Please read carefully our disclaimers at the end of this newsletter. Weekly Status Report: Contents
Year-To-Date Performance
* An average of managed accounts, net after commissions and fees. Individual account results may vary. See also www.deencapital.com/perform.htm. For information on managed accounts, see www.deencapital.com/mgdaccts.htm. Market Stance: BULLISH (since August 18, 2004) Some major uncertainties were resolved last week -- there was no election-related terrorist attack, we know who our next President is, and the outcome was decided by the people, not the courts -- and Wall Street partied. The post-election rally I was expecting is emphatically here. The three major indices each gained more than 3% last week, and volume continues to be heavy. Deen Capital managed accounts posted solid gains, but lagged the market because I stepped on a land mine. On Wednesday, I bought a stock (DITC). A few hours later, after the close, the company issued an earnings warning, and the stock price immediately collapsed by some 30%. Fortunately, our other stocks performed so spectacularly well that they more than made up for the loss. Going forward, I expect the pace of the market's advance to cool a bit, and the pace of our account values' advance to pick up. My primary technical indicators are unanimously bullish: + My NASDAQ Timing Model (Ver.10q) remains on its October 1 bullish signal. + My Performance-of-Recent-Stock-Picks Index (PRSPI) improved from +5.0 to +6.4. It's now back into "green light" territory. + Market internals are strong and improving. The percentage of stocks ($8 and up) trading above their 50-day moving average now stands at 79%, the best level of this metric in a month. Also, we've had two nice surprises adding fuel to the rally -- a drop in the price of oil and a very robust jobs report from the Labor Department. Oil futures, you'll recall, had been on a relentless climb, and this was keeping a lid on stock prices. They peaked at $55.50 on Mon Oct 25, the latest in a series of all-time highs. But now they've fallen for two weeks in a row. The latest price is $49.61. Regarding that jobs report -- we learned Friday morning that 337,000 non-farm jobs were created in the U.S. in October, almost twice the expected increase. This is very welcome news. On the negative side, we can expect more rate hikes from the Fed, including one next week. Indeed, at some point down the road, rising interest rates will likely become a problem for stocks. But my technical indicators are telling me "not yet". This looks and feels like the early stage of a new bull market which began in August. Some backing and filling, consolidation, profit-taking, whatever you want to call it (these are all euphemisms for "down days") is to be expected now -- but the trend is clearly up. As always, however, my view of the market's direction is subject to change at any time without notice, as I review market conditions on a daily basis. -KD, November 6, 2004
* Net buy prices shown are the total net purchase cost after commissions for all managed accounts divided by the total number of shares. Stocks Sold Over Past 13 Weeks
* Net buy (sell) prices shown 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 net after commissions. Welcome to The Deen's ListTM, an 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. Your personal information, including your e-mail address, will be held in strict confidence by Deen Capital Management, Inc. We will not share it with or sell it to others. All stocks discussed in The Deen's ListTM involve a high degree of risk. It should not be assumed that any stock discussed in The Deen's ListTM 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 Copyright © 2004 Deen Capital Management, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||