Thursday, December 21, 2006


LEADING index up
GDP revised lower
FEARLESS forecasts

The market is evidently slowing as the data suggests. Yet analysts are overwhelming bullish about the coming year 2007. The 'soft-landing' theory is still in play and is mostly likely fully priced in to the markets. Any deviation from this theory and evidence of a hard landing may lead to a a fleeting exit from the equity markets and potentially a large drop in the indices. We have had an extremely bullish run from the June lows- nearly 1800 points on the Dow, almost 200 on the S&P 500 and over 400 on the NASDAQ. A big portion of this move came during the typically bearish months of September and October while we have had a rather mellow November and December. While January is a typically bullish month, we could see a market pullback especially if the data continues so suggest we are in for something more than a 'soft-landing'. For now I continue to be bearish equities in general with short positions in several leading tech stocks - GOOG, AAPL, RIMM and AKAM to name a few.
I am long energy for now as well as metal producers. I also have index shorts in anticipation of a broad market pullback.

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