Still a Bear with Horns. 1-30-06

Good Evening.

Performance anxiety still rules the roost as the Bears displayed anemic intraday action. The dips were as potent as sour cream and Bulls wasted no time in containing the Bears. Small Caps continued to show signs of recent tiring but are doing so on decreasing volume…a good thing, no? Trani's were up 1% today and the VIX is still showing levels of slight disbelief in the recent rally. Breadth was slightly negative, which is no problemo during a consolidation day. There were over 500 new highs and only 39 new lows which is certainly impressive. Keep in mind tomorrow will be action packed commencing in the afternoon yet the morning will be slower than old people getting out of bed.

When Greenspan sings his swan song, we expect one more hike from the Master. The statement should offer very little variance from the previous one, essentially emphasizing the data dependency going forward for the Fed.

After the Bell Google (GOOG) will report a great GOOGLE-ISH number. Therefore, the after hour activity will be more volatile than usual. By 6pm tomorrow night Traders will be completely "Bushed", speaking of which…there's always the State of The Union Address from our articulate President Tuesday evening. Plenty of things to chew your nails over between now and then.

We have been playing the alternative energy sector recently and have specifically done well with SunPower (SPWR). Our intention is to lighten up in the complex by 4pm tomorrow, due to our expectations that Bush will highlight this group (buy the rumor, sell the news).

Have you noticed that Broadcom (BRCM) and Marvell (MRVL) are finally starting to lag? Jim Cramer ignited these two a few weeks ago and they have been "en fuego" ever since. We are waiting for much more attractive entry points before we pounce.

Over the last few weeks we have also been building a position in Clorox (CLX). This is our low risk methodology to play the better than expected sales to come from iRobot (IRBT) with their new product Scooba. Essentially Scooba only works with CLX cleaning solution.

We have also been doing well with our position in Gold Mining Stocks. We continue to believe that dips should be bought in this complex despite the very extended looking charts. However, this is more of an investment thesis for 2006 versus a trade.

If You Held a Taser To Our Head:
We continue to maintain a fully invested portfolio and will likely do so going into the Fed's meeting. Other than a few minor trims here and there we are staying the course in this uncomfortable position of fading our own Bearish views. In other words we fully expect to take a one day hit before we get out but only after we rack up a little more grape juice for the kids.

Hope you're doing well. See you tomorrow.

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