Last week was definitely a very busy, and as I sit here working on this week's Sterling Weekly; I am thinking of what I consider to be the most significant events of last week, and the week ahead. I think the most significant event was last week's signing of Tort Reform legislation by President Bush. I've said in the past, and I'll gladly say it again. I think politics is the single biggest influence on the stock market. The Class-Action Fairness Act of 2005 is a very important step in reducing the overly burdensome legal expenses faced by almost every major industry within this country. It very much seams as if you are part of a successful and profitable industry, sooner or later your company will become the target of attorneys seeking to find any reason possible to launch a class action lawsuit against your firm and take some of your company, and shareholders profits for themselves in the form of humongous legal fees while the actual plaintiffs receive a pittance for their damages. Or your company is the target of an ambitious state Attorney General with ambitious political motives, like Elliot Spitzer, who suddenly decides to go after industries long standing policies or business practices based upon a new and unique interpretation of some obscure state regulation. I use the term "your company" because as a shareholder, these companies really are your companies!! A few thoughts about class action lawsuits and some of the players involved. 1) Any politician who is opposed to Class Action reform, is only really interested in the political contributions they can receive from the Trial Lawyers Lobby and not his constituents or anyone else he or she represents. 2.) Mr. Spitzer is very good at targeting industries and forcing out of court settlements that extract big sums of money from these companies and then open them up to a wave of class action lawsuits. Let's not forget that Mr. Spitzer's office has never defeated any company or industry in an actual court of law. My guess is that he has vastly over reached in his department's actions against Mr. Grasso, who I believe will come out victorious against Mr. Spitzer. Not to mention his targeting of Ken Langone for attacks while ignoring H. Carl McCall who is a major figure in the New York state Democratic Party is so overly political that Mr. Spitzer should resign. 3) Class Action lawsuits are destructive to American industries not just in terms of what they cost, but also in the detriment they are to entering new business ventures and their other anti-competitive effects. Additional information on the Class-Action Fairness Action of 2005 can be found at the web site of the White House.

Class Action Reform is only the first step in badly needed Tort Reform. Furthermore, Tort Reform is only one of many areas of the US Economy that are badly in need of reform including taxes, social security, pension, and a whole sectors that are in desperate need of changing the way they operate. I am looking forward to commenting on these and other issues in the future.

Dow Jones Industrial Average:

Today's Opinion: Closed @ 10,785.22 Last Signal: Called Higher Current Expectations: I am expecting the Dow Jones Industrial Average to continue to move higher and test 10,854.54. On a longer term basis If the Dow closes above 10,854,54 then I expect it will move to 11,340.47 over the near to intermediate term. However since the Dow Jones Industrial Average has already closed above 10,737.70 it has completed a "cup pattern" with an indicated move to 11,725.41 This is my mid term target for the Dow Jones Industrial Average. On a longer terms basis of the next 3-5 years I am expecting the Dow Jones Industrial Average to move higher and test 16,159.69