The Week Ahead: The housing sector of the economy continues its post bubble weakness with the smallest number of new home starts in a decade as a glut of unsold properties saturates the market. This news should keep the Fed on hold with interest rates but watch the January minutes release by the FOMC on Tuesday as well as the Consumer Price Index for further clues. The holiday shortened week will produce only one other important report as it pertains to energy which is the weekly oil and gas distillate stocks on Wednesday.

Stock to Watch: Watch General Motors (GM) stock as reported talks to buy the Chrysler division from parent company Daimler/Chrysler (DCX) heats up. Harley Davidson (HOG) could get a lift as a tentative agreement with labor unions on strike since February 2 was reached. Campbell Soup (CPB) is breaking higher on news of strong earnings and an expanding earnings outlook for 2007. XM Satellite Radio (XMSR) is rebounding after a Bear Stearns report on the benefits of a merger with Sirius Satellite Radio (SIRI). Finally Cascade Corp. (CAE) is being added to the Small Cap 600 Index replacing Elk Corp.

Special Note: The current momentum streak of the market has now reached 30 weeks without as little as a 2% correction for the blue chips. Very near term indicators point higher but keep in mind that the S&P 500 is now in its 9th consecutive month higher, and the DOW its 8th. This rare formation combined with an end to the influx of above average retirement contributions this quarter do to strong corporate profits should give pause to investors as March approaches. Stay diversified with a mixture of longs and shorts in different sectors.


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

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