Dear Subscribers,

Thanks to Sheraz Mian for ably filling in for me during my vacation the past week. Unfortunately I came back to see that the "risk off" trade continued Monday as small caps and other high beta stocks continued to take it on the chin. It's hard to see that given the modest -0.4% decline of the Dow. However, the -1.6% drubbing of the NASDAQ and -1.5% flogging of the Russell 2000 paints the full picture.

Gladly I think this pain is about to stop. Why? Because I have one of the best market timing indicators. I call it the Reitmeister Panicked Selling Index (aka Reitmeister Nausea Index).

Here is how it works. I am a professional investor who can deal with the ups and the downs better than most. Yet every man has his breaking point. So when the market is running against me for too long, I start to hear little voices in my head to SELL NOW!!! I have learned to not give into these impulses because at the peak of the panic the market general bounces higher within a day or two. Right now those alarms are going off in my head (and stomach). So I am doing my best to sit tight with my favorite stocks expecting them to bounce soon. Let's see how well the index works this time around.

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

Today's Top Stories: Tuesday- May 17, 2011

ZACKS RANK BUY STOCKS

• Aggressive Growth - Hexcel Corp. (HXL) operating income almost doubled, from $23.8 million to $27.2 million. That led to earnings per share of $0.25, which was 5 cents higher than the Zacks Consensus Estimate. Read More...
   
• Growth & Income - AmTrust Financial Services, Inc. (AFSI) reported first quarter earnings per share of 76 cents, crushing the Zacks Consensus Estimate of 55 cents. Total revenue for the quarter came in a $275.8 million. Read More...
   
• Momentum - Weight Watchers International (WTW) earnings came in strong at $1.00, 12% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 9% over the last four quarters. Read More...
   
• Value - Valero Energy Corporation (VLO) analysts have raised, and one lowered, estimates for 2011 in the last month. That has pushed up the Zacks Consensus by 25 cents to $3.25 per share for an earnings growth of 91%. Read More...
   

Learn how to profit from our exclusive Zacks Rank stock-ranking system with free resources. Read More...

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• Zacks Industry Outlook: Chemical Industry Outlook – May 2011
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EDUCATION: Value

Factoring in Intangibles Read More...

PeopleAndPicks.com:

VIP "dmonnie" pinpoints trade makers with BUY calls in (AP), (LBY) and (PEET).
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EARNINGS PREVIEW Retailers' Turn

Retailers are just about the only firms left to report first quarter earnings, and most of the big remaining ones will report next week. Read More...

• LEFT OUT OF JOBS RECOVERY @ CNNMoney.com
• Capital One: Financial Winner @ TheStreet.com
• 10 Companies With the Best Work/Life Balance @ MAINSTREET.com
• How to Reel In Exploding U.S. Debt @ FOXBUSINESS.com

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

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