The Deen's List Vol.4 #198

The Deen's List^TM

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

Vol.4 #198 Saturday, September 30, 2006

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
Contact Us

Year-To-Date Performance

Year-To-Date as of September 29, 2006
Deen Capital	+12.5%	*
S&P 500	+8.4%

* 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: BULLISH (since July 28, 2006)

The market is doing fine. The major averages had an up week, an up month (September), and an up quarter. The Dow is only 44 points away from an all-time high. (The NASDAQ, on the other hand, while also doing well lately, must gain another 123% from here to get back to its all-time high. In all the euphoria about the Dow, the financial press rarely mentions this!)

Yet Deen Capital accounts had a down week, a down month, and a down quarter. What's going on?

No need to panic. We still have outstanding performance on a year-to-date and trailing 52-week basis -- easily better than the market averages. A significant part of the problem lately is that small-cap stocks have begun to under-perform their large-cap brethren. This appears to be a new trend. In recognition of this trend, I am more inclined to buy large-cap and less inclined to buy small-cap going forward, at least until small-caps once again show signs of leadership.

My technical indicators deteriorated from overall bullish to overall neutral last week, which means the yellow caution flag is out. Managed accounts are about one-third in cash now, and, if anything, I may consider increasing that cash level. I don't like the way things are going here recently. It may be time to pull in my horns, at least a bit.

My Three Primary Technical Indicators:

                                       Prior week             Now
                                       ----------           -------
NASDAQ Timing Model (Ver.10q):           BULLISH            BULLISH (1)

Performance of Recent Stock Picks:    +2.2 BEARISH     +1.7 BEARISH (2)

Market Internals:                      +67 BULLISH      +69 NEUTRAL (3)

Overall Rating:                          BULLISH            NEUTRAL

(1) A proprietary computer model based on technical analysis of the NASDAQ Composite. Last signal: BULLISH on Jul 28, 2006.

(2) This number (from -10 to +10) is based on the performance of ALL my stock picks (I actually buy only some of these). A positive number means my stock picks are generally rising; a negative number means they are generally falling. Even so, I consider a reading below +3.1 to be bearish. I require a reading of +5.6 or better to call this indicator bullish.

(3) This is the percentage of stocks ($8 and up) which are trading above their 50-day moving average. The rating of this percentage (bullish, bearish or neutral) is based on which way it's been moving recently -- up, down or sideways.

-KD, September 30, 2006

Open Positions

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

AZZ Inc. AZZ 09/29/06 $36.93 $36.50 0.0 -1.2%

Ultra Clean Holdings, Inc. UCTT 09/20/06 $11.09 $10.68 1.3 -3.7%

Park Electrochemical Corp. PKE 09/20/06 $31.18 $31.68 1.3 +1.6%

II-VI Inc. IIVI 09/15/06 $25.03 $24.92 2.0 -0.4%

First Marblehead Corp. FMD 09/15/06 $60.21 $69.26 2.0 +15.0%

Diodes Inc. DIOD 09/14/06 $43.92 $43.17 2.1 -1.7%

Psychiatric Solutions, Inc. PSYS 09/12/06 $35.60 $34.09 2.4 -4.2%

Macrovision Corp. MVSN 08/18/06 $23.14 $23.69 6.0 +2.4%

Watson Wyatt & Co. Holdings WW 08/10/06 $35.03 $40.92 7.1 +16.8%

Wellcare Group WCG 08/03/06 $51.71 $56.63 8.1 +9.5%

PeopleSupport, Inc. PSPT 08/01/06 $14.94 $18.50 8.4 +23.9%

IDEXX Laboratories, Inc. IDXX 07/28/06 $86.56 $91.14 9.0 +5.3%
Average 4.2 +5.3%

* 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

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

U.S. Global Investors, Inc. GROW 09/07/06 $27.84 09/29/06 $24.61 3.1 -11.6%

Merix Corp. MERX 09/21/06 $13.87 09/26/06 $10.41 0.7 -24.9%

ICON plc ICLR 07/26/06 $62.59 09/19/06 $67.02 7.9 +7.1%

FormFactor, Inc. FORM 07/28/06 $42.87 09/19/06 $46.18 7.6 +7.7%

Integrated Device Tech, Inc. IDTI 08/02/06 $15.29 09/15/06 $15.94 6.3 +4.3%

ValueClick, Inc. VCLK 08/07/06 $16.99 09/15/06 $17.45 5.6 +2.7%

Internat'l Assets Holding Cp IAAC 09/13/06 $23.11 09/15/06 $20.54 0.3 -11.1%

Anixter International Inc. AXE 07/25/06 $50.65 09/11/06 $54.39 6.9 +7.4%

Technitrol, Inc. TNL 07/31/06 $24.66 09/11/06 $27.05 6.0 +9.7%

Encore Wire Corp. WIRE 08/03/06 $34.85 09/11/06 $34.56 5.6 -0.8%

Nu Horizons Electronics Corp NUHC 08/15/06 $11.46 09/11/06 $11.94 3.9 +4.2%

Digital River, Inc. DRIV 08/16/06 $47.16 09/11/06 $47.46 3.7 +0.6%

Ansoft Corp. ANST 08/28/06 $24.38 09/11/06 $23.55 2.0 -3.4%

The Exploration Co of DE TXCO 08/22/06 $12.88 08/29/06 $11.86 1.0 -7.9%

Allscripts Healthcare Sltn MDRX 08/02/06 $21.86 08/25/06 $19.77 3.3 -9.5%

Digene Corp. DIGE 08/09/06 $45.06 08/23/06 $42.48 2.0 -5.7%

Core Laboratories N.V. CLB 08/04/06 $71.40 08/14/06 $66.70 1.4 -6.6%

Illumina, Inc. ILMN 07/19/06 $37.20 08/11/06 $34.08 3.3 -8.4%

Nu Horizons Electronics Corp NUHC 07/19/06 $10.47 08/08/06 $10.82 2.9 +3.3%

Apple Computer, Inc. AAPL 07/24/06 $61.51 08/04/06 $66.68 1.6 +8.4%

Merix Corp. MERX 06/29/06 $10.40 07/27/06 $10.36 4.0 -0.4%

Cephalon, Inc. CEPH 06/30/06 $60.44 07/27/06 $64.08 3.9 +6.0%

Huron Consulting Group Inc. HURN 06/21/06 $31.60 07/21/06 $33.23 4.3 +5.2%

Focus Media Holding FMCN 06/16/06 $60.93 07/14/06 $61.88 4.0 +1.6%

Bear Stearns Companies, Inc. BSC 06/16/06 $131.97 07/14/06 $132.40 4.0 +0.3%

America Movil, S.A. de C.V. AMX 06/16/06 $29.80 07/14/06 $31.26 4.0 +4.9%

Old Dominion Freight Line ODFL 06/26/06 $35.66 07/13/06 $33.51 2.4 -6.0%

Zevex International, Inc. ZVXI 07/06/06 $19.17 07/12/06 $16.29 0.9 -15.0%

Nu Horizons Electronics Corp NUHC 07/07/06 $9.93 07/12/06 $10.11 0.7 +1.8%

Hittite Microwave Corp. HITT 07/03/06 $42.16 07/10/06 $36.62 1.0 -13.1%
Average 3.5 -1.6%

* 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.

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.

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