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OTC Journal Members:
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Market
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As we predicted in last weekend's
newsletter this has been a choppy week with slight upside bias. Friday's
PPI number is huge for the market direction. Wall Street is totally
focused on interest rates. The current rebound has been fueled by rising
unemployment, decreasing housing starts, and decreasing large appliance
sales.
All these numbers suggest that aggressive
tightening by the FED is cooling off the economy. This eliminates fears
of inflation and increasing interest rates, which is very good for growth
stocks. Friday's PPI number is huge. If it comes in fairly soft
look for the Bull to come back in a big way. 60% of economists recently
surveyed don't believe that the FED will raise interest rates in June.
That means we wait until the end of August for the next potential interest
rate increase. We believe that the FED's tightening is working, but mostly
because of the April/May stock market crash. People simply feel less wealthy
because of the market, and are curtailing their spending.
In the meantime there an enormous
amount of cash sitting on the sidelines just waiting to jump back into
the market. Here's a phenomenal statistic: In the last TWO DAYS 11.7
Billion Dollars has flowed into mutual funds. This is an unprecedented
amount of inflow in just a two day period of time. In addition, the recently
announced buy out of Best Foods by Unilever will put an additional $20
billion of liquidity into the market.
Couple that with the record short
interest in technology stocks and you have all the ingredients for a serious
summer bull market. If the secondary stocks in this market get hot, look
for short covering to drive the Russell 2000 up rapidly. The small stocks
that we follow will participate.
In the weekend edition we will cover
the PPI numbers which come out at 8:30 AM Eastern time on Friday and let
you know what it might mean to you.
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Next Wednesday we will have our next
free monthly special for members. This is one we have been working on for
some time, and it directly relates to making money in the market everyday.
Active traders will love this one, and of course it is free and we are
the only place you can get it.
Later this month we will be introducing
a new service that you will love. It relates to tracking your stocks in
real time, and of course we will bring it to you for free. Shortly thereafter
we will be starting a referral contest with cash prizes. This should be
a lot of fun and you can make some money if you want to get involved.
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We have been getting a lot of E-mails
from members that have concerns about some of the stocks that we cover.
Any stock we profiled in late 1999 or early 2000 is down from it profiled
price, and down dramatically from its all time high thanks to the April/May
market crash.
First of all, keep in mind that we
are in the riskiest end of the market. We will always continue to feature
the small, undiscovered companies that you won't find out about anywhere
else. These stocks are risky. Some are much riskier than others, and when
that is the case we will tell you so. MicroAccel (OTC BB: MIXL)
is a perfect example. We told that it was very risky and you might lose
all your money. Envoy (NASDAQ: ECGI) is not nearly as risky with
sales over $100 million and significant profits. If you can't handle risk
just click on the remove link at the bottom of this newsletter.
Stocks always go up higher than they
should when they are hot, and they go down lower than they should when
they are cold. Recently we received an e-mail from a member that owns PawnBroker
(OTC BB: PBRR) at $14. He bought when the stock was red hot and running.
He suggested that shareholders get together and file a law suit against
the company which is the stupidest comment we have ever heard. We could
easily put together a list of 50 stocks that were over $70 in March, and
are now between $5 and $20. Why don't we go ahead and sue all those companies
also because their stocks fell in price. Why not sue Alan Greenspan for
raising interest rates which kicked off a bear market? That makes as much
sense to us.
If the Bull Market returns a lot
of these smaller stocks will trade well. Investors should stop whining
about low prices and start thinking about making money. Small stocks are
still on sale and there is plenty of opportunity. Somebody bought Pawnbroker
in March when it went to $17, and somebody bought it last week in the mid
$3 range. If you are still holding stocks that were much higher in March,
you can either wait it out or average your cost down while the stocks are
on sale. It only makes sense to average down if the Company is executing
its business plan. Some of these smaller companies are going to fail, in
which case it makes no sense to put good money after bad. Here is a list
of the stocks that we believe will rebound sharply in the next Bull
Market because the companies are doing well:
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Blue Zone (OTC BB: BLZN):
Click Here
For Archive and Disclaimer
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Envoy Communications (NASDAQ: ECGI)
Click Here
for Archive and Disclaimer
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PawnBroker (OTC BB: PBRR)
Click Here
for Archive and Disclaimer
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NetSol International (NASDAQ: NTWK)
Click Here
for Archive and Disclaimer
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PhotoChannel Networks (OTC BB: PHCHF)
Click Here
for Archive and Disclaimer
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iQROM (OTC BB: IQCO)
Click Here
for Archive and Disclaimer
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StockGroup Holdings (OTC BB SWEB)
Click Here
for Archive and Disclaimer
Some of the others that we didn't mention
might also come back, but the timing is not right yet. We are waiting for
corporate developments. That's it for today- We'll be back with the weekend
edition unless we have breaking news between now and Friday.
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