Stock Market Commentary for 3/21/08

This week has certainly been a roller-coaster ride for US equities. One day the DJIA is up 400 points, but the next it is down 200 points, and the next it is up 200 points again. Thursday the DJIA finished up 261 points, but that may just portend another down day for Friday. Certainly our Viable Acquisitions Index for Friday is again down in the yellow cautionary zone at 73—down from a reading of 144 for Wednesday. I do not remember a more volatile week, but then my memory is not the best. This is the kind of bouncing around one could expect when the market is indeed reaching a bottom. Someone has said that March comes in like a lion and goes out like a lamb. Let's hope that applies to markets as well as to weather.

In recent months the HHI Index has been based largely on a technical-momentum strategy with less reference to stock fundamentals. We have seen that technical data are highly ephemeral. Stocks like COIN and its warrants are at the top of the list one day, and at the bottom the next. I have decided, therefore, to add some additional data regarding the stocks on the list to aid in decision making. Specifically, I am supplementing the list with current point-and-figure analysis information, cash flow information, and earnings growth information.

With regard to P & F analysis, only the following stocks in the list show favorable patterns: DMX, XIDE, VLNC, OFG, CMD, NFLX, EXAC.

With regard to cash flow and free cash flow, only the following stocks show acceptable levels: OFG, LNN, EXAC.

With regard to earnings growth, only the following stocks show regular improvement: DMX, XIDE, SWC, OFG, LNN, NFLX, EXAC.

As you can see, only OFG and EXAC excel in all three categories. DMX, XIDE, NFLX, and LCC excel in two of the three categories.

Best wishes, GH

The HHI Index for Friday, March 21, 2008 is as follows:

+6 (strong buy) — DMX, XIDE, /

+5 (buy) — VLNC, MXFD.OB, OFG, CMD, LNN, /

+4 (hold) — COINW, COINZ, ILDS.PK, STEN, SWC, COIN, NFLX, RIGL, EXAC, /

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

• Today's Bible Reflection: Encouragement #25
• Yesterday's Stock Market Commentary
• Yesterday's Bible Reflection: Encouragement #24
• What is the HHI Index?

_{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.}

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