The anticlimactic end to rate hikes came to an end last week as most everyone expected. It didn’t take long for traders to "sell the news".. Remember, the market looks several months into the future and had already priced in the end to rate hikes.  Now the market turns to more important things such as the actual data that this data dependent Fed is basing its decisions on. Kicking it off on Tuesday and Wednesday is the all important  PPI and CPI inflation data which will give us another clue as to just how fast inflation is rising.  This data has the potential to be a real market mover, so be prepared one way or the other.  I still think there is more risk to the downside than potential to the upside.  We’ll probably see a pop Monday morning on news of a cease fire agreement in the Middle East, but I would expect that to be short lived.  The market has been flashing warning signs and put together another 2 days of distribution (institutional selling) last week following the Fed decision.  When the market speaks, it pays to listen.  Be careful out there.

It was another  busy and profitable week in the Model Portfolio.  Two short positions were covered – one for a quick 3 day gain of 23% in Grupo Simec (SIM), the other for a 7% loss in Business Objects (BOBJ).  These were replaced by 2 new short positions on Tuesday which I continue to hold for gains.  Only one long trade was attempted in Dril Quip (DRQ) and promptly sold for a 3% loss as the stock reversed course.  Currently, the portfolio allocation is roughly 30% short, 10% long and 60% cash.  The portfolio gained 1.5% for the week and is sitting on a gain of 14.5% year to date.

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** Best/Worst Performers **

– Top 10 Performing Industries For the Week –

1. Office Supplies                            6.60%
2. Networking & Comm Devices      6.55%
3. Multimedia & Graphics Software 4.40%
4. Drugs – Generic                           4.10%
5. Personal Serivces                        2.80%
6. Catalog & Mail Order Houses       2.80%
7. Nonmetallic Mineral & Mining         2.35%
8. Specialized Health Services         2.35%
9. Hospitals                                       2.15%
10. Publishing – Periodicals               1.85%

– Top 10 Worst Performing Industries For the Week –

1. Music & Video Stores                  -14.85%
2. Trucks & Other Vehicles             -11.35%
3. Rental & Leasing Services          -10.20%
4. Major Airlines                                -8.90%
5. Residential Construction               -8.15%
6. Farm & Construction Machinery   -7.65%
7. Drug Delivery                                -7.50%
8. Manufactured Housing                 -6.90%
9. Sporting Activities                        -6.70%
10. Movie Production                        -6.20%

– Top 5 Best Performing ETFs For the Week –
 
1. Turkish Invest Fd (TKF)                     6.00%
2.Chile Fund (CH)                                  6.00%
3. Russia & E. Europe (TRF)                 4.15%
4. Morgan Stanley India (IIF)                  3.10%
5. Templeton Dragon Fund (TDF)          3.10%

– Worst 5 Performing ETF’s –

1.SPDR Homebuilders (XHB)                 -8.15%
2. Dow Jones Transportation (IYT)      -4.05%
3. PowerShares Clean Energy (PBW) -3.70%
4. Gold Miners (GDX)                           -3.60%
5. Commodity Index (DBC)                    -3.50%

**  IPO’s worth watching for the coming week **

1. InnerWorkings (INWK): provides printing solutions.  The company believes its unique technology enables it to obtain favorable pricing, deliver high quality products and services to its clients.  During the first quarter, the company reported strong growth from the year ago period.  Trading is set to start Wednesday.

2. GNC (GNC): This is a carryover from last week and no trading date has been set.  Specialty retailer of nutritional products, including vitamins, herbs, minerals and supplements with over 5800 locations worldwide.  Earnings and sales are growing quickly. 

** Upcoming Economic Reports (8/14/06- 8/18/06) **

Monday:        No Events
Tuesday:       PPI, Treasure Capital Inflows, NY Manufacturing Index, Retail Sales
Wednesday:  CPI, Industrial Production, Real Earnings, Housing Starts, Petroleum Status
                       Mortgage Applications
Thursday:      Money Supply, Philly Fed Survey, Leading Indicators, Jobless Claims
Friday:           Consumer Sentiment (Prelim)

** Latest Blog Entries – In Case You Missed Them!**

– SelfInvestors Blog –

1. Today’s Notable Earnings Movers (NCTY, ECLG) (Aug 10)
http://investing.typepad.com/tradingstocks/2006/08/todays_notable__4.html

2. Yahoo Demos New Ad Platform (Aug 8)
http://investing.typepad.com/tradingstocks/2006/08/yahoo_demos_new.html

3. Today’s Notable Earnings Mover’s (VTIV, JOBS) (Aug 7)
http://investing.typepad.com/tradingstocks/2006/08/todays_notable__3.html