Dow + 187.34    I  Nasdaq + 32.54    I  S&P 500 + 22.67    

Market Wrap
(Briefing):

Stocks rallied Wednesday, more than erasing Tuesday's broad-based pullback, as a market increasingly vulnerable to rising bond yields finally got some interest rate reprieve. All 10 economic sectors posted hefty gains while only four of the 147 S&P 500 industry groups closed lower.

After tumbling more than 1.0% Tuesday and being down 2.3% on average less than two weeks into June, it was reasonable to see the major indices stage some sort of a rebound Wednesday. Surprising, though, was a government report that provided investors with a much-needed best case scenario of economic expansion without rising inflation pressures.

At 2:00 ET the Beige Book showed that manufacturing activity was up in most districts while the majority of the 12 Fed regions also reported that overall wage pressures do not seem to be rising, even though hiring picked up in late April through May.

That anecdotal report helped calm some of the nervousness ahead of key inflation data coming in the next two sessions (i.e., PPI and CPI) and provided an even stronger floor of support under early market gains that were inspired by a relief rally in Treasuries.

With the 10-year yield closing at a five-year high of 5.24% Tuesday and overnight action lifting it to 5.32% (a 43-basis point surge since May 31), income-oriented investors were looking to benefit from the bond market's oversold condition. Strikingly, Wednesday's bond rally gained traction after a stronger than expected Retail Sales report for May.

Of the 10 economic sectors closing sharply higher, Materials (+2.2%) led the charge after Bear Stearns said Alcan (AL 83.17 0.74) might make a counteroffer for Dow component Alcoa (AA 40.42 +1.08). The rate-sensitive Utilities sector (+2.0%), which has taken a beating at the expense of rising interest rates, ranked a close second.

The Financial (+1.8%) sector bouncing back into positive territory for the year in impressive fashion also benefited from the sizable drop in borrowing costs.

Equity investors have become increasingly concerned about what a rising interest rate environment will mean for mortgages and the record pace of M&A activity that has kept a bid in this market for so long. As the most heavily-weighted sector, strong leadership from Financials was the most notable reason behind Wednesday's rebound.

The Industrials sector (+2.0%) was another influential leader to the upside. Boeing (BA 98.49 2.01) surged 1.1% after raising its 20-year forecast for global aircraft deliveries while fellow Dow component Caterpillar (CAT 79.74 +1.66) turned in a similar performance after backing its 2007 outlook.

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

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Today's Picks - June 14, 2007

1.   OMTR - Omniture Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-14-07		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 19.73

2.   AOI - Alliance One

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-14-07		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 10.86

3.   NVDA - NVIDIA

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-14-07		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 37.18

Previous Trades

IMMR - Immersion

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-13-07		Long	12.91	13.18	Below 12.49	up to + 21 cents per share (13.12)

SSRI - Silver Standard Resources

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
		Short	Below 15 low	Cover 1/2 once risk covered	Above HOD at time of setup
	* did not setup

CELG - Celgene Corp

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-13-07	06-13-07	Short	57.40	56.55	Closed Above 58.39	up to -$1.06 per share (57.27 LOT)

MHP - McGraw-Hill Companies

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-13-07	06-13-07	Short	67.84	Reached (67.52)	Closed Above 67.84	up to + 32 cents per share (67.52)

CROX - Crocs

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-12-07	06-13-07	Long	93.22	95.89	Closed Below 90.37	up to - $2.92 per share (93.58 HOT)