Monday, January 29, 2007


Market Action:
If you looked at the market averages after the close you might have thought Monday was a dull day and for the most part you would be correct.  The market did end close to where it began but there was a little flurry of activity in the middle.  This happened when…well, let’s tell the beginning of the story first…

We learned (along with the rest of the world) that DELL had cut a special deal (DELL got a DEAL, amazing) with MSFT to be the first computers to be sold with the new operating system VISTA.  Our guess is that DELL talked them into this deal because they are a mail order house and therefore the buyers really weren’t going to get their PC’s until at least Tuesday, the original release date.  

So, on Monday, DELL made a gloriously bullish announcement that it had sold tens of thousands of copies of VISTA over the weekend presumably in the form of computers.  This news sent the stock market headed higher quickly in late morning trading with most of the benefit accruing to the tech sector.  Once this little ramp was over, the market quickly reversed to go back down to the lows of the day before rallying a bit going into the close.  

Tonight we are biding our time with all of the news coming out this week.  Most of the time we set our sights on the jobs’ report and this seems to be an ok strategy this evening.  The FED will most likely not do anything on Wednesday and the market reaction to that should be muted.  
The big thing we are looking at is the total lack of upside conviction the market is taking here at the end of the month.  Yes, the Dow did finish up today but only about 3 points after dropping last Thursday and Friday.  Frankly, we would like to see another rally going into the jobs’ report this week.  That would be a good opportunity for us to set up some of our positions.

For tonight, we see no urgency to rush into any positions or out of any given the type of week we are in, what with all of the news.  Normally, we don’t worry too much about the news because it is just a way for us to execute our trades at better prices; the trend doesn’t really change due to the daily economic news.

We do realize that the market can “turn on a dime” so we want to be prepared to act should a good opportunity present itself but tonight, we are again waiting for Friday’s jobs’ report.  

Dow Industrials:  12,490.78  +3.76
VIX: 11.45
HUI:  325.09
QQQQ:  43.61
RYVNX:   16.97
RYAIX:  21.43
RYCWX:  35.48
TLT:  86.72
BEGBX:  13.47

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