The Deen's List(TM) A service of Deen Capital Management, Inc. Vol.1 #27 Sunday October 19 2003 Please read carefully our disclaimers at the end of this newsletter. Market stance: BULLISH (since Oct 3 2003) *************** Weekly Status Report: Market Commentary **************** We were having a good week up until Friday, when a single sharp down day erased those gains. Thursday was the latest in a series of year-to-date highs (actually 19- month highs) in the NASDAQ. It's moments such as this -- a sharp down day after a year-to-date high -- that MAY present ideal exit points for the market timer. I have not yet decided to turn bearish, though further weakness next week might be reason enough to do so. I do not like changing my market stance so frequently; on the other hand, I like losing money even less. Earnings season is in full swing now, and earnings are very good, as expected, but it's not at all clear that there is enough of a positive surprise factor in these earnings to fuel further gains in the market. Most, if not all, of the good news was already priced in as stocks ran up during August and September, and arguably got ahead of themselves. Also, there were some high-profile and worrisome disappointments last week (such as EBay). I still think we are in a new primary bull market, fueled by a fledgling economic recovery. This bull market has now turned one year old. That's still quite young as bull markets go. And so, if I do turn bearish next week, it will probably be only for a short time. And, if there is a severe correction over the next few weeks, there's a good chance that that will set up a strong finish to the year. I wrote last week about the "October effect". My research suggests that if the market was strong going into October -- as it was this year -- then the odds of a bad October go up. This adds to my worry that Friday's selloff -- minor in and of itself -- may be a prelude to a more severe correction. What about my indicators? My NASDAQ Timing Model is still bullish, but my Performance-of-Recent-Stock-Picks Index is worrisome. It's still positive, but, over the past two weeks, it has fallen alarmingly (from +7.1 two weeks ago to +5.6 one week ago to +2.9 now). I consider the direction of change to be more significant than the number itself, so I interpret this indicator as bearish right now. Even on an absolute basis, +2.9 is a weak reading. On the other hand, Friday's selloff came on a downtick in volume, which suggests it can be safely ignored. For the moment, I'm still bullish, but this is subject to change any day. -KD **************************** Open Positions **************************** Stock Buy NetBuy Current Holding Gain Symbol Date Price* Price Period (Loss) ----- -------- ------ ------ --------- ------ AGE 10/07/03 $38.74 $40.98 1.4 weeks +5.8% APH 10/15/03 $58.55 $58.57 0.3 weeks +0.0% BSX 10/15/03 $64.75 $63.48 0.3 weeks -2.0% COO 10/14/03 $42.01 $42.05 0.4 weeks +0.1% MOVI 10/08/03 $21.97 $21.99 1.3 weeks +0.1% NXTL 10/03/03 $20.73 $21.81 2.0 weeks +5.2% PLCE 10/09/03 $24.10 $27.67 1.1 weeks +14.8% QLGC 10/16/03 $54.23 $52.70 0.1 weeks -2.8% TSA 10/13/03 $37.74 $36.08 0.6 weeks -4.4% ********************** Positions Closed Last Week ********************** Stock Buy NetBuy Sell NetSell Holding Gain* Symbol Date Price* Date Price* Period (Loss) ----- -------- ------ -------- ------ --------- ------ HLYW 10/07/03 $17.31 10/14/03 $16.73 1.0 weeks -3.3% BRCM 10/03/03 $17.42 10/17/03 $30.26 2.0 weeks +4.2% * "Net" buy (sell) prices are the total net purchase cost (proceeds) after commissions for all managed accounts divided by the total number of shares. The Gain (Loss) is therefore also net after commissions. *********************** Subscription Information *********************** Welcome to The Deen's List(TM), a new e-mail stock newsletter from Deen Capital Management, Inc. My intention is to inform you as quickly as is practical regarding my stock market moves. When I buy or sell a stock, first I take care of client accounts, then I buy/sell for my personal account(s), and then, third, I send out this newsletter. Your feedback is welcome. Send e-mail to deenslist@deencapital.com. To subscribe or unsubscribe, include the word "subscribe" or "unsubscribe" in the Subject line. This newsletter is free to managed account clients. For a limited time, it is also free to all interested parties. **************************** Privacy Policy **************************** Your personal information, including your e-mail address, will be held in confidence by Deen Capital Management, Inc. We will not share it with or sell it to others. ************************ IMPORTANT DISCLAIMERS ************************* * All stocks discussed in The Deen's List(TM) involve a high degree of risk. It should not be assumed that any stock discussed in The Deen's List(TM) or purchased by Deen Capital Management, Inc. will be profitable. * Past performance is not necessarily indicative of future results. * The information contained herein has been compiled from sources deemed to be reliable; however, we are not responsible for its accuracy or completeness. ************************************************************************ Ken Deen Deen Capital Management, Inc. PO Box 30925 Santa Barbara, CA 93130 (805) 682-1870 deenslist@deencapital.com Copyright (C) 2003 Deen Capital Management, Inc.