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March 22, 2003
Volume VI, Issue 26
Email : [email protected]

To OTC Journal Members:

Market Comment- V Bottom Suggests Higher Levels Imminent

The current rebound in the market has been breathtaking and extended beyond most people's expectations. The DOW was up 8.4% this week alone, the best one week performance since 1982.

The "V" bottom formation depicted in the chart has now been repeated five times during the bear market: Oct 2002, July 2002, Sept 2002, March 2001, and now.

In each case, the market rebounded to the point at which the breakdown had started, stalled out temporarily, then surged far higher than expected. 

Yesterday the market "filled the gap" created when the current breakdown began on January 16th.

If the "V" bottom repeats the same pattern established during the previous four adventures in this bear market, we can expect a short breather, and a move considerably higher. The October rebound in the NASDAQ took the index 240 points higher from the point at which the index broke support.

If we grind sideways for a couple of days look for a trading recommendation on the long side. It's too risky to enter now. A slight pullback and renewed fear would be healthy for continuing advancement to the upside. When the media reports it was "just a short covering rally" and the earnings outlook is bleak, that will be the time to look to take a long position.

The market is absolutely giddy over the seemingly quick end to the war in Iraq. As we write the weekend edition, the media is confirming coalition troops have complete control of Iraqi oil fields with minimal damage. This is the best news the market could get. It could be all over by the end of the weekend.

Technicals currently dominate trading strategies over fundamentals.

Looking For Dividend Yield? - Consider Teco Energy (NYSE: TE)

If you're unhappy with the 1% you're getting in your money market account, and willing to take a little risk for a better yield, consider investing in TECO Energy (NYSE: TE). TECO pays an annual dividend of $1.42. Based on Friday's closing price of $10.95, this hybrid utility/energy company's stock is paying a 12.97% annual cash dividend.

In 2002 TECO's revenues rose 8% to $2.68 billion. Profits rose 9% to nearly $300 million, or $1.99 per share. The company has a variety of energy related operations all over the South East, and owns the Tampa Electric Company and the People's Gas System division of Tampa Electric.

The stock dropped recently when Moody's announced it would review the credit rating of the company's debt. However, TECO's cash level at the end of 2002 reached $411 million, up from $108.5 million at the end of 2001, suggesting the balance sheet is strong.

Energy delivery companies have been weak in the last year as deregulation of the utilities industry and the misdeeds of energy trading companies have cast a pall over the group. 

The dividend is very attractive in this low yield environment, and the stock is only $1.48 above its all time low of $9.47. Investors can assume some negative news is already priced into TECO with the yield at 13%. If the company were to get a lowered debt rating or reduce its dividend, the stock might actually go up if the news weren't too terrible. A good Stop Loss- $9.46- which would be a new low. 

In short- worth the risk for the yield and potential appreciation of the stock with your medium risk capital.

Member's Forum

Tons of mail on Wednesday's edition entitled Bush's Big Bet- Both Sides of the Story on War With Iraq. Many seemed to think our piece was slanted against the war, which was not our intention. We were simply sharing points from both sides which we felt the media was not adequately presenting. Here are some of the representative comments. Sorry we can't publish them all.

Members' Forum

Please do your research before you do your political spiels under the guise of "economic impact" from the Bush administrations policies.  Unprovoked attack?  It is on record the Saddam not only supported the 9/11 terrorists but let them train in Iraq.  He provided a commercial airliner for them to learn how to break into the cockpit and Iraqi citizens were furnished as the planes' "crew".  This is enough provocation to merit the invasion.  Killing literally thousands of his own people with WMD (these dead folks did not care that they weren't nuclear) is enough provocation for me as well as 71% of Americans.   I have no problem with your disagreement with Bush policies, the voice of dissent helps keep America on the straight and narrow, but let's be careful that our biases (yours or mine) do not cloud our judgment or cause us to misrepresent the facts.

Richard  S

The most important goal to be achieved with the war and subsequent occupation of Irak is the establishment of a strong military force in the Middle East, with the capability of deploying overwhelming force in a matter of hours and with the ability to crush any terrorist organization in its cradle. 

The United States Armed Forces are the natural, and only, organization capable of fulfilling this role of Global Policeman, and all of us - free men of the world - are deeply grateful to George Bush for having the vision and the courage to commit his country, as well as his personal fate, to the fight against terrorism and to the achievement of stability in that troubled region. The rest of the arguments, in favor or against, are purely academic.

Mario N
Buenos Aires

I don't know where you get your information, but it doesn't jive with my own research. For instance, we do not receive 80% of Iraq's oil. France and Russia may, but we do not. You failed to mention that France and Russia have been in violation of the UN sanctions for years and currently have HUGE contracts with Iraq, mainly for oil. You also fail to mention that for 12 years these same entities (France, Germany, and Russia) have blocked the UN from taking harder actions against Hussein for his torture and genocide tactics. Gee, I wonder why. As for Iraq's nuclear capabilities,  please explain why the previous head of the International Atomic Energy Agency has gone on record stating that he was actively trying to make a nuclear weapon, and defectors have stated that he has gotten the technology to produce them. You also mention the fact that he has Bio and Chemical weapons but that it is no big deal! Maybe you don't give a damn about anything but the stock market, but I've got a news flash for you, Hussein has murdered over a million people. He tortures children. Good lord man, don't you have any compassion? Or are you only interested in money?

As for your slam on Israel, you prove your colors by failing to mention the fact that as late as last week Hussein was sending blood money checks to the homicide bomber's families as payment for their martyrdom. You also fail to mention the fact that the hijackers from 9/11 trained for their mission in Iraq. You also fail to mention that had France bothered to stop Hitler we wouldn't have had WWII. Where would the stock market be if we hadn't had WWII?  I certainly hope that you put more effort into your research of stocks than you have in your slanted editorial of Bush as a reckless cowboy. Your political opinions are not well researched and allude to a lack of moral character. Evil men prevail when good men do nothing. Do us all a favor and keep your reporting limited to stocks. 

Barry D
Augusta, Ga. 

Aside from some editing shortcomings, your analysis of the Iraq war was excellent. As you make plain, both sides can make strong arguments for removing Saddam. It dismayed me that the strongest argument for the war -- the humanitarian one of deposing a regime that has kill and tortured thousands -- was the last one put forward by the Bush administration. 

The one aspect of this debate your analysis didn't address -- probably because it's moot now that the shooting has started -- is whether peaceful means could have been employed to remove or disarm Saddam. Various members of the Bush administration asked in recent weeks, "How long are we supposed to let the inspections continue?" My answer was always, "How about forever?  They cost a pittance compared to war, and nobody gets killed."

The next step for the U.N. could have been to demand that legions of human-rights monitors be allowed in to investigate the torture and other atrocities and then, in collaboration with the World Court, make arrests for crimes against humanity. 

Ed C
Granger, IN  USA

I shall begin by saying that: your obervations and subject matter content within the article is excellent and very clearly articulated. There should be more honest and un-bias material like this readily available for people within the country to have access to. However, I feel compelled to interject a couple of key notes:

When referring to Muslims, the use of confusing adjectives such as Muslim Extremist, and Muslim Fundamentalist is very mis-leading to readers - in particular those not well versed in understanding of Al Islam and Muslims. This only generates pre-conceived notions... leading to negative connotations in the mind of readers.

Myself along with many others are still not convinced that Terrorists from outside this country are the blame for what happened on Sept.11, 2001... for two main reasons: America the super-power and leader in sophisticated technologies -  the same country that has stealth technology at its power has to seem weak and defenseless according to Bush in his campaign to convince the people of the world that a highjacker with a Knife was able to hold the entire plane... crew and passengers completly hostage, not to mention how quickly/rapidly physical evidence was located and acquired to supposedly link certain alledged Al- Qaida members to all of this. I'm sorry, but were is the real proof ?

Finally, most of the people within the United Stations approx. 75-80% are not happy with the direction given by leadership for this country. A lot of negative impact was felt with the slumping economy prior to Sept.11, and inspite of the political rhetoric more dismay has been expressed form the international community. Furthermore, 80-90% of the world is disappointed with the go to war mentality and blatant disregard to UN policy. It's clear what the real intent is for storming into Iraq - as you mentioned in the article. But inspite of all the atrosities that we witness before our eyes from leadership... what are we doing as a people from a collective stand point to help bring about change and implement a system that will be a healing and bring about true peace in the world and cure the present illness's and sickness's of society that is afflicted upon us? Well, you dont have to look much further cause that very system does exist by the name of "Al-Islam", which is gaining more attention day by day... it's wonderful vastness and peace that it brings to every individual that embraces it with sincerity is becoming more and more received within the hearts, communites, and society as a whole.

Thank you for your time,


I'm glad to read a good pro/con outline of this "war".You did a more thoughtful rundown than the big media.


Thank you AP- At least we accomplished our mission with one member.

Please keep your comments coming for the Members' Forum. Email [email protected] on any subject you want. Please try to keep your comments down to one or two paragraphs.

Monday- Special edition on XML Global Technologies (OTC BB: XMLG)- We're finally getting some facts and it's not all bad.

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