Sunday, August 22, 2004

Weekly Outlook

There are a few important economic reports and some significant corporate earnings reports scheduled for release this week. Economic reports this week include Existing Home Sales, Durable Goods Orders, New Home Sales, Initial Jobless Claims, Preliminary 2Q GDP, Preliminary 2Q Personal Consumption, Preliminary 2Q Price Deflator, and the Final Univ. of Mich. Consumer Confidence reading for August. Home Sales, Durable Goods and the Preliminary 2Q GDP all have market-moving potential.

Toys "R" Us(TOY), H.J. Heinz(HNZ), Toll Brothers(TOL), H&R Block(HRB), OmniVision Tech(OVTI), SeaChange Intl.(SEAC), Williams-Sonoma(WSM), ADC Telecom(ADCT), The Sports Authority(TSA), Dollar General(DG) are some of the more important companies that release quarterly earnings this week. There are also several other events that have market-moving potential. The Fed's Guynn speaking to paper and pulp executives, Alan Greenspan's speech at the Kansas City Fed Symposium, the Raymond James Mid-west Mini-conference and the Novellus(NVLS) Mid-quarter update could also impact trading this week.

Bottom Line: I expect U.S. stocks to finish the week modestly higher as oil prices fall further, more than offsetting terrorism fears ahead of the Republican Convention. Technology shares, continuing to rebound from oversold levels, and homebuilders should lead the way. I would like to see volume accelerate on any further advance and measures of investor anxiety increase. My short-term trading indicators are still giving Buy signals and the Portfolio is 125% net long heading into the week.

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