Stock Market Commentary for 7/9/08

Tuesday, US equity markets rebounded in the final hour of trading. There were several positive developments that served as catalysts. First, Charman Bernanke's speech assuaged anxiety concerning the credit meltdown by detailing steps the Fed is taking to ensure greater controls over potential lending abuses and by extending loans to non-governmental financial institutions. At the same time the dollar strengthened and crude oil futures fell to 135 dollars a barrel. They currently stand at 136.51 in some after-market strengthening. Energy stocks fell sharply across the board, and with that sector rotation no energy stocks remain on the computer-generated HHI Index of stocks suggested for possible acquisition. And to ease worries about oil supply still further, we heard that Ahmadinejad promised not to attack Israel any time soon.

Prior to Tuesday's rebound, market conditions were as bleak as I can remember in the past decade. Our VAQ Index reading was at 25 for Monday, 44 for Tuesday, and is now at 50 for Wednesday's open; however, this is still in the red danger zone. Mortgage lenders Fannie Mae and Freddie Mac suffered losses of 16% and 17% in share prices on Monday alone and the ultra-short financial exchange-traded fund SKF was setting new highs in price as a sign of deterioration in the financial sector.

We are definitely not out of the woods yet, but the market conditions have improved substantially.

Best wishes, GH

The HHI Index for Wednesday, July 9, 2008 is as follows:

+7 (very strong buy) — NONE, /

+6 (strong buy) — NSYS, HGR, CRMT, /

+5 (buy) — LBAS.OB, HIRE, HCKT, ERES, /

+4 (hold) — GETG.PK, PARL, CYBX, /

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

• Today's Bible Reflection: Reflections on Psalm 31
• Yesterday's Stock Market Commentary
• Yesterday's Bible Reflection: Reflections on Psalm 30
• 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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Stock Market Commentary for 7/7/08

HHI

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