Awaiting Earnings & Breakout Confirmation; Hot IPO: China Digital TV (STV)

It was a fairly ho hum week with light trading volume as the market awaits the kick off of earnings season in a couple weeks but market reactions to news events suggest the bulls still remain in control as key technical resistance levels at the July highs come into play. Retail warnings from Target and Lowe’s, weaker than expected housing numbers, a big drop in consumer confidence and record high oil was tempered by tame inflation (at least according to the government) and strong manufacturing data. Clearly, the market focused on the good news last week and that is characteristic of any bull market. However, I think most traders are waiting for some kind of big confirmation move after the Fed induced surge nearly two weeks ago before getting aggressive on the long side. My own strategy hasn’t changed from last week. I want to see a confirmation breakout move above the July highs OR some significant light volume selling to support levels before moving more cash to the long side.

::: Model Portfolio Update :::

While I did add a couple more small long positions and one short position I continue to remain fairly tentative as the market meanders with little volume ahead of earnings season. As I said last week, I want to see either a few percentage points to the downside with light selling volume OR a confirmation breakout with volume before I’m willing to get more aggressive on the long side. If we continue to push higher with light volume I may even be tempted to add another short position or two. For the week, the Model Portfolio edged up a bit by .4% to a YTD gain of 11.3%. I continue to hold a significant 45% cash position with 50% on the long side and 5% of the portfolio short.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Data Storage Devices: 5.10%
2. Industrial Metals & Minerals: 4.75%
3. Diversified Investments: 4.55%
4. Steel & Iron: 4.10%
5. Telecom Services – Foreign: 4.10%
6. Aluminum: 4.00%
7. Computer Peripherals: 3.90%
8. Life Insurance: 3.75%
9. Beverages – Soft Drinks: 3.75%
10. Farm & Construction Machinery: 3.60%

– Top 10 Worst Performing Industries For the Week –

1. Building Materials Wholesale: -9.45%
2. Residential Construction: -8.35%
3. Home Improvement Stores: -7.40%
4. Sporting Goods Stores: -5.10%
5. Banks – SE: -4.80%
6. Medical Practitioners: -4.10%
7. Water Utilities: -4.00%
8. Staffing & Outsourcing: -3.80%
9. Printed Circuit Boards: -3.55%
10. Hospitals: -3.20%

– Top 5 Best Performing ETFs For the Week –

1. Thai Fund (TTF) 12.30%
2. Claymore BRIC (EEB) 7.65%
3. Ishares China (FXI) 6.85%
4. India Fund (IFN) 6.75%
5. Powershares Golden Dragon (PGJ) 6.55%

– Worst 5 Performing ETF’s –

1. Herzfeld Caribbean Basin (CUBA) -12.50%
2. Dow Jones Home Construction (ITB) -11.30%
3. SPDR Homebuilders (XHB) -8.05%
4. KBW Banking (KRE) -2.70%
5. PowerShares Dynamic Enegy Exploration (PXE) -2.40%

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

1. China Digital TV (STV): provides digital TV network operators with products and services that allow them control access to their content. The company’s subsidiary, Super TV, sells the set-top boxes and smart cards that allow subscribers to access channels or programs on a digital TV network. Super TV also provides the software on the network end that controls the content distribution, offers systems intergration services for network operators, and licenses it’s set top box design to manufacturers. Smart cards account for more than 85% the company’s sales. Trading set to begin on Friday.

::: Upcoming Economic Reports (10/1/07 – 10/5/07) :::

Monday:         ISM Index, Auto/Truck Sales
Tuesday:       Pending Home Sales
Wednesday: ISM Services, Crude Inventories
Thursday:      Initial Claims, Factory Orders
Friday:            Average Workweek, Hourly Earnings, Nonfarm Payrolls, Unemployment Rate, Consumer Credit

::: Upcoming Notable Earnings Reports :::

Wednesday: Immucor (BLUD)

Thursday: Research In Motion (RIMM)

::: In Case You Missed It – SelfInvestors Blog Entries of the Past Week :::

1. Swing Trade Case Study – China Precision Steel (CPSL)

2. Halo 3 Launches Amid Rave Reviews

3. Stock Trade of Day – FalconStor Software (FALC) Cup With Handle Breakout

4. IPO Tracker ..Video Style

5. Trade of the Day – Cogent Systems (COGT) Breaks Out