With traders getting in end of summer vacations and no major economic events on the calendar, it was one of the quietest weeks of the year.  While next week provides a look at consumer confidence and the FOMC minutes on Tuesday and the GDP number on Wednesday, I’d expect more of the same until normal trading begins again after the Labor Day weekend.. then the fun begins.  This lull provides an opportunity to get those watchlists in order and prepare.. prepare for what will most likely be a major move in the last few months of the year.  The market remains very difficult to read, so in what direction is anybody’s guess, but the health of the market has improved of late and I’m just a bit biased toward the bullish side.  The reason for this is the emergence of tech over the past couple weeks and the ability of the market to hold recent gains this week despite more negative news in the housing market as well as the Iran situation.
The best course of action is to allocate a significant portion to cash and be prepared on both sides.  Remember, the market has a tendency to lull you to sleep before big moves.  Get ready.

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I’m releasing a new Stock Watch report to premium members in the next few minutes – and no you won’t find my two highest rated breakout stocks in the IBD 100 this weekend.  These big potential breakouts are flying under the radar providing a much greater success rate – don’t miss it!

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** Model Portfolio Update **

With the market half asleep this week and pulling back a bit, the Model Porfolio did the same.. off 1% for the week.  Just one new transaction, a small $10K silver play on the long side was made.  The year to date performance continues to stay well ahead of the major indices with a 14.3% gain.  I anticipate another fairly quiet week ahead and will most likely ride with current positions until normal trading volumes resume after the Labor Day holiday.  Current allocation is about 17% short, 40% long and 43% cash.

** Best/Worst Performers **

– Top 10 Performing Industries For the Week –

1. Broadcasting – Radio                      5.70%
2. Home Health Care                           4.28%
3. Personal Computers                        3.24%
4. Semiconductor – Memory Chips      3.10%
5. Drug Delivery                                   3.02%
6. Shipping                                            2.50%
7. Lumber/Wood Production                 2.45%
8. REIT – Residential                              2.05%
9. Processed & Packaged Goods         2.00%
10. Farm Products                                1.95%

– Top 10 Worst Performing Industries For the Week –

1. Home Furnishing Stores                  -8.00%
2. Apparel Stores                                -5.20%
3. Long Distance Carriers                   -4.95%
4. Electronic Stores                            -4.80%
5. Gaming Activities                            -4.00%
6. Metal Fabrication                             -3.92%
7. Wholesale Other                             -3.85%
8. Sporting Goods Stores                   -3.80%
9. Home Furnishing & Fixtures            -3.70%
10. Trucking                                         -3.67%

– Top 5 Best Performing ETFs For the Week –
 
1. PowerShares Dynamic Energy (PXE) 2.10%
2. HLDRS Pharmaceutical (PPH)              1.25%
3. SPDR Select Health Care (XLV)           1.00%
4. Templeton Russia & E. Europe (TRF)     .92%
5. Ishares Biotech (IBB)                             .85%

– Worst 5 Performing ETF’s –

1. Turkish Invest Fd (TKF)                     -6.00%
2. Ishares Brazil (EWZ)                         -4.20%
3. PowerShares Dynamic Retail (PM     -3.55%
4. Ishares Latin America (ILF)               -3.10%
5. Chile Fund (CH)                                 -2.60%

**  There are no IPO’s worth watching again this week – the IPO market should pick up again after Labor Day**

** Upcoming Economic Reports (8/28/06- 9/1/06) **

Monday:        No Events
Tuesday:       Consumer Confidence, FOMC Minutes
Wednesday:  GDP (prelim), Petroleum Status, Mortgage Apps
Thursday:      Money Supply, Factory Orders, Personal Income, Jobless Claims, Chicago PMI
Friday:           ISM Manufacturing, Construction Spending, Employment Situation, New Motor
                      Vehicle Sales, Consumer Sentiment (Final)

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

– SelfInvestors Blog –

1. Thirsty For Profits? Go Get Some Water – Powershares Water Resources ETF http://investing.typepad.com/tradingstocks/2006/08/thirsty_for_pro.html