Jan 8: What a rally! Market Kick off 2006 buying out all. And the market just start with a little wave of selling the last Tuesday, may be the last chance to some bargain hunters to buy that dip to build a huge rally that leave the end of the week with all the major indexes crossing into 52wk high or all-time highs, with this situation the picture deserve a closer look. Federal reserve member comments suggesting some change in the policy after 1 or even 2 more hike to come (FOMC meeting will be in Jan-28) give us a pretty nice rally on Tuesday giving us an amazing reversal candle, followed on the coming days for confirmation with a market that keeps going into new highs in all the indexes. Now the question that may raise in the next session (even with the earningâs season ready to start in about a few days) will be how long this rally could go and if we have enough strength to hold the run. The Nyse composite crossing an all-time high above 8000 points was the note of the week and the major mover so far, also, the SP hitting a 52wk high around 1285 was a mover. The laggard was, again, the DJIA crossing 10930 in a big effort but shy if we compare to others. Like I said before the point now is if the market have enough power to go direct and consolidate a run before 2300 on Nasdaq composite and 8000 on Nyse or the overbought condition (in intraday basis) will prevail to a healthy correction shy of 700 on Russell, 1300 on SP, 43.20 on QQQQ and 11000 on DJIA. Those levels, then , are the zones to watch in the coming week, a week with some data on the economic front with Wholesale inventories coming out on Tuesday and PPI and Retail Sales on Friday. Trade Balance on Thursday could affect currencies in this moment of quite sensibility. Then I watch the market to the upside until a contrarian signal, so, I think the more âprudentâ here is to go long in intermediate levels, expecting a correction as normal, $42.2 on QQQQ, 7980-8000 on Nyse and 1278-1281 on SP could be key levels to follow, anyway, the change of go long in any break-up to the upside will be still in place with tight stops. _ Good luck to all on the coming week _ Diego M Rolando, Jan-8-2005