On the surface, we had a great week last week, with the major indices having their best week since ’04 and clearing several resistance levels in the process (at least in the Dow and S&P500 – have a look at the latest market report released just a few hours ago: http://investing.typepad.com/tradingstocks/2006/07/dow_also_surges.html). With Bernankes recent comments, lower GDP and jobs numbers and a cooling housing market, traders are pricing in an end to rate hikes. The concern is that what are traders going to focus on once the end to rate hikes euphoria wears off? There aren’t too many positives out there. The Middle East situation will be closely watched and some think that the situation will be resolved quickly. Quickly? They’ve been fighting for 50 years.. it won’t end quickly. Traders will soon get their wish of an end to rate hikes, but then we’ll need to see evidence of a soft landing in the housing market and in the economy in general all while keeping inflation in check. It’s going to be a difficult tight rope to walk over the next several months. No wonder traders are fleeing to defensive areas.
It was another ho hum week for the Model Portfolio as I continue to sit largely on the sidelines. I was forced out of one short trade in TWGP for a 7% loss and initiated a new long trade with an oil play that is currently up 3%. For the coming week I’ll be considering some short term short entries and may initiate another long if the "stars are aligned".
** Best/Worst Performers **
– Top 10 Performing Industries For the Week –
1. Semiconductor – Memory 8.55%
2. Silver 8.15%
3. Copper 7.80%
4. Drugs – Generic 6.70%
5. Drug Related Products 6.60%
6. Auto Manufacturers 6.45%
7. Industrial Equipment Wholesale 6.40%
8. Computer Based Systems 6.10%
9. Oil/Gas Drilling & Exploration 5.90%
10. Heavy Construction 5.90%
– Top 10 Worst Performing Industries For the Week –
1. Consumer Services -10.80%
2. Music & Video Stores -9.05%
3. Health Care Plans -8.70%
4. Lodging -7.65%
5. Manufactured Housing -7.20%
6. Resorts & Casinos -6.25%
7. Air Delivery & Freight Service -6.20%
8. Food Wholesale -5.80%
9. Office Supplies -4.65%
10. Trucking -4.10%
– Top 5 Best Performing ETFs For the Week –
1. HLDRS Telecom (TTH) 5.70%
2. Market Vectors Gold Miners (GDX) 5.70%
3. HLDRS Oil Service (OIH) 5.60%
4. HLDRS Semis (SMH) 5.60%
5. Ishares Semis (IGW) 5.50%
– Worst 5 Performing ETF’s –
1. Ishares Transportation (IYT) -3.15%
2. HLDRS Internet (HHH) -2.70%
3. PowerShares Retail (PMR) -1.65%
4. HLDRS Retail (RTH) -.70%
5. India Fund (IFN) -.65%
** There are no IPO’s worth watching for the coming week **
** Upcoming Economic Reports (7/31/06- 8/4/06) **
Monday: Chicago PMI
Tuesday: ISM Manufacturing, Personal Income, Construction Spending, Retail Sales
Wednesday: Petroleum Status, Mortgage Apps
Thursday: Money Supply, Factory Orders, ISM Non Manufacturing, Monster Employment
Index, Jobless Claims
Friday: Employment Situation, Public Debt
** Latest Blog Entries – In Case You Missed Them!**
– SelfInvestors Blog –
1. Dow Surges Above Downward Trend Line, But Market Flashes Red Flags (July 30th)
http://investing.typepad.com/tradingstocks/2006/07/dow_also_surges.html
2. Today’s Notable Earnings Movers (FORM, RACK) (June 28th)
http://investing.typepad.com/tradingstocks/2006/07/todays_notable__3.html
3. Today’s Notable Earnings Movers (AKAM, KNDL) (June 27th)
http://investing.typepad.com/tradingstocks/2006/07/todays_notable__2.html
4. Today’s Notable Earnings Movers (TRMB, CHH) (June 26th)
http://investing.typepad.com/tradingstocks/2006/07/todays_notable__2.html
5. S&P Clears Resistance, Dow Next? (June 25th)
http://investing.typepad.com/tradingstocks/2006/07/sp_clears_resis.html
6. Today’s Notable Earnings Mover’s (HOLX, NTRI) (June 25th)
http://investing.typepad.com/tradingstocks/2006/07/todays_notable_.html