Take The Gains From The First Week of 2006 OUT...

... and we get a flat market for the year!! That is an amazing fact, given all the hoop-la going around about earnings, strong growth potential, etc. Well, it would seem that not all is well -- I have never seen gold and oil spiking through the roof and equities going up as if nothing was the matter. Even with all the talk that the Fed may soon be done (at 5%), the market just can't seem to muster enough strength to take off from here. I've been thinking about going long large caps (say Dow Jones Industrial Average) against shorting the small caps (Russell 2000), purely on a fundamental basis. I simply can't see how small caps can keep delivering in the current macro environment, M&A or no M&A activity. More on this a bit later when I do my homework...