Stock Tiger Update

For Thursday December 21, 2006  

Tomorrow is the Winter solstice marking the beginning of winter in the Northern Hemisphere and summer in the Southern Hemisphere. The winter solstice occurs either December 21 or 22, when the sun shines directly over the tropic of Capricorn and this year it is Thursday. The winter solstice marks the shortest day and the longest night of the year. So from now on in the Northern Hemisphere the days will be getting longer for the next 6 months!

That kind of thinking can catch on and if it does then more an more may want to beat the crowd and they could start a sell off in the market before next year. - We cannot know if it will happen that way but there are signs that the market may stumble at any time.

It is not uncommon for the market to rally a bit in January then sell off mid month but don't be surprised to see it happen earlier.

I use Front Page for this newsletter and yesterday it stopped displaying PNG images (which we use for charts) as did Internet Explore and other Windows programs though Firefox shows fine. I need to try and find a solution to this so today's Update is short on comments and I cannot see the images on the page.

You may have noticed that break outs have not been as strong in the last two weeks. From now until the end of they year this may be the case as traders may be happy to lock in gains sooner during thin trading times.

The Dow is in a tight range so could make yet another run for the Santa Rally but I think if so it is only a traders rally. See how far away it is getting from the 50-day EMA. I have put in some Fibonacci lines so if this is the top you can see what  bigger pullback may look like but first of course just a test of the trend line and we will look again then.

The Nasdaq broke a trend line this week and now is consolidating below it. It may recover but it looks more like a bear flag shaping up and a drop to the 50-day seems likely. Even a rally to the recent high will not negate this unless it were to break out on heavy volume.

The S&P 500 is holding up quite well. Some money has been leaving the Russell 2000 stocks and think some is being parked in the bigger caps for "safety. We see it could yet have a break higher and you see the trend line at 1410

The NYSE still high up in its channel and again I have put in the Fibonacci lines to use if this is the top. So a rally yet to the channel top or a drop to the bottom but which first?

The Russell 2000 also broke the trend line this week and now sure looks like a bear flag. It could surprise but this index is now at only $1 above the May high so not like the SPX and DOW that have been making new yearly highs.

Oil is close to a break out at the 200-day. For the last year or two the market mainly went up as Oil went up but not now so if this can rally again it may be when the general market is pulling back.

Gold bounced at the 38% retrace as show and the trend line and managed to close over the 50-day EMA again. Gold stocks may pullback when the general market does but still may rally this year.

Thanks for taking this unusual route to the newsletter this time.

Here are a few new ones to watch for break outs and note that some that are now on our watch list are very close to a buy point like PACT that did break out but may be ready to run higher soon. PRST is also not far from $6.40. EXTR is right at $4.30 and CRY tried $7.50 today on good volume and was turned away so likely to see it soon. So it was a slow day but many still look good.

First just a look at this unusual one. INOC was up this morning about 100% on news of a big contract. Then it got halted and news from the company later saying that they have no idea where the news story came from as it was not true at all. The stock closed up 6 cents any way (instead of up $3)

UNCA is right near a $13.65 break out