The Deen's List Vol.2 #291

The Deen's List^TM

A service of Deen Capital Management, Inc. (www.deencapital.com)

Vol.2 #291 Sunday, December 12, 2004

Please read carefully our disclaimers at the end of this newsletter.

Weekly Status Report: Contents

Year-To-Date Performance
Market Commentary
Open Positions
Stocks Sold Over Past 13 Weeks
Subscription Information
Privacy Policy
Disclaimers

Year-To-Date Performance

Year-To-Date as of December 10, 2004
Deen Capital	+3.4%	*
S&P 500	+6.8%

* 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 Commentary

Market Stance: BEARISH (since December 7, 2004)

One big down day, if other factors fall into place, can generate a bearish signal from my NASDAQ Timing Model (Ver.10q). We had just such a day, and signal, on Tuesday. In response, I turned bearish and sold everything. All managed accounts are now 100% in cash.

Tuesday, the NASDAQ Composite fell 1.7%. Volume, at 2.7 billion shares, set an 18-month record. This big down day came one day after the NASDAQ matched (within three points) its high for the year, set in January. This is a "double-top" chart pattern, and it triggered that bearish signal.

Looking at historical precedent, I find that my current Timing Model, when run over historical data, would have given a double-top signal thirteen times over the past 17 years (the current Dec 7 2004 signal is #13). Of the prior twelve occasions, six were excellent signals, in that the NASDAQ fell hard in the subsequent days and weeks. That suggests a 50/50 chance that the market is now on the brink of a substantial fall. I see the market as quite vulnerable here.

On the other hand, this could be one of those false signals. Reviewing past double-top signals, I notice that, when the market does fall hard subsequently, it starts doing so almost immediately, within a few days at most of the signal. We've now had three days since the signal, and the market has held up well.

Helping the market, we have the price of oil continuing to fall. Crude futures were recently over $50 a barrel. One week ago it was $42.54. Now it's down to $40.71.

So, then, the question becomes: Was Monday December 6 a major market top or not? And the answer is: It's too early to tell. I will be watching my other two primary technical indicators closely to give me a clue. (I'm referring to my Performance-of-Recent-Stock-Picks Index [PRSPI] and the percentage of stocks trading above their 50-day moving average.) Both of these indicators fell last week, though only slightly. If these two indicators improve, I may choose to override my NASDAQ Timing Model and start buying again.

Next week is key.

-KD, December 12, 2004

Open Positions

- none -

Stocks Sold Over Past 13 Weeks

Company Name Stock
Symbol Buy
Date NetBuy
Price* Sell
Date NetSell
Price* Weeks
Held Gain
(Loss)

Monarch Casino & Resort MCRI 10/27/04 $27.11 12/09/04 $33.45 6.1 +23.4%

NCI Building Systems Inc. NCS 11/16/04 $34.72 12/09/04 $37.63 3.3 +8.4%

Bluegreen Corp. BXG 11/23/04 $14.64 12/09/04 $17.41 2.3 +18.9%

China Yuchai Int'l Ltd. CYD 12/02/04 $17.51 12/09/04 $16.13 1.0 -7.9%

Digital River Inc. DRIV 09/13/04 $27.42 12/08/04 $41.96 12.3 +53.0%

Infocrossing Inc. IFOX 11/17/04 $15.05 12/08/04 $16.75 3.0 +11.3%

Innovative Solutions ISSC 11/18/04 $29.02 12/08/04 $29.68 2.9 +2.2%

Rofin-Sinar Tech Inc. RSTI 08/24/04 $28.28 12/07/04 $37.55 15.0 +32.8%

DHB Industries Inc. DHB 09/24/04 $13.38 12/07/04 $17.99 10.6 +34.5%

Charles River Assoc Inc. CRAI 09/30/04 $38.19 12/07/04 $43.88 9.7 +14.9%

M.D.C. Holdings Inc. MDC 10/12/04 $72.28 12/07/04 $76.40 8.0 +5.7%

Sigmatel Inc. SGTL 10/21/04 $28.28 12/07/04 $34.87 6.7 +23.3%

Nanometrics Inc. NANO 11/02/04 $14.71 12/07/04 $16.52 5.0 +12.2%

NETGEAR, Inc. NTGR 11/03/04 $13.68 12/07/04 $17.29 4.9 +26.4%

Rofin-Sinar Tech Inc. RSTI 11/10/04 $37.22 12/07/04 $37.55 3.9 +0.9%

Excel Maritime Carriers EXM 11/23/04 $27.91 12/07/04 $32.81 2.0 +17.6%

Sify Ltd. ADR SIFY 11/24/04 $6.88 12/07/04 $6.29 1.9 -8.6%

United Therapeutics Corp. UTHR 11/29/04 $43.54 12/07/04 $42.32 1.1 -2.8%

Accredited Home Lenders LEND 11/30/04 $42.93 12/07/04 $44.91 1.0 +4.6%

DHB Industries Inc. DHB 12/01/04 $18.60 12/07/04 $17.99 0.9 -3.3%

KongZhong Corp. KONG 12/07/04 $11.17 12/07/04 $10.31 0.0 -7.7%

Navarre Corp. NAVR 09/21/04 $16.69 12/06/04 $15.69 10.9 -6.0%

Navarre Corp. NAVR 10/13/04 $14.72 12/06/04 $15.69 7.7 +6.6%

Navarre Corp. NAVR 10/22/04 $14.99 12/06/04 $15.69 6.4 +4.7%

Navarre Corp. NAVR 11/12/04 $16.26 12/06/04 $15.69 3.4 -3.5%

Diodes Inc. DIOD 10/01/04 $27.19 12/01/04 $23.97 8.7 -11.8%

Diodes Inc. DIOD 10/19/04 $25.65 12/01/04 $23.97 6.1 -6.6%

LCA Vision Inc. LCAV 10/26/04 $27.58 12/01/04 $33.67 5.1 +22.1%

Diodes Inc. DIOD 11/26/04 $24.77 12/01/04 $23.97 0.7 -3.2%

Littelfuse Inc. LFUS 11/08/04 $38.19 11/30/04 $38.82 3.1 +1.6%

MicroStrategy Inc. MSTR 10/27/04 $63.30 11/29/04 $64.55 4.7 +2.0%

Quiksilver Inc. ZQK 09/13/04 $25.73 11/22/04 $28.62 10.0 +11.2%

F5 Networks Inc. FFIV 10/27/04 $40.08 11/22/04 $39.90 3.7 -0.4%

Amedisys Inc. AMED 09/15/04 $28.84 11/17/04 $31.63 9.0 +9.7%

Dawson Geophysical Co. DWSN 09/29/04 $20.70 11/17/04 $21.13 7.0 +2.1%

Amedisys Inc. AMED 10/21/04 $31.28 11/17/04 $31.63 3.9 +1.1%

Ventiv Health Inc. VTIV 11/08/04 $19.25 11/17/04 $17.58 1.3 -8.7%

Dawson Geophysical Co. DWSN 11/15/04 $23.64 11/17/04 $21.13 0.3 -10.6%

Dawson Geophysical Co. DWSN 11/16/04 $23.34 11/17/04 $21.13 0.1 -9.4%

InfoSpace Inc. INSP 10/26/04 $53.99 11/16/04 $49.59 3.0 -8.1%

MarketWatch Inc. MKTW 10/28/04 $14.01 11/16/04 $17.89 2.7 +27.7%

MarketWatch Inc. MKTW 10/29/04 $13.33 11/16/04 $17.89 2.6 +34.2%

Ctrip.com International CTRP 11/01/04 $41.21 11/11/04 $45.29 1.4 +9.9%

Carpenter Technology Corp. CRS 10/26/04 $48.51 11/05/04 $50.78 1.4 +4.7%

Ditech Communications Corp. DITC 10/21/04 $26.66 11/04/04 $15.07 2.0 -43.5%

Ditech Communications Corp. DITC 11/03/04 $22.75 11/04/04 $15.07 0.1 -33.7%

VSE Corp. VSEC 10/18/04 $28.51 11/02/04 $25.58 2.1 -10.3%

Mannatech Inc. MTEX 10/21/04 $16.40 11/02/04 $16.63 1.7 +1.4%

Hurco Companies Inc. HURC 10/12/04 $15.30 11/01/04 $13.05 2.9 -14.7%

Petroleum Development Corp. PETD 09/07/04 $32.51 10/27/04 $36.79 7.1 +13.2%

Petroleum Development Corp. PETD 10/20/04 $39.43 10/27/04 $36.79 1.0 -6.7%

Comtech Telecom Corp. CMTL 09/22/04 $24.01 10/22/04 $26.81 4.3 +11.6%

Portfolio Recovery Assoc PRAA 10/05/04 $32.56 10/22/04 $31.97 2.4 -1.8%

TASER International, Inc. TASR 10/19/04 $40.36 10/20/04 $40.27 0.1 -0.2%

Universal American Fin'l UHCO 09/21/04 $12.52 10/15/04 $11.81 3.4 -5.7%

J2 Global Communications JCOM 09/21/04 $30.99 10/15/04 $30.06 3.4 -3.0%

Steel Technologies Inc. STTX 09/28/04 $24.79 10/13/04 $25.72 2.1 +3.7%

Sandisk Corp. SNDK 09/10/04 $25.20 10/11/04 $28.86 4.4 +14.5%

Sierra Wireless Inc. SWIR 09/09/04 $18.69 10/07/04 $17.83 4.0 -4.6%

Sierra Wireless Inc. SWIR 09/16/04 $18.23 10/07/04 $17.83 3.0 -2.2%

TRM Corp. TRMM 09/21/04 $18.15 10/07/04 $17.66 2.3 -2.7%

ATI Technologies Inc. ATYT 10/07/04 $18.07 10/07/04 $17.00 0.0 -5.9%

Niku Corp. NIKU 08/19/04 $13.09 10/05/04 $14.63 6.7 +11.8%

Volt Info Sciences Inc. VOL 09/15/04 $26.59 10/01/04 $29.03 2.3 +9.2%

ADE Corp. ADEX 08/25/04 $17.86 09/27/04 $17.09 4.7 -4.3%

AudioCodes Ltd. AUDC 09/13/04 $12.74 09/27/04 $12.01 2.0 -5.8%

Cree Inc. CREE 09/20/04 $29.95 09/27/04 $28.13 1.0 -6.1%

Netflix Inc. NFLX 09/07/04 $16.33 09/24/04 $16.62 2.4 +1.8%

eResearchTechnology Inc. ERES 09/14/04 $17.87 09/22/04 $18.36 1.1 +2.7%

Kensey Nash Corp. KNSY 08/18/04 $25.62 09/20/04 $28.75 4.7 +12.2%

Winnebago Industries Inc. WGO 09/02/04 $32.90 09/20/04 $34.55 2.6 +5.0%

Connetics Corp. CNCT 09/02/04 $26.19 09/20/04 $26.20 2.6 +0.0%
Average 3.9 +3.7%

* 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.

Subscription Information

Welcome to The Deen's List^TM, 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.

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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