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North of the Blue Stock Analysis System Executive Newsletter
Executive Newsletter  Tuesday March 9, 2010
In This Issue
Education
Timing
Rules and Charts
Current Portfolio
Year to Date Coomparison
January Comparison
Buy Watch
Buys This Week
Current Portfolio
References to North of the Blue's Web Site
Channel Charting
Greetings!
 
We have new thoughts, new stocks and a change of perspective for you.  The change of perspective comes in the form of a new rule, the Channel Trading Rule.
 
First of all we are trying to get away from the narrow, long columns that run for fifteen pages. We think that this newsletter format is a step in the right direction.  We're interested in what you have to say, so drop us a line. 
 
We also thought that the green would tie us into St. Patrick's Day.  My sainted and long departed Irish Mother would certainly approve.
 
Big news.  We have nearly doubled our support staff.  Margaret Watson steps in this week to take over many of our bookkeeping and customer relations activities.
 
Ryan Butcher joins our team as an Account Executive.  He brings to us the perspective of a younger person who has found understandable rules that produce repeatable results.  In short, a program that he can "get his arms around".  He is also a serious user of the program and is very pleased with his results.
 
We have others coming on board to better assist you.  Names to follow. 
 
Why are we doing this?  Because we see the need to expand what North of the Blue can do.  We would like to expand our rules in several areas (more on this later at one of our evening seminars).  Also, we want to take our tried and true rules into the world of Mutual Funds and Variable Annuities.  Ask Jim Pedersen about the need for a North of the Blue that addresses the needs of such users.
 
The best news of all:  our accuracy rate has climbed to 86%.
 
Sincerely,
 

Richard Brenneke
503-233-9452
The Picture of Profit Education
  ... seminars and one-on-one sessions
 
Our Wednesday evening seminars have become a highlight in our lives and in the lives of many of our subscribers.  We know this because people keep coming back.  When they do they bring new and different questions.  After several months of use many come to tell us about their gains and how they the lives of many of our subscribers.  How do we know this?  Because they keep coming back and telling us how much money they made using the knowledge they gained at the last meeting.  In addition, our subscribers tell us how much we exceed their expectations at these meetings.  Significant praise.  Obviously, the greatest paise is that they take their new knowledge and one or more of the stocks we discussed and just went out and made a profit for the week.  We are at about 15 subscribers and trial subscribers in each Wednesday evening meeting.  The time has come to find another evening for a new group.  Are you interested?  Please tell us which evening would work best for you.  There is nothing quite as nice as projecting a North of the Blue Chart onto a wall so that everyone can understand the point being made.
 
There is no charge for these seminars if you are a paying subscriber or a trial subscriber.  
 
Our seminars now run about one and one-half hour.  So far that feels just right. 
 
These scheduled seminars are held every Wednesday evening from 7:00PM to 8:30PM at 11000 SW Barbur Blvd, Ste 100, Portland 97219. if you are someone who has been coming on a regular basis you do not need to reconfirm.  We'll hold your space.  Please call us if you cannot make it and just leave a message.  That opens the space up to someone on our waiting list.
 
We also schedule meetings during the week.  Unfortunately, we cannot accommodate "Drop Ins".  If you would like to meet with us on a one on one basis during the day please let us know in advance so that we can find a time that works for you and for us.  These slots are beginning to fill so let us know as soon as you can.  There is a $25.00 charge per person for these meetings.  Unlike the seminars, these meetings are designed to address your questions only.  We want to see you use these to cut your learning curve down. 
 
Using a one hour meeting where we go through one or more of our tutorials will pay you big dividends. 
 
Yes, you will have plenty of time to ask your questions in either venue.  The goal of these meetings and on our one-on-one daytime meetings is to get you up to the point where you can make prudent, profitable choices based on a thorough understanding of our very simple charts and rules.
 
As one of our new clients told me yesterday:  I certainly will convert my trial subscription to a real paying subscription right away.  I have made quite a bit of money on paper but just made $600 by following your rules and investing a very modest amount of money.  He did this before this trial subscription ran out.  We want to see you do the same thing.
 
Know your target audience. Who are your most important customers, clients or prospects, and why? Know what is important to them and address their needs in your newsletter each month. Include a photo to make your newsletter even more appealing.
 
Insert a "read on" link at the bottom of your article to drive traffic to your website. Links are tracked, allowing you to see which articles create the most interest for your readers.
 
Timing
 
We had an extremely appropriate demonstration of this two weeks ago.  On February 26 we sent out a special mailing explaining that VanceInfoTechnologies (VIT) was available at about $19.00.  What happened to generate our interest?  VIT had gone North of the Blue just that day, February 26.  Both the Upward Price Strength and the High Price Strength were rising rapidly upward even though they had separated somewhat.  The separation was minimal but the upward climb was at a significant rate.  Finally, the stock had seen nearly two weeks of virtually uninterrupted Buy Days, i.e. more buying than selling volume which produces the blue line.  Finally, the stock had rested for some time on two Machine Generated Support Levels.
 
Life in the stock market is really all about timing and the ability to use our rules to produce repeatable results.  Are we always right?  Of course not. 
 
How good are we?  I think of our stock selections in terms of baseball, the great American pastime.  Hitters who regularly come through with hits that put them on base 33% of the time are earning millions of dollars every year.  North of the Blue has hit 86% of our selections this year out of the park.  86%!  Every stock analysis programs points to this and that winner.  But they don't want to get pinned down to specifics when you ask how many of their stocks are winners.  Did you ever notice that? 
 
Several of our clients called a week after our alert on VanceInfo Technologies (VIT) to see whether to see whether it was still a good buy.  Unfortunately, all we could say was "We don't know."  We don't have a specific rule that deals with stocks after they have started a significant gain.  We are refining our Channel Analysis rule that will address this but it needs more work.  Stay tuned for this.
 
You may want to know the point of all this.  Since February 26 VIT has climbed 23.19%.   That's 46% a month or over 600% per year if you bought when the rules said "Buy".
 
What about buying a week or two late?  This is terra incognita.  In other words, we just don't know. 
 
 
I think that users of North of the Blue must test it to the point that they believe what the program tells them.  Buy when the rules say 'Buy" and sell when the rules say "sell". 
Rules
 
So let's look at the rules once again.  Please go to the bottom to see our newest rule the Channel Trading Rule.
 
 North of the Blue Stock Charts and Buy/Sell Rules
... Building-Block Strategy
... NOTB is simple, unique and driving gains  out of this world
 
The Picture of Profit
 
 
Click on "Master NOTB Chart" below.  It links to a summary of North of the Blue's Chart outline.  All charts use the same basic structure
 
Master NOTB Chart. 
 
To look at a table of printable rules, please click here. 
 
North of the Blue is not built on magic dust, mirrors or slight of hand.  It is built on one simple rule that allows an investor to control his or her own destiny.  It is based on investments in solid stocks and analysis using our easy to understand, proprietary algorithms, charts and rules.  Our algorithms and insights allows North of the Blue to give you a unique approach to making money in the stock market.
North of the Blue does not depend on bells, whistles, arrows all over the chart and rulers that you put over a graph.  Instead it builds on a single, very simple rule, to generate unbelievable profits.  "Unbelievable" that is until you put the money into your bank account.
 
To work with North of the Blue you need to be kept current with our thinking.  So, we keep you advised of our progress either in these weekly newsletters or by Twitter.  In depth analysis can be found on our web site.  On our web site you will see an example of how we used our basic rule and our building blocks for one stock in 2009 that led to gains ranging from 76% to 214%.Click here to see the how this happened. 
 
Adding a rule, The Channel Rule.  Click here for a well written explanation.
 
Here are our basic rules.  We suggest that you clip these and keep them by your computer until they become second nature.
 
North of the Blue Basic Rule (NOTB BASIC RULE):  A stock should be bought when its price is increasing up through our Blue Moving Average (BMA) and sold when its price is declining through our BMA. 
 
But using the 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 BASIC RULE to complete.
 
In order to recoup more of the gain without adding any risk we modify our 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 a confirming or auxiliary rule.  Here's the complete rule:
 
North of the Blue Basic Rule with Early Sell: A stock should be bought when its price is increasing up through our Blue Moving Average (BMA) and sold (a) when its price is declining through our BMA OR (b) when its High Price Strength and Upward Price Strength drop below 85% on our green stochastic panel, whichever comes first.  
 
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 BASIC RULE.  The rule now provides more accurate (and more risky) early buying as well as early selling.  Here's the complete rule:
 
North of the Blue Basic Rule with Early Buy and Early Sell:   A stock should be bought (a) when its price is increasing up through our Blue Moving Average (BMA) OR (b) 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 it should be sold when its High Price Strength and Upward Price Strength drop below 85%. 
 
 
Another rule is based solely on the behavior of our Upward Price and High Price Strength for any given stock.  This rule, called our STOCHASTIC "W" or  POWER "W".  It is a stand alone rule that does not depend on our Basic Rule.  Here it is:
Stochastic "W" or Power "W":  A stock can be safely bought when its Upward Price Strength and High Price Strength join and form a clearly identified "W" under our 15% Stochastic or Price Strength Line. The stock can be bought before the last part of the "W" climbs over 15%.  To maximize profit the stock should be bought before the upward Price Strength line reaches 50%.
 
There is one more stand alone rule that does not depend upon our Basic Rule. As you might expect when programmers and other technocrats get together to codify their rules for technical stock analysis, at least one rule will be based on how computers are used or programmed.  Don't be disappointed because we left this until last.  The rule is our MACHINE TRADING RULE. Here is the rule in a nutshell.
 
MACHINE TRADING RULE:  A stock may be safely bought when it passes through one of our green, horizontal lines going up (Resistance Lines) OR when it rebounds up from one of these lines (Support Lines).  The Machine Trading name comes from the points at which institutional investors have their computers set to buy and sell.  If you look at how prices behave around these points you will see that these are the points that major market drivers come into play.  More on this in a later newsletter.
 
 
For an in depth analysis please click here to visit our web site. To look at the first explanation of our Channel Trading Rule, please click here.
 
 
March 9 2010

Year to date

North of the Blue gain 16.35%
Dow Jones Industrial Average gain 1.67%
S&P: gain 2.13%
NASDQ gain 2.01%
   
North of the Blue Accuracy 86%

February 2010
North of the Blue gain 15.5%
Dow Jones Industrial Average gain 2.54%
S&P: gain 3.82%
NASDQ gain 2.84%
   
North of the Blue Accuracy 79%
 

January 2010
North of the Blue gain 12.5%
Dow Jones Industrial Average loss -3.48%
S&P loss -3.83%
NASDQ loss - 3.83%
   
North of the Blue Accuracy gain 77%

Buy-Watch List March 9, 2010

 
 Symbol Company Actions
AMGN Amgen Action: B-W 3/10
Amgen bounced of a Machine Generated Support Line, climbed North of the Blue appears to be climbing over the BMA. If this continues and it looks like the price will break through the Machine Generated Resistance Line this one will meet our tests in the North of the Blue Rule and be a buy.
WEL Boots Koots Action: B-W 3/10
Boots Koots was a good buy on February 12 when it barely climbed through the BMA. Since then it has continued to climb and the BMA has produced a real trend upward. In answer to many questions about buying late, here is an example of a late buy that should work out. No guarantees but it is a good stock to look at.
PWE Pen West Energy Action: B-W 3/10
Pen West is another stock that has contiued to climb and the BMA has produced a real trend upward. Here's another answer to many questions about buying late, here is an example of a late buy that should work out. No guarantees but it is a good stock to look at.
BPL Buckeye Partners Action: B-W 3/10
Buckeye Partners is one more stock that has contiued to climb and the BMA has produced a real trend upward. Here's another answer to many questions about buying late, here is an example of a late buy that should work out. No guarantees but it is a good stock to look at. In addition, this is a good example of the Channel Rule. More on this later.

  ... buys this past week

 March 9, 2010
 

 *BMA = Blue Moving Average

Symbol Stock Actions
REASONING:  What rules were applied, why and when.
VIT VanceInfo Technologies, Inc. Action: Bought 2/26/10 at open at $19.36; stop is at 5%; HOLD 3/2 price $21.28, GAIN 9.91% in 3 trading days. HOLD
VIT climbed through our BMA* with no hesitation. Before making this jump it bounced off of a heavy Machine Generated Support Level. On February 5 VIT bounced of a very well defined Machine Generated Support Level and began to climb. At the same time it broke out of our Red Zone and began a strong climb toward 85% with both the Upward Price and High Price Strength. This has all of the signs of a winner.
WX Wuxi Pharmatech Cayman Inc Action: B-W 3/2/10 at $16.73.
WX is once again trying to climb through a Machine Generated Resistance Level. It has not done well at this in the recent past. But, this time the Upward Price and High Price Strength are growing closer together and both are climbing at the similar rates. Unfortunately, volume remains at or below average. Definitely a wait and see stock.
Current Portfolio Holdings
March 9, 2010
Symbol Company Actions
ABX
Barrick Gold Action: BW:  1/23/10; buy 3/2 at $38.99; 3/9 gain 1.5%
REASONING: Watch for rebound off of  Support Level. 3/2/10 Good rebound off support level. Stock broke through BMA; Upward Price and High Price Strength stochastics are moving up; stock has had several days of buy volume.
APOL
 Apollo Group Inc. CL A Action: BW:1/23/10 Buy 3/4 $61.10 3/9 $62.40 gain 3.12%
REASONING: Watch for rebound off of  Support Level. Still not through the BMA.
CAAS
 China Automotive Systems Action: Bought 2/16/10 at $17.00; 2/23 up 8.2%. Hold but consider a stop. 3/2 $23.90 GAIN 40.99%; keep the stop loss; 3/9 $23.60 gain 38.82%
A perfect Stochastic-W formed last week. Rryan Butcher found this one. Kudos Ryan. Well worth a buy this Tuesday. I would suggest caution since the "W" appears to be flattening out. However, buying is still very good and the price is still rising. Stochastic looks like it will continue to climb.
COHR
 Coherent, Inc. Action Buy: 2/1/10 at $29.66; 2/16 hold still well North of the Blue;2/23 hold; 3/9 32.80 gain 10.58%
REASONING: Used Basic Rule. Stock crossed the BMA* on 1/29/10.  We could have bought at that point.  However, I waited until the Upward Price and High Price Strength lines joined, left the stochastic Red Zone and climbed through the 85% line.  This could have been bought on !/30 but I decided to wait and see if the Upward and High Price Strength lines would settle above 85%.
CSCO
 Cisco Systems Action Buy: 2/1 at open $22.65; hold with stops; 2/23 sold at $24.20 gain 6.84%. This may be eligible for another buy.3/2 buy 3/2 $24.66. Gain 6.83%
REASONING: Cisco has been one of the most active stocks  on the NASDAQ Exchange over the past ten days.  It moved out of the Red Zone while forming a near perfect "W".  I say "near perfect".  It is a good sign although it could be better.  But, the High Price Strength and Upward Price Strength joined an dare now climbing in lockstep.  This stock is poised to go North of the Blue with real strength.  We are looking at a serious buy in the next day or so. Stock climbed back through the BMA and ma be in line for another buy. Cicso went back through the Blue Moving Average.
GCI
Gannett Inc. Action: BW: 31/2/10 at $15.95; 3/9 16.00 gain 3.1%
REASONING: GCI broke through our BMA* on March 1 at $15.22. If the Upward Price and High Price Strength lines join and continue to 85% this could be a winner. In fact, three are a number of very good reasons to buy now. It looks like it is resuming the trend which started in July of 2009.
GG
Goldcorp Inc New Action: BW:  1/23/10; 3/2 buy $38.65; 3/9 40.44 gain 4.62%
REASONING: Watch for rebound off of  Support Level. Price touched the BMA*.  Good rebound.  Watch to see if the Upward Price Strength and High Price Strength both point up in the next day or so. .Stock rebounds off Machine Generated Support Level and broke through the BMA on 3.2.10. Good rebound and finally a breakthrough of BMA.
GLD
SPDR Gold Trust Action: BW:  1/23/10; buy $110.15; 3/9 110.16 gain 0% hold
REASONING: Watch for rebound off of  Support Level. 3/2 good rebound off support level and finally a breakthrough of the BMA.
GOLD
 Rangold Resources Ltd. Action: BW:  1/23/10; 3/2 buy $74.50; 3/9 76.67 gain 2.91%
REASONING: Watch for rebound off of  Support Level. Price touched the BMA*.  Good rebound.  Watch to see if the Upward Price Strength and High Price Strength both point up in the next day or so. 3/2 great bounce off Machine Generate Support Level and poised to go through BMA. I know that this is early but all gold stocks and gold metal are going up.
GSIC
 GSI Commerce. Action: Bought 3/1/10 at open $25.75. 3/2 price $26.00 Gain 1% in one day. HOLD A Forbes suggestion. 3/9 hold 26.90 gain 4.46%
A perfect Stochastic-W formed last week. Ryan Butcher found this one. It looks like Ryan pulled off the "hat trick". Very nice going.
IEF
 - iShares TR; Lehman 7 - 10 year Treasury Bonds Action: Buy: 1/22/10 at $90.46; watch for break through Resistance Level. Hold 2/23
REASONING: Buy:Basic Rule with Early Buy.  Stock moved rapidly out of Stochastic Red Zone then jumped very quickly tot 50%.  Not surprising since bonds are a traditional hedge in troubled times such as we have now.  Here you get the equity gain as well as the interest  But watch to see if Strength lines continue to climb.  Upward Price Strength is lagging.  (Note:  interest is paid if you hold the bond for at least one quarter.)
INTC
 Intel CP Action:: BW: 2/7; buy 3/2 $21.00; 3.9 21.20 hold gain 1%
REASONING: Intel is beginning to show serious strength.  It broke through our Red Zone with ease and is now beginning to climb toward 50%.   We will have to wait until the Strength lines join and the price to work its way through the numerous Resistance Lines between the current price and our BMA*.  Keep this one on your radar screen.  Everything I see and read tells  me that silicon chip makers (That's what they make computer chips out of.) are very, very busy. 3/2  If you have any money left after buying the gold stocks look hard at Intel. I think it is poised to generate another trend line like the one we saw from July through November.
NEWP
 Newport CP Action: Buy at $8.67; 2/23 hold 3/9 11.41 hold gain 31.60%
REASONING: This stock has shown significant buying volume over the past week or so.  Upward Price Strength and High Price Strength have joined forces and are continuing to climb.  However, we need to see them pass the 85% marker before this becomes a serious contender. As you can see, the price line is poised to pass through our BMA*. 2/2 stock rebounded off Machine Generated Support Line; climbed through BMA*.
SHY
  iShares TR Lehman 1 - 3 Year Treasury Bonds Action: Buy: 1/22/10 at $83.52; HOLD 2/23; 3/9
REASONING: Buy:Basic Rule with Early Buy.  Stock moved rapidly out of Stochastic Red Zone then jumped very quickly past 50%.  Not surprising since bonds are a traditional hedge in troubled times such as we have now.  Here you get the equity gain as well as the interest (Note:  interest is paid if you hold the bond for at least one quarter.)
TLAB Tellabs, Inc. Action: Bought 2/16/10 at open at $6.70; 3/2 $7.16 gain 6.87%; 3/9 7.45 gain 11.19%
I bought TLAB a little late but believe I can still participate in the growth based on its well established trend line.
TLT
 iShares TR Lehman 20+ Year Treasury Bonds Action: Buy:: 1/22/10 at $91.86 hold with close stop 2/23
REASONING: Basic Rule with Early Buy.  Stock moved rapidly out of Stochastic Red Zone then jumped very quickly tot 50%.  Not surprising since bonds are a traditional hedge in troubled times such as we have now.  Here you get the equity gain as well as the interest  But watch to see if Strength lines continue to climb.  (Note:  interest is paid if you hold the bond for at least one quarter.)
VIT VanceInfo Technologies, Inc. Action: Bought 2/26/10 at open at $19.36; stop is at 5%; HOLD 3/2 price $21.28, GAIN 9.91% in 3 trading days. HOLD 3/9 23.85 hold gain 23.19%
VIT climbed through our BMA* with no hesitation. Before making this jump it bounced off of a heavy Machine Generated Support Level. On February 5 VIT bounced of a very well defined Machine Generated Support Level and began to climb. At the same time it broke out of our Red Zone and began a strong climb toward 85% with both the Upward Price and High Price Strength. This has all of the signs of a winner.
VPRT
VistaPrint NV Ord The  Netherlands
 Action BW:1/23/10; 2/26 buy $57.65; 3/2 $61 GAIN 5.81%; 3/9 62.77 gain 8.88%
REASONING: Stock failed to cross BMA; Stochastics fell off sharply. Upward Price Strength and High Price Strength are both climbing strongly and holding above 85%, I waited to see if they would hold above 85%.
 
 
The Picture of Profit Portfolios in Detail
If you want to look at our Cash in the Bank Portfolio and see the others in more detail please go to http://www.northoftheblue.com/stock_status_20100309.html or just click here.
 
Channel Charting
We are not able to introduce this rule to you.  We have tested it for several years and built an impressive number of wins.  Take a look by clicking here.