Up Nineteen Percent in Six Weeks

October 14, 2007

Hi, Friends,

We are in the midst of a powerful uptrend across all markets and most sectors, but as always, caution is necessary.

Since initiating our positions on September 4th, we're up 19% in unrealized gains in six weeks, and new positions placed on October 1st are up 5.6%.

Almost every sector is showing gains and the broader markets are all in up trends as the Dow and S&P500 both broke into record territory this week.

However, I'm never too excited about new records as they can be followed by sharp sell offs like the 10% drawdown this summer that came right after passing Dow 14,000 for the first time.

But for now, all of our positions remain in strong short and medium term up trends and we will be following them upwards with trailing stops to lock in these gains because it's always critical to not get complacent when the market is going our way.

Watch your inboxes this week for a new Special Report I've just written.

I've written 5 new Special Reports which are now included as Free Gifts with your guaranteed subscription.

Tthey're packed with good information and insight and you can learn more about them at
http://www.wall-street-sector-selector.com/

The View from 35,000 Feet

This week's move upward was driven by stronger than forecast retail sales and no nasty surprises in the beginning of earnings season. The tech. market went through a nasty gyration downwards on Thursday only to rally again on Friday, and oil hit a record close on Friday of $83.69/bbl. Also, there was an unexpected rise of 1.1% in the PPI, driven mostly by food and energy.

The Week Ahead

Several important reports are coming out this week which will be market movers along with earnings reports that will be coming all week:

Tuesday:

Wells Fargo reports earnings, the first of the big banks and a look at how the financials are faring after the credit crisis.

Wednesday:

JP Morgan Chase reports earnings
Sept. Housing Starts
Fed. Beige Book Report on economic activity
September Housing Starts

Thursday:
Bank of America reports earnings
Leading Economic Indicators

What It All Means

We continue to have a mixed picture as far as news is concerned and are in a very interesting tug of war between the forces of inflation and a slowdown in the economy.

On the one hand, the retail sales report, while considered good, was essentially flat when you remove gasoline and auto sales, and on the other hand, we have a rising Producer Price Index and energy prices that rose 4.1% last month alone.

Of course, Benny and the Feds are watching all of this closely and will use these inputs to decide their course at their Halloween meeting.

Fed watchers continue to play their "what will the Fed do with rates" game, and the picture is decidedly cloudy today with recent news pointing to rates staying steady at the end of October.

However, I expect that this week's reports will help to substantially clear up the picture and give us a more focused view of what the Feds might do.

But, as always, it's important to remember that Wall Street Sector Selector doesn't trade on news, which tends to be a poor predictor of market action, but rather based on our indicators which give us a view ahead for the next 4-8 weeks.

Sector Spotlight

Almost all sectors are in up trends for the month with International and Energy still leading the way. Homebuilders and Real Estate are in the positive column, and as I mentioned last week, I'm watching these two closely. While it's much too early to take a position in these, it's interesting to watch them come out of the negative column after so many months, especially with all of the negative news surrounding these sectors.

Autumn in Bend has been particularly beautiful this year with the changing leaves exploding across our town. In the mountains, golden aspen are sprinkled throughout the conifer sea, and this Saturday morning, Mount Bachelor glistens snowcapped in the sunshine outside our living room window.

Today my young son and I are heading for Twin Lake for a last night out in our R.V. and then I'll winterize and store it for winter this week. That's always the definitive close of summer around our house and something of a melancholy time. Summer is over and we're heading into the darker months, but looking at the snow capped mountain, it's exciting to think of ski season just ahead.

If you compare a human life span of 84 years to the calendar, October would be the start of a person's 64th year. It's a beautiful month, and for many people I know, a beautiful time of life.

My goal with Wall Street Sector Selector is to make all our months and years truly golden, and I greatly appreciate your confidence and trust in that important endeavor.

Have a great weekend.

Your partner in prosperity,

John Nyaradi
Publisher
Wall Street Sector Selector
http://rs6.net/tn.jsp?t=95n8pfcab.0.0.eou954bab.0&ts=S0289&p=http%3A%2F%2Fwww.wall-street-sector-selector.com%2F&id=preview