Sunday, April 15, 2007

Big Week Ahead

Market Action:
Friday morning, the market had some trouble trying to maintain the prices of Thursday. The Dow did jump out of the blocks but fell back over the first hour before embarking on a upward course the rest of the day. In the NASDAQ, there were some earnings disappointments from Thursday evening that the market digested in the early going and then it to moved up.

With about ninety minutes to go in the session, CSCO (Cisco) made an announcement that the company sees very strong demand and growth should come in at the high end of expectations. With that news, CSCO jumped about 3.5% in about 3.5 minutes taking the NASDAQ indexes up with it. This move did encourage other tech stocks to move up a little in response.

We know that we were whining a little late last week and we’ll try to do a little better job this week (not in the whining department, in the not whining department). The last two days of the week were particularly unnerving with the market down early and then rallying the rest of the day. Thursday morning’s decline was pretty deep so it felt pretty real so when the rally came it was a little surprising. Friday’s decline was almost a fake and we didn’t feel anything strong about it at all especially with the Dow hardly moving down at all.

One news item we like to mention is the massive trade deficit. Last week the trade deficit showed a modest decline from January to February, $58.4 billion versus $58.9 billion. First of all, that’s not much of a decline and second: we are required to comment on the fact that January has 31 days while this year February had only 28. Why is this decline so difficult to figure out???

The upcoming week has a lot of potential market surprises, lots of news and lots of earnings. We expect there will be ample opportunities to get burned trading. We recommend extreme caution due to the possibility of significant landmines to dent stock prices. We know the news past may be ok but there have been several forecasts that haven’t been too bright. We will keep an eye on it too and report it to you here.

News for the Upcoming Week:
Monday—Retail Sales
Tuesday—Housing starts and building permits
Thursday—Leading economic indicators (LEI)
Thursday—Philly Fed Index

Earnings reports, to mention a few:
Tuesday—INTC (Intel), YHOO (Yahoo!), IBM
Wednesday—EBAY, JPM (JP Morgan)
Thursday—GOOG (Google)

Dow Industrials: 12,612.13 +59.17
VIX: 12.20
HUI: 364.47
QQQQ: 44.65
QQQRS: 1.23 bid
QQQRT: 1.72 bid
RYVNX: 16.40
RYAIX: 21.20
RYCWX: 35.16
TLT: 87.12
BEGBX: 13.91

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