You have to hand it to the bulls who have shown remarkable resiliency to keep this market afloat.  Following the Fed minutes on Wednesday in which the Fed removed any possibility of a rate hike in the near future (which is what fueled the rally folllowing the Fed decision March 21st), the market sold with some intensity.  It set up the likelihood that, at the very least, the major indices would take out support of the 50 day moving averages.  But there were buyers again stepping in and taking the market higher Thursday and Friday, albeit with uninspiring volume. 

From what I’m seeing, as the market comes close to retesting its previous highs, many traders have all but forgotten the big sell off on February 27th.  What’s important to remember is that technical damage of that magnitude doesn’t just disappear.  It takes time to repair the damage – done with a lengthy sideways consolidation and/or a retest of those lows.  This hasn’t happened.  YET.  It will.  Maybe we continue push to the highs of February, but the closer we get to those highs, the greater the risk on the long side.  Play accordingly. 

Next week is a big week with earnings kicking off in full force.  With housing starts, building permits, CPI data and several earnings reports, Tuesday could provide an important clue as to where this market is headed.

I’ll post an analysis of the charts of the major indices tomorrow night.

::: Model Portfolio Update :::

It was another fairly quiet week for the Model Portfolio in this directionless market.  I’m not doing a whole lot on either side right now but did close out a few positions and replaced them with what should be stronger ones.  I closed out my TIE position for a small 5% gain and replaced it with a top Chinese play.  Also closed out were 3 Quick Strike Profit plays that while still fairly bullish, were showing enough weakness for me to cut and run.  With the market still needing to repair significant damage and likely to see further selling at some point, I’m moving on at any sign of weakness, however small.   Closed were JAV (+5%), TTG (-3%) and MFN (-2%).  These were replaced with 2 other QSP plays, both of which remain profitable.  For the week, the portfolio edged up just .1% and stands firm with a 7.6% YTD return.  Current allocation remains a bit on the bearish side with 40% long, 35% short and 25% in cash.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Railroads: 6.75%
2. Recreational Goods: 4.85%
3. Long Term Care Facilities: 4.50%
4. Technical Services : 4.45%
5. Heavy Construction: 4.35%
6. Copper: 4.25%
7. Silver:  4.15%
8. Nonmetallic Mineral Mining: 4.15%
9. Manufactured Housing: 3.85%
10. Oil & Gas Equipment & Services: 3.65%

– Top 10 Worst Performing Industries For the Week –

1. Advertising Agencies: -3.75%
2. Toy & Hobby Stores: -3.05%
3. General Entertainment: -2.60%
4. Auto Manufacturers: -2.20%
5. Pollution & Treatment Controls: -2.05%
6. Residential Construction: -1.85%
7. Diversified Computer Systems: -1.85%
8. Savings & Loans -1.80%
9. REIT – Hotel/Motel: -1.80%
10. REIT – Residential: -1.65%

– Top 5 Best Performing ETFs For the Week –
 
1. Morgan Stanley China (CAF)  5.20%
2. Central Europe and Russia Fund (CEE) 5.15%
3. Morgan Stanley India (IIF) 5.00%
4. Central Fund of Canada (CEF) 4.40%
5. India Fund (IFN) 3.80%

– Worst 5 Performing ETF’s –

1. Japan Small Cap (JOF)  -3.80%
2. Herzfeld Caribbean Basin (CUBA) -1.40%
3. Ishares Japan (EWJ) -1.15%
4. HLDRS Retail (RTH) -1.00%
5. US Oil Fund (USO) -.95%

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

1. MetroPCS Communications (PCS): provider of wireless broadband personal communication services. The company offers service on the basis of no long-term contract, flat-rate, unlimited usage in selected major metropolitan markets in the United States. The company serves over 3 million customers in the San Francisco, Miami, Tampa/Sarasota/Orlando, Atlanta, Sacramento, Dallas/Ft. Worth, and Detroit metropolitan areas.  The company is profitable and will begin trading on Thursday.

2. Simcere Pharmaceutical Group (SCR): China-based manufacturer and supplier of branded generic pharmaceuticals in China. The company  manufactures and sells 35 pharmaceutical products, including antibiotics, an anti-cancer medication and an anti-stroke medication. Simcere also has 12 product candidates in various stages of development, including treatments for cancer, cerebrovascular diseases, infections, rheumatoid arthritis, nasal allergies, nausea and vomiting associated with chemotherapy.  Profits and sales have increased significantly over the past year.  Trading set to begin on Friday.

3.  Superior Offshore International (DEEP): provider of subsea construction and commercial diving services to the crude oil and natural gas exploration and production and gathering and transmission industries on the outer continental shelf of the Gulf of Mexico.  Profits and sales have more than tripled over the past year.  Trading set to begin on Friday.

::: Upcoming Economic Reports (4/16/07 – 4/20/07) :::

Monday:        Retail Sales; Business Inventories
Tuesday:       CPI; Housing Starts; Building Permits; Industrial Production, Capacity Utilization
Wednesday:  Crude Inventories
Thursday:      Leading Indicators, Initial Claims
Friday:           None

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

Monday:   None
Tuesday:  Steel Dynamics (STLD), EMC Corp (EMC)
Wednesday: Ebay (EBAY), Alliance Data Systems (ADS),
Thursday: Google (GOOG), Cybersource (CYBS), Schering Plough (SGP), United Health (UNH)
                   CBOT Holdings (BOT)
Friday: Schlumberger (SLB)