While the Dow did gain over 100 points this past week,
it was by no means a walk in the park for those market players who were still
hanging onto hopes on the long side.  Positive comments regarding a
possible interest rate easing by the Fed did help the equities markets rally,
however, the major indexes were unable to hold onto those gains.  The NASDAQ
Composite underwent a bit of a snap back rally on Wednesday, but by Friday, it
had given up all of its gains and then some.  Tech stocks (due to a mixed bag of
earnings releases) were very weak across the board, which was pretty
disappointing given how oversold they appear.  While there were isolated pockets
of strength, it seemed like most sectors were destined to close in the red.

Moving
forward, economic news will most likely continue to dominate the markets’
attention.  Last week’s comments from the Fed were taken as very optimistic,
when, frankly, I felt it was all an overreaction.  As I’ve mentioned several
times, I suspect that the Fed remains on track for at least several more
interest rate increases in 2006, regardless of what the markets may be hoping
for.  Either way, after 17 straight interest rate moves, it's now getting to a
point where market players are likely becoming concerned that the Fed may
accidentally over-tighten (which, based on history, would be typical) and send
the economy into a brief recession. 

Please feel free to email me
with any questions you might have, and have a great trading week!

Chris Curran

Chris Curran started his trading career
at the age of 22 with a national brokerage firm. He combines fundamental and
technical analysis to get the big picture on the market. Chris has been trading
for 15 years, starting full time in 1997, and has never had a losing year as a
full-time trader.