Dow - 39.38    I  Nasdaq - 11.59    I  S&P 500 - 3.30    

Market Wrap
(Briefing):

Stocks snapped a four-day winning streak Friday, but a little profit taking on a light volume day did little to tarnish such a strong performance during what is historically the worst month of the year for stocks and a seasonally weak quarter. All three major indices finished lower on the day but up 2.0%, 2.8% and 4.6% on average for the week, month and third quarter, respectively.

After the Dow briefly eclipsed its all-time closing high of 11,722.98 early on to stay on pace for its best Q3 performance since 1995, a feeling of vertigo set in that kept the major averages stuck in a relatively tight trading range throughout most of the session. That is until a late-day reversal in oil prices, which erased a 2.1% pullback to close the commodity in positive territory, and last-minute rebalancing added some volatility that exacerbated concerns about the sustainability of the recent run-up in stocks.

Before the bell, the Commerce Dept. showed that the core-PCE deflator rose just 0.2% in August, matching economists' forecasts and reflecting a slight moderation from the previous trend. Nonetheless, since the data also left the Fed's favored inflation gauge at an 11-year high, as personal spending rose at its slowest pace (+0.1%) this year, the market became reluctant to extend recent gains.

Since investors continue to be pre-occupied with the pace of economic growth, the market was also in a holding pattern until the release of the Chicago PMI at 10:00 ET, which checked in with a solid reading of 62.1 for September -- its best reading this year. However, even though the data trumped last Thursday's disappointment from the Philly Fed and eased fresh concerns that manufacturing activity was cooling off as well, the report took a backseat to the anticipated release of Monday's more influential national ISM Index and some very candid Fed-speak about monetary policy. While St. Louis Fed President William Poole introduced the prospect of a possible easing, which the Treasury market has been pricing in for months now, an added remark that it will take a rapid slowdown for policy makers to cut interest rates removed more of the optimism behind the market's recent rally.

The absence of influential sector leadership also posed a problem for the bulls. Unlike Thursday when notable strength in a handful of Dow components (e.g. GM, INTC, CAT, HPQ) helped the blue-chip index finish within five points of its all-time closing high, Hewlett-Packard (HPQ 36.70 +0.73) was among Friday's only bright spots on the Dow as investors applauded Congressional testimony given by CEO Mark Hurd and HPQ's entry into the lucrative video game market with the announced acquisition of Voodoo Computers.

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Today's Picks - October 02, 2006

1.   SGP - SCHERING PLOUGH

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-02-06		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 22.12

2.   MRX - MEDICIS PHARMACEUTICAL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-02-06		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 32.46

Previous Trades

MA - MASTERCARD

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-29-06		Long	68.97	Reached (70.26)	Below 68.97	up to + $1.47 per share (70.45)
	* 09-29-06 - stock gapped down

CSE - CAPITALSOURCE

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-29-06		Long	25.58	Reached (25.67)	Below 25.58	up to + 47 cents per share (26.05)

GIS - GENERAL MLS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-28-06		Long	56.54	Reached (56.94)	Below 56.58	up to + 45 cents per share (56.99)

OMG - OM GROUP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-27-06		Long	40.70	Reached (40.88)	Below 43.25	up to + $ 4.00 per share (44.70)

XEL - XCEL ENERGY

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
09-25-06	09-29-06	Long	20.86	Reached (20.93)	Closed Below 20.86	up to + 19 cents per share (21.05)
	* 09-27-06 - The stock gapped down at the open forcing us to place an emergency stop just below the first 15min low of 20.52. This emergency stop held and the stock traded as high as 20.76.