Executive Newsletter North of the Blue
America's Stock Analysis System
May 5, 2010 |
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| Greetings! |  Wednesday evening at our office is where the action is this week. You thought there was only losers in the market, lets talk about winners tonight.
Almost all of you have been watching the market this week and we are going to discuss what you have seen. Here are some of the more important pictures as viewed by us:
- Gold prices are falling as is the price of the Euro. The Euro went into free fall late last week and continued today as it hit a new low for the year on the Asian markets; What will this do to the prices of US stocks?
- The dollar continues to shine, primarily because of the risk aversion due to Greece and Portugal, but it shouldn't be overlooked that the US has posted some solid data over the past few weeks leading many investors to believe that the United States' economy is re surging.
- Take a look at the world wide calendar for this week on http://www.forex.com/economic_calendar.html. Though this mostly focuses on foreign exchange it will have significant effects on the US market.
- Why has gold been falling, more important why have metals been going in one direction while metal mining goes in the other?
- Finally, what can North of the Blue do for you in this rather dicey market? The answer is "quite a lot". Join us tonight.
Last week I pointed out to our group a serious anomaly in our stochastics and stock prices. My conclusion as expressed at that time was that stocks should either be sold or have solid stops set up to prevent loss in the coming market drop. This week I want to talk further about the market drop, how the coming fall in the Japanese market and the drop in the Euro will affect the US market. Don't miss this one. Enjoy. The best of all investing to you. Dick |
| Saving Our Gains! |
 This has been a very difficult week for investors, unless they were investors using North of the Blue. Last Wednesday I pointed out to the folks at our free evening class that we were seeing a true anomaly: prices were going up or holding their own while the Upward Price Strength and High Price Strength lines were continuing to fall. This is never a good thing as I pointed out. I suggested two alternatives: sell or set stops very close to the gain you wanted to protect.
This week we are seeing what we would expect to see: Stochastics are falling and prices are falling. Both signs to get out. What concerns me most is that these happened to nearly every equity index. Look at the KEY-INDEXES this week to see what we are talking about.
On the other side of the coin, we see bonds, e.g. AGG, going up. A good time to buy since most are hitting our North of the Blue Buy Rule.
It is interesting to note that gold stocks are falling after their brief run up.
On the other hand, ultrashort funds such as EUO are racking up huge gains. If you believe that the EURO is in serious trouble and not getting better, look at some of the short and ultrashort ETN and ETF stocks. We'll talk about these this evening.
Don't miss tonight's meeting. Not only will it be a winner but it will produce some real winners. |
| What's New! |
Watch Ryan's Monday and Thursday newsletters for the hottest stocks around. His high quality tips bring significant stock picks that you will not want to miss. Please note that there are several things that will affect the market this week. An excellent calendar can be found at: http://www.forex.com/economic_calendar.html. Don't forget your stops! When in doubt, sell, move the money into a bond fund and wait for the next round of buying opportunities. Both Ryan and I will discuss these opportunities tonight and in our webcast on Thursday. Believe it or not, there are really solid buys available, especially in such investments as the Proshares Ultra Short Euro Fund (EUO). This will lead to a discussion of how you short stocks and currency without actually going short. It is a fascinating and profitable world. 1. Please join my meeting, Thursday, May 20 at 6:30 PM Pacific Daylight
Time. https://www1.gotomeeting.com/join/9616359442. Use your microphone and speakers (VoIP) - a headset is recommended. Or, call in
using your telephone. Dial 630-869-1020 Access Code:
961-635-944 Audio PIN: Shown after joining the meeting Meeting ID:
961-635-944 GoToMeeting® Online Meetings Made EasyT |
| What Do You Want From Us? |
I am afraid that we are overloading your Spam circuits. Here is our current mailing schedule. Monday and Thursday Ryan sends out our Red Runners. On Tuesday/Wednesday I finalize our Executive Newsletter and drop it into the email. The weekend we reserve for research and analysis of stocks that have shown promise during the week. Sometimes none do; sometimes there are dozens showing promise and we have to pare the selections back heavily.
So here's our question to you: Are you getting too much information from us? Would you like fewer stock insights or more? Please let us know because you are the ones we want to please. |
| Red Runners in North of the Blue |
Our Red Runners' program continues to grow with great help from Ryan and the many subscribers who have contributed their research and analytical talents. We are trying to stay ahead of the stocks we list so that Red Runner selections really are ones that recently left a Red Zone in a stock's Power Panel. |
| Metals and Other New Sectors |
Are you looking at our "Metals" listing? How about RYANPICKS AND DICKPICKS? Have you checked on NOTB-RED-RUNNERS? Checked the INTEGRATION list recently? What about NW-STOCKS? As you can see we are diversifying. The Northwest Stocks is an attempt to bring to your attention local buying opportunities.
Did I mention Mr. Butcher Sr? Here is a man with a wealth of information of the mechanics and business practices of gold miners as well as those who buy and sell gold. I would not miss his insights for the world. With a little luck, we will be able to have him address our group again tonight. |
| North of the Blue's Vision |
Three principles set us apart from other stock analysis companies:
Support
Whether you are a paying subscriber or are using our system on a trial basis you will get world class support from your fellow Americans. American's wrote this program, support this program and help the program's users.
Stocks
Four times per week you will receive stock suggestions from us. The stocks we send out meet one or more of our buy or sell rules. That's right, we tell you when stocks meet our sell tests too.
Simple and Transparent Rules
As you all know, we have one basic rule, our North of the Blue Rule. In essence it says that a stock meets our buy test when it climbs North of (up through) our Blue Moving Average (BMA) and meets our basic sell test when it drops South of (down through) our BMA. The rest of our rules are variations on this theme. This last rule is the reason that we have so many professional people as subscribers. CPA's, lawyers and others who deal with rules in their daily lives appreciate the fact that we not only tell you that a stock meets our buy or sell test but we also tell you why. |
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Indexes Year to Date May 19, 2010| % Change Year-to-Date | Market |
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| 27.07% | North of the Blue Current Portfolio |
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| 8.46% | Nasdaq OTC Comp Index |
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| 5.63% | Amex Composite Index |
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| 6.42% | S & P 500 Index |
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| 5.57% | Dow Jones Industrials Index |
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| 5.55% | IBD New America Index |
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| 4.03% | N.Y.S.E Composite Index |
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| 11.08% | Gold Index |
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*For a detailed listing of the top stocks in each sector please go to the "List" section of our program. | The Company you May Keep: Always investigate before you invest. Always check our chart. Does your stock meet one of our Buy Rules? Is the price up more than 5% from a defined Buy-Point for the rule you are using? Over 5% may be more risky. Fundamental research includes knowing annual and current earnings and sales increases, high return on equity, better profit margins, sponsorship, market in a confirmed upturn. When either a sector or the market overall are in a downturn you need to pay particular attention to your reasons for buying. What, for instance, convinces you that a particular stock can buck a broad trend?
A company's inclusion in one of our lists should not be viewed as a recommendation. Many are newer, smaller and highly volatile companies that require further research due to their speculative nature. Companies located outside the United States bring added risks because of the influence government policies may have on the company. Detailed research on your part is imperative. | |
Buy-Watch
North of the Blue's - Red Runners
May 19, 2010
| SJF | Ultrashort Russel 1000
| Action: BW 5/19 at $47.50
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REASONING: SJF slowly emerged from the Red Zone and has built some support lines. It is slowly climbing. Plan would be to set a stop loss.
| | BP | BP PLC
| Action: BW 5/19 at $45.53
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Reasoning: BP is really oversold. Keep watching the news and progress of BP
| | SJL | Ultrashort Russel mid
| Action: BW 5/19 at $22.00 |
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| REASONING:SJF is another Inverse ETF that has come out of the Red Zone. Very low volume at this point. But it continues to gain each day. | | SRS | Ultrashort Real Estate
| Action: BW 5/19 at $28.50 |
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REASONING: SRS stochastics are together coming out of the Red Zone and NOTB with buying power. Watch what this does tonight and consider buying tomorrow with a stop loss. This meets our basic North of the Blue rule
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For more info click HERE on Proshares
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| ZSL
| Ultrashort Silver
| Action: BW 5/19 at $35.50
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| REASONING: ZSL is in the basic material sector and is falling faster the gold. The stochasicts are not together which worries me a little. We have seen some buy days but I am not sure if I am going to jump on this one quite yet. I am being very conservative at this point in time. | | SRS | Ultrashort Real Estate
| Action: BW 5/19 at $29.00 | | REASONING:SRS is one that shot out of the Red Zone with some intensity. It moved NOTB as of today IF it closes at its current price. This meets our basic NOTB buy rule. |
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Ryan's Notes Week of May 19, 2010
| Symbol | Company | Actions |
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SKF | ProShares UltraShort Financials
| Action: Buy: 5/18 $19.32
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| REASONING: Buy: I bought this stock on the open today and ended up doing very well. The stochastics have traveled through 50% and have gone North of the Blue. This is an Inverse ETF and I do have a stop loss set. Inverse ETF's have the tendency to gap up or down overnight. These are for experienced investors only. | EFZ
| Proshares Short Msci Eafe
| Action: Buy Watch
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REASONING: EFZ has been breaking through all kinds of resistance lines. Watch to see if the momentum continues.
| CHFC
| Chemical Financial Corporation | Action: Buy Watch
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Reasoning: I've been watching CHFC for many reasons but the main point is the trend of the Bue Moving Average. It had been performing perfectly until last weeks disaster on wall street. Now is has rebounded and continues to move up.
| | SMN | Ultrashort Basic Materials
| Action: BUY Watch
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REASONING: SMN has gone NOTB and has a few more resistance lines to travel through. Watch closely if gold keeps on falling this is where money is to be made. Look at the massive blue volume below.
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TYP | Direxion Tech Bear 3x
| Action: Buy
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REASONING: This stock is in the lower price range. It is backed by heavy support lines and is NOTB. The stochastics are together with a lot of buying power behind them. I will be purchasing this sometime today or tomorrow morning.
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Also check "RYANPICKS" in our program list. |
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Interest Placements for Uninvested Dollars
May 5, 2010
| Symbol | Company | Actions |
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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 |
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| 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.) | |
SHY | iShares TR Lehman 1 - 3 Year Treasury Bonds | Action: Buy: 1/22/10 at $83.52; HOLD 2/23; 3/9 |
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| 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.) |
Also check "DickPicks" in your "DicksPicks"List in our program and NOTB-BUY-WATCH list. | | |
Current Portfolio Holdings
May 5, 2010
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CSCO | Cisco Systems | Action
BW: 2/1 Buy: Buy: 2/1 at $22.65 (open)
Sold: 5/4 with stop loss at $26.75
Up: $4.10
Gain: 18.10%
Annualized Gain 78.43%. |
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| 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. Trend still good. 4/6 hold. 5/4 Sold | |
INTC | Intel CP | Action
BW: 2/7
Buy: 3/2 at $21.00
Sold: 4/28 at $23.40
Up: $2.40
Gain: 11.42%
Annualized Gain: 74.23% |
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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. Hold for very good trend. Also look at significant growth in silicon wafer sector. 4/20 hold and enjoy the ride.
4/27
REASONING: INTC has had a good run but watching the stochastics we may be using the early sell rule. We will see if INTC can bounce back to life.
4/27 Hold to watch for Early Sell Rule. 4/28 EARLY SELL HIT
| | MRVL | Marvell Technology Group | Action
Buy: 3/29 $20.16
Sold: 4/28 at $22.00
Gain: 9.13%
Annualized Gain 118.69% |
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REASONING: MRVL is ratcheting up its price every day. There are no giant leaps, but each day brings another step back and then up again. Fortunately the ups are greater than the downs and the trend line has begun to swing up. Another day or two should make this a solid buy. 4/20 Ryan says to watch this closely. We may sell soon as the stochastic's are dropping. Stop set.
4/27
REASONING: The stochastics have dropped and we are still holding. The BMA has gone flat for the moment. I believe when that yellow leaves it will show the stochastics flatten a little. Watch to sell if this is goes south of the blue.
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NEWP | Newport CP | Action
Buy: 2/2 $8.67
Sold: 4/28 $13.95. Stop loss activated. Up $5.28 Gain: 60.89%
Annualized Gain: 263.85% |
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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*. Strong upward trend, hold. 5/20 watch carefully as stochastic's are going down. We may take our large profit and call it good on the 21st.
5/5
REASONING:NEWP has done very well for us. It has a great upward trend line. NEWP fell with many other stocks on April 29th and 30th. Lucky NOTB had a stop loss in place. We are watching to see if NEWP will come back and stay North of the Blue. It could be a buy if it manages to stay there.
SOLD but on Buy Watch
| | TLAB | Tellabs, Inc. | Action:
Buy: 2/16/10 at open $6.70;
Sold: 5/4 at $9.10
Up: $2.40
Gain: 35.82%
Annualized Gain: 186.54% |
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I bought TLAB a little late but believe I can still participate in the growth based on its well established trend line. 4/6 hold as the trend line strengthens. 4/20 doing well but watch the stochastic's. May sell to protect gain on Wednesday or Thursday.
5/5
REASONING: A great sample of the new Integration Rule. The trend line is up sotchastics where above 85% (we need to see some more blue buy days to see them return above 85%) | |
| Average Gain for this Portfolio |
27.07% | |
| Average hold time for this Portfolio |
10 weeks | |
| Annualized Gain for this Portfolio |
150.76% |
| | Cash in the Bank Portfolio | |
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| Rules |
North of the Blue Stock Charts and Buy/Sell Rules
... Building-Block Strategy
... NOTB is simple, unique and driving gains out of this world
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
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 another 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.
Here is a rule we introduced in April of this year, our Integration Rule. It emphasizes the fact that North of the Blue is an integrated, cohesive system. All of the pieces must function together to provide valid buy and sell decisions.
INTEGRATION RULE: A stock may be safely bought using this rule when: (1) it is rising in value; (2) the Blue Moving Average (BMA) displays a smooth, upward trend; (3) there are no significant Resistance Lines above the stock price; (4) the Upward Price Strength and the High Price Strength are joined above 85%; (5) there is continuous buying volume and that volume is near or above 100% of our Average Volume. The stock should be sold when any of these conditions are no longer true.
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| How to Find Us |
Telephones:
General Office: (503) 233-9452
Support: (503) 446-9390
Address, meetings by appointment:
11000 SW Barbur Blvd, Ste 100
Portland, Oregon 97219
Mail:
North of the Blue
P.O. Box 569
Lake Oswego, Oregon 97034
North of the Blue is a dba owned by Custom Computer Programming, LLC. Billings for North of the Blue come from Custom Computer Programming, LLC |
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Remember to join us for a detailed view of our latest rule -- the Integration Rule, where you let someone else spend the dollars proving that the stock is a good buy and you join in to collect some cash. Almost too good to be true. But, it does not cost you a penny to find out.
Sincerely,
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Richard Brenneke
North of the Blue, America's Stock Analysis System
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