seperated and fell below our 85% stochastic line AND price line is descending towards our Blue Moving Average.
EMS - Emergency Medical Services Corp Buy Watch: 10/20/09
Buy 11/5/09 $49.39.
Sell 11/17/09 at $52.06.  Up 5.40% in 2 days.		 Price line fell and both of our stochstic Strength lines fell below 85%.
GMCR - Green Mountain Coffee Roasters

Buy Watch: 10/27/09
Buy: 11/10/09 at $70.68. Sold 11/12/09 at $70.71.  Up 30 cents in two days. Out the cost of brokerage fees.

 
 

 

 Stock price fell below our Blue Moving Average and both strength stochastics fell way below 85%.
MED - Medifast, Inc. Buy Watch: 10/28/09
Buy 10/29/09 at $20.26. Sell
11/10/09 26.93 up 32.92% in two weeks. 		Sound fundamentals; good earnings; Channel turning up; buy at the Rebound Rule Buy Point. 11/3/09 buy rule satisfied.
PCLN- PriceLine.com Buy Watch: 10/27/09
Buy 11/2/09 at $157.29
Sell 12/07/09 at $221.99.  Up 41.13% in three plus weeks.		 Stochastics are beginning to lose their strength.  Put the profit in the bank.
ABX - Barrick Gold Corp Buy Watch: 10/20/09
Buy 10/29/09 at $35.32.  Sell 12/03/09 at $47.95. Up 35.76% in 5 weeks.
 Price began to fall and stochastics showed no power as they sank rapidly below 85%. In addition dollar was rebounding.
GG - Goldcorp

Buy Watch: 10/20/09
Buy 10/30/09 at $35.47. Sell 12/03/09 at $45.88 Up 29.35% in 5 weeks.

 Price began to fall and stochastics showed no power as they sank rapidly below 85%. In addition dollar was rebounding.
GLD - SPDR Gold Trust

Buy Watch: 10/20/09
Buy 10/29/09 $101.48. Sell 12/2/09 at $119.27. Up 17.53% in 5 weeks.

 Price began to fall and stochastics showed no power as they sank rapidly below 85%. In addition dollar was rebounding.

GOLD - Rangold Resources Ltd WS Buy Watch: 10/20/09
Buy 11/2/09 at $66.50. Sell 12/03/09 at $88.63.  Up 33.28% in 5 weeks. 		 Buy when price at the Rebound Rule Buy Point or North of the Blue Buy Point or the Support Level Rebound Point. 11/2/09 Rebound Rule satisfied and Upward Price and High Price Strength are at 85%
AAUKY Anglo American PLC Ads Buy 10/20/09 at $18.40
Sell 10/23/09 at $19.84 up 7.82%		 Sell when the Upward Price and High Price Strength fall below 85%. 10/23/09 sell rule satisfied.
ABX - Barrick Gold Corp Buy 10/5/09 at $35.98
Sell 10/14/09 at $40.51 up 12.6% 		Stochastics fell below 85% and price dropped. 
GOLD - Rangold Resources Ltd WS Buy 10/5/09 at $65.76
Sell 10/16/09 at $76.20 up 15.87% 		at the Rebound Rule Buy Point; sell when the High Price and and Upward Price Strength fall below 85%.
CAT - Caterpillar, Inc. Buy 10/5/09 at $48.70
Sell 10/10/09 at $57.78 up 18.6% 		at the Rebound Rule Buy Point
EMS - Emergency Medical Services Corp Buy 10/5/09 at $46.04
Sell 10/16/09 at $49.69 up 7.9% 		at the Rebound Rule Buy Point
Alcoa (AA) Buy 10/5/09 at $12.85
Sell 10/16/09 at $14.28 up 11.1% 		at the Rebound Rule Buy Point
AAUKY Anglo American PLC Ads Buy Watch 10/2/09
Buy 10/20/09 at $18.40
Sell 10/23/09 at $19.84 up 7.82%		 Sell when the Upward Price and High Price Strength fall below 85%. 10/23/09 sell rule satisfied.
GG - Goldcorp Buy 10/2/09 at $37.72
Sell 10/16/09 at $42.74 up 13.3% 		at the Rebound Rule Buy Point; or at the Move out of Red Jail Bars; or at the Support Level Rebound Point;sell when the High Price and and Upward Price Strength fall below 85%.
AAUKY Anglo American PLC Ads Buy 10/2/09 at $14.80
Sell 10/23/09 at 19.84 up 34.1% 		at the Support Level Rebound if it occurs
GOLD - Rangold Resources Ltd WS Buy 9/2/09 at $57.25
Sell 9/16/09 at $75.85 up 32.48% 		Buy as stock price goes North of the Blue; sell when the High Price and and Upward Price Strength fall below 85%.
GLD - SPDR Gold Trust Buy 8/27/09 at $92.38
Sell 10/15/09 at $103.95 up 12.52% 		the Rebound Rule Buy Point; sell when the High Price and and Upward Price Strength fall below 85%.
 
 
The Picture of Profit This is the place where the rubber meets the road.  If you cannot put what you earn into the bank it just does not exist.  Period.  End of story.  So look at what we are putting in the bank.
Insider Information
For North of the Blue Users
Insiders' tips:
 
Our Executive Newsletter is published mid week every week.  We write the news on Tuesday and try to do a final review on Wednesday just before it goes into the email. Often market factors cause us to wait until Thursday before we publish. 
 
Check our web site for more information on Channel Trading for those of you doing your own analysis. Mastering this analysis tool, which is unique to North of the Blue, is well worth the effort.
 
Tweet!  Yes, we are now on Twitter.  See us at twitter/northoftheblue.
 
If you are not a subscriber, now is the time.  Convert your trial subscription and save $25 on the Activation Fee.  A great deal that won't last long.  Click here to see why you need to subscribe.
 
Sincerely,
 

Richard Brenneke
North of the Blue Stock Analysis System
In This Issue
Expansion
Economic Overview
Rules
Buy-Watch List
Current Portfolio Holdings
Cash in the Bank
Insider Information: Using NOTB
Quick Links
 
 
The Picture of Profit
Read why then use your North of the Blue tools to check out our Buy-Watch list.
 
R. J. Brenneke photo
Featured Articles
Look at our Buy-Watch selections then follow them into our Current Portflio and our Cash in the Bank "Portfolio". The thinking behind our selections is in our Education section at our web site.