THE END

Markets closed on a down note as someone/someones were pushing the major indexes all over the board in the final hour. The DJIA closed down 38 and a mere 7 points lower than Jimmy Cramer's closing prediction (what a genius and guru all in one).

Sector winners were GLD SLV and reits. Leading lower were oils, airlines, banks, internets, trannies, biotechs and brokers.

The DJIA had 7 winners and 23 losers while the SPX 500 had 87 up and about 400 down with the others unch. The biggest losers on the SPX were CIEN COL HES CPWR and XTO. Winners on the SPX included GT AAPL AT WIN JWN and SNDK.

Wrapping up the year, check out the following list of winners and losers:

SSRI +100%

GS +56%

XBD +23%

HUI +22%

GLD +22%

AAPL +18%

IWM +17%

XLE +17%

MSFT +14%

SPX +13.6%

GOOG +11%

NAZ COMP +9.5%

MSH +8.8%

OIH +8.4%

NDX +6.8%

IBB +1%

SMH -8%

INTC -19%

HHH -20%

HAPPY NEW YEAR.

SNOOZEFEST

Markets are trading near the flat line after the NAZ got off to a good start on the heels of the AAPL news.

Strongest sectors are reits, retail, tech, homies and utilities. Weakest are oil service, airlines, internets, banks and trannies.

The DJIA Futures are just hanging at the 12,580 Pivot Point and we wait to see which way they break. DJIA is about 50/50 between winners and losers with 13 of the stocks within 10 cents of the unchanged level.

Market internals are slightly bearish with about 800 more losers than winners. The NDX 100 shows about half the stocks in the green while the OEX 100 shows about 35 winners and 65 losers.

Outliers to the upside include GM HD NSM T MDT AAPL SNDK APOL AEOS and TLAB. Biggest losers include SYMC PTEN PDEC VRTX SUNW WMB ROK EP S and COF.

Turning to politics, the tradesports.com site has the following odds for 2008:

CLINTON 25%

MCCAIN 23%

ROMNEY 10%

GIULIANI 9%

OBAMA 10%

EDWARDS 7%

GORE 5.5%

In addition, the odds have shifted to about 70/30 that the dems maintain both Houses of Congress.

GURU TIME

Here goes on Cramer and his DJIA forecast, overall damn good as he said 12,470 vs. the number as I type near 12,510. I commend him for the close call. The problem is how he got there as he made individual picks to get to his number. He got 4 stocks xactly correct- AXP BA JPM and PG. He was too bullish on 14 and too bearish on 12. Here are the details:

MRK predicted at 25 now 43.

AIG predicted at 90 now 72.

CAT predicted at 80 now 62.

DIS predicted at 28 now 35.

GM predicted at 10 now 31.

INTC predicted at 31 now 20.

MCD predicted at 36 now 45.

MO predicted at 105 now 86.

T predicted at 25 now 36.

XOM predicted at 64 now 77.

Interesting how crummy individual predictions yields dead on overall prediction.

And then of course there is the real stuff, his Action Alert portfolio which is up a whopping 6.97% as of this morning. That doesn't compare too favorably with IWM up 18%+ SPY+14, and DJIA +16%.

SQUEAKY CLEAN

Markets are higher this morning on the heels of the clean as a whistle investigation of AAPL buy AAPL and for AAPL. If Nixon could have investigated himself we would all be working on Tuesday.

The NDX 100 is leading the way up about 1% and 85 of the 100 issues trading in the green. The SPX stocks are not doing nearly as well as half of the OEX and SPX are trading in the green. Back to the DJIA, 21 up and 9 down with T WMT HD VZ and HPQ leading and AA HON DD MO MRK and JPM lagging.

Market internals are slightly green overall with +177 on the NYSE and +250 on the NAZ.

Leading sectors include tech, retail, brokers, semis, homies, brokers, biotech and gaming while oils, metals and banks lag.

Hopefully later in the day a look back at Jimmy Cramer's DJIA prognostications and of course his favorite spec stocks performance. Good amusement for a slow trading session.

2007 PREDICTIONS

Trying to predict what will happen in the financial markets over 12 month periods is not a great idea in my opinion and folks who got it right last year will no doubt get it wrong next year.

So where will the major market indexes end on December 31, 2007? I have no idea but I do know that there will excellent times to buy and sell - witness AAPL from yesterday and Wednesday.

Where will the price of oil be at year end 2007? I have no idea, but I do suspect there will be times to buy the commodity and the XLE/OIH etf's - I suspect buying the stocks/etf's when the price of oil dips to the mid 50's will be a good time to buy and a lift in price to the mid to high 70's will be a good time to sell.

The price of gold and silver is a little different scenario in my view as I suspect the dollar will fall over the long term as wealth is transferred from this country to the BRIC folks and the dollar will become less desirable. Witness the other day when one of the Middle East courntries decided to reduce the amount of dollars they carry in favor of Euros. They will not be the last and as the dollar goes down the prices of metals and oil will increase in dollar terms.

For those looking for long term investments in stocks, I have no idea as I use mutual funds for most long term investing. Which ones; generally value funds that don't have wide swings with big down years and long tenures by the same manager/managers such as:

TAVFX +15% YTD and +14% 5 year record.

TWEIX +20% YTD and +14% 5 year record.

ARTQX +15% YTD and +17% 5 year record.

FAGIX (high yield bond fund) +13% YTD and 13% 5 year record.

OAKGX +25% YTD and +19% 5 year record.

OAKLX +14% YTD and +8% 5 year record.

QFVOX +30% YTD and 24% 5 year record.

TASCX +12% YTD and 13% 5 year record.

For precious metals, I own VGPMX which is closed to new investors but has a great long term record. Look for it when it opens.

I also own MQIFX and MDISX, two Mutual Series Funds that were grandfathered into low expenses when Michael Price sold his funds to Franklin. They have done great in up and down markets but the low expense feature is closed to new investors.

MARKETS CLOSE

The markets have closed slightly lower with the major averages being easily pushed around on this low volume day. Volume was about 900M on the NYSE which is a bit more than half the typical day's volume.

Sector leaders were metals, reits, biotech, drugs, integrated oil and semis. Leading lower were internets, utilities, oil service, retail and gaming.

The NDX closed with about 20 up and 80 down while the OEX 100 had about 40 higher and 60 lower. SPX about 150 up and 350 lower.


The trade of the day, the purchase of the DJIA Futures at the pivot point of 12,555. The market hit it and sat there and then took off back to the 12,600+ level giving all the buyers a nice end of year gift. Unfortunately, I was not one as the internals and the action in GOOG AAPL MS GS etc never convinced me the market was going to snap back.

Tomorrow may bring some interesting DJIA Futures trading as the price closed right near tomorrows pivot.

NOON LOOK

Markets are lower on the heels of good economic news but probably overbought stocks. Favorite market tells GOOG AAPL and GS are all considerably lower.

The SPX 100 and NDX 100 both show about 25 up and 75 down while the SPX 500 has about 125 up and 375 down so not to bullish for the rest of the day unless things change dramatically.

The strongest sector is metals while oils and drugs are flat. Leading lower are internets, airlines, brokers, banks, software and gaming.

Best of the big caps are EP COP CL JNJ and LTD while C AAPL EK ROK MS S and LEH lag.

I haven't made a trade yet today and probably won't make any as shorting this market has not been a winning trade in some time and being long for the day doesn't make much sense either.
DJIA Futures pivots is at 12,555 and support at 12,515 area so maybe a long if we approach the support area.

MARKET OPENS

Markets are trading a bit lower at 10:00 as they got a boost on the heels of the consumer confidence/existing home sales and Chicago PM news.

Strongest sectors are semis, metals, retail and small caps. Downside leaders include gaming, oils, internets and brokers.

Checking the internals, the SPX/NDX and OEX all show about 50/50 between winners and losers.

The NYSE has 70 net issues to the green while the NAZ has about 400 net to the red.

Overall it looks like the day will be choppy as folks may be able to push it all around due to the light volume.

Big cap winners include ATI EP AA CL CAT and JNJ while losers include AVP MDT LEH C AMGN and CPB.

FOOD FOR THOUGHT

The chart above shows an interesting change in the markets that began around the end of November. No, not the long awaited outperformance of the big caps but the outperformance of the SPX over the NDX.

Since the lows of July 18, the SPX is up 16.5%, the Russell 2K is up 18.9% and the NDX is up 21.9%. So the NDX has been the best performer since the summer bottom but now the NDX is lagging and it may be giving a heads up of some future underperformance by the other major indexes as tech and the NDX led on the way up and probably will lead on the way down.

In addition the SMH, the ETF proxy for the semiconductor stocks, hit its high way back in mid October at $35.95 and has since fallen back 6.1% to $33.75 yesterday. And the semis are supposed to lead the markets.

Barry R on his blog also notes the recent NDX lag and in addition mentions that yesterday was the last day for mutual funds to buy stocks that will show up on the books on the 2006 year end financial statements. So just maybe a little window dressing yesterday and Tuesday. FWIW.

CLOSING NUMBERS

Markets closed again at/near their highs with almost every sector closing in the green. The DJIA closed at a new high and the NDX was the worst performer of the major market indexes.

Looking at sectors, gaming, metals, homies, airlines, oils, semis, small caps, retail and brokers led higher while the dollar and AMGN are the standouts that finished lower.

On the SPX, about 420 stocks finished higher and 80 lower with ATI FCX SHW GM IR and APC acting best. The worst stocks on the SPX were BXP CC ODP STJ and THC.

The NDX closed with about 73 up and 27 down with WYNN AKAM LVLT AEOS and PTEN acting best with PETM ESRX ERTS and SIRI acting worst.

The OEX also closed with the 80/20 slant with USB and TWX acting the worst.

Market internals closed with about 1,850 higher on NYSE and 1,265 net green on the NAZ.

Volatility indexes closed way down with the VXO back at the 9.75 lows and the VIX at 10.65.

The SPX closed with a 2 day RSI in the mid 80's and with the VXO/VIX back low but hardly at the key oversold levels, the markets may continue higher the rest of the week.

ALMOST HIGH NOON

Markets continue to trade higher on what appears to be an alligator trade as the asset allocators buy equities and sell fixed income. Note the 10 year Bond rate is trading at 4.66%, the highest since mid November as the dollar goes lower.

Checking the sectors, the metals (dollar down trade) are acting best followed by homies, gaming, semis, small caps, brokers, software, trannies and oil service. On the other side, AAPL AMGN ERTS and the dollar are weak.

The NAZ 100 has about 80 winners and 20 losers with AKAM WYNN LVLT ATVI and AEOS acting best.

On the OEX (SPX 100), about 75 winners and 25 losers with AA SLB ATI C HPQ and GOOG acting best and USB EP DOW DD TWX and UTX acting worst.

Yet to be heard on BUBBLEVISION, but the IWM is up about double the big cap SPX; and of course the crummy action on the NDX continues as the futures are up 7 after trading back to flat earlier this morning. AAPL's anyone?

GREAT MARKETS

Markets are ripping higher as just about all sectors are in the plus category with the only notable stock not participating being AAPL on the heels of a bigger stock option backdating problem.

Leading sectors include metals, semis, biotechs, homies, trannies, brokers, software and internets. Oils, the dollar and the volatility indexes are the only red on the screen.

Market internals are overwhelmingly green with a net 1,700 gainers on NYSE and net +1,200 on NAZ.

The SPX 100 shows about 85 plus and 15 down with USB DOW HAL LTD and COF lower while UPS F AA MRK C and MS are leading higher.

On the NAZ 100, about 90 higher and 10 lower with AAPL PETM ESRX NTLI and ESRX leading lower and AKAM CKFR INTU PCAR and ATVI higher.

The DJIA Futures seemed to have run into a little resistance at the 12,560 level although I suspect pullback will be bought; the NAZ Futures are a bit disappointing as they are only up about 6 points on the heels of the fabu breadth. Also interesting to note that if QQQQ were a normal stock, it would be number 71 in performance on the NAZ 100 so far this morning. And I suspect folks will be kicking themselves for not buying some AAPL today.

TECHNICALS -OIH

OIH in a near perfect set up as it trades back to its uptrending 50 day SMA with a 2 day RSI reading of 6 and overbought stochastics. Of course it can get more oversold but it is probably a nice time to dip a toe in as few expect oil to move higher from here (fade em).

Markets are set to gap higher with the DJIA Futures +42, NAZ+8 and ES +4 on the heels of strong overseas markets. The DJIA Futures are trading between initial resistance at 12,525 and the second level of resistance at 12,555.

My play will probably be to wait for a pullback assuming the internals stay strong and buy the dip as any and all dips have rewarded buyers very well. Witness yesterday morning when the markets were oversold and the volatility indexes were overbought at the 110% of the 10 day SMA levels. Nice gains.

CLOSING RAMP

Markets closed near/at their highs as the strong internals and strength in financials/brokers and semis early gave the sign that a nice up day may be the play.

Strongest sectors were airlines, small caps, homies, brokers, banks, trannies, semis and utilities. Weakest were oils and retail as the usual black Friday excitement of "its gonna be a great holiday season" faded to the typical post XMAS disappointment.

Market internals were strong all day and closed with 1,300 more gainers than winners on the NYSE and 735 more green than red on the NAZ.

The NAZ 100 ended with 70/30 winners to losers with JOYG CHRW AMAT INFY XRAY SNDK the strongest. On the SPX 100, there were about 8 winners to every 2 losers with EK MER MS WMT GM and DD the big winners. To the downside were LTD EP SLB HAL and BHI.

On the DJIA there were only 5 losers, PFE MMM MRK T and JNJ.

I suspect the rally continues tomorrow but note again the underperformance of the NAZ and the outlier performance of the IWM. Hmmmmm.

Oh and one of Jeff Saut's picks for 2007 is the ITA or the DJ Aero/Defense index. I like it.

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.

LATE MORNING LOOK

Markets continue to trade higher with the DJIA+36, NAZ+8 and SPX+3.75.

Sector winners include airlines, metals, reits, small caps, semis, homies, banks and brokers while oils, retail, internets and software lag.

The DJIA shows 28 winners and 2 losers; SPX 100 has about 80/20 winners to losers and NDX about 70/30 winners to losers, fairly bullish.

Market internals are 1,150 net green on NYSE and 600 net green on NAZ.

Hopefully some folks took advantage of the morning DJIA YM Futures call and bought and sold. And a heads up from Adam on the 50 day SMA on the OIH.

Jeff Saut had a great piece on minyanville.com this morning on his predictions. Check out some of his stuff below:


"1) What is your target for the S&P 500 a year from now?

Answer: Assume the S&P 500 is going nowhere and invest accordingly. Our investment approach has typically centered on trying to invest in “cheap” stocks, since good things tend to happen to “cheap” stocks. That strategy has allowed our Analysts Best Picks to achieve a 38.3% per annum return over the past 10 years.

2) How much do you expect S&P earnings to grow in 2007? Answer: Less than the consensus projections.

3) When the Fed moves again, which direction will it be? Answer: The “fooler,” in 2007, may just be that the economy re-accelerates and the Fed actually raises interest rates, not lowers them.

4) When will the Fed make its move? Answer: Who knows?

5) Interest Rates. The Fed funds rate is currently 5.25%. Where will it be a year from now? Answer: Unchanged.

6) The 10 year T’note is trading just above 4.5%. Where will it be a year from now? Answer: You might as well “flip” a lucky penny.

7) What is your expectation for economic growth next year?

Answer: The current economic environment is rendering “mixed” signals. While the headline figures suggest slower economic growth, many of the numbers we look at are actually accelerating. Consequently, we are confused and accordingly cautious."

More to come later in the day from the real deal.

OPENING BULL

Markets open slightly higher with small caps, semis and metals leading/ retailers and biotechs lagging.

Market internals are green on the NYSE with 800 issues higher (helped by fixed income equities as the ten year trades higher) and plus 325 on the NAZ.

On the NAZ 100, about 70 issues trading higher and 30 lower with INFY SNDK CHRW JOYG and KLAC acting best while ROST VRTX RIMM CELG and AMZN act the worst.

Checking the SPX 100, 70 are higher and 30 lower with TXN AA COP INTC and GS leading while LTD EP MMM MSFT DIS and ATI act the worst.

GOOG AAPL MS KLAC all green.

The opening pivot trade is looking good as the DJIA Futures are now trading +25 and about 10 below the pivot target. Also looks like the markets want to go higher.

HOLIDAY WEEK

As I power up, it appears that some of the selloff that occurred in the last few minutes of trade on Friday is being regained in the pre market.

The DJIA Futures are + 13, SP Futures+2 and NAZ +2.

The Pivot Point trade looks ripe today as the YM Pivot is a bit above the 12,450 level with support at 12,380 and resistance at 12,490. The high probability trade here is the touch of the YM DJIA pivot and a 20 point potential gain.

Also keep in mind that the markets are short term oversold here with the VIX/VXO short term overbought and about 8%/9% above their 10 day SMA's. The 2 day RSI on the major indexes is also way oversold with a reading of 6 on the SPX, 1 on the QQQQ and 6 on the DJIA.

The rule of thumb is that the major market indexes are buys when they trade above their 50 day SMA's and the 2 day RSI readings are below 10. Of course any market can and will go lower so scaling into these trades is generally the desired method.

And how bout those DBack's trying to trade for Randy Johnson. If I were Cashman, in a heartbeat, as Randy has lost most of his fastball and all his consistency.