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February 2 , 2007, 7:30am

Market liquidity was the main engine to the continuing advance. S&P 500 index was 7.70 to close at 1,445.94. Such momentum had brushed aside January's ISM index which unexpectedly fell to 49.3%, indicating contraction, and ran counter to a Fed directive that showed firming economic growth. The disappointment initially left investors confused and questioned the validity of Wednesday's rally. Again, Wall Street failed to understand that with Fed interest rate unchanged, international stability marked by a moderating dollar and low inflation meant expanding equity values. Confirming the Fed policy was the Commerce Department's report before yesterday's bell that inflation pressures had eased. The core PCE deflator - the Fed's favored inflation measure - was only up 0.01%. While the January data left the year to year increase steady at 2.2%, and a bit higher than Fed would like, the rate of increase slowing over the last three months offered added relief on the market's current focus. Remain progressive, commit funds into stocks which will participate in the upward momentum providing the S&P continues within its technical parameters. At 1450 would be upside resistance and a test appears at hand. Use today to reconcile your positions, remove lagers and take profits on issues that may appear overbought or technically suspect.

February 1, 2007, 7:30am . At 1,438.24 9.42 the S&P 500 index closed out the month with its eight straight month of gains. Stocks rallied as investors embraced the idea that continuing interest rates at 5.25 percent is not a bad idea - sounds familiar. The Fed communicated that core inflation had improved modestly, and the U.S. dollar was stable against major currencies. Perfect scenario for further gains in stock prices. However, 1450 remains the deciding factor to keep the market's momentum from consolidating. ... Oil prices tacked on a 2.1 percent gain onto the prior 5.5 percent surge, marking the biggest two-day gain since December '04. Perfect scenario for Middle East money to continually purchase U.S. equities and ensure worldwide liquidity.

... . Purpose of the arrows: - projecting that DJIA, Nasdaq and S&P barometers will close higher at the end of the day. - projected consolidating barometers with limited directional action. - projecting all three barometers declining for the days. .... Our Message Board and "Contact Us" elements are available at no cost to keep you up-to-date with timely information. Our Fantasy Hedge Fund gives you a concise overview of how investment ideas are executed. All transactions are posted on the Message Board

 
View From the Bottom - A roundup of the day's performance

February 2, 2007, 4:00 pm. ... Day Trader for the day shows a gain of $41,400.00. ... Adjustments to the 60-Day Summary list shows; (1) sold 10% of call options of CATCY.X for gain of $38,625.00; (2) sold ZICA for a gain of $81,000.00; (3) sold PRGO for a gain of $5,600.00; (4) sold RDK for a gain of $1,100.00; (5) sold ASYT for a gain of $100.00; (6) sold entire position of SCT for a loss of $176,400.00. Net realized change for the day in Stocksmirf Fantasy Hedge Fund portfolio ("SFHF") is a loss of $8,575.00 and for the month to date a profit of $76,625, excluding unrealized gains or losses....

note: Most upsetting was the convolved display of misinformation issued by Scottish Re Group Ltd. (SCT) management and their desire to "steal" the company and offer it at a substantial discount to a special interest predator that had no desire to insure the lowly shareholders receive a fair share of the company's true value. On the 23rd of February, SCT will be given away at less than 25% of intrinsic worth and the collective shareholders will be further deluded. However, since the "new" investors will have a major equity stake, they're major means to enhance value would be to insure the stock value appreciates. From now to the 23rd, management will "bad mouth" the company to push the stock closer to $4.00 per share as a means of insuring the transaction becomes effective. It is difficult to believe that such a tactic had been successfully executed.

February 1, 2007, 400pm ... Day Trader for the day shows a loss of $9,200.00. ... Adjustments to the 60-Day Summary list (1) sold 25% of call options in CATCY.X for a gain of $127,500.00; (2) covered short on CMVT for a gain of $5,500.00; (3) covered short on POZN for a gain of $7,200.00; (4) sold SNDK for a loss of $39,600.00; (5) sold UNCA for a loss of $6,200.00. Net realized change for the day in Stocksmirf Fantasy Hedge Fund portfolio ("SFHF") is a gain of $85,200.00, and for the month to date a profit of $85,200.00, excluding unrealized gains or losses.

January 31, 2007, 4:00 pm. ... Day Trader for the day show no activity. ... Adjustments to the 60-Day Summary list: (1) sold OBCI for a loss of $100,000.00; (2) sold ELNK for a gain of $1,600.00; (3) sold SPEX for a gain of $17,500.00. Net realized change for the day in Stocksmirf Fantasy Hedge Fund portfolio ("SFHF") is a loss of $80,900.00. and for the month to date a profit of $615,550.00, excluding unrealized gains or losses

.For the fourth calendar quarter of 2006 on the SFHF portfolio. Total performance, including unrealized gains, was $1,027,724.90 on weighted capital of $4,832,125.72, representing 0.2127%. for the period ending December 31, 2006.

*** based on the weighted portfolio value adjusted daily.

 
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best idea

.. . February 2, 2007

... 2:53pm ... SHORT Pitney Bowes Inc. (PBI) - last $48.10. With earnings due Monday, PBI will show revenue improvement, but may surprise to the downside on guidance. However, the real issue is the $1.1 billion payment immediately due in tax liability from the Capital Services business sale. On a technical basis, PBI is at resistance with little room for further gains above $48, while on the downside support develops in the $40-$42 range. PBI is a prudent short with limited risk. EXIT POINT is set at $42.

... 11:28am .. BUY ZI Corporation (ZICA) - last $2.34. Had ZICA as a sell at $2.38 under 60-Day Summary and take profit. However, improving maca and level of buying interest suggests a momentum play. BUY with no EXIT POINT determined.

... 7:30am ... BUY Thomas & Betts Corporation (TNB) - last $48.70. Limited entrance point $48.20. TNB designs and manufactures electrical component used in industrial, commercial, communications and utility. At 15 times forward earnings and strong instructional sponsorship, the stock has long term appeal and may represent a core holding.

Ticker
Last Trade
Direction
Entrance Point
Exit Point
TNB
February 2, 2007
limit order $48.20
*


P/E Ratio: 20
Forward P/E Ratio: 15
Float Shares2: 57.9 M
Company Guidance: *
Recommendation3: *
Support4: 47.25
Resistance5: 51.50
Under Accumulation6: yes
Under Distribution7: limited

 
today's action

... DAY TRADER

.... February 2, 2007:

... 11:36am .. COVER SHORT #2 on ILMN - last $36.23.

... 10:54am .. SHORT#2 ILMN - last $37.60.

... 10:03am ... COVER SHORT on ILMN - last $37.05.

... 9:45am ... SHORT Illumina Inc. (ILMN) - last $37.75. Even with decline ILMN is under pressure.

.. February 1, 2007.. 12:37pm .. COVER SHORT Under Armour Inc. (UA) - last $47.61.. Up-volume too strong and unpredictable. Take loss... 11:46am ... SHORT Under Armour Inc. (UA) - last $47.15 . Even after declining $3.78, UA is under distribution.

January 31, 2007, 7:30am. No action.

January 30, 2007... 9:42am ... SELL GKSR - last $36.52. Take profit on pre-market trade....9:00am ... BUY G&K Services Inc. (GKSR) - last $18.88 [pre-market] Closed yesterday at $39.18 off 51% after disappointing numbers. Reaction on downside was overblown. With book value of $25.79, proven business model and superior management, GKSR should respond to a "dead-cat" bounce. [not effective - see message board]

 

.... From the 60-Day Summary list

.. February 2, 2007

... 3:34pm ... SELL Scottish Re (SCT) - last $4.66. Reluctant liquidation with intent to revisit later. Taking major loss.

... 12:20pm ... SELL Call Options on CATCY.X - last bid $8.00. Originally suggested at $2.85 on 01.24.07, the underlying common stock (CAT) appears to have consolidated. Reduce call options by 10% of outstanding position.

... 10:52am ... SELL Asyst Technol (ASYT) - last $6.38. Failed to perform as expected.

... 10:40am ... SELL ZI Corporation (ZICA) - last $ 2.38. Originally suggested at $1.84 on 01.11.07. Take profit to revisit later.

... 10:27am ... SELL Ruddick Cp (RDK) - last $27.81. Take profit.

... 10:18am ... SELL Perrigo Company (PRGO) - last $17.90.. Take profit.

... 9:37am ... SELL Acceltys Inc. (ACCL) - last $6.18. Earnings failed to give ACCL traction.

February 1, 2007... 2:00pm ... SELL Unica Corporation (UNCA) - last $11.59. With earnings due after the close today, UNCA is acting like more bad news is coming. A prudent decision would be to cut the loss.... 12:26pm ... COVER SHORT on Pozen Inc. (POZN) - last $16.75. Take profit.... 12:19pm ... COVER SHORT on Comverse Tech (CMVT.PK) - last $19.49. Not acting like a pink sheet stock, believed further weaken which did not materialize. Take minor profit... 11:43am ... SELL SanDisk Corporation (SNDK) - last $40.24. Take loss. Under selling pressure. Looks lower with near term support at $38.75. ... 11:16am ... [limited] SELL Caterpillar March 2007 $57.50 CALL (CATCY.X) - last bid $7.95. Originally suggested at $2.85 on 01.24.07. Take profit on 25% of position..

January 31, 2007... 3:18pm ... SELL Earthlink Inc. (ELNK) - last $7.35. Take minor profit. ELNK lacks meaningful sponsorship. .... 3:08pm ... SELL Ocean Bio. Chem. (OBCI) - last $3.55 . Take loss. OBCI failed to maintain support and remains under distribution. ... 9:37am ... SELL Spherix Ins. (SPEX) - last $1.85. Originally suggested at $1.50 on 10.10.06. SPEX failed to meet mid-term expectations. Take profit.

January 30, 2007.... 10:25am ... SELL Pinnacle Airlines (PNCL) - last $17.62. Originally suggested at an average cost of $16.48. Take profit with intent to revisit.

_______________________________

NET VALUE OF Stocksmirf Fantasy Hedge Fund (SFHF) portfolio for the period ending 01.31.07....................,....... . $6,717,175.00

REALIZEDGAINS LOSSES FOR THE MONTH OF OCTOBER '06 in the SFHF portfolio ........................ ......... $277,601.00

REALIZED GAINS LOSSES FOR THE MONTH OF NOVEMBER '06 in the SFHF portfolio. ...............................$338,049.00

REALIZEDGAINS LOSSES FOR THE MONTH OF DECEMBER '06 in the SFHF portfolio ...... .......................... $371,020.00

REALIZREDGAINSLOSSES FOR THE MONTH OF JANUARY '07 in the SFHF portfolio ...................................$615,500.00

REALIZED GAINS LOSSES FOR FEBRUARY '07 TO DATE in the SFHF portfolio...................................076,625.00

UNREALIZED GAINS (LOSSES) in the Stocksmirf Fantasy Hedge Fund portfolio.

February 2, 2007, 4:00pm ..... 284,254.96

February 1, 2007, 4:00pm ......108,174.00

January 31, 2007, 4:00pm .....080,964.96

January 30, 2007, 4:00am .. .. 000,007.00

January 29, 2007, 4:00pm ..... 147,810.00

January 26, 2007, 4:00om ..... 100,003.93

\_____________________________________

Prior Dartline summaries ... January 31, 2007, 7:30am ... ... Not withstanding the breath of disappointments on the earnings front and higher oil prices, the S&P 500 index was up 8.20 and closed at 1,428.82. The x-factor was the renewed enthusiasm for beaten-down oil stocks. All of the Energy sector's 33 components closed sharply higher. Crude for March delivery surged 5.4%, the biggest one-day move since Hurricane Katrina, to closed near $57 per barrel. Higher energy prices keep intact the $150 billion of uncommitted funds to support equity prices at historic levels. . For months we have reported that surplus money kept building up on the sidelines and was systematically committed to equities This massive pile of money had been earned by the oil producing countries, especially in the Middle East., and available for unrestricted circulation. Worldwide equities are more liquid today than any time is history. The only acceptable reason was the new value created by converting oil into a value--added commodity - intangible assets, mainly equities. Therefore, any decline in equities in the near term will be moderate. Continue to search for value plays, and adjust your portfolio for maximum performance. ... On the 29th of January, a suggest to purchase SanDisk Corporation (SNDK) at $42.22 was made with the following declaration: " .... Earnings due tomorrow after the close. Projections indicate $0.75 vs. $0.68 for the December '06 quarter .... Look for moderate bullish remarks." SNDK closed yesterday at $42.83 and in the first 30 minutes in the after-market reached $43.95. Once the full impact of the numbers and comments by management were disclosed, SNDK fell to $38.30, losing 10.58% of its value. Upsetting to us was the lack of candor by SNDK's management to offer preannounce guidance relating to the cost associated with the MSystems Ltd acquisition. When we contacted the company two weeks ago, and asked a direct question about acquisition costs, the response was not forthright. SNDK is a well managed company, experienced and fully aware of the value to keep shareholders informed. To surprise shareholders and the financial community with the extent of "acquisitions costs" was irresponsible. How the stock acted after the close is a clear indication that management failed its fiduciary responsibilities. Here's part of statement posted on Yahoo's message board that underscores the disappointment: "....[T]he worst call I've ever heard from this management team. No pure guidance whatsoever, in particular, none for a full year."

January 30, 2007, 7:30am . S&P 500 index closed at 1,420.62 1.56. In general, the market finished like it opened as investors remained uncertain while 25% of the index's underlying stocks report this week. Today's the start of the big event - a two-day Fed meeting, after which investors will receive the central bank's latest read on the economy and intersect rates. Since the Fed has left short-term rates unchanged at its last four meeting, more of the same is assumed. Indeed,, the consensus has come around to our view - leaving short-term rates unchanged is not a bad idea - and will stabilize the 30-year Treasury note and cause the U.S. dollar to remain firm against the other major currencies. As investors reconcile the new reality as far as the Fed stands, the general market will continue to consolidate without a major decline. However, we must remain vigilant to how the S&P 500 index reacts at the 1410 area. So far so good, as the index has enjoy a solid performance without collapsing. With the level of high liquidity, especially from the Middle East, equities have found little reason to materially decline. Continue to weed out stocks less than desirable while adding to special situations.

January 29, 2007, 7:30am ... ..At 1,422.18 the S&P 500 index in no--man's land as confirmed by Friday's range of 1416.96-1427.27. A time for caution until a clear indication which way the general market will move to, as 1410 remains the near term support, while 1450 represents resistance. Looming large on the week's agenda will be the Fed's first meeting of the year, a two-day affair that begins Tuesday. While investors have long since given up hope for a cut in interest rates at the meeting, they will no doubt pounce on any suggestion that might reveal the central bank's intentions for the future. For now, use the opportunity to reduce weak performing stocks and carefully move into special situations on both sides - long and short.

Prior Best Ideas ... February 1, 2007, 7:30am. No action

January 31, 2007.. 2:54pm ... BUY Highway Holdings Ltd. (HIHO) - last $5.35. Under limited accumulation after sustain wave of distribution last over five-days. .... 1:38pm ... SHORT Comverse Technology Inc. (CMVT) - last $19.60. Delisting is scheduled for 02.01.07 and should effect liquidity. Decline to $18.50 is likely in the near term..... 7:30am.... BUY Hanger Orthopedic Group Inc. (HGR) - last $9.02. HGR owns and operates orthotic and prosthetic 669 patient-care centers in U.S. Recently receiving Medicare payment increase of 4.3% (first in three-years) and Cigna contract will immediately show on the bottom line. BUY for near term hold with EXIT POINT $13.50.

January 30, 2007... 3:13pm ... SHORT POZEN (POZN) - last $17.01 . Anticipation of positive FDA ruling to be announced at mid-cap conference is premature. Silence suggests a longer delay than wish to admit. At resistance ($17.15-$17.00) for pulling back to $16.10. ... Five Issues to appreciate in the near term to capture February 1st earnings announcements: (1) Accelrys Inc. (ACCL) last $6.18. Exit point $7.25 (2) Asyst Technologies Inc. (ASYT) - last $6.39. Exit point $9.10; (3) Perrigo Company (PRGO) - last $17.37. Exit point $20.15; (4) Ruddick Company (RDK) - last $27.70. Exit Point $30.10 (5) Unica Corporation (UNCA) - last $12.21. Exit point 14.50.

January 29, 2007... 3:39pm ... BUY Origin Agritech Limited (SEED) - last $8.82. SEED is oversold after declining $2.59 (23%) on failing to meet the estimates of a single analyst. With excellent business model, a dedicated management to execute the plan and sufficient working capital SEED is a value play for the near term. BUY with no EXIT POINT determined. ... 2:07pm ... BUY SanDisk Corporation (SNDK) - last $42.22. Earnings due tomorrow after the close. Projections indicate $0.75 vs $0.68 for the December '06 quarter. However, the guidance for the next 90-day period will establish the near term direction. Look for moderate bullish remarks. Current term EXIT POINT $44.50. January 26, 2007...2:23pm ... SHORT International Rectifier Corporation (IRF) - last $42.62. IFR is within a level level that appears overbought, and a pullback to $40.80 likely.

 

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1 Based on market conditions and other factors previewed in Best Ideas, changes can happen at any time. Accordingly, continue to log-in on a regular basis to maintain maximum performance.
2 Float - Available stock position in the hands of the general public of the total outstanding.
3 Institutional recommendations during the last 30 days.
4 Under technical analysis the term 'support' refers to a point in the stock's price that is immediately maintained and usually suggests an entrance point to purchase.
5 Under technical analysis the term 'resistance' suggests that a point in the stock's price has been reached and further gains are temporarily unlikely.
6 Under Accumulation occurs when abnormal buying in a particular stock takes place, and suggests that inside information may be at play and anticipates future price appreciation.
7 Under Distribution suggests that insiders and others are stealth fully selling on the belief that lower stock prices will occur.
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