Just when it appeared the market would begin a slide into significant deterioration, Bernanke saved the day on Wednesday with dovish comments, indicating inflation concerns continue to diminish and the economy remains strong.  It provided a catalyst for another surge that sent the bears back into hibernation for a bit longer.  However, I still wonder what can propel this market further.  The general skepticism of many traders that this rally can continue provides a nice "wall of worry" for this market to climb, but the market can only rise on Bernanke’s optimistic outlook for so long.  Until the Nasdaq can bust out of its base with volume, I’m still skeptical and maintain a cautious approach up at these levels by carrying a significant short and cash position.  Tuesday is the most important day of the week with the CPI data on tap and the potentially market moving FOMC minutes.  The market is closed tomorrow.

::: Model Portfolio Update :::

It was not a good week for the Model Portfolio.  The portfolio slipped a bit (- 0.4%), despite a week in which the overall market rose bringing the YTD performance to 6.7% (still well ahead of the S&P500).  Much of the loss for the week took place in Watts Technologies (WTS) which sold off after missing earnings badly.  I rarely hold a stock through earnings but considered WTS a core holding and a good play for the water industry.  Hoding through earnings proved to be a big mistake as the stock missed earnings by a wide margin.  Considering the poor results, I decided to abandon my long term approach with WTS and dump it for an 8% loss to use the cash elsewhere, possibly in the Water Powershares ETF (PHO) which is seeing some big money coming into it lately.  I continue to play the Quick Strike Profit trades, which continue to bring in some nice profits.  Goamerica (GOAM) was dumped for a loss of 7%, but the 15% gain in Nexceum Brands (NEXC) more than made up for it.  Since the portfolio was very much leaning towards a scenario in which the market would see further deterioration, I needed to add some more long exposure and added 3 core long plays and another QSP trade.  The QSP trade was a play on the hot solar industry.  Current allocation of the portfolio is 55% long, 25% short and 20% cash.

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

1. Toy & Hobby Stores: 8.20%
2. Farm & Construction Machinery: 7.05%
3. Medical Practitioners: 7.00%
4. Aluminum: 6.70%
5. Railroads: 5.20%
6. Steel & Iron: 5.20%
7. Internet Service Providers:  5.05%
8. Copper: 5.00%
9. Regional Airlines: 4.85%
10. Dairy Products: 4.80%

– Top 10 Worst Performing Industries For the Week –

1. Diagnostic Substances: -3.20%
2. Heavy Construction: -1.95%
3. General Entertainment: -1.85%
4. Marketing Services: -1.75%
5. Oil & Gas Drilling & Exploration: -1.45%
6. Office Supplies: -1.40%
7. REIT – Residential: -1.30%
8. REIT – Diversified/Industrial: -1.25%
9. REIT – Healthcare Facilities: -1.15%
10. Personalized Services: -1.10%

– Top 5 Best Performing ETFs For the Week –
 
1. Morgan Stanley China (CAF)  5.80%
2. Japan Equity (JEQ) 4.90%
3. Korea Fund (KF) 4.85%
4. China Fund (CHN) 4.75%
5. Ishares Japan (EWJ) 4.30%

– Worst 5 Performing ETF’s –

1. India Fund (IFN)  -3.05%
2. US Oil Fund (USO) -2.85%
3. Ishares Commodities (GSG) -2.20%
4. HLDRS Oil Services (OIH) -2.00%
5. Templeton Russia & E. Europe (TRF) -1.85%

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

No IPO’s Worth Watching for This Week

::: Upcoming Economic Reports (2/12/07- 2/16/07) :::

Monday:         None – Market Closed
Tuesday:       CPI, Leading Indicators, Crude Inventories, FOMC Minutes
Wednesday:  Initial Claims
Thursday:      None
Friday:           None

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

Monday: Silver Wheaton (SLW)

Tuesday: Ventas (VTR), Vasco Data Security (VDSI), Ituran Location and Control (ITRN), Crocs (CROX), Wal Mart (WMT)

Wednesday: Abercrombie and Fitch (ANF)

Thursday: Morningstar (MORN)

Friday: None

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

– SelfInvestors Blog –

1. Part II: Profiting From the Advanced Energy Initiative – A Look At Clean Coal, Nuclear Power Utilities & Uranium Miners
http://investing.typepad.com/tradingstocks/2007/02/part_ii_profiti.html

2. Festival of Stocks
http://investing.typepad.com/tradingstocks/2007/02/festival_of_sto.html

3. Today’s Earnings Movers – Intervac (IVAC), American Continental Lines (ACLI)http://investing.typepad.com/tradingstocks/2007/02/todays_earnings_3.html

4. Today’s Earnings Movers – Icon (ICLR), theKnot.com (KNOT)http://investing.typepad.com/tradingstocks/2007/02/todays_earnings_5.html

5. Trading Spot Price of Uranium
http://investing.typepad.com/tradingstocks/2007/02/a_diversified_w.html

6. After Market Report – A Weak Bounce Ahead of Bernanke; Stock of Day Icon (ICLR)http://investing.typepad.com/tradingstocks/2007/02/after_market_re_1.html

7. Today’s Earnings Movers – Break Out In Titanium Metals (TIE), Ansoft (ANSS) Adds to Yesterday’s Break Out http://investing.typepad.com/tradingstocks/2007/02/todays_earnings_6.html

8. Market Loves Bernanke, Broad Rally With Volume; Stocks of Day – Titanium Metals (TIE)http://investing.typepad.com/tradingstocks/2007/02/market_loves_be.html

9. Today’s Earnings Movers – Top Chines Plays Baidu.com (BIDU) and 9Limited (NCTY) Sell Off; Strayer Education (STRA), Navigaorts (NAVG) Break Out
http://investing.typepad.com/tradingstocks/2007/02/todays_earnings_7.html

10. Today’s Earnings Movers – Chipotle Mexican Grile Breaks Out
http://investing.typepad.com/tradingstocks/2007/02/todays_earnings_8.html