Wayne Harrison, the founder of the KWIK*POP trading approach (it is more of an approach than a system), likes to remain in close contact with his customers.  I receive e-mails from him nearly every day discussing improvements, refinements and fine points of trading with the software add-on tools he provides.  He even makes himself available, during trading hours, using an internet link with his customers known as Hotcomm Lite (see www.hotcomm.com).  So, KWIK*POP users can share charts and talk with each other as they watch the market in real-time.  I admire this level of dedication and product support.  Here are some charts from today's session -- near the close: 

The tan chart on the left portrays the 1 minute candlesticks.  Notice the thin, vertical aqua line, about three inches high at the very left side of the chart.  That is known as a "volume spike."  Generally, it is followed by a weakening of prices.  This did occur, to such an extent that the candlestick turned yellow.  The pink arrow pointing down, and the other momentum oscillators, suggest the possibility of going short at about 12:46 pm (Pacific Time).  However, 2 minute charts in the middle and the 3 minute chart on the right failed to confirm the downside signals.  And, in fact, the market bounced right back up. 

At 12:49, all three charts look bullish.  One could have gone long at about 882.5.  As I have mentioned before, KWIK*POP does not provide clear entry or exit signals.  If I had taken that trade (which I did not), I would have probably held out for two points.  Unfortunately, the market went up to only 884.00 before retreating back down.  The chart below shows the options over the next few minutes: 

As you can see the two and three minute charts remained bullish (to put it in simple terms, blue) all the way up again to 884.  However, had I allowed the pink down arrows on the one minute chart to frighten me, I might have sold the position with a tiny profit at 883. 
 
 

Very little of my forecasting work focuses, these days, on fundamental analysis.  This is largely because I enjoy looking at short-term fluctuations.  Fundamental analysis, I think, is largely for long-term investing.  On the other hand, my impression is that the wealthiest investors are those who, in the tradition of Warren Buffett, have taken a fundamental approach.  Frankly, I don't know of anyone who has become a billionaire by virtue of short or medium term speculation (although perhaps some do exist). 

The Value Point Analysis Stock Forum offers participants free use of a software model that analyzes 13 different pieces of fundamental information about a company.  The output is the value point: what this software -- based on certain assumptions -- believes the stock is really worth.  In addition, it is possible to create various scenarios using this model.  And, there is already an archive with data from hundreds of companies. 

The image below show a Value Point Analysis of ORCL, done last May: 

Today, ORCL closed at $9.49. 

The software model is a little outdated.  It was used by Merrill Lynch in the 1970s, and by Dean Witter in the 1980s.  Clearly, this model was not designed to account for the risks that are paramount in the minds of investors today -- i.e., inflated earnings reports, war and terrorism, stocks that have been overvalued for years, etc.  Nevertheless, I think it is a good starting point to begin to think about questions of fundamental analysis. 

I like the fact that this free website very generously makes a great deal of useful information available to the general public.  But, I decided to explore further to see if I could learn about other competing products and services.  And, I did find a few.  RAVE is a free, web-based system similar to Value Point, however it seems to allow for many more inputs.  Sharepricer.com offers software of a similar nature for only $19.95.  Fullerton Software offers another package that appears to be much more sophisticated for $25.00. 

But, I would have to say the most impressive looking offering I found was that of a company called VectorVest.  In addition to a very sophisticated (and higher priced) software package, they also offer a free, web-based fundamental analysis service. 

Thank you for requesting an analysis of Oracle Systms from VectorVest. The ticker symbol for Oracle Systms is ORCL. ORCL is traded on the NASDAQ and options are available on this stock.   
   
PRICE: ORCL closed on 10/18/2002 at $9.49 per share.   
   
VALUE: ORCL has a Value of $5.96 per share. Value is the foundation of the VectorVest system. It is a measure of what a stock is currently worth. Value is based upon earnings, earnings growth rate, dividend payments, dividend growth rate, and financial performance. Current interest and inflation rates also play an important role in the computation of Value. When interest and/or inflation rates decrease, Value goes up. When interest rates and inflation increase, Value goes down. Sooner or later a stock's Price and Value always converge.   
   
RV (Relative Value): ORCL has an RV of 0.77. On a scale of 0.00 to 2.00, an RV of 0.77 is poor. RV reflects the long-term price appreciation potential of the stock compared to an alternative investment in AAA Corporate Bonds. Stocks with RV ratings above 1.00 have attractive upside potential. A stock will have an RV greater than 1.00 when its Value is greater than Price, and its Relative Safety (see below) and forecasted earnings growth rate are above average. In some cases, however, a stock's RV will be above 1.00 even though its Value is well below Price. This happens when a stock has an exemplary record of financial performance and an above average earnings growth rate. In this case, the stock is currently selling at a premium, and the investor is banking on future earnings growth to drive the stock's price higher. This information is very useful not only in knowing whether or not a stock has favorable price appreciation potential, but it also solves the riddle of whether to buy high growth, high P/E, or low growth, low P/E stocks. We believe that RV ratings above 1.00 are required to consistently achieve above average capital gains in the stock market.   
   
RS (Relative Safety): ORCL has an RS rating of 1.07. On a scale of 0.00 to 2.00, an RS of 1.07 is fair. VectorVest looks at safety from the viewpoint of an equity investor (one who is buying stock of a company) rather than that of a purchaser of debt (one who is lending money to the company). From this perspective, consistency of financial and operating performance, stock price appreciation history, and price volatility are the key factors used in the evaluation of Relative Safety (RS). Debt to equity ratio, capitalization, sales volume, business longevity and other factors are also considered, but to a lesser degree.  
VectorVest favors steady, predictable performers. All stocks are rated on a scale of 0.00 to 2.00. A stock with an RS greater than 1.00 is safer and more predictable than the average of all stocks. A stock with an RS less than 1.00 is less predictable and riskier than the average stock.  
   
RT (Relative Timing): ORCL has an RT rating of 1.03. On a scale of 0.00 to 2.00, an RT of 1.03 is fair. RT is a fast, responsive, short-term price trend indicator. It analyzes the direction, magnitude, and dynamics of a stock's price behavior over the last 13 weeks; then reflects and projects the short-term price performance of the stock. Once a stock's Price has established a strong trend, it is expected to continue that trend for the short-term. If the trend dissipates, RT will gravitate towards 1.00. Should the price change dramatically, RT will notice the crucial turning point. When warranted, it will explode from a Price low and dive from a Price high.  

All stocks are rated on a scale of 0.00 to 2.00. If RT is above 1.00,the stock's Price is in an uptrend. Below 1.00, the stock's Price is in a downtrend.  
  
VST-Vector (VST): ORCL has a VST-Vector rating of 0.98. On a scale of 0.00 to 2.00, an VST of 0.98 is fair. VST-Vector solves the dilemma of balancing Value, Safety and Timing. Stocks with high RV values often have low RS values, or stocks with low RV and RS values have high RT's. How can we find the stocks with the best combinations of Value, Safety, and Timing?  
The classic vector formula (square root of the sum of the squares) handles this problem. It combines a set of forces into a single indicator for ranking every stock in the VectorVest database. Stocks with the highest VST-Vector have the best combinations of Value, Safety and Timing. These are the ones to own for above average capital application.  
  
GRT (Growth Rate): ORCL has a GRT of 4 % per year. This is very poor. GRT stands for forecasted Earnings Growth Rate in percent per year. GRT is updated each week for every stock. Watch GRT trends very carefully. If the GRT trend is up, the stock's Price will likely rise. If the GRT trend is down, the stock's Price will increase more slowly, cease to increase, or subsequently fall.   
   
Recommendation (REC): ORCL has a Hold recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks which are rising in price, and to avoid or sell risky, overvalued stocks which are falling in price.  

VectorVest is tuned to give an "H" or "B" signal when a stock's price is approximately 10% above a recent low, and an "S" signal when the stock's price is approximately 10% below a recent high. High RV, RS stocks are favored toward receiving "B" REC's, and sheltered from receiving "S" RECs.  
   
STOP-PRICE: ORCL has a Stop-Price of 8.76 per share. This is 0.73 or 7.7 % below its current closing Price. VectorVest analyzes over 7,400 stocks each day for Value, Safety and Timing, and calculates a Stop-Price for each stock. These Stop-Prices are based upon 13 week moving averages of closing prices, and are fine-tuned according to each stock's fundamentals.  
In the VectorVest system, a stock gets a "B" or an "H" recommendation if its price is above its Stop-Price, and an "S" recommendation if its price is below its Stop-Price.  
  
   
DIV (Dividend): ORCL does not pay a dividend. VectorVest focuses on annual, regular, cash dividends indicated by the most recent disbursement. Special distributions, one-time payments, stock dividends, etc., generally are not included in Dividend (DIV).   
   
DY (Dividend Yield): ORCL has a DY of 0 percent. This is below the current market average of 1.1 %. DY equals 100 x (DIV/PRICE), and is expressed as a percentage.   
   
EY (Earnings Yield): ORCL has an EY of 4.52%. This is above the current market average of 3.83%. EY equals 100 x (EARNINGS PER SHARE/PRICE), and is expressed as a percentage.   
   
EPS (Earnings Per Share): ORCL has an EPS of $0.43 per share. EPS stands for leading 12 months Earnings Per Share. VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year earnings forecasts.   
   
P/E (Price to Earnings Ratio): ORCL has a P/E ratio of 22.07. This ratio is computed daily based upon Price and EPS. P/E = Price/EPS.   
   
GPE (Growth to P/E Ratio): ORCL has a GPE of 0.18. This ratio suggests that ORCL is overvalued. Growth to P/E ratio is a popular measure of stock valuation which compares Earnings Growth Rate (GRT) to Price Earnings ratio (P/E). A stock is considered to be undervalued when GPE is greater than 1.00, and vice-versa. VectorVest believes that RV is a much better indicator of long-term value. The RV of 0.77 for ORCL is poor.   
   
DS (Dividend Safety): ORCL has a DS of 0. On a scale of 0 to 99, a DS of 0 is poor. DS is defined as the assurance that regular cash dividends will be declared and paid at current or at higher rates for the foreseeable future. Stocks with DS values above 50 on a scale of 0 to 99 are above average in safety.   
   
RISK (Dividend Risk): ORCL does not pay a dividend. All stocks in the VectorVest system that pay dividends are classified as having Low, Medium or High Dividend Risk (RISK). Stocks with DS values above 50 are above average in safety. These stocks are classified as having LOW or MEDIUM RISK. Stocks with DS values below 50 are below average in safety and are classified as having HIGH Risk.   
   
DG (Dividend Growth): ORCL has a DG of 0 percent per year. Dividend Growth is a subtle yet important indicator of a company's historical financial performance and the board's current outlook on the future use of funds.   
   
YSG-VECTOR (Yield-Safety-Growth Vector): ORCL has a YSG-Vector of 0. On a scale of 0.00 to 2.00, a YSG-Vector rating of 0 is very poor. VectorVest combines Dividend YIELD, SAFETY and GROWTH into a single parameter. YSG-Vector allows direct comparison of all dividend paying stocks. Stocks with the highest YSG-Vector values have the best combinations of Dividend Yield, Safety and Growth. These are the stocks to buy for above average current income and long-term growth.   
   
VOL(100)s: ORCL traded 54763500 shares on 10/18/2002.   
   
AVG VOL(100)s: ORCL has an Average Volume of 47990000. Average Volume is 50 day moving average of daily volume as computed by VectorVest.  
  
   
% VOL: ORCL had a Volume change of 14.1% from its 50 day moving average volume.   
   
OPEN: ORCL opened trading at $9.55 per share on 10/18/2002.   
   
HIGH: ORCL traded at a high of $9.67 per share on 10/18/2002.   
   
LOW: ORCL traded at a low of $9.23 per share on 10/18/2002.   
   
CLOSE: ORCL Closed trading at $9.49 per share on 10/18/2002.   
   
% PRC: ORCL showed a Price change of -3.8% from the prior day's closing price.   
   
INDUSTRY: ORCL has been assigned to the Software (Business) Group. VectorVest classifies stocks into over 190 Industry Groups and 50 Business Sectors.   
   
ORCL has about average safety with well below average upside potential. It reflects a stock which is likely to give well below average, relatively consistent returns over the long term.   
   
The basic strategy of VectorVest is to buy low risk, high reward stocks. We suggest that Prudent investors buy enough high Relative Value, high Relative Safety stocks to keep the overall RV and RS ratings of their portfolios above 1.00. As you do this, you'll find that your risk will go down and your investment performance will improve. Not a bad combination. Thank you for your interest in VectorVest 

 

If all of this free information was not enough, I discovered with great anticipation, that VectorVest also offers market-timing software.  In fact, as the chart below shows, the company claims to have called every single major market turn since 1991: 

In fact, the VectorVest website even offers a report from the University of Chicago that seems to demonstrate how dramatically their selected investment portfolio outperformed the S&P 500.  Academic endorsements are hard to come by.  So; I am impressed.  On top of that, I discovered a lengthy and generally quite favorable review in Technical Analysis of Stocks and Commodities.  As you might imagine, at this point, I am seriously considering adding VectorVest to my growing collection of market analysis software packages.  Since the company provides a 5-week trial offer for only $9.95, it's a hard deal to pass on. 

BioComp Profit Neural Network S&P 500 Futures Contract "MegaSystem" Forecast: 
Friday's close: down from Thursday's close 
Monday's close: down from Friday's close 
Tuesday's forecast will be available on Saturday 

Nirvana OmniTrader Composite Technical Forecast for the S&P 500 Futures Contract: 
Short-term, aggresssive strategy: down 

Volatility Breakout System, Daily, for S&P Futures Contract:  
Buy stop order filled Thursday at 877.00 
Sell limit order for Friday set at 888.50, filled. 

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