Wanted: One More Up Day!

The Bears tried and tried but just couldn't do it. They wanted so badly to slap the Bulls around a little bit more but didn't seem to have enough gusto. Although they stopped the Bulls from running away into the close; the fact that the market breadth was so positive and technology held its bid is a feather in the hat for the Bulls. Note: Traders should not focus on the 65 or so point decline in the Dow Jones due to the fact that Caterpillar (CAT) and Pfizer (PFE) disproportionately skewed that average. All-in-all we slightly tip our hat to the Bulls for today's action, and are happy with slightly. Remember we outlined in our prior posts that the Bulls need to merely show sequential up days before the true fireworks ignite.

Today's options expiration made it difficult to tell the true intentions of the market for Monday. However, after the close the NASDAQ futures Spiked up on volume indicating that buyers are around. Those crafty Bulls were waiting for the options expiration to be completed before revealing some of their true intentions.

Next week we expect to see broad participation to the upside including the energy complex. The energy sector is so badly beaten down that at least a relief rally is likely. This will help the S&P 500 which in turn will instill confidence in the Bulls. Ultimately we expect the energy sector to meet resistance while the technology sector continues on its merry way.

If You Held a Taser to Our Head:
Your Friendly Neighborhood Kcap Team is continuing to bask in our slightly over 100% net long exposure. No one can say that Kcap is afraid to put their money where their mouth is. This exposure has served us very well recently as we are far outperforming the major averages. We even intend on adding positions in the Financial sector on dips next week. We strongly believe that next to the technology group Brokerages will be a wonderful upside play. These two groups feed off of each other during times of giddiness.

We have written many posts in this blog describing the power of rotation into technology. The cooling housing sector, backup in yields, and energy deterioration will all provide enormous liquidity searching for a place to reside. We strongly believe that the names we selected for our technology oriented portfolio have that "good 'ol feel" of home.

Next week should prove to be interesting.

Have a good weekend.

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