Weekly Outlook

Click here for Wall St. Week Ahead by Reuters.

Click here for Stocks to Watch Monday by MarketWatch.

Click here for TradeTheNews.com Weekly Calendar.

BOTTOM LINE: I expect US stocks to finish the week modestly higher on declining financial sector pessimism, short-covering, technical buying, diminished terrorism concern, tech sector optimism and less economic fear. My trading indicators are giving bullish signals and the Portfolio is 100% net long heading into the week.

Market Week in Review

S&P 500 1,115.10 -.49%*

Click here for the Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices
S&P 500 1,115.10 -.49%
DJIA 10,428.05 -.37%
NASDAQ 2,269.15 -.02%
Russell 2000 625.39 -.89%
Wilshire 5000 11,385.11 -.58%
Russell 1000 Growth 500.22 -.39%
Russell 1000 Value 566.27 -.73%
Morgan Stanley Consumer 670.32 -.75%

Morgan Stanley Cyclical 829.86 -1.24%
Morgan Stanley Technology 578.10 +.19%
Transports 4,099.63 -2.0%
Utilities 398.01 -.69%
MSCI Emerging Markets 41.58 +2.34%

Lyxor L/S Equity Long Bias Index 973.91 +.43%

Lyxor L/S Equity Variable Bias Index 850.10 +.52%

Lyxor L/S Equity Short Bias Index 942.82 -1.64%

Sentiment/Internals
NYSE Cumulative A/D Line +68,909 -.16%
Bloomberg New Highs-Lows Index +178 -453
Bloomberg Crude Oil % Bulls 44.0 -8.33%
CFTC Oil Net Speculative Position +75,262 +41.49%

CFTC Oil Total Open Interest 1,159,436 -4.74%
Total Put/Call .91 +10.98%
OEX Put/Call 2.30 -20.42%
ISE Sentiment 92.0 -42.86%
NYSE Arms 2.15 +241.27%
Volatility(VIX) 21.68 +10.0%
G7 Currency Volatility (VXY) 13.66 -1.30%
Smart Money Flow Index 9,176.11 -1.01%

Money Mkt Mutual Fund Assets $3.294 Trillion +.70%
AAII % Bulls 49.18 +30.52%
AAII % Bears 22.95 -39.09%

Futures Spot Prices
CRB Index 283.38 +1.44%

Crude Oil 79.36 +2.07%
Reformulated Gasoline 205.29 +2.52%
Natural Gas 5.57 -2.50%
Heating Oil 211.56 +2.97%
Gold 1,096.20 -.71%
Bloomberg Base Metals 211.72 +2.40%
Copper 334.65 +1.72%

US No. 1 Heavy Melt Scrap Steel 260.0 USD/Ton +2.23%

China Hot Rolled Domestic Steel Sheet 3,899 Yuan/Ton +1.70%

S&P GSCI Agriculture 353.43 +1.80%

Economy
ECRI Weekly Leading Economic Index 131.20 +.69%

Citi US Economic Surprise Index +18.40 +308.89%

Fed Fund Futures imply 64.0% chance of no change, 36.0% chance of 25 basis point cut on 1/27

US Dollar Index 77.86 +.16%

Yield Curve 269.0 -14 basis points

10-year US Treasury Yield 3.83% +3 basis points

Federal Reserve’s Balance Sheet $2.219 Trillion -.07%

U.S. Sovereign Debt Credit Default Swap 43.0 unch.

10-year TIPS Spread 2.40% +2 basis points
TED Spread 19.0 -2.0 basis points
N. Amer. Investment Grade Credit Default Swap Index 85.60 +3.88%

Euro Financial Sector Credit Default Swap Index 62.17 -5.92%
Emerging Markets Credit Default Swap Index 258.44 -1.33%
CMBS Super Senior AAA 10-year Treasury Spread 440.0 -25.0 basis points

M1 Money Supply $1.685 Trillion unch.

Business Loans 664.70 -.27%
4-Wk MA of Jobless Claims 460,300 -1.2%

Continuing Claims Unemployment Rate 3.8% -10 basis points
Average 30-year Mortgage Rate 5.14% +9 basis points
Weekly Mortgage Applications 595.80 -10.71%

ABC Consumer Confidence -44 -2 points
Weekly Retail Sales +1.90% +40 basis points
Nationwide Gas $2.64/gallon +.06/gallon
US Heating Demand Next 7 Days 13.0% above normal
Baltic Dry Index 3,005 unch.

Oil Tanker Rate(Arabian Gulf to US Gulf Coast) 37.50 +4.17%

Rail Freight Carloads 141,699 -32.45%

Iraqi 2028 Govt Bonds 77.17 -.37%

Best Performing Style
Large-Cap Growth -.39%

Worst Performing Style
Mid-Cap Value -1.17%

Leading Sectors
Disk Drives +1.52%

Education +1.33%

Steel +1.28%

Semis +.28%
Homebuilders +.12%

Lagging Sectors
Hospitals -2.26%
Airlines -2.54%
HMOs -3.11%

Oil Tankers -3.33%
Coal -5.46%

One-Week High-Volume Gainers

One-Week High-Volume Losers

*5-Day Change

Stocks Finish Lower, Weighed Down by REIT, Transportation, HMO, Hospital and Utility Shares

Evening Review
BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Briefing.com In Play

SeekingAlpha Market Currents

WSJ Today’s Markets
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StockCharts Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Morningstar Style Performance
Commodity Futures
S&P 500 Gallery View
Timely Economic Charts
Most Recent Guru Stock Picks
CNN PM Market Call
After-hours Stock Commentary
After-hours Movers
After-hours Stock Quote
After-hours Stock Chart

Stocks Slightly Lower into Final Hour on Profit-Taking, Higher Long-Term Rates, Rising Energy Prices

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Financial longs and Medical longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is about even, most sectors are falling and volume is very light. Investor anxiety is very high. Today’s overall market action is mildly bearish. The VIX is rising +4.91% and is high at 20.94. The ISE Sentiment Index is low at 94.0 and the total put/call is around average at .87. Finally, the NYSE Arms has been running high most of the day, hitting 1.37 at its intraday peak, and is currently 1.12. The Euro Financial Sector Credit Default Swap Index is rising +.42% to 62.17 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising +2.05% to 85.55 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is unch. at 21 basis points. The TED spread is now down 444 basis points since its all-time high of 463 basis points on October 10^th of last year. The 2-year swap spread is falling -6.28% to 27.88 basis points. The Libor-OIS spread is up +1 basis point to 9 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up +1 basis point to 2.41%, which is down -24 basis points since July 7^th of last year. The 3-month T-Bill is yielding .05%, which is up +1 basis point today. Oil Service, Gold, Airline, Gaming, Homebuilding, Financial, Disk Drive, Ag and Alt Energy shares are higher on the day. Gauges of investor angst are fairly high again today given just mild market weakness, which is a positive. I still suspect terrorism jitters are holding stocks back a bit ahead of tonight’s festivities. The UK sovereign debt cds is falling -2.1%, which is another positive. US scrap steel is up another 2.2% over the last five days. The Bloomberg Financial Conditions Index rose again this week to .09, which is the best level since the week of July 20^th, 2007. (XLF) is trading well today. Despite terrorism and rising oil worries, airlines haven’t given back much of their recent gains and are outperforming again today, rising +.4%. On the negative side, cyclicals are relatively weak and the market mostly ignored today’s positive economic report again. Nikkei futures indicate an +174 open in Japan and DAX futures indicate an +2 open in Germany on Monday. I expect US stocks to trade modestly higher into the close from current levels on short-covering, less economic fear, technical buying, year-end window dressing, less financial sector pessimism and seasonal strength.