The Market Direction…

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*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Market Direction Summary (02-02-2010)

Dow-30 +111.32 @ 10296.85; S&P 500 +14.13 @ 1103.32; Nasdaq 100 +16.20 @ 1776.92; Russell 2k +4.80 @ 614.05; VIX -1.11 @ 21.48; U.S. Dollar Index -0.17 @ 79.00; 10 Year Tsy Rates -0.19 @ 36.35; Crude Oil +2.05  @ 77.00; Gold +9.10 @ 1114.30; CRB +5.21 @ 273.19; DJ-U.S. Real Estate Index +2.88 @ 174.78

Yes, it really is earnings season. Refusing to be upstaged anymore by EU issues related to Greece’s sovereign debt problems or even Washington’s political haggling over regulatory reforms and economic recovery assistance programs, positive earnings results finally earned some respect from the market’s audience.

However, a slightly better than expected Pending Home Sales index (Dec-2009 actual @ 96.6 vs. Nov-2009 revised @ 95.4) played a supporting role. The just barely good enough housing results were more than good enough for the Global Timber Fund (CUT) and homebuilder exchange traded funds (i.e. XHB and ITB). In fact, Hillbent’s entire real estate ETF universe responded positively and experienced six short-term and three intermediate term trend upgrades. Overall volume increased signficantly within this group (see below).

Commodities, having succumbed to renewed dollar strength and being extremely oversold, rebounded to be included amongst today’s top performers. Notable trend upgrades occurred for the DB Agriculture (DBA), DB Commodities (DBC), Gold Trust (GLD), Platinum Fund (PTM).

Energy related ETFs, Gasoline Fund (UGA) and Oil Fund (USO), continued to move on the momentum created by yesterday’s better than expected gains in the ISM Manufacturing Index report.

DB Base Metals Fund (DBB) remains well below its short and intermediate trend resistance levels, but appears to have found support at its 38.2% retracement level. Acting as a bullish catalyst for industrial metals was January’s reported U.S. Vehicle sales at Ford being up an annualized 25%. DBB closed up 0.84% on surging volume.

Price Volume Analysis…

Although today’s dominant trading pattern was bullish (36% price up & volume up) and showed a definite improvement in morale, the breadth was hardly a cause for celebration.

Come on buyers… Let’s pump up the volume! We can’t hear you!

ETF New Highs & Lows…

ETF 5 Day New Highs: (Note * denotes 250 day new high)

• U.S. Equities (DIA, SPY, IYZ, XLB, XLE, XLF, XLI, XLP, XLV, XLY, BBH, CUT, GDX, HAP, IGF, ITA, KIE, PPH, PXR, RKH, SLX)
  
• International Equities (EWC, EWW, EWZ, ILF, ISI, EWG, IEV, RSX, VGK, EWH, EWJ, FXI, IFN, VNM, EEM, GAF, GML, GUR)
  
• Commodities (DBA, DBC, GLD, PTM, SLV, UGA, UNG, USO)
  
• Forex (BZF, CEW, FXC, FXM, XRU)
  
• Bonds (N/A)
• Real Estate (ICF, ITB, IYR, REM, REZ, RTL, XHB)
  

ETF 5 Day New Lows: (Note * denotes 250 day new low)

• U.S. Equities (N/A)
• International Equities (EWT)
  
• Commodities (N/A)
  
• Forex (FXA)
• Bonds (BWX, EMB, JNK, TLT)
  
• Real Estate (N/A)

Closing Comments…

The market, even after two consecutive days of positive performance, still remains widely oversold from a short-term perspective. This gives it plenty of stretching room should bulls decide to make a charge.

However, consensus estimates and actual results for the all important employment reports (ADP on Wednesday, Jobless Claims on Thursday, and Employment Situation on Friday) will overshadow the market as the trading week winds down to a conclusion.

In regards to earnings, there are 63 S&P 500 constituents reporting quarterly results over the next three days. Some that could help us connect the dots for a better macro-picture of the economy are consumer credit barometers: MasterCard (MA) and Visa (V); real estate bellwethers: CB Richard Ellis (CBG), Simon Property (SPG), Kimco Realty (KIM), and Weyerhauser (WY); international energy offshore driller: Diamond Offshore (DO); and technology infrastructure leaders: Cisco (CSCO), Akamai (AKAM), Broadcom (BRCM), and Memc Electronic Materials (WFR).

Fasten your seatbelts, the rubber will begin to meet the road of the true Market Direction over the next three days!

Signing off at Hillbent on The Market Direction and ETF Market Trends™…

ETF Market Trends™ Monitor (02-02-2010)

*PMI measures strength of % daily trading range on scale of 0 to 100

**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend

***Vol% measures % change in daily volume vs. average daily volume

Market Momentum Diary: 02-02-2010

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Hillbent scans the market for significant positive and negative earnings surprises which may be potential catalysts for future bullish or bearish price action. The results generated are not intended to be comprehensive but allow investors to focus on the top or bottom earnings results and provide a starting point for further research efforts and the market direction.

It is important to note that a positive, negative, or in-line earnings surprise is not necessarily a respective overall positive, negative, or neutral event for a reporting company. Some of these companies may still be experiencing year-over-year positive, negative, or flat growth rates.

(This screen is not intended as a specific recommendation to buy or sell a security, but merely provide a starting point for investors and improve the efficiency of their individual investment research efforts.)

Earnings Surprises Summary for Feb-02-2010

Upcoming key earnings reports for Wednesday (Feb-03-2010) from the following sectors: Auto (TM,); Basic Materials (IP); Business Services (EFX, V); Conglomerates (HIT, ITT); Consumer Discretionary (BDK, CMCSA, DLB, RL, TWX, WU); Energy (ENB, MMP, NOV, WLT); Finance (AIZ, AMP, AVB, CBG, EQR, FNF, KIM, LAZ, NLY, REG, WSH); Retail (YUM); Health (PFE); Technology (AKAM, ARW, BRCM, CSCO, ONNN, ROP, SPIL, TMO, UMC, WFR); Utilities (PHI).

For after-hours info on earnings guidance, please click here for earnings guidance news @ Hillbent.com.

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Market Direction Summary (02-01-2010)

Dow-30 +118.20 @ 10185.53; S&P 500 +15.32 @ 1089.19; Nasdaq 100 +19.68 @ 1760.72; Russell 2k +7.21 @ 609.25; VIX -2.03 @ 22.59; U.S. Dollar Index -0.30 @ 79.17; 10 Year Tsy Rates +0.45 @ 36.54; Crude Oil +2.30  @ 74.95; Gold +23.40 @ 1105.20; CRB +2.39 @ 267.98; DJ-U.S. Real Estate Index +3.07 @ 171.90

No comments this evening…

Price Volume Analysis…

The dominant price volume relationship for Monday’s trading was distribution (55% price up & volume down) and makes me a bit suspicious of this young rally.

A win is a win in the history books, but expanding volume is the sort of stuff that creates momentum and sustainability. The lack of it shows that many investors are not yet fully committed to buying these dips at this stage of the game.

ETF New Highs & Lows

ETF 5 Day New Highs: (Note * denotes 250 day new high)

• U.S. Equities (RSX, EWH, FXI, GAF, GUR)
• International Equities (N/A)
• Commodities (PTM)
• Forex (CYB, UUP)
• Bonds (AGG, MBB, SHY, TIP, TLT)
• Real Estate (ITB, REM, XHB)
  

ETF 5 Day New Lows: (Note * denotes 250 day new low)

• U.S. Equities (VXX, XLU, XLV, IHI)
• International Equities (EWC, EWW, EWZ, ILF, ISI, EWG, EWQ, EWU, IEV, VGK, EWA, EWJ, EWY, GAF, GML)
  
• Commodities (CWO, DBA)
  
• Forex (FXA, FXB, FXY, XRU)
• Bonds (AGG, BXW, EMB, HYG, IEF, JNK, MBB, MUB, SHY, TLT)
  
• Real Estate (N/A)

Closing Comments…

Should the market continue to rally from its extremely short-term oversold condition, which I previously mentioned as a possibility, then caution should be used as it approaches levels of resistance.

Unless it can be reversed, the breakdown in the intermediate downtrend really increases the potential for further downside risks and volatility.

Signing off at Hillbent on The Market Direction and ETF Market Trends™…

ETF Market Trends™ Monitor (02-01-2010)

*PMI measures strength of % daily trading range on scale of 0 to 100

**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend

***Vol% measures % change in daily volume vs. average daily volume

Market Momentum Diary: 02-01-2010

*Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

At the end of each trading week, Hillbent scans the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our ETF Market Trends™ Report to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

1) Stocks with Hillbent’s proprietary "A" (strongest) or "B" (next strongest) ranking in terms of positive fundamentals for revenue and earnings stability comprise what is better known as the "Weekly Babies With Bathwater" watchlist. (See results below)

Weekly Babies With Bathwater (01-29-2010)

2) Stocks with Hillbent’s proprietary "E" (weakest) or "D" (next weakest) ranking in terms of negative fundamentals for revenue and earnings stability represent what is better known as the "Weekly Dogs With Fleas" watchlist. (See results below)