CLOSING COMMENTS 5-30-06

The Last Week in Review:

The bulls and the bears continued their battle last week. An early week sell-off put the bears in control, but by Friday, the markets ended the week higher. The Dow rallied 134 points and is now up 5.2% for the year. Despite the recent weeks of selling, the Dow is only 3.9% away from its all-time high. The S&P 500 rose 13 points and is up 2.6% year-to-date. The NASDAQ tacked on 16 points for the week, and is now up only 0.2% for the year. The Russell 2000 added 7 points, and is the best performing index, up 8.4% year-to-date.

On a technical basis, the last two days of the week removed much of the downward momentum that controlled the market in May. In fact, all of the indexes clearly rebounded from technically oversold levels. A key support level many analysts are watching for is 1295 on the S&P 500. This represents the bottom of the five-month ascending channel. The next key resistance level for the NASDAQ is 2230, which represents its 200-day moving average.

The Week Ahead:

The Memorial Day Week could see a slowdown in volume and few earnings reports are still to be released. Homebuilder, Hovnanian Enterprises' (HOV), will release their earnings on Wednesday, while the technology sector could have some direction on Wednesday as Symantec Corp. (SYMC) hosts an Analyst Day and Internet leader, Google (GOOG), holds an Investor Conference call. Both General Motors (GM) and Ford (F) will release monthly auto sales reports on Thursday.

The conference calendar is light for the week beginning with Bear Stearns holding a Biotech conference on Wednesday. Citigroup holds a two-day Semiconductor Conference also on Wednesday. Friedman, Billings & Ramsey hold their two-day 2006 Growth Investor Conference beginning on Wednesday.

The economic calendar is very busy this week, including the all important Friday's May Employment Report, which is expected to show the economy added 175,000 jobs for the month. On Tuesday, Consumer Confidence Reports will be reported. Wednesday brings the release of the weekly energy report, the May Chicago PMI, and the release of the FOMC Minutes from Fed's May 10 meeting. On Thursday, the April Construction Spending, the ISM Index for May, and First Quarter Productivity all will be released. In addition to the Employment Report on Friday, April Factory Orders will also be reported.

In summary: Investors need to focus on the May Employment Report and key technical support levels mentioned earlier.

Stay tuned!