Dow - 146.00    I  Nasdaq - 26.80    I  S&P 500 - 20.86    

Market Wrap
(Briefing):

The stock market struggled Wednesday, but not the entire day as a blowout earnings report from Morgan Stanley (MS 87.32, -0.48), word from Home Depot (HD 40.03, +1.76) that it is increasing its stock buyback authorization by a massive $22.5 billion, and a drop in oil prices all helped to keep selling efforts in check during the morning session.

The bulls, however, never quite stepped up to the plate with any conviction; and the afternoon trade played out in a decidedly bearish fashion when bids all but disappeared around 1:00 ET.

A backup in the 10-year note yield from 5.09% to 5.14% will garner much of the blame for the reversal of fortune, but that is a dubious excuse when taking into account that the drop in yield last week from 5.32% to 5.17% was viewed as a rallying point.

So, with the yield still below its best level from last week, it doesn't make a great deal of sense that the bump to 5.14% would cause such a negative reaction Wednesday.

What did then, you ask? There isn't a definitive answer, but a plausible explanation relates to reports that Bear Stearns may be shutting two mortgage hedge funds due to losses suffered in the wake of the subprime fallout.

A whiff of this possibility sparked spillover concerns that hit the broader market in a sell-first-ask-questions-later move that manifested itself in vivid form in the financial sector (-1.7%) which sold off in the afternoon trade. Incidentally, the financial sector began to weaken noticeably around 1:00 ET and closed at its lows for the session.

The fact that selling accelerated in the final hour when bond yields held fairly steady validated the idea that something other than the backup in yield got the better of Wednesday's participants.

Overall, there just wasn't any sector leadership to save the market. All ten economic sectors ended lower with energy (-2.9%) leading the way.

The latter sector got clobbered after a weekly inventory report from the government showed a much larger than expected 6.90 million barrel build in crude stockpiles versus expectations for a slight draw of 50K barrels. July crude futures dropped $0.91 to $68.19 per barrel, which was a boon for the airline stocks Wednesday.

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

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Today's Picks - June 21, 2007

1.   GM - General Motors

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-21-07		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 35.59

2.   GES - Guess Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-21-07		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 47.34

3.   MTRX - Matrix Service

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-21-07		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 23.44

4.   SGP - Schering-Plough Corp

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-21-07		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 29.73

Previous Trades

ANAD - Anadigics 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

WPI - Watson Pharmaceuticals

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-20-07		Long	32.47	32.65	Below 32.15	up to + 13 cents per share (32.60)

RIO - Companhia Vale do Rio Doce

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-20-07	06-20-07	Short	45.72	Reached (45.22)	Closed Above 45.72	up to + 59 cents per share (45.13)
	* 06-20-07 - stock gapped up

IR - Ingersoll-Rand

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-19-07		Long	55.07	Reached (55.85)	Below 55.07	up to + $1.56 per share (56.63)
	* 06-19-07 - stock gapped down

JNS - Janus Capital Group

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-19-07	06-20-07	Long	29.01	Reached (29.31)	Closed Below 29.01	up to + 52 cents per share (29.53)

ONXX - Onyx Pharmaceuticals

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-19-07		Short	28.83	27.85	Above 28.65	up to + 73 cents per share (28.10)
	* 06-19-07 - stock gapped up

MA - MasterCard

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-18-07		Long	161.84	Reached (165.31)	Below 162.78	up to + $7.56 per share (169.40)

WRNC - Warnaco Group

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-18-07		Long	37.09	37.58	Below 36.85	up to + 24 cents per share (37.33)

OMTR - Omniture Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
06-14-07		Long	19.58	Reached (19.85)	Below 20.49	up to + $2.36 per share (21.94)