Bears Are Too Arrogant 10-11-05

Good Morning.

The stock market showed some good opening strength this morning but was quickly faded by overzealous Bears. Genentech (DNA) and Alcoa (AA) continue to perform well which is evidence that the Bulls are starting to get angry. Oil is up today and is actually helping the S&P 500 in a perverse way.

Overall when the Semiconductors can find a bid, which should be soon, we expect most underinvested Bulls and overzealous Bears to be caught off-guard. Therefore, we are adding a little more long exposure to our Merrill Lynch Semiconductor Holders (SMH) since the NASDAQ has retested last week's lows around the 2069 level. The NASDAQ is currently 2073 at the time of our additional purchases.

When the Bears act as cocky as this, it usually blows up in their face.

Hope You're Trading Well.

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