AFTERNOON RAMP

The DJIA Futures turned out to be a plenty good trade as I bought it and sold it a few times and now it is approaching the daily resistance point near the 12,490 level.

Market internals and sector leaders continue to indicate a bullish environment for the day.

Sector leaders continue to be airlines, small caps, reits, brokers, semis, banks and metals while oils, retail, biotech and internets lag.

The NAZ 100 index continue to lag as about 65 issues are higher and 35 lower led by AMAT JOYG CHRW INFY and KLAC while PTEN RIMM XMSR and AMLN lag.

The SPX 100 shows more positive action with 80/20 the green to red action. Leaders are F MER GM BAC GM and MS while LTD EP HAL WMB and MMM lag.

Market internals are +1,100 on NYSE and +600 on NAZ.

And here is more from the Jeff Saut column this morning:

"8) What do you expect to see as the high, low, and average prices for oil in 2007?

Answer: We have been energy “bulls” for the past five years and remain so. With 5 billion new entrants joining the world’s economy the demand for energy can only increase. Therefore, we continue to think the era of cheap oil is over. As for how high oil prices go, hereto you might as well “flip” a lucky penny.

9) What will the best performing stock sector be next year? Answer: Large-cap growth is cheaper than large-cap value for the first time in more than 30 years. This is why we have tilted portfolios toward large-cap growth since the beginning of 2006.

10) Best stocks for 2007? Answer: Cheap stocks, preferably with dividends.

11) Worst stocks?

Answer: Stocks that go down in price, which is why we continue to embrace our mantra since the Dow Theory “sell signal” of September 1999 – Don’t let ANYTHING go more than 15 – 20% against you!

12) Will the boom in private equity deals continue? Answer: As long as there is excess money in private equity funds chasing returns, the M&A activity will continue driven by the Jessica Simpson investment style, “I totally don’t know what it is, but I want it!”

13) Will hedge funds outperform or underperform or match the returns of the S&P 500?

Answer: There are currently more hedge funds than there are stocks. By definition then, most hedge funds will probably underperform over the long-term. "

Great stuff from Jeff Saut who is one of the few real strategists with some actual thoughtful insight.