Dow - 73.40    I  Nasdaq - 28.48    I  S&P 500 - 11.74    

Market Wrap
(Briefing):

After several failed attempts to lock in some of the market's impressive gains of late, sellers finally finished what they started, closing stocks lower across the board.

With the Dow just a day removed from hitting its 13th record high in 18 days, a sense that stocks were overbought on a short-term basis left the market looking tired and vulnerable in pre-market action. Also acting as a constraint before the opening bell even sounded was a weaker than expected GDP report.

At 8:30 ET, the Commerce Dept. reported that Q3 GDP rose only 1.6% (consensus 2.1%) in Q3, the slowest pace in three years, due primarily to a huge 17% drop in residential construction activity which shaved 1.1% off the GDP gain. That wasn't all that surprising, though, since Fed Chairman Bernanke said on October 4th that the U.S. housing market is in a "substantial correction,'' which will lop about one percentage point off economic growth in the second half of the year.

The GDP report also showed that consumer spending picked up and that inflation, as reflected in a lower than expected 1.8% rise on the chain deflator, remains contained, indicative of a soft landing. Be that as it may, the weak GDP headline left investors questioning the sustainability of the recent advance, which opened the door for anything negative to push stocks even lower.

Then, as it appeared the bulls might simply surrender a modest pullback to some characteristic consolidation following such a huge run-up, sellers wrapped their arms around a negative research note and ran wit hit. Between 1:00 and 2:00 ET, it was reported that Goldman Sachs is cutting its growth forecast for motherboard shipments. After the broker reportedly said motherboard demand is "falling off a cliff," tech stocks did just that, selling off and removing notable sector leadership that took a toll on overall sentiment.

Better than expected reports from blue chips like Microsoft (MSFT 28.34 -0.01) and Chevron (CVX 67.64 +0.14) were all but forgotten.

---

Trade system guidelines only available to newsletter subscribers

---

Today's Picks - October 30, 2006

1.   PHI - PHILIPPINE LONG DISTANCE TEL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-30-06		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 47.20

2.   FD - FEDERATED DEPT STORES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-30-06		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 43.65

3.   ISRG - INTUITIVE SURGICAL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-30-06		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 99.34

Previous Trades

SYNA - SYNAPTICS INC

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

ARRS - ARRIS GROUP

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

AEM - AGNICO EAGLE MINES

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-26-06		Long	35.60	Reached (36.38)	Below 35.60	up to + 85 cents per share (36.45)

CNI - CANADIAN NATL

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
10-19-06	10-27-06	Long	45.21	Reached (45.70)	Closed 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 84.10/font>	up to + $3.97 per share (86.63)