After a few weeks of a bull/bear stalemate, the bulls won out on Thursday as the market surged higher out of consolidation.  Important moves such as the one on Thursday provide clues to future direction, at least in the short term.  Right now the market is indicating higher prices as we wind down ’06.  On the technical side, the Nasdaq continues to hover at the bottom of the upward channel, the S&P remains firmly entrenched in the upward channel, while the Dow is testing resistance of the upward trend line (but is probably just carving out a flatter upward trend).  It’s a fairly busy week before trading begins to wind down ahead of Christmas and New Years, particulary on Tuesday when the PPI and housing starts numbers are released.  Until next time, good trading!

::: Model Portfolio Update :::

Following last week’s Model Portfolio surge of 7%, it pulled back a bit this week and lost 2.5% due to a couple quick strike profit plays gone bad – in Cauity (CTTY), sold for a 8% loss and Trio Tech (TRT, sold for a 12% loss).  With the market breaking out of consolidation on Thursday 2 short positions were covered which combined for just a small loss – China Life (LFC) covered for  4% loss and Icon (ICLR) covered for a 3% gain.  I continue to use just a bit of margin and the portfolio remains dominated by long positions (currently about 80% long, 20% short.  The year to date performance stands at 24.6%.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Grocery Stores                                 5.25%
2. Office Supplies                                  4.00%
3. Drug Related Products                       3.60%
4. Foreign Regional Banks                     3.15%
5. Banks – Midwest                                3.07%
6. Internet Software & Services            3.00%
7. Cement                                                2.95%
8. Electronic Equipment                           2.80%
9. Housewares & Accessories              2.70%
10. Life Insurance                                   2.65%

– Top 10 Worst Performing Industries For the Week –

1. Building Materials                                   -5.40%
2. Electronics Wholesale                           -5.15%
3. Electronic Stores                                   -3.60%
4. Trucking                                                 -3.45%
5. Semiconductor – Memory                       -3.25%
6. Printed Circuit Boards                            -3.25%
7. Drug Delivery                                         -3.20%
8. Nonmetallic Minerals & Mining                -3.15%
9. Silver                                                      -3.00%
10. Metal Fabrication                                  -2.80%

– Top 5 Best Performing ETFs For the Week –
 
1. Turkish Invest Fund (TKF)                      6.45%
2. Templeton Russia Fund (TRF)                5.00%
3. Ishares China  (FXI)                                4.30%
4. Latin America Fund (LDF)                       3.65%
5. HLDRS Software (SWH)                         3.10%

– Worst 5 Performing ETF’s –

1. Ishares Silver (SLV)                                       -6.30%
2. Central Canada Fund (CEF)                            -2.75%
3. StreetTracks REIT (RWR)                               -2.50%
4. PowerShares Biotech (PBE)                          -2.15%
5. Ishares Tawain (EWT)                                   -2.05%

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

1. Fuwei Films (FFHL): China-based developer of high-quality plastic film using the biaxial-oriented stretch technique for use in consumer-based packaging, imaging, electronics, and electrical industries and in magnetic products.  Set to start trading sometime this week.

2. Melco Entertainment (MPEL):  Hong Kong-based operator of casino gaming and entertainment resort facilities in Macau. The company’s subsidiary, MPBL Gaming, is one of six companies licensed to operate casinos in Macau. Melco PBL is a 50/50 joint venture between Melco and PBL. It is the exclusive vehicle of Melco and PBL to carry on casino, gaming machines, and casino hotel operations in Macau.  Trading set to start Tuesday.

3. Trina Solar (TSL):  China-based manufacturer of integrated solar-powered products. The company produces standard solar power modules built to general specifications or designed to fit customers’ specs.  Trading set to start on Tuesday

4. Universal Power Group (UPG):  Texas-based supply chain and third-party logistics service provider of batteries, related portable power products, and security products.  Trading set to start this week.

5. Solarfun Power Holdings (SOLF):  China-based manufacturer of photovoltaic (PV) cells and PV modules in China. Solarfun recently incorporated Shanghai Linyang to provide system integration services in China. In November, it won a competitive bid to provide a substantial majority of the PV modules to be used in a 1 MW solar power plant in Shanghai.  Trading set to start on Wednesday.

::: Upcoming Economic Reports (12/18/06- 12/22/06) :::

Monday:        None
Tuesday:       Housing Starts, Building Permits, PPI
Wednesday:  Crude Inventories
Thursday:      GDP (final), Initial Claims, Leading Indicators, Fed Minutes
Friday:           Durable Orders, Personal Income, Personal Spending

::: Notable Upcoming Earnings Reports I’ll Be Watching This Week :::

Monday: Oracle (ORCL)
Tuesday: Factet Research Systems (FDS), Morgan Stanley (MS)

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

– SelfInvestors Blog –

None

** Anything you’d like to see in this report or have suggestions?  Just hit your reply button and respond.  I’m all ears!