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

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

::: Model Portfolio Update :::

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

::: Best/Worst Performers :::

– Top 10 Performing Industries For the Week –

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

– Top 10 Worst Performing Industries For the Week –

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

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

– Worst 5 Performing ETF’s –

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

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

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

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

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

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

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

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

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

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

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

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

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