THANK YOU TO ALL THE BRAVE MEN AND WOMEN WHO HAVE MADE GREAT SACRIFICES FOR THIS GREAT NATION.  WE SALUTE YOU NOT JUST ON THIS MEMORIAL DAY, BUT EVERY DAY.

Last week we saw the indices take a much needed breather after an impressive run off those March lows and as expected the next level of key support levels are in the process of being tested – I’m referring to the upward trend line of the Nasdaq (see below) as well as the 50 day moving average of the S&P (see below).  At this point, the selling of last week doesn’t indicate anything other than significant profit taking and while there was distribution going on, I don’t think it’s enough at this point to completely derail the rally and take us back to the March lows.  What would be more of a concern is if the S&P and Nasdaq join the Dow in taking out their 50 day moving averages.  A breach of this area with high volume selling would in my opinion set us up for the possibility of a retest of those March lows.  We’ll just have to see how traders respond later in the week as they file in from a long weekend and ponder the GDP report on Thursday.  Taking a look at stochastics reveals the market is nearing oversold levels in the short term and likely due for some kind of bounce very soon.  I would not bite on that and get too aggressive too quickly.  I just think it’s really difficult to be aggressive on either side of the market right now and the best place to be is in cash. 

::: Model Portfolio :::

** This section will now appear as a separate report about every other Wednesday. 

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::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Health Care Plans: 5.21%
2. Drugs – Generic: 3.10%
3. Medical Appliances & Equipment: 1.90%
4. Long Term Care Facilities: 1.40%
5. Oil & Gas Refining & Marketing: 1.30%
6. Home Health Care: .70%
7. Drug Related Products:  .55%
8. Music & Video Stores: .40%
9. Gold: .40%
10. Waste Management: .20%

– Top 10 Worst Performing Industries For the Week –

1. Major Airlines: -23.50%
2. Sporting Goods Stores: -12.40%
3. Residential Construction: -12.25%
4. Resorts & Casinos: -8.80%
5. Investment Brokerage – Regional: -8.70%
6. Semiconductor – Memory: -8.50%
7. Department Stores: -8.10%
8. Regional Airlines: -8.10%
9. Home Furnishing Stores: -8.10%
10. Surety & Title Insurance: -7.90%

– Top 5 Best Performing ETFs For the Week –

1. Ishares Silver (SLV)  7.60%
2. Market Vectors Nuclear Energy (NLR) 6.10%
3. US Natural Gas (UNG) 5.90%
4. United States Oil (USO) 4.60%
5. Central Fund of Canada (CEF) 4.00%

– Worst 5 Performing ETF’s –

1. SPDR Homebuilders (XHB) -12.60%
2. iShares Home Construction (ITB) -12.55%
3. Morgan Stanley China (CAF) -9.95%
4. Claymore China Real Estate (TAO)  -7.50%
5. iPath India (INP) -7.40%

:::  IPO’s Worth Watching for This Week :::

This section will now appear as a separate post on Mondays.

While 2008 should be a much slower year for IPO’s considering the deterioration of the market, there will continue to be some good companies coming to market here and there.  I’ll be highlighting the best IPO’s every Monday.

::: Upcoming Economic Reports (5/26/2008- 5/30/2008) :::

Monday:        None – Holiday
Tuesday:       Consumer Confidence, New Home Sales
Wednesday:  Durable Orders, Crude Inventories
Thursday:      GDP (prelim), Initial Claims
Friday:           Personal Income/Spending, PCE Core Inflation, Chicago PMI

::: Earnings I’m Watching This Week :::

Tuesday:
Donaldson (DCI), Shanda Interactive (SNDA), Wuxi Pharma Tech (WX)

Wednesday:
Jinpan (JST),  Synovis Life Technologies (SYNO), Esterline (ESL),

Thursday:
Caraco Pharmaceutical (CPD), Costco (COST), Netezza (NZ)

Friday:
China Finance Online (JRJC)