Indices
Dow - 54.70 at 10,596.48  I   Nasdaq - 13.00 at 2,166.74  I  S&P 500 - 4.65 at 1,229.03 

Market Wrap
(Briefing):

Stocks closed lower as a mixed batch of earnings reports, rising oil prices and benchmark yields near two-month highs prompted broad-based consolidation following another week of market gains... Blue chips like American Express (AXP 54.64 +0.07) and BellSouth (BLS 26.89 +0.17) both beat analysts' Q2 expectations by $0.03 but Xerox (XRX 13.15 -0.90) missed Q2 forecasts by $0.03 and issued downside Q3 guidance... While overall indications remain good for Q2 earnings to check in above initial expectations of 7.5%, as the blended aggregate of reported actuals with remaining forecasts is a bit over 9%, a lack of more influential earnings reports also added to the market's overall cautious stance... Further weighing on sentiment was a rebound in crude oil prices ($59/bbl +$0.37) midday that extended last Friday's 2.7% surge and closed the commodity near a one-week high... Of the nine economic sectors finishing in negative territory, Consumer Discretionary was one of the day's worst performing sectors, losing ground amid weakness in retail (-0.8%) and homebuilding (-2.6%)... The latter was in focus throughout the session following a 2.7% rise in June existing-home sales to a record 7.33 mln units (consensus 7.15 mln) and an upward revision to May's figures (to 7.14 mln from 7.13 mln)... Even though the report lent further proof to the understanding that job growth and low mortgage rates continue to underpin strong buying demand, which provided some early support for stocks, new home sales, which will be released on Wednesday (10:00 ET), could have a more influential economic impact on the market since they typically carry more weight... The fact that the majority of homebuilders have recently hit historic highs, coupled with rising borrowing costs - as the 10-year note closed down 7 ticks to yield 4.24% - also left the window open for widespread profit-taking... A more influential interest-rate sensitive area also impacted by a flattening yield curve was Financial... The Treasury market lost ground as traders consolidated some of Friday's gains ahead of a busy week of economic data and upcoming bond auctions... The Industrials sector was weighed down by weakness from conglomerates (i.e. GE, TYC and UTX) and transportation (i.e. FDX and BNI) while Health Care, which was in focus following Teva Pharmaceutical's (TEVA 31.23 +0.07) confirmed $7.4 bln bid for Ivax (IVX 25.17 +2.29) also traded lower... Providing the bulk of sector weakness was consolidation in biotech stocks (i.e. GILD and GENZ), losses from large-cap drug names like JNJ (-1.5%) and MRK (-1.3%) and a Q2 report from Quest Diagnostics (DGX 51.11 -0.51) which merely matched expectations... Technology was also under pressure amid weakness in the hardware and semiconductor... Chip stocks, which were under the microscope ahead of Q2 reports after the bell from Texas Instruments (TXN 30.60 -0.16) and Altera (ALTR 22.53 +0.33), lost ground after Merrill Lynch downgraded LSI Logic (LSI 9.89 -0.33) on valuation concerns... Energy, however, paced a day of limited gains, getting a boost from rising oil prices as well as more positive analyst commentary on Halliburton (HAL 54.86 +1.57) and Schlumberger (SLB 84.88 +2.60)...NYSE Adv/Dec 1231/2062. .NASDAQ Adv/Dec 1169/1902.

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

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Today's Picks - July 26, 2005

1.   BHI - BAKER HUGHES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-26		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 56.85

2.   ASN - ARCHSTONE SMITH

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-26		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 41.51

3.   LLL - L-3 COMMUNICATIONS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-26		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 78.39

4.   BJS - BJ SVCS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-26		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 58.65

5.   PBR - PETROLEO BRASILEIRO

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-26		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 49.44

6.   AMD - ADVANCED MICRO DEVICES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-26		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 19.69

Previous Trades

SWN - SOUTHWESTERN ENERGY

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		Long	53.90	55.00	53.60	up to + 85 cents per share

DO - DIAMOND OFFSHORE DRILLING

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		Long	58.20	59.20	57.95	up to + 80 cents per share

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
	* did not setup

RIG - TRANSOCEAN INC

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		Long	58.86	60.53	58.22	up to + 12 cents per share

NE - NOBLE CORPORATION

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		Long	67.91	69.40	67.34	up to + 44 cents per share

BR - BURLINGTON RES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		Long	62.58	Reached	62.58	up to + $1.28 per share (63.86)

XLE - SELECT SECTOR SPDR

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-25		Long	47.52	Reached	47.52	up to + 69 cents per share (48.21)

CAM - COOPER CAMERON

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-22		Long	69.43	Reached	70.44	up to + $1.85 per share (71.28)

BAX - BAXTER

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
07-21	07-25	Long	38.65	39.21 Reached	38.81 Hit	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	26.62	up to + 56 cents per share (26.38)