The Week Ahead: The new year begins with its shortest trading week and a light economic calendar. Two significant themes for 2007 will be whether the Federal Reserve's next interest rate move is up or down and if S&P companies can reach there expected 10% earnings growth rate. To that end, this week's statistics to watch are Wednesday's November construction spending numbers as well as December's auto sales, Thursday's November factory orders, and Friday's first big economic release of the year, the December employment report, at the opening of trading.

Stocks to Watch: The start of the year is a good time to review what has become a widely watched list of stocks known as the "dogs of the Dow". These DJIA companies are the 10 highest yielding stocks at the end of the previous year and are usually either depressed in price or generally out of favor. As a group they tend to out-perform over the following 12 months but not always. They are: Verizon (VZ), Citigroup (C ), AT&T (T ), Altria Group (MO), Pfizer (PFE), General Motors (GM), Dupont (DD), J.P. Morgan (JPM), General Electric (GE), and Merck (MRK).

Special Note: Watch market momentum follow on the heels of December at least in the very near term, but keep in mind some very distinct topping signals that have thus far been ignored. They include: The Dow Transports non-confirmation of the Dow Industrials new highs, complacency as measured by the Volatility Index (VIX) at or near record lows, Daily Sentiment Index readings at persistently extreme bullish levels, a general decline in volume as the market rises, and near record low cash levels at mutual funds to name a few. Traders and investors should be inclined to lock in profits where warranted and position portfolios with increased cash or short side weighting.


Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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