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Market Wrap
(From Briefing)

Lower oil prices instilled a positive bias at the open, but mixed economic data prompted investors to lock in last year's gains on the first day of trading in 2005... Early buying interest was fueled by growing optimism, a strong outlook for 2005 and a 4.0% sell off in crude oil ($42.12/bbl -$1.33), following forecasts of warmer than expected weather in the Northeast, that kept sellers on the sidelines; but not for very long... Within minutes of mixed economic results, market internals turned negative for good and the major indices broke through key technical levels, first falling through Friday's lows and then hitting levels not seen since December 21... Investors first received an indication that the manufacturing sector continued to grow at a decent pace in December when the ISM index matched economists' expectations of 58.5 with a reading of 58.6, better than November's reading of 57.8... But the market interpreted the employment component of the ISM report - a reading of 52.7 versus November's figure of 57.6 and a 6-month average of 56.0 - as a precursor to this Friday's December nonfarm payrolls data, sending bonds higher in the process... The 10-year note, which was down as much as 10 ticks in the early going recovered some ground to close up 1/32 to yield 4.21%... A construction spending decline of 0.4% for the month of November, versus an anticipated increase of 0.4%, merely sustained mounting weakness as the broad-based selling kept buyers at bay for the rest of the session... Virtually every sector closed lower, with energy (-3.2%) leading the list of laggards... Health care, utility, materials and transportation all lost roughly 1.0% while technology was lower across the board... An encouraging report from Wal-Mart (WMT 53.39 +0.57), which showed that Dec. same-store sales are now expected to be at the high end of its forecasted 1-3% range, contributed to early strength in retail (-0.4%), but profit taking following an 18% gain for the group in 2004 was too much for sellers to ignore... The only areas that showed relative strength were Internet software (+1.5%), following upward estimate revisions from Goldman Sachs on Yahoo (YHOO 38.14 +0.46) and Google (GOOG 202.64 +9.85), and drug retail (+3.5%), after Walgreen Co. (WAG 40.33 +1.96) beat Q1 (Nov) earnings forecasts by two cents... The dollar, which hit record lows against the euro last week, showed some strength as well, gaining 0.6% against the European currency (1.3470) but barely budging against the yen (102.68)... ..NYSE Adv/Dec 856/2470. ..NASDAQ Adv/Dec 957/2239.

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Today's Picks - January 04, 2005

1.   WAG - Walgreens

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04		Long	Above 15 min high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 40.46

2.   EXC - Exelon

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04		Long	Above 15 min high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 43.23

3.   SHFL - Shuffle Master

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04		Long	Above 15 min high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 45.03

4.   HAL - Halliburton

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 37.94

5.   WLP - Wellpoint

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 112.50

6.   POG - Patina Oil & Gas

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 36.13

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EOD = End of day.
LOD = Low of day.
PDC = Previous Day's Close.
S/R = Support/Resistance.
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