Indices
Dow + 32.74  I   Nasdaq + 19.72  I  S&P 500 + 4.66 

Market Wrap
(Briefing):

Though caught within a tight trading range from open until close, the equity market's major averages managed to sustain positive footing following Tuesday's broad-based, Fed-induced rally with which they rang in 2006. Gains were modest, but buyers nonetheless dominated trading.

Nine of the ten economic sectors closed higher. Extending Tuesday's 2.0% run, the Technology sector served as the broader market's best source of support. A surging internet consulting and services industry teamed with relative strength in the communication equipment, semiconductors, and electronics industries in driving a weighty 1.1% gain. On a related note, rising Google (GOOG 445.56 +10.33) shares, following an analyst upgrade and another price target hike, helped to underpin a sense of bullishness across the tech board -- while fueling the Nasdaq's outperformance. Prolonged pharmaceutical strength helped Healthcare register a market-lifting 0.8% gain, and an upped price target on, and positive analyst comments regarding, Colgate-Palmolive (CL 55.56 +0.65) aided the Consumer Staples sector (+0.2%) in clearing the flat line. Solid earnings from Monsanto (MON 80.86 +0.26), meanwhile, helped pull the Materials sector (+0.6%) north.

Rocky energy price action served as somewhat of a bearish backdrop Wednesday. The commodity surged to a two-month high Tuesday, pulled back this morning, but eventually returned from the red and closed at $63.10 per barrel. At the same time, its rise did little to spark aggressive buying within the Energy sector (+0.5%). Traders may have stuck closer to the sidelines considering Tuesday's 4.5% jump an ahead of the EIA's inventory stats that have been postponed until Thursday. The crude action joined particular weakness in home improvement retail in stunting the Discretionary sector (0.0%). J.P. Morgan downgraded Lowe's (LOW 66.24 -0.83) shares, and its citation of a cautious outlook on the macro housing environment sent Home Depot (HD 40.46 -0.78) spinning in sympathy. While automakers' December same-store sales reports were dismal, a market that appeared to have expected worse sent the auto industry north. Apparel also emerged as a pocket of Discretionary support.

Just as gains were modest, so were losses. The Financial sector (-0.2%) stood solo in the red, and a halving of its intra-day decline helped the indices close at the high end of the session's range. Ultimately, though, the submerged status of the marker's most influential sector capped an overall advance. Banks, which rallied Tuesday following a bullish interpretation of the December 13 FOMC minutes, lost steam on account of Citigroup's (C 48.44 -0.85) downgrade. Bank of America cited industry concerns; as a result, one of the S&P's heaviest issues slumped and took its peers down with it. Strength in insurers and a somewhat steepening yield curve, following last week's inversion, helped limit the sector's slide. Since the release of Tuesday's minutes, which said the number of remaining rate hikes would "probably not be large," the spread between the two and 10-year notes has widened nearly six basis points.

Separately, Wednesday's economic calendar delivered an expected 2.5% increase in November factory orders. Strong aircraft orders were behind the rise; excluding transportation, orders were flat...NYSE Adv/Dec 2401/951...NASDAQ Adv/Dec 1891/1159.

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Trade system guidelines (edited):
Only available to Newsletter Subscribers.

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Today's Picks - January 05, 2006

1.   CTXS - CITRIX

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-05-06		Long	Above 15 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 30.00

2.   FE - FIRSTENERGY

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-05-06		Long	Above 15 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 50.57

3.   SIRF - SIRF TECHNOLOGY

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-05-06		Long	Above 15 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 32.44

4.   EWC - ISHARES CANADA

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-05-06		Long	Above 15 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 22.73

5.   DO - DIAMOND OFFSHORE DRILLING

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-05-06		Long	Above 15 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 74.25

Previous Trades

RIG - TRANSOCEAN

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04-06		Long	73.36	Reached (74.36)	Below 73.36	up to + $1.07 per share (74.43)
	* 01-04-06 - stock gapped down

AAUK - ANGLO AMERN

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04-06		Long	36.46	36.93	Below 35.87	up to + 18 cents per share (36.64)
	* 01-04-06 - stock gapped down

ABC - AMERISOURCEBERGEN

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-04-06	01-04-06	Long	42.38	42.74	Closed Below 41.90	up to - 54 cents per share
	* 01-04-06 - stock gapped down

FLS - FLOWSERVE

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* did not setup

MDR - MCDERMOTT INTL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-03-06		Long	46.05	Reached (46.88)	Below 47.23	up to + $2.26 per share (48.31)

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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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