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Market Wrap
(Briefing):

The rate-cut rally on Tuesday persisted on Wednesday, as the major indices pressed onward in the wake of a pleasing inflation report and continued enthusiasm about the Fed's actions.

Although the gains on Wednesday weren't nearly as large as the ones registered in the prior session, they were still significant in that there wasn't any concerted selling interest throughout the day. Moreover, it was evident that participants were feeling less risk averse as small-cap stocks outperformed and the Treasury market remained on the defensive.

In turn, the financial sector (+0.6%) looked past a disappointing earnings report from Morgan Stanley (MS 67.43, -1.48) and added to Tuesday's 4.5% advance; although the investment banking group (+0.2%) showed some relative weakness.

The financial sector performed in line with the market, but tellingly, all ten economic sectors ended the day higher. The telecom services sector (+1.4%) led the way and was followed by utilities (+1.4%) and basic materials (+1.4%).

The energy sector (+0.8%) also provided some sponsorship for Wednesday's move as rising oil prices once again sparked buying interest in related stocks. Crude futures hit their highs for the day ($82.51) right about the time the Dept. of Energy reported a 3.87 million barrel drawdown in stockpiles versus expectations for a decline of 2.025 million barrels.

Crude futures for October delivery finished off their highs (+$0.28 at $81.79) as the bullish inventory report had been largely priced in already. However, the improved growth outlook that followed the Fed's rate cut kept a bid in the market. Crude futures have risen approximately 15% in the past month.

While rising oil prices have stoked inflation concerns, the CPI report for August didn't cause any shockwaves. Total CPI actually declined 0.1% while core-CPI, which excludes food and energy, rose 0.2%. The latter was in line with expectations and left the year-over-year increase at a palatable 2.1%.

Thursday's economic calendar features the weekly initial claims, Leading Indicators, and Philadelphia Fed Index reports. FedEx (FDX 107.51, -1.48), Bear Stearns (BSC 115.64, -3.56), Goldman Sachs (GS 205.50, +5.00), Circuit City (CC 10.57, +0.15), Carnival Corp. (CCL 47.30, +0.60), Nike (NKE 58.56, -0.23) and Oracle (ORCL 20.84, +0.11) are the luminaries on the earnings calendar.

The market will also be keeping a close eye on the testimony on the mortgage market from Fed Chairman Bernanke and Treasury Secretary Paulson before the House Financial Services Committee that will begin at 10:00 ET.

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

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Today's Picks - September 20 2007

1.   STKL - SunOpta Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-20-07		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 14.81

2.   ADSK - AutoDesk Inc

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-20-07		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 50.04

3.   CNQ - Canadian Natural Resources

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-20-07		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 73.71

Previous Trades

DE - Deere & Co

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07	09-19-07	Long	148.89	150.39	Closed Below 147.11	up to - $1.99 per share (149.12 HOT)

CCE - Coca-Cola Enterprises

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* did not setup

PEG - Public Service Enterprise Group

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07	09-19-07	Long	90.02	Reached (90.65)	Closed Below 90.02	up to + 89 cents per share (90.91)

SLB - Schlumberger

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-19-07		Long	106.61	108.20	Below 104.74	up to + $1.20 per share (107.81)

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 47.35	up to + $1.93 per share (48.95)

AMT - American Tower Corp

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-18-07		Long	41.10	Reached (42.06)	Below 41.10	up to + 98 cents per share (42.08)

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 48.15	up to + $3.97 per share (51.67)

K - Kellogg Co

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-17-07	09-19-07	Long	56.28	Reached (56.69)	Closed 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 15.32	up to + $1.01 per share (15.66)