Dow + 20.09    I  Nasdaq + 6.55    I  S&P 500 + 3.44    

Market Wrap
(Briefing):

Stocks extended their winning streak to three on Monday and, more notably, lifted the Dow to within 3 points of 12,000 before closing at another new all-time high of 11980.60.

After stumbling out of the gate on early profit taking efforts, it didn't take long for the market's underlying bullish tone to resurface and again sideline those trying to fight the upward trend in equities. Even though the Q3 earnings season is not expected to begin in earnest until Tuesday, any evidence to support a 13th straight quarter of double-digit profit growth for the S&P 500 kept investors keyed in on the bottom line.

Better than expected Q3 earnings from Eaton (ETN 75.53 +5.23) and WW Grainger (GWW 72.70 +2.18), coupled with a stronger than expected early read on October manufacturing conditions which suggested the much desired soft landing remains on track, provided a floor of support for the Industrials sector. Even the sector's transportation components turned in notable performances despite dealing with a third consecutive rise in oil prices.

Directly benefiting from crude's 2.4% climb back toward $60/bbl was the profit engine that is Energy - the day's best performing sector (+2.2%). Crude oil was up in sympathy with cold weather in parts of the U.S. boosting the prices of natural gas futures (+14%).

The financial sector was also in focus after Charles Schwab (SCHW 17.10 -0.46) beat expectations and Wachovia (WB 55.25 -1.22) matched Wall Street forecasts. However, with SCHW shares up more than 30% since bottoming out in mid-July, shareholders took some money off the table. In turn, Wachovia missing on its top line renewed some concerns about how much of an impact an inverted yield curve will have on other money center banks. Thus, the absence of leadership in Financials kept blue chip gains at a minimum and left investors still waiting for the Dow to reach its next milestone.

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Trade system guidelines only available to newsletter subscribers

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Today's Picks - October 17, 2006

1.   FDX - FEDEX CORP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-17-06		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 117.00

2.   EXPD - EXPEDITORS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-17-06		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 48.58

3.   ICE - INTERCONTINENTAL EXCHANGE

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-17-06		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 77.30

Previous Trades

RTN - RAYTHEON CO

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-16-06		Long	50.82	51.15	Below 50.37	up to + 7 cents per share (50.89)
	* 10-16-06 - Stock gapped down

EQR - EQUITY RESIDENTIAL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-16-06		Long	53.41	Reached (53.56)	Below 53.41	up to + 18 cents per share (53.59)

CMX - CAREMARK RX

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
		Short	Below 15 low	Cover 1/2 once risk covered	Above HOD at time of setup
	* did not setup