For the week, the Dow added 400.71 points to finish at 10368.86, while the Nasdaq gained 78.21 points to close at 1802.75. The S&P advanced 41.94 points to end at 1131.78. Volume for the week was quite similar to what we have seen in 2002 thus far Stocks rallied, as a number of positive economic reports gave investors reason to be optimistic that a recovery is underway for the US economy. After a nice rally Monday, the middle of the week was fairly quiet. In fact, Wednesday and Thursday the markets had solid gains, but sellers managed to take over late in the day. Finally, on Friday the markets saw a very impressive upward surge on the heels of a strong manufacturing report. During this strong move, resistance levels were taken out on both the Dow and S&P, which bodes well for near term trading. While technology shares did have a very strong day Friday as well, once again most tech shares (other than chip shares) under performed the overall market. By and large, the markets behavior was quite constructive. In our trading, our strategy remains the same. Focus on keeping risk to a minimum and preserving our capital. In addition, we feel keeping cash levels rich moving forward could prove to be quite rewarding, as this market may present some nice trading opportunities in the near term. The rally we saw in the major averages Friday may have some "legs" in the near term. The Dow finished at its highest level in six months and closed above what many were calling a major barrier at 10300. This in turn may bring technical traders back into many stocks and the markets. In addition, with short interest near all-time highs, it's quite possible that short covering could to play a large role in the market's direction moving forward (if this market continues to rally, short covering could help push it to slightly higher levels than it would have otherwise). Keep in mind, the action of shorting the market (and as mentioned, the short interest is currently at historically high levels) tends to provide latent support for stocks, not to mention fuel for upwards moves which might otherwise not be present. Certainly, short covering alone will not turn a bear market into a bull market, but when the market changes direction (even sometimes during a single day) the action of shorts bringing in shares does tend to magnify the move up. The Nasdaq, on the other hand, looks a bit more questionable when compared to the Dow and S&P. From a technical standpoint, the index may be able to gain some ground (we did see a close near the highs on Friday),however, serious overhead resistance still could be present just above current levels. Moreover, visibility in the tech sector remains poor and earnings are still not showing any signs of [rapid] improvements. As such, ********* in most tech companies at this point seems to provide much more risk than other areas of the market. Therefore, it's probably wise to steer clear of most tech shares for a bit longer, or at least until the risk/reward ratio improves a little. As far as market moving events, there are a number on the schedule next week which could move the markets. They include: factory orders, Fed's Beige Book, consumer credit and the employment report. Clearly, the employment report will be the most anticipated event of the week. At the same time, with the street so focused on the economic recovery, all of the reports will likely be critical to the near term direction of this market.