To OTC Journal Members:
 

Market Comment- Very Constructive Week Bodes Well For Higher Levels

The editors of the OTC Journal believe the threat of potential war with Iraq has had a major dampening effect on the market's potential to move up. This is not simply psychological. The threat of war makes consumers afraid to spend and companies afraid to invest capital in expansion, which inhibits top line growth.

Like Daniel Boone, the market isn't really lost, it is just temporarily bewildered. September quarterly earnings were very strong, driven primarily by corporate cost cutting initiatives. The market traded up nicely in October on the heels of unexpectedly strong corporate performance, but could not break through the high set in August. The subsequent pull back ended in a lower low, which suggests we are still in a bear market.

One could have reasonably expected the NASDAQ to drop to a lower low in November, following the same pattern we have lived with since March of 2000. However, much to the delight of investors, this has not happened. The NASDAQ dropped a little in a pullback characterized by extremely light volume, and now appears to be poised to challenge the 1430 level again. If the NASDAQ can pierce this level convincingly, look for a confirmed trend reversal and higher levels for stocks.

This past week was very constructive. We had a fifty point rebound in the NASDAQ on Thursday as tensions eased with Iraq, but today's action was even more impressive. The NASDAQ had every reason to get clobbered on weak economic data and geopolitical terrorist fears from a strong home land security warning, and the NASDAQ ended up flat on very light volume. Look for a retest of the 1430 level next week. If it gets through, many technicians will be declaring the Bear extinct.
 

StockGroup Information Services (OTC BB: SWEB)- Analyst Places Price Target 190% Above Today's Closing Price

Volume continues increasing in this stock without significant price appreciation, but we believe a break out is imminent. The 20 day average volume (140,000 shares per day), is nearly 300% higher than the 150 day average volume (51,000 shares per day), which clearly indicates interest in increasing.

Others are beginning to take notice. Yesterday, an independent analyst who has been following StockGroup for some time issued an updated research report, projecting a 52 week price target of $.55 to $.65, some 190% above today's closing price.

Moreover, Michael Whitney of Investrend Research, believes the company will earn $.05 per share in 2003 on $4.1 million in revenues. 

The recent contract we covered in our November 5th edition with Microsoft has brought significant new interest into the stock, and is mentioned specifically in the research report.

As this report becomes more widely disseminated to investors, we expect volume to continue to increase in the stock, leading to a breakout in price.

Over the past several months we have witnessed significant volume increases in several of the microcap stocks will follow, but there has not been significant corresponding price appreciation. The past 2 1/2 years of challenging market conditions have resulted in pent up demand to sell. Once this demand is satisfied, many of these microcap stocks will trade up rapidly.

Investors would do well to remember that stocks make 90% of their moves in 10% of the time they trade. If you're not in when lightning strikes, you won't be there to take the profits. Patience while awaiting the inevitable should pay off.

We strongly recommend you read the two page research update and earnings projections. Simply click here to access the document and see if you don't agree this stock has powerful upside potential. 

Here is the complete text of the associated news release for your review:
 

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