Dow - 80.86    I  Nasdaq - 7.06    I  S&P 500 - 8.23    

Market Wrap
(Briefing):

After being down as much as 125 points on the Dow, and all three major averages off 0.9% at their lows, the bulls made a late-day effort Tuesday to pare market losses. However, that effort was a losing one as the bears held the upper hand in Tuesday's trading.

The main excuse to take some money off the table Tuesday was predicated largely on bond yields hitting their highest levels since last summer.

In the midst of another slow news day, all eyes this morning were on Fed Chairman Bernanke; investors were hoping he might drop some hints of a possible rate cut. To the dismay of both stock and bond investors, his prepared remarks about housing and the economy offered nothing new frankly compared to recently released minutes from the May 9 FOMC meeting.

Throw in the strongest reading on the ISM Services Index since April 2006 and bond traders became increasingly convinced that the Fed is far from easing anytime soon. Fed funds futures now price in less than a 10% chance of a rate cut by November. Goldman Sachs, which had been expecting the Fed to cut the overnight lending rate 75 basis points to 4.50% this year, altered its view Tuesday and now doesn't see any rate cuts at all in 2007.

The absence of any upside sector leadership also posed a problem for the bulls to extend the S&P 500's winning streak to seven and close the broader market at another new all-time high.

Of the 10 sectors closing lower, Utilities (-1.5%) paced the way as rising bond yields made the sector's income-oriented appeal less attractive. The rate-sensitive Financials sector (-0.6%) also suffered as the yield on the 10-year note closed at a nine-month high of 4.97%. The yield on the 5-year note hit 5.00% for the first time since August.

Telecom turned in the next worst performance, but its decline wasn't surprising as it too ranks among this year's best performing sectors. Consumer Discretionary (-0.7%) ranked third among the day's disappointments as a Q1 profit warning from Bed Bath & Beyond (BBBY 38.27 -2.20) left Home Furnishings (-5.4%) as the session's worst performing S&P industry group.

Homebuilding (-1.3%), which was also hit by Tuesday's rise in borrowing costs, was under additional pressure after Bernanke said "tighter lending standards... will serve to restrain housing demand."

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

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Today's Picks - June 06, 2007

1.   AG - AGCO

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-06-07		Long	Above 15min 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 44.29

2.   FPL - FPL Group

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-06-07		Long	Above 15min 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 61.34

3.   SID - Companhia Siderurgica Nacional

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-06-07		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 52.50

4.   OKE - Oneok Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-06-07		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 53.34

Previous Trades

CF - CF Industries Holdings

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-05-07	06-05-07	Long	48.72	Reached (48.90)	Closed Below 48.72	up to + 66 cents per share (49.38)
	* 06-05-07 - stock gapped down

WMB - Williams Companies

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

LTR - Loews Corp

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

TSN - Tyson Foods Inc

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

XLE - Energy Select Sector SPDR

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

OXY - Occidental Petroleum

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-04-07		Long	56.92	Reached (57.30)	Below 57.72	up to + $2.06 per share (58.98)

RTN - Raytheon

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-04-07	06-05-07	Long	56.32	Reached (56.61)	Closed Below 56.32	up to + 43 cents per share (56.75)
	* 06-04-07 - stock gapped down