::: Today’s Market Action :::

On Tuesday, the market plummeted mid day following news of the Yahoo warning and the Thai coup.  It didn’t take long for the market to show its resiliency and recover most of the days losses.  The market continued its resilient ways after traders immediately sold positions following the Fed announcement by quickly reversing the other way to close near the highs of the day.  Today, we find ourselves in a similar position.  We started strong at the open, and stayed green for a bit until a bearish Philly fed index was released.  It sent the market plummeting mid day once again.  Will the market recover and recover today’s losses once again?  We shall see.  While trading volume isn’t quite heavy enough for me to believe we’ll get distribution at this point, but if the selling accelerates in to the close we could see a day of distribution (institutional selling).  The final 2 hours of trading today, in my opinion, will reveal much about where we are headed in the short term.

(Note: volume averages are based on the average over the past 50 days)
Data as of 2:15PMEST

Nasdaq: down .42% today with volume currently tracking 6% ABOVE  average
Nasdaq ETF (QQQQ): down .3%, volume 3% ABOVE the average
Dow: down .58%, volume 4% BELOW average
Dow ETF (DIA): down .64%, volume 22% ABOVE the average
S&P ETF (SPY): down .44%, volume 7% ABOVE the average
Russell Small Cap ETF (IWM): down -1.05%, volume 10% ABOVE the average

::: SelflInvestors Leading Stocks :::

Leading stocks that make up the SelfInvestors Breakout Tracker database are holding up quite well today, despite the overall selling.  The Index is basically flatlining today.

Summary:

* Decliners Leading Advancers 213 to 139.
* Advancers are up 1.34% today, with good volume … 14% ABOVE average
* Decliners are down 1.41% but volume is right near the average at below 2%
* The total SI Leading Stocks Index is down .33% today with volume a bit above average at 5% ABOVe

* Where’s the Money Flowing *

Many websites just provide leading industries based on price performance alone.. without the volume, this can be misleading.  The only way that I know of to guage 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 guaging 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. 

* Leading Sectors/Industries – Software, Technology, Retail, Consumer Services

* Lagging Sectors/Industries – Energy, Energy, Energy.. and Energy AND Gold (still no change here)

* Today, Oil & Gold are finally seeing some buying and moving with a little volume
* Profit taking in Retail, Nanotech, Semis and Homebuilders (yes, there was decent money made in homebuilders in the past couple weeks!)

** Stocks **

::: Today’s Market Action :::

Despite more bullish inflation data indicating a soft landing for the economy, the market is selling off in heavy volume today making it likely we’ll get a day of distribution.  The market fell off a cliff with near simultaneous news of a Yahoo profit warning and news of a coup attempt out of Thailand.  With lots of room to run to the downside before first levels of support are hit, today’s action probably sets up further selling in the coming days.  As I’ve said on numerous ocassions over the past two weeks, be careful up here.

(Note: volume averages are based on the average over the past 50 days)
Data as of 2:45PMEST

Nasdaq: down 1.22% today with volume currently tracking 9% ABOVE  average
Nasdaq ETF (QQQQ): down 1.02%, volume 35% ABOVE the average
Dow: down .47%, volume 28% BELOW average
Dow ETF (DIA): down .45%, volume 26% ABOVE the average
S&P ETF (SPY): down .59%, volume 15% ABOVE the average
Russell Small Cap ETF (IWM): down 1.43%, volume 4% ABOVE the average

::: SelflInvestors Leading Stocks :::

Leading stocks that make up the SelfInvestors Breakout Tracker database are getting hit quite hard today in terms of price movement but there isn’t a ton of volume behind the move.

Summary:

* Decliners Leading Advancers 298 to 54.
* Advancers are up 1.22% today, with good volume … 19% ABOVE average
* Decliners are down 2.06% but volume is right at the average
* The total SI Leading Stocks Index is down 1.57% today with volume a bit above average at 3% ABOVe

* Where’s the Money Flowing *

Many websites just provide leading industries based on price performance alone.. without the volume, this can be misleading.  The only way that I know of to guage 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 guaging 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. 

* Leading Sectors/Industries – Consumer Discretionary, Consumer Services, Pharma, Telecom, Retail (consumer related stocks continue to do very well.. retail staging surprising run)

* Lagging Sectors/Industries – Energy, Energy, Energy.. and Energy AND Gold (still no change here)

* Today, Treasuries and Realty are moving
* Internet getting hit very hard today, followed by Oil Services, Semis, Gold and Energy

** Stocks **

This area still under development.

With early indicators forecasting a soft landing in the economy and crude and other commodities continuing their precipitous decline, the environment was ripe for more buying from the bulls last week.  With another leg up, we inch ever so close to those all important multi year highs in the Dow and S&P.  Add to that housing data, producer price index inflation data and another Fed decision on interest rates and you have a whopper of a week on the horizon.  No doubt this week is critical and may determine the fate of this market for the rest of the year.  Put your hard hats on and get to work.  It’s important to prepare for both sides of the market at this point. 

Be sure to keep an eye on my MidDay Market reports this week.. I’ll be watching price and volume movemnents like a hawk and keep you updated on important market moves this week.

::: Model Portfolio Update :::

Last week was one of the busiest weeks of trading in the Model Portfolio that I can remember, having to shift from a short dominated portfolio, to a long one.. I got caught leaning the wrong way this week and paid the price.  For the week, the market went one way (up) and the Model Portfolio went the other (down 1.2%). 

While the short plays hurt, the biggest hit occurred in my lone silver play Silver Wheaton (SLW), which went from big time bullish break out and leader of the portfolio to massive breakdown at the drop of the hat.  A sizable gain turned to a loss on the trade.  Highly frustrating, but it happens (hopefully not very often).  Along with SLW, two other long positions were closed during the week – Time Warner Telecom (TWTC) (Quick Strike Profit Play) for a small loss and Knight Capital (NITE) for a small gain. TWTC was sold because I felt like it was stalling.. it was eventually sold when it broke through the 35 day moving average on Sept 11.  NITE sold off sharply due to a report on Friday that  trading volume had decreased from the previous month AND the year ago period.  With heavy selling volume in the morning and no sign of a bounce, I wasted no time in taking a small profit in the position. 

On the other side of the coin, I scrambled to close 4 of the 5 short positions as all were showing considerable strength.  Penn National Gaming (PENN) was covered for an 11% gain, while SIAL (-5%), CHRW (-6%) and ATHR (-4%) were covered for losses.  To replace the shorts and closed long positions, 6 new long positions were initiated (2 on Monday, 4 Wednesday). 

Current allocation of the portfolio is as follows: roughly 7% short, 23% cash and 70% long.  With multi year highs fast approaching I may be decreasing my long exposure on any signs of weakness.  The Year to Date performance of the portfolio dropped 1.2% for the week and stands at 15%.. still more than double the return of the S&P500.

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::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Electronic Stores                            12.50%
2. Major Airlines                                    9.55%
3. Investment Brokerage                       9.40%
4. Industrial Equipment                          9.30%
5. Processing Systems & Products      8.60%
6. Home Furnishing Stores                   8.30%
7. Residential Construction                   8.02%
8. Home Improvement Stores                7.85%
9. Jewelry Stores                                 7.50%
10. Housewares & Accessories          7.45%

– Top 10 Worst Performing Industries For the Week –

1. Silver                                                -12.48%
2. Gold                                                    -9.00%
3. Copper                                                -7.20%
4. Oil & Gas Equip & Services                -5.65%
5. Long Distance Carriers                       -5.35%
6. Independent Oil & Gas                        -4.55%
7. Oil & Gas Drilling & Exploration           -4.55%
8. Industrial Metals & Minerals                -4.40%
9. Heavy Construction                            -3.70%
10. Nonmetallic Mineral Mining                -3.25%

– Top 5 Best Performing ETFs For the Week –
 
1. SPDR HomeBuilders (XHB)                    9.00%
2. HLDRS Internet Infrastructure (IIH)        9.00%
3. Ishares Broker – Dealer (IAI)                  7.30%
4. Ishares Networking (IGN)                      6.00%
5. PowerShares Dynamic Semis (PSI)      5.70%

– Worst 5 Performing ETF’s –

1. Ishares Silver  (SLV)                            -11.00%
2. Market Vectors Gold Miners (GDX)      -10.25%
3. Asa Gold (ASA)                                     -8.62%
4. Central Fund of Canada (CEF)               -7.10%
5. StreetTracks Gold (GLD)                       -5.35%

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

The number of IPO’s coming to market will increase dramatically over the next few weeks, so keep an eye on this space!

1. DivX (DIVX): Certainly the most anticipated IPO’s of the week and possible one of the most anticipated of the year.  DivX offers products and servcies to improve the media experience, such as compression-decompression software library.  It’s still a very small company with just 27 million in revenue in the first 6 months of the year, but one that is rapidly growing.  Trading set to start on Friday.

2. CommVault Systems (CVLT): Provider of data management software applications and related services.  The company’s products enable its customers to deploy solutions for data protection, business continuance, corporate compliance, and centralized management and reporting.  The company is profitable and showing very good growth.  Trading set to start on Friday.

3. Home Diagnostics (HDIX): Manufacturer of blodd glucose monitoring systems and disposable supplies for diabetics.  The company believes its blood glucose monitoring systems offer diabetics performance and features that are comparable to or better than its comptetitors at substantially lower prices.  The company is profitable and growing quickly as profits have more than doubled in the past year.  Trading set to start on Thursday.

4. Riverbed Technologies (RVBD): Provider of innovative and comprehensive solutions to the fundamental problems of wide area distributed computing.  The company believes its Steelhead appliances can enable its customers to improve the performance of their applications and access to their data across WANs, increasing transmission speeds by 5 to 50 times and, in some cases, by up to 100 times.  This is not a profitable company and one that continues to burn cash.  Trading set to start on Wednesday.

5. Hawkeye Holdings (HWY):  Third largest ethanol producer in the US based on production capacity as reported by the Renewablee Fuels Association.  It owns 2 of the largest ethanol production facilities in the US.  The company is experiencing very good growth over the past year.  Trading set to start on Friday.

6.  Hiland Holdings (HPGP): Engaged in gathering, compressing, dehydrating, treating, processing, and marketing natrual gas, and fractionating, or separating, natural gas liquids..  Trading set to start on Wednesday.

Others to Watch: Porter Bancorp (PBIB) on Friday & Warner Chilcott (WCRX), a specialty pharma company starts trading Wednesday.

** Upcoming Economic Reports (9/18/06- 9/22/06) **

Monday:        Treasury International Capital Inflows, Current Account
Tuesday:       PPI, Housing Starts, Retail Sales
Wednesday:  FOMC Interest Rate Decision, Petroleum Status, Mortgage Apps
Thursday:      Money Supply, Philly Fed Survey, Jobless Claims, Leading Indicators
Friday:           None

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

– SelfInvestors Blog –

Big Drop In Commodities Gives Market Momentum, But Major Resistance Looms (Sept. 12th)
http://investing.typepad.com/tradingstocks/2006/09/resistance_loom.html

** Look for a new Breakout Stock Highlights article to be posted tomorrow at the blog – there are several high quality breakouts in the last couple weeks.

::: Today’s Market Action :::

It’s triple witching friday and that means a whole lotta volatility and strange movements in individucal stocks.  The market opened up big out of the gates as traders were pleased with the tame CPI data and sent the Nasdaq surging above important resistance of the 200 day moving average and the June Highs around 2233.  It didn’t take long for those gains to evaporate as the Nasdaq filled the opening gap, but finding support there.  It’s been on the way back up and the odds are good for the market to finish the day in the green.  Both the Dow and S&P have yet to touch their multi year highs, but are within striking distance.  Expect volatility to increase as we near the close.. in addition to options expiration, the S&P will undergo some reshuffling. 

** Market volume levels are meaningless for guaging health today, so I won’t be displaying those in this report.

::: Self Investors Leading Stocks :::

SelfInvestors Leading Stocks are stocks of the fastest growing companies in the world that are near a breakout or have already broken out of bases.  These stocks comprise the Breakout Tracker database of SellfInvestors.com and are hand picked by me for inclusion based on sales/earnings growth, ROE, profit margins, management ownership and institutional buying.  Only the best make it into the database.  Tracking the health of these stocks is a very important piece to guaging the overall health of the market.  The SelfInvestors Leading Index is an aggregate performance of the entire database of stocks (usually 300 – 400 stocks depending on the health of the market).  I break it down into Advancers and Decliners and look at the price and volume movements of both throughout the day.

** Again, it’s meaningless to display volume levels but advancers are outpacing decliners today. Volume is a bit heavier in stocks moving to the downside today, but nothing to be too concerned about.  Volume levels are relatively meaningless today.

::: Where’s the Money Flowing :::

Many websites just provide leading industries based on price performance alone.. without the volume, this can be misleading.  The only way that I know of to guage 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 guaging 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. 

* Leading Sectors/Industries – Semis, Technology, Consumer Discretionary, Telecom, Consumer Services
* Lagging Sectors/Industries – Energy, Energy, Energy.. and Energy AND Gold.

* In keeping with the common theme of late, Homebuilders are leading the way again today.  Also doing well is Software and Nantoech.  Gold is getting a little bounce today with some volume
* Once again Energy is the only area of significant selling.

::: Stocks :::

This area still under development.

::: Today’s Market Action :::

After yesterday’s sharp bullish reversal off the lows with volume, the market is following through with another bullish move through the first part of trading day today.  Volume is quite good and on pace to come in higher than yesterday in the major indices (it should be noted that volume is tracking much lower in the tracking ETFs of the major indices), indicating a good chance of another day of accumulation (a telling sign that institutions are once again putting money to work). 

(Note: volume averages are based on the average over the past 50 days)
Data as of 1:30PM EST

Nasdaq: up .91% today with volume currently tracking 3% ABOVE  average
Nasdaq ETF (QQQQ): up .81%, volume 13% BELOW the average
Dow: up .52%, volume 2% BELOW average
Dow ETF (DIA): up .58%, volume 23% BELOW the average
S&P ETF (SPY): up .52%, volume 27% BELOW the average
Russell Small Cap ETF (IWM): up 1.42%, volume 40% BELOW the average

Leading stocks that make up the SelfInvestors Breakout Tracker database are fairing a bit better today but sell volume is still heavier than buy volume in these leading stocks. 

Summary:

* Advancers leading Decliners 283 to 110.
* Advancers are up 1.67% today, but volume is 8% BELOW average
* Decliners are down .98% and volume is somewhat heavy at 10% ABOVE average
* The total SI Leading Stocks Index is up .82% today but with volume a bit below average by 3%

* Where’s the Money Flowing *

Many websites just provide leading industries based on price performance alone.. without the volume, this can be misleading.  The only way that I know of to guage 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 guaging 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. 

* Leading Sectors/Industries – Consumer Discretionary, Technology, Pharma, Financial, Retail
* Lagging Sectors/Industries – Energy, Energy, Energy.. and Energy AND Gold.

* Today, Homebuilders, Broadband and Retail are surging again just as they did yesterday; Transports and Consumer Discretionary are also moving up today with volume
* Energy is getting hit once again today.. along with Utilities

** Stocks **

This area still under development.

In early trading today it appeared we were headed for distribution day number 3 in just 4 days, then buyers rushed in to save the day and keep both the S&P and Nasdaq above support of their 20 day moving averages.  Bullish action indeed.  With volume coming in at below average levels but ahead of Friday’s levels, we’re in line for a day of accumulation (assuming of course the early selling doesn’t resume in the last hour of trading).  Here are the volume levels as of 2:45PM EST)

(Note: volume averages are based on the average over the past 50 days)

Nasdaq: up .34% today with volume currently tracking 11% BELOW  average
Nasdaq ETF (QQQQ): up .57%, volume 29% GREATER than average
Dow: up .06%, volume 11% BELOW average
Dow ETF (DIA): up .22%, volume 16% BELOW the average
S&P ETF (SPY): up .15%, volume 5% BELOW the average
Russell Small Cap ETF (IWM): up .06%, volume 11% BELOW the average

Leading stocks that make up the SelfInvestors Breakout Tracker database are NOT fairing well today.  Volume is much heavier in declining stocks than advancing stocks.. a bearish indicator.

Summary:

* Decliners are outpacing Advancers 226 to 167.
* Advancers are up 1.27% today, but volume is 18% BELOW average
* Decliners are down 2.37% and volume is somewhat heavy at 15% ABOVE average
* The total SI Leading Stocks Index is down .82% today with volume up just a bit at 1% GREATER than the average

* Where’s the Money Flowing *

Many websites just provide leading industries based on price performance alone.. without the volume, this can be misleading.  The only way that I know of to guage 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 guaging 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. 

* Leading Sectors/Industries – Consumer Discretionary, Technology, Pharma, Financial, Realty
* Lagging Sectors/Industries – Energy, Energy, Energy.. and Energy.  Transports too.

* Today, Homebuilders, Broadband, Semis, Retail and Consumer Services are moving up with volume
* Gold and Energy are selling off today with significant volume

** Stocks **

This area still under development.

As expected, traders returned from Labor Day vacations to take some profits off the table.  While selling volume wasn’t particularly intense, it was enough for 2 consecutive days of distribution indicating the big fellas were taking some profits off the table.  Nothing to be alarmed about at this point, but worth keeping an eye on.  The big event for next week will be Friday’s CPI data and how the market reacts will reveal a big clue as to the health of this market.  One underlying shift with potentially big implications is declining crude prices, which over time could dramatically decrease inflation concerns and be the catalyst this market needs to break out to multi year highs.  Looking at a long term chart of light crude (continuous contract), it broke through a 3 year trend line at the end of August and more recently broke through support of the 200 day moving average (http://www.selfinvestors.com/crude91006.jpg).  Crude is oversold in the short term and most likely will see some bounce, but the technical damage is done.  It’s going to be a long time before we see $80 crude and that bodes well for the bulls.

** Model Portfolio Update **

The Model Portfolio held up well in a down week.. and managed to eak out a gain of .2%.  With the market reaching lofty levels and profit taking underway, I shifted the weight of the portfolio more to the short side by closing 2 long positions and initiating 3 new short positions (all of which closed the week with a profit).  Long positions were closed in Cognizant Tech Solutions (CTSH) and True Religion (TRLG).  While both don’t look particularly weak, they don’t look particularly strong either.  As part of a strategy shift in an increasingly choppy market, I don’t hesitate to dump a stock if it’s not showing great strength.  There are too many other opportunities out there and you can always buy them back.  In particular, with CTSH I plan to buy the stock back if it proves itself by breaking above 72 with great volume.  With a 16.2% year to date return, the strategy is paying off.  Current prtfolio allcocation is roughly 35% short, 35% long and 30% cash.  Should the market hold up reasonably well next week, I plan to add a long position or two.

:::::::::::::::::::::::::::::::::::::::

A couple weeks ago I sent out a report to premium members highlighting my top break stocks for the coming week.  At the top was US Global Investors (GROW), which soon thereafter vaulted more than 30%.  I’m about to release two new top breakout plays (and no you won’t see these in the IBD 100!) off the radar of most traders and on the verge of big time moves.  Get these picks and full access to all member tools and reports with your *free* 30 day premium trial.  Just login to your account page at http://www.selfinvestors.com/amember/member.php and sign up in seconds! 

:::::::::::::::::::::

** Best/Worst Performers **

– Top 10 Performing Industries For the Week –

1. Pollution & Treatment Controls        5.19%
2. Dairy Products                                5.08%
3. Long Distance Carriers                   4.73%
4. Discount – Variety Stores               3.55%
5. Department Stores                          3.52%
6. Lodging                                           2.71%
7. Apparel – Footwear                        2.68%
8. Aerospace/Defense                       2.43%
9. Restaurants                                    2.36%
10. Auto Parts Stores                         2.06%

– Top 10 Worst Performing Industries For the Week –

1. Oil & Gas Refining & Marketing        -5.41%
2. Shipping                                           -5.18%
3. Water Utilities                                   -5.02%
4. Manufactured Housing                    -4.66%
5. Data Storage Device                       -4.49%
6. General Contractors                        -4.21%
7. Auto Parts                                        -4.20%
8. Industrial Metals & Minerals              -3.92%
9. Independent Oil & Gas                      -3.86%
10. Medical Laboratories & Researc    -3.85%

– Top 5 Best Performing ETFs For the Week –
 
1. HLDRS Retail  (RTH)                              2.09%
2. Ishares Tawian  (EWT)                         1.76%
3. PowerShares Retail  (PMR)                   1.69%
4. Ishares Singapore  (EWS)                     1.43%
5. Ishares Consumer Services  (IYC)        1.19%

– Worst 5 Performing ETF’s –

1. Ishares Silver  (SLV)                            -6.03%
2. Powershares Dynamic Energy  (PXE) -4.87%
3. Central Europe & Russia  (CEE)           -4.74%
4. Ishares South Africa  (EZA)                -4.59%
5. PowerShares Clean Energy  (PBW)    -3.97%

**  No IPO’s Worth Watching for This Week **

** Upcoming Economic Reports (9/11/06- 9/15/06) **

Monday:        None
Tuesday:       Trade Balance, TIPP Economic Optimism, Retail Sales
Wednesday:  Treasury Budget, Petroleum Status, Mortgage Apps
Thursday:      Money Supply, Import Price Index, Business Inventories, Jobless Claims
Friday:           CPI, Industrial Production, Real Earnings, Manufacturing Index, Consumer Sentiment

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

– SelfInvestors Blog –

Self Investors Leading Breakouts Soar to New Heights, But.. I’m Stil Cautious (Sept. 5th)
http://investing.typepad.com/tradingstocks/2006/09/selfinvestors_l.html

With the market a bit extended and resistance levels near, it’s most likely looking for any excuse to pull back.  What’s important is how orderly and the amount of selling volume that accompanies any consolidation/pull back.  Today, we are getting some orderly profit taking as volume is currently well below average levels and lighter than yesterday.  Here are the numbers for the major indices as of 1PM EST:

(Note: volume averages are based on the average over the past 50 days)

Nasdaq: down 1.2% today with volume currently tracking 1% GREATER than average
Nasdaq ETF (QQQQ): down 1.39%, volume 22% BELOW average
Dow: down .35%, volume 20% BELOW average
Dow ETF (DIA): down .43%, volume 37% BELOW the average
S&P ETF (SPY): down .67%, volume 32% BELOW the average
Russell Small Cap ETF (IWM): down 1.78%, volume 27% BELOW the average

Leading stocks that make up the SelfInvestors Breakout Tracker database are fairing well today despite a more than 3:1 ratio of Decliners vs. Advancers.  Leading stocks that are moving are moving with volume, while those that are declining are declining with mild volume.

* Decliners are outpacing Advancers 336 to 53.
* Advancers are up 1.3% today and volume is good at 28% ABOVE the average
* Decliners are down 1.86%, but the good news is that volume is light at 11% BELOW average.
* The total SI Leading Stocks Index is down 1.43% today with volume 5% below the average

* Where’s the Money Flowing *

Many websites just provide leading industries based on price performance alone.. without the volume, this can be misleading.  The only way that I know of to guage 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 guaging 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. 

* Leading Sectors/Industries – Pharma, Financial, Nanotech, Health Care, Telecom
* Lagging Sectors/Industries – Transports, Oil Services, Home Builders

* There are no significant sector/industry moves up today
* Homebuilders, Semis, Water, Global Energy and Broadband is getting hit today

** Stocks **

This area still under development, but you may like to have a  look at the latest post over at the blog which highlights a few of the top breakout stocks in the SelfInvestors database

http://investing.typepad.com/tradingstocks/2006/09/selfinvestors_l.html

With economic data of last week showing signs of a soft landing, the market continued to march higher, albeit in unmeaniful holiday trading.  With trading volume levels returning to normal levels later this week, we should begin to see signs of the market showing its hand.  I continue to believe that the market has come too far, too fast, with little institutional support behind the move in the past couple months. 

With resistance at multi year highs in both the S&P (1326.70) and Dow (11670.19) as well as the 200 day moving average for the Nasdaq (about 2230) on the horizon, it’s important to proceed with caution on the long side.  There is some room to run to the upside before meeting those levels, but once those levels are reached I’ll be playing the market as if that is the end of road.  Essentially, I’m forcing the market to prove me wrong by breaking out to new multi year highs in the Dow and S&P and above the 200 day moving average for the Nasdaq WITH BIG VOLUME.  Only then will I get aggressive on the long side.

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** Model Portfolio Update **

With another week of light trading, there were few transactions in the Model Portfolio.  In fact, just one one new long position was initiated and no positions were closed.  After pulling back last week, the Model Portfolio had another winning week with a nice 1.7% gain.  The year to date performance continues to stay well ahead of the major indices with a 16% gain and 8 of the 10 open positions remain profitable.    Current allocation is about 17% short, 50% long and 33% cash.

** Best/Worst Performers **

– Top 10 Performing Industries For the Week –

1. Catalog & Mail Order                     10.30%
2. General Entertainment                    8.40%
3. Silver                                               7.60%
4. Building Materials Wholesale           7.10%
5. Manufactured Housing                    6.70%
6. Major Airlines                                   6.55%
7. Semicondutor – Memory                   6.40%
8. Internet Service Providers                6.20%
9. Data Storage Devices                      6.05%
10. Diagnostic Substances                  6.05%

– Top 10 Worst Performing Industries For the Week –

1. Oil & Gas Refining & Marketing        -3.05%
2. Shipping                                           -2.80%
3. Oil & Gas Equipment & Services      -2.25%
4. Major Integrated Oil & Gas                -1.90%
5. Independent Oil & Gas                      -1.15%
6. Banks – Southeast                              -.85%
7. Nonmetallic Mineral & Mining               -.70%
8. Marketing Services                             -.35%
9. Pollution & Treatment Controls            -.25%
10. Jewelry Stores                                 -.15%

– Top 5 Best Performing ETFs For the Week –
 
1. HLDRS Internet Infrastructure (IIH)       6.20%
2. HLDRS Internet (HH)                             5.90%
3. Ishares Silver (SLV)                             4.35%
4. Ishares Brazil (EWZ)                            4.15%
5. Chile Fund (CH)                                     4.05%

– Worst 5 Performing ETF’s –

1. Powershares Dynamic Energy (PXE) -3.25%
2. SPDR Select Energy (XLE)                  -2.95%
3. Templeton Russia & E. Europe (TRF)  -2.95%
4. Ishares US Energy (IYE)                     -2.85%
5. Ishares Global Energy (IXC)                -2.30%

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

1. New Oriental Education & Technology Group (EDU): a Bejing provider of education programs, services, and products, primarily of English and other foreign language training and testing preparation courses.  The company offers these programs to over 872K students in 25 schools, 111 learning centers and 13 bookstores.  Trading set to start on Thursday

** Upcoming Economic Reports (9/4/06- 9/8/06) **

Monday:        Market Closed
Tuesday:       Retail Sales, Job Cut Announcement
Wednesday:  Productivity & Costs, ISM Non Manufacturing, Beige Book, Petroleum Status,
                       Mortgage Apps
Thursday:      Money Supply, Wholesale Trade, Public Debt, Jobless Claims
Friday:           Consumer Credit