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Market Wrap
(Briefing):

The market finished in mixed fashion, as buyers favored safer blue chips to technology amid falling oil prices, declining bond yields and easing inflation concerns... Crude oil prices ($53.54/bbl -$1.23) finally closed lower (-2.3%) for the first time in seven sessions amid growing U.S. oil inventories and diminishing demand for Chinese oil imports... Meanwhile, weekly initial claims unexpectedly jumped to their highest level in two months, checking in at 327K (consensus 310K), slightly lifting the 4-week average to a respectably low 313K... But the data were only viewed in a negative light by the bond market, which subsequently began buying Treasurys as job creation growing at a steady pace somewhat alleviated inflation fears... And the recovery in bonds, which eventually pushed yields on the 10-year note below the 4.50% mark, as the benchmark 10-year note closed up 14 ticks to yield 4.46%, lifted market sentiment just enough to close blue chips in positive territory despite overall market breadth holding a slightly bearish bias... The Nasdaq, however, exactly five years removed from hitting a record of 5048.62, closed just below the flat line to keep the Composite down roughly 5.3% for 2005... Better than expected Q3 earnings, encouraging Q4 guidance and a $400 mln stock buyback program from National Semiconductor (NSM 21.08 +1.09) gave a boost to Semiconductor (+1.4%)... But chip gains were not enough to counter losses in Hardware and Storage, with the latter coming under pressure after Brocade Communications (BRCD 5.73 -0.16) said the SEC had begun an informal investigation... Financial, Health Care, Consumer Staples, Utility and Telecom Services were also influential sectors closing higher... Consumer Discretionary finished on an upbeat note, led by retailer Toys R Us (TOY 23.64 +0.59), which surged after reports suggested that Cerberus Capital Management may buy it for roughly $5.0 bln... Energy (-1.5%), however, paced the way lower on heavy volume amid further industry consolidation, a sell off in oil and downbeat analyst comments... ExxonMobil (XOM 60.29 -0.50) extended Wednesday's 3.7% drubbing while Oil & Gas Exploration companies like Devon Energy (DVN 46.07 -1.69) and Apache (APA 60.77 -2.08) lost ground after being downgraded to Neutral from Buy at Merrill Lynch... Materials (-1.1%) was also an influential leader closing lower, pressured by continued profit taking as commodity prices have hit record highs over the last two days... Transportation (-0.6%), which typically benefits from falling oil prices, could not shrug off weakness from airline, which was under pressure after Delta Air Lines (DAL 4.30 -0.59) said in an SEC filing that it expects a "substantial" net loss in 2005... Separately, the Feb Budget Deficit worsened $17 bln from a year ago, checking in at a record $113.9 bln of red ink, as monthly outlays more than doubled receipts... The budget shortfall hurt the U.S. dollar against the euro (1.3427) but had little impact on the greenback's decent performance against the yen (104.03)... Another economic release out today provided the latest read on Jan wholesale inventories, which rose 1.1% (consensus +0.6%), as sales rose 0.5% to leave a larger inventory-to-sales ratio of 1.15 months... However, since the inventories data said little about personal consumption and the trade deficit data can be predicted with reasonable accuracy, investors paid little attention to both reports...NYSE Adv/Dec 1354/1961. ..NASDAQ Adv/Dec 1250/1821.

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

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Today's Picks - March 11, 2005

1.   GT - Goodyear

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-11		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 14.63

2.   EIX - Edison

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-11		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 33.93

3.   GPS - Gap Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-11		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 22.18

4.   OMX - OfficeMax

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-11		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 34.02

5.   PXP - Plains Explor

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-11		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 35.60

6.   RIG - Transocean

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-11		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 47.55

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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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