Indices
Dow - 63.55  I   Nasdaq - 14.35  I  S&P 500 - 4.68 

Market Wrap
(Briefing):

The market opened sharply lower, as soaring oil prices weighed on sentiment, while traditional pre-earnings season uncertainty underpinned additional nervousness throughout the session, closing seven out of ten economic sectors in negative territory. The threat of possible UN sanctions on Iran regarding their nuclear ambitions coupled with more violence in Nigeria acted as the day's biggest distractions, reminding investors that the supply-demand balance for oil remains extremely tight as crude futures climbed to three-month highs at $66.30/bbl (+$2.38). While oil's 3.7% surge and gains across the energy complex were a windfall for Energy, helping extend its year-to-date gain to over 10% and playing into our Overweight rating on the sector, the absence of leadership from more influential sectors weighed on the proceedings from start to finish.

To wit, Technology was weak across the board as analyst downgrades on Advanced Micro Devices (AMD 32.86 -1.27) and Applied Materials (AMAT 19.76 -0.39) weighed heavily on chip stocks, clouding an upcoming Q4 report from Intel Corp (INTC 25.52 -0.27). Financial was another sore spot for the bulls after Q4 earnings disappointments from Fifth Third Bancorp (FITB 38.44 -0.49) and Wells Fargo (WFC 62.69 -0.56) kicked off the quarter's biggest reporting period for the banking group on a sour note. Health Care was also in focus after Boston Scientific (BSX 23.86 -1.34) sweetened its bid for Guidant (GDT 76.22 +5.38) to $27 bln, but BSX's latest amendment raised questions for shareholders over the value of GDT in the face of increasing legal scrutiny about its heart devices.

Even though manufacturing activity showed that the economy remains in good shape, as evidenced by a better than expected 0.6% rise in Dec. industrial production to a record level and a strong 20.1 read on the Jan. Empire State index, the Industrials sector failed to take notice. Analyst downgrades on Tyco International (TYC 26.19 -0.93), Ingersoll-Rand (IR 39.38 -0.99) and Robert Half International (RHI 37.58 -1.85) contributed to the bulk of sector-wide anxiety. United Parcel Service (UPS 74.98 +0.48) was one bright spot after being upgraded at CSFB but was the only transportation component to close higher.

Joining Energy in the plus column were Materials and Utilities. The latter benefited from an afternoon rebound in Treasuries, as speculation that Wednesday's CPI data will not surprise the market with inflation concerns helped knock the yield on the 10-yr note (+06/32) down to 4.32%.

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

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Today's Picks - January 18, 2006

1.   SYNA - SYNAPTICS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-18-06		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 not enter the trade unless it trades above 30.76

2.   EOG - EOG RES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-18-06		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 not enter the trade unless it trades above 82.54

3.   CVX - CHEVRON CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-18-06		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 not enter the trade unless it trades above 61.90

4.   TSG - SABRE HLDGS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-18-06		Short	Below 15 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 24.07

Previous Trades

GG - GOLDCORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-17-06	01-17-06	Long	25.55	25.73	Closed Below 25.25	up to - 36 cents per share

AU - ANGLOGOLD

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-17-06		Long	55.60	56.37	Below 54.71	up to + 58 cents per share (56.18)
	* 01-17-06 - stock gapped down.

HPQ - HEWLETT PACKARD

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

NCR - NCR CORP

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

FD - FEDERATED DEPT STORES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
01-13-06	01-17-06	Long	73.56	Reached (74.04)	Closed Below 73.56	up to + $1.40 per share (74.96)

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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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