2-13-06 The Dove's May Fly Soon.

Good Evening.

The market is still holding around the low end of the trading range. A little panicky rinse would go a long way as long as the market were to close strong. We almost had that occurrence on Friday but the Bulls were unable to follow through today.

Despite the market sell off today, volume was light and breadth continued to be a disappointing (but not atrocious) 2:1 negative. Finally some of the big boys like CSCO were getting shot at. When the leaders and best fundamental stocks finally give up, the end of the market decline is near. Maybe those gun shots were actually from Dick Cheney…can you believe it? Bush crashes his bicycle several times, Dick Cheney shoots his 85 year old friend…maybe Rumsfeld will poke them both in the eyes and we'll all have a new episode of the Three Stooges! On a side note: Do you think Cheney will simply give up killing innocent animals? Not a chance, he can't help himself from being an arrogant, moronic bully (hey…it's our blog).

We continue to slowly scale into more long side exposure. Patience, you must have patience; we keep telling ourselves. The last easy buying opportunity that the market will see for several months is taking shape. We currently have a very diversified portfolio with a slight overweight in Large Cap Technology, which we expect will lead a broad short term rally.

The hedge funds that are outperforming year to date and also capitalize on the next sharp rally will be extremely well positioned for when the real blood letting takes place in the market. Frankly a number of our readers feel that this particular Bullish trading call of ours will be wrong and may have already happened when the NASDAQ rallied to 2284. They are urging us to declare victory and get back into our Bear costume. Apparently we have created a lot of anxiety over our NASDAQ 2150 intermediate term Bearish target.

We acknowledge that this new long side trade is somewhat "cute" but feel that the upside is too juicy to ignore. We expect it to be fast and furious and worth the wait. Our very attractive lead over the major averages has placed us in a position to seek out opportunities that others cannot afford to take. We like the current risk vs. reward ratio in the market as well as for ourselves and are willing to be patient.

If You Held a Taser to Our Head:
Ben Bernanke will be speaking to Congress Wednesday morning. It is quite probable that the market will trade up tomorrow in anticipation of a little Love From a Dove.

We will not be posting tomorrow but will return on Wednesday.

Hope you traded well.

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