To OTC Journal Members:

In the short run the market is always an emotional roller coaster, with the psychology of fear and greed ruling the day. As Enronitis spreads like an airborne flu virus, and buyers are nowhere to be found, sensibly waiting for the emotional reaction to take stocks to virtually risk free entry points.

The financial news is dominated with horror stories of accounting abuse and potential fraud. Every morning another Congressional committee subpoenas Enron officials, only to watch these people exercise their Constitutional right to plead the 5th Ammendment.  There is little doubt some Enron officials will be eventually going to prison, possibly rooming with Arthur Andersen auditors.

This past week there were also news reports of FBI and SEC investigations into the activities at now bankrupt Global Crossing.

Amidst all this horrific news the market is, of course, tanking. Stocks are being treated as if every public company has been cooking its books, and money managers are fleeing to cash at any price.

Many fund managers felt the market's rebound from the post Sept 11th crash to the early January high was premature. Corporate performance did not justify the run from 1400 to 2100. Most were expecting sales and earnings to show signs of improvement in the second half of the year.

True to form, the market found an excuse to bring stock prices back to reality.

Entry levels are now very attractive. This fear driven climate has given investors some exciting opportunities, and if you can tune out the media's focus on a few horror stories, calmer heads will recognize it's bargain basement shopping time. You have to believe that most pubilcly traded companies do, in fact, report honest financial statements.

One particularly striking example was the market's reaction to rumors circulating about telecommunications giant Qualcomm (NASDAQ: QCOM). One analyst questioned how the company recognized $11 million in revenues last quarter.

The stock responded by losing $3 billion in market cap. This company does $2.7 billion in annual sales. Irwin Jacobs, the Chairman of Qualcomm, recently endowed the San Diego Symphony with $50 million.

$11 million to Qualcomm is petty cash, and the $3 billion market cap loss is a prime example of the absurd levels of fear which rule the markets today. Qualcomm is a screaming buy at these levels.

A quick glance at a chart of the NASDAQ from the end of September low shows an index that has pulled back to a critical support level. A drop below 1680 could take us back to the old lows, but a rebound is more likely from these levels.

Aggressive investors may wish to grab a few shares of their favorite stock at these bargain basement prices. If you are concerned about further downside risk, use a tight stop loss.

This year we have focused on three stocks- Cross Media Marketing (AMEX: XMM), Energy Power (OTC BB: EYPSF), and XML Global (OTC BB: XMLG). We believe all three are trading at excellent entry levels right now.

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