Bernard's Paper Trades (PAPER)

[Bernard Ng]

Dollar weakness generally helps to increase most commodity prices given that non-U.S. dollar denominated countries account for just over half of total demand for key commodities such as copper and aluminum.

[bbgold]

DJX March 111 Puts at 1.10
Speculation with NDX/SOX/TRAN failing support

[bbgold]

Yes, CME another good mover
The premiums are just too high early in the month.
If I am not busy next expiration week will take a look again at both. Just papertrading of course.
Have a Wonderful Weekend!

[Bernard Ng]

I think it's still good to trade it. Daytrading it has been great as well. You might also want to look at CME's options.

[bbgold]

GOOG volatile the last 2 months
There were a lot of possibilities. Not sure if it stays volatile or just consolidates here a while now? Might take a look again next expiration week to see if the Mar premiums are beaten down at all
Good Trading!
OPTION CHAIN FOR GOOGLE INC
CALLS PUTS
Hide February, 2006 Options
Symbol Last Change Vol Bid Ask Open Int. StrikePrice Symbol Last Change Vol Bid Ask Open Int.
GOUBJ 120.00 +12.60 681.00 118.30 119.10 250.00 GOUNJ 0.05 83.00 0.05 0.05
GOUBL 109.00 +4.00 11.00 108.20 109.10 260.00 GOUNL 0.05 -0.02 12.00 0.05 0.05
GOUBN 100.80 +28.60 1.00 98.30 99.10 270.00 GOUNN 0.05 -0.03 47.00 0.05 0.05
GGDBP 76.80 +14.80 26.00 88.30 89.10 280.00 GGDNP 0.05 20.00 0.05 0.15
GGDBR 66.80 +13.30 34.00 78.30 79.10 290.00 GGDNR 0.05 61.00 0.10 0.05
GGDBT 69.00 +2.40 141.00 68.30 69.10 300.00 GGDNT 0.05 -0.15 34.00 0.05 0.15
GGDBB 58.80 +6.60 42.00 58.20 59.10 310.00 GGDNB 0.05 -0.30 1,652.00 0.05 0.15
GGDBD 49.50 +4.40 140.00 48.30 49.10 320.00 GGDND 0.05 -0.05 657.00 0.05 0.05
GGDBF 38.90 +1.90 272.00 38.30 39.10 330.00 GGDNF 0.05 -0.05 413.00 0.05 0.05
GGDBH 28.40 +1.30 2,007.00 28.30 29.00 340.00 GGDNH 0.05 -0.15 2,005.00 0.05 0.05
GGDBJ 19.00 +2.20 8,365.00 18.30 19.00 350.00 GGDNJ 0.05 -0.45 12,044.00 0.05 0.05
GGDBL 8.50 +0.50 22,707.00 8.30 8.50 360.00 GGDNL 0.05 -1.55 29,764.00 0.05 0.05
368.75 Last as of 2/17/2006
GGDBN 0.05 -2.70 88,140.00 0.05 0.10 370.00 GGDNN 1.50 -4.60 53,552.00 1.25 1.30
GOPBP 0.05 -0.85 28,331.00 0.05 0.05 380.00 GOPNP 11.70 -2.70 3,792.00 11.10 11.70
GOPBR 0.05 -0.30 7,191.00 0.05 0.05 390.00 GOPNR 21.60 -2.40 2,417.00 21.20 21.40
GOPBT 0.05 -0.10 3,354.00 0.05 0.05 400.00 GOPNT 31.00 -2.50 714.00 31.00 31.50
GOPBB 0.05 362.00 0.05 0.05 410.00 GOPNB 40.30 -5.50 178.00 41.00 41.80
GOPBD 0.05 +0.10 71.00 0.05 0.10 420.00 GOPND 51.00 -2.70 170.00 50.90 51.80
GOPBF 0.05 +0.05 3.00 0.05 0.05 430.00 GOPNF 60.80 -2.80 84.00 60.90 61.80
GOPBH 0.05 -0.05 24.00 0.05 0.05 440.00 GOPNH 71.00 -2.60 5.00 70.90 71.80
GOPBJ 0.05 -0.05 6.00 0.05 0.05 450.00 GOPNJ 79.00 -4.60 14.00 80.90 81.80
GOPBL 0.05 30.00 0.05 0.05 460.00 GOPNL 102.00 -15.90 31.00 90.90 91.80
GOPBG 0.05 12.00 0.05 0.05 470.00 GOPNG 100.80 -27.10 15.00 100.90 101.80
GOPBI 0.05 5.00 0.05 0.05 480.00 GOPNI 137.00 151.00 110.90 111.80
GOPBK 0.05 1.00 0.05 0.05 490.00 GOPNK 122.60 -11.20 10.00 120.90 121.80
GOPBO 0.05 -0.05 1,008.00 0.05 0.05 500.00 GOPNO 129.10 -16.30 10.00 130.90 131.80
GOPBU 0.05 -0.05 15.00 0.05 0.05 510.00 GOPNU 170.40 +28.40 20.00 140.90 141.80
GOPBV 0.05 10.00 0.05 0.05 520.00 GOPNV 180.40 +3.40 10.00 150.90 151.80
GOPBW 0.05 5.00 0.05 0.05 530.00 GOPNW 162.00 +17.20 289.00 160.90 161.80
GOPBX 0.05 -0.05 10.00 0.05 0.05 540.00 GOPNX 182.00 -15.60 4.00 170.90 171.80
GOPBY 0.05 -0.05 4.00 0.05 0.05 550.00 GOPNY 204.70 +16.70 11.00 180.90 181.80
GOPBZ 0.05 -0.05 11.00 0.05 0.05 560.00 GOPNZ 191.00 -2.50 26.00 190.90 191.80
GOPBQ 0.05 1,002.00 0.05 0.05 570.00 GOPNQ 202.20 -6.10 10.00 200.90 201.70
GOOBP 0.05 110.00 0.05 0.05 580.00 GOONP 227.30 -12.90 20.00 210.90 211.70
GOOBR 0.05 10.00 0.05 0.05 590.00 GOONR 235.40 -10.60 17.00 220.90 221.80
GOOBT 0.05 -0.55 35.00 0.05 0.05 600.00 GOONT 241.40 -13.30 13.00 230.90 231.80
GOOBB 0.05 -0.50 20.00 0.05 0.05 610.00 GOONB 240.90 -12.90 20.00 240.90 241.70
GOOBD 0.05 -0.40 80.00 0.05 0.05 620.00 GOOND 251.30 -22.00 11.00 250.90 251.80
GOOBF 0.05 -0.30 30.00 0.10 0.05 630.00 GOONF 260.90 -13.20 20.00 260.90 261.80
GOOBH 0.05 -0.25 100.00 0.05 0.05 640.00 GOONH 273.10 -20.20 10.00 270.90 271.80
GOOBJ 0.05 -0.25 40.00 0.05 0.05 650.00 GOONJ 282.20 -10.50 10.00 280.90 281.80
GOOBL 0.05 -0.30 138.00 0.05 0.05 660.00 GOONL 290.20 -12.50 32.00 290.90 291.80
GOOBN 0.05 -0.15 100.00 0.05 0.05 670.00 GOONN 299.60 -14.20 20.00 300.90 301.80

[Bernard Ng]

The first trading day of Google's options after the delta hedging options expiry Friday in January.

Symbol	Last	Change	Vol	Bid	Ask	Open Int.	StrikePrice	Symbol	Last	Change	Vol	Bid	Ask	Open Int.	 
 GOUBJ	176.60	+20.60	31.00	178.20	179.10		250.00	GOUNJ	0.25	-0.05	229.00	0.15	0.25		 
 GOUBL	168.20	+21.70	4.00	168.20	169.20		260.00	GOUNL	0.35	+0.10	167.00	0.25	0.35		 
 GOUBN	153.10	+20.95	24.00	158.40	159.30		270.00	GOUNN	0.45	-0.05	193.00	0.30	0.45		 
 GGDBP	117.00	-38.70	52.00	148.50	149.50		280.00	GGDNP	0.55	-0.05	673.00	0.40	0.60		 
 GGDBR	131.00	+18.76	4.00	138.70	139.60		290.00	GGDNR	0.70	-0.35	1,953.00	0.50	0.70		 
 GGDBT	129.20	+30.90	23.00	128.90	129.90		300.00	GGDNT	0.85	-0.70	4,934.00	0.80	0.85		 
 GGDBB	116.00	+23.10	59.00	119.30	120.20		310.00	GGDNB	1.25	-0.75	854.00	1.10	1.25		 
 GGDBD	104.60	+20.00	51.00	109.70	110.60		320.00	GGDND	1.55	-1.55	2,807.00	1.50	1.60		 
 GGDBF	93.90	+19.90	23.00	100.30	101.20		330.00	GGDNF	2.00	-1.90	3,098.00	1.85	2.05		 
 GGDBH	90.80	+23.60	21.00	91.10	91.90		340.00	GGDNH	2.70	-3.00	1,951.00	2.70	2.80		 
 GGDBJ	83.00	+23.50	274.00	82.00	82.90		350.00	GGDNJ	3.80	-4.00	2,890.00	3.70	3.80		 
 GGDBL	68.90	+17.40	264.00	73.40	74.20		360.00	GGDNL	4.90	-5.40	3,523.00	4.70	4.90		 
 GGDBN	66.00	+21.20	916.00	65.00	65.80		370.00	GGDNN	6.60	-6.90	1,955.00	6.50	6.80		 
 GOPBP	57.90	+19.60	1,419.00	57.00	57.80	380.00	GOPNP	8.30	-8.70	3,304.00	8.30	8.50		 
 GOPBR	50.30	+17.10	1,301.00	49.60	50.30	390.00	GOPNR	10.91	-11.09	3,014.00	11.00	11.20		 
 GOPBT	42.70	+14.70	6,784.00	42.70	43.40	400.00	GOPNT	13.70	-13.30	6,907.00	13.90	14.20		 
 GOPBB	36.40	+12.60	8,610.00	36.30	37.00	410.00	GOPNB	19.60	-13.50	6,647.00	17.50	17.90		 
 GOPBD	30.60	+11.10	12,644.00	30.60	31.00	420.00	GOPND	22.00	-17.40	3,632.00	21.90	22.00		 
 			427.50	+28.0398 	Last as of 1/23/2006	 
 GOPBF	25.90	+9.80	9,479.00	25.70	25.90	430.00	GOPNF	26.50	-19.50	2,014.00	26.50	26.90		 
 GOPBH	21.40	+7.70	5,867.00	21.20	21.40	440.00	GOPNH	32.00	-20.50	1,530.00	32.00	32.50		 
 GOPBJ	17.20	+5.30	10,168.00	17.40	17.50	450.00	GOPNJ	39.00	-20.60	629.00	38.10	38.70		 
 GOPBL	14.20	+4.30	8,730.00	14.00	14.20	460.00	GOPNL	45.00	-22.80	412.00	44.70	45.40		 
 GOPBG	11.40	+3.50	4,952.00	11.20	11.40	470.00	GOPNG	57.40	-18.70	169.00	51.90	52.60		 
 GOPBI	8.80	+2.30	2,574.00	8.80	9.10	480.00	GOPNI	60.50	-24.30	111.00	59.70	60.40		 
 GOPBK	7.40	+1.70	6,993.00	6.90	7.30	490.00	GOPNK	68.40	-25.20	73.00	67.80	68.50		 
 GOPBO	5.80	+1.40	7,793.00	5.60	5.80	500.00	GOPNO	76.10	-27.70	131.00	76.40	77.00		 
 GOPBU	4.40	+0.40	1,846.00	4.30	4.50	510.00	GOPNU	88.12	-23.98	79.00	85.20	86.00		 
 GOPBV	3.60	+0.30	1,333.00	3.30	3.70	520.00	GOPNV	104.50	-17.00	38.00	94.30	95.30		 
 GOPBW	2.65	-0.10	1,246.00	2.60	3.00	530.00	GOPNW	109.30	-15.60	10.00	103.60	104.60		 
 GOPBX	2.25	-0.25	1,788.00	2.10	2.25	540.00	GOPNX	119.30	-17.80	2.00	113.10	114.00		 
 GOPBY	1.75	-0.15	1,188.00	1.65	1.80	550.00	GOPNY	128.00	-20.70	25.00	122.70	123.60		 
 GOPBZ	1.40	-0.35	259.00	1.30	1.50		560.00	GOPNZ	138.00	-20.40	54.00	132.40	133.30		 
 GOPBQ	1.20	-0.06	1,492.00	1.00	1.25	570.00	GOPNQ	143.50	-24.80	40.00	142.20	143.10		 
 GOOBP	0.85	-0.20	1,367.00	0.80	1.00	580.00	GOONP	158.30	-15.00	15.00	152.00	153.00		 
 GOOBR	0.75	-0.15	613.00	0.65	0.80		590.00	GOONR	187.00	+41.90	1.00	162.00	162.90		 
 GOOBT	0.65	-0.15	2,982.00	0.50	0.70	600.00	GOONT	189.40	-13.50	11.00	171.90	172.80		 
 GOOBB	0.50	-0.10	277.00	0.40	0.55		610.00	GOONB	192.40	+32.50	21.00	181.90	182.70		 
 GOOBD	0.45	-0.05	705.00	0.40	0.45		620.00	GOOND	201.90	+20.00	10.00	191.90	192.80		 
 GOOBF	0.25	-0.20	378.00	0.25	0.40		630.00	GOONF	182.80	+20.70	21.00	201.90	202.80		 
 GOOBH	0.25	-0.15	77.00	0.20	0.30		640.00	GOONH	220.70	+18.20	2.00	211.90	212.80		 
 GOOBJ	0.30	-0.10	169.00	0.20	0.30		650.00	GOONJ	223.60	-18.60	42.00	221.90	222.80		 
 GOOBL	0.20	-0.15	434.00	0.20	0.25		660.00	GOONL	214.90	+19.10	32.00	231.90	232.80		 
 GOOBN	0.10	-0.15	1,275.00	0.15	0.25	670.00	GOONN	252.00	-11.10	1.00	241.90	242.70

[Bernard Ng]

MSCI iShares, for the stronger indexes the year, it's better to buy them in December. For the weaker indexes, becareful of a sudden gap down in the last two weeks of the year. These weaker indexes will also pop right back on the first trading day/week of the new year.

[Bernard Ng]

Seven ETFs to watch in 2006

http://custom.marketwatch.com/custom/excite-com/news-story.asp?guid={5CAA13FA-E77C-4B75-8936-7AF4928...

Focus on gold, financials, energy, emerging markets
By John Spence, MarketWatch
Last Update: 12:03 AM ET Jan 2, 2006

BOSTON (MarketWatch) -- Exchange-traded funds concentrated on energy and emerging-markets stocks took the spotlight in 2005, but ETFs focused on out-of-favor sectors may light up 2006.

Large-cap growth funds and technology funds gathered momentum going into the new year, and will be among the most closely watched ETFs in 2006.

Investors will also likely focus on ETFs -- baskets of securities which trade on exchanges like stocks -- that track financials, homebuilders and gold, along with a controversial new fund that favors companies based on fundamentals instead of market valuation.

Here are seven ETFs to watch in the new year:

Energy Select Sector SPDR

Given the surge in crude oil prices, Energy Select SPDR (XLE: news) not surprisingly was among the top-performing ETFs in 2005, gaining 39.6% through Dec. 29, according to investment researcher Morningstar Inc.

Top holdings include Exxon Mobil Corp. (XOM: news) , Chevron Corp. (CVX: news) and ConocoPhillips (COP: news) . A cold winter could be a boon for this ETF if heating costs rise, and investors will monitor OPEC's oil output and how quickly the damaged Gulf Coast facilities come back online.

Other energy ETFs to consider: iShares Dow Jones U.S. Energy (IYE: news) , Oil Service HOLDRS (OIH: news) and Vanguard Energy Vipers (VDE: news) and PowerShares Dynamic Energy Exploration & Production (PXE: news) .

iShares S&P 500 Growth

Last year, many analysts called for large-growth companies to lead the market after trailing smaller value stocks for years, but the transition didn't materialize.

iShares S&P 500 Growth (IVW: news) rose 4.6% through Dec. 29 according to Morningstar, while iShares S&P SmallCap 600 (IJS: news) gained 6.7% for the same period.

"Given the way large-growth stocks have lagged the rest of the market in recent years, one might expect ETFs focused on them . . . to look relatively undervalued," wrote Dan Culloton, Morningstar senior fund analyst, in recent commentary posted on the firm's Web site.

Yet Culloton notes the funds "actually are mixed bags valuation-wise," with Microsoft Corp. (MSFT: news) , Boston Scientific Corp. (BSX: news) and Dell Inc. (DELL: news) looking attractively priced.

On the other hand, Google Inc. (GOOG: news) , UnitedHealth Group Inc. (UNH: news) and oil-services firm Schlumberger Limited (SLB: news) appear richly valued, Culloton added.

The index for the iShares S&P 500 Growth ETF recently overhauled its investment process, and Barclays Global Investors says it has already rebalanced the fund to reflect the benchmark change. See ETF Focus.

Competing large-cap growth ETFs include iShares Morningstar Large Growth (JKE: news) , iShares Russell 1000 Growth (IWF: news) , PowerShares Dynamic Large Cap Growth (PWB: news) , StreetTracks Dow Jones Wilshire Large Cap Growth (ELG: news) and Vanguard Growth Vipers (VUG: news) .

PowerShares Dynamic Building & Construction Portfolio

ETFs focusing on the homebuilding sector may be late to the party. In late October, the PowerShares Dynamic Building & Construction Portfolio ETF (PKB: news) began trading.

If the housing market deflates in 2006 after a multi-year run and momentum investors seek other shelter, this fund could take a hit. Aside from homebuilders, the PowerShares ETF also holds stocks from related industries such as home-improvement retailers such as Home Depot Inc. (HD: news) and Lowe's Companies Inc. (LOW: news) .

State Street Global Advisors and Barclays Global Investors have also filed ETFs focusing on homebuilder stocks that will likely start trading in 2006, although investors may want to approach these trendy offerings with caution. See ETF Investing.

StreetTracks Gold Trust

The warm reception of gold ETFs was one of the big investment stories of 2005.

Launched in Nov. 2004, the StreetTracks Gold Trust (GLD: news) has amassed $4 billion in one of the most successful fund launches ever. The iShares Comex Gold Trust, which began trading in January, has gathered $361.9 million.

The StreetTracks Gold Trust has performed well, gaining 14.5% in the year, with gold futures recently topping $500 for the first time since 1987. While gold ETFs can be used as an inflation hedge in small doses, gold is notoriously volatile and these funds could see big price swings.

Financial Select Sector SPDR

There are mixed signals here. An inverted yield curve isn't a good sign for banks that borrow money at short-term rates and lend at long-term rates in the so-called carry trade. That could hit broad financials ETFs such as Financial Select Sector SPDR (XLF: news) , iShares Dow Jones U.S. Financial Sector (IYF: news) and Vanguard Financial Vipers (VFH: news) .

However, some analysts are positive on the sector for 2006.

"Managers believe the economy is growing and expect the Fed tightening cycle to end soon -- setting the stage for the financial services sector to prosper," said Randy Lert, chief portfolio strategist at Russell Investment Group, in recent commentary.

"Managers may also be expecting strong performances by investment banks and financial institutions that specialize in regional mortgages," Lert added.

iShares MSCI Emerging Markets

Emerging markets funds soaked up cash in 2005, with U.S. investors looking overseas for growth, and $10 billion iShares MSCI Emerging Markets (EEM: news) was a popular ETF choice for inexpensive, diversified exposure.

The fund rose 32.7% in the year, buoyed by dollar weakness relative to foreign currencies. Highflying stock markets in Latin America and Asia have generated much of the steam.

Recognizing cheaper stock valuations than U.S. markets offer, investors piled into hot-performing emerging markets, but some analysts are worried about a cooling-off period in 2006.

Other emerging markets ETFs include BLDRS Emerging Markets 50 ADR (ADRE: news) , which invests in the American Depository Receipts of foreign companies, and Vanguard Emerging Markets Vipers (VWO: news) . Many financial advisers recommend a small allocation to emerging-markets funds -- usually 5% of portfolio assets and typically no more than about 10%.

PowerShares FTSE RAFI U.S. 1000 (PRF)

ETF upstart PowerShares Capital Management made headlines in 2005 by launching ETFs at a furious clip, but none could be more closely watched than one introduced at the end of the year.

Building on its "enhanced index" strategies, the firm rolled out an ETF based on "fundamental" indexing strategies developed by investment manager Robert Arnott. The PowerShares FTSE RAFI U.S. 1000 Portfolio (PRF: news) is listed on the New York Stock Exchange, which itself is trying to beef up its ETF business.

Rather than positioning companies by market capitalization, like most traditional indexes, the Research Affiliates Fundamental Index (RAFI) series weight stocks by fundamental factors such as cash flow, dividends, book value and sales. See ETF Focus.

In his research, Arnott contends that his indexing strategy outperforms conventional benchmarks because it doesn't lean towards companies that have enjoyed significant share-price appreciation. Investors will watch to see if what has worked in theory can perform in reality.

Seven ETFs to watch in 2006
Energy Select Sector SPDR (XLE: news) 39.6%
iShares S&P 500 Growth (IVW: news) 4.6%
PowerShares Dynamic Building & Construction Portfolio (PKB: news) n/a
StreetTracks Gold Trust (GLD: news) 17.5%
Financial Select Sector SPDR (XLF: news) 6.8%
iShares MSCI Emerging Markets (EEM: news) 32.7%
PowerShares FTSE RAFI U.S. 1000 (PRF: news) n/a

Source: Morningstar Inc. Year-to-date returns through Dec. 29 close. Data not shown for ETFs launched after Jan. 1, 2005.

John Spence is a reporter for MarketWatch in Boston.

[Bernard Ng]

What Happens When the Fed is Finished?

http://www.hussman.net/wmc/wmc051219.htm

John P. Hussman, Ph.D.
All rights reserved and actively enforced.

With the S&P 500 at 19 times peak earnings - a level which has rarely delivered satisfactory long-term returns - investors are looking for a "story" to support continued bullishness. After all, the holiday seasonality argument is a bit long in the tooth.

So attention has turned to the prospect that the Fed has finished, or is just about to finish, its tightening cycle. Isn't that alone a great reason for bullishness here?

Well, not so fast. As it happens, there have been 13 tightening cycles since 1950 where the Fed has raised rates at least twice. In the six month period following the last hike of the cycle, the S&P 500 has delivered annualized total returns averaging 2.47% over the following 6 months, 5.06% over the following year, and 8.55% over the following 18 months. All figures are on a monthly closing basis.

In other words, the market's return has actually been sub-par for a reasonably long period following the final hike of a rate tightening cycle. Now, if we look ahead to the first cut of a new easing cycle, things are definitely more interesting. Historically, the Fed tends to start new easing cycles well into established bear markets, and not surprisingly, the subsequent returns have been quite good on average. Following the first cut of a new easing cycle, the S&P 500 has delivered annualized total returns averaging 23.01% over the following 6 months, 21.18% over the following 12 months, and 22.12% over the following 18 months.

Well then, all we've got to do is wait for the first sign of slight concern. Surely Bernanke will give the market a little jolt by easing rates a bit, don't you think? Then we've got it made. And if we know now that we'll have it made then, why not just stay bullish?

Unfortunately, it's not that simple either. In fact, if you parse the statistics based on the starting level of valuation when the last hike or the first cut was made, something profound happens. The results line up decidedly along valuation lines.

For example, about half the Fed reversals from tightening to easing have historically occurred from price/peak earnings multiples of 12 or less on the S&P 500. Even if you look at the periods following the final tightening, you can already see the impact of favorable valuations. In this situation, the S&P 500 has delivered annualized total returns averaging 6.41% over the following 6 months, 8.92% over the following 12 months, and 11.62% over the following 18 months. Note the improvement over the "unconditional" average outcomes (2.47%, 5.06% and 8.55% respectively).

But there's more. If you look at the first rate cut when the price/peak earnings multiple on the S&P 500 has been 12 or less, the market has historically responded with annualized total returns averaging 38.43% over the following 6 months, 30.95% over the following year, and 31.91% over the following 18 months. Those aren't even typos.

From the standpoint of our own discipline, it's not surprising that when favorable valuation meets favorable market action (even if you restrict market action to Fed-controlled rates only), you get some amazingly strong outcomes.

There is, of course, a flipside to that story. If you look at periods where the price/peak earnings multiple was 16 or higher on the S&P 500, the final rate hike of a tightening cycle was actually associated with losses on an annualized total return basis, averaging -7.18% over the following 6 months, -9.94% over the following 12 months, and -5.87% over the following 18 months. Given the current multiple of 19 times peak earnings on the S&P 500, this would be the relevant set of comparisons even if the latest rate hike was the final one (an apparent hope of some analysts, which runs counter to the Fed's language last week, where it noted "The Committee judges that some further measured policy firming is likely to be needed.")

Still, isn't it just a matter of waiting for the first cut? Unfortunately, again the outcomes parse out on the unfavorable side. From a starting multiple of 16 or higher, the market's performance even after the first rate cut has been invariably tepid, with the S&P 500 achieving annualized total returns averaging -3.63% over the following 6 months, 5.47% over the following year, and 5.52% annualized over the following 18 months.

Suffice it to say that the hopes that a turn in Fed policy will be bullish for stocks, at these valuations, aren't all they're cracked up to be.

Market Climate

As of last week, the Market Climate for stocks continued to be characterized by unusually unfavorable valuations and unfavorable market action. It's important to recognize that our measures of market action have much more to do with broad market internals, spread behavior, price/volume action and industry and security group dispersion than they have to do with simple observation of the major indices. I neither attempt, nor believe it is possible, to "time" and "forecast" short term movements in the major indices with any reliability. The objective of our hedging is much more humble, but I think, very effective over the long run. That objective is to accept market risk in conditions that have generally been associated with high or at least acceptable average return/risk tradeoffs, and to avoid or hedge away market risk in conditions that have generally produced hostile tradeoffs, on average.

As a rule, once you've established a sufficiently diversified portfolio (if you haven't, the first step in risk management is to shut down your diversifiable risk), it's then optimal to vary your exposure to market risk more or less proportionally with the market's expected return/risk ratio. At present, the Strategic Growth Fund is fully hedged. Not net short (it never is), but fully hedged.

Though I've been asked by several journalists, I continue to decline the opportunity to provide a "2006 forecast" for stocks. It's fair to say that I adhere to a general thesis that rich valuations tend to mute investment outcomes more often than not, and rich valuations coupled with unfavorable market action (assuming it continues unfavorable) is downright hostile. But as for forecasts, especially short-term ones, I have no idea. We'll align our investment position with the prevailing Market Climate and shift that position when sufficient evidence of a Climate shift emerges.

In bonds, the Market Climate continues to be characterized by unfavorable valuations and unfavorable market action, holding the Strategic Total Return Fund to a short 2-year duration, mostly in Treasury Inflation Protected Securities. The Fund also continues to hold somewhat less than 20% of assets in precious metals shares, and about 5% of assets in foreign currency denominated notes, primarily the Japanese Yen.

Peace, Love, Hope

And he took the child Jesus in his arms and praised God. - Luke 2:28

Merry Christmas.

Wishing you also a Happy Hanukkah, and a glad, hopeful New Year. With gratitude and appreciation, not only for your investment, but most importantly, for your trust, and for those of you I know personally, your friendship.

- John

[Bernard Ng]

Chicago Merc ready for exchange consolidation, CEO says

I like this industry...


Futures exchange has lots of capital but will be cautious
By Alistair Barr, MarketWatch
Last Update: 9:32 AM ET Dec 9, 2005

SAN FRANCISCO (MarketWatch) - Bolstered by surging derivatives trading volume and a soaring stock price, the Chicago Mercantile Exchange is ready to lead a likely wave of consolidation, Chief Executive Craig Donohue said in an interview this month.

Surging derivatives trading volume has propelled earnings at the CME, the world's largest futures exchange, in recent years, leaving it with what one analyst expects will be $1 billion in cash by this time next year.

The company's shares have followed a similarly stratospheric path: Since its initial public offering three years ago Chicago Mercantile Exchange stock (CME: news) has gained 10 fold and now trades above $350.

That leaves the exchange with two hefty sources of financial strength to acquire rivals in what is still a fragmented industry. There are more than 60 derivatives and futures exchanges globally, according to research by Credit Suisse First Boston, an investment bank. (See the table at the end of this story for the top 10.)

"We've worked very hard to position the company for success in this consolidating environment and to effect consolidation," Donohue said. "We certainly don't need the amount of capital we have just to reinvest in our current operations."

The executive wouldn't identify specific targets and struck a cautious note: Acquisitions will focus on cost savings that could be wrung out of combining infrastructure, rather than "more speculative revenue based transactions."

Still, Donohue said powerful forces are driving consolidation that should favor the largest exchanges over smaller rivals.

"The industry will look quite different in five years," he predicted. "We won't have as many as exchanges as we presently do."

Influential financial market intermediaries, such as investment banks and brokers, face pressure on commissions as institutional investors seek cheaper ways to trade, Donohue said.

In this environment, intermediaries want to deal with fewer exchanges, while institutions will gravitate to the largest exchanges because they'll have the ability to cut costs more and bring together a larger pool of buyers and sellers, he explained.

"In the past 15 years there have been lots of small startup operations, but large intermediaries won't direct capital and trading flows to smaller exchanges anymore," he said.

CBOT combination?

CME shares jumped in June on speculation that it was close to acquiring cross-town rival the Chicago Board of Trade (BOT: news) ahead of that exchange's planned IPO. See full story.

No deal materialized though, and CBOT shares debuted on the New York Stock Exchange in October, but expectations of an acquisition by CME still linger.

"A CME/CBOT combination would look pretty compelling," Howard Chen, an analyst at CSFB, wrote in a Nov. 28 note to investors.

The exchanges don't compete much on products, but would have "tremendous" opportunities to develop new products together, Chen said. CBOT also already uses CME's clearinghouse to guarantee trades, he added.

CME could offer $125 per share for its rival and still get a 5% boost to earnings from the deal after a year, Chen calculated using "fairly conservative synergy expectations." CBOT shares currently trade below $100.

Growth opportunities

The Chicago Merc's Donohue wouldn't comment on a potential CBOT deal.

"We're marching to the beat of our own drum," he said. "We have a view of what is value creating for shareholders and will choose opportunities we think are worthwhile."

Indeed, Donohue noted that a lot of the industry consolidation that's expected could happen through trading activity gravitating towards the largest exchanges, rather than via mergers and acquisitions.

Some of the CME's best opportunities lie in expanding the types of products it offers and branching out overseas.

Growing the exchange's options and foreign exchange businesses are major initiatives, along with grabbing more European and Asian customers, he said.

New products such as weather derivatives, real-estate futures and inflation hedging devices will hopefully contributed to future growth, Donohue explained.

"We've been constantly growing at a more rapid rate than our competitors," he claimed. "That's because of our strategy of expanding distribution globally and the breadth and range of products we offer."

The top 10 global derivatives exchanges
Chicago Mercantile Exchange 787 million
Eurex 728 million
Chicago Board of Trade 600 million
Euronext.liffe 356 million
Mexican Derivatives Exchange 204 million
Bolsa de Mercadorias & Futuros 176 million
New York Mercantile Exchange 163 million
Shanghai Futures Exchange 81 million
Dalian Commodities Exchange 75 million
Tokyo Commodities Exchange 75 million

Source: CSFB; company reports

Alistair Barr is a reporter for MarketWatch in San Francisco.

[Bernard Ng]

Federal Reserve Chairman History

http://taylortree.com/archive/2005_02_01_archive.html

Cumulative Knowledge (02/27/2005)
I've written earlier about the Federal Reserve Chairman history. Read here. As we get closer to Greenspan's closing months as Fed Chairman...we are sure to be bombarded with hype, worries, gloom and doom as we play musical chairs with our nation's top economists. Thought it would be interesting to see what happened to the DJ-30 a month before, the month started, and one year after a new Fed Chairman begins his/her tenure.

Marriner Eccles (starting month: February; 1936 - 1948)
DJ-30 January 2, 1936 close: 144.10
DJ-30 February 3, 1936 close: 150.60
DJ-30 March 2, 1936 close: 154.10
DJ-30 February 1, 1937 close: 186.60

Thomas McCabe (starting month: April; served: 1948 - 1951)
DJ-30 March 1, 1948 close: 168.10
DJ-30 April 1, 1948 close: 177.60
DJ-30 May 3, 1948 close: 179.50
DJ-30 April 1, 1949 close: 176.30

William McChesney Martin (starting month: April; served: 1951 - 1970)
DJ-30 March 1, 1951 close: 252.80
DJ-30 April 2, 1951 close: 246.60
DJ-30 May 1, 1951 close: 260.70
DJ-30 April 1, 1952 close: 267.20

Arthur Burns (starting month: February; served: 1970 - 1978)
DJ-30 January 2, 1970 close: 809.20
DJ-30 February 2, 1970 close: 746.40
DJ-30 March 2, 1970 close: 780.20
DJ-30 February 1, 1971 close: 877.80

G. William Miller (starting month: March; served: 1978 - 1979)
DJ-30 February 1, 1978 close: 774.30
DJ-30 March 1, 1978 close: 743.30
DJ-30 April 3, 1978 close: 751.00
DJ-30 March 1, 1979 close: 815.80
* note Miller did not serve a full year.

Paul Volcker (starting month: August; served: 1979 - 1987)
DJ-30 July 2, 1979 close: 834.00
DJ-30 August 1, 1979 close: 850.30
DJ-30 September 4, 1979 close: 872.60
DJ-30 August 1, 1980 close: 931.50

Alan Greenspan (starting month: August; served: 1987-current)
DJ-30 July 1, 1987 close: 2409.80
DJ-30 August 3, 1987 close: 2557.10
DJ-30 September 1, 1987 close: 2610.97
DJ-30 August 1, 1988 close: 2130.51

Overall, the beginning of a Federal Reserve Chairman's tenure is much ado about nothing. Sure, there was Greenspan's awful performance leading to a -12% decline in his first year as Fed Chairman. But, by and large, most end their first year better than they started. In fact, based just on the numbers above...it looks as the first year of a Fed Chairman is a good thing for the market. Of course, I'm leaving out Benjamin Strong (1914-1928) and Ronald Ransom. My time series does not go back 1914 nor do I have Strong's starting month. And, I cannot find anything for Ronald Ransom's tenure.

Roger Nusbaum posted a blurb about Tom Dorsey's statement that almost every stock that reaches $90 then goes to $100. When I read this I just had to test the idea. The problem was a test of this type requires a time series that is not split-adjusted. Because, stocks that do get to $90 and follow on to $100...are most likely to split their stock...forever removing their original stock price from stock market history. Unless, as I said before, you have access to data pre-split. Despite not having this type of data...I figured there would be enough ETF's and possibly REIT's that did not split to provide some sort of test of the idea. To find out the results of the test, please read Roger Nusbaum's post and the comments posted here. Then follow on to Anumati's blog on his review of this type of confirmation bias at work. Anumati does a great job summarizing this type of bias here.

Let me say one more thing in regard to the $90 to $100 statement above. I do believe the results would improve by including those stocks that have split in the sample. But, is it a tradeable idea? That's a whole different ball game. My test was just to see if $100 was reached. There's many other things to consider in trying to turn the idea into an actual system. And I'll leave it at that.

[Bernard Ng]

Xbox360 Stocks, potential good longs.

Can Xbox360 Boost ATI's Fortunes?

Commentary: Success may be in the (graphics) cards
By John C. Dvorak
Last Update: 7:21 AM ET Oct 27, 2005

BERKELEY, Calif. (MarketWatch) -- When the original Xbox was released by Microsoft it changed the balance of power in the industry by injecting a lot of money and introducing new ideas to the game console business.

Microsoft (MSFT: news) is not letting up, and its newest Xbox360, to be released for sale at the end of November, promises to keep pressure on the game console business.

The first iteration of the Xbox had impact on one supplier in particular. It's most adverse effect was on the Sega company which, under pressure, ended its game console business altogether. And the big winner in the deal was nVidia (NVDA: news) which was the maker of the graphics controller within the Xbox. Its stock soared and has continued to do well.

Are there any potential side bets this time around with the Xbox360? A lot will depend on ironing out some early glitches. It's already gotten off to a rocky start as its wireless components seem to interfere with in-store wireless networks. This was witnessed by a recent problem at the Wal-Mart chain where the system was going to be previewed. That should be resolved quickly.

I have played with and examined the Xbox360 and despite the foul-up at Wal-Mart there is no doubt that this machine will be a blockbuster success. That means millions of units will be sold. Wedbush Morgan Securities in a recent report predicts 2.5 million units sold in the U.S. and Europe alone.

The supplier names that crop up in conjunction with the Xbox are IBM (IBM: news) , maker of the microprocessor used by the device; Chartered Semiconductor (CHRT: news) , the second source for the chips; Flextronics (FLEX: news) , Wistron [3231.TW] and Celestica (CLS: news) as contract box manufacturers; and ATI Technologies (ATYT: news) as the graphics chip designer/manufacturer.

NVidia has gone over to the Sony Playstation as its graphics controller maker after some disputes with Microsoft during its work on the original Xbox.

If the biggest beneficiary of the first Xbox success was nVidia, would this mean ATI is the company to watch? That would be my best guess. And since Flextronics has recently been slammed by the street, it might also make an interesting turnaround working with Microsoft. All the companies mentioned would be worth following, but ATI has the most to gain.

Here's what actually happens to boost the fortunes of a company such as ATI or nVidia when they develop controllers for an advanced game console like this. They are afforded the luxury to push the envelope of the technology with a lot of expensive R&D to incorporate newer ideas into these cards to make the displays faster and more realistic. This immediately falls over into the bigger more profitable PC markets, especially amongst PC gamers and their hot machines.

NVidia, for example, is still benefiting from its relationship with Microsoft as it leads the industry with very advanced graphics controllers including the newest SLI (scanline interleave mode) systems that are the ultimate in desktop computer graphics. The cards cost around $450 each and you need two of them for the ultimate in performance. Everyone wants them.

What will happen with ATI is that certain characteristics of its Xbox360 controller will be admired by the game developers and they will employ code to optimize use of these features. This always spills over to the PC side and suddenly ATI will have a card that specializes in this function or method. The next thing you know everyone has to have that new card. ATI and nVidia have been fighting with each other in this incredibly competitive market for years now and the results have been remarkable products for end-users and profits for the companies.

ATI has been lagging behind nVidia with nothing solid to compete with the remarkable nVidia SLI cards. If the Xbox is a massive success, as I predict it will become, then ATI could be the main beneficiary.

[Bernard Ng]

I'm glad that I am watching the relationship between EWJ and Nikkei 225. They have been diverging in the last two days, while Nikkei keeps going up, EWJ is selling off right in your face. Nikkei has one of the biggest tankage today, down over 2%. The arbitrage works.

[Bernard Ng]

Must cover before EOD, and make sure to go long at EOD (including E-minis), for people are anticipating a good start on the first trading day of the year, the futures are going to run up overnight. E-minis make immediate profit right after it reopened at 4:30pm.

[Bernard Ng]

End of Year Selling

I've witnessed the end of year selling on the last day of the year. I assume the idea is that some fund strategies require to close the trade by the end of the year. Huge sell off begins at 3:30pm, to cheat the entry, try to start the shorts at 3pm.

It works for the sell side only, not the buy side.

[Bernard Ng]

Now, I'm investigating if this crazy runup at the close will cost some quick sell off on Monday morning after rebalancing. This should cost some sell off at the indexes.

[Bernard Ng]

My conclusion: first day after the announcement, the trading will go logically at the gap, stocks that are going out will drop, stocks that are going in will rise. Then it doesn't really matter, until the last day. Long the stocks that are going in for the day, and especially the last ten minutes. To better position the trade, try to get in at 3:00pm. It works for both long and short positions, it seems that long positions are more crazy. Basket orders are suggested to use, so one can execute both long and short stocks. Close all trades at close or post market, 5 to 10 minutes after market close could be the best time to close out the positions.

[Bernard Ng]

Stocks that are supposed to be short, but went up on Friday: FHCC and NVDA. While stocks that are supposed to be long, but went down on Friday: ERICY. Will these stocks provide some "safer" trades? We shall see.

[Bernard Ng]

A test on Annual Re-ranking of the NASDAQ-100 Index

Assume we will get the opening print of these stocks on Monday, 13th, and we will get the closing print of Friday, 17th.

http://finance.yahoo.com/q/cq?s=CEPH%2c+CPWR%2c+FHCC%2c+GNTX%2c+HSIC%2c+NVDA%2c+PTEN%2c+RYAAY%2c+XMS...

As of Friday, 10th
Short:
CEPH Dec-10 47.25 0.42 -0.88% 516,734
CPWR Dec-10 5.61 0.05 -0.88% 1,599,364
FHCC Dec-10 18.19 0.07 0.39% 1,158,658
GNTX Dec-10 33.6 0.2 -0.59% 727,182
HSIC Dec-10 68.91 0.3 -0.43% 417,298
NVDA Dec-10 23.31 0.44 1.92% 5,445,378
PTEN Dec-10 18.7 0.14 -0.74% 1,858,521
RYAAY Dec-10 40.49 0.35 -0.86% 367,319

Long:
XMSR Dec-10 38.64 0.521 1.37% 2,707,055
ADSK Dec-10 66.31 1.06 1.62% 1,272,213
LBTYA Dec-10 44.85 0.15 0.34% 582,475
NTLI Dec-10 70.14 1.34 1.95% 1,055,093
MCIP Dec-10 19 0 0.00% 4,574,964
WYNN Dec-10 64.1 2.7 4.40% 2,110,425
ERICY Dec-10 31.81 0.14 -0.44% 1,928,679
SIRI Dec-10 7.59 0.42 5.86% 104,483,072




NASDAQ Announces the Annual Re-ranking of the NASDAQ-100 Index
December 10, 2004 6:30:00 PM ET


NEW YORK, Dec. 10 /PRNewswire-FirstCall/ -- The Nasdaq Stock Market, Inc. (NASDAQ)(OTC Bulletin Board: NDAQ) announced today the annual re-ranking of the NASDAQ-100 Index(R), effective with the market open on Monday, December 20, 2004.

"The NASDAQ-100 Index is a transparent and objective index whose members are ultimately decided by investors and not by a committee," said John L. Jacobs, chief executive officer of Nasdaq Financial Products Services, Inc. This re-ranking will ensure that one of the world's most widely followed barometers of market activity will continue to be comprised of companies that represent a diverse range of industries."

The following 8 issues will be added to the NASDAQ-100 Index: XM Satellite Radio Holdings Inc. XMSR, Autodesk, Inc. ADSK, Liberty Media International, Inc. LBTYA, NTL Incorporated NTLI, MCI, Inc. MCIP, Wynn Resorts, Limited WYNN, LM Ericsson Telephone Company ERICY, and Sirius Satellite Radio Inc. SIRI.

The NASDAQ-100 Index is composed of the 100 largest non-financial stocks on the NASDAQ Stock Market(R) and dates to January 1985 when it was launched along with the NASDAQ Financial-100 Index(R), which is comprised of the 100 largest financial stocks on NASDAQ(R). These indices were originally designed to segment NASDAQ into two major industry groups to support media coverage and to act as benchmarks for financial products such as options, futures, and funds. The NASDAQ-100 is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.

On a cumulative basis, the NASDAQ-100 Index has risen over 1157% since inception, and it has outperformed several major domestic and international stock indices for the ten-year period ended November 30, 2004, although past performance is not indicative of future performance. For the most recent one and five-year periods ended November 30, 2004, the Index cumulative return was 10% and 47% respectively.

Shares of each company in the Index are included in the NASDAQ-100 Index Tracking Stock(SM) (QQQ(R)) QQQQ, which is an exchange-traded fund (ETF) that trades like a stock. It is the world's most actively traded ETF. It is also the most actively traded listed equity security in the U.S. QQQ represents ownership in the NASDAQ-100 Trust(SM). The Trust holds a portfolio of equity securities that comprise the NASDAQ-100 Index and aims to provide investment results that, before expenses, generally correspond with the NASDAQ-100 Index performance. Since its inception in March 1999, the Trust's total assets have grown to over $23 billion.

The NASDAQ-100 European Tracker Fund(SM) (EQQQ(SM)) is listed on Borsa Italiana and SWX Swiss Exchange and is designed to closely follow the NASDAQ- 100 Index. EQQQ provides European investors with low cost access to the entire range of companies in the NASDAQ-100 Index in European hours, on European markets. Since its inception in November 2002, the Fund's total assets have grown to over $ 142 million. EQQQ is not available to U.S. investors.

There are also 21 domestic mutual funds and 8 international funds linked to the NASDAQ-100 Index. For more information about the NASDAQ-100 Index, including eligibility criteria, visit http://www.nasdaq-100.com.

As a result of the re-ranking of the NASDAQ-100 Index, the following 8 companies will be removed: Cephalon, Inc. CEPH, Compuware Corporation CPWR, First Health Group Corp. FHCC, Gentex Corporation GNTX, Henry Schein, Inc. HSIC, NVIDIA Corporation NVDA, Patterson-UTI Energy, Inc. PTEN and, Ryanair Holdings plc RYAAY.

NASDAQ is the largest U.S. electronic stock market. With approximately 3,300 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market. It is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks. For more information about NASDAQ, visit the NASDAQ Web site at http://www.nasdaq.com or the NASDAQ Newsroom at http://www.nasdaq.com/newsroom/.

To learn more about the criteria for inclusion to the NASDAQ-100, visit http://dynamic.nasdaq.com/dynamic/nasdaq100_activity.stm

Notes to editors:

The Trustee for the NASDAQ-100 Trust is required to adjust the composition of the Trust within three business days of the effective date of a change to the composition of the NASDAQ-100 Index.

The NASDAQ-100 Index Tracking Stock is subject to risks similar to those of stocks, including those regarding short selling and margin account maintenance. An investor cannot invest directly in the Index. Index performance does not reflect the fees and expenses associated with investing in the NASDAQ-100 Index Tracking Stock.

An investor should carefully consider investment objectives, risks charges and expenses before investing. For this and more complete information about NASDAQ-100 Index Tracking Stock(SM), a unit investment trust, obtain a prospectus from your broker, or call [phone] or visit our Web site at http://www.nasdaq-100.com. Read it carefully before you invest.

While there is no assurance that the performance of the NASDAQ-100 Index can be fully matched, the NASDAQ-100 Index Tracking Stock is designed to provide investment results that generally correspond to the performance of the NASDAQ-100 Index before fees, expenses, and taxes. Past performance is not indicative of future performance.

ALPS Distributors, Inc., a registered broker-dealer, is distributor for the Trust.

The sponsor of the NASDAQ-100 Trust, a unit investment trust, is NASDAQ Financial Products Services, Inc. ("NFPS"), a wholly owned subsidiary of The Nasdaq Stock Market, Inc. ("NASDAQ," and collectively with its affiliates except NFPS, the "Corporations"). Investment returns and principal value will fluctuate so that an investor's shares, when redeemed or sold, may be worth more or less than the original cost.

"NASDAQ" and related marks are trademarks or service marks of NASDAQ and have been licensed for use for certain purposes by NFPS. The NASDAQ-100 Index is comprised and calculated by NASDAQ without regard to the NASDAQ-100 Index Tracking Stock. The Corporations make no warranty, express or implied, and bear no liability with respect to NASDAQ-100 Index Tracking Stock. The Corporations and NFPS make no warranty, express or implied, and bear no liability with respect to the NASDAQ-100 Index, its use or any data included therein. The Corporations do not guarantee the accuracy or the completeness of the Index, or any data used to calculate the index, or determine the index components.

Company briefs:

The following are brief descriptions (source: Bloomberg) of the 8 companies added to the NASDAQ-100 Index in descending order based on market capitalization as calculated in the NASDAQ-100 Index annual re-ranking review. Securities listed on the NASDAQ Stock Market that meet the eligibility criteria were ranked by market capitalization using closing prices as of the end of October and publicly available total shares outstanding as of the end of November.

XM Satellite Radio Holdings Inc. provides audio entertainment, information programming, and data services. The Company transmits its XM Radio service from its satellites to vehicle, home, and portable radios. XM Satellite Radio offers, as well as develops, more than 130 channels of news, talk, sports, traffic, weather, children's programming, and commercial-free music. The Washington, DC, company had a market capitalization of $6.6 billion at the time of ranking.

Autodesk, Inc. provides software and services to six million users in the building, manufacturing, infrastructure, digital media, and wireless data services fields that help customers create, manage, and share their data and digital assets more effectively. The San Rafael, California, company had a market capitalization of $6.1 billion at the time of ranking.

Liberty Media International, Inc. is a holding company that owns interests in broadband distribution and content companies principally in Europe, Asia, and Latin America. The Englewood, Colorado, company had a market capitalization of $6.1 billion at the time of ranking.

NTL Incorporated provides communications services to residential, business, and wholesale customers. The Company offers residential telephony, cable television, and Internet access services. NTL also provides national and international carrier telecommunications, satellite, and radio communications, as well as digital and analog television and radio broadcast transmission services. The New York, New York, company had a market capitalization of $5.8 billion at the time of ranking.

MCI Inc. provides business and residential communications services. The Company owns and operates network facilities throughout North America, Latin America, Europe, Africa, and the Asia-Pacific region. The Ashburn, Virginia, company had a market capitalization of $5.5 billion at the time of ranking.

Wynn Resorts, Limited is constructing and will own and operate Le Reve, a luxury hotel and destination casino resort in Las Vegas, Nevada. The Company is seeking to attract a range of customers, including middle market customers and high roller and premium gaming patrons. The Las Vegas, Nevada, company had a market capitalization of $5.3 billion at the time of ranking.

LM Ericsson Telephone Company is an end-to-end provider of mobile and fixed-line telecommunications equipment and services to operators worldwide. The company provides equipment in each of the major technology standards, as well as solutions for enterprise, mobile platforms, microwave, radar systems, cables and modems. The company also develops and manufactures mobile phones through its Sony Ericsson Mobile Communications joint venture. The Stockholm, Sweden, company had a market capitalization of $5 billion at the time of ranking.

Sirius Satellite Radio Inc., from its orbiting satellites, directly broadcasts more than 120 channels of music, news, entertainment and sports in digital-quality audio. The Company provides its services throughout the continental United States for a monthly subscription fee. The Company provides 65 commercial-free music channels in every genre, as well as 55 channels of news, traffic, weather, original talk programming and sports. The New York, New York, company had a market capitalization of $4.9 billion at the time of ranking.

© 2004 PRNewswire

[Bernard Ng]

Missed the trade again... but I have to remind myself here, don't get mad, and don't chase. However, I must find a way to enter these stocks under certain situations.

[Bernard Ng]

INTC, 2000 shares, sell short at $27.38 by Method D.

[Bernard Ng]

Forgot to check with a longer time frame chart, cancelling the order.

[Bernard Ng]

MLNM, 1000 shares, long at $17.01 by Method D.

[Bernard Ng]

Didn't get filled on QLGC, missed the boat... EOM

[Bernard Ng]

QLGC, 1000 shares, long at $33.61 by Method D.

[Bernard Ng]

Out the rest of AMAT for a $40 profit. EOM

[Bernard Ng]

Funny the 1/3 method actually got the top, not the mid point method... I guess it's because because the trade is an anti trend trade. While Method R is still in the trade, which is the current exit method.

[Bernard Ng]

Out half AMAT at $21.23, for a $100 profit. Trailing stop loss at a close below $21.17 on the 3 min chart.

[Bernard Ng]

Filled at $21.13, it's an against the trend trade, so I might only take 10 cents, max, selling at $21.28, according to a mid point exit method.

[Bernard Ng]

AMAT, 2000 shares, long at $21.13 according to Method D.

[Bernard Ng]

I've updated the filter for stocks selection...

NASDAQ 100 stocks to short:
SNDK, ALTR, QLGC, MLNM, LRCX, VRSN, GNTX, GRMN

NASDAQ 100 stocks to long:
ROST, LAMR

[Bernard Ng]

Closed the QQQ's trade, +$70. EOM

[Bernard Ng]

Trailing stop of QQQ, now at $35.83. EOM

[Bernard Ng]

Trailing stop of QQQ, $35.88, at the close of the 3 min bar.

[Bernard Ng]

QQQ, got my confirmed sell signal, switching to Price Chart R to trail the stock and provide the trailing stop.

[Bernard Ng]

Got filled for sure, setting the stop at the break of $36, going out for lunch... what a boring day...

[Bernard Ng]

QQQ, 1000 shares, sell short at 35.90, cheating the entry with CCI and Indicator G confirmation.

[Bernard Ng]

Holding off all short trades until the lunch time. If I take the short side right now, it's because I want to play the potential gap filling... probably not, but the gap is big enough to make it worthwhile to do counter trend trades for once.

[Bernard Ng]

NDX 100 stocks to take the short side on Monday:
YHOO, DISH, SNDK, NVDA, ALTR, CTXS, LRCX, ATYT, MERQ, APOL, ROST, SPOT, MOLX

Potential nasty tankage candidates (watchout for the quick reversal):
BIIB, FISV, LAMR, SIAL

NDX 100 stocks to take long side on Monday:
AMZN, CPWR

I've visually charted all NASDAQ 100 components, Monday should be a down day, or at most flat. This visual scan will provide me the stocks to watch on Monday, I've developed a new stop loss strategy over the weekend. Entry method will continue to use the 3 min Method D under Price Chart P. Exit method will be based on Price Chart R. I plan to trade the stocks above, and take only the side I've visually scanned.

[Bernard Ng]

RIMM, out for a $20 gain... lousy. I need a better method to trail the profit and a better stop loss system.

[Bernard Ng]

Both didn't get filled, Method D missed it by 1 cent, and here she tanks according to CCI breakdown and G indicator down turn.

[Bernard Ng]

RIMM, setting trailing stop loss at $89.79. EOM

[Bernard Ng]

Method D and mid point method got filled at $89.75, I believe this trade will be able to turn this day to positive.

Exit method includes selling it at EOD, selling it at 90.75, or when 8 min chart gives a sell signal.

[Bernard Ng]

ORCL, 3000 shares, short at $12.07 and $12.09 by Method D at different bar.

[Bernard Ng]

ORCL, out here at $12.02 (loss $210 or $240) based on an exit method that I think has major flaw. However, I believe ORCL should go down this afternoon, for the G indicator is down and CCI has broken down.

[Bernard Ng]

This is another trade where 3 min G indicator confirms with the trend and the buy signal, while the 1 min G indicator is still turning down. This prompts me to try to get a better entrance price, just I don't know which entry method is the best under this situation. This trade has also confirmed with the 8 min buy signal, probably good to hold for the rest of the afternoon.

[Bernard Ng]

RIMM, 500 shares, long at $89.75 by Method D and mid point method, long at $89.55 by last bar high on the 3 min chart. Long at $89.60 by last bar high method on the 1 min chart.

[Bernard Ng]

Yep, the indicator wins... not out of the trade yet, since I still don't have a sell signal. The lesson here is to trust the G indicator and CCI, but try to get a better entry price. The stop loss method I'm using is also really bad for these two days, definitely need another method...

[Bernard Ng]

I have a feeling that if I don't take profit for a quick scalp here, this will be a losing trade as well. This system could be very bad for a consolidation day after a super strong trend day.

[Bernard Ng]

Both methods got filled, this time, I'm following the trend and the signal, but trading against the CCI and G indicator.