Stock Market Commentary for 3/17/08

Friday was yet another tumultuous down day for stocks. The DJIA gave up 195 points and our Viable Acquisitions Index fell from 150 points to 123 points for Monday's open. Equity futures are pointed sharply down following word of the Bear Stearns Corporation collapse over the weekend. That company with a recent 36-billion-dollar valuation was sold to J.P. Morgan Bank for only $2.00 per share, amounting to something just over 200 million dollars. The losses to shareholders and employee retirement plans are unimaginable. Accordingly, the Federal Reserve Board dropped their lending rates to banks another 25 basis points on Sunday, and appears to be planning a much larger cut to be announced on Tuesday of this week. The dollar fell to a new low of $1.58 to the Euro, and showed similar drops against other major currencies. On one stock bulletin board I noticed some traders were speculating whether the lending rate could fall to zero, or even go to negative territory. One trader posted a cartoon of Bernanke throwing dollars from a helicopter over a major city, while another was shouting, "Free money!" But I am thankful for a Fed that is willing to intervene.

And yet, for all of this negativity, Friday was a good day for holders of EMDH.OB that gained nearly 18% and LBAS.OB that gained over 5%. Mining stocks also did well, as you can see from the list of stocks on the Index for Monday. We must be approaching the bottom, but there is often a major capitulation move just before that happens. Meanwhile, many of the microcap bulletin board stocks still seem to be gaining ground even as if there were no word of a recession. May all of you be protected in these difficult times.

Best wishes, GH

The HHI Index for Monday, March 17, 2008 is as follows:

+6 (strong buy) — ILDS.PK, MXFD.OB, XIDE, /

+5 (buy) — COINW, COINZ, MTL, CMD, HSVLY, TGB, AEM, CALM, KGC, /

+4 (hold) — VLNC, COIN, SWC, JRCC, STEN, MRCMF.PK, BZP, WLT, RIGL, AUY, BVN, EOG, HL, AKS, STLD, /

Daily Stock Market Commentary is accompanied by a daily Bible Reflection.

• Today's Bible Reflection: Encouragement #24
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• Yesterday's Bible Reflection: Encouragement #23
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_{The HHI Index is a list of stock ratings derived from a proprietary computer model and are being shared as a public service with no guarantee of or responsibility for trading success. Readers are strongly encouraged to do their own research and to exercise caution in all trading activity. Click here for an explanation of the HHI Index.}