This list is a bullish watchlist, so lends itself to a bullish bias with most of these stocks.  However, there are some very reasonable bearish setups here as well.  Obviously, being in line with the broader market is where we want to be.  As always, you be the judge.

ABT forming another bull flag.  Each big surge higher has come on decreasing burst of volume as it nears its all time high from January.  Nevertheless, the trend is still in tact and this pullback has come on low volume.

(Click on images to see them grow.)

APH is volatile, to say the least.  Nevertheless, it had a major move on monster volume in mid July and after testing that opening level once it is trying it again.  This would be a somewhat aggressive entry, but it could also be a nice power-packed ascending triangle in the making.  Regardless, with a stop at 46 or so and a target of 52, you've got at least a 1 to 2 risk/reward ratio.

BUCY - Long term trend up.  Intermediate term trend down.  Short term trend up.

If and when the short term trend support line is broken, getting back in like with this nice downtrending intermediate term channel could be a nice ride down to 55 or 52.50 where the long term support line would be waiting in a couple months or maybe a touch less.

FCN is looking tired.  Either it blasts through this resistance level on huge volume for a nice buy trigger, or it's going to poop out here after one too many failed attempts at getting through there.  The crazy reaction to earnings on the 6th doesn't exactly paint the picture of cool and confident stock holders.  Either way, I'll be it'll be a wild ride down or up.

FLS is another one that looks like it could go either way wildly once this range breaks.

FSLR has put in an intermediate term lower high and formed a pretty stable and well defined sideways range on gradually lower volume.  I guess that volume theme is a bit old and perhaps not all that relevant considering the time of the year.  Swing traders might play this one back and forth between support and resistance until it breaks out up or down.  Of course, given the long term chart and the solar story, I'll be looking for an upside breakout.  But with oil possibly going lower, who knows?

MPWR is like a wild stallion.  Sure, the snapback from the recent high has been just as quick as the surge up there, but the volume doesn't seem to show people bailing with quite the panic as the conviction of the buyers bringing it up in the first place.  Nice risk/reward entry from here above 24 anyway.  First target 28-29.

NOV shows lots of potential for any number of scenarios playing out.  Whatever the course, there are a good, clean lines to use for entry/exit points.  The only thing I'll point out is that the surge the day after the earnings call and two days last week were on pretty high volume compared to most days.

OSIP may have gotten a bit ahead of itself in recent run up in July.  I spy a failed breakout in the form of a double top.  Resistance here at 50 now?  Maybe a touch early to tell.  But something to watch, for sure.

PQ - Double bottom reversal.  If oil decides to rally, this could be a nice entry to ride along with it.

PRXL is a mighty stock.  I think the weekly chart tells the story a bit better.

SOHU Symmetrical Triangle - Nice decreasing of volume as the volatility contracts

WAB - Consolidating in a clear sideways range after moving higher on some very high volume jumps.  Volume calming down as the stock has moved sideways.  Watch for a breakout or a breakdown of what could be a potentially forming double top.

Activity Report
August 21, 2008

Our expectancy so far is 73% losers, 27% winners, +11% per winners, - 9% per losers

Since we began our trading experiment out portfolio is down 18.7% while the SPX is down 13.9%
(1484.25- vs 1277.72)  We’re more behind the S&P!

Current Group $SPX Posture:
NEUTRAL but intermediate green line on market forecast is out of the lower reversal zone.

Market forecast – Intermediate line is out of the upper reversal zone at 69.83 and headed down.  The momentum and the intermediate lines are headed up and between 40 and 50…  they may make lower lows which is a bearish divergence but we’ll see. The sentiment line is flattened out, imperceptibly rising.

MACD is turned up a bit but not stochastics. S&P is kinda going sideways, sitting on top of the 30 day.

Portfolio $ Change Today  -$773

Portfolio Today $40,663 -- minus 18.7% from $50,000 – this is depressing.

Current Positions, Cost Basis, and Stops:
230 FLIR @ 37.45, stop loss 35.89
141 CMED @ 46.05, stop loss 40.08
365 PRXL @ 28.13, stop loss 25.69
187 ABT @ 58.71, stop loss 53.99
111 FCN @ 74.05, stop loss 65.79
133 shares WAB @ 58.01, stop loss 51.56

Buy Orders Filled Today:
none
Stops Moved:
FLIR to 35.89

Stops Triggered – Closed Positions:
none

New Buy Orders Placed with Stop Loss:
none

Existing Unfilled Buy Orders:
none

Expired Buy Orders:
none

Notes/Comments:
FLIR broke some support and produced 3 reds – moving stop.

CMED went down more and JUST missed the stop by .04.

PRXL gapped up on earnings and has pulled back into a flag or pennant – it is holding above S2.

ABT went down and bounced off the 30 day.

FCN is consolidating sideways.

WAB spiked way down then came up to close above the 30 day.

SOHU made 3 greens today but it is sideways and didn’t have 150% volume spike.

NOV made 3 greens but we can’t enter because it is down trending.  It would probably be a Dave Johnson C pattern long entry.  BUCY was also probably a C pattern long entry yesterday.  But our rules don’t allow these types of entries.

Our expectancy so far is 71% losers, 29% winners, +10% per winners, - 9% per losers

Since we began our trading experiment out portfolio is down 17.1% while the SPX is down 14.1%
(1484.25- vs 1274.54)  We’re behind the S&P!

Current Group $SPX Posture:
NEUTRAL but intermediate green line on market forecast is out of the lower reversal zone and has gotten into the upper reversal zone.

Market forecast – Intermediate line is out of the upper reversal zone at 72.53 and headed down.  The momentum and the intermediate lines are coming out of the lower reversal zone. The sentiment line is flattened out, imperceptibly rising.

MACD and stochastics are heading down.  There are 2 red arrows but not one on the 30 day moving average. We have made a lower high and a lower low and broken the uptrend line ie the rising wedge is broken.

Portfolio $ Change Today  -$187

Portfolio Today $41,436 -- minus 17.1% from $50,000

Current Positions, Cost Basis, and Stops:
230 FLIR @ 37.45, stop loss 34.99
141 CMED @ 46.05, stop loss 40.08
365 PRXL @ 28.13, stop loss 25.69
187 ABT @ 58.71, stop loss 53.99
111 FCN @ 74.05, stop loss 65.79
133 shares WAB @ 58.01, stop loss 51.56

Buy Orders Filled Today:
none
Stops Moved:
none

Stops Triggered – Closed Positions:
none

New Buy Orders Placed with Stop Loss:
none

Existing Unfilled Buy Orders:
none

Expired Buy Orders:
none

Notes/Comments:
FLIR is going sideways.

CMED went down a bit more.

PRXL gapped up on earnings and has pulled back into a flag or pennant – it is holding above S2.

ABT went down and bounced off the 30 day.

FCN is consolidating sideways.

WAB is going sideways.

SOHU made 3 greens today but it is sideways and didn’t have 150% volume spike.

FSLR made 3 greens today but it is sideways and didn’t have 150% volume spike.

BUCY made 3 greens today but it is down trending.

NOV close to making 3 greens

The potential effect of Proposition 8 on existing same-sex marriages is already being debated among legal scholars and opposing sides in the Nov. 4 ballot measure campaign. Brown's position is significant because his office will represent the state in lawsuits over Prop. 8's validity and meaning if it passes.

The measure would amend the state Constitution to declare that "only marriage between a man and a woman is valid or recognized in California." It would overturn the court's ruling that the previous ban on same-sex marriage - established by statutes rather than a constitutional amendment - discriminated on the basis of sexual orientation and violated the right to marry one's chosen partner.

The measure does not state explicitly that it would nullify same-sex marriages performed before Nov. 4. But in their ballot arguments, supporters of Prop. 8 declare it would invalidate all such marriages "regardless of when or where performed" - an interpretation that would apply to existing as well as future marriages.

Courts that interpret ballot measures sometimes refer to such statements as evidence of what the voters knew and intended.

Brown's office said in a court filing Monday that he believes the ballot measure would not invalidate existing marriages.

"I believe that marriages that have been entered into subsequent to the (May 15) Supreme Court opinion will be recognized by the California Supreme Court," Brown told The Chronicle. Noting that Prop. 8 is silent about retroactivity, he said, "I would think the court, in looking at the underlying equities, would most probably conclude that upholding the marriages performed in that interval (before the election) would be a just result."

Brown's legal filing was among a flurry of competing arguments submitted Monday to a Sacramento County Superior Court judge, who is scheduled to hold a hearing Thursday on challenges to the ballot materials that will be sent to California's 16 million registered voters.

One issue is Brown's title for Prop. 8, which declares that the measure "eliminates the right of same-sex couples to marry." The Yes on 8 campaign said in a lawsuit last week that the title was "inherently argumentative and highly likely to create prejudice" against the measure. The campaign asked the judge to order a different title, such as "Limit on Marriage," which was used during signature-gathering before the court ruling.

Brown defended his ballot language as neutral and accurate Monday, while opponents of Prop. 8 pressed their challenge to a section of the Yes on 8 argument. That argument declares that teachers will be required to tell students as early as kindergarten that "gay marriage is OK" unless the ballot measure passes, a claim that the No on 8 campaign calls baseless.

In another development Monday, the California Catholic Conference, representing Catholic bishops, endorsed Prop. 8, declaring that "same-sex unions are not the same as opposite-sex unions" and that only a relationship that can produce children should be called marriage.

"Mike, did you sleep here last night?" Jerry asked as he strolled up to Mike's desk.

"I tried, but didn't get much sleep," he replied, his eyes burning.

Jerry furrowed his brow. "Mike that's not a good thing..."

"What isn't?"

"Hanging around here all night."

"Yeah," Mike dismissed the junior detective quickly with a half-hearted wave. "Know what I think is weird? Melissa Anson didn't attend a parochial school."

Jerry saw that the discussion about Mike's late nights was now over. "So?"

"Why was she wearing the Catholic school get-up?" Mike asked.

Jerry shrugged.

"I think there's some connection between the location and what she was wearing."

"What, like some whacko dressing up his victims before he rapes and strangles 'em?"

"Maybe."

"I don't know Mike. Why would the guy leave these clothes on her? That's all possible evidence."

"So's DNA. But..." Mike stared into space for moment then glanced back at Jerry. "Do you think the clothes were hers."

Eyebrows raised, Jerry shot back. "What's 'at mean, Mike?"

"She's done this before..."

"Oh, come on. A thirteen-year-old whore playing what... to the pedophile crowd?" Mike stared at Jerry unblinking. "Go home, Joseph and get some rest. You're raving." Jerry swung his head from side to side as he spoke sarcastically.

"Odds are against it Jerry, but it makes more sense than anything else we've seen." There was a long pause before Jerry put his thumb to his upper lip to ponder Mike's idea.

"I gotta check out the school." Jerry blurted out, at last.

Mike stood and swung his coat on.

"I need to visit the Anson house. I'll bring a couple lab guys with me."

"Bring a computer nerd," Jerry added with a slow nod. "Every kid's got a computer now."

"Yeah." Mike was already dialing the phone.

There would be no investigation at the Anson residence that day. The dead girl's mother, Lydia, explained that family and friends had descended on the Anson's to offer condolences and renew familial bonds. The moment he heard her words Mike felt foolish. He should have realized there would have been a gathering at the Anson's. The emotional detachment he had cultivated to protect himself was creating a schism between himself and humanity and it reared up like a venomous snake during their conversation, catching Mike off guard.

The following day was a Saturday but Mike was able to find two lab technicians willing to come for a thorough search of the girl's room. Mike asked the mother to keep guests out of the girl's room until the police could complete an investigation. Even with his emotional shields in place Mike felt callus asking for Lydia Anson's cooperation on this point.

*****

Early that next morning Mike stood in the doorway of his old house waiting for his daughter. When the door swung wide Mike's ex-wife did not speak to him, but instead yelled over her shoulder to their only child and plodded away from the open door.

Their life together had been filled with inside jokes and stolen glances. Separated in a crowded room they were still together, casting smiles and secret signals between each other while they pretended to be interested in someone else's conversation. This shared intensity made his separation from her more difficult.

His favorite family photograph, the one that sat propped up on the edge of his desk, was one a friend took at a beach outing. Mike was lying on a blanket with Prudence, then only two years old, on his chest and Cynthia nestled into the hollow of his shoulder. The entire family was deep in slumber on a warm sunny day. He never even knew the photo was taken until his friend offered him an enlargement. To Mike, that was the defining moment in their marriage. But the pressures of being married to a policeman had pushed Cynthia too far.

Prudence brushed passed him, in a hurry, towards his car.

"Hi daddy, where we goin' today?" She asked in rush.

Mike sighed and trotted to catch up as she leaped through the passenger's side door .

Sliding into the driver's seat Mike struggled for the words to express his regrets.

"Actually, I can't take you anywhere, today." Mike twisted the rubbery coating of the steering wheel in his grasp. He hated hearing those words as much as he hated saying them.

His young daughter leaned forward, her face turned towards him. "Last weekend, you didn't want me to leave..."

"I know, I know. I've got a new case that's got me working overtime and..." Mike let his words drift off while he continued to stare straight ahead.

There was a long silence before Prudence spoke.

"The other day I asked mom if she loved you."

Mike felt his eyes clamp shut before he could catch himself. His chest fell heavily before he opened his eyes again to stare through the windshield.

"She said when you guys were first together her heart would jump when she saw you."

Mike swallowed and licked his lips slowly while his daughter continued.

"And she said she knew you loved her... but you loved bein' a cop more and she wouldn't take second place to anyone or anything."

"Yeah, it was pretty tough on her." Mike whispered.

"What was?"

Turning, at last, Mike smiled weakly at the girl. "Me, being a cop."

"No... she said it was you 'being a good cop'… that was tough."

Mike opened his mouth to speak but no words came out and he turned his gaze towards the emblem at the center of steering wheel in hopes of some comforting sign. He found none. Prudence went on.

"She said to be a good cop you had to give up everything else. Does that include me?"

"No, honey," Mike spun back towards his daughter throwing an arm around her pulling her close. The sniffles he heard from his daughter tore at him. "No, Prudence. Never." Mike squeezed her tighter. "It's just this case is really bad and I have to take care of it, myself."

Wresting him to arm's length Prudence let Mike know she was not about to take second place to his career, either. He let go of her and she wiped her eyes quickly on the heel of palm. The car door flew open and before he could say another word and his daughter was out of the car sprinting back towards the house.

The front door opened as Prudence approached signaling Mike that his ex-wife had been watching from inside as father and daughter sat together. He cursed under his breath. It wasn't fair, he thought staring out the windshield again.

With the sound of the front slamming shut Mike started the car, threw it into gear and headed to the Anson house where he had arranged to meet with the forensic tech and a computer geek from the state police.

Mike delighted in leaving saucy notes throughout their home in places where he knew Cynthia would stumble across them at some future time. While on an evening patrol Mike swung by his house to surprise Cynthia, only to find her huddled in the dark kitchen crying. An "I love you" doodle left in between two dinner plates had set her into a teary jag. He remembered it clearly: trying to get back to the patrol car with his partner impatiently waiting inside, and Cynthia weeping as she clung to his sleeve. Between sobs she told him of her fear that she might find one of his notes after something bad had happened to him and the pain that carried with it. Their life together would never again be like it was in the photograph that sunny afternoon on the beach.

*****

The Anson house looked like all the others in their middle class neighborhood. All; two story row houses, well kept with immaculate dark green lawns the size of postage stamps. The middle class loves their lawns, Mike thought as he stepped out of the car and pulled his suit coat on. "Probably more than their kids," he muttered under his breath.

The door bell was answered almost as soon as his finger rebounded from the button. Someone had been expecting him. Lydia Anson pulled the door open. A quick nod and then Mike squeazed past her noticing, as he did, that her eyes were a burnt red probably from many tear-filled hours. He assumed she wasn't cried out yet.

"Please, sit down," she offered with a sweeping open palm.

Mike wandered into the living room. It was bright and simple, without the accumulated clutter associated with an older couple. Mike could tell the approximate age of a couple by the amount clutter in a living room. As a couple grew together more items brought on some "magical" memory, a moment to be remembered with a simple memento. Mike's apartment contained nothing that could evoke memories save some leftovers in the refrigerator, left in a "to-go" bag, now sporting blue smudges of mold on the outside. He found it better not have reminders in his apartment of what he hoped would be the rest of his life.

"Can I get you something? Coffee?" Lydia dabbed at her nose with a tissue.

Mike forced a smile and shook his head.

Lydia fell into a chair across from Mike. "Okay," she started with a heavy sigh. "Where do you wanna start?"

Flipping open his notebook, Mike forced himself to look away from the woman's features. She was attractive, he realized. A petite woman, Lydia had delicate features and striking blond hair. A nervousness set loose several butterflies in Mike's stomach.

Concentrate, Mike he told himself. Married. She's married. And she's vulnerable. Get your head back into the game. The tickling sensation in his gut was banished to that place where Mike sent all his feelings. A place, he feared, that was becoming quite crowded.

"Misses Ans..." Mike caught himself. "I'm sorry, Lydia, right?" The woman nodded. "Let's start with the morning, day before yesterday, when you called the police."

"Um, we sat down for breakfast... myself and my husband Warren, and he asked me where Melissa was. I told him I thought she went to a friend's house after church. She does that sometimes. When I turned on the TV and saw the pictures..." The woman sucked her lips into her mouth to hold back her tears. She cleared her throat and continued in a wavering tone.

"Something hit me and I just felt panicky. Warren told me to call the police... just so I'd feel better. But..." Now the woman screwed her eyes shut sending tears streaming down her cheeks dragging a tiny rivulet of mascara in its wake. "I'm sorry," she whined turning her head away from Mike.

Mike sat silently listening to the weeping of a mother who had lost her only child. No psychology text books or classroom exercises could prepare a public servant for the grief that came attached to the profession. He wanted to reach out to her, to touch her shoulder, and give her warmth or some wizened words that she could cling to in her despair. He couldn't. He was like the doctor who needed to maintain a distance if he was to be effective as an investigator. That protocol cut him like a cold blade some days.

Instead Mike sat, reserved, searching the room for photographs or something that made a visable connection to the couple's dead child. No pictures were on the walls and Mike thought maybe there was some gallery in a hallway or another room. Someplace where the couple could chronicle their daughter's journey from childhood into adulthood, a journey that would never be completed.

Not being able to protect Mike while he carried on as a policeman, Cynthia became obsessive about their child. It became so frenzied that Mike requested the Police Department Psychiatrist intervene. The psychiatrist told the couple that Cynthia was over-compensating for her fears about Mike's safety and suggested Mike look into duty that was less dangerous. That same week Mike took the Detective's examination. His first attempt had been a trial run. The test was brand new—consolidating several different enforcement agencies' examinations, each adding questions—and the score needed for Mike to make the promotion list his first time eligible would have had to be near perfect.

New to it, Mike did enjoy the adrenaline rush he felt walking up to a car in the middle of the night, not knowing who or what waited inside. But he began to feel selfish. He was a cop but  also a father and a husband and he truly wanted to be good at all three.

Neither time nor repetition could inure a good cop to the pain that spilt over to touch even the hardest hearts. Mike blinked his eyes purposefully a couple of times to refocus on the questions he needed to ask in order to move forward with his investigation.

"I am so sorry..." Mike spoke haltingly, leaving his mouth open to continue but after a moment he could only sigh and snap his jaw shut.

Nodding her head, Lydia dabbed at her bloodshot eyes until the woman, at last, was able to swallow, take a deep breath, and continue.

"Normally Warren would've been on the road that night but one of his customers came to town. They went to dinner and he got home about 9:30 and went to bed about ten. I was right behind him. I never even thought to check..." Her voice rose up an octave. When she turned her head away, Mike began filling in his "physical characteristics" information. He scribbled a bit and then glanced back towards the woman.

Looking back to his pad again, Mike was surprised by the words he had written on the page. It seemed to him as though his fingers had scribbled her description without his control.

It started with the usual information: "5' 5" 110 lbs, blond, green..." Then as an addendum he noticed the words, "Pretty, button nose, petite."

Mike took a deep breath and let it out slowly before he turned his pencil over to rub out these last observations. Inside Mike was feeling like some idiotic love-struck teen. The last few months had been difficult for Mike; with his divorce becoming final and his feeling that he had lost his moorings to the "real" world.

Cynthia accused Mike of deliberately failing the exam so he could stay on patrol duty. Regardless of his true reasons, his wife was becoming manic by now. By the time he took the exam again it was too late. Cynthia was more detached from reality and was on a daily regimen of medication. In spite of this, Mike had now immersed himself in his new duties.

After a time Cynthia recovered, but their marriage did not. Half a year away from the daily stress of being a cop's wife and she was okay. Six months apart—calling it a trial separation—and six months together. Both stuck to their agreement, but it didn't take long for both of them to see going back to their old life was not an option. Living together again they both saw how far apart they had become.

Their marriage slipped farther away as Cynthia's composure returned. No more fits when someone cut her off on the freeway or tantrums in restaurants. Her life was coming back to normal: except she was no longer the wife of a cop. She professed her love for Mike on many occasions since their first split, crying to him, "I'm just not that keen on excitement."

Just as he began to erase the inappropriate descriptors he stopped himself, deciding against it. He knew enough about psychology and himself that leaving these words in place might work as a reminder that he needed to keep some detachment from anything in this case that might cloud his judgment. Now Mike circled the words repeatedly as he waited for the bereaved mother to gather herself and continue with the interview.

Muscling his "official" persona back to the surface, Mike pressed the woman to speak.

"Misses..." Mike stopped dead. The word "Lydia," underlined, his internal code for preferred title, danced above the page in front of his eyes. "Lydia?" he continued.

She sniffed and cleared her throat before she turned back to face Mike again. "I'm okay, now." Tears still tumbled down her cheeks but Mike saw the woman set her jaw, ready to soldier on.

"This is the hardest aspect of this job." A genuine feeling of empathy swept over him causing him to sit forward hoping to offer the woman some sign of comfort.

She pursed her lips and nodded quickly. "S'okay."

The ring of the door bell interrupted them.

The woman let the two lab techs in and led them to the girl's room. Mike nodded to them as they passed through the living room but remained seated waiting to finish his questioning of the dead girl's mother.

When she returned she sat diffidently across from Mike, her hands folded neatly in her lap.

Opening his mouth to speak Mike stopped and then furrowed his brow. "Where's your husband, today?"

"Oh, he'll be back in a little while. He had to go to the office for a couple of minutes... and send out some memos to let everybody know he would be out for a couple of weeks." She answered with a dismissive wave.

"He couldn't do that... over the phone?"

Lydia sighed heavily. "He... he needed some time. Some time... away from me, I think. Things... have been a little rough lately," she finished in rush.

"You mean, in your marriage?"

"Yeah. I'm sorry I... gushed all over you at the hospital. I just needed a confessor and you bore the brunt of it." A trace of a chuckle tried to shine through her statement.

“Do you know the names of the people... uh, where she would spend the night after church?" Mike continued with his questions.

Lydia, sighed and nodded. Rising quickly she retreated to the kitchen returning with a small address book. Flipping it open she read off several names which Mike scribbled down in order to interview each.

"I wanted to ask you more about Melissa's trips with her father," Mike started. He paused for a long moment. "I visited my daughter today and... she wasn't happy about um... I couldn't stay."

Her lips pursed in a tight smile, Lydia nodded quickly. "That was one of the reasons we wanted Lydia to travel with, uh Warren. So there wouldn't be any... um... missed weekends or brief visits."

"Did she seem affected after any of these business trips?"

"What do you mean?"

Mike paused. "Did she seem unhappy or disturbed after any of these trips?" The ice was thin where Mike was pushing this line of questions and he knew he needed more than a modicum of tact when approaching a grieving mother about a possible sexual liaison between her husband and her daughter.

The woman glared at Mike and it made him uncomfortable but he could not leave this question unanswered.

"No." She snapped.

Mike turned his eyes back to his notebook to avoid her burning gaze. A sticky silence separated the two for a moment. He needed to continue his query but the woman's fiery stare burned his face and he found himself feeling uneasy.

"Um..." He started in an unsteady voice, but was interrupted by a call from the girl's bedroom.

“Hey, Mike," one of the men beckoned.

"Excuse me, Lydia." Mike shot out of his chair and hurried out of her sharpened stare.

The man held up a scarf-wrapped bundle. Flipping back the gaily flowered silk the held out the bundle for Mike to see. It was a neat stack of bills, a portrait of Benjamin Franklin sitting atop the pile.

"Holy shit," Mike muttered under his breath.

A thumb fanned along the corner of the stack revealing that all the bills were all one hundreds.

"How much, ya think?"

The man shrugged before he answered. "Maybe five k or more," he pronounced as he handed the stack over to Mike.

"Where was it?"

"In a pair of boots... Booty... ha, ha," The other man seated at the computer chuckled slightly. Mike felt the muscles in his jaw tighten.

"Knock it off, you two," Mike growled before he glanced over his shoulder towards the living room where he had left the dead girl's mother.

"Mike, I think this girl was hookin'," offered the man seated in front of the computer.

"Why?" Mike snapped.

"I found some pictures and something that looked like an ad for a..." The man shook his head. "Here, I'll read it. 'Catholic girl needs a ride home from school. Your car is warm and dry. 13 year-old girl looking for daddy with benefits. Front door safe. Lolita 69 at..."

"Stop it." Mike help up his open palm. Hearing those words twisted Mike's gut in knot. He sighed heavily and pinched the bridge of his nose between his thumb and index finger.

"There's also some pictures." The man at computer went on softly.

"Of what?" Mike asked in a sad tone.

"Looks like other girls who might've been doing... the same thing." The man clicked the mouse twice and an image appeared on the screen that made Mike cringe.

Mike stared at the electronic image labeled simply "Renee.jpg" for a long time. The diminutive girl in the photo couldn't have been more than fifteen years old with a mere wisp of pubic hair between her thin legs. She had a beguiling smile that begged for acceptance, reassurance, or possibly some show of kindness. There was a willingness in that face to do anything to please.

"Renee" had her tee-shirt hiked-up to her arm pits displaying to the world all her secrets. On the bunched shirt were the words: "Daddy's girl!"

"There's more of 'em in here," the man stated flatly

In a buried folder, labeled "them," on the dead girl's computer, images were found of young girls, all near Melissa's age and all in various states of undress. The faces of these young girls made Mike's chest feel as though a great weight were pressing down on him robbing him of breath.

Mike looked from the stack of one-hundred-dollar bills and back to the screen.

"I don't fucking believe this," he moaned shaking his head. The man seated in front of the computer turned to stare out the window while the other man let his gaze fall to the floor. Both the lab men knew Mike well enough to recognize the flame of anger in the chief detective's face. Anyone spotting that look knew better than to treat the situation lightly. Mike's reputation as a good cop was second to his reputation as a man who took the life and, sometimes, death struggles a cop deals with everyday, as serious business.

Mike squeezed his eyes shut and twisted the stack of bills in his grasp. Anger consumed the chief detective. This little girl died because she was willing to sell herself to a murderous pederast who could give her enough money to overlook the degradation, danger, and humiliation that rode shotgun with every female who bartered sexual favors.

"Mike. Mike!" A voice brought him back quickly. He snapped open his eyes.

The man seated at the computer pointed at Mike's hand, still clutching the wad of one-hundred-dollar bills. Mike's trembling hand had crushed the neat stack of bills in his rage.

"That's evidence, Mike." The man whispered.

A wave of embarrassment hit Mike when he realized the two men were watching him vent his internal rage. A rage against so many things. A rage against so many people. A rage at his impotence in the face of those same things and people.

"Sorry," Mike offered up meekly before he handed the money back to the man.

Spinning away to face the wall, Mike flipped open his cell phone hit a speed dial number.

The first was Biovail (BVF), which I profiled some time back. The company was a producer of generics and, also, a creator of novel therapeutics -- bought at the same time as purchases of Forest Labs (FRX), Barr (BRL), and Teva (TEVA). The thesis of purchase, beyond it being undervalued, was that healthcare inflation would continue the institutional payors' preference for generics. The company, however, has suffered more than its share of difficulties, including law suits and a proxy battle with the founder, which, due to a court ruling this week, will continue for at least another round. During this time, current management made the decision to devote most of the firm's R&D efforts to researching novel therapeutics (a flipping of strategic focus). While the company may succeed in the long run, and I certainly hope it does, it strikes me as a wandering and dysfunctional enterprise, and, with regret, I sold today at a significant loss (around 30 percent).

A 30 percent loss, by the way, does not bother me, but I must be sold on the company, the quality of management, and the story behind the stock and its future. In fact, Barr lost 30 percent during my ownership of the shares, and, convinced of the company and its prospects, I bought on the way down -- prompting my wife to question my sanity. Today, rumors of a purchase of Barr by Teva for the equivalent of $70+ dollars per share gave the stock a one-day boost of more than 20 percent (to $57.17). Concerned about the prospects for Biovail, I elected against buying during the painful decline. The paper gain on BRL easily exceeds the realized loss on BVF by a factor of 3. The truth of the matter, however, is that I should have sold BVF as soon as management outlined the change in strategic focus, and, more importantly, this is a lesson I should not need to learn today -- I teach it to my management students.

[BVF Note: I should mention that my initial profile preceded the change in strategic focus by management. This prompted me to pull the profile and to republish it with a description of the change. I have held the stock the entire time.]

Next, is National Oilwell Varco (NOV). I inherited the shares when NOV purchased Grant Prideco, in a stock and cash transaction. Grant Prideco was an excellent company, with sound fundamentals and a cheap stock price. I purchased Grant at a 10 percent discount to its price on the day of the announcement, and NOV paid a further 15 percent premium. I held on to the Grant stock until completion of the merger because I did not like the pre-take-over discount (compared to the time remaining -- in what became an arbitrage decision). NOV, however, was overvalued and not as well managed as Grant, but, due to the virtues of size and relative profitability, NOV was the acquiring firm. I would have sold NOV after the merger settled, but NOV's stock was climbing with the oil boom, and I chose to let it run. The price grew by around 15 percent over a couple months and declined in the last several days, before I sold for a 10 percent grain (more than 20 percent on an annualized basis).

With BVF, I had a hard time because it was the ugly puppy that need someone to love it. With NOV, it was the product of a shot-gun wedding, and the divorce was easy. The third of today's sells fell between the two.

Gardner Denver, which produces supplies for the oil and natural gas industry screamed "Buy Me" on December 3rd of last year. It was wildly undervalued at $33 (by something on the order of 80 percent by my DCF model). This was before the pundits began raving about oil. So, I bought OXY, OSG, and GDI at around the same time and for the same reasons (i.e., valuation). I have since sold OXY for a nice profit (could not tolerate the CEO's salary), and OSG is has meandered to an 11 percent gain (and is still a holding in my portfolio). GDI, on the other hand, climbed to a gain of 60+ percent, before dropping marginally in advance of today's sell.

I did not sell in order to take profits, however. I did so because the company is investing in growth. Now, this may seem nothing less than stupid, but Weighted Average Cost of Capital (12.32 percent) exceeds Cash Return on Invested Capital (8.4 percent), CROIC is just 7.2 percent (weak if the economy is suspect), and Replication Value has exceed Earnings Power Value every year for the past decade. Is all that money spent on growth benefiting the stockholders by increasing the company's value? If it were, the numbers should be different.

I realize that this week's posting is shorter than most, and there are not any graphics to display. There is a reason for this, and, blessedly, it has nothing to do with computer problems. I am preparing to speak at a conference in Charleston, SC next week (meeting with senior leaders with the Veterans Administration and the Centers for Medicare and Medicaid services). This blog will, therefore, be up but minus a posting from me until the weekend after next. I do want to cover two items related to investing before closing, however.

First, in a recent posting, I mentioned a phone conversation with a Wall Street equities analyst. At the time, he indicated concern over the market's health, and this prompted me shift half my holdings into cash. Actually, it was not just his comments that prompted that decision, but, rather, my own concerns on this front, largely drawn from an assortment of recent articles coming out of Europe. All of this was before the testimony before congress this week by Treasury Secretary Paulson and Federal Reserve Chairman Bernanke. Last night, I spoke with my friend again, and he remains persuaded that, despite the government's intervention with Freddie and Fanny, IndyMac, and the SEC going after naked short sellers, the problems that plagued the markets last week are worse than reported and that we are not yet half way through the problems related to sub-prime, the liquidity crisis, etc. This prompted me to review all of my stock holdings today, and it led to the three selling decisions just described. Those sells were prompted by company fundamentals, however, not rumors or market gyrations. For example, the commodities have taken a hit over other last several days, but I am still holding on to FCX and PCU. The market can go away for the next decade, and I would be happy to own both -- even though FCX's management needs to grow up and stop playing Napoleon.

Second, Gerry recently posted a question following an earlier entry, indicating that he purchased UNH largely based on my defense of the company. While nearly all of my holdings have an 18-month to three-year holding target, UNH is, as indicated, a play on the tectonic shifts related to healthcare and US demographics. The boomers do not start retiring until 2010-2011, after all. UNH, however, is a value today, while it may not be in a year. Because it is so strongly related to healthcare and all the politics that surround it, the stock is likely to be volatile. Consequently, I view UNH as a long-term holding, with "long term" defined in the same way as swans view monogamy -- they mate for life, you know. While I will sell if confronting evidence of infidelity, I have been renewing my vows as the market's love for the stock abates.

In fact, it wasn't long ago that JNJ was being trashed as a has-been -- a sentiment that went away this week with their earnings report. Does this mean that the market gets things wrong? No. Today it is right. Last month it was merely mistaken. And their is no accounting for its ignorance during distant events -- the dot.com euphoria, the S&L crisis, the Nifty Fifty, the run-up of the 1920s, or that inexplicable love of tulips we have heard so much about. But, "wrong" today? ... never ... until, of course, today becomes that distant memory, when others got caught up in the mania but we were conveniently off darning our socks or washing the car.

cool eh!!!!!

Autor: José Saramago

Resumen: Durante las elecciones municipales de una ciudad sin nombre, la mayoría de sus habitantes decide individualmente ejercer su derecho al voto de una manera inesperada.

El gobierno teme que ese gesto revolucionario, capaz de socavar los cimientos de una democracia degenerada, sea producto de una conjura anarquista internacional o de grupos extremistas desconocidos.

Las cloacas del poder se ponen en marcha: los culpables tienen que ser eliminados. Y si no se hallan, se inventan.

Con esta obra, Saramago, un escritor que se ha convertido en la conciencia lúcida de una época cegada por los mecanismos del poder, lanza una llamada de alerta: "Puede suceder que un día tengamos que preguntarnos Quién ha firmado esto por mí". Ese día puede ser hoy.

लड़ते हो ख़ुदाओं के मज़हबों की नाम पर
ना जाने कौन सी ये इबादत का रंग है

अब नहीं ड़रता मै के अंजाम क्या होगा
हर शय में आजकल क़यामत का रंग है

बच्चों की बात में भी वो मासूमियत कहाँ
उन पे भी चढ़ा अब तो नफ़ासत का रंग है

क्यों सोचते हो मुल्क़ के हालात के बारे
तुम्हारी ही चुनी हुई सियासत का रंग है

पहले मै था कैसा और अब क्या हो गया
खुद से करी थी जो उस बगावत का रंग है

रोहित जैन
12/11/2006

मुफ़लिसी हर आँख में किसी ना किसी शय की
अपनी तरह से हर कोई मोहताज जुदा है

मूर्ती भी सजी है मय्यत भी ज़ुल्फ़ भी
फूलों का रंग एक है परवाज़ जुदा है

थे हाथ कभी जोड़ते अब सर पे चढ़े हैं
है शख़्स तो वो ही बस आवाज़ जुदा है

खुशी में भी आते हैं और ग़म में भी यारों
हैं अश्क़ सब की आँख में आग़ाज़ जुदा है

रोहित जैन
12/11/2006

ETF/CEF:

• EWC - Canada iShares
• IGE - Natural Resources iShares S&P/GSCI Index Fund
• IYE - Energy iShares
• OIH - Oil Services Holders
• PXJ - PowerShares Dynamic Oil & Gas Services Portfolio
• SLX - Market Vectors Steel
• XLE - Energy Select Sector SPDR

A word of caution...some of these ETFs are thinly traded.  I didn't cull them out so we can see the themes.  And that theme is definitely oil, natural resources and energy.  Is the future still bright for these sectors?  Only time will tell.

STOCKS:

• ATAC - Aftermarket Technology Corp.
• BKR - Michael Baker Corp.
• BWA - BorgWarner, Inc.
• GIB - CGI Group, Inc.
• GIL - Gildan Activewear, Inc.
• HPQ - Hewlett-Packard Co.
• IMO - Imperial Oil Ltd.
• KOP - Koppers Holdings Inc.
• LXU - LSB Industries
• MEA - Metalico Inc.
• MT - ArcelorMittal SA
• MTW - Manitowoc Co, Inc.
• NOV - National Oilwell Varco, Inc.
• SA - Seabridge Gold, Inc.
• SJR - Shaw Communications, Inc.
• SYNO - Synovis Life Technologies, Inc.

Quite a nice array of stocks with several in the energy/resources sectors.  A sub-theme is steel, from scrap steel processing to fabrication.  I looked at the steel ETF which is SLX - Market Vectors Steel and I found it wasn't picked by RSI because it didn't quite make the grade, it missed it by a small bit, so I fudged and added it to the ETF/CEF list....I can do that.  Don't look at the guy behind the curtain!  All these stocks have had great gains for the year and almost all have put in 50%+ performance.  I owned Seabridge Gold and it hit its stop in August for a double. Not too shabby. 

I'll present the falling knife picks this weekend.  Sorry for the delay.  Have a good weekend.  We have a snowy night here and I have to cut some firewood tomorrow.

December 8, 2007

This report will primarily focus on the options for type 2 diabetes treatment, the market and highlight a gem that has been mostly overlooked by Wall Street – Generex Biotechnology (NASDAQ: GNBT).

DIABETES TREATMENTS, THE MARKET AND THE PLAYERS

GlaxoSmithKline saw a 38 percent drop in Avandia (Rosiglitazone) sales during the third quarter as a result of increased concerns over a risk of heart failure. Actos, is a drug in the same class as Avandia, that is sold by Deerfield-based Takeda Pharmaceuticals North America Inc., the U.S. unit of Japan's largest drugmaker, Takeda Pharmaceutical Co. of Osaka. Avandia, Actos and other diabetes drugs have been under increased scrutiny and were the subject of a Food and Drug Administration advisory panel hearing July, 2007. Notably, Dr. Rosen (Panel Chair) called ^{for approval of antidiabetic drugs based on long-term clinical outcomes, not on the surrogate of glycated hemoglobin, a measure of glycemic control. Per the New England Journal of Medicine, Dr. Rosen suggested "… that approval should require evidence that cardiovascular events, a major long-term complication of diabetes mellitus, are reduced. This change could have major implications for the availability of treatments for type 2 diabetes." We expect that this will delay the availability of new drugs for the treatment of diabetes and might make development of new drugs impossible. Per a study published in the Cochrane Database, "We didn’t find any benefits of rosiglitazone over other drugs for type 2 diabetes, but the drug is clearly associated with increased risks of edema, fractures, and weight gain. These adverse effects, together with the suggestion of an increased cardiovascular risk, lead us to conclude that doctors should think twice about using rosiglitazone [Avandia], as we have good alternatives." Merck's Januvia (Sitagliptin), approved in Oct. 2006, Januvia is a new oral hypoglycemic anti-diabetic drug of the new dipeptidyl peptidase-4 (DPP-4) inhibitor class of drugs. According to Bear Stearns analyst John Boria, it could bring in sales of $2.1 billion for the company by 2012 and dominate the $5 billion oral diabetes treatment market. Other research estimates for Januvia are more conservative at nearly half that amount. One of the big advantages of Januvia is that it can be taken as a pill. However, as discussed above, pills have come under increased scrutiny as popular brands have been associated with heart attacks.}

Injectible

Several analysts are looking to Eli Lilly and its partnership with Amylin Pharmaceuticals and Alkermes on the long-acting version of Byetta, or Exenatide, as a possible market-changing drug. Friedman, Billings, Ramsey analyst Jim Reddoch, in a note to Alkermes investors earlier this month, said it looks like a possible $3 billion seller, citing recent safety data and the once-weekly versus prior twice-weekly application. While it may lower blood glucose levels on its own, Exenatide is only approved "as adjunctive therapy to improve glycemic control in patients with type 2 diabetes mellitus who are taking metformin, a biguanide, or a combination of metformin and a sulfonylurea but have not achieved adequate glycemic control". In addition to gastrointestinal adverse reactions, a relative disadvantage of Exenatide is that it is administered by injection. Additionally, as per the United States FDA, patients taking exenatide (Byetta) may be at risk for acute pancreatitis.

Insulin Rapid Pumps

Insulin lispro (Humalog® by Eli Lilly), insulin aspart (NovoLog® made by Novo

Nordisk) and insulin glulisine begin to work in 15 minutes or less after taken and peak in

one hour and go on to work for another two to four hours. The drawbacks are the invasiveness, complications with usage and tissue scarring.

Inhaled Insulin

Generex, on the other hand, is revolutionizing how inhaled insulin is delivered. Generex’s Oral-Lyn is used as a preventive pharmacologic agent by people with pre-diabetes to delay the onset of diabetes and by patients with Type 2 diabetes to delay the onset of insulin dependence and complications associated with diabetes. The fact that Insulin is approved globally has made the regulatory approval process relatively simple for Generex, as demonstrated by the success in obtaining approval in Ecuador and India. By delivering through the buccal mucosa (cheek and lips), patients avoid the potential risks of chronic lung tissue exposure to insulin. Generex Oral-lyn reaches peak circulation levels in 30 minutes versus 60 minutes for injected insulin. And, Generex Oral-lyn does not have to be refrigerated.

Generex’s expertise in buccal mucosa delivery of treatments Advantages include:

Bypass the gastrointestinal tract and hepatic portal system

Delivery of small and large molecule drugs

Improved patient compliance

Non-invasive and pain-free

Rapid absorption of medications into circulatory system

Reliable and convenient

Limitations of buccal mucosa delivery:

Rapid elimination of drugs due to flushing action of saliva or ingestion of food

Non-uniform distribution of drugs within saliva

Patient acceptability in terms of taste irritably and mouth-feel

ESTIMATES FOR GENEREX

The current treatments for diabetes are:

12% insulin and oral medications

16% insulin only

57% oral medications only

15% no medication

We project that Insulin sales will double by 2010 to $14.5 billion. Over the next 5 years, Oral-Lyn is expected to capture approximately $1.5 billion of the market. And over the same time period, we are forecasting Generex’s revenues of $300 million from combined results of other pipeline products. A summary of Generex’s product pipeline is provided below. Using a P/E multiple of 20 times our 2012 EPS of $3.27 discounted 40%, our long-term target is $12. Generex’s strong cash position, relatively low cash burn, and expected near-term product launches make Generex an excellent buy. We do not anticipate the company will need additional financing options given its cash and securities positions coupled with our expectations of near-term sales revenues and product licensing announcements.

PRODUCTS LAUNCHING OR AT MARKET

^{PRODUCT PIPELINE}

Phase 2

Phase 1

Morphine Spray (Pain Management)

Important Disclaimer

This opinion contains forward-looking statements that involve risks and uncertainties. A company's actual results could differ materially from those described in any forward-looking statements or announcements discussed herein. This material is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. Affiliates, officers, directors and employees may have also bought or may buy shares of companies mentioned herein and may profit in the event those shares rise in value. The company and its affiliates will not advise as to when it decides to sell and does not and will not offer any opinion as to when others should sell; each investor must make their own decision based on his or her judgment of the market

Cut:
AOB - Price Pattern 2.25 (But keep an eye on it. Constructive big cup pattern. Set alert at 14.
BLUD - Price Pattern 2.25, sideways, choppy chart for the year, bad press (SEC investigating)
DIOD - Low F/E, Price Pattern 2.25
FMCN - Group chart makes it not buyable according to our rules. (Even though it's a China stock and who really knows the correlation to this "group." )
HLF - Drastically under performing its group. Bad press. Price Pattern 1.75
SCRX - Yuck! Nasty chart. Price Pattern 1.5
NOV - Oil services looking iffy and RIG is enough representative
CAM - Same reasoning as for NOV

Add:
CBI
CHK
CYBS
JASO
PRGO
SNDA
STLD

Bonus Wildcard:
LIFC - Strong fundamentals, BUT avg. volume 492K. Just a touch under. I doubt it'll stay that way for long. BUY BUY BUY.

In all its glory, the new money pool:

On probation:
PCP - Iffy group, clinging to resistance. BUT, ROE of 28, Nice, consistent track record for earnings and sales growth and meeting estimates.
(Find this on info the "Quarterly Earnings" link.)

Click to see it bigger.

Comments, thoughts, insights, totally off-the-wall trade ideas all welcome.

ETF/CEF:

• DOO - Wisdom Tree International Dividend Top 100 Fund
• EFA - EAFE Index iShares
• IGE - Natural Resources iShares S&P/GSCI Index Fund
• IXN - iShares S&P Global Information Technology Sector
• IYM - Basic Matls iShares

View these in light of yesterday's ETF selections and see the continued tilt towards international investing.  Also materials/resources are making their appearance today.

Stocks:

• FDG - Fording Inc. (Canadian coal operations)
• HSC - Harsco Corp. (steel construction)
• KOP - Koppers Holdings Inc. (lumber and wood products)
• NOV - National Oilwell Varco, Inc. (oil & gas equipment & services)
• PRXL - PAREXEL Intl Corp. (bio/pharmaceutical services)
• SINA - sina.com (online media & information services)
• TUP - Tupperware Brands Corp. (kitchen products)
• VIVO - Meridian Bioscience Inc. (manufacture of diagnostic test kits)

Okay, quite an eclectic bunch of stocks from coal to kitchen products. But twin themes of materials/resources and healthcare/pharma have emerged from these selection.  A lot of neat ideas.

CFK:

• HRP - Hrpt Properties Trust
• IJS - SmCap 600 Value iShares
• IWS - Russell Mid-Cap Value iShares
• PSI - PowerShares Dynamic Semiconductors Portfolio
• SMH - Semiconductor Holders
• VOE - Vanguard Mid Cap Value ETF

Again these are the beaten down funds that are only for the speculative minded...no guarantee, so use extreme caution.

Mutual funds..I'm going to punt on them for now.  Yesterday the list was over 450!  Way too unmanageable.  Until I can figure out how to deal with this mess, I will defer from using RSI to pick mutual funds.

ETF/CEF:

• IEZ - iShares Dow Jones U.S. Oil Equipment & Services
• ITA - iShares Dow Jones U.S. Aerospace & Defense

These are two speciality industries and both are doing quite well in the midst of this current correction.  I like them both, but they do expose the investor to specific industry risk.  ITA also trades under 100k shares per day, so use care.

Stocks:

• CAM - Cameron International Corp.
• FDG - Fording Inc.
• FSTR - L.B. Foster Co.
• GME - Gamestop Corp.
• JEC - Jacobs Engineering Group Inc.
• NOV - National Oilwell Varco, Inc.

Aside from Gamestop Corp. all these stocks have major business in the energy/oil & gas industry.  This theme reinforces the ETF pick of IEZ.  Don't you just love this??

CFK:

• PTY - Pimco Corporate Opportunity
• VVR - Van Kampen Senior Income

The two falling knife candidates are both CEFs.  PTY has made a double bottom and may be poised for a takeoff.  VVR looks promising too, but I still hate its huge expense ratio  of 4.3$%!!!

Mutual Funds:

BJMIX Brazos/JMIC Micro Cap Growth Portfolio
BMIAX Brazos Micro Cap EVUYX Evergreen Utility & Telecommunications
FANAX Fidelity Advisor Natural Resources
FANIX Fidelity Advisor Natural Resources Institutional
FSESX Fidelity Select Energy Services
ICENX ICON Funds - ICON Energy Fund
MPFAX Munder Power A
MPFBX Munder Power Plus
NFMAX Navellier Fundamental Fund
OEPIX ProFunds Oil Equipment, Services & Distribution UltraSector
RYESX RYDEX SERIES FDS ENERGY SERVIC
RYVAX Rydex Series Trust Energy Services Fund Advisor
RYVCX Rydex Series Trust Energy Services Fund
RYVIX Rydex Energy Services
TIIEX TIAA-CREF INSTL International Equity Fund
TRERX TIAA CREF International Equity

As you can see this is heavy with energy related funds.  Certainly the theme for today and another vote for energy.  Therefore I'm adding IEZ to the Way Ahead portfolio.  See you tomorrow.