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!

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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.