Hey Mr. Market…SHAKE THIS! 4-10-06

Good Evening.

The NASDAQ is still suffering from the effects of Friday's reversal. The recent leaders such as BRCM, MRVL, GLW, CSCO, FFIV, and AAPL continue to struggle which is mostly a function of consolidation as opposed to anything more alarming. We say this warily due to the fact that we are very cognizant of how orderly sell offs in key names can sometimes morph into true ugliness, taking the entire market with them. Thus far there has been no technical damage or reasons to doubt that this market will attempt further meaningful upside in the days and weeks ahead. Phewww…that sentence had way too many double negatives so lets rephrase…ya gotta buy 'em here!

The Semiconductors continue to feel heavy which is further exasperating the profit taking in the 'good news names' such as the ones mentioned above. We continue to believe that the lack of preannouncements bodes well for earnings season in general. In fact we have indications that Large Cap technology companies are likely to deliver robust earnings over the next couple of weeks. This should be a perfect catalyst to draw funds into the Semiconductor space which will likely lead the NASDAQ to challenge its most recent highs and perhaps break out. That particular breakout should finally lead to the Bulls tripping over themselves to gain long exposure.

If You Held a Taser to Our Head:
The market is doing another fine and dandy job of shaking out the weak minded Bulls and offering another dose of false hope to the Bears. The timing is perfect as the 'wall of worry' is being rebuilt just in front of the slew of earnings starting this week. Your friendly neighborhood Kcap Team is nauseously staying long and strong, refusing to allow Mr. Market to shake us out. Should the earnings show early signs of disappointments we will reconsider, but for now we need to be in it to win it!

LETS GO SOX!!

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