Friday, October 31, 2008

The Kirk Report

The Kirk Report

One For The History Books

Posted: 31 Oct 2008 04:14 PM CDT

Good news - October is finally in the history books.

S&P 500: This Week

For the week, the S&P 500 rallied +10.49%, Dow +11.29%, Nasdaq +10.88%, and the Russell 2000 +14.09%. The bulls even tried to knock on the key 980ish level in the S&P 500 today ahead of next week's big election.

While the gains were impressive this week, the largest rallies could be found overseas in Russia (RSX), Europe (GUR), Turkey (TUR), South Korea (EWY), South Africa (EZA), and the BRIC (BIK) which jumped more than +30% higher over the past five trading days.

Other big winners this week were real-estate (URE), gaming (BJK), telecom (LTL), steel (SLX), and lots of small caps (UWM). Meanwhile, the worst performances were found in those leveraged "ultra" short funds like the EEV, FXP, SRS, DUG, SMN, TWM, & SCC.

I'll be back next with with another monthly review of my stock screen machine, another member mailbag, and a few more interesting items as we start off November. Until then, I hope you a great Halloween weekend!

Spooky Stocks 2008

Posted: 31 Oct 2008 12:49 PM CDT

It's time to celebrate Halloween by revealing this year's Spooky Stocks - i.e. the stocks most likely to scare investors and blow away their returns. Before we do so, let's first take a look at the performance of previous spooky stocks.

The stocks I selected back in 2006 declined -16.85% last year which was pretty good considering the bull market at the time. In addition, if you kept shorts on many of those stocks again for another year, you'd would have seen some seriously scary action - namely JDO, SORC, & OVRL (spooky stocks in 2006) went on to decline more than -95% if you sold them short for two years instead of just one!

Last year we started doing two lists - spooky stocks submitted by members and my own picks. Here's how they both performed. Members' spooky stocks declined -51.39% (2 gainers & 28 losers). My spooky stocks declined -44.43% (3 gainers & 24 losers.

Unfortunately, both tracking performance figures are not fully representative of the declines. For example, within the members' picks (BEAS, HSOA, & CFC) were not figured in because they either got taken over, moved to the OTCBB, or something else. The same is true with 6 of my picks last year (ACA, CLAY, FMP, NRMX, RSTO, & WCI). I know a couple of these went belly up, but as for the others I don't really know. If someone would like to take the initiative to track down the final closing price of each of these stocks, please let me know and I'll update these performance totals.

With that known, it's time to reveal our Spooky Stocks for 2008:

file spookystocks2008_members.gif

Spooky Stocks

Although I don't know what the reasoning was behind the picks submitted by members this year, I can tell you that my goal was to find the companies with the worst fundamentals, valuations, and most negative forward potential. Things could certainly change and some companies as you know do come back from the dead, but many of these stocks are headed to the market's graveyard as we've seen in previous years. In fact, current economic conditions should accelerate that trip.

Happy Halloween!

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More Volatile Trading Ahead

Posted: 31 Oct 2008 08:15 AM CDT

Good morning. Weakness in overseas markets (both the Hang Sang & Nikkei fell -5%) have provided negative sentiment in premarket trading. We've also seen a mixed reaction to this morning's economic data on personal income, personal spending and employment costs. Focus also remains on the latest batch of earnings reports while liquidity and credit conditions around the world continue to show improvement.

Premarket gainers: PDGI, AKAM, IVN, LMC, CAJ, NXG, SAIA, DIVX, SWIM, CDE, BOOM, AIRT, UCBH, MGM, WNR, LHCG, ARKR, IDCC, UAUA, EMS, GLBL, ESRX, AMR, MPEL, TITN, SJM, & MFE.

Premarket losers: ERTS, ACGY, BARE, VISN, PWAV, CNXT, MORN, HTGC, TRIN, GM, BT, PCLN, CSIQ, SOLF, CNXT, STLD, SBUX, BCS, PETS, GFIG, BCS, CTV, MT, IFX, MTL, AAUK, TRIN, JAVA, & GME.

As you might expect, expectations are quite low for both the Chicago manufacturing PMI (9:45) and the University of Michigan consumer sentiment survey (10:AM) and good news there would serve as a positive catalyst on an otherwise slow news day.

For the final trading day of October, I want to see the S&P simply hold above the 930 level which has been the area that buyers have come into the market over the past couple of days. Have a great Friday!

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