Click here to go to the StocksCom.com website

 

Stockscom Report for Sunday June 9 2002

Publisher: Colin Alexander     Editor: Ken Wilson

Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)

 

Market Synopsis

 

The market action on Friday was another example of the seesawing volatility that we’ve seen lately, however in this case we went from extreme negativism to a strong positive outlook all in a matter of hours. Nonetheless we still view equities with suspicion and the trend firmly in place continues to be the downward trekking path that has been so familiar to us of late. The Nasdaq Composite appears to be only too willing to test the September lows which lie 112 points lower while the Dow, and to a lesser extent, the S&P seem prepared to follow far behind and not go to such extreme measures. The S&P is about 62 points higher than its September low so there’s still a chance that it could participate.

 

The much awaited figures on unemployment showed a decrease to 5.8% from April’s 6.0% in the monthly rate and a lower than expected figure for the number of jobs created. The latter number is often revised both up and down in subsequent months. These figures jolted the market and when taken with previously reported increases in ISM purchasing manager’s numbers gave traders the impetus to buy severely beaten down stocks.

 

Of course buying a stock simply because it looks cheap at current prices is often a loser proposition. Investors who purchased stock in Nortel can attest to that fact as even shares bought when price was a lowly $10 now find themselves with stock worth a fraction of the price. Similarly, investors who piled into shares on Friday because prices appeared cheap may be in for a rude awakening since the downward sinking trend has yet to abate.

 

For now, we prefer to remain mostly on the sidelines and observe the unfolding drama. In all investment strategies, the central focus should be capital preservation above all else. Markets are being buffeted by winds from different directions, which are now showing up in the rising VIX volatility measure. Though still well off its highs reached during September, it is noticeably greater than it has been in the recent past.

 

 

Our Stock Picks

The stop losses of $7.80 on AOF and $11.20 on MUO are maintained.

 

 

New Buy Recommendations:

 

None.

 

New Short Sales

None.

 

Stock Positions to Sell/Exit:

 

None.

 

List of Current Stock Recommendations:

Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S where positions should be retained. S+ and S++ indicate stocks for which there is a technical case to add to the positions with plusses adding weight similar to long positions. The maximum number of plus signs is 2.

Stocks marked # are eligible as Canadian content in Canadian RSP funds. Otherwise there is a 30 percent restriction on foreign stocks held in these accounts.

Date of Entry	Name	Symbol	Entry Price	Current Price	Action Rating
22/04/02	Acclaim Entertain.	AKLM	5.79	4.45	SOLD
02/01/01	Acm Government Opportunity Fund	AOF	7.99	9.06	B
10/08/01	Agnico-Eagle Mine	AEM #	10.85	15.76	B
22/04/02	Aspect Comms.		4.92	3.76	SOLD
03/11/02	Caterpillar	CAT	59.08	50.25	SOLD
22/04/02	Cobalt	CBZ	15.15	19.50	SOLD
03/18/02	Dupont	DD	48.70	43.56	SOLD
10/22/01	Glamis Gold	GLG #	3.28	8.97	B
10/08/01	Gold Fields ADR*	GFI	4.97	12.53	B
03/18/02	Johnson & Johnson	JNJ	64.70	57.90	SOLD
03/11/02	Modis Prof. Srvcs	MPS	7.75	7.70	SOLD
03/04/02	Moore Corp	MCL #	11.50	12.80	SOLD
02/01/01	Pioneer Interest Shares	MUO	11.95	11.66	H
03/11/02	United Tech	UTX	75.32	67.30	SOLD

 

*Gold Fields changed their symbol to GFI from GOLD