There wasn’t anything in particular that threw the indices firmly in the red today.  Just call it good old fashioned profit taking after a record run as we head into what has historically been one of of the worst performing months for the market.  I’m sure the sell off of last May is still fresh in the minds who took a hit in their portfolios about this time last year. 

Now that the selling has begun, we turn our attention to the intensity of this selling and strength/weakness at key support levels.  Both the Dow and S&P chalked up a day of distribution while the Nasdaq narrowly averted the classification.  One or two of these over the next week or two is relatively harmless, so nothing to be alarmed about at this point.  In terms of key support levels, the Nasdaq was not able to hold above its multi year highs and is now sitting right on the upward trend line that began with the key reversal on March 14th.  There is a good chance it will wipe out that support level at some point tomorrow, creating the likelihood of a drop to the 50 day moving average at some point.  The Dow and S&P are in much better shape and haven’t touched their first lines of support.. in fact the Dow needs to drop about 265 points just to hit its first level of support.  That’s a good indication of just how overbought this market has become.  No change in strategy from the past couple weeks – lock in hard earned profit and sit flush with cash waiting for the next round of opportunity.

::: Major Indices Performance – The Numbers :::

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day April 30th 2007

Distribution in the Dow and S&P500.

Nasdaq: DOWN 1.26% today with volume 6% BELOW  average
Nasdaq ETF (QQQQ) DOWN 1.31%, volume 23% BELOW average
Dow: DOWN .44%, volume 6% ABOVE the average
Dow ETF (DIA): DOWN .43%, volume 5% ABOVE the average
S&P ETF (SPY): DOWN .83%, volume 5% BELOW the average
Russell Small Cap ETF (IWM): DOWN  2.11%, volume 40% ABOVE the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  Leading stocks got hit fairly hard today – about in line with the Nasdaq but with heavier volume.

Summary:

* Decliners led Advancers 326 to 80
* Advancers were up an average of 2.14% today, with volume 69% ABOVE average
* Decliners were down an average of 2.21% with volume 14% ABOVE average
* The total SI Leading Stocks Index was DOWN  1.35% today with volume 25% ABOVE the average

::: Where’s the Money Flowing :::

Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF’s.  A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for gauging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://selfinvestors.com/si/industry_tracking/

* Current Leading Sectors/Industries (over last 30 trading days): 
Semiconductors, Networking, Biotech, Pharma, Financial
                                               
* Current Lagging Sectors/Industries (over last 30 trading days): 
Internet Infrastructure, Agriculture

* Today’s Market Moving Industries/Sectors (UP):
Bonds

* Today’s Market Moving Industries/Sectors (DOWN):
Clean Energy, Homebuilders, Oil Services, Semis, Retail, Transports

::: Stocks :::

The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation.  Sorry, no Stock of the Day today.  There just weren’t any high volume movers that piqued my interest.

A bull mode market is characterized by a focus on the good news and shrugging off the bad.  This week was a great example of that as traders focused on strong earnings reports rather than weak economic data (GDP, Housing).  On Wednesday, awful new home sales figures weren’t enough to put a damper on blow out results from Amazon and then again on Friday, lower than expected GDP data sent the market gapping down at the open, but it wasn’t long before buyers stepped in again as the Dow rose for yet another day.  Friday was really a testament to the strength of the bulls right now.  Certainly, the character of this market has changed significantly in the past couple weeks.

Now that  key resistance areas have been taken out, we turn our attention to adding positions (or adding to positions) at drops to key support levels, rather than looking to dump positions or initiate shorts at key resistance levels.  That’s where we’re at now.  A complete reversal from just a few weeks ago.  Some healthy, consolidating action with light volume would go a long ways in confirming the strength of the bull and providing an entry point to get more aggressive on the long side.  With the big fellas mostly done reporting, any additional weak economic numbers next week may be enough to do just that.

::: Model Portfolio Update :::

Not much has changed in the Model Portfolio.  I’m slowly moving to a portfolio allocated more on the long side, but continue to wait for some consolidation/selling in this market to get more aggressive on the long side.  The portfolio has been weighed down a bit by a few short positions, two of which were exited during the week – a position in Nasdaq Ultra Short (QID) was covered for a 10% loss and a short position in Carter’s (CRI) was covered for a 7% loss.  On the long side, my NYX position got hit with a downgrade and I was forced out of the position ahead of earnings for an 8% loss.  There were a few bright spots.  One of my Quick Strike Profit plays in FALC was closed for a 7% gain and a new QSP position entered on Friday provided a quick gain of 8% and I’m holding for more.  All in all, the portfolio managed a small gain for the week and the YTD performance rose to a respectable 6.9% – still ahead of the S&P500 despite being on the wrong side of the market the past couple weeks.  The current allocation of the portfolio is beginning to lean towards the long side slowly but surely.  I’m now 50% long, 17% short and am sitting on a large cash position of 33% waiting to initiate more longs.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Catalog & Mail Order Houses: 11.75%
2. Trucks & Other Vehicles: 7.60%
3. Education & Training Services: 6.15%
4. Medical Practitioners: 5.85%
5. Appliances: 5.55%
6. Small Tools & Accessories: 5.45%
7. Waste Management:  5.30%
8. Personal Computers: 5.00%
9. Security Software & Services: 4.95%
10. Aluminum: 4.75%

– Top 10 Worst Performing Industries For the Week –

1. Major Airlines: -6.60%
2. Office Supplies: -4.90%
3. Building Materials Wholesale: -4.60%
4. Dairy Products: -4.60%
5. Drugs Wholesale: -4.05%
6. Home Improvement Stores: -3.30%
7. Regional Airlines: -3.30%
8. Specialty Retail: -3.20%
9. Recreational Goods: -2.90%
10. Silver: -2.85%

– Top 5 Best Performing ETFs For the Week –
 
1. HLDRS Internet (HHH)  7.50%
2. HLDRS Oil Service (OIH) 5.60%
3. PowerShares Dynamic Oil (PXJ) 4.70%
4. Morgan Stanley China (CAF) 3.80%
5. Herzfeld Caribbean Basin (CUBA) 3.75%

– Worst 5 Performing ETF’s –

1. HLDRS Internet Internet Infrastructure (IIH)  -4.80%
2. Ishares Spain (EWP) -3.90%
3. Mexico Fund (MXF) -3.15%
4. Templeton Russia & Eastern Europe (TRF) -2.95%
5. Ishares Silver (SLV) -2.75%

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

1. Interactive Brokers (IBKR): automated global electronic market maker and a broker that specializes in routing orders and executing and processing trades in securities, futures, and foreign exchange instruments as a member of more than 60 electronic exchanges and trading venues around the world.  Trading set to begin on Friday.

2. Cavium Networks (CAVM): caters to clients whose networking equipment delivers "triple play" packages of voice, video, and data services at high speeds. Cavium is known for its fast and secure system-on-chip processors. Its customer list is a "Who’s Who" in tech with names such as Cisco, IBM, and Samsung.  Set to start trading on Wednesday.  The company isn’t yet profitable but rapidly moving that way.

3. Acorn International (ATV): Shanghai, China company that provides multi-platform marketing through direct TV sales and a nationwide distribution network. The company believes it operates the largest direct TV sales business in China. It also  believes it was one of the first companies in China to use direct TV sales programs, also known as TV infomercials.  Trading to begin on Thursday

4. Qiao Xing Mobile Communications (QXM): Beijing company that manufactures mobile phone handsets in China. The company’s mobile phone handsets are based primarily on GSM global cellular technologies. Qiao Xing focuses on higher-end and differentiated products. Trading set to begin on Thursday.

::: Upcoming Economic Reports (4/30/07 – 5/4/07) :::

Monday:        Personal Income, Personal Spending, Chicago PMI, Construction Spending
Tuesday:       ISM Index, Pending Home Sales, Auto Sales
Wednesday:  Factory Orders, Crude Inventories
Thursday:      Initial Claims, Productivity (prelim), ISM Services
Friday:           Hourly Earnings, Nonfarm Payrolls, Unemployment Rate

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

Monday: RTI International Metals (RTI), Pan American Silver (PAAS), BE Aerospace (BEAV)
               Atheros Communications (ATHR), Vulcan Materials (VMC), Manitowoc (MTW),
               Hercules Offshore (HERO), LHC Group (LHCG), TransDigm Group (TDG)

Tuesday: Hologic (HOLX), Chipotle Mexican Grill (CMG), NYMEX Holdings (NMX)
                Iconix Brands (ICON), DivX (DIVX), Vocus Inc (VOCS), Interactive Intelligence (ININ)

Wednesday: Superior Energy Services (SPN), TODCO (THE), Hecla Mining (HL),
                     NightHawk Radiology (NHWK), Dolby Laboratories (DLB)
                     Liquidity Services (LQDT), Radiation Therapy (RTSX), Ness Tech (NSTC)
                     Radvision (RVSN), Houston Wire & Cable (HWCC), Natco Group (NTG)
                     Garmin (GRMN), HealthSpring (HS), GFI Group (GFIG)
                     Intercontinental Exchange (ICE), Las Vegas Sands (LVS), Cognizant Tech (CTSH)
                    
Thursday: Northgate Minerals (NXG), Companhia Vale de Rio Doce (RIO), Morningstar (MORN)
                  Celgene (CELG), Strayer Education (STRA), Techwell (TWLL), Tower Group (TWGP)
                  Gildan Activewear (GIL), Gerdau (GGB), Big Band Networks (BBND)

Friday: Telenor ASA (TELN), Allis Chalmers (ALY), Tenaris (TS)

The bullish fervor was in full force today, with a blow out quarter from Amazon fueling the fire.  Kind of takes you back to the hay day of the late 90’s when moves of $5 – $10 was the rule, rather than the exception.  Ok, not quite, but with new all time highs in the Dow, the S&P500 approaching all time highs and the Nasdaq breaking out with force today, there should be cause for some excitement.  The sell off of February 27th is long forgotten and new (much higher) support levels are in place.  At this point, those new support levels could provide a floor for the market to stage a summer rally.  However (at the risk of sounding like a broken record), keep in mind the parabolic rise over the last few weeks with absolutely no pause for a rest.  If you have some big gains avoid the greed and lock in some profit.  If you missed much of this move like I have, don’t chase it.  There are very few good entry points out there right now, particularly in the small to mid caps as this has been a predominantly large cap fueled rally.  They will emerge though.  Patience.

::: Major Indices Performance – The Numbers :::

(Note: volume averages are based on the average over the past 50 days)
Data as of 4:00EST – End of Day April 25th 2007

Accumulation in all indices.

Nasdaq: UP .92% today with volume 25% ABOVE  average
Nasdaq ETF (QQQQ) UP 1.33%, volume 13% BELOW average
Dow: UP 1.05%, volume 2% ABOVE the average
Dow ETF (DIA): UP .88%, volume 34% ABOVE the average
S&P ETF (SPY): UP .92%, volume 1% BELOW the average
Russell Small Cap ETF (IWM): UP  .29%, volume 17% BELOW the average

::: SelflInvestors Leading Stocks :::

The Self Investors Leading Stocks Index is comprised of stocks in the Breakout Tracker, which is a database of the fastest growing companies near a breakout or having already broken out of a base.  Leading stocks (smaller, high growth) just did OK today – they significantly lagged the performance of the major indices and the advancers over decliners ratio was just barely above 2:1 (not impressive on a big move today).

Summary:

* Advancers led Decliners 276 to 123
* Advancers were up an average of 1.69% today, with volume 9% ABOVE average
* Decliners were down an average of 1.66% with volume 49% ABOVE average
* The total SI Leading Stocks Index was UP  .65% today with volume 21% ABOVE the average

::: Where’s the Money Flowing :::

Many investing websites provide leading industries based on price performance alone. However, without accompanying volume levels, this can sometimes be misleading.  The only way that I know of to gauge industry/sector strength WITH volume levels is through the analysis of ETF’s.  A couple years ago this was not possible, but as more traders/investors use ETF’s they become a much better tool for gauging the health of the market and seeing where the money is flowing (or not flowing).  Using the proprietary SelfInvestors Demand Indicator score which measures price and volume movements, I’m able to quickly see which sectors/industries are seeing the greatest inflows of cash.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://selfinvestors.com/si/industry_tracking/

* Current Leading Sectors/Industries (over last 30 trading days): 
Semiconductors, Broadband, Biotech, Networking, Utilities
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Agriculture, Home Builders

* Today’s Market Moving Industries/Sectors (UP):
Oil Services, Internet, Networking, Transports, Energy

* Today’s Market Moving Industries/Sectors (DOWN):
Internet Infrastructure, Health Care Providers

::: Stocks :::

The stocks section will be an area where I highlight one stock selected from a group of stocks moving up with volume well above average and most likely breaking out of a base or consolidation.  Today’s stock is for the most part off the radar of Wall St. with just one analyst covering it, technically bullish and poised for a break out.

ABOUT:  Internet Gold Golden Lines Ltd. is a communications company that provides Internet access and related value-added services, international telephony, e-advertising, content and e-commerce services throughout Israel under the brand name smile. The Company launched its International Telephone Service (ITS) under the brand 015 in August 2004. The license to provide ITS was granted for 20 years. It has two focused businesses: Communication and Media. Communications provide Internet services and international telephony services, such as Internet Access, Value Added Services, International Telephony, and IT Integration businesses focus on the provision of services and support to individual and business end-users. Media provides Website content provision, portal operating, search engines, lead-generation, e-Commerce and Paid Content. In January 2007, the Company’s wholly owned subsidiary, Smile.Communications Ltd., completed the acquisition of 012 Golden Lines Ltd.

FUNDAMENTALS: Internet Gold (IGLD) is an Israeli company that appears to be on the verge of a major growth spurt.  While a small company that has been turning a profit for several years now, not until the last 3 quarters has the company shown explosive growth.  The growth at the end of 2006 was enough to help double their profits over the previous year.  2007 is expected to be even bigger with an earnings estimate calling for 130% growth.  I like the fact that management owns 70% of the company which indicates they have a strong vested interested in seeing the company succeed.  Net margins aren’t impressive at 7% but it is improving quickly.  Return on Equity is excellent at around 16%. 

TECHNICAL:  IGLD is in the process of carving out the right side of a fairly short base, but one that is looking quite bullish.  Based on the big, high volume drop in the weekly chart at the beginning of March, the base is probably too short to work through that technical damage.  I’d be hesitant to initiate a position on a break out from this current base and would rather catch it on a pull back from any break out.  The company reports earnings on May 8th which could very well be the catalyst this stock needs to soar to new heights.  Put it on the radar.

SELFINVESTORS RATING: With a total score of 50/60 (24/30 for fundamentals, 26/30 for technical), Internet Gold (IGLD) is a very good break out candidate.

Full Disclosure/Disclaimer: The stock of the day is by no means a buy recommendation.  Please do your own research and make a personal decision based on your own tolerance for risk.  I currently do not own a position in Internet Gold (IGLD).