(3) Important support and resistance zones for the NASDAQ based on market geometry are:

WEEKLY

MONTHLY

QUARTERLY

YEARLY

OUTER RESISTANCE

2480-2486

2610-2639

2646-2690

3002-3101

INNER RESISTANCE

2452-2464

2458-2478

2494-2537

2575-2674

INNER SUPPORT

2386-2399

2369-2397

2251-2322

2128-2294

OUTER SUPPORT

2349-2354

2293-2322

2153-2196

1742-1841

(4) Important support and resistance zones for the S&P 500 based on market geometry are:

RELEVANT HISTORICAL DATA FOR PERIOD AHEAD( new or updated in bold print)

(1)The next potential S&P turning point dates are January 12th and 18th.

(3) Since 1950, when the S&P is up during the first five days of the year, the S&P has finished the year up 86.1%(31 of 36) of the time, but when the S&P is down the first five days, the S&P is down 48%(a coin flip?) of the time

(4)Since 1950(does not include 2006), The Dow has gained 11691.79 points in the November 1st to April 30th period while losing 538.98 points from May 1st through October 31st.

(5) Since 1832 the first two years of the presidential term produced a total net gain of 227.0% versus 745.9% for the last two years.

(6) Since 1950, up Januarys, have been followed by up years in the S&P 90.9% of the time.

(7) Since 1950, down Januarys, have been followed by down years in the S&P 61.9% of the time.

(8) There have been no down pre-election years for the Dow in the last 68 years.

(9)Since 1950, January has been the third best month of the year with an average gain of 1.4%, and 37(66%) of the last 56 years have been up months.

(10) From Todd Market Forecast Stock Market Update for Thursday 10/05/06
www.toddmarketforecast.com:

Here's something to consider. Going back decades, there tends to be a major low every fourth year. Counting backwards 24 years from 2006 and looking at the percentage decline from top to bottom we get the following: 2006 - 6.5%; 2002 - 34%; 1998 - 19%; 1994 - 8.9%; 1990 - 20%; 1986 - 9.4% and 1982 - 17%.
This is the vaunted four year presidential cycle expressed in S&P terms. Now, if we calculate the percentage gain from the low of the fourth year to the peak of the following year, we get the following: 1982-3 + 70%; 1986-7 + 46%; 1990-1 + 41%; 1994-5 + 42%; 1998-9 + 30%: 2002-3 + 43%.
The 2006 loss from top to bottom was the smallest of all the declines and we are assuming that the low has already been seen. Indeed, it would take a major catastrophe to get us back down to S&P 1223.
The smallest rally from the low to the peak was 30% in the 1998-99 period. A similar rally from the June 2006 lows would put us at S&P 1612 sometime in 2007. Most of the previous rallies were just above 40%. Such a move would put us at S&P 1810 next year.
(11) Since 1942 if you bought the close of the Monday before Thanksgiving and held through the third day in January, you would have made money 75% of the time.

(12) From the latest issue of The Stock Traders Almanac Investor newsletter: Since this year’s Worst Six Months (WSM) were pretty good, with the Dow up 6.3% from April to October,we ran the numbers on how Best Six Months(BSM) fared after up WSM. Since 1950 the BSM were up 25 of the 33 times with only one double-digit) loss in troubled Pre-ElectionYear 1973.

(13) From Mike Burk Alphaim.net:

Next year is the 3rd year in the 4 year Presidential Cycle and, on average, the strongest by a wide margin.

Since 1963 the OTC has been up every 3rd year except 1987. The average gain for the 3rd year has been 36.5%, nearly 3 times the average gain of all years combined.

Since 1928 the SPX has been up every 3rd year except 1931 and 1939. The average gain has been 15.5%, a little over double its average gain of all years combined.

IMPORTANT INVESTOR SENTIMENT INDICATIONS( new or updated in bold print)

(4) The commercial data at the moment may not be relevant as there has been a reclassification of who should be included in commercials.

(5) The Investors Intelligence Bullish percent remains in the danger zone. The market doesn't usually start a correction immediately on entering the danger area, but you have to be on a lookout for a possible top within several weeks. At the end of 2005 it was at 60.4%, and the market made a peak on May 10th a little over 4 months later. The small investor still is not showing much enthusiasm.

EVENTS THAT COULD HAVE A MAJOR IMPACT ON THE MARKET, AND OTHER RUMINATIONS. ( new or updated in bold print)

(3) From January 1st's Barron's Barron's Commodities Corner column: THE COMMODITY-MARKET ROLLERCOASTER ride of 2006 may careen on in the new year. Just as in '06, large investment flows into commodities are expected. But the direction of a few key markets, such as crude oil, gold and corn, could determine just how much of a thrill ride 2007 becomes.

Inflows are likely to persist until monetary-policy rates around the world "reach restrictive levels," JP Morgan wrote in a recent research note.

Ultimately, the direction of commodities prices will depend on the movements of key markets. Crude oil led the way in 2006, but corn and precious metals are expected to share the driver's seat in 2007.

(4) From December 18th's Barron's article The Templeton Touch an interview with BAHAMAS-BASED JEFF EVERETT, chief investment officer of the Templeton Global Equity Group, a Franklin Resources (ticker: BEN) unit that oversees the $152 billion Templeton fund family, is the kind of investment manager who won't hesitate to go up the down staircase -- especially if he thinks it leads to an unnoticed and undervalued stock. In short, he says, "We like to go where expectations are the lowest."That strategy is currently taking him to large companies in developed markets with stable businesses -- essentially the antithesis of the more exotic issues in which many of his peers are investing.

One of the biggest changes in our global fund during the past 18 months has been the increased weighting of U.S. stocks in our portfolio -- from 17% to 40% -- because of the strong performance of the U.S. market. However, we are still below the MSCI All Country World Index's recommended weighting for the U.S. of 49%.

(5) From December 11th's Barron's cover article Outlook 2007: Perhaps it's a bit imprecise to say investors "enjoyed" this year's generosity, as professional investors have had a bear of a time keeping pace with the bull run. More than 70% of active large-cap fund managers were trailing the market as of Oct. 31. To have exploited the year's twists and turns fully, one would have had to bet heavily on a commodity boom until May, a sharp slowdown and commodity bust into summer and a recovery led by consumer spending this fall.

What's more, much of the fuel for the recent rally was provided by stubborn short sellers, who expected the market to swoon into the midterm elections, as history suggested it would. Their plans foiled, the shorts were forced to cover their positions, sending stocks even higher.

The market's gains are all the more impressive given that all the year's upside, and more, has come since midyear, when concerns about slower economic growth and commodity-fueled inflation culminated in an 8% pullback in the indexes, the largest decline of the bull market that began in late 2002. Stocks have risen in each of the past five months and in 11 of the past 12.

This winning streak so far has exceeded the forecasts of all but one of the Wall Street strategists surveyed by Barron's a year ago (Prudential's Ed Keon), and has emboldened this year's group to pencil in still more upside for '07. Collectively, the Street's forecasters are looking for an 8% gain (that's both the average and median prediction), which would place the S&P 500 at around 1520 by year end, on the threshold of its all-time record of 1550 set in early 2000.

Neatly summing up the group's general view, Goldman Sachs' longtime chief investment strategist, Abby Joseph Cohen, says: "Share prices properly reflect a favorable fundamental picture for 2007. Growth is moderating, inflation pressures are abating and the [Federal Reserve] is expected to maintain a friendly stance. Equity valuation is supportive." Cohen thinks the S&P 500 can rise 10%, to 1550 in a year.

(6) From December 11th's Barron's The Trader column:With America Inc.'s profits and cash balances at record highs, and interest rates relatively low, there's plenty of cash sloshing around financial markets. Last week's activity was a reminder of just how much of a friend liquidity is to the stock market, says James Paulsen, chief investment strategist at Wells Capital Management. The mergers, buyouts and shareholder-friendly actions helped the market, he says, and then made people "go back and look for what's left that's still cheap."

"The tremendous drive for deals is the market speaking to how cheap stocks are," adds Milton Ezrati, Lord Abbett's strategist. "It remains very profitable to borrow to buy."

The average weighted cost of capital for the S&P 500 is unchanged from three years ago, while there has been an explosion in profits since then, notes Jim Swanson, chief strategist for Massachusetts Financial Services. U.S. returns on equity have risen to 18% from 10% to 12% in the same span. With the cost of capital less than 7% for corporations, and less than that for private-equity investors, "there hasn't been this big a disparity [between returns and cost of capital] in at least a decade," Swanson says.

The surfeit of buyouts and related activity is no surprise and should continue, he adds. What could put a damper on desire? Swanson fingers a big surge in oil prices or a collapse of the U.S. dollar. A sustained rise in interest rates, however unlikely, would do the trick, too.

LBO Candidates

The stocks below scored high as leveraged-buyout candidates in a Morgan Stanley screen, based on factors typically favored by private-equity buyers

(7) From December 4th's The Trader column: This is good news for one domestic group: American multinational corporations, which derive a big slug of their profits from overseas. As the dollar drops, U.S. exports of products and services become cheaper for foreigners, and each unit of foreign currency earned by the multinational translates into more bucks back here.

Not every large U.S. company is affected in the same way. Some sectors do more selling overseas than others, like technology companies in general, and semiconductor companies in particular.

Bank of America's chief market strategist, Joseph Quinlan, says a "sustained, broadly based decline"

In the dollar would likely provide a big boost to earnings for many U.S. multinationals. Against a backdrop of a slowing U.S. economy, he adds, foreign revenue could be the crucial difference next year between hitting and missing profit estimates for these companies.

Among the stocks in the Dow Jones Industrial Average, Intel (INTC) leads in overseas exposure, with 85% of its revenue coming from outside the U.S. The computer-chip maker, far and away the worst Dow performer since mid-2000, could be the biggest beneficiary of a lower dollar next year. Other Dow stocks that get a majority of their sales abroad are Coca-Cola (KO), 71%; ExxonMobil (XOM), 69%; McDonald's (MCD), 66%; Hewlett-Packard (HWP), 65%; International Business Machines (IBM), 62% (see "The New Big Blue"), and 3M (MMM), 61%.

(8) From April 13th's Barron's The Trader column: With the midterm elections over, it's no surprise market pundits dragged out a hatful of historical trends, some more curious than predictive. For example, markets generally have done better with Democrats controlling Congress. And, since 1960, every third year of a president's term -- 2007 will be one -- has been positive for the stock market. In all but one such year, stocks have run up by double digits.

OK, one more: Under a Republican president, the S&P 500 has performed best when the Democrats controlled at least one house of Congress.

THE DEMOCRATIC ELECTORAL VICTORIES last week sent a gamut of health-care stocks tumbling, amid fears the Democrats will revisit the Medicare Drug Benefit with an eye toward lowering prescription-drug prices, and otherwise meddle with the profitability of the health-care sector. Among the 10 worst-performing S&P industry groups were health-care suppliers, down 6.6%; pharmaceuticals, down 3%; managed health, down 2.6%, and health-care services, down 1%.

The market's fear is not unreasonable, given the Dems' populist policy bent. Yet, history and the checks and balances that will circumscribe action by this Congress suggest the decline in shares prices might present some buying opportunities in the sector.

(9) From October 23rd's Barron's Current Yield article: One other factor appears to have been at work in the markets' advance over the past couple of months -- the return of the yen-carry trade. That involves borrowing yen, which costs a fraction of a percent, to buy higher-yielding assets.

The strategy backfired earlier this year when the Bank of Japan ended its so-called Quantitative Easing, which involves stuffing the channels with trillions of yen of excess liquidity to stimulate the domestic economy. That helped precipitate the spring selloffs in everything from the Icelandic krona to the U.S. stock market.

Expectations that the Japanese central bank would take the next step, to lift rates from zero, helped push the yen up sharply, to about 110 to the dollar by mid-May from around 119. And that's what put the kibosh on the markets. Even if the BOJ jacked up rates all the way to 1%, it still would be the cheapest money in the world. But the Japanese currency's rise would mean nearly a 10% increase in the dollar value of a yen loan, a crushing blow to a levered speculator.

The yen has since gradually receded back to the 118-119 level to the dollar, and despite expectations of an eventual rise in Japanese short-term rates, the BOJ is still stuck at zero. Given the irresistible prospect of free money, the yen-carry trade resumed in mid-summer, which Charles Dumas of London-based Lombard Research writes "is the chief explanation of Wall Street's recent bull run."

(11) The Dow divisor is now .12482483 Every 1 point move in a Dow stock will move the average 8.01 points. If each Dow stock moved 1 point the Dow would move 240.34 points.
(12) From September 18th's Barron's Current Yield column: Kessler, the eponymous head of a Denver-based company that manages leveraged Treasury portfolios for the very rich but not so famous around the globe, thinks the Fed will have to come to the rescue of a faltering financial system by next year. Some 43% of all U.S. bank assets -- a record -- are tied to real estate, he points out. As the value of that collateral begins to buckle, the Fed will have no choice but to slash rates, just as it did in the wake of the Nasdaq debacle and the series of credit accidents in 1994.

(13) From January 1st's Barron's The Trader column:The Brown Brothers Harriman liquidity index last week notched an 18-month high. Buyout firms have hundreds of billions burning holes in their pockets. U.S. stocks have lagged most global markets, suggesting that asset allocators may move some of their chips stateside.

So, the fuel is there for continued upside.

But this is a market that has gone longer without a 9% pullback than any in history, and each Fed tightening cycle of the past couple of decades has resulted in some financial mishap that gouged equity prices at least temporarily. Only a couple of bull markets have lasted through a fifth year, so we're testing the odds here.

(14) From January 1st'sBarron's International Trader column: ANOTHER YEAR OF STRONG GAINS MIGHT be on tap for emerging markets in 2007 -- and for Asia in particular. That's the consensus among a group of analysts and investment managers we checked in with in the waning days of 2006.

Today, every major emerging economy is booming, according to Bridgewater Associates, and all but one, Chile, is growing faster than any major developed economy. For the first time, emerging economies are contributing more than half of global growth.

That's a nice backdrop for further gains in emerging-market equities, which jumped 25%-plus last year on the dollar's weakness and a fallback in oil prices that kept U.S. consumer spending stronger than people expected. China's currency and a host of other Asian currencies have strengthened, boosting returns for people who keep score in dollars.

Expect more mileage out of the BRICs [Brazil, Russia, India, China] theme this year, as Brazil's interest rates fall, Russia's consumers keep spending, and investors in China keep buying their own shares. Over the long haul, "EPS growth will outstrip that of developed markets pretty significantly," predicts Julian Mayo, investment director at Charlemagne Capital in London, which runs U.S. Global Emerging Markets Fund.