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Market Wrap
(Briefing):

A big decision by the Federal Open Market Committee fueled a big day for the stock market.

The major indices were already trading with modest gains ahead of the 2:15 ET decision from the FOMC. Those gains were built on the back of a better-than-feared earnings report from investment bank Lehman Bros. (LEH 64.49, +5.87), stronger than expected results from retailer Best Buy (BBY 47.46, +2.92) and a reassuring PPI report for the month of August.

The action prior to the FOMC decision, though, paled in comparison to what came after the FOMC's decision to cut both the fed funds rate and the discount rate by 50 basis points to 4.75% and 5.25%, respectively.

Conventional wisdom was that the FOMC would cut the fed funds rate by just 25 basis points; and there was uncertainty as to what the FOMC would do with the discount rate.

As it turned out, the FOMC took the aggressive road. In doing so, it created a great source of relief for the stock market that manifested itself in huge gains for the major indices. The Dow, Nasdaq and S&P all rallied better than 2.0%.

The FOMC's rationale for the aggressive move was that it wanted to "forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time."

Although the Committee judged that some inflation risks remain, the statement did not convey as much concern about the inflation outlook as past statements. The Treasury market for its part registered some inflation concerns as the back end of the Treasury curve underperformed the front end by a significant margin, resulting in some noteworthy curve steepening that will benefit the banking industry.

The financial sector (+4.5%) was Tuesday's stalwart as it took off amid the confluence of good news that included the Lehman Bros. report, the rate cut action, and the curve steepening. It had plenty of company as every economic sector ended with a gain. The laggard of the bunch was the defensive-oriented consumer staples sector, which jumped "only" 1.75%.

To be sure, there was a clear orientation toward growth in Tuesday's showing as the materials (+4.2%), consumer discretionary (+3.3%), industrials (+3.2%) and energy (+3.0%) sectors rounded out the list of the best-performing sectors.

The commodity index also reflected the growth orientation. Copper prices rallied 2.6% while oil prices jumped to $82.10 per barrel in extended action. The rate cut decision weighed on the dollar, which stoked some inflation concerns and helped drive up gold prices 1.6%.

The major indices ended at their highs for the session on a pickup in volume that followed the FOMC announcement.

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

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Today's Picks - September 19 2007

1.   DE - Deere & Co

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07		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 145.86

2.   CCE - Coca-Cola Enterprises

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07		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 24.60

3.   PEG - Public Service Enterprise Group

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07		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 89.68

4.   SLB - Schlumberger

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07		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 105.07

Previous Trades

SYNA - Synaptics Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-18-07		Long	47.02	Reached (47.80)	Below 47.02	up to + 97 cents per share (47.99)

AMT - American Tower Corp

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-18-07		Long	41.10	42.06	Below 40.00	up to + 58 cents per share (41.68)

SIGM - Sigma Designs Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-18-07		Long	47.70	Reached (48.26)	Below 47.70	up to + $2.16 per share (49.86)

TV - Grupo Televisa

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-18-07		Long	25.35	Reached (25.39)	Closed Below 25.35	up to + 22 cents per share (25.57)

K - Kellogg Co

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-17-07		Long	56.28	Reached (56.69)	Below 56.28	up to + 42 cents per share (56.70)
	* 09-13-07 - stock gapped down

HCBK - Hudson City Bancorp

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-14-07		Long	14.65	Reached (14.69)	Below 14.81	up to + 70 cents per share (15.35)

ICE - IntercontinentalExchange Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-06-07	09-18-07	Short	140.03	Reached (138.04)	Closed Above 128.88	up to + $14.35 per share (125.68)
	* 09-06-07 - stock gapped up