Sunday, February 08, 2004


Investors will focus on Greenspan's testimony to Congress on Wed. for affirmation that an imminent rate hike is not forthcoming. A preliminary reading from the Univ. of Mich. on consumer confidence will be released Fri. These are the only 2 significant economic events for the week. The short-term technical indicators I follow turned positive on Fri. I expect the recent strength in retail, homebuilding and technology will continue this week. Consumer spending will only strengthen throughout the year with major tax cuts, low interest rates and decreasing unemployment continuing. Investors are anticipating this now.

BOTTOM LINE: On Fri. I positioned the portfolio 100% net long(%longs-%shorts). I covered some shorts and added a few new longs in the above mentioned sectors. I initiated a position in OHB, a small-cap homebuilder, on fri. It is down 40% from its high on interest rate fears. It has a great track record, low valuation and strong fundamentals. Technicals confirmed my buy decision and I expect it to outperform until interest rate fears resurface.

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