Dow + 28.98    I  Nasdaq + 22.51    I  S&P 500 + 6.86    

Market Wrap
(Briefing):

With the Fed decision in the rearview mirror and the policy statement having a less hawkish tone than initially feared Wednesday, the market's focus returned to earnings Thursday; and, not surprisingly, they continued to top Wall Street estimates.

Thursday's headliner was none other than the world's largest company by market capitalization, Exxon Mobil (XOM 71.62 +0.61). Shares opened at a historic high after the company handily beat. Despite a 1.7% pullback in oil prices, XOM ultimately closed at an all-time high to help power the Dow to its 13th record close in 17 days.

Staying in the energy patch, oil prices slipping back below $61/bbl was just one of the many factors boding well for the improved spending patterns and earnings prospects that helped Consumer Discretionary turn in the day's best performance. The sector, which we upgraded to Market Weight in late September, got its biggest boost from a 3.2% surge in its most influential component -- Comcast (CMCSA 40.00 +1.24). The stock, which is also among the ten heaviest weighted companies on the predominantly tech-heavy Nasdaq, closed at a 52-week high after Q3 profits soared 46% year/year.

Also providing sector support were homebuilders, as a Q4 warning from Pulte Homes (PHM 32.60 +0.40) was overshadowed by a decline in borrowing costs and a report that new home sales unexpectedly rose 5.3% in September to a 1.075 mln annual rate - the most in three months. Median prices plunging at the fastest rate (-9.7%) in 35 years, however, did temporarily raise concerns that consumers will drastically rein in spending. Fortunately for buyers, the underlying bullish tone returned in afternoon trading to again send the bears looking for cover.

In fact, the Commerce Dept. provided a separate report before the bell that provided more evidence that the Fed is on track with its objective of engineering a soft landing. At 8:30 ET, the report showed that non-defense capital goods orders excluding transportation rose a healthy 1.1%, suggesting that overall investment trends are holding up well. Durable goods orders for September rose 7.8%, the biggest increase in six years given a large jump in aircraft orders. While that news typically bodes well for Boeing (BA 79.06 -1.80), the day's worst performing Dow component (-2.2%) losing a huge plane order (worth about $10 bln at list prices) to rival Airbus prevented the Industrials sector from providing any upside leadership.

Financials also provided some notable support, fueled by falling bond yields and continued enthusiam for brokerage stocks, which plays into our Overweight rating on the sector. In particular, Goldman Sachs (GS 193.38 +4.77) hit a historic high after it was hired by Clear Channel Communications (CCU 35.48 +3.13) to help the media giant evaluate strategic alternatives. Clear Channel soaring nearly 10% was yet another source of support for the discretionary sector.

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Trade system guidelines only available to newsletter subscribers

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Today's Picks - October 27, 2006

1.   SYNA - SYNAPTICS INC

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-27-06		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 29.19

2.   ARRS - ARRIS GROUP

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-27-06		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 13.80

Previous Trades

AEM - AGNICO EAGLE MINES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-26-06		Long	35.60	36.38	Below 34.70	up to + 20 cents per share (35.80)

SLW - SILVER WHEATON CORP

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

HMY - HARMONY GOLD MNG

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

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 47.43	up to + $2.70 per share (47.91)

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 83.24	up to + $3.97 per share (86.63)