Dow + 10.97    I  Nasdaq - 10.72    I  S&P 500 + 0.36    

Market Wrap
(Briefing):

Per usual the day before the Fed makes its policy decision known, investors erred on the side of caution Tuesday as the major averages traded in relatively tight ranges all day. Even though there is virtually no chance that policy makers will change the fed funds target from 5.25% Wednesday, worries that the policy statement will reflect continued and perhaps even heightened concern about the trend in core inflation kept blue chip gains to a minimum and left the Nasdaq in consolidation mode.

On a positive note, investors were again greeted with another batch of better than expected earnings reports across a diverse set of industry groups. However, with investors having already priced in another strong quarter of double-digit profit growth with little room for error, it only took a few disappointments to provide an excuse to lock in some recent gains.

Texas Instruments (TXN 30.52 -1.36) had anotherwise solid quarter, but its acknowledgment that Q4 semiconductor growth will be below the seasonal average sent the stock to three-month lows. That weighed on the semiconductor group and removed notable leadership from Technology -- the day's worst performing sector.

Of the four sectors trading higher and helping the broader market close relatively unchanged, Energy turned in the best performance as a rebound in oil prices played into the argument that oil stocks are still oversold on a short-term basis. While that bodes well for Energy sector profits, higher energy prices also acted as an obstacle for the bulls to overcome Tuesday.

Materials also surged more than 1.0% after Dow component DuPont (DD 46.00 +0.55) swung to a profit in Q3 and reaffirmed its full-year outlook. However, as the least influential of the 10 S&P 500 sectors, Materials struggled to offset the absence of leadership from more notable areas like Technology, Consumer Staples and Health Care.

With regard to the latter, it was in focus after Amgen (AMGN 74.94 +1.57) reported a 14% rise in Q3 earnings to beat expectations and raised its FY06 EPS outlook. An analyst downgrade on the sector's most influential component -- Pfizer (PFE 27.28 -0.45) -- acted as an offset. In fact, if it wasn't for a 52-week high on General Motors (GM 36.15 +0.96) of all stocks, the Dow would not have closed at another record high. For a second straight day, the auto maker paced index gains, surging 2.7% in anticipation of a surprisingly strong report Wednesday and following an analyst upgrade on rival Ford Motor (F 8.31 +0.41).

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Trade system guidelines only available to newsletter subscribers

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Today's Picks - October 25, 2006

1.   OS - OREGON STL MLS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-25-06		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 57.19

2.   RIMM - RESEARCH IN MOTION

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-25-06		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 117.30

3.   BSC - BEAR STEARNS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-25-06		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 154.13

Previous Trades

LTD - LIMITED BRANDS

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

FDO - FAMILY DLR STORES

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

SHLD - SEARS HLDGS

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-23-06		Long	175.05	175.92	Below 177.54	up to + $6.15 per share (181.20)
	* 10-23-06 - stock gapped down.

CNI - CANADIAN NATL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-19-06		Long	45.21	Reached (45.70)	Below 46.95	up to + $2.20 per share (47.41)

ICE - INTERCONTINENTAL EXCHANGE

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-17-06		Long	82.66	Reached (84.00)	Below 82.66	up to + $1.69 per share (84.35)