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Market Wrap
(Briefing):

With earnings season now in full swing, and the first of 17 quarterly reports - Citigroup - from Dow components scheduled this week missing analysts' expectations, investors were prompted to consolidate recent market gains... Before the bell, Citigroup (C 45.10 -1.32) - the most influential component within the most highly weighted economic sector (financial) - reported Q2 earnings of $0.97 per share, which were $0.06 shy of analysts' forecasts due primarily to sluggish fixed-income revenues... With the markets having already factored in a lot of positive earnings news, as evidenced in a two-week rally that lifted the S&P (+2.8%) back into positive territory for the year and to its best levels since July 2001, Citigroup's disappointment became the catalyst that left participants little choice but to lock in some hefty profits... A lack of notable economic data Monday to further validate the plethora of very bullish economic reports over the last two weeks (i.e. inflation, job growth and retail sales) placed even more emphasis on Monday's mixed batch of earnings, as all ten economic sectors closed in negative territory... Providing the bulk of leadership to the downside was Financial, as Citigroup's discouraging report damaged the perception of financial stocks across the board, in particular, Bank of America (BAC 45.23 -0.75) and MBNA's (KRB 25.83 -0.39) - both of which posted better than expected results... The lone exception was Brokerage, which benefited from a 65% increase in Q2 profits from Charles Schwab (SCH 13.40 +0.66), but gains were also minimized by a late-day surge in benchmark yields... The 10-year note finished off 14 ticks to yield 4.21% as traders squared positions ahead of upcoming Greenspan testimony... Technology was another influential leader to lose ground, as investors booked profits ahead of IBM's (IBM 81.90 -0.48) report after the close... Semiconductor, which surged 5% last week alone, was one leading sub-sector that weighed on the sector... Health Care also traded lower after Guidant (GDT 67.11 -2.30) announced a defect in 28,000 of its pacemakers, which shed even more uncertainty about Johnson & Johnson's (JNJ 64.73 -0.30) proposed $25 bln acquisition of GDT...Profit-taking in Genzyme (GENZ 68.72 -1.59), following a 12% surge last week that sent shares to an all-time high, coupled with analyst downgrades on Health Management Associates (HMA 25.16 -0.34) and Tenet Healthcare (THC 12.02 -0.08), added to overall weakness... Industrials also showed relative weakness but losses were minimized after Eaton (ETN 65.77 +3.73) beat expectations and issued encouraging guidance and WW Grainger (GWW 63.75 +2.19) was upgrade to Buy from Hold at BB&T on the heels of a strong Q2 report last Friday... Even Consumer Discretionary, which clung to a modest gain throughout most of the session amid broad-based strength in Retail (e.g. TGT, LOW, JCP and JWN hit 52-week highs) and continued momentum in auto stocks ahead of GM and Ford's earnings this week, failed to close in positive territory... Reports of Whirlpool's (WHR 73.29 +3.30) $1.3 bln bid for Maytag (MYG 17.53 +2.08) also kept the sector in focus, as a strong Q2 report from Hasbro (HAS 21.50 +0.02) struggled to offset a Q2 disappointment from Mattel (MAT 18.70 -0.75)...NYSE Adv/Dec 1322/1908...NASDAQ Adv/Dec 1231/1808.

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

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Today's Picks - July 19, 2005

1.   LH - LABORATORY CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 50.97

2.   HD - HOME DEPOT

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 42.50

3.   SFA - SCIENTIFIC ATLANTA

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 37.22

4.   ASD - AMERICAN STD

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 44.06

5.   NXTL - NEXTEL COMMUNICATIONS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 32.37

6.   NEW - NEW CENTURY FINANCIAL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 50.00

7.   C - CITIGROUP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-19		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 44.90

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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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