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Market Wrap
(Briefing):

The market showed its resilience in the face of disappointing quarterly reports from two tech giants and surging oil prices, as a relief rally in bonds, blue chip leadership and late-day short covering ahead of the weekend helped stocks shrug off a day of lackluster trading... In fact, when it was all said and done, early weakness may have been more company-specific than initially thought... Microsoft (MSFT 25.68 -0.76) beat analysts' Q4 expectations by $0.03 but missed on revenues and issued disappointing Q1 sales guidance, losing almost 3.0% on the day; but other software companies like ORCL, ADBE, ADSK and BMC traded higher... Google (GOOG 302.40 -11.54), which quadrupled Q2 profits but failed to exceed the high end of analysts' estimates, lost nearly 4% as investors locked in profits following a three-month 75% surge in shares ahead of another widely expected blowout quarter... But rival Yahoo (YHOO 33.53 +0.59) surged 1.8%, due in large part to a Prudential upgrade... Even in the absence of schedule economic reports, which placed even more emphasis on earnings and guidance, renewed buying efforts in bonds knocked benchmark yields on the 10-year note (+14/32) down from two-month highs of 4.28% to 4.21%, providing investors some reprieve after Thursday's drubbing positioned bonds for their worst losing streak (four straight weeks) since January... Bond traders stepped in ahead of the weekend, attracted to yields offering value at 2-month highs as concerns that the yuan revaluation would lead to less demand for U.S. Treasurys faded... Perhaps also improving overall sentiment was another solid recovery effort on the FTSE 100 Index (+0.4%), following the fatal shooting of a suspected would-be bomber a day after a second set of explosions rocked London... Pacing the way higher was Energy, which benefited from a 2.7% surge in oil prices ($58.65/bbl +1.52), strong Q2 reports from Halliburton (HAL 53.29 +4.59) and Schlumberger (SLB 82.28 +4.32), both of which hit new 52-week highs, and analyst upgrades on Apache (APA 69.95 +3.86) and Burlington Resources (BR 62.37 +3.26) ahead of their Q2 reports next week... Materials also showed relative strength, following an upgrade on U.S. Steel (X 42.56 +1.39), while falling bond yields helped interest-rate sensitive areas like Financial and Utilities close to the upside... Consumer Discretionary traded higher, getting a boost from strong follow-through buying in retail, a rebound in homebuilding and reports that Ford (F 10.72 +0.08) could slash up to 30% of its current white-collar work force... Technology, however, paced the way lower, as a 2.9% selloff in MSFT and weakness from INTC and CSCO, offset a 1.3% rebound in Semiconductor... Chip stocks got a lift following Broadcom's (BRCM 43.00 +4.39) strong Q2 report... Health Care also closed lower amid weakness in drug stocks and biotech... The latter slipped from its best levels in four years after a UBS downgrade on Gilead Sciences (GILD 44.47 -1.70), citing valuation, prompted consolidation throughout the group...NYSE Adv/Dec 2129/1105...NASDAQ Adv/Dec 1866/1165.

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

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Today's Picks - July 25, 2005

1.   SWN - SOUTHWESTERN ENERGY

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 53.53

2.   DO - DIAMOND OFFSHORE DRILLING

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 58.20

3.   URBN - URBAN OUTFITTERS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 62.96

4.   RIG - TRANSOCEAN INC

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 58.80

5.   NE - NOBLE CORPORATION

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 67.85

6.   BR - BURLINGTON RES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 62.44

7.   XLE - SELECT SECTOR SPDR

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		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 47.46

Previous Trades

CAM - COOPER CAMERON

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-22		Long	69.43	70.74	68.75	up to + 45 cents per share

PMI - PMI GROUP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-22	07-22	Long	41.24	41.47	closed	up to - 41 cents per share

DHI - D R HORTON

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-22		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Did not set up.

PHM - PULTE HOMES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-22		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Did not set up.

CTX- CENTEX CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-22		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Did not set up.

BAX - BAXTER

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-21		Long	38.65	39.21 Reached	38.81	up to + 93 cents per share

PFE - PFIZER

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-21		Short	26.94	26.68 Reached	26.89	up to + 46 cents per share