The Week Ahead: An economic report card of data are due out starting with Tuesday's durable goods orders for January and an important existing home sales figure. The consumer confidence index for February will also be released. Wednesday brings the 4th quarter GDP and January new home sales as well as the crude oil and gasoline inventories. Thursday continues with personal income and spending for January along with construction spending. The ISM manufacturing index and auto sales numbers for February also come out. Finally, Friday has the University of Michigan consumer sentiment reading.

Stocks to Watch: Profits at Lowes Cos. (LOW) came in better than estimates sending the stock to new highs but are speculative here because of the housing slump. Chesapeake Energy (CHK) came in with better than expected earnings and the stock strengthened crossing the 200 day moving average. American Reprographics (ARP) stock looks poised for further gains as the company reported excellent earnings and gave a strong outlook for fiscal 2007. Roper Industries (ROP) continues to show good long term performance with solid 4th quarter earnings and 1st quarter outlook.

Special Note: Year to date the mid-cap stocks are outperforming with a 7.5% return verses 5% for small cap and 2.2% for large cap stocks. Mid-cap indexes like the S&P 400 are seen to provide growth because they are still small enough in size relative to big blue chip stocks but beyond the speculative phase of smaller companies. One note of caution is the yield curve which has been negative for 6 months where short term rates exceed long term rates. This duration historically precedes a top in the market. Perhaps defensive stocks should be the focus going forward.


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

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