Iran, Russia, Oil, and Gold Seen Pressuring Stocks this week.

Continued defiance and boldness by Iran will pressure stocks in the near term. Iran publicly declared that it had successfully lanched a missle in to the outer space in their bid to establish satellites by year 2010. Additionally, according to Fox news, http://www.foxnews.com/story/0,2933,254480,00.html, Iran's nuclear ambition is now declard as a freight train without brakes and rear gear. Further antagonism by Russia further escalates concern for continued oil price spike, infation worries, and a market sell off on Wall Street. The last dark horse that can cause a market sell off is Israel, who may take matters into their own hands in attempting to neutralize the Iranian menace. Much like in the early 1990's attack by Israeli air force on Iraq's suspected nuclear site, this may be a likely scenario, especially when Israel is the preeminent focus by prior statements by Iran's hardline president Ahmadinejad. If this scenario was to take place, it would increase global tensions, oil price spikes, and sell off in global equities, and may be the fuel that is needed for the long awaited "corrective phase" in the US market.

Russia's anti-US rhetoric is growing. Russia is increasingly supplying Iran with weapons for anti-aircraft defense and Putin has publincly warned the US and European allies against establishing anti-missle defense systems in Eastern Europe. Furthermore, Russia has publicly called for OPEC like cartel to control the natural gas supply and establish pricing power. Read in between the lines, it is clear that Russia is willing to parlay their substantial oil and natural gas powers to gain leverage and prestiege on the world stage. Any conflict within Iran by either US and their allies or Israel will result in oil spike above $65 to $70 in quick order, thereby sqashing any hopes for "Goldilocks economy". Inflation jitters will predominate and a sell off can ensue in the global equity markets.

Gold prices are hovering around $680, which is alarming, but not surprising given the issues surrounding Iran, Russia, and evidence to the contrary to what the Fed chairman Ben Bernake said regarding to the dovish economic situation in the US.

In light of these issues, it creates the "wall of worry" that is necessary for the markets to continue moving up. I don't see any reason to push the "eject" button just yet. Cooler heads will prevail in this market. I would advocate possibly starting a small short position around Bidu, Google, Crox, Apple, QQQQ, dated out to at least June, and slowly add to that position as conditions deteriorate. Long positions should be kept small, short, and sweet. Take profits early and often and reassess. Most importantly, this is not the time to be greedy as there is a lot of growing risk in this market. Many momentum stocks are extended and good entry point does not exist. Many leaders have began to roll over. As usual, don't allocate more than 20% of your cash position into any trades. That would be my advice for the week.

1. I myself will be looking to buy some June 07 $85 puts, slowly as BIDU's price rises. The gap should finish filling around $111.80 mark but the stock may run as high as $120.00, but below the 50 DMA which should pose significant resistance.

2. I have established 21 contract position at Mindray MR April $30 calls. I will look to add to this position leading up to earnings onf 3/12/2007. I expect a blow out earnings.

3. I will sell my Google call contracts this week.

4. I am establishing position into LHC Group leading into earnings on 2/28/2007. I would like to establish 100 contract positions.

5. I may establish a small 10 contract position into TWGP April $40 contracts.

As always becareful out there.