"Politics is Show Business for Ugly People" (Jay Leno) 1-31-06

Good Afternoon.

You can talk about double tops, you can think about head and shoulders, you can worry about geopolitical concerns and the high price of oil, you can sweat over the Fed, Google (GOOG) and Bush, and you can get nauseous over the unemployment report on Friday, but the Market just doesn't want to roll over at this time. That does not mean it won't, it simply means that Kcap will not act on our Bearish views until we actually see some carnage. This does not mean that we will prosper with our new found Brass Balls; it is simply a matter of choice considering our current position relative to our peers. We are stronger than most year-to-date and choose to make a little bit of our own luck.

Do not kid yourself, despite what anyone on Wall St. will tell you, a portion of this game involves pure luck. The difference between success and failure is often defined by when people choose to "go for it". Without an edge and only a wall of worry to climb your friendly neighborhood Kcap Team chooses the "no pain no gain" scenario at this time. If we are right we will have even more stellar returns for 2006 in short order. If we are wrong we will remove significant exposure on the second day of a hit leaving us still most likely well ahead of the averages. People that find this tactic too risky should not be in the business for they have not learned how to "make your own luck" and press their advantage when they have it.

You can dream about getting wealthy by winning the lottery but unless you occasionally buy a ticket it's just not going to happen. The key is knowing when to exercise self control and not blow your entire paycheck on lotto.

We believe the Fed will raise rates 1/4% as well as keep the "measured pace" language and other most recent statements in place. Fed Funds rate will be at 4.5% which is arguably neutrality. This is not a time for Greenspan to shake things up too much which could risk tumultuous markets just as his friend Ben takes the reigns. Therefore, should the Fed deliver a relatively similar report as last time, the market would likely consider it somewhat friendly. The December '05 Fed meeting created a sell the news reaction last time around and it is unlikely that history will repeat itself so neatly.

All eyes will be on GOOG after the bell. We expect a blowout report, largely demonstrating its market share gains from rivals such as Yahoo (YHOO). This would help explain some of YHOO's lackluster performance on their most recent report. GOOG has lost much of its luster recently yet is not terribly extended going into Tuesday's earnings. This should at least stabilize the stock as well as other speculative names in the NASDAQ.

Tonight we will watch President Bush speak on and on about Freedom and health savings accounts. We will watch the TV camera focus in on Chief Justice Roberts and wait for commentary how his robe is lacking the gold stripes of Rehnquist. We will watch the clowns stand up and down on both sides of the isle as they try to brainwash the American public of their own agenda. It is an embarrassing show and rather insulting to watch, but for some reason it is still must see TV.

This will be our last post for today as well as the rest of the week. Although we will be actively managing our portfolio's we will let you know our views on Monday. Short term traders who can't "live without" Kcap need to assess their own current risk v. reward capability especially if they have no edge in the near term market action saturated with market moving catalysts. We are playing for potential near term upside because we can afford to. Longer term players already know our intermediate term Bearish views and may want to take defensive action into short term strength.

Have a good week. See you on Monday.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________

Click Here To E-mail Comments