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Market Wrap
(Briefing):

The market continued to show its resilience, this time around in the face of early profit-taking and surging oil prices, as the S&P and Nasdaq extended gains for the fourth consecutive session... The Dow, which touched its best intraday levels (10544) since June 23 and was up as much as 3.8% from Thursday's lows, slipped into negative territory heading into the close, but losses were minimal at best... Meanwhile, stocks opened slightly lower as investors felt the need to lock in some profits after the major indices averaged gains of about 3.5% over the last three days... Not even better than expected earnings from blue chips like Genentech (DNA 85.89 +2.39) and PepsiCo (PEP 54.60 +0.75) was enough to sideline widespread nervousness - as is often the case early in the earnings season until a clearer trend emerges in the reports... Perhaps investors were waiting for quarterly reports from the likes of ABT, AMD, AAPL, UNH and GE over the next few days, as well as key inflation data and retail sales figures, to provide a more distinctive tone to trading... In any event, stocks finished the day in similar fashion to the recovery efforts witnessed last week in the wake of Thursday's bomb blasts in London, as the market demonstrated its toughness despite the enticement to book profits, even as oil prices surged 2.9%... Crude oil futures closed at $60.62/bbl (+$1.70) as tropical storm Emily strengthened ahead of a weekly oil report that may show a larger than expected draw of crude inventories due to disruptions in the Gulf of Mexico from Tropical Storm Cindy and Hurricane Dennis last week... With regard to sector strength and weakness, Technology paced the way higher, benefiting from broad-based gains in Software, Semiconductor and Networking... Chip stocks got a lift ahead of Advanced Micro Devices' (AMD 19.37 +0.36) Q2 earnings Wednesday night and after Micron Technology (MU 11.82 +0.09) was upgraded, which helped lift the PHLX Semi Index (456.10 +4.50) to a new 52-week high, while Networking surged after Alcatel (ALA 12.15 +1.07) raised Q2 guidance... Energy was strong amid rising oil prices and upbeat comments out of CIBC, which initiated coverage of APC, BR and DVN with Sector Perform ratings... Consumer Discretionary traded higher, as a 1.1% surge in retail offset weakness in homebuilding... The S&P Retail Index (RLX 463.96 +4.99) closed just shy of a historic high, getting a boost from Home Depot (HD 41.30 +1.00) after Jefferies upgraded the stock to Buy from Hold on valuation... Consumer Staples showed relative strength following better than expected Q2 earnings and strong revenues from PepsiCo and reports that Procter & Gamble (PG 53.94 +0.04) shareholders approved the $57 bln acquisition of Gillette (G 51.70 +0.07)... Despite benchmark yields on the 10-year note (-12/32) closing near session highs (4.14%), pushing up borrowing costs for consumers and corporations, the Financial sector posted a modest gain... Bonds were weak as traders squared positions ahead of key inflation data (i.e. CPI and PPI) and additional supply coming on line from upcoming bond auctions... Providing the bulk of support was Brokerage, as evidenced by the AMEX Securities Broker/Dealer Index (XBD 167.77 +0.55) closing at historic highs after Ameritrade (AMTD 19.28 +0.37), which hit a new 52-week high, beat analysts' Q3 earnings forecasts... Banks got a boost amid reports of new M&A activity, as Hudson United (HU 41.64 +4.14) agreed to be acquired by TD Banknorth (BNK 29.10 -0.86) for $1.9 bln in cash and stock... The Industrials sector, however, paced the way lower as rising oil prices weigh on transportation stocks and large-cap issues such as CAT and UTX that depend on energy to grow... Despite a falling dollar making commodities like steel and chemicals more attractive, widespread consolidation following recent gains still weighed on the Materials sector...NYSE Adv/Dec 1881/1401...NASDAQ Adv/Dec 1593/1489.

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

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Today's Picks - July 13, 2005

1.   PTEN - PATTERSON UTI ENERGY

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 31.09

2.   FST - FOREST OIL CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 44.86

3.   GRP - GRANT PRIDECO

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 29.03

4.   AEOS - AMERICAN EAGLE OUTFITTERS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 33.09

5.   RIG - TRANSOCEAN

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 57.81

6.   TK - TEEKAY SHIPPING MARSHALL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 47.02

7.   FSH - FISHER SCIENTIFIC

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 63.90

8.   BP - BP PLC SPONSORED

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-13		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 65.64

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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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