On Monday, September 26th, the price of GMX Resources, GMXR, closed at $21.09 per share, with a VST rating of 1.43. Stock Viewer ranked it 38th from the top of the list by VST. On Tuesday GMXR's price soared 12.71% and Stock Viewer ranked it fourth highest by VST, with a rating of 1.52. On Wednesday, GMXR soared another 11.02% and it became the top rated stock in the VectorVest database, as ranked by VST, with a rating of 1.56. This was no surprise.

GMXR has been on a roll since it broke out to a new high at $8.54 per share on high volume in mid-January. It subsequently made a succession of new highs and joined the 2005 FWS Cumulative WatchList at $8.91 per share on February 4th. After several months of consolidation, it began soaring again and achieved its first VST rating above 1.40 on June 28th. It became a charter member of the elite FWS Favorites WatchList at $14.85 per share on July 15th, and appeared on the primary Stock Viewer screen for the first time on July 19th, with a VST rating of 1.45. It's been on and off this screen ever since.

So what's the point of all of this? The point is that there are ways of spotting good stocks that are moving higher in the VectorVest hierarchy long before they become the top rated stock. One of the best ways is to use Delta VST.

Before going into how I like to use Delta VST, allow me to digress. We used to have a lot of fun with the Delta VST in our Executive Premier Workshops in late 1999 and early 2000. We would run a 5-day Delta VST search as of October 22, 1999 and sort by VST Delta descending. (Many of you may recall that this was one of our best bull market calls of all-time.) Anyway, a little stock called Smartserve would appear at the top of the list. In one week this stock was up by 119.05%. In one month it was up 504.76%. Although it was up 1,614.29% in three months, it was behind Precision Optics which was up 1,910.30%. As you might expect, Smartserve peaked just before the bubble burst. On February 23, 2000, it was up 6,414.29%! The top ten stocks were up an average of 923.29%!!

I have tested the Delta VST search over a number of years and found I like it better than a Delta Price or Delta RT search in many cases. Price and RT are strictly technical indicators while VST combines both fundamental and technical information. In any case, each search has its time and place. If we're looking to find stocks moving up in VST rank, however, there's nothing better. But you just can't use a simple 5-day Delta VST. I have found that using it on stocks that already have a VST rating of 1.40 or better is a great way to find a better class of stocks moving up in price. I also found that a price cap on the search often supercharges the gains.

This week's "Strategy of the Week" illustrates a Delta VST search called "Rising VST Stocks." It gave 167.22% gain from 01/07/05 through yesterday. Using Auto Tester, I also ran a portfolio using this strategy from January 7, 2000 through yesterday. It produced a phenomenal gain of 3,836.31%. Momma mia! Viva la Delta VST.

Attendees at our upcoming Two-Day Investment Seminar in Lynnwood, Washington are in for a special treat. They will be receiving a Friday night presentation on Firework Stocks. These stocks have been sensational performers in a very difficult market.

By definition, a Firework Stock is one that shoots up in price and goes on to double, triple or quadruple in a matter of weeks. The whole idea behind Firework Stocks was first described in my essay of July 1, 2005. A step-by-step procedure for finding these guys, at the lowest possible price, was given in my essay of July 8, 2005. I also noted that the procedure was somewhat complicated, so we created a WatchList Group called "Firework Stocks - 2005" and began sending the results of our searches to you. On July 15th, we began sending a WatchList called "FWS Favorites" to you. This is the mother lode and deserves your full attention. Let's see how they have performed.

Quick Test shows that the top 10 stocks ranked by VST in the 07/15/05 FWS Favorites WatchList gained an average of 36.41% from 07/15/05 through yesterday, 09/22/05. There were 8 winners and 2 losers. The Price of the VVC gained 0.18% over this same time period. The average annualized gain of the top 10 VST stocks in the 10 FWS Favorites WatchLists created since 07/15/05 was 55.26%. The average annualized gain for the Price of the VVC in this same series of tests was -20.59%.

I also ran a series of 10 back-tests on the FWS Favorites WatchLists using Portfolio Manager and AutoTester. In these tests, I bought the top 10 FWS Favorites stocks under $10.00, ranked by VST descending, sold on a 10% loss, and managed daily. (A similar test was shown as our Strategy of the Week on 07/29/05.) The average annualized gain for the ten tests was 84.90%. Not bad. These results are quite good actually, given the choppy market we've been in. Even so, I'm not suggesting that you blindly buy FWS Favorites stocks without paying attention to the direction of the market. It's much better to buy these guys when the market is going up, i.e., the Primary Wave is Up. When the Primary Wave is Down, as it is now, familiarize yourself with the graphs of these stocks. I always prefer to trade the stocks with the nice, smooth chart patterns.

If you are at all interested in buying low-priced stocks and watching them deliver triple digit gains, attend a seminar such as the one in Lynnwood, or at least re-read the essays cited above. Having said this, you should also be aware that past performance is not a guarantee of future profits. I like these stocks and will keep tracking and trading them. In a couple of months, I'll be sending you another Update on Firework Stocks.

President Bush spoke to the nation last night. He said the great city of New Orleans will rise again. Work has already begun to rebuild the Gulf Coast region and the federal government will fund "the great majority of costs" for repairing roads, bridges, schools, hospitals and other public facilities. Mr. Bush also cited more things that the federal government would do. Cost estimates of $200 billion have been bandied about to complete these tasks. Given the government's track record, my guess is that the final figure will be more, much more. Who will pay these costs?

Three weeks ago, Dr. Alan Greenspan, Chairman of the Federal Reserve Board and the man in charge of maintaining monetary stability, said the bloated trade and budget deficits threaten the long-term health of the U.S. economy. Little did he know the federal budget deficit was about to explode.

Both Mr. Bush and Dr. Greenspan need to step up to the plate here. I'm strongly in favor of rebuilding the Gulf Coast, but Mr. Bush has busted the budget by allowing Congress to spend money with reckless abandon. The tales of pork and fat in the recently signed $286.4 billion highway bill, which includes 6,371 pet projects and the $14.5 billion energy bill which rewards energy companies that are already making record profits and does little to relieve America from foreign suppliers, are nauseating. Mr. Bush needs to ask Congress to revisit these bills.

Dr. Greenspan has a different, but equally important, problem. He has a policy meeting coming up on Tuesday, September 20th, in which he needs to decide whether or not to raise interest rates for the twelfth consecutive time. If he's really concerned about the health of the U.S. economy, he would not raise interest rates now. The affects of hurricane Katrina on the economy are just beginning to unfold and evidence of the slowing effects of high gasoline prices on consumer spending have just started to appear. The risks of crippling the economy are too high. Indeed, Dr. Greenspan should be lowering interest rates, not raising them.

Mr. Bush, it's easy to spend other people's money. Dr. Greenspan, get out of the rut. We don't need another recession. What we need are leaders who can make courageous, Bold Moves.

ROUGH LANDING.
I've been wondering who in the world has been buying those crummy airline stocks like Delta and Northwest. I got my answer today in the Wall Street Journal. Apparently some clever hedge fund managers have been betting against the odds on the direction of oil prices and other matters. They got burned when both Delta and Northwest went into bankruptcy.

Take a look at the average RV, RS, RT and VST values for the Transportation (Airlines) Industry Group. All are below 1.00. Ugh. Look at the graphs of Delta and Northwest. Both have been losing altitude since last December. Now they have hit ground zero with a Rough Landing.

Many of you have noticed that VectorVest has been advertising on CNBC's show, "Cramer's Mad Money." As reported in my essay of April 15, 2005, I watch the show and I enjoy it. Best of all, I have made some serious money by watching the show. But I had a major advantage that most of his viewers didn't have. I had VectorVest.

When I first starting watching the show, I would sit back and enjoy it, occasionally jotting down symbols of stocks that seemed interesting. Then I thought it would be neat to compare Mr. Cramer's recommendations with those from VectorVest, so I began to check them in Stock Viewer. In doing this, I learned a lot more about the stocks Mr. Cramer was talking about, but I enjoyed the show a lot less. Moreover, I still had to write down the symbols of the stocks I liked. I then decided to create a "Mad Money" WatchList Group and put the ticker symbols into two WatchLists: one for Buys and one for Sells. Now I can enjoy the show and use rank analysis afterwards to see which stocks to favor and which to avoid. These WatchLists also allow me to see how well Mr. Cramer's recommendations are performing over time. (No, we will not be sending you these WatchLists.)

While Mr. Cramer is a very bright guy and knows a lot about the market, I don't agree with everything he says. For example, I don't like buying stocks falling in price. He claims to know when to do this and when not to, but I just don't do it. He doesn't like buying stocks hitting new highs, but recommends them all the time. He refuses to acknowledge market downtrends and says, "There's a Bull market out there somewhere and I'll find it." I wish I were that smart, but I'm not. So I try to let the trend be my friend.

While there are other areas where our methods differ, we agree far more than we disagree. For example, Mr. Cramer favors companies he calls, "best of breed." VectorVest does too. The stock with highest Relative Safety, (RS), rating in an Industry Group would be the "best of breed." Perhaps the most important area of agreement is that we both want to help you make money in the market. So why not put two and two together. Watch Cramer, use VectorVest and really see How to Make Money.