::: Today’s Market Action :::

For the second time in as many days, the Nasdaq led the way higher and ultimately broke out of a trading range as trading volume continues to come into this market.  Institutions are taking part and that can only mean more green into the foreseeable future.  To begin the year I was a bit concerned that we’d see a sell off similar to the way it played out last year, but every sell attempt to begin the year was met with stiff resistance from the bulls, leaving key support levels that I discussed in the Weekend Report intact.  With the Nasdaq break today and the S&P and Dow poised to do the same soon, the picture is decidedly bullish over the next few weeks.

::: 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 Jan 11th 2007

Nasdaq: UP 1.04% today with volume 13% ABOVE average
Nasdaq ETF (QQQQ) UP 1.03%, volume 59% ABOVE average
Dow: UP ..59%, volume 4% ABOVE the average
Dow ETF (DIA): UP ..45%, volume 13% BELOW the average
S&P ETF (SPY): UP .44%, volume 19% BELOW the average
Russell Small Cap ETF (IWM): UP .62%, volume 1% 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.  Today’s strength was confirmed by SelfInvestors Leading stocks.

Summary:

* Advancers led Decliners 320 to 103.
* Advancers were up an average of 1.85% today, with volume 12% ABOVe average
* Decliners were down an average of 1.54% with volume 49% ABOVE average
* The total SI Leading Stocks Index was UP 1.02% 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 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.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Technology, Retail, Heath Care Providers, Semis, Biotech (all of the sectors you want leading in a bull market!)
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Natural Resources, Energy, Oil, Gas

* Today’s Market Moving Industries/Sectors (UP):
Biotech, Broadband, Internet, Realty, Consumer Services

* Today’s Market Moving Industries/Sectors (DOWN):
Oil, Oil Services, Software, Commodiites, Energy

::: 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 Genentech (DNA), a leader in today’s hottest sector. 

ABOUT:  Genentech, Inc. (Genentech) is a biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. A number of the existing biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes multiple biotechnology products, and receives royalties from companies that are licensed to market products based on its technology. On December 8, 2006, Lonza Group AG acquired Genentech’s mid-scale mammalian biopharmaceutical production plant in Porrino, Spain.

FUNDAMENTALS:  A company that has posted outstanding profit growth of around 60% in each of the past few years.  Sales growth is equally impressive with growth in the 40 – 50% range.  Growth is expected to moderate some over the next couple years but remain strong at 20 – 30%.  Still very impressive for a company it’s size.  Margins and ROE (continuing to rise) are excellent. 

TECHNICAL:  With the stock going nowhere for the past year, the relative strength is poor.  I expect that to change in the coming months as the stock starts a new uptrend.  On both the daily and weekly charts, the stock has broken through key resistance levels while trading volume continues to rise.  Institutions are beginning to put money to work in DNA once again.  Next stop: $100

SELFINVESTORS RATING: With a total score of 47/60 (26/30 for fundamentals, 21/30 for technical), DNA is just considered an average breakout stock.  However, given the leader status in a growth industry and much of the low score due to the low RS rating which will improve quickly, it’s a worthy mention!

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.

Afer a couple weeks of light holiday trading, the first trading week of the new year brought in volatility and a shift from commodities to tech as any oil, gold, silver and steel got hit hard.  To close out the week, downgrades in Motorola, Exxon and Dell fueled significant selling on Friday, but not heavy enough to indicate institutional selling.  There is enough downward momentum however to set up a test of key support levels this week- Nasdaq 2400, S&P 1400, Dow 12300 (the 50 day moving averages).  The Nasdaq remains the strongest of the two and managed to close in the upper half of its range on Friday.  With commodities getting hammered, The Dow and S&P were hit the hardest.  In a check of leading stocks Friday, they were hit fairly hard and remain on shaky ground.  The Self Investors Leading Stock Index fell 1.33% with volume 21% greater than the average.  With big gains in hand over the past several months and the market looking tired up at these levels, now is certainly not the time to get aggressive on either side of the market.  The economic calendar is light for the coming week and earnings won’t kick off in full force for another couple weeks.  Expect more volatile days ahead as the market bounces around key support.

::: Model Portfolio Update :::

Over the past few weeks I’ve been slowly getting off margin and locking in some hard earned profits on the long side – MVIS (38%), ININ (22%), NCTY (13%), ALY (13%) as well as on the short side – JBL (16%).  After a big run in the second half of last year, a new year marked a transition where the possibility of a correction from here increases.  While the major indices still have key support intact I’m playing cautiously now and have no problem sitting largely on the sidelines for most of January.  I will look to add a short position or two in the coming days. 

I was pleased with my results for 2006.  In a check of Model Portfolios tracked by Hulbert Financial, the SelfInvestors Model Portfolio would rank 32nd out of 680 portfolios tracked by the service for 2006 and right near the top for well diversified portfolios (many of the top performing Model Portfolio focus on one particular sector or country).  After a subpar year in 2005 when I just matched market returns I made some adjustments as well as focused more time on it.  Last year I probably spent too much time in building the site and adding features and not focusing enough time in research, reviewing trades, etc.  I focused much more of my attention to trading this year and tweaked my strategy by locking in profits sooner, adding versatility (ETF’s and Quick Strike Profit plays) and becoming more of a technical  trader.  To add some gusto to the portfolio, I added Quick Strike Profit plays in the latter half of the year.  These are swing type trades with explosive profit potential in a short time.  About 20% of the portfolio is allocated to such trades.  Microvision (MVIS), which I just sold for a 38% gain is prime example.  Also implemented toward the end of the year were ETF trades to take advantage of emerging markets.  For example I recently purchased the China Fund (CHN) and sold for a quick 20% profit.  For 2007, I expect to maintain this more versatile, shorter term strategy and believe gains will be even better than they were in 2006.  We shall see.  You’ll get the details of the triumphs and tribulations throughout the year here in the Weekly Report .. stay tuned!

::: PinPoint the Highest Ranked Breakout Stocks in Just Minutes Each Day! :::

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::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Internet Info Providers – 4.45%
2. Major Airlines – 3.95%
3. Trucking – 3.60%
4. Personal Computers – 3.45%
5. Networking & Comm Dev – 3.31%
6. Rubber & Plastics – 2.65%
7. Biotechnology – 2.50%
8. Regional Airlines – 2.40%
9. Drugs – Generic – 2.15%
10. Diversified Communication Services – 2.10%

– Top 10 Worst Performing Industries For the Week –

1. Oil & Gas Equip & Services: -8.45%
2. Manufactured Housing: -8.00%
3. Industrial Metals & Minerals: -7.90%
4. Heavy Construction: -7.40%
5. Silver: -6.80%
6. Gold: -6.80%
7. Oil & Gas Drilling & Exploration: -6.45%
8. Gaming Activities: -6.05%
9. Oil & Gas Refining & Marketing: -5.75%
10. Steel & Iron: -5.50%

– Top 5 Best Performing ETFs For the Week –
 
1. Japan Small Cop (JOF) 4.85%
2. HLDRS Biotech (BBH) 2.95%
3. Ishares Malaysia  (EWM) 1.75%
4. HLDRS Internet (HHH) 1.55%
5. Latin America Discovery (LDF) 1.25%

– Worst 5 Performing ETF’s –

1. Templeton Russia & E. Europe (TRF)  -12.05%
2. Turkish Invest Fund (TKF) -10.65%
3. PowerShares Dynamic Oil (PXJ) -8.40%
4. Central Europe & Russia Fd (CEE) -8.20%
5. India Fund (IFN) -7.85%

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

The IPO Calendar is typically quiet at the start of a new year – no IPO’s worth watching for this week.

::: Upcoming Economic Reports (1/8/07- 1/12/07) :::

Monday:        Consumer Credit
Tuesday:       None
Wednesday:  Trade Balance, Wholesale Inventories, Crude Inventories
Thursday:      Initial Jobless Claims, Treasury Budget
Friday:           Export/Import Prices, Retail Sales, Business Inventories

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

There is currently a problem with the script that displays earnings dates for the stocks in the databse so no calenar for this week.  I should be fixed in time for the next Weekly Review.

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!

::: Today’s Market Action :::

Eventually something had to give between the bull/bear tug-o-war and today it was clear that the bulls have won this battle.  Traders have been waiting patiently for any indication that we’ll see the Santa Claus rally this year and I think today we got confirmation that this market is heading higher at least over the next couple weeks.   All of the major indices broke out of tight consolidations today, with the Dow and S&P moving to new highs.  If there was a negative today, it was the performance of SelfInvestors Leading stocks, which did move up today with significant volume and lagged the price performances of the major indices.  Tomorrow morning we get the important CPI number.

::: 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 Dec 14th 2006

Nasdaq: UP .88% today with volume 13% ABOVE average
Nasdaq ETF (QQQQ) UP 1.12%, volume 1% BELOW average
Dow: UP .81%, volume 4% ABOVE the average
Dow ETF (DIA): UP .71%, volume 5% BELOW the average
S&P ETF (SPY): UP .88%, volume 8% BELOW the average
Russell Small Cap ETF (IWM): UP .41%, volume 4% 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.  On a day like today, you’d expect leading stocks to surge higher with heavy volume.. they did not.

Summary:

* Advancers led Decliners 267 to 125.
* Advancers were up an average of 1.52% today, with volume 10% BELOW average
* Decliners were down an average of 1.26% with volume 20% ABOVE average
* The total SI Leading Stocks Index was UP .64% today with volume 1% BELOW  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 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.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Home Construction, HomeBuilders, Health Care, Semis, Consumer Goods, Technology
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Broadband, Nanotech

* Today’s Market Moving Industries/Sectors (UP):
Fairly broad based rally today- Internet Infrastructure, Retail, Broadband, Oil & Gas, Semis

* Today’s Market Moving Industries/Sectors (DOWN):
None

** 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 Interactive Intelligence (ININ), a stock that actually broke out of consolidation yesterday, but cleared multi year highs today.  Volume levels have indicated tremendous demand for this stock. 

ABOUT:  Interactive Intelligence, Inc. is a provider of software applications for contact centers with a presence in North America; Europe, the Middle East and Africa, and Asia/Pacific. The Company offers a software solution based on Microsoft Windows that resides on a customer’s server and uses an open Session Initiation Protocol (SIP) for voice over Internet protocol (VoIP) networking. This open approach typically results in lower overall costs for phone devices, system maintenance and customer networking. The Company’s software applications are also pre-integrated to many business applications, such as financial, customer relationship management (CRM) and enterprise resource planning (ERP) software, thereby automating and tracking business transactions to customer interactions.

FUNDAMENTALS:  A company that began to move rapidly toward profitability beginning in ’02 and reached that milestone for the first time in ’04.  2006 will end as a year of record growth.
Margins are solid and ROE is outstanding (both are rising rapidly).  I have found that one key element to the market’s biggest winners is rapidly rising margins & ROE, but there aren’t many companies that meet the criteria.  Management owns a significant portion of the company (30%) which is a big positive as well.

TECHNICAL:  The technical picture of ININ is just as good as the fundamental picture, if not better.  After busting out of a base at the end of October, the stock spent several weeks carving out a very bullish pennant formation, which it just broke out of.

SELFINVESTORS RATING: With a total score of 54/60 (26/30 for fundamentals, 28/30 for technical), ININ has been the highest rated candidate in the Breakout Watch for many weeks now and remains a holding in the SelfInvetors Model Portfolio.

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 hope you had a great weekend.

Following a jobs number that was surprisingly positive, the market was able to stem the downward momentum that began the day before and keep the Nasdaq and S&P above their upward trend lines.  The Dow remains below this level and is currrently testing what is now a resistance area for the index.  It was another week in which the neither the bulls or bears could assert themselves, providing us with any clues as to which direction the next leg of the market will take.  For now we remain in a holding pattern and just may stay there for awhile as the market awaits more clues about the health of the economy.  On Tuesday the Fed will make a rate decision but as usual it will be the wording of the Fed and not the decision itself that may move the market.  Rates are expected to hold steady.  On Friday, we get another glimpse of inflation data with the CPI number.

::: Model Portfolio Update :::

In terms of the number of transactions, it was a quiet week for the Model Portfolio, with just 2 new long quick strike profit plays initiated and no sells or covered shorts.  In terms of performance, it was huge week for the portfolio as it soared 8% during the week, bringing the YTD performance to 27.1%.  The portfolio is currently being led by long positions in Google (GOOG) – up 18%, Allis Chalmers (ALY) – up 22% in just a week and Comtech (COGO) – up 23%.  While I’m currently leveraged with margin (using 30% of available), a decent portion of that is in short positions (all which remain profitable), providing a bit of a hedge.  Should the S&P and Nasdaq join the Dow and take out their upward trend lines this week I’ll begin scaling back the long positions and may add another short position.   Current allocation of the portfolio stands at 77% long and 23% short.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Long Distance Carriers                     7.50%
2. Home Health Care                              7.02%
3. Internet Service Providers                 6.50%
4. Drug Stores                                       6.00%
5. Tobacco Products                             5.80%
6. Resorts & Casinos                             5.60%
7. Metal Fabrication                                5.15%
8. Drug Delivery                                     4.50%
9. Recreational Goods                           4.45%
10. Gaming Activities                             4.45%

– Top 10 Worst Performing Industries For the Week –

1. Silver                                                     -3.30%
2. Personal Computers                              -3.15%
3. Semi – Specialized                                 -2.45%
4. Auto Parts Wholesale                            -2.00%
5. Gold                                                       -1.75%
6. Trucking                                                 -1.75%
7. Broadcasting – Radio                             -1.75%
8. Farm Products                                        -1.55%
9. Independent Oil & Gas                            -1.15%
10. Music & Video Stores                           -1.05%

– Top 5 Best Performing ETFs For the Week –
 
1. US Oil Fund (USO)                                  6.30%
2. SPDR Energy (XLE)                                5.55%
3. Ishares Energy (IYE)                              5.40%
4. HLDRS Oil Services (OIH)                      5.25%
5. PowerShares Dynamic Energy (PXE)    4.80%

– Worst 5 Performing ETF’s –

1. Ishares Commodity Trust (GSG)                     -4.05%
2. StreetTRacks Gold (GLD)                               -3.25%
3. Ishares Gold (IAU)                                          -3.25%
4. Central Fund of Canada (CEF)                        -2.85%
5. Unites States Oil Fund (USO)                          -2.70%

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

1. Altra Holdings (AIMC): designer of a wide range of motion control products, such as industrial clutches and brakes, enclosed gear drives, open gearing, couplings, and other items,. Set to start trading Friday.

2. Cal Dive International (DVR):  marine contractor providing manned diving, pipe laying, and pipe burial services to the offshore oil and natural gas industry.  Trading set to start Thursday.

3. Double Take Software (DBTK):  provider of affordable software that cuts downtime and protects data for business-critical systems.  Trading set to start Friday.

4. Genesis Lease Limited (GLS):  Ireland-based company, was recently formed to acquire and lease commercial jet aircraft and other aviation assets.  Trading set to start on Friday.

5. IPG Photonics (IPGP):  developer of a broad line of high-performance fiber lasers and amplifiers used in various processes, including the production of medical stents and memory chips.  Trading set to start on Thursday.

6. NewStar Financial (NEWS): commercial finance company providing customized debt financing to middle-market businesses and mid-sized specialty finance companies, as well as to issuers of asset-backed and commercial mortgage-backed securities, and commercial real estate borrowers.  Set to start trading on Thursday.

7. US BioEnergy (USBE):  Minnesota-based producer and marketer of ethanol and distillers’ grains.  Trading set to start Friday.

::: Upcoming Economic Reports (12/11/06- 12/15/06) :::

Monday:        Wholesale Inventories
Tuesday:       FOMC Rate Decision, Trade Balance, Treasury Budget
Wednesday:  Business Inventories, Retail Sales, Crude Inventories
Thursday:      Export Prices, Import Prices, Initial Claims
Friday:           CPI, Capacity Utilization, Industrial Production

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

Tuesday: Goldman Sachs (GS)
Friday: j2 Global Communications (JCOM)

::: 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!

::: Today’s Market Action :::

A somewhat surprising move to start the week following a week which saw the major indices trip up a bit.  In what is typically bullish action, the market accentuated the positive today focusing on a drop in oil prices, M&A activity and an absense of market moving economic reports instead of the company specific Pfizer disaster.  On the surface today’s action looked a bit more bullish than it actually was.  Price movement was excellent and the S&P moved to a new multi year high, but volume levels did not indicate a big institutional buying today.  Clearly, there remains some hesitation ahead of economic reports in the coming days.

::: 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 Dec 4th 2006

Nasdaq: UP 1.46% today with volume 3% ABOVE average
Nasdaq ETF (QQQQ) UP 1.37%, volume 19% BELOW average
Dow: UP .74%, volume 13% ABOVE the average
Dow ETF (DIA): UP .61%, volume 19% BELOW the average
S&P ETF (SPY): UP .76%, volume 23% ABOVE the average
Russell Small Cap ETF (IWM): UP 1.98%, volume 14% 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 did quite well today in terms of price action, but like the overall market there wasn’t much volume behind the move.

Summary:

* Advancers led Decliners 354 to 53.
* Advancers were up an average of 2.31% today, with volume 4% BELOW average
* Decliners were down an average of 1.03% with volume 30% ABOVE average
* The total SI Leading Stocks Index was UP 1.88% today with volume 1% 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 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.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Home Construction, HomeBuilders, Real Estate, Gold, Consumer Services
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Broadband

* Today’s Market Moving Industries/Sectors (UP):
Internet Infrastructure, Retail, Semis, Technology, Biotech

* Today’s Market Moving Industries/Sectors (DOWN):
Pharma and Oil

** 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.  Oil stocks have begun to breakout and one highly rated SelfInvestors oil play was one of them today.  The company is Omni Energy Services (OMNI).

ABOUT:  OMNI Energy Services Corp. (OMNI) is a service company that provides a range of onshore seismic drilling, operational support, permitting, and survey services, and dock-side and offshore hazardous and non-hazardous oilfield waste management. Environmental cleaning services are also offered, including tank and vessel cleaning and safe vessel entry, for oil and gas companies operating in the Gulf of Mexico. At December 31, 2005, OMNI operated in two business divisions: Seismic Drilling and Environmental Services. In November 2006, the Company completed the acquisition of Rig Tools, Inc.

FUNDAMENTALS:  With the exception of a bad year in ’04 in which the company lost money, it’s a company that has posted excellent growth over the last several years.  Both margins & ROE are excellent and continue to get even better.  Management owns 40% of the company.

TECHNICAL:  Other than the fact the base is too deep, it’s a very good looking chart.  The stock broke out of a fairly long handle formation today with good volume and looks poised to tackle the highs of the left side of the cup around 12.

SELFINVESTORS RATING: With a total score of 50/60 (26/30 for fundamentals, 24/30 for technical), OMIN is in the upper echelon of SelfInvestors oil plays.

Following a round of less than stellar economic numbers, renewed fears that a soft landing won’t take place crept into the market later in the week.  Despite the fear, the market held up remarkably well.  That was apparent in Friday’s action when large, early losses were largely erased by the end of trading.  What could have been an ugly day of distribution ended up as healthy, consolidating action.  While all the major indices have taken out first support levels of their upward trend lines, support of the 50 day moving averages remain.. an area where i’d expect a test of within the coming week.

::: Model Portfolio Update :::

The Self Investors Model Portfolio was off a bit for the week, down 1.2% .. bringing the YTD performance to 19.2%.   In a bit of a strategy shift, I’ve begun to utilize quick strike profit plays more frequently looking to capitalize on quick profit gains in swing type trades (I highlighted a few more of these types of plays in a bonus premium report to you last week).  While the core of the portfolio will remain focused on longer term, fundamentally superior companies, breaking out of sound bases, I plan to allocate around 25% of the portfolio for quick strike profit plays which have the potential to really accelerate portfolio returns.   During the week, I closed out 6 small QSP trade positions:  DSTI (+17%), VSE (+10%), CTDC (+5%), NPSP (+5%), CHNR (-2%) and SYNA (-3%).  With the market entering a correction phase, I’ve begun to move more of the portfolio to the short side by initiating 3 new short positions during the week, bringing the total number of short positions to 4.  Current allocation of the portfolio stands at 72% long, 28% short. 

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Oil & Gas Drilling & Exploration          5.25%
2. Oil & Gas Equip. & Services              4.85%
3. Residential Construction                    4.30%
4. Silver                                                  4.10%
5. Oil & Gas – Independent                     4.05%
6. Air Services – Other                           4.00%
7. Oil & Gas – Refining & Marketing         3.65%
8. Gold                                                    3.60%
9. Oil & Gas – Major Integrated               3.35%
10. Consumer Services                          3.30%

– Top 10 Worst Performing Industries For the Week –

1. General Entertainment                           -5.70%
2. Department Stores                                -5.20%
3. Pollution & Treatment Controls              -4.65%
4. Major Airlines                                        -4.50%
5. Investment Brokerage                           -4.00%
6. Sporting Goods                                     -3.60%
7. Internet Info Providers                           -3.55%
8. Rubber & Plastics                                  -3.45%
9. Toys & Games                                      -3.40%
10. Office Supplies                                   -3.20%

– Top 5 Best Performing ETFs For the Week –
 
1. US Oil Fund (USO)                                  6.30%
2. SPDR Energy (XLE)                                5.55%
3. Ishares Energy (IYE)                              5.40%
4. HLDRS Oil Services (OIH)                      5.25%
5. PowerShares Dynamic Energy (PXE)    4.80%

– Worst 5 Performing ETF’s –

1. Ishares Broker/Dealer (IAI)                             -5.40%
2. HLDRS Internet (HHH)                                     -4.95%
3. PowerShares Nanotech (PXN)                       -4.25%
4. India Fund (IFN)                                               -4.20%
5. HLDRS Semiconductors (SMH)                       -3.75%

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

1. Allegiant Travel (ALGT): a Las Vegas-based provider of low-cost airline passenger services linking travelers in small cities to world-class leisure destinations, such as Las Vegas, Orlando, and Tampa/St. Petersburg. Set to start trading Friday.

2. Heely’s (HLYS):  Texas-based designer of action sports-inspired footwear products for the youth market. The company’s primary product, HEELYS-wheeled footwear, is dual-purpose footwear that incorporates a stealth, removable wheel in the heel that allows the user to transition from walking or running to skating by shifting weight to the heel.  Heelys sells its products through distribution channels, including full-line sporting goods retailers such as The Sports Authority, Modell’s, and Dick’s Sporting Goods, specialty apparel and footwear retailers, such as Journeys and Bob’s Stores, and select department stores, such as Nordstrom and Mervyn’s.  Trading set to start Friday.

::: Upcoming Economic Reports (11/20/06- 11/24/06) :::

Monday:        None
Tuesday:       Productivity (rev.), Factory Orders
Wednesday:  Crude Inventories
Thursday:      Initial Jobless Claims, Consumer Credit
Friday:           Hourly Earnings, NonFarm Payrolls, Unemployment Rate

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

None

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

– SelfInvestors Blog –

1.  Dow and S&P Break Upward Trends
http://investing.typepad.com/tradingstocks/2006/11/dow_and_sp_brea.html

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

Disclaimer: Please excuse any poor grammar or sentences that make absolutely no sense.. still recovering from a cold and heavily medicated 🙂

::: Today’s Market Action :::

Following a little Thanksgiving intermission, traders were in no mood to continue their buying spree.   A declining dollar, civil unrest in Iraq, a valuation question of Google and poor sales results out of WalMart all provided good reasons for good old fashioned profit taking.  Ok, well it was a little more than just profit taking today as both the S&P and Dow broke their upward trend lines and will test their 50 day moving average in the coming days.  If their is a silver lining it’s that volume, while heavier than Friday’s holiday trading, was just a bit above average.  In addition, the Nasdaq is holding the upward trend .. just barely.  Today’s move was certainly not surprising and the action up to this point remains healthy.

::: 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 Nov 27th 2006

* Accumulation (institutional buying) today in the S&P and Dow

Nasdaq: DOWN 2.21% today with volume 3% ABOVE average
Nasdaq ETF (QQQQ) DOWN 2.22%, volume 40% ABOVE average
Dow: DOWN 1.29%, volume 5% ABOVE the average
Dow ETF (DIA): DOWN 1.28%, volume 20% ABOVE the average
S&P ETF (SPY): DOWN 1.38%, volume 20% ABOVE the average
Russell Small Cap ETF (IWM): DOWN 2.24%, volume 42% 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 of course did not fare well at all today.  I’ve mentioned in previous reports that health of leading stocks has been deteriorating and that was no exception today.

Summary:

* Decliners led Advancers 374 to 31.
* Advancers were up an average of .97% today, with volume 5% ABOVE average
* Decliners were down an average of 2.67% with volume 11% ABOVE average
* The total SI Leading Stocks Index was DOWN 2.39% today with volume 10% 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 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.  For a detailed look at how I go about gauging sector/industry strength please see the following post: http://investing.typepad.com/tradingstocks/2006/09/wheres_the_big_.html

* Current Leading Sectors/Industries (over last 30 trading days): 
Home Construction, Realty, Gold, Real Estate, Technology, Consumer Services
                                              
* Current Lagging Sectors/Industries (over last 30 trading days): 
Health Care Providers, Oil, Broadband

* Today’s Market Moving Industries/Sectors (UP):
Not a one today.

* Today’s Market Moving Industries/Sectors (DOWN):
Fairly broad selling today – Broker/Dealers, Internet, Realty, Real Estate, Biotech and Energy

** 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.  Despite all the selling today, there was a diamond in the rough – Team Inc (TMI), a thinly traded company that gapped up with heavy volume and flirted with a breakout.

ABOUT:  Team, Inc. (Team) is a professional full-service provider of specialized industrial services, including on-stream leak repair, hot tapping, fugitive emissions control monitoring, field machining, technical bolting, field valve repair, field heat treating and non-destructive testing/examination (NDE) inspection services. These services are provided throughout the United States in over 50 locations. The Company operates in two segments: industrial services, and equipment sales and rental. The Company conducts operations through international locations in Singapore, Aruba, Canada, Venezuela and Trinidad. In addition, Team licenses its techniques and materials to various companies outside the United States and receives royalties based upon revenues earned by its licensees. In August 2004, Team acquired the business assets of Cooperheat-MQS, Inc., a Houston, Texas-based company with two primary service offerings: field heat treating and NDE inspection services.

FUNDAMENTALS:  With the exception of a couple quarters of poor earnings results at the end of ’04 and beginning of ’05, TMI is a company that has posted big time growth in the past couple years.  30% growth is expected to continue.  Margins are poor, but ROE is excellent and continues to rise.

TECHNICAL:  The stock did break out today from a decent looking base with good volume on a gap up and managed to hold the gains well.  Relative Strenght is lagging a bit, but overall a decent looking chart.

SELFINVESTORS RATING: With a total score of 50/60 (26/30 for fundamentals, 24/30 for technical), TMI is a solid SelfInvestors breakout candidate.

It’s been a couple weeks since the last market review.  At the time, the market was showing some signs of weakness, but ultimately the bears were unable to grab any control.  The profit taking was mild to say the least and the major indices bounced off the first levels of support (the bottom of their upward trendlines) and charged higher, keeping the trend intact.  Technically, there is currently no reason to believe the trend can’t hold.  The market continues to look very strong heading into what is typically the strongest time of the year for the market.  The major indices remain firmly in their upward trends with some room to run before hitting resistance.

On the economic front, traders are turning their attention from inflation fears to "is the economy slowing too much".  At this point, it doesn’t appear to be curbing the spending habits of consumers but that could change.

::: Model Portfolio Update :::

Following a week in which the Model Portfolio rose nearly 4%, it was a bit of a ho hum week this week as the portfolio pulled back a bit.  Despite hitting a rough patch in the past few weeks, the YTD performance remains at a respectable 17.5% return.  The strategy of the portfolio has changed a little recently as I aim to capitalize on profits in shorter time frames – there were four new quick strike profit plays intitiated this week.  I’m not willing to ride most positions up at these levels, nor am I willing to to leverage with the aggressive use of margin (although I have been dipping into margin just a bit).  On the short side, I was forced to cover 3 positions in the Semis Holders (SMH), American Medical (AMMD) and Claires Stores (CLE).. the combined trades basically amounted to a wash.  I still continue to hold one short trade holding its gain and may initiate one or two more should the market show any signs of deterioration. 

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Sporting Goods Stores                     9.05%
2. Residential Construction                   8.85%
3. Major Airlines                                    7.95%
4. Semiconductor – Memory Chips        7.85%
5. Drug Related Products                      7.85%
6. Medical Practitioners                         6.65%
7. Manufactured Housing                      5.75%
8. Regional Airlines                                5.70%
9. Education & Training Services           5.58%
10. Semiconductor – Equip & Mat.          5.45%

– Top 10 Worst Performing Industries For the Week –

1. Gold                                                       -4.00%
2. Copper                                                  -3.49%
3. Personal Products                                -3.40%
4. Industrial Metals & Minerals                  -3.39%
5. Silver                                                    -3.35%
6. Nonmetallic Mineral Mining                    -2.70%
7. Printed Circuit Boards                          -2.45%
8. Specialty Retail – Other                        -2.20%
9. Oil & Gas Drilling/Exploration                -2.00%

– Top 5 Best Performing ETFs For the Week –
 
1. Ishares Home Construction (ITB)           7.50%
2. SPDR HomeBuilders (XHB)                     7.15%
3. HLDRS Broadband (BDH)                       5.70%
4. HLDRS Semiconductor (SMH)                5.05%
5. Ishares Semis (IGW)                              5.00%

– Worst 5 Performing ETF’s –

1. Central European & Russia Fund (CEE)          -5.05%
2. ASA Gold (ASA)                                             -5.00%
3. U.S. Oil Fund (USO )                                       -4.45%
4. Market Vectors Gold Miners (GDX)                -4.40%
5. Ishares South Africa (EZA)                            -3.40%

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

1. AerCap Holdings (AER): sells and provides aircraft management, engine maintenance, and aircraft repair and disassembly services to about 100 customers in 50 countries.  The company is making good money, but growth isn’t exceptional.  Set to start trading Tuesday.

2. Spirit AeroSystems (SPR):  independent non-OEM designer and manufacturer of aerostructures. The company provides structural components such as fuselages, propulsion systems, and wing systems for commercial and military aircraft.  Trading set to start Tuesday.

3.  Wildan Group (WLDN):   provider of outsourced services to small and mid-sized public agencies in California and other Western states. The company operates a network of over 20 offices offering outsourcing services for civil engineering, building and safety services, geotechnical engineering, financial and economic consulting, and disaster preparedness and homeland security.  Set to start trading this week.

4. North American Energy Partners (NOA):  Canada-based provider of resource services to primarily Canadian oil and natural gas producers and other natural resources companies. The company offers mining and site preparation, as well as piling and pipeline installation services. Trading set to start Wednesday.

::: Upcoming Economic Reports (11/20/06- 11/24/06) :::

Monday:        Leading Indicators
Tuesday:       Retail Sales
Wednesday:  Consumer Sentiment (Final), Petroleum Status, Mortgage Apps, Jobless Claims
Thursday:      None
Friday:           Money Supply

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

Tuesday: Coldwater Creek (CWTR), Ituran Location and Control (ITRN), Brocade (BRCD)

::: 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!