A few of you have asked where i do my blog.  Well before i type a word, I get on one of my best suits and put on a tie and then I do my stuff.  You don't believe me, Ok here is a picture of me working on the blog yesterday.

15,000 Here We Come?

Ok I was skeptical too when I saw the cover of this week's Barron.

15,000 by the end of 2013, and a 50/50 chance of 17,000? Gene Epstein does a great job of laying out many reasons to suggest we might see a 17% increase in the market over the next 22 months. Most of the prognostication comes from technical chart patterns based upon the last 141 years of the market and the very identifiable and usually reliable cyclical trends within in those patters. He also acknowledges some fundamental issues about earnings growth over the last two years.

If, yes, if (and Epstein uses this two letter word quite a bit in the article) you can buy into his premise and that of one Wharton School of Finance Professor Jeremy Siegle (Author of "Stocks For The Long Run-worth putting in your investment library.), you kind a feel good about the direction of the market over the next two years. Unfortunately, the word "if" is followed by references to the Europe Debt Situation and The US Debt Situation, and global social unrest.

It is a great article and definitely worth the cover charge for this week's magazine.

Alan Abelson rambled on about how poorly we rate out Congress. It has the lowest ratings in like a forever. Imagine that? He manages to avoid the interesting debacle The President finds himself in with regard to the contraceptive issue. Then he shifts gears and gives a bullish plug for Pfiezer. Alan was all over the place this week. Not his best work.

Michael Santoli picks up the pieces and makes a bullish argument for a higher market, or does he? He implies with everyone feeling so bullish is it time to look for a correction. The tape so fat this year looks a lot like last years and about March, we saw a 6.5% correction. Food for thought as only Michael can deliver. He sums up by saying a correction is due followed by a strong recovery afterward. He we said that last week.

Tiernan Ray gives a bullish plug for Cisco, in a well researched and well presented piece. Simon Constable writes a nice piece about the Baltic Dry Index as a economic indicator. We mention the BDI a few times a year. Of late, the index has become a bit irrelevant because of the huge build up of inventories in ocean going freighters. The Index measure ships, tonnage a rates of ocean going freighters around most of the world. When oil shot up to 150 a barrel 5 years ago, all ship builders went over board and flooded the market with freighter just in time to have oil return to 70-80 a barrel. Constable's article explains that the index is getting relevant again. Steven Sear explains the dull but profitable practice of selling out of the money call options against long positions. It is a nice clean explanation of one of the simplest and most effective use of call options.

All in all, we can highly recommend this week's issue of the Barron's. Now let's tale a look at the week ahead. Will we see us getting back the .5% drop of last week? Let's polish up the crystal ball.

Swami Photo

Since most of the ups and downs of the last couple of weeks have been Euro Reliant, let's take a look at Int'l news due out this week.

Monday

Today (Sunday) the Greek Parliament votes on the revised austerity cuts and indications are they will not get passed. In essence it means that Greece will step out of the Eurozone. While most have been expecting that, all of the ramifications of that decision have not been built into the market. Also on Monday, The Bank of Japan Monetary policy gets released and no one is expecting changes in interest rates or Bank reserve limits. Industrial production in Japan is up, though not as much as originally estimated, and their core inflation numbers are down a wee bit. Any except the status quo would get the markets attention.

Tuesday

There is an industrial production report out of the Eurozone, look for it to be down and look for a soft opening here on Valentines day. There is a monthly Business survey report out of Germany and an inflation report out of The UK, but neither should be news worthy. (Then why the heck did you put it in here Brian?)

Wedensday

We have GDP reports for 2011 and forecast for 2012 from most of the Eurozone's big players. The numbers should support a Euro Centric recession in 2012 and that has been priced into most markets. We will also hear about the employment situation in the UK and that might move the market if it is bad.

Thursday

Australia reports labor numbers and the outlook is not bright. (Thanks Terry for the info).

Friday

There is a retail sales report out of the UK, that should be a bit gloomy, but again that is expected and should be priced into the overall markets. It won't keep key retailing stocks in the UK and Europe from dropping a bit on the news.

Here at home it is an average economic news calendar but a busy earnings report week. (Cramer did a good job on Friday with his weekly preview and game plan. If you only have one hour a week to watch economic news and investing news, catch Cramer's Friday show. Nine times out of ten he does a great job of sharing with us relevant information for the week ahead.

Monday

Not much in the way of economics, but Cramer is suggesting keeping an eye on Masco to see how the housing market might be doing. As far as numbers, they are expected to loose 3 cents a share. In Cramer's comments he is definitely taking a page out of the CAN SLIM strategy. The stock is not too highly rated by The IBD (56), but you can see a beautiful cup having formed between last August and December 16. (Look at a two year weekly chart to see it.) If that is the cup as it appears to be the buy point of $10.56 established on Oct 28th (The high for the day was $10.46 and the handle started to form the next day so the buy point is 10 cents above the high for the day.) CAN SLIM rules suggest that you don't buy more than 5% above the latest established buy point. That means you would not buy above $11.09. Cramer said he likes the stock but not at this price. He said he'd like to see it come down a buck and half or two. It closed Friday at $12.72. Mmmm. A coincidence? NOT.. WE DO NOT OWN MASCO. DO YOUR HOMEWORK. We prefer to look at USHS

Tuesday

Look for the Small Business Optimism survey to tag on one more upward moving month making 5 in a row. It will be a small increase, but it should show positive signs. Autos should help provide a nice retails sale report on the morning. Look for a .7 or .8% rise, closer to .4% when you back out oil and autos. That makes for a nice retail report and the market should like it barring any extremely bad news out of the Eurozone. Look for an increase in business inventories, hopefully a small one. Keep in mind that if business inventories get to high, factory production shuts down. It would be great news and market moving if we could see .3% (flat) or even a drop in inventories. That would be a market mover.

Cramer does not like one of my Speculative picks ZNGA, Zynga. He is a seller expecting it to plummet like Groupon. I am betting he is wrong. We have collected quite a few shares over the last couple of weeks with our play money in the account, waiting for this earnings call. Cramer does not make many mistakes, but I think he missed this one.    

Wednesday

Speaking of production, we have the all influential Empire State report on Wednesday. It is expected to inch up a wee bit. We can't find any evidence to the contrary so we will agree. If it come in light look for a market reaction to the down side. If it comes in higher, the market will like it but will look to Europe for direction. The same could be said for the Industrial Production report due out. Look for a slight increase. Then we have the housing market index report which had a blow out number last month. We can't expect another huge 4 point rise like last month so let's go with the consensus if one more point to the upside.

We have DE reporting and it is always one everyone watches as it's a tell for the agriculture and industrial sectors. Now Cramer said this stock always beats up on itself when they announce earnings and it drives the stocks down for a few days. Now we have a subscription service called Whisper Number which tracks data like that and Cramer is spot on. Usually after reporting earnings the stock comes down 4-5% in the next 5 days then rebounds. WE DO NOT OWN DE. But we might look at a in the money 30 day Put option? We will tell you the play if we find one tomorrow.

Thursday

We have the housing starts number which should continue to improve especially since we have had only a few areas with real nasty weather making it good to build homes. We will have the weekly initial jobless claims number which should continue to look pleasant assuring this White House more positive talking points to buffer his contraceptive blunder from last week. The consensus is looking for a seasonally adjusted increase in initial jobless claims (Those people having Holiday job not being kept in the New Year. In all we are reading, we think we will see a pleasant surprise. And a surprise that will move the market. Thursday is a busy day as we also have the Producer's Price Index and with oil taking that bump over that time frame look for an increase in the number. When you back out oil, prices should be flat.

GM reports but the financials are such a mess, we would agree with Cramer to wait and see. We like JWN chances for a beat of 1.10 cents a share. Nordie's is a great brand and retail numbers are up and the consumer credit report last week indicates people are buying again. We like a 1.13 for earning and a nice little pop for the stock hopefully getting it out of the 50.00 range. WE DO NOT OWN JWN.

Friday

To follow the PPI, we will have the consumer price index aka CPI. Look for a slight increase before and after food and energy. It should be a mild increase. If the increase jumps up above .4%, look for a nasty market turn because it would suggest the Fed will have to rethink its low interest promise into 2014. The market does not like higher interest rates.  

Campbell's and Heinz report Cramer hammered them. Baidu, the Chinese equivalent of Google reports and they are expected to be down from last year. With Google leaving the market, that is not intuitive logic. We think they will surprise to the upside. WE DO NOT OWN CPB, HNZ OR BIDU.  

In summary, there is a lot going on but all eye are on Europe. Look for another low volume week and a slight increase in the market over the week. Maybe we will make back the .5% we lost last week.

Salve Lucrum