The Deen's List Vol.6 #309

The Deen's List^TM

Our Goal: To outperform the S&P through up markets and down.

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

Vol.6 #309 Saturday, September 20, 2008 11:07PM EDT

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

Weekly Status Report: Contents

Performance
Market Commentary
Open Positions
Stocks Sold Over Past 13 Weeks
Subscription Information
Privacy Policy
Disclaimers
Contact Us

Performance

Deen Capital S&P 500

Year-to-date as of September 19, 2008 -14.4% * -13.2%

12 months (Sep 19, 2007 to Sep 19, 2008) -10.6% * -16.2%

* An average of managed accounts, net after all commissions and fees.

Click here for more performance data.

Click here for information on managed accounts.

Market Commentary

Market Stance: BULLISH (since September 18, 2008)

This was a week for the record books, on so many levels. Just read any major newspaper for details. We had the most dramatic V-shaped bottom I've ever seen. Early in the week, the market sold off hard, continuing its recent slide to new lows for the year. Volume was extremely heavy, as it seemed the entire U.S. financial system was on the brink of collapse.

Then the federal government stepped in with unprecedented measures aimed at restoring stability and shoring up the balance sheets of ailing financial institutions. The markets immediately exploded to the upside, starting Thursday morning, right after the announcement from President Bush and his economic team.

The question I must grapple with is this: Is it possible that government action can turn things around? I am very skeptical of this, and yet the incredibly enthusiastic market reaction -- enthusiasm like the world has never seen -- has persuaded me to give this rally the benefit of the doubt, at least for for the moment.

Another name for enthusiasm is buying volume, and it was astounding. Both Thursday and Friday saw new all-time records for trading volume on the New York Stock Exchange.

So the market bottom (so far at least!) was Wednesday. I turned bullish on Thursday. Deen Capital accounts nevertheless under-performed for the week, because we were mostly in cash at the opening bell on Thursday. This is to be expected at major market turning points.

We are now 95% invested in the SPDRs (pronounced "spiders" -- Standard & Poors Depository Receipts). This is an exchange-traded fund which performs in lock step with the S&P 500. It is an easy way to quickly get on board when the market turns, without taking on the additional risk associated with individual stocks.

I am a very nervous bull here. There is plenty of reason to be skeptical of this rally. For one thing, my indicators remain overall bearish. For another, all this buying volume may be just a short-term phenomenon fueled by a two-week ban on short-selling. The fact that the rally was mostly short covering in and of itself does not worry me. All bull markets begin with a short-covering rally. But the fact that the government has changed the rules of the game does worry me. It means that the predictive value of this heavy volume buying is unusually suspect.

If my indicators continue to improve (they did improve on Thursday and Friday), I'll hang in there. If not, I may retreat again very quickly to the safety of cash.

My Three Primary Technical Indicators:

                                       Prior week             Now
                                       ----------           -------
NASDAQ Timing Model (Ver.10q):           BEARISH            BEARISH (1)
Last signal:  BEARISH on Sep 4, 2008

Performance of Recent Stock Picks:  -3.8 BEARISH       -1.2 BEARISH (2)

Market Internals:                    42% NEUTRAL        42% NEUTRAL (3)

-----------------------------------------------------------------------
Market's Overall Technical Rating:       BEARISH            BEARISH

Stocks:Cash ratio (average):              56:44              100:0

(1) A proprietary computer model based on technical analysis of the NASDAQ Composite.

(2) This number (from -10 to +10) is based on the performance of ALL my recent stock picks (I actually buy only some of these). A positive number means my recent 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, Saturday, September 20, 2008

Open Positions

Model Portfolio

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

S&P Depository Receipt SPY 09/19/08 $124.55 $124.49 0.1 53.2% -0.0%

S&P Depository Receipt SPY 09/18/08 $120.17 $124.49 0.3 40.8% +3.6%

Royal Gold Inc. RGLD 09/18/08 $37.77 $37.65 0.3 5.8% -0.3%

Cash 0.1%

Total 100%

* Buy prices shown are net after commissions and fees.

Stocks Sold Over Past 13 Weeks

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

Varian Medical Systems VAR 07/24/08 $59.79 09/19/08 $60.12 8.1 +0.5%

Thoratec Corp. THOR 08/05/08 $23.18 09/19/08 $27.48 6.4 +18.6%

Covidien, Ltd. COV 08/05/08 $52.60 09/19/08 $53.60 6.4 +1.9%

Estee Lauder Cos Inc. EL 08/18/08 $51.31 09/19/08 $50.51 4.6 -1.6%

Super Micro Computer, Inc. SMCI 09/03/08 $10.71 09/17/08 $9.98 2.0 -6.8%

DXP Enterprises, Inc. DXPE 09/08/08 $60.40 09/17/08 $57.66 1.3 -4.5%

Questcor Pharmaceuticals, Inc. QCOR 09/11/08 $6.19 09/17/08 $5.78 0.9 -6.7%

CSX Corp. CSX 09/12/08 $61.28 09/16/08 $56.59 0.6 -7.7%

Solera Holdings Inc. SLH 08/28/08 $30.01 09/15/08 $28.74 2.6 -4.2%

II-VI, Inc. IIVI 09/08/08 $42.30 09/15/08 $40.26 1.0 -4.8%

Bruker Corp. BRKR 09/02/08 $16.37 09/12/08 $15.30 1.4 -6.5%

Parametric Tech PMTC 09/08/08 $20.77 09/11/08 $19.76 0.4 -4.9%

Sapient Corp. SAPE 08/27/08 $9.25 09/10/08 $8.66 2.0 -6.4%

SkillSoft PLC SKIL 08/22/08 $10.67 09/09/08 $10.43 2.6 -2.3%

Ebix Inc. EBIX 08/14/08 $105.10 09/05/08 $102.11 3.1 -2.8%

VisionChina Media Inc. VISN 08/21/08 $19.22 09/05/08 $17.33 2.1 -9.8%

LDK Solar Co. Ltd. LDK 08/26/08 $48.65 09/05/08 $43.52 1.4 -10.6%

Kendle International Inc. KNDL 08/28/08 $50.63 09/05/08 $46.49 1.1 -8.2%

II-VI, Inc. IIVI 08/05/08 $39.98 09/04/08 $41.88 4.3 +4.8%

PAREXEL International Corp. PRXL 08/07/08 $32.62 09/04/08 $30.63 4.0 -6.1%

SunPower Corp. SPWR 08/18/08 $89.00 09/03/08 $85.19 2.3 -4.3%

Woodward Governor WGOV 07/22/08 $44.19 09/02/08 $45.87 6.0 +3.8%

Amphenol Corp. APH 08/22/08 $48.98 08/25/08 $47.52 0.4 -3.0%

St. Jude Medical STJ 07/16/08 $45.55 08/20/08 $46.03 5.0 +1.0%

Sapient Corp. SAPE 08/08/08 $8.16 08/19/08 $8.70 1.6 +6.7%

Badger Meter Inc. BMI 07/22/08 $55.68 08/18/08 $51.49 3.9 -7.5%

Amphenol Corp. APH 08/06/08 $48.29 08/18/08 $50.15 1.7 +3.8%

Innophos Holdings Inc. IPHS 08/06/08 $34.71 08/15/08 $33.70 1.3 -2.9%

Amedisys Inc. AMED 07/17/08 $59.44 08/12/08 $54.31 3.7 -8.6%

Altera Corp. ALTR 07/18/08 $21.45 08/12/08 $23.71 3.6 +10.5%

IBM IBM 07/21/08 $129.38 08/12/08 $124.71 3.1 -3.6%

EZCORP, Inc. EZPW 07/25/08 $17.71 08/11/08 $15.48 2.4 -12.6%

Titan International Inc. TWI 07/31/08 $46.52 08/11/08 $40.35 1.6 -13.3%

Calgon Carbon Corp. CCC 07/31/08 $19.69 08/11/08 $18.70 1.6 -5.0%

America's Car-Mart, Inc. CRMT 07/03/08 $18.95 08/04/08 $19.34 4.6 +2.0%

Robbins & Myers Inc. RBN 07/16/08 $50.30 08/04/08 $48.98 2.7 -2.6%

Amphenol Corp. APH 07/17/08 $50.73 08/04/08 $46.32 2.6 -8.7%

Northwest Pipe Co. NWPX 07/23/08 $56.53 08/04/08 $52.56 1.7 -7.0%

Tyler Technologies Inc. TYL 07/25/08 $17.15 08/04/08 $15.37 1.4 -10.4%

VisionChina Media Inc. VISN 07/30/08 $23.16 08/04/08 $19.37 0.7 -16.4%

ENGlobal Corp. ENG 07/09/08 $13.92 07/31/08 $12.38 3.1 -11.1%

CIRCOR International Inc. CIR 07/10/08 $62.06 07/31/08 $59.62 3.0 -3.9%

Plexus Corp. PLXS 07/25/08 $30.28 07/30/08 $29.33 0.7 -3.1%

Balchem Corp. BCPC 07/08/08 $25.56 07/29/08 $25.69 3.0 +0.5%

AeroVironment Inc. AVAV 06/25/08 $28.28 07/24/08 $30.19 4.1 +6.7%

Fuel Systems Solutions Inc. FSYS 07/09/08 $31.64 07/24/08 $37.36 2.1 +18.1%

Crown Holdings Inc. CCK 07/18/08 $29.16 07/24/08 $27.65 0.9 -5.2%

Lufkin Industries Inc. LUFK 07/17/08 $91.00 07/18/08 $83.84 0.1 -7.9%

SAIC, Inc. SAI 06/04/08 $20.69 07/16/08 $19.05 6.0 -7.9%

AZZ Inc. AZZ 06/27/08 $39.10 07/14/08 $44.25 2.4 +13.2%

ENGlobal Corp. ENG 06/30/08 $14.31 07/07/08 $13.15 1.0 -8.1%

EnerSys ENS 06/12/08 $34.73 07/02/08 $32.04 2.9 -7.8%

N. American Energy Partners NOA 06/23/08 $22.13 07/02/08 $19.94 1.3 -9.9%

The Western Union Co. WU 06/25/08 $26.01 07/02/08 $23.85 1.0 -8.3%

Fuel Systems Solutions Inc. FSYS 05/13/08 $24.34 06/24/08 $35.29 6.0 +45.0%

Agrium Inc. AGU 06/11/08 $99.96 06/24/08 $107.01 1.9 +7.0%

ReneSola Ltd SOL 06/19/08 $22.01 06/24/08 $19.75 0.7 -10.3%

Gushan Environmental Energy GU 06/19/08 $13.39 06/23/08 $11.90 0.6 -11.2%

* Buy and sell prices shown are net after commissions and fees. This means that the gains/losses shown are also net after transaction expenses.

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.

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