What a great holiday week it was, every single industry we follow managed to be in the green for the week. The only bad news, as we mentioned yesterday, was that it all happened on volume thinner than a runway model.

Looking at the top performing industries, it appears to be old-times all over again with oil, energy and steel on top. The last time we saw the same industries on top, oil was on its way to $200 a barrel. We don’t dare make the same pronouncement.

Here are the week’s poorest performing industries:

There are many indicators that look positive for stocks right now. The S&P 500, NASDAQ and Dow Jones Industrials all closed Friday at 20 day highs. Our momentum model’s score is well above 4 standing at 22.77. Our Technical Analysis shows the short term moving averages one the brink of crossing above the 50 day moving average and the MACD crossing above zero. All of these are considered buy signals.

There are two caveats to all this good news. All of the buy signals were produced on holiday volume and our market leadership model is still in sell territory. Perhaps some of the week’s economic news can push the volume up and the leadership model into the green. The reports to be on the lookout for are:

Wednesday: Weekly Applications of Mortgages
Thursday: Weekly Claims for Unemployment Insurance
Friday: Employment Situation Report

Ten predictions, some more realistic than others, for stocks, sports, politics, and the economy in 2009.

1. The stock markets will return 4.3% for investors by year’s end. After falling another 15-20% to start the year, the markets will recover and get above water early in the fall and post profits for the year.
2. Technology, Consumer Cyclical, Financial and Transportation stocks will be the best performers in 2009. At some point in the late spring early summer, it will be apparent that the downtrend in the economy is over. Money managers will pour money into stocks that tend to outperform in the early stages of a recovery.
3. Inflation will roar its ugly head by spring. With an additional Trillion dollars set to be spent by the incoming president, money we don’t have, the printing presses will by working overtime printing dollar bills. Seven hundred billion plus a trillion dollars, all that money has to go somewhere and will fire up the inflation engine.
4. There will be another attempted terrorist attack on US soil. Even Joe Biden believes Obama will be “tested.” There is little doubt jihadists around the world will want to see what Obama is made of.
5. Trying to pass a green tax will lead President Obama’s poll numbers moving down to 50%. The American consumer will see no need with gas prices floating around $1.25-1.50. When the average citizen is presented with the real cost to his/her wallet, they will resoundingly say no.
6. One country in the European Union will leave the alliance. The EU was all fun and games on the way up, we doubt that will hold with thousands of years of distrust between most members on the way down as Europe won’t recover until mid-to-late 2010.
7. At least 1 major sports franchise will file for bankruptcy. It will be either a small market baseball team or any number of NHL teams.
8. The Tennessee Titans will face the Carolina Panthers in the Super Bowl with the Panthers emerging as champs. Carolina’s Steve Smith will be the MVP.
9. LeBron James will be the NBA MVP and lead the Cavaliers to the NBA finals against Kobe Bryant and the L.A. Lakers. The team will home court advantage will win in an epic game 7 that has TV execs jumping for joy.
10. Finally, my beloved Cubs will trade for Jake Peavy before the season starts and win the World Series against the N.Y. Yankees. The Cubs will join the Chicago Blackhawks as champions making Chitown the Presidential Championship City.

If only the first half of number 10 becomes a reality, it will be a great year.

Happy New Year to all The Correct Call readers! We will be back with a vengeance after the 1st and look forward to having a great ’09.

The market appears to be stuck in neutral. Our momentum models are posting buy signals while our leadership models are reading sell.

According to our technical analysis, the charts paint a clearer picture. If we don’t make a move up right about now, we could have some selling pressure. As you will see on the chart below, all 3 of the major indexes are at the cusp of delivering a sell signal.

It looks to us that the major indexes have found some major resistance. This could be good or bad for investors in the weeks ahead. The good: the markets are headed higher if they break above resistance. The bad: we will probably test the lows if they do not.

The key resistance levels are:

S&P 500: 900-911
NASDAQ: 1600-1625
Dow Jones Industrials: 9000

Our momentum model is still in positive territory, but its strength is waning. We would like for it get healthier. Our market leadership model marks its 8th straight week in the negative column. The Correct Call believes they will be in both camps soon; we are just not sure which. Although we are leaning (hoping?) towards positive.

Our weekly technical analysis of industry charts uncovered potential in some stocks that have been pummeled; gambling stocks. Since these stocks present more risk than a hand of blackjack, we recommend owning a few and maintaining stops. Risk is not always a bad thing; in this case we hope to be dealt a One Eyed Jack and an Ace of Spades.

The 3 gambling stocks we like are:

Full House Resorts (FLL) trades at less than its book value of $1.86 and at a forward PE of just 7 times earnings. The company is generating enough cash flow to buy back up to $1 million in shares. Full House expects substantial EPS growth when their new FireKeepers Casino opens in mid 2009.
Technically, the stock looks attractive too; recently the MACD registered a buy signal with a positive MACD crossover under zero. A note of caution, FLL is a thinly traded stock averaging 38,000 shares a day.
Nevada Gold & Casinos Inc. (UWN) trades at only a quarter of its book value of $2.90 and has an aggressive one year target price of $4.00; not bad for a 75 cent stock. Nevada Gold also boasts an impressive return on equity of 79.5% and trades at just 1.5 times sales. Management recently sold off some assets to create cash for attractive acquisitions that can put more profit on the bottom line.

Monarch Casino & Resort Inc. (MCRI) trades with an attractive PEG ratio of .99. Shares exchange hands a little more than 1.5 times its book value and just 1.12 times sales. Despite the hardship facing casinos, Monarch was able to top Wall Street’s 3rd quarter estimate by four cents. MCRI’s management is also in the process of buying back up to 1,00,000 million shares. If Monarch’s shares can break out of this range, it could be a $12 stock soon.

Nordson Corporation (NDSN) is set to discuss earnings before the market opens Thursday, December 18. With direct operations in 30 countries worldwide, Westlake, Ohio-based Nordson Corporation is the world’s leading manufacturer of systemsthat apply adhesives, sealants and coatings during manufacturing operations.

NDSN is expected to earn a profit of 84 cents for its 4th quarter. We expect the adhesive company to announce earnings that will miss investors’ and analysts’ expectations.

KeyBanc Capital Markets analyst Matt Summerville recently lowered estimates of Nordson’s earnings per share to 82 cents from 87 cents for the fiscal fourth quarter and to $3.35 from $3.41 for 2008. For 2009, he now expects earnings per share of $2.70, down from $3.85.

According to our technical analysis, this stock is poised to move following earnings and it has a history of jumping wildly following its earnings report. Last time out the stock dropped more than 25% following its quarterly check up. NDSN shares have also soared 10-15% following the call. We see it as an ideal candidate for an options straddle.

Suggested Stop Long: $25.31

Suggested Stop Short: $31.17

Our technical analysis leads us to believe the indexes are headed for resistance levels early in the week. For the markets to continue their upward march from the November lows they will have to breakthrough and turn resistance into support. The important numbers for investors to be on the lookout for are:

S&P 500 a close greater than 900
NASDAQ a close greater than 1600
Dow Jones Industrials’ picture is a bit muddled, but 9000 appears to be the key closing point.

As far as our market models are concerned, our momentum model is still generating a buy signal and our market leadership model is still in sell territory. This means more aggressive investors can buy stocks, index based ETFs like PowerShares QQQ (QQQQ)make sense. More conservative investors should wait until each gives the green light. Both are on the edge and capable of flipping in either direction with modest gains or losses. We will keep our readers updated.

With the auto bailout failing to pass the Senate last night, futures and world markets are falling. Situations like this can override our indicators, fundamental and technical analysis. Today’s action will undoubtedly turn all of our scores around into the red.

Something is very wrong with Wall Street right now. It is no longer a stock market, IT IS A POLITICAL market. When Wall Street is getting its cues from Washington, we are ALL in big trouble. The same politicians who had a hand in creating this mess are going to fix it? Yeah Right, I have the perfect bridge for you.

We will have this week’s Trading Earnings pick up later today.

As we were applying our technical analysis to more than 800 ETF charts, we decided to stop halfway through to focus on one major new trend. International ETFs appear to ready to deliver outperformance in the weeks and months ahead. We found 18 new buy signals in our international ETF universe and there were almost as many within a dollar or two of joining the club. We wouldn’t be surprised to see many of the near misses in our report next week.

For those of our readers that don’t have any international exposure, consider this gem from Princeton professor Burton Malkiel’s book A Random Walk Down Wall Street. Reporting on the results of his 20 years of research, he wrote:

”It turns out that the portfolio with the least risk had 24% foreign securities and 76% U.S. securities. Moreover, adding 24% [Europe, Australia, and Far East] stocks to a domestic portfolio also tended to increase the portfolio return. In this sense, international diversification provided the closest thing to a free lunch available in our world securities markets. When higher portfolio returns can be achieved with lower risk by adding international stocks, no individual or portfolio manager should fail to take notice.”

The international ETFs with new buy signals include:

BLDRS Emerging Markets 50 ADR Index (ADRE)
iShares S&P Asia 50 Index (AIA)
SPDR S&P BRIC 40 (BIK)
iShares MSCI BRIC Index (BKF)
WisdomTree DEFA (DWM)
iShares MSCI Sweden Index (EWD)
iShares MSCI Spain Index (EWP)
iShares MSCI France Index (EWQ)
iShares MSCI South Africa Index (EZA)
SPDR DJ EURO STOXX 50 (FEZ)
PowerShares FTSE RAFI Emerging Markets (PXH)
iShares MSCI EAFE Value Index (EFV)
iShares MSCI Hong Kong Index (EWH)
SPDR S&P Emerging Asia Pacific (GMF)
SPDR S&P China (GXC)
Claymore/AlphaShares China Real Estate (TAO)
iShares FTSE/Xinhua China 25 Index (FXI)
PowerShares Gldn Dragon Halter USX China (PGJ)