BEARS CRYING UNCLE

from YHOO finance:

3:59PM Afternoon Wrap:

Impressive extension of reversal :Although the market took a dive early on Thursday it quickly stabilized with the action from midday yesterday all through today a near vertical climb. The surge has come amid broad based participation with little other than energy (Oil Service -0.9%, Oil -0.3%, Natural Gas -0.2%) on the defensive today. Top performing groups include: Airline +3.8%, Biotech +2.8%, Networking +2.52, Computer-Hardware -2.4%, Semi +2.4%, Steel +2.3%, Casino +2.1%, Chemical +2%, Transportation +1.9%, Broker/Dealer +1.5%, Paper +1.4%, Internet +1.4%, REITs +1.4%.

3:52PM New 52-Week Highs: REITs and Retailers :Nearly every major REIT is at a new 52-week high today, along with a bunch of retailers. Tallies so far today for new highs vs lows are 394-16 (NYSE) and 175-19 (Nasdaq)... Sectors with good representation on the new high list today include Recent IPOs (CTRN, KNXA, WTI, VLCM, ZUMZ), Retail (BBY, BKS, CHRS, CTRN, COH, CVS, DKS, DBRN, GAP, GES, GME, JCP, KSS, STGS, VLCM), REITs (ACC, AKR, ARE, BRE, BXP, CLI, DDR, EOP, EQR, ESS, FMP, FRT, GGP, HCN, KIM, KPA, KRC, MAA, MAC, PEI, PNP, PSA, SKT, SLG, SPG, SSS, VNO).

3:31PM With market surging and talk that hedge funds are out jamming shorts, may want to look at this month's Heavily Shorted Stocks Report :Names of interest this month include Jamdat Mobile (JMDT), Dollar Financial (DLLR) and Deckers (DECK). See the Small Cap Focus page for the report.

*It would appear, with strength and breadth of advance, the bulls are not yet done. 412 new highs on NYSE.

OPEX next Friday, I don't know if today was in advance of that. gain, with turn around engineered or not in place, it's open season and the bears are on the run.

I will be out of town until Sunday, so this will be my last post until next week. It should be interesting read from Elliot Wave Theory tonight. I would ASSUME the wave count has changed and we obviously are not witnessing a 3rd of a 3rd. of which they seemed so sure of.

SPX/VIX ratio vaulted back 10 points today to close near its high reading. I suggest Monday could open with some follow through, but we could see some weakness near end of week, it may depend on more than earnings but guidance going into next quarter.

I do not feel stocks have the kind of earnings momentum going forward to warrant playing them, holding them. As quickly as a rally comes from nowhere so does the declines.

But I have no crystal ball, and the wind is at the back of the rally, it may have some legs left.

Weekly NDX technicals have been positive, but the bars have not been doing much since going positive.

I would use tight stops if deciding to play anything long.

BDI continues its decline, a rather odd development given the bullishness for the world's economies, I cannot disregard that.

EVEN with the HOOPLAH, we are below water here in the year ending in 5 2005.

Is this the start of the famed SUMMER RALLY going into August? I am not sure, but you can never outguess the market.

It is NOT easy sitting it out, maybe settling for small gains with MM or treasuries, yield funds. BUt a strategy of buying stocks only because they are going up is a losing strategy.

Can you find value? dividend yield? stocks selling for 1 or 2 X book value. 3 or 4 sales?

I can survive without additional income, I still believe we are in a secular bear market held at bay, and definately NOT the beginning of another long running secular bull mkt.....for reasons ad nauseum I have listed.

I trust the 100 year plus history of the market, and my reasoning based on that. Today was fun if you were long, maybe more coming, as long as you know when enough is enough, most will not see a problem until long after it is too late to get out.

Until the next time,

Duratek