05-12-26 Monday: Market Briefing

Monday, December 26, 2005 (data as of prior close)

RS weakening: energy (OSX, XNG, alt. energy, coal), REITs. Sell into strength, reopen positions if RS emerges 1/06.

RS gaining: XAU, industrial metals. Buy weakness and breakouts.

Market Strength 10-day high: ~2530
Market Strength 10-day low: ~2435
Market Strength intraday stochastic: 7 , falling

Nasdaq 10-day high: ~2270
Nasdaq 10-day low: ~2215
Nasdaq 10-day stochastic: 60, neutral

Breakout Strength, 10-day stochastic: 72, rising
Breakout Strength: intra/it: 100, rising

Outlook: Bottoming. 12/20 potential near-term low. Unconfirmed short-term uptrend. Possible year-end run-up. Look for erratic trading as volume will be low. Likely that selling pressure has abated as many stocks corrected in early December, theoretically due to profit taking. Rather unlikely that portfolio managers would wait until final week of trading to lock-in gains.

Look for bids in small float stocks and possible selling into strength by institutions. Tuesday-early Thursday should be peak for window dressing due to t+3 settlement and avoidance of blantant window dressing on 12/30/05. Sell into mid-week strength. Find potential long and/or short plays for the first week of January.

Top 100 Alpha: 208
Top 3 Sectors/Alpha

Strong: NTRI TRE TIE PRLS GMXR
Weak: tzoo ampx snda antp jas

tages: January effect, year end selling, strategy.