Dec 30:  We've got our data for the year 2006.  By our own analysis, the broad market gained about 14%.  The Russell 3000 gained 13%, while the Dow gained 16%.

Despite the broad gains, the year was probably the most themeless, meandering market year in memory.  About the best strategy was to buy stocks that are held by large numbers of institutions relative to the stocks' market caps...up 33%.  Stocks of particularly low capitalization fared well.  Stocks with large book values (relative to share price) or cash per share figures tended to outperform the indices.  No industry groups were found in our non-adjusted top ten lists, though REIT's and utilities managed decent gains after risk-adjustment.  Non-volatile stocks in general were stronger than might be expected in a year of double digit gains.

We didn't identify any broad groups of stocks that actually lost value.  Buying stocks that were particularly volatile toward the end of 2005 proved to be a weak strategy.  Stocks that lost large sums on the final trading session of 2005 were weak over the course of 2006...up as little as 7%.  Free agents were weak.  Biotechs did not impress.  Stocks with big 2005 gains underperformed.

Given the meandering nature of 2006, it would seem difficult to predict 2007's course.  One might speculate that this meandering would reverse, with sharply focused gains in a number of industries and other groups.  One should also bear in mind that 2007 falls in the strongest year of a presidential cycle.  In the absence of oil shocks or nasty world events, one should expect a positive year, conforming to the usual seasonal cycles.  We're particularly excited about the prospects for gains in select groups (cheap stocks, volatiles, biotechs, semiconductors?) early in 2007, given the fact that the market over the last 3 months has conformed rather nicely to the usual seasonal trends.

Perhaps the theme for 2006 was "gains with safety".  In that case, one might wish to look back and see what followed positive years in which the Dow outgained the more speculative indices.  1994 and 1996 fit the bill, with nice gains following in 1995 and 1997.

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We've got our data for the fourth quarter.  By our calculations, the market was up a tad over 9%...quite nice!

The strongest stocks were those that had negative book values...a rather odd result, but we won't quibble with it...up better than 18%.  Volatile stocks were strong, gaining 16%.  Stocks with large losses on the last trading day of the third quarter fared well.  Stocks trading well below their most prominent resistance levels showed nice gains as well.  On a risk-adjusted basis, transports were strong.

We didn't identify any groups that actually lost money...stocks with strong September performances narrowly escaped that honor, finishing flat.  Yearlong winners were weak.  Banks failed to impress. 

As below, the above trends are fairly typical, and would tend to suggest continued stereotyped action into the next year.

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We've got our data for the month of December.  Our own take on the market had it up .5%.

Nothing of great significance emerged on the positive side of the market.  Purchasing stocks that are largely held by institutions (after factoring in market capitalization) was the strongest approach...up about 3.4%.  Stocks with large losses in November followed closely behind.  Free agents were strong.  In usual form, non-volatiles outperformed. 

On the negative side, oils lost 3.7%.  Stocks with strong November performances reversed.  Biotechs lost.

The above trends are fairly typical for December, giving us cause to believe that January should evolve without any special surprises.

Dec 29:  The final trading session of the year saw the Dow lose .3%, and Nasdaq .4%.  Our own take on the market had it down .6%.  Separation between groups was 2%.

Stocks held by a large number of institutions after dividing by the company's capitalization topped our list of gainers...up .7%.  Cheap stocks, volatiles, small caps, free agents, recent losers, yearlong losers, and REIT's were relatively strong.

Losers were led by  Tuesday's big winners...down 1.3%.  Regional banks were weak.  Stocks with a tendency to lose in this time slot repeated the performance.

The above trends are slightly positive for the next session.

Dec 28:  The Dow lost .1%, Nasdaq .2%.  Separation between groups was 2.4%.  No industry groups appeared on either side of our tables.

Stocks that opened well below Wednesday's close were strongest today...up 1.4%.  The trend was quite significant...not merely spurred by freaky gains in one or two stocks.  Wednesday's big losers reversed.  Free agents were strong.

Wednesday's big gainers were weakest...down 1%.  Stocks with nice gains over the last week to 3 months fell.   Fundamentally weak stocks suffered.

The above trends are neutral for the next session. 

Dec 27:  The Dow gained .8%, Nasdaq .7%.  Separation between groups was a mere 1.5%.

Stocks that have taken large losses over the last month were strongest today...up 1.8%.  At the same time, stocks with strong recent momentum gained nicely as well.  Transportation-related stocks were strong, as well as a number of heavy industries.  Stocks that were weak this time last year were strong this time around.

We didn't see any groups that actually lost money.  The weakest of the lot were cheap stocks, picking up a mere .3%.  Biotechs floundered again.  Stocks with large yearlong losses continued downward.

The above trends are again slightly positive for the next session.

Dec 26:  Both the Dow and Nasdaq gained .5%.  Separation between groups was 2.9%.

Banks were the top gainers today...up 1.5%.  Stocks that lagged their best trading partners in the last session tended to make up for it today.  Heavily shorted stocks moved nicely.

On the weak side we have stocks with a strong tendency to gain in the afterhours...down 1.4%.  Big gainers in the last session reversed.  Biotechs floundered.

The above trends are slightly positive for the next session...the broad gains are nice, but we'd like to see more volatiles make a move.  Perhaps January will be the time.

Dec 22:  Both the Dow and Nasdaq lost .6%.  Our own take on the market had it down a mere .1%!  Separation between groups was 2.1%.

Stocks that are not largely held by insiders led gainers today...up 1.4%.  The trend, however, was not significant.  Despite the losses in the indices, the patterns of gains and losses had the flavor of a positive session...volatiles, fundamentally weak stocks, and cheap stocks all outperformed.  Stocks trading well over their 20 day averages fared well.  Free agents were strong.

On the weak side, Wednesday's losers dropped as much as  .7%.  Oils were weak.  REIT's dropped.   Expensive stocks did not impress.

The above trends are positive for the next session.

Dec 21:  The Dow lost .3%, Nasdaq .5%.  Separation between groups was 2.4%. 

Free agents (stocks whose movements seem unaffected by the movements of other stocks) were strongest today...up 1.3%.  Small caps were strong.  Stocks trading well below their 20 or 100 day averages fared well.  Cheap stocks finished in positive territory.

Losers were led by stocks trading well over their most prominent resistance levels...down as much as 1%.  Semiconductors, oils, metals and mining, and retails were all weak. 

The above trends are neutral for the next session.

Dec 20:  Both the Dow and Nasdaq lost .1%.  Our own take on the market had it up .3%...small caps were strong.  Separation between groups was 2.6%.

Small caps were strongest today...up as much as 1.4%.  Stocks with large yearlong gains fared well.  Retails outperformed.

On the negative side, oils continued see-sawing from day to day...down 1.2%.  Stocks with a history of strength in this time slot were weak this time around.  Volatile stocks underperformed.

The above trends are slightly negative for the next session.

Dec 19:  The Dow gained .2%, while Nasdaq lost .2%.  Separation between groups was 2.4%.

Oils were strongest today...up 1.3%.  Not surprisingly then, yesterday's big losers were strong as well.  "Free agents" were strong. 

On the weak side, we find biotechs...down 1.1%.  Big dividend payers plopped.  REIT's were hit.  Stocks with big recent gains reversed.  Stocks that were particularly strong this time last year were weak this time around.

The above trends are mixed as predictors of tomorrow's direction, so we'll refrain from guessing.

Dec 18:  The Dow was flat, while Nasdaq lost .9%.  Separation between groups was 2.6%.

We didn't identify any groups that actually gained today.  The best stocks to hold were simply the least volatile...down as little as .2%.  Large caps outperformed, as the relative performance of the Dow would indicate.

The big loser was clearly oils...down 2.9%.  Stocks that were weak this time last year repeated the performance.  Volatiles were burned.  Stocks with large losses over the last month to three months lost in excess of the market.

The above trends are negative for the next session.

Dec 15:  The Dow gained .2%, Nasdaq .1%.  Separation between groups was 2.1%.

Stocks with recent losses were strongest today...up 1.1%.  The trend was significant.  Losses over the last three months or so also predicted nice gains.  Stocks with high or negative p/e ratios fared well...nice to see some hints of risk-taking.  Cheap stocks outperformed. 

On the negative side, nothing of great significance emerged.  Stocks that are heavily held by insiders lost as much as 1%.  Oils lost.  Stocks with large gains over the last three months were weak.

The above trends are positive for the next session.

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Behind the scenes, we've been analyzing 177,000 rows of insider trading data.  For our first comments on the data, take a look here.

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We've got our data for the first half of the month.  Our own take on the market had it up slightly over 1%.

One of our proprietary indicators pointed to gains of about 3.5%.  Things played out fairly stereotypically for this time of year...non-volatiles performed better than might ordinarily be expected,  yearlong gainers continued to rise, and communications stocks were strong. 

On the weak side, stocks with negative p/e's were weakest...down about 1.6%.  Biotechs were weak due to several monster losses related to failures in clinical trials (check out neol and onxx).  Stocks that finished November with poor momentum continued their losing ways.  Highly volatile stocks lost money. 

Again, the above trends are typical, so we might expect December to continue to evolve in standard fashion.  In that case, look for biotechs to reverse their recent woes, longterm winners to continue to prosper, and non-volatiles to surprise.  On the negative side, don't look for any spikes from semiconductors, yearlong losers, or volatile stocks in general.

Dec 14:  The Dow gained .8%, Nasdaq .9%.  Separation between groups was 2.2%.

Stocks with a large high-close differential yesterday topped our gainers...up 1.8%.  Recent losers in general were strong.  Yearlong winners outperformed. 

On the losing side, biotechs were again weak...down .4%.  Stocks with negative p/e ratios dropped.  Yearlong losers finished the day with losses.  Dividend payers underperformed.

The above trends are slightly positive for the next session.

Dec 13:  Both the Dow and Nasdaq were flat.  Separation between groups was a miniscule 1.4%.

Nothing of great significance emerged on the positive side of the market.  Proprietary indicators pointed to gains as high as .7%.  Oils and metals and mining stocks outperformed the market.  Stocks trading well below their 100 day averages were strong.

On the losing side, stocks with a history of losses in this time slot repeated the performance...down .7%.  Biotechs were weak.  Dividend-payers actually underperformed the market. 

The above trends are neutral as predictors of the next session.

Dec 12:  The Dow lost .1%, Nasdaq .5%.  Separation between groups was 1.9%.

A couple of our proprietary indicators pointed to gains as high as .4%, with decent significance.  Outside these indicators, non-volatiles were strong...up .3%.  Banks finished the day with gains. 

On the losing side, last Thursday's big losers lost yet again...down 1.5%.  Yesterday's losers were weak as well.  Stocks with large yearlong gains were hit.  Volatiles were weak.  Metals and mining stocks underperformed. 

The above trends are negative for the next session.

Dec 11:  Both the Dow and Nasdaq gained .2%.  Separation between groups was 2.5%.

Stocks with large increases in volume in the last two weeks were strongest today...up 1%.  Small caps were strong.  Broadcasting and communications stocks fared well. 

Biotechs were weakest...down 1.5%.  The trend, however, was not significant, suggesting that one or two big losses pulled the rest of the industry down.  Stocks with negative p/e ratios were weak.  Stocks with weak volume of late dropped. 

The above trends are positive for the next session.  Once again, though, we fail to see volatile stocks lead the market.

Dec 8:  The Dow gained .2%, Nasdaq .4%.  Our own take on the market showed a very slight loss.  Separation between groups was again weak...1.5%.  This is certainly the longest period of such stagnant trading that we've seen for quite a while.

Stocks trading well over prominent resistance levels were strongest...up .8%.  Volatiles were relatively strong.  Stocks with strong volume outperformed.  Biotechs and drug stocks fared well. 

Nothing of great significance emerged on the negative side of the market.  Stocks trading well over their 20 day averages lost .7%.  Small caps underperformed, though the indices might have you believe otherwise.  Monday's losers lost yet again.

The above trends are slightly positive for the next session.

Dec 7:  The Dow lost .3%, Nasdaq .7%.  Separation between groups was weak again...1.7%.

"Free agents" were strongest today...up .7%.  Stocks with large volume increases over the last three days fared well.  Biotechs and healthcare stocks finished above water. 

Semiconductors were weakest...down 1.1%.  Not surprisingly, then, volatile stocks generally lost.  Stocks whose movements are strongly tied to the movements of other stocks (the opposite of a "free agent") were weak.  Recent losers continued to lose.

Bearing in mind that stocks often reverse trends on Friday, the above patterns are negative for the next session. 

Dec 6:  The Dow lost .2%, Nasdaq .3%.  Separation between groups was again weak...1.7%.

Stocks whose short term averages have fallen well below longer term averages were strongest today...up .8%.  Last Thursday's big gainers were strong.  Yearlong losers outperformed.  Volatiles finished with small gains.

On the negative side, last Friday's losers lost as much as .9%.  The general feeling, however, was of a market that randomly punishes or rewards stocks today.  In fact, not a single industry was found on the winning or losing side of our tables.

The above trends are slightly positive for the next session.

Dec 5:  The Dow gained .4%, Nasdaq .2%.  Separation between groups was a mere 1.6%.

Stocks with a recent tendency to finish near their daily lows were strongest today...up 1.1%.  The trend was not, however, particularly significant.  Stocks with a series of recent losses reversed.  Heavy industry was strong...not surprisingly, then, stocks with low p/e ratios fared well.  Stocks that fared poorly in this time slot last year were strong today.

On the negative side, yesterday's big winners were weak...down .5%.  REIT's lost money.  Fundamentally weak stocks, as measured by p/e ratio, did not impress.

The above trends are neutral for the next session. 

Dec 4:  The Dow gained .7%, Nasdaq 1.5%.  Separation between groups was 3.1%.

Stocks in the leisure and entertainment sector were strongest...up 2.6%.  Stocks with large gains over the last 3 months to 1 year fared well.  Small caps outperformed, though the absolute smallest of small caps were actually rather weak.  Stocks in the 8th decile of volatility (i.e. volatile, but not super-volatile) gained nicely.  Thursday's and Friday's losers reversed. 

On the negative side, we find cheap stocks...down .6%.  The losses were quite significant, so it can't be said that large losses in one or two cheap stocks dragged the entire group down.  Fundamentally weak stocks, as measured by p/e ratio, lost money.  Stocks with a tendency to lose in the afterhours were weak in the regular session.

The above trends are slightly positive for the next session...we'd like to see more gains in risky groups.

Dec 1:  The Dow lost .2%, Nasdaq .8%.  Separation between groups was a mere 1.5%.

Yearlong losers were strongest...up .3%.  Utilities finished the day with gains.  Cheap stocks fared well.  Non-volatiles were flat.

On the negative side, stocks with big gains over the last 3 months lost as much as 1.1%.  Software stocks were generally weak. 

The above trends are neutral for the next session.

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We've got our data for the month of November.  Our own take on the market had it up about 2%.

Winners were led by stocks with a high "corr" statistic...these are stocks whose movements are strongly tied to the movements of other stocks.  The group was up about 7%.  Oils tend to move as a pack, so it's not surprising that they had nice gains as well...up a tad under 6%.  Some rather dowdy, heavy industries, fared quite well, particularly after risk-adjustment.  Volatiles outperformed.

On the negative side, cheap/weakly-traded stocks lost around 1%.  Big yearlong winners were flat, but yearlong losers underperformed as well.  Retails failed to impress. 

Looking for historical matches, resemblances are weak, so we won't offer any predictions based on this methodology.

Nov 30:  Both the Dow and Nasdaq were flat.  Our own take on the market had it up .3%.  Separation between groups was 2.4%.

The big gains on a flat day came from an unusual source...heavy industry.  The group gained 2%.  Not surprisingly, then, stocks with low p/e ratios gained nicely.  Stocks with large yearlong losses fared well. Yesterday's big gainers continued to gain.  Volatiles outperformed.

On the negative side, banks lost around .4%.  Stocks with weak volume yesterday finished today with losses.  Retails were weak.  Stocks with large yearlong gains underperformed.

The above trends are slightly positive for the next session.

Nov 29:  The Dow gained .7%, Nasdaq .8%.  Separation between groups was 2.7%.

Oils were again the big winners by a large margin...up 3%.  Stocks with a series of recent losses reversed, gaining as much as 2.3%.  Stocks that opened on Tuesday well below Monday's close were strong.

We didn't identify any groups that actually lost money.  The weakest of the lot was semiconductors...up only .3%.  Stocks in our "business services" group were weak.  Yearlong losers underperformed.  Free agents underperformed.

The above trends are neutral for the next session...the general positivity of the market is nice, but we'd like to see volatile groups partaking in the action.

Nov 28:  The Dow gained .1%, Nasdaq .3%.  Separation between groups was 2%.

Oils were clearly the biggest winners today...up 1.6%.  Stocks with big volume increases yesterday were strong.  Banks fared well.

On the negative side, nothing of great significance emerged.  Free agents lost around .4%.  Despite the positivity in Nasdaq, tech stocks tended to lose money.  Volatiles in general were weak.

The above trends are slightly negative for the next session.

Nov 27:  The Dow lost 1.2%, Nasdaq 2.2%.  Separation between groups was 2.6%...less than one might expect on a day of big losses.

Non-volatiles were strongest, losing as little as .8%.  Utilities held up well.  Oils outperformed.  Stocks with a small close-low differential in the previous session managed to avoid big losses.

Losers were topped by stocks with high or negative p/e ratios...down 3.3%.  Stocks with a big close-low differential in the previous session had big losses.  Recent winners got hit. 

The above trends are negative for the next session.

Nov 24:  The Dow lost .4%, Nasdaq .2%.  Separation between groups was a meager 1.5%.

Volatile stocks were strongest today (up .7%)...a positive sign despite the languid nature of today's market.  REIT's were strong, continuing recent gains.  Stocks with large 3 month losses reversed.

Nothing of great significance emerged on the negative side of the market.  Stocks with a history of losses in this time slot continued to lose...such stocks lost as much as .8%.  Stocks that closed near their highs on Wednesday were weak.

The above trends are positive for the next session.

Nov 22:  The Dow was flat, Nasdaq gained .4%.  Separation between groups was a meager 1.8%.

Volatile stocks were strongest today...up as much as 1.3%.  Cheap stocks weren't far behind.  Healthcare stocks fared well.

On the negative side, nothing of great significance developed.  Stocks trading well over their most prominent resistance levels were weak...down .4%.  Banking stocks finished with losses.

The above trends are positive for the next session.

Nov 21:  The Dow was flat, Nasdaq gained .1%.  Separation between groups was 2.2%.

REIT's continued yesterday's winning ways...up 1.4%.  Oils were strong.  Stocks with big gains last Friday, or big losses last Thursday fared well.  Stocks that fared well in this time slot last year continued to do so.

Losers were led by stocks that are largely held by institutions as a percentage of total capitalization...down as much as .8%.  These stocks are often small caps, so it's not surprising that small caps were relatively weak, despite the relative strength in the Nasdaq versus the Dow.  Cheap stocks and yearlong losers finished with losses. 

The above trends are again neutral for the next session.

Nov 20:  The Dow lost .2%, Nasdaq gained .3%.  Separation between groups was 2.7%.

REIT's were clearly the winner today...up 2.1%, nearly 7 standard deviation units off the average gain!  Given the fact that REIT's often offer nice dividends, it's not surprising that dividend payers also fared well.  Small caps gained nicely.  Stocks with a recent tendency to close near their highs were strong. 

Stocks with large losses over the last month to three months were weak, losing as much as .4%.  A number of heavy industries lost.  Large caps were weak in general.

The above trends are again neutral for the next session.

Nov 17:  The Dow gained .3%, Nasdaq lost .1%.  Separation between groups was 2.3%.

Winners were led by oils, gaining .7%.  Biotechs fared well.  Stocks with a series of recent losses reversed.  Large caps outperformed the broader market.

On the losing side, stocks that closed much higher than their lows in the previous session lost as much as 1.6%.  The trend was quite significant.  Stocks with large recent gains reversed.  Semiconductors were weak.

The above trends are neutral for the next session.

Nov 16:  The Dow gained .4%, Nasdaq .3%.  Separation between groups was 3.2%.

Nothing of great significance emerged on the positive side of the market.  One of our proprietary indicators predicted gains as high as 1.1%, but the significance wasn't impressive.  Non-volatiles outperformed.  Despite the stronger performance of the Dow relative to Nasdaq, small caps were strong.  Dividend payers fared well.  Free agents gained.

Losers were dominated by oils...down 2.1%.  The next closest group (stocks that had big gains this time last years) lost only 1.3%.  Metals and mining, not surprisingly, were weak as well.  Yesterday's big winners reversed.  Volatiles underperformed.

The above trends are neutral for tomorrow's session.

Nov 15:   The Dow gained .3%, Nasdaq .5%.  Separation between groups was 2.5%.

Transportation-related stocks topped our list of gainers...up 2.4%...impressive gains considering the usual lack of volatility in the group.  Stocks with big yearlong gains (70%+) outperformed.  Cheap stocks were strong.  Monday's big gainers continued upwards.

Stocks that underperformed their best "trading partner" in the last session were weak again today.  Those with unusually heavy volume yesterday reversed.   Non-volatiles and dividend payers were flat.

The above trends are again weakly positive for the next session.

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We've got our data for the first half of November.  Our own take on the general market had it up a tad over 2% over the period.

Software stocks led the way, gaining around 6%.  Semiconductors weren't far behind.  The second most volatile decile of stocks gained nicely. 

Only a few groups actually lost money.  Stocks that are simultaneously cheap and lightly traded lost around 1%.  Banks and REIT's were weak.  Free agents failed to gain.  Given the weakness in banks and REIT's, it's not surprising that dividend-payers in general finished flat.  One surprise, given the positivity of the two weeks:  stocks with high volatility in October were essentially flat.

Nice gains in tech stocks are typical for Nov h1, so a good guess would be that the market will continue to unfold in typical fashion for this time of year...look for strength in volatiles, cheap stocks, and yearlong losers.  Oils are typically weak.

Nov 14:  The Dow gained .7%, Nasdaq 1%.  Separation between groups was 2.2%.

The best stocks were those that have lost around 7% in the last month...large, but not extreme losses.  The group was up 2.4%, and the gains were significant.  Software stocks were again strong.  Last Friday's big winners continued upwards.  Market leaders outperformed.

We didn't identify any groups that actually lost money.  Cheap stocks were weak, gaining as little as .2%.  Stocks with extreme recent volatility underperformed, though non-volatiles were weak as well.  "Free agents" did not impress.  No industry groups were included on the weak side of our tables...that wasn't where traders focused their sells.

The above trends are neutral for the next session...we'd like to see more action in volatiles.

Nov 13:  The Dow gained .2%, Nasdaq .7%.  Separation between groups was a mere 1.9%.

Stocks with a large cash per share position led the way today...up 1.6%.  Software stocks were strong.  Stocks with a large high-close differential on Friday gained nicely.  Cheap stocks outperformed.

On the negative side, a number of retails were weak, losing as much as .3%.  Oils lost.  Stocks with weak volume over the last couple of weeks (as compared to that of the last three months) underperformed.

The above trends are positive for the next session.

Nov 10:  The Dow was flat, while Nasdaq gained .6%.  Separation between groups was 2.7%.

Recent losers were strong, gaining around 1.8%.  Yesterday's losers reversed nicely.  Stocks that have strongly underperformed their closest "trading pair" in the last month outperformed.  Construction stocks fared well.

On the losing side, stocks that lost in this time slot last year repeated their performances...down .8%.  Oils were weak.  "Free agents" (stocks whose trading behaviors don't seem particularly linked to the behaviors of other stocks) failed to gain.  Stocks with large gains yesterday or over the last month were flat.

The above trends are weakly positive for the next session.

Nov 9:  The Dow lost .6%, Nasdaq .4%.  We had the market down around .9%!  Separation between groups was 2.8%.

Oils were clearly strongest...up .5%.  Stocks with nice volume yesterday managed to stay above water.  Non-volatiles and large caps had minimal losses.

Biotechs were weak...down 2.3%.  Yearlong losers were hit hard, but stocks with large 1 month gains were hit as well.  Fundamentally weak stocks, as measured by profit margin, fell in excess of the market.

The above trends are negative for the next session, though Friday's trends are often not particularly "connected" to Thursday's.

Nov 8:  The Dow gained .2%, Nasdaq .4%.  Our own take on the market had it up .7%...small caps were strong.  Separation between groups was 2.2%.

Stocks with a big high-close differential yesterday topped our gainers...up 1.6%.  Oils fared well.

On the negative side, medical equipment makers dropped .6%.  Biotechs were weak, reversing recent strength.  Stocks with a long history of gains in this time slot were flat.  Large caps lagged.

The above trends are weakly positive for the next session...the general gains are nice, but we'd like to seem more action in volatile stocks. 

Nov 7:  Both the Dow and Nasdaq gained .4%.  Separation between groups was 1.9%.

Stocks with strong volume yesterday were strong again today...up 1.1%.  Biotechs fared well.  Stocks with a recent tendency towards afterhours losses were strong in the regular session.  3 month gainers outperformed.

On the negative side, we have REIT's...down .8%.  Oils were weak.  Stocks with large losses over the last week continued losing.  Dividend payers performed poorly.

The above trends are positive for the next session.

Nov 6:  The Dow gained 1%, Nasdaq 1.5%.  Separation between groups was 2.3%.

Despite the positivity of the session, no trends of great significance emerged on either side of the market.  Stocks with a long history of gains in this time slot topped our gainers...up 2.4%.  Biotechs were strong.  Stocks with big yearlong gains fared well, but yearlong losers were also relatively strong. 

We didn't identify any groups that actually lost money today.  Stocks with big losses over the last month gained as little as .1%.  Dividend-payers were weak.  Stocks with a history of losses in this time slot continued to lose.  Non-volatiles were weak, though stocks we've pegged with a high "perceived risk" (high volatility + cheap stock price) were weak as well.

The above trends are bullish for the next session.

Nov 3:  The Dow lost .3%, Nasdaq .1%.  Separation between groups was 2.9%.

Oils were clearly the strongest group today...up 2.1%.  Semiconductors fared well.  Monday's big losers gained nicely.  Stocks with high or negative p/e ratios were strong.

On the negative side, nothing of great significance emerged.  A number of heavy industries lost as much as .7%.  REIT's lost in excess of the market, continuing yesterday's performance.  Despite the losses in the general market, non-volatiles were weak.

The above trends are positive for the next session.

Nov 2:  The Dow lost .1%, while Nasdaq was flat.  Separation between groups was 2.1%.

Nothing of great significance emerged on the positive side of the market today.  Stocks with a history of nice gains in this time slot fared well...up as much as .7%.  Tuesday's losers reversed.  3 month losers finished in positive territory.

REIT's were weakest today...down 1.5%.  Stocks that were weak at this time last year repeated the performance.  Cheap stocks fared poorly.  Volatile stocks lost in excess of the market.

Bearing in mind that Friday has a way of reversing the previous day's trends, the above trends are negative for the next session.

Nov 1:  The Dow lost .7%, Nasdaq 1.4%.  Separation between groups was 2.5%.

We didn't identify any groups that actually made money today.  The best of the lot was utilities, down about .1%.  Free agents fared well.  Naturally, non-volatiles outperformed.

The biggest losers were last Friday's big losers...down as much as 2.6%.  Semiconductors got hit.  Big yearlong winners were burnt.  Volatiles underperformed.

The above trends are negative for the next session.

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We've got our data for the month of October.  Our own take of the market had it up a healthy 4.6%.

Stocks with big losses in October 2005 were strongest in 2006...up 11%.  Yearlong and 3 month losers weren't far behind.  Stocks with a large high-close difference on the last day of September gained nicely.  Biotechs fared well.  Stocks with a high "perceived risk" statistic outperformed.  On a risk-adjusted basis, dividend payers, especially utilities, actually topped our list.

We didn't identify any groups that actually lost money, though some were quite flat.  Banks gained a mere 1%.  Stocks with big September gains lagged.  Non-volatiles and large-caps underperformed.

The above trends are typical for Octobers.  October 1993, 2001, 2002, and 2004 match up nicely.  Assuming, then, that November evolves in standard fashion, one should expect continued gains from beaten-up stocks, particularly yearlong losers.

Oct 31:  The Dow was flat, while Nasdaq gained .1%.  Separation between groups was 2.7%.

Again, nothing of major significance was found on the positive side of the market.  Volatiles were strong, up as much as 1.2%.  Cheap stocks outperformed.

On the negative side, yesterday's big winners reversed...down 1.2%.  A number of heavy industries were weak, pulling the Dow down.  Stocks with strong recent momentum underperformed.

The above trends are positive for the next session.

Oct 30:  The Dow was flat, while Nasdaq gained .6%.  Separation between groups was a mere 1.8%.

Nothing of great significance emerged on the positive side of the market.  Software stocks gained 1.1%. 

On the negative side, several proprietary indicators predicted loss as much as .7%.  Oils, healthcare stocks, and biotech were weak.  Stocks with large 3 month losses continued to lose.  Stocks that were weak this time last year continued the weakness.

The above trends are neutral for the next session.

Oct 27:  The Dow lost .6%, Nasdaq 1.2%.  Separation between groups was 2.8%.

Stocks with a strong recent tendency to close off their daily highs were our only winning group...up .3%.  Healthcare-related stocks held up well.  Losers over the last week to last three months outperformed. 

Semiconductors were weakest today...down 2.6%, reversing several days of gains.  Not surprisingly, then, stocks with recent strength reversed in general.  Stocks that were weak this time last year were weak again.

The above trends are negative for the next session.

Oct 26:  The Dow gained .3%, Nasdaq 1%.  Separation between groups was 2.2%.

Stocks with high p/e ratios gained as much as 2.1%.  Semiconductors extended yesterday's gains.  Software stocks were strong as well.  Tuesday's losers reversed. 

Nothing of great significance emerged on the negative side.  Stocks with big gains over the last week reversed, losing around .1%.  Oils underperformed.  Non-volatiles lagged the market.

The above trends are positive for the next session.

Oct 25:  The Dow gained .1%, Nasdaq .5%.  Separation between groups was 2.5%.

Semiconductors led the way today, gaining as much as 1.9%.  Stocks trading well below their prominent resistance levels were strong.  Volatiles were strong.  Stocks with large losses on Monday reversed.  Cheap stocks and oils outperformed.

Despite the strength in the Nasdaq, small caps weren't particularly strong, losing as much as .5%.  Stocks trading well over their prominent resistance levels lost similarly.  Retails lost.  Expensive stocks were flat.

The above trends are positive for the next session.

Oct 24:  The Dow gained .1%, Nasdaq lost .5%.  Separation between groups was 3.2%.

Winners were led by stocks that tend to closely follow the trading patterns of other stocks (a high "corr" value)...up 1.8%.  Oils tend to trade as a group, so it's not surprising that they performed strongly as well (up about 1.4%), but as an experiment we tossed out all oils and still saw gains of better than 1% in the stocks that carry a high "corr" value. 

On the losing side, biotechs were worst:  down 1.4%.  Semiconductors fared poorly.  Fundamentally unsound stocks, as measured by p/e ratio, were weak.  Volatile stocks in general lost money.  Stocks with good recent momentum reversed. 

The above trends are negative for the next session.

Oct 23:  The Dow gained .9%, Nasdaq .6%.  Separation between groups was a mere 1.8%, following last Friday's 1.9%.

Nothing of great interest emerged on the positive side of the market.  Stocks with heavy institutional ownership gained as much as 1.2%.  Large caps outperformed.

On the negative side, stocks that are both cheap and volatile (a high "perceived risk") were weakest...down .6%.  Stocks with large gains over the last 3 months were victimized.  Stocks with high or negative p/e ratios fell.

The above trends are weakly positive for the next session.

Oct 19:  Both the Dow and Nasdaq gained .2%.  Separation between groups was 3.4%.

Winners were led by stocks grouped according to a couple of our proprietary indicators...up as much as 2.5%.  The gains were quite significant.  Oils were strong.  Monday's big gainers fared well. 

Finance-related stocks were weak...down .9%.  Stocks that have been weak in this time slot in the last three years continued their weakness.  Heavy industry underperformed.  Non-volatiles were flat.

The above trends are positive for the next session.

Oct 18:  The Dow gained .4%, Nasdaq lost .3%.  Separation between groups was 2.3%.

Biotechs were strongest again...up .6%.  Dividend paying stocks, especially REIT's, outperformed.  Non-volatiles finished with gains, as might be surmised by the Dow's superior performance today. 

Semiconductors were again weak, dropping 1.6%.  Yesterday's big losers (largely semiconductors) continued to lose.  Volatiles in general were weak.

The above trends are negative for the next session.

Oct 17:  The Dow lost .3%, Nasdaq .8%.  Separation between groups was 2.2%.

Biotechs were strongest today...up .8%.  Utilities fared well.  Stocks with big spikes in volume yesterday outperformed.  Free agents eked out gains.  Non-volatiles avoided losses.

On the negative side, semiconductors dropped 1.4%.  Volatiles were weak.  Stocks with strong recent momentum reversed. 

The above trends are negative for the next session.

Oct 16:  The Dow gained .2%, Nasdaq .3%.  Our own non-weighted view of the market had it up .8%!  Separation between groups was 2.2%.

Stocks with a low "leadership" ranking fared best...up 2.2%.  Stocks with strong momentum over the last week gained nicely.  Three month losers were strong, again.  Oils outperformed.

We didn't identify any groups that actually lost money.  Non-volatiles were flat.  Free agents were weak.  Banks and dividend-payers in general failed to impress.

Historically, the emphasis at this time of year has been on long term losers.  This trend definitely seems to be playing out.  At the same time, volatiles and "free agents" don't seem to be partaking in the current rally to the extent that some market gurus might expect.  We like this....in a best-case scenario, we should be able to profit by holding long term losers, sell them at some point (the end of November makes historical sense), and stock up on volatiles, free agents, and cheap stocks as the new year approaches.  While most folks will see one rally, we'll take advantage of two.  That's the theory, anyway.

The above trends are positive for the next session.

Oct 14:  We've got our data for the first half of October.  Our own take on the market had it up 4.4%.

Stocks with a large high-close differential on the last trading day of September were strongest...up 8.5%.  Naturally, then, stocks with large losses on that day gained nicely as well.  Stocks trading well below their prominent resistance levels were strong.  On a risk-adjusted basis, scientific instruments were strong...otherwise, no industry groups appeared in our winning tables.

We didn't identify any groups that actually lost money.  Non-volatiles were weak, gaining as little as .1%.  Healthcare stocks underperformed.  Stocks with a small high-close differential on the last trading day of September fared poorly.   Banks and utilities failed to keep up with the market.  Free-agents were weak...perhaps they'll reverse in the next few weeks.

The above trends match up fairly well with Oct h1 2001.  Oct h2 2001, for what it's worth, continued the focus on long term losers and volatile stocks.  Cheap stocks, small caps, and free agents were featured as well. 

Oct 13:  The Dow gained .1%, Nasdaq .5%.  Separation between groups was 2.4%.

Stocks trading well below their 100 day averages were strongest today...up 2.2%.  Yearlong losers were strong as well.  Such trends extend yesterday's large gains in these sorts of stocks.  Risky stocks were emphasized...cheap stocks, volatile stocks, and those with high or negative p/e's all outperformed. 

Healthcare stocks were weak...down .2%.  Large caps were flat. 

The above trends are positive for the next session.

Oct 12:  The Dow gained .8%, Nasdaq 1.6%.  Separation between groups was 3.6%.

We saw some large, significant gains today, but nary an industry group was to be found on the positive side of our tables.  The big winners were stocks that trade well below their most prominent resistance levels...up as much as 4%.  Long term losers of just about every variety were strong.   Small caps fared well. 

No groups actually lost money.  The worst of the lot were simply stocks with low volatility, gaining as little as .3%.  Utilities were weak.  Free agents underperformed.  Large caps failed to impress.

The above trends are positive for the next session.

Oct 11:  The Dow lost .1%, Nasdaq .3%.  Our own take on the general market had it down .4%.  Separation between groups was 2.1%.

Despite the losses on Nasdaq, semiconductors were strongest...up as much as .7%.  Utilities were strong.  Stocks with a string of recent losses finished with small gains today.

Losers were led by yesterday's big winners...down 1.4%.  Oils fared poorly. 

The above trends are mixed as indicators for tomorrow's session....the general losses should be seen as a negative, but the gains in semiconductors are enticing.

***************

Recently, we noticed a market guru recommending a stock based on the fact that it had been unusually non-volatile over the short term.  I guess we're looking at the "lull before the storm" sort of logic.

We decided to test that thinking out.  We generated 15,000 lines of data for stocks over the last 4 years and looked at the best and worst predictors of two week gains.  The choice of a two week period was somewhat arbitrary...we just figured that a day would be too short of a period to examine, and a period over a month or so would be too long.

The average gain over a 2 week period was about .9% in our test.  Sorting stocks according to short-term/long-term volatility ratios, we found that a low ratio indeed predicted gains above that .9%.  For example, the lowest 50% such ratios produced gains a tad above 1%.  However, one must consider that the volatility of individual stocks is related to the volatility of the market as a whole.  Naturally, the market undergoes short term lulls in volatility...during such periods, one should expect a good chunk of individual stocks to exhibit the same behavior.  After filtering the effect of the market out (by ranking every column of data in a particular timeframe on a scale of 1-50), the "volatility ratio effect" totally disappeared.

The lesson is this:  a lull in the volatility of the overall market may be a positive sign, but one shouldn't expect a lull in an individual stock to predict much of anything.

Oct 10:  The Dow gained .1%, Nasdaq .2%.  Separation between groups was 2.2%.

Stocks with a low "leadership" ranking (stocks whose moves are contrary indicators to the future direction of the market) were strongest...up 1.8%.  Oils were strong.  Stocks that tend to trade as a group (a high "corr" value) fared well.  One month losers outperformed.

On the negative side, little of significance emerged.  A high "vave" (a proprietary indicator) predicted losses of .4%.  Tech stocks and banks were weak.  Stocks with recent weakness continued to be weak.

The above trends are neutral for the next session...we'd like to see a stronger performance out of the most volatile of stocks.

Oct 9:  The Dow gained .1%, Nasdaq .5%.  Separation between groups was a mere 1.9%.

Cheap stocks were strongest today...up as much as 1.7%.  Stocks trading well over their 20 day averages were strong.  Friday's losers reversed.  Semiconductors fared well.  Stocks with high recent volatility outperformed.

Despite cuts in OPEC production, oils were weakest...down .2%.  Stocks that have been significantly weaker than their best trading partners over the last few weeks failed to gain.  Non-volatiles did not keep up with the market.

The above trends are positive for the next session.

Oct 6:  The Dow lost .1%, Nasdaq .3%.  Separation between groups was 2.2%.

Stocks with large yearlong losses were by far the best performers today...up 1.1%.  Volatile stocks were strong.  Free agents gained nicely.  Biotechs and oils outperformed.

Retails continued their losing ways...down 1.1%.  Stocks with large gains over the last week underperformed. 

The above trends are positive for the next session.

Oct 5:  The Dow gained .1%, Nasdaq .7%.  Separation between groups was 2.8%.

Stocks with a low "leadership" indicator led the way today...up 2.8%.  The trend was quite significant.  Stocks with large recent losses were strong.  No industry groups appeared on the winning side of our tables.

Only a couple groups actually lost money.  Retails lost just a tad.  Stocks with large gains on Tuesday were down.  Utilities were weak.  Non-volatiles underperformed.

The above trends are positive for the next session.

Oct 4:  The Dow gained 1.1%, Nasdaq 2.1%.  Separation between groups was 2.5%.

Our top gainers came from a cluster of normally dowdy business, primarily composed of restaurants...up 2.5%.  Last Friday's big loser's reversed.  Stocks with recent weakness in general were strong today.

We only identified one loser...the smallest of small caps were essentially flat.  Non-volatiles didn't keep pace with the market.  Free agents and cheap stocks were weak. 

The big gains in the general market are nice, but we'd like to see more action in the high-risk end of the market...today's trends are weakly positive for the next session.

Oct 3:  The Dow gained .5%, Nasdaq .3%.   Separation between groups was a big 4.2%, driven by large gains and losses in specific industries.

Retails were clearly the leader today...up 1.8%.  The next closest group (represented by a proprietary indicator) gained .9%.   Stocks with nice gains over the last three months continued upwards.

Losers were topped by oils...down 2.4%.  3 month losers continued to lose.  Last Friday's big gainers showed weakness. 

The above trends are only slightly positive for the general market...we'd like to see volatile stocks making the big moves upwards, and non-volatiles getting left behind.

***********

You may been following the Amaranth hedge fund debacle.  Though the details aren't yet clear, it seems that a good chunk of the losses relate to going long on March contracts for natural gas, and short on April contracts, expecting the spread between the two to grow, or perhaps dwindle at an unexpectedly slow rate.  Take a look at our seasonal charts for natural gas, and ask yourself if that's a good idea from a seasonal perspective.

Oct 2:  The Dow lost .1%, Nasdaq .9%.  Separation between groups was 2.2%.

Entertainment-related stocks were strongest...up .3%.  Utilities finished in positive territory.  Stocks with large dividends held ground.  Non-volatiles, expensive stocks, and large-caps round out our list of outperformers.

Losers were topped by software stocks...down 1.9%.  Oils were weak.  As is often the case, stocks with big gains on the last day of the quarter reversed. 

The above trends are negative for the next session.

Sep 29:  We have our third quarter data.  We see the general market up about 1.5%.

The strongest stocks were retails...up about 10%.  REIT's faired nicely.  Non-volatiles gained about 5%.  Stocks with large losses in June fared well. 

On the losing side, stocks with strong June performances lost as much as 7%.  Stocks that were particularly strong in Q3 2005 reversed.  Stocks with big yearlong gains fared poorly, violating a historically strong rule.  Big winners on the last day of June were also weak (confirming another rule).

The above trends don't match up well with any particular historical Q3.

*************

We have our data for the month of September.  Our own take on the market had it up about 1.3%.

The strongest stocks were retails...up 7%.  Stocks that came into the month with large 3 month losses fared well.  Despite the absence of semiconductors and biotechs in our "top 10" list, volatiles outperformed the general market. 

The weakest stocks were the cheapest...down 4.5%.  Fundamentally unsound stocks (as measured by p/e ratio) were weak.  Oils and biotechs lost ground.  Big winners in September 2005 reversed.  Stocks with late August weakness continued to underperform.

The above trends don't match up strongly with any particular historical September.  The general gains do extend a September winning streak to 4 years now...over the longer haul, September has been the weakest month of the year.

*************

We have our data for the second half of September.  The period was just a tad negative...down .2%.

Companies held largely by insiders fared best...up 2%.  Retails continued to gain. 

On the negative side, fundamentally unsound stocks (as measured by p/e ratio) dropped about 4.2%.  Cheap stocks, small caps, and yearlong losers also finished in negative territory.

*************

The Dow lost .3%, Nasdaq .5%.  Separation between groups was 2.5%.

Cheap stocks were clearly the strongest group today...up .8%.  Stocks that have significantly underperformed their best trading partners in the last month were strong.  3 month losers finished in positive territory.  Oils stayed above water.

On the negative side, last Monday's big gainers plopped 1.7%.  Banks were weak.

Looking ahead to the fourth quarter, one should recall that trends that occur at the ends of quarters are often contrary indicators.  Thus, for example, we have one small piece of evidence that perhaps cheap stocks will not experience a resurgence in the next three months.

The above trends are neutral for the next session.

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