Bummer! 12-29-05

Good Evening.

The Bulls and your friendly neighborhood Kcap Team are highly disappointed over today's action. The Bear trap was beautifully laid throughout the week ready for the slightest bit of buying to create upward momentum. Unfortunately the Bulls continued to be overly polite to each other insisting that the other goes first. When the clock wound down and it became clear that the Bulls were lacking what it takes, the Bears were handed a nice opportunity to put on a little short trade in the futures. This of course further scared the Bovines leading them to pull the final few bids hanging under the surface. Without much effort the Bears were able to Cliff the market and breach yesterday's lows.

The good news is…FUGEDABOUDIT there is no good news! Unless you want to get excited over the potential short covering that will take place as today's Bears have to eventually unwind. Ultimately we are still expecting at least an oversold bounce to materialize in the next few days. NASDAQ 2250 - 2260 is still an attainable target before a more serious decline hits the market.

Perhaps it was too much for Fund Managers to ask for (this so called Year-End Rally) to put a little icing on performance numbers. Nonetheless, we firmly believe that Mr. Market cannot suppress his short-term oversold condition too much longer before he needs to relieve himself! Bummer for Fund Managers that it looks more likely to materialize next week as opposed to this week.

If You Held a Taser To Our Head:
In light of today's market performance we have absolutely no idea what to expect for tomorrow. However, we do plan on maintaining significant long exposure until this oversold condition is relieved. Maybe Santa has brought us the virtue of patience as his ultimate present.

See you tomorrow.

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