What else can I write about after the major indexes dropped 2.93%, 3.08% and 3.20% (DOW, NASDAQ and S&P 500)? Volume wasn’t overwhelming for the day but peaked during the hours of the major decline. The first two days of this week have basically wiped out all of the gains from last week while the S&P 500 has now recorded its worst year-to-date start in the index’s history (according to Investor’s Business Daily).

Avon Products, Church and Dwight and Apollo Group were among the stocks making a positive move this week. These are not the stocks you want to lead a strong market (we all know it’s far from strong). Cosmetic, personal care, household and education industries are all related to defensive moves for investors. Run for cover from the former leaders when these stocks rise to the top.

However, the names below may provide for nice safe havens while this market sorts itself out. Their relative strength ratings are holding steady and their declines from recent 52-week highs (some at all-time highs) are rather impressive when compared to the fallen leaders that are now off by as much as 60%. Even long time superstars such as AAPL are off by almost 40%, GOOG by 30% and MDR by 30%.

Will Institutional Investors park Money here?

• CPLA – 60.70, a primetime $60-$100 candidate as the stock corrects back towards the 200-d m.a. for the first time ever. A nice moving average (accumulation) buy – not far from all-time highs
• MA – 206.78, even with the credit crisis, this stock is within a few dollars of its all-time high. Continue to accumulate shares along the long term moving day average. Remember, MasterCard isn’t responsible for default loans (the banks are).
• POT – 139.86, what was I smoking when I passed up POT on numerous buying opportunities in 2007. I guess I can realistically say that it never pulled back to the 200-d m.a. so it slipped my best risk/reward screens. Still a place for funds to park money
• FSLR – 178.00, the stock has corrected by 50% since hitting its peak but it is still holding the 200-d m.a. strong, a sign of institutional sponsorship
• JASO – 50.25, still a nice play as it challenges the 200-d m.a. for the first time since the IPO debut last February. The Olympic hype, solar angle, IPO aspect and increasing earnings should keep this one flying.
• RIMM – 88.30, the blackberry stock has corrected back to the 200-d m.a. for the first time since 2006. The correction is welcomed so let’s watch to see if it can hold the line. A nice accumulation area if it holds its weight. Keep an eye of the 10/30-week crossover to the downside (a negative signal).

None of these stocks are recommended buys when the “M” in CANSLIM is weak but do keep an eye on them and accumulate when you find the best risk-to-reward setup and a sign of life in the market.

My last stock purchase of this year and first of next year will be 110% speculative and based on a hunch and nothing more. I had the same feeling last year with Calpine (see below for details).

Why is it speculative?
1. Because it trades under $10 per share (it actually trades under $2 per share).
2. Because it trades over the counter (DSCI.ob)

I said I was done investing in stocks in 2007 but I read an interesting story in the NY Daily News while riding the train home from Manhattan on Thursday night (I took my wife to see Mama Mia on Broadway). Excellent show by the way!

The article highlighted Derma Sciences Inc. (DSCI.ob), a Princeton, NJ company that engages in the manufacture, marketing, and sale of dermatological related products in the areas of wound care, wound closure and specialty securement devices, and skin care in the United States and internationally.

The general description didn’t catch my attention but the fact that the FDA green-lighted it’s product Medihoney on Nov. 7 is what got me thinking (this could be bad – lol).

MEDIHONEY™ is the first honey-based product cleared for use by Health Canada and also the first cleared for use by the FDA. These unique dressings contain Active Leptospermum Honey, indigenous to New Zealand (Manuka) and Australia (Jellybush). The dressings can be used in all phases of wound healing and could be considered a key dressing in any wound bed preparation protocol. These qualities can help to take much of the guesswork out of wound management.

As the Daily News states, honey is most likely to catch on among Americans inclined toward alternative health treatments – especially those concerned about overexposure to antibiotics as drug-resistant staph becomes more common.

Honey has been used since ancient Egyptian times to heal wounds and prevent them from becoming infected. It has natural anti-inflammatory and antimicrobial properties that are especially potent in a strain known as manuka cultivated in Australia and New Zealand.

Israeli doctors reported in the journal Medical Oncology that 64% of cancer patients who ate the honey didn’t develop anemia, and 40% didn’t suffer a low white-blood-cell count.

Some predict that honey will become a part of big business among alternative treatments and I firmly believe this could be true. Therefore, I will be putting my money where my mouth is by buying shares as the market opens tomorrow. It will be a small position but one that I will add to if the stock does what I expect it to do.

Interesting Technical Developments:

• It was up more than 48% on huge volume over the past week and that CATCHES my attention.
• It gained 27.66% Friday on volume 4.5 times the 3-month average. I was slow (on vacation) and didn’t buy Friday (could have enjoyed a large portion of that 27% gain)
• Volume was more than 5 times the weekly average this week and more than 10 times the weekly average three weeks ago. (Started to make its move from $0.65 to $1.20)

This is not a typical buy that I place into my portfolio but I did something very similar last year with Calpine and it worked very well (VERY WELL)!

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