Market Discussion

[la-onda]

from IV board:
cheers
Oliver

Weekend Chart Summary
Good Evening All,

Despite the apparent commodity lock down while US politicians negotiate campaign contributions in return for rubber stamping welfare for Wall Street, I thought to take a little time to look at the charts.  Surprisingly, several key commodities look very good.  Gold has formed a powerful flag pattern with a price objective of $1100.  Silver looks to be carving out a bullish Reverse Head & Shoulder pattern.  Platinum is still stuck in its three month down trend line but could break out if gold gets over $920.  Oil is threatening a key resistance level, which if broken will take the US dollar down.  Copper's chart looks like that metal is on life support.  A few percent lower and copper will be in bear territory.  Unleaded gasoline, despite storage levels being the lowest in 42 years, still can't catch a bid.  Anyone want to bet if this wasn't a major election cycle it would be much higher right now?  Natural gas has found a level of support and about to enter its seasonal strong period.  The US dollar is still in bullish territory despite the fact the US government has already loaned out $1.2 Trillion out of the Federal Reserve's balance sheet and about to spend another $700 Billion on a poorly planned trash buying binge.

*************************************************************************************************************************

Copper,
http://stockcharts.com/h-sc/ui?s=$COPPER&p=W&yr=2&mn=10&dy=0&id=p19803629205&a=131178698&listNum=3

Crude Oil,
http://stockcharts.com/h-sc/ui?s=$WTIC&p=W&yr=1&mn=10&dy=0&id=p24529265152&a=151246794&listNum=3

Gold,
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=6&dy=0&id=p05362961313&a=125323719&listNum=3

Gold Stock Index,
http://stockcharts.com/h-sc/ui?s=$HUI&p=D&yr=0&mn=6&dy=0&id=p56411303839&a=130853106&listNum=3

Natural Gas,
http://stockcharts.com/h-sc/ui?s=$NATGAS&p=D&yr=0&mn=6&dy=0&id=p35793139969&a=146051370&listNum=3

Platinum,
http://stockcharts.com/h-sc/ui?s=$PLAT&p=D&yr=0&mn=7&dy=0&id=p47420823100&a=108052216&listNum=3

Silver,
http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&yr=0&mn=5&dy=0&id=p15675868608&a=131179498&listNum=3

Unleaded Gasoline,
http://stockcharts.com/h-sc/ui?s=$GASO&p=W&yr=2&mn=6&dy=0&id=p86244906657&a=131181422&listNum=3

US Dollar Index,
http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=0&mn=8&dy=0&id=p06475580727&a=112138636&listNum=3

[la-onda]

fyi:
the ELLIOTT WAVE lives on....

27 September: weekend update
REVIEW
After the big surge in stocks late last week. This week was filled with mostly disappointing news. Economic reports such as homes sales, jobless claims, and durable goods orders continued to go in the wrong direction. WAMU failed on thursday, the largest bank failure in US history. Congress and the Treasury/FED could not resolve their differences in the so called "bailout plan". As a result the SPX/DOW declined 2.75%, and the NDX/NAZ dropped 4.1%. Rates on the 10-yr Bond rose to 3.83%, Crude gained 4.0%, Gold added 2.8%, and the Euro gained versus the USD 1.0%.
LONG TERM:bullish for potential Primary wave B rally
At the beginning of 2008 we projected that a bear market was underway, to correct part of the 2002 - 2007 bull market. The wave structure was expected to unfold in a series of ABC's, which is typical of bear markets. For example, the 2000 - 2002 bear market was a series of ABC's, a triple zigzag. We also projected that the first significant decline, Primary wave A, would take about one year and be followed by a multi-month Primary wave B counter-trend rally. The chart of this projection is still posted in the photo section on this blog. We also expected the decline from the bull market top at SPX 1576, to conclude near the SPX 1100 level. A week ago thursday the SPX hit 1134, and at that juncture Major wave C (May-Sept) equalled Major wave A (Oct-Jan) at precisely 306 points each. Over the next 24 hours the market surged from 1134 - 1265, a 131 point rally. This one day rally exceeded the total advance of three of the four uptrends during Primary wave A. It was certainly the biggest surge since this bear market began. This type of activity usually occurs at significant lows. After reviewing the market internals while the surge was underway, we concluded prior to the opening that friday morning that Primary wave A had probably concluded at SPX 1134, and Primary wave B was underway. Since Primary wave A took eleven months to unfold (Oct-Sept), we would expect Primary wave B to take between six and eight months to unfold, ideally concluding in May 2008. Primary wave B should also take the form of an ABC, consisting of three Major waves. Typically a bear market counter-trend rally of this nature retraces about 61.8% of the previous entire decline. This would project a top near the SPX 1400 level in the spring of next year. This scenario is predicated upon OEW confirming a new uptrend within the next few weeks.
MEDIUM TERM: downtrend may have bottomed at SPX 1134       
This week, the market pulled back to an important support level on wednesday at SPX 1180, near the 1179 pivot. Then the SPX rallied into the close on friday to SPX 1216. We are counting this initial surge and pullback as waves 1 and 2 of a potentially new uptrend, and part of Primary wave B. Should this indeed be the scenario, this uptrend will be labeled as Major wave A of an ABC Primary wave B rally. At the SPX 1134 lows, several technical events occurred. There were positive divergences in the SPX on all timeframes, from hourly to weekly, and including the monthly charts. This was confirmed on many timeframes by the DOW. Also many of our longer term technical indicators positively diverged at the lows as well. Technically, all these indicators have created an opportunity for the market to move upward for the next several months. When applying the symmetry thus far displayed by this bear market we can make some some projections for Major waves ABC. There have been two sets of downtrends one between 170-180 points, and the other between 240-250 points. Since we are expecting this next uptrend to be a kickoff to Primary wave B it should be quite strong. This would project an advance of 240-250 points from the 1134 low, suggesting a Major wave A top near the 1383 pivot. A pullback of about 115 points should follow to about the 1261 pivot to end Major wave B. Then another uptrend to about SPX 1440 to end Major wave C and Primary B. Therefore based upon the symmetry displayed thus far in the bear market we would expect the three waves of Primary wave B to unfold: 1383 - 1261- 1440. We'll post this projection on the SPX weekly chart in green "pending". And, will update the the 2008 forecast, when we get a confirmed OEW uptrend.
SHORT TERM
Support for the SPX is at 1179 and then 1168, with resistance at 1219 and then 1240. Short term momentum has been swinging from overbought to oversold as the waves from the SPX 1134 low have progressed. Thus far we have labeled this potential uptrend as waves 1 (1265) and 2 (1180) of Major wave A. The near term indicators are also suggesting this wave pattern. The pivot at SPX 1179 remains critical support.
FOREIGN MARKETS
The Asian markets are holding there lows of a week ago. India's BSE appears to be the weakest of the five.
The European markets are holding their lows as well, with the FTSE leading the way higher.
The Commodity markets have held too, with Brazil performing the best.
COMMODITY MARKETS
After a multi-month rally Bonds have made several gaps down in their ongoing correction. Expecting higher yields.
Crude appears to have bottomed near the previous fourth wave at $92. It's trying to confirm another uptrend.
Gold has stormed ahead after making a low at $740, with positive divergences. Expecting it to continue higher.
After a two month rally in the USD it has pulled back to initial support near 76. A further pullback is likely, as the Euro rallies.
NEXT WEEK
Another weekend another sunday watch, this time it's the "bailout plan". On monday the mutual/hedge funds start their window dressing to not only close out the month, but the quarter as well. Also on monday the PCE will be reported. On tuesday the much dreaded Case-Shiller housing price report and the Chicago PMI. ADP employment and ISM manufacturing is reported on wednesday. Then thursday is the weekly unemployment claims and factory orders. On friday another important report, Non-farm payrolls, and then ISM services. Busy week! The FED has little on the agenda other than closing out the "bailout plan". Best to your week! 
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987   

[la-onda]

fyi:

Knobias Sector Commentary
Monday , September 29, 2008 15:59ET

Energy

The Energy sector gapped lower at the open and added to those losses through the first hour. After stabilizing and trading near the lows heading into the lunch hours, the sector saw another leg down and added more losses into the close. Oil & gas producers were lower while oil and equipment names also saw declines and losses. Across the board, the sector saw an extensive selloff as oil prices plunged throughout the day. But overall, the voting in Washington caused the leg down. The House of Representatives vote against the bailout was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- BAS: Acquisition of Azurite for $60M Cash
- CHK: Merrill Lynch Starts @ Buy
- SYMX: License Agreement with ExxonMobil for MTG Technology
- CPE: $250 Million Credit Agreement w/Union Bank of California
- COP: Goldman Sachs Cuts to Neutral from Buy
- MRO: Goldman Sachs Ups to Buy from Neutral
- NHYDY: Smith Barney Ups to Buy from Hold

Materials

The Materials sector gapped lower at the open and continued to add losses through the first hour of trade. After stabilizing near its lows, the sector traded in range into mid day trade. After the lunch hours, the sector saw a sharp selloff and added to the mounting losses. Chemicals were all lower while the miners and metals sported the heaviest declines. Across the board, the sector saw a large leg down as commodity prices plunged throughout the day. But overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- TRA: Goldman Sachs Ups to Neutral from Sell; Analyst Notes
- FCX: Deutsche Bank Cuts to Hold from Buy; Cuts Tgt to $77 vs $125; Analyst Notes
- CDE: Deutsche Bank Cuts to Sell from Hold; Cuts Tgt to $1.25 vs $2.25; Analyst Notes
- VCP: Goldman Sachs Cuts to Neutral from Buy
- ARA: Goldman Sachs Cuts to Sell from Neutral

Industrials

The Industrials sector gapped lower at the open and continued to add losses through the first hour of trade. After stabilizing near its lows, the sector traded in range into mid day trade. After the lunch hours, the sector saw a sharp selloff and added to the mounting losses. General industries, support services, aerospace and industrial transports all saw large decline. Industrial engineering and heavy construction names were the largest losers of the day. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- VSH: To Buy Internationall Rectifier For $23/Share Cash
- Staffing Sector Downgraded to Underperform from Market Perform @ BMOC
- IR: JP Morgan Sets @ Neutral; Analyst Notes
- JBL: Raymond James Cuts to Outperform from Strong Buy

Consumer Discretionary

The Consumer Discretionary sector gapped lower at the open and continued to add losses through the first hour of trade. After stabilizing near its lows, the sector traded in range into mid day trade. After the lunch hours, the sector saw a sharp selloff and added to the mounting losses. General retailers, and travel leisure names all saw declines. Media names saw sharp losses. Food and drug names also saw bright red. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- SCS: Q2 EPS 23c vs 26c Beats 22c Est; Guidance Below Consensus
- TTWO: SG Cowen Ups to Outperform from Neutral; Analyst Notes
- DISH: Deutsche Bank Cuts to Hold from Buy; Cuts Tgt to $31 vs $51; Analyst Notes
- CC: Q2 Adj EPS ($1) vs (38c) Beats ($1.04) Est
- CMCSA: Oppenheimer Cuts to Underperform from Sector Perform; Analyst Notes
- CWTR: Thomas Weisel Ups to Market Weight from Underweight
- HOT: Smith Barney Cuts to Hold from Buy; Cuts Tgt to $33 vs $50; Analyst Notes
- URBN: Thomas Weisel Cuts to Market Weight from Overweight
- ANF: Thomas Weisel Ups to Overweight from Market Weight
- KSS: Thomas Weisel Cuts to Underweight from Market Weight
- COH: Thomas Weisel Ups to Overweight from Market Weight
- BWA: KeyBnc/McDonald Ups to Buy from Hold; Sets Tgt @ $46; Analyst Notes
- THO: Baird Cuts to Underperform from Neutral
- PSO: Goldman Sachs Ups to Buy from Neutral
- GME: Wedbush Morgan Ups to Buy from Hold; Cuts Tgt to $43.5 vs $46.5; Analyst Notes
- KSS: Thomas Weisel Cuts to Underweight from Market Weight; Sets Tgt @ $40; Analyst Notes

Consumer Staples

The Consumer Staples gapped marginally lower and chopped along basically in neutral territory heading into the lunch hours. After the noon hours, the sector saw another leg down before selling off again into the close. Beverages, household goods, tobacco, personal good and food producers were all lower on the day. Autos, leisure goods and home builders were overall laggards. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- CALM: Q1 EPS 47c vs 76c EPS -38% Y/Y
- WAG: Q4 EPS 45c vs 40c Meets 45c Est
- PPC: Agreement With Lenders on Temporary Covenant Waiver
- DKAM: 15-Year Exclusive Master Distribution Agreement in Israel
- SDA: Smith Barney Cuts to Sell from Buy
- CHD: Goldman Sachs Starts @ Neutral

Health Care

The Healthcare sector gapped marginally lower at the open but saw an extended decline into the lunch hours. After mid day, the sector saw a sharp move lower before bouncing back and seeing another sell off into the close. Pharmaceuticals were all lower on the day. BIIB was one of the lone bright spots in the sector. Healthcare and equipment names were also all lower on the day. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- CPHD: FDA Clearance for Xpert(TM) MRSA/SA Skin and Soft Tissue Infection test
- HOLX: Collins Stewart Starts @ Hold; Analyst Notes
- ALTU: Merrill Lynch Cuts to Neutral from Buy

Financials

The Financial sector gapped lower at the open and added to the losses through the first hour of trade. After stabilizing somewhat, the sector traded in range into the lunch hours. After the lunch hours, the sector saw a steep decline and bounced up and down in violent trade which set new lows and testing of lows. Into the close, the sector saw buying interest increase and help the sector off those lows but still sharply lower from the open. Banks were all lower while general finance names were laggards on the day. Insurance, both life and non life were all lower. Wachovia and Citi announced an agreement before the open which caused Wachovia to decline by almost 80%. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- NCC: Friedman Ups to Outperform from Mkt Perform; Sets Tgt @ $5.5; Analyst Notes
- HST: Smith Barney Cuts to Hold from Buy; Cuts Tgt to $13 vs $15; Analyst Notes
- BBV: Smith Barney Cuts to Sell from Hold; Cuts Tgt to $6 vs $9; Analyst Notes
- ACGL: JP Morgan Cuts to Neutral from Overweight; Analyst Notes
- CM: RBC Capital Ups to Sector Perform from Underperform; Ups Tgt to $65 vs $62; Analyst Notes
- NCC: Oppenheimer Ups to Outperform from Sector Perform; Sets Tgt @ $5; Analyst Notes
- MI: Sandler O'Neill Cuts to Sell from Hold
- SOV: Janney Ups to Buy from Neutral

Information Technology

The Technology sector gapped lower at the open before adding to those losses through the first hour. After stabilizing, the sector traded in range into the lunch hours. After mid day, the sector saw a sharp decline and added to those losses into the final hour. A bounce off the worst levels of the day in the final hour helped the sector off the low but still sharply lower from the open. Both hardware and software names were sharply lower. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- DRIV: CSFB Cuts to Neutral from Outperform; Analyst Notes
- ARBA: SG Cowen Cuts to Neutral from Outperform
- WBSN: Deutsche Bank Cuts to Hold from Buy; Sets Tgt @ $25; Analyst Notes
- CTXS: Deutsche Bank Cuts to Hold from Buy; Sets Tgt @ $28; Analyst Notes
- TSRA: Michael Anthofer Named CFO
- TLAB: Baird Ups to Outperform from Neutral; Ups Tgt to $6 vs $5; Analyst Notes
- AAPL: RBC Capital Cuts to Sector Perform from Outperform; Cuts Tgt to $140 vs $200; Analyst Notes
- CTXS: RBC Capital Cuts to Sector Perform from Outperform; Cuts Tgt to $34 vs $35; Analyst Notes
- CNQR: RBC Capital Cuts to Underperform from Sector Perform; Cuts Tgt to $40 vs $43; Analyst Notes
- DRIV: RBC Capital Cuts to Sector Perform from Outperform; Cuts Tgt to $35 vs $47; Analyst Notes
- VDSI: RBC Capital Cuts to Underperform from Sector Perform; Cuts Tgt to $14 vs $15; Analyst Notes
- NT: UBS Securities Ups to Buy from Neutral; Sets Tgt @ $3.25; Analyst Notes
- DRIV: CSFB Cuts to Neutral from Outperform
- MU: JMP Sec Starts @ Mkt Underperform; Sets Tgt @ $10
- QLGC: JMP Sec Starts @ Mkt Outperform; Sets Tgt @ $18
- AAPL: Morgan Stanley Cuts to Equal-weight from Overweight; Cuts Tgt to $115 vs $178
- XLNX: Piper Jaffray Ups to Buy from Neutral
- ELX: JMP Sec Starts @ Mkt Underperform; Sets Tgt @ $10; Analyst Notes

Telecommunication Services

The Telecom sector gapped lower at the open and continued to add to those losses through the morning session. After mid day, the sector saw violent moves down and continued to add losses into the final hour. Buying interest increased into the close which helped the sector off the lows. Even so, the sector finished sharply lower for the day. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

- KONG: Appointment of Leilei Wang as Chairman and CEO
- S: Oppenheimer Cuts to Underperform from Sector Perform; Analyst Notes
- TSP: JP Morgan Ups to Neutral from Underweight
- TSP: Goldman Sachs Ups to Buy from Neutral
- CPSH: Awarded $1M Army Research Laboratory Contract for Armor Development

Utilities

The Utilities sector gapped lower at the open and added to those losses through the morning hours. After mid day, the sector saw violent moves lower and a sell off into the close. Both electrical and gas/water names saw large losses. Overall, the voting in Washington caused the decline. The House of Representatives vote against the rescue package was followed by one of the largest down days on the Dow in history. While politicians survey the damage, more rhetoric is expected and another vote could come in the near future.

[la-onda]

That left a mark..Dow, Nasdaq and S&P 500
As many will have expected, the technical picture of all three broad market indexes look horrible.  I think if the bailout would have been passed what we saw today would have occurred in a few weeks anyway.  It will be very interesting what the Dow futures bring early in the morning.  Last January, the Dow was down over 1,300 points and the Federal Reserve reacted by a 3/4 point cut before market open.  The Dow opened down 350 or so points.

It seems to me the Feds have thrown just about everything they can at this problem and nothing seems to stick.  Curiously, they have not cut down to 1% Fed Funds rate nor have they reinstated the short selling Up Tick rule.  The lofty level of the US dollar certainly gives them room to cut.  Why they haven't brought back the Up Tick rule is a bit of a mystery.  They have gone as far as eliminate short selling for a select part of the market.  My guess the reason the Up Tick rule has not been reinstated is so that less market desirable investments such as commodity producer stocks can continue be contained.  Conventional wisdom is that oil and gold stocks move ahead of each respective commodity.  By leaving out the Up Tick rule, these stocks can be driven into the ground with impunity setting up a negative divergence to a rising oil or gold commodity price.  This may explain why the XAU/Gold ratio is near all-time lows.

Dow,
http://stockcharts.com/h-sc/ui?s=$INDU&p=M&yr=7&mn=0&dy=0&id=p12624099644&a=128643446&listNum=3

Nasdaq,
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=M&yr=7&mn=0&dy=0&id=p44235340514&a=128643093&listNum=3

S&P 500,
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=6&mn=2&dy=0&id=p44699714675&a=128643678&listNum=3

[Terliso]

What an ugly chart,....be prepare for another breakdown in the market, I believed the Dow Jones will go to 9,000... that's sad to say but I think it will.

Oh my lord, The Dow Jones breaks down all the MAJOR support areas.... I see below 9,000 in the Horizon...... Shit!!!!

[berloga]

Bush spread panic across the order by painting the gloom and doom scenario. His plan is to give money to the suckers who lost money making wrong bets in the first place. It's Alan Greenspan and Bush that originally allowed Freddie Mac and Fennie Mae to mix up the sub-prime mortgages with the conventional ones and Bush removed the limitations to the derivatives trading. Now they can't figure out what properties are tied to what obligations. I think they should let those ill banks kick the bucket and focus on helping investors with benign agenda.

  As for the market, this is where big boys make money. The more turmoil they cause, the more they shake off the little guys like us on setting panic. They will return, I bet soon with "good news" and lif the stock market. Stock market trades paper. I can't see how the economy immediately relates to speculation, other than through moving the capital...

[la-onda]

Knobias Sector Commentary
Tuesday , September 30, 2008 15:59ET

Energy

The Energy sector saw early buying interest at the open and added to those gains for the remainder of the day. Large cap oil and gas producers were all higher while small caps outperformed. Equipment and service names also saw higher prices. Crude saw decent gains and reached the $100 dollar level which helped the sector higher. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and ushered the markets higher.

- GLBL: Awarded $75M Pipeline Project by Pemex
- GW: CIBC Cuts to Sector Perform from Sector Outperform; Analyst Notes
- TDW: Jesup & Lamont Starts @ Buy; Sets Tgt @ $110; Analyst Notes

Materials

The Materials sector gapped higher at the open before closing that gap and bouncing higher into mid day. During afternoon trade, the sector saw a slowing of buying interest but still held the gains into the close. Chemical names were all higher while metals and miners also saw decent advances. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- PKX: Downgraded to Neutral from Overweight @ HSBC
- ARG: Baird Ups to Outperform from Neutral; Sets Tgt @ $68; Analyst Notes
- AKZOY: CSFB Cuts to Neutral from Outperform
- ANR: BMO Capital Starts @ Market Perform

Industrials

The Industrial sector gapped higher at the open before closing that gap in the first hour. After closing, the sector rallied for the remainder of the session and closed near the highs of the day. General industrials were all higher. Transports performed well while CAT was a laggard in the industrial machinery area. Electrical names were all higher while heavy construction were leaders with oil prices on the rise. Defense names were laggards in the sector on the day after speculation suggested the passage of a rescue bill would cut into some of the funding for defense spending. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- AWI: SunTrust Cuts to Neutral from Buy; Analyst Notes
- LSTR: Wachovia Ups to Outperform from Mkt Perform; Analyst Notes
- EMR: Baird Ups to Outperform from Neutral; Sets Tgt @ $38; Analyst Notes
- BEZ: Baird Ups to Outperform from Neutral; Sets Tgt @ $33; Analyst Notes
- TSS: Oppenheimer Cuts to Sector Perform from Outperform; Analyst Notes
- ABB: Societe General Ups to Buy from Hold
- EMR: Societe General Starts @ Sell; Sets Tgt @ $34
- ROK: Societe General Starts @ Sell; Sets Tgt @ $33
- TDK: JP Morgan Ups to Overweight from Neutral
- JEC: DA Davidson Ups to Buy from Neutral
- LSTR: Sidoti & Co Ups to Buy from Neutral

Consumer Discretionary

The Consumer Discretionary sector gapped higher at the open before closing that gap in the first hour. After closing that gap, the sector traded in range through the morning session before seeing buying interest increase during the lunch hours and helping the sector to its best levels heading into the close. General retailers were mostly higher during the day. Travel and leisure names posted solid gains while media names also saw solid advances. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- GNTX: Barrington Cuts to Mkt Perform from Outperform
- CRI: Sterne Agee Cuts to Hold from Buy; Analyst Notes
- THO: Q4 EPS 9c vs 90c Misses 30c Est
- CTB: BB&T Cuts to Hold from Buy
- GNTX: Baird Cuts to Neutral from Outperform; Sets Tgt @ $16; Analyst Notes
- NFLX: Stifel Nicolaus Starts @ Hold; Analyst Notes
- AMR: Argus Ups to Hold from Sell; Analyst Notes
- CC: RBC Capital Cuts to Underperform from Sector Perform; Cuts Tgt to $1 vs $3; Analyst Notes

Consumer Staples

The Consumer Staples sector saw early buying interest at the open before trading in a tight range through the morning hours. After reaching a low during the early afternoon hours, the sector bounced higher and rallied through the remainder of the day and finished near the highs. Beverages, household goods, tobacco and food producers were all higher on the day. Personal goods and leisure goods also saw decent gains while autos were mixed. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- WAG: Barrington Cuts to Mkt Perform from Outperform; Analyst Notes
- PBG: Q3 EPS $1.06 vs $1.12 Beats $1.04 Est; Guidance Varies from Consensus
- WOOF: Jefferies Cuts to Underperform from Buy; Analyst Notes
- WAG: UBS Securities Cuts to Neutral from Buy; Cuts Tgt to $34 vs $42; Analyst Notes

Health Care

The Healthcare sector saw early selling pressure at the open which sent it lower to test yesterday's lows. After bouncing off that level, the sector chopped along in neutral territory through the morning and early afternoon session. In the closing hours, the sector saw buying interest increase which ushered it to green territory where it closed marginally changed on the day. Large cap pharmaceuticals and biotechs were all higher on the day. Small caps countered the strength with losses. Medical device names were leaders in the sector while large cap healthcare providers also sported solid gains. Small cap providers were laggards and countered strength in the larger caps. Medical supply names were mixed. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- ALTU: Merrill Lynch Cuts to Neutral from Buy
- IDEV: JMP Sec Keeps @ Mkt Outperform; Ups Tgt to $9 vs $4
- HMA: Argus Cuts to Sell from Hold; Analyst Notes
- IDEV: Begins Ph III Trial of Octreotide Implant for Acromegaly
- SNN: Morgan Stanley Starts @ Equal-weight
- AUXL: Brean Murray Starts @ Sell; Sets Tgt @ $18; Analyst Notes

Financials

The Financial sector saw early selling pressure at the open send the sector lower. After reaching a bottom in the first hour, the sector rallied higher and added gains for the remainder of the session and finished near the highs. Large cap banks were all higher. Smaller caps also performed well. General finance names also saw decent advances. Non life names were laggards with HIG falling on exposure to troubled companies while life insurance names sported decent gains. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- NLY: Sterne Agee Starts @ Buy; Sets Tgt @ $17; Analyst Notes
- FHN: Sterne Agee Ups to Buy from Hold; Sets Tgt @ $10; Analyst Notes
- SOV: Sandler O'Neill Ups to Hold from Sell; Analyst Notes
- DLR: Baird Starts @ Outperform; Sets Tgt @ $50; Analyst Notes
- FITB: Baird Cuts to Neutral from Outperform; Analyst Notes
- SOV: Fox-Pitt Ups to Outperform from In-line
- FHN: SunTrust Ups to Buy from Neutral; Sets Tgt @ $12.5; Analyst Notes
- C: Argus Cuts to Hold from Buy; Analyst Notes
- ACAS: Avondale Starts @ Market Outperform

Information Technology

The Technology sector chopped along in early trade before seeing buying interest increase and usher the sector higher throughout the day. In the final hours, the sector saw a spike send it to its best levels were it closed near the daily high. Large cap hardware and equipment names were all higher on the session. Large cap software and service names also saw solid gains and were leaders on the session. Smaller caps performed well but had a few laggards. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- AAPL: Gabelli Ups to Buy from Hold; Analyst Notes
- APKT: Piper Jaffray Cuts to Sell from Neutral
- RIMM: JMP Sec Ups to Mkt Outperform from Mkt Perform; Sets Tgt @ $80; Analyst Notes
- INTC: Piper Jaffray Ups to Buy from Neutral; Sets Tgt @ $22; Analyst Notes
- VSEA: Needham Cuts to Hold from Buy; Analyst Notes
- QLGC: Argus Ups to Buy from Hold; Sets Tgt @ $19; Analyst Notes
- ARMH: Goldman Sachs Ups to Buy from Hold
- ARMH: DA Davidson Ups to Buy from Neutral

Telecommunication Services

The Telecom sector gapped higher at the open and added to the gains through the morning session. During afternoon trade, the sector consolidated in the first hour before rallying in the final hours and finishing near the best levels of the day. Fixed line and mobile names were both higher with only a few laggards. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- KTC: Merrill Lynch Cuts to Neutral from Buy
- DT: Goldman Sachs Ups to Buy from Neutral; Analyst Notes
- T: To Announce a Reorganization

Utilities

The Utilities sector saw choppy trade in neutral territory for the first half of the session. After mid day, the sector saw buying interest increase which helped the add gains for the remainder of the day and finish near its best levels. Electricity names were mostly higher with only a couple of laggards. Gas and water names were similar with only a couple of laggard. Overall, equities saw a broad based bounce after yesterday's historic loss. Optimism regarding a rescue package being passed in the coming days bolstered the markets while economic data was positive and also ushered the markets higher.

- RRI: Calyon Cuts to Neutral from Add; Cuts Tgt to $10 vs $22; Analyst Notes

[la-onda]

 

Knobias Sector Commentary
Thursday , October 02, 2008 16:00ET

Energy

The Energy sector gapped lower at the open and continued to add losses through the first few hours of trade. After reaching a bottom, the sector saw a small bounce into the mid day hours before losing the area and chopping lower into the close. Large cap oil and gas producers were marginally changed while small caps saw sharp declines. Equipment and service names also saw sharp declines as the dollar's rise ushered oil lower. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- CETG: COO Daniel R. Coffee Named President
- MTRX: Q1 EPS 36c vs 23c Beats 30c Est; Guidance In-Line with Consensus
- DNR: Merrill Lynch Cuts to Neutral from Buy
- BRY: Merrill Lynch Cuts to Underperform from Buy
- MUR: Merrill Lynch Cuts to Underperform from Neutral
- NTG: LOI for Major Contract in SE Asia; Reduces Q3 and Q4 Guidance
- BP: Merrill Lynch Ups to Neutral from Underperform
- TOT: Merrill Lynch Ups to Neutral from Underperform
- STO: Merrill Lynch Cuts to Underperform from Neutral
- TSO: Caris & Co Ups to Average from Below Average; Ups Tgt to $17 vs $14; Analyst Notes

Materials

The Materials sector gapped lower at the open and continued to add losses through the first few hours of trade. After reaching a bottom, the sector saw a small bounce into the mid day hours before losing the area and chopping lower into the close. Large cap chemical names were all mostly lower. Metals and miners were laggards and saw the sharpest declines as the dollar's rise ushered commodities lower. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- AKS: Soleil Ups to Buy from Hold
- MOS: Q1 EPS $2.65 vs 69c Misses $2.93 Est; Guidance Comments
- TRA: Merrill Lynch Cuts to Underperform from Buy
- CF: Merrill Lynch Cuts to Underperform from Buy
- POT: Merrill Lynch Cuts to Underperform from Buy
- MOS: Merrill Lynch Cuts to Underperform from Buy
- AGU: Merrill Lynch Cuts to Underperform from Neutral
- AA: Goldman Sachs Cuts to Neutral from Buy; Analyst Notes
- AU: Goldman Sachs Ups to Buy from Neutral
- MON: Merrill Lynch Cuts to Neutral from Buy
- MOS: Goldman Sachs Cuts to Neutral from Buy

Industrials

The Industrial sector gapped lower at the open and continued to add to those lows through the first hours. During mid day, the sector saw a small bounce off the lows but lost the levels into the afternoon hours and traded near its lows into the close. The sector was hit hard by negative economic data with Factory Orders worse than expected. GE's dilutive offering also weighed the sector down. General industrials were all lower. Aerospace and defense, support services, electronic, industrial engineering, transports, and construction names all saw sharp declines. Bright spots were few and far between. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- GE: Enters $3B PIPE; 10% Perpetual Preferred + Warrants
- HCM: CEO Comments on Agreement to Merge w/Walter Industries
- STP: Soleil Starts @ Buy; Sets Tgt @ $41; Analyst Notes
- APH: UBS Securities Starts @ Neutral; Sets Tgt @ $45
- MMAB: Joint Venture Agreement w/Suntech Power Holdings
- CNW: JP Morgan Cuts to Neutral from Overweight; Analyst Notes
- ATR: Merrill Lynch Cuts to Neutral from Buy
- PTV: Merrill Lynch Ups to Buy from Neutral
- CNW: Goldman Sachs Cuts to Neutral from Buy; Analyst Notes
- IRM: Smith Barney Ups to Buy from Hold
- CNW: Friedman Cuts to Mkt Perform from Outperform; Analyst Notes
- DSX: Oppenheimer Starts @ Outperform; Sets Tgt @ $23; Analyst Notes
- OSG: Oppenheimer Starts @ Sector Perform; Analyst Notes
- DRYS: Oppenheimer Sets @ Sector Perform; Analyst Notes
- ACM: Janney Starts @ Buy; Sets Tgt @ $31
- CNW: Stifel Nicolaus Cuts to Hold from Buy; Analyst Notes

Consumer Discretionary

The Consumer Discretionary sector saw early selling pressure at the open and added to the losses throughout the day. General retailers were all lower while media and travel/leisure names saw sharp declines. Food and drug retailers weathered most of the selling pressure but still didn't see much interest. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- TJX: Soleil Ups to Buy from Hold
- MAR: Q3 EPS 27c vs 33c Misses 32c Est; Guidance Below Consensus
- LEA: Smith Barney Ups to Hold from Sell; Ups Tgt to $11 vs $10; Analyst Notes
- AEO: SG Cowen Starts @ Outperform; Analyst Notes
- DISH: Soleil Ups to Hold from Sell; Keeps Tgt @ $23; Analyst Notes
- JCG: Friedman Starts @ Mkt Perform; Sets Tgt @ $25; Analyst Notes
- PNRA: Jefferies Cuts to Hold from Buy; Cuts Tgt to $52 vs $56; Analyst Notes
- WYNN: Morgan Stanley Cuts to Equal-weight from Overweight
- LVS: Morgan Stanley Cuts to Equal-weight from Overweight
- CTRP: Kaufman Bro Starts @ Hold; Sets Tgt @ $47; Analyst Notes
- IACI: Kaufman Bro Starts @ Buy; Sets Tgt @ $21.5; Analyst Notes
- SIRI: CRT Capital Ups to Fair Value from Sell

Consumer Staples

The Consumer Staples sector chopped along for the first hours of trade before seeing selling pressure sent the sector marginally lower. After stabilizing near the low, the sector traded in a tight range in negative territory before finishing near the low. The defensive sector weathered most of the selling pressure seen in the overall market but still sported a decent loss at the close. Beverages were household goods, and tobacco names were marginally lower on the day. Food producers were split with large cap grain producers unchanged while farming names saw declines. Autos, leisure goods, and homebuilders were the laggards and saw the sharpest losses on the day. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- STZ: Q2 Adj EPS 45c vs 35c Beats 44c Est; Guidance Varies from Consensus
- EBAY: Morgan Stanley Cuts to Equal-weight from Overweight
- VLGEA: Q4 EPS $1.05 vs 96c EPS +9% Y/Y

Health Care

The Healthcare sector saw early buying interest at the open. After reaching a high in the early minutes, the sector saw a choppy decline for the remainder of the day and sold off with the rest of the market. Large cap pharmaceuticals and biotechs were mostly unchanged while small caps saw sharp declines. Medical device and healthcare providers also saw losses while medical supply names fare somewhat better. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- BLUD: Q1 EPS 28c vs 25c Beats 23c Est; Guidance In-Line with Consensus
- GENZ: Lazard Freres Keeps @ Buy; Sets Tgt @ $92; Analyst Notes
- PLX: UBS Securities Starts @ Buy; Sets Tgt @ $5
- ARNA: UBS Securities Starts @ Buy; Sets Tgt @ $9
- ARRY: UBS Securities Starts @ Buy; Sets Tgt @ $11
- GERN: UBS Securities Starts @ Neutral; Sets Tgt @ $4.5
- ZOLL: Major Hospital in Finland Adopts AutoPulse(R)
- PDX: Morgan Keegan Cuts to Mkt Perform from Outperform; Analyst Notes
- CLDX: Receives $10M Milestone from Market Launch of Rotarix(R) in U.S.
- PGNX: Completes Enrollment in Two Ph II Studies of PRO 140 for HIV
- ERES: Leerink Swann Ups to Mkt Perform from Underperform; Analyst Notes

Financials

The Financial sector saw early selling pressure and added to those losses throughout the day in a slow choppy trend. Large cap banks were all lower on the day. Smaller caps fared much better. General finance names saw sharp declines while insurance also lost ground. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- FHN: Sterne Agee Cuts to Hold from Buy; Keeps Tgt @ $10; Analyst Notes
- BXP: Banc of Amer Cuts to Neutral from Buy; Cuts Tgt to $96 vs $108; Analyst Notes
- SOV: Friedman Ups to Mkt Perform from Underperform; Cuts Tgt to $5 vs $6; Analyst Notes
- ITU: JP Morgan Ups to Overweight from Neutral
- BBD: JP Morgan Ups to Overweight from Equal Weight
- PFG: Morgan Stanley Cuts to Underweight from Equal-weight
- ZION: Morgan Keegan Starts @ Mkt Perform
- HBAN: Morgan Keegan Starts @ Mkt Perform
- UBS: Deutsche Bank Ups to Buy from Hold; Analyst Notes
- HBC: Keefe Bruyette Cuts to Mkt Perform from Outperform; Analyst Notes
- UDR: Stifel Nicolaus Cuts to Sell from Hold; Analyst Notes
- PRU: Sterne Agee Starts @ Hold; Sets Tgt @ $88
- LNC: Sterne Agee Starts @ Hold; Sets Tgt @ $50
- MET: Sterne Agee Starts @ Hold; Sets Tgt @ $63
- PFG: Sterne Agee Starts @ Hold; Sets Tgt @ $47
- AMP: Sterne Agee Starts @ Hold; Sets Tgt @ $45
- HIG: Sterne Agee Starts @ Hold; Sets Tgt @ $53
- RGA: Sterne Agee Starts @ Buy; Sets Tgt @ $65
- AIZ: Sterne Agee Starts @ Buy; Sets Tgt @ $76
- LRY: Merrill Lynch Ups to Buy from Neutral
- BPO: Merrill Lynch Ups to Buy from Neutral
- EQY: Merrill Lynch Ups to Buy from Neutral

Information Technology

The Technology sector gapped lower at the open and added to those losses through the first hours of trade. Around mid day, the sector saw a small bounce off the lows but lost that level and traded lower in the close. Hardware and equipment names all saw sharp declines. MU was one of the bright spots after reporting quarterly numbers. Earnings were less than expected but the company did announce cost cutting initiatives with one being a 20% decrease in pay to top executives. The move was applauded by investors as the shares gained on an overall dismal day. ATML also saw gains after an unsolicited offer from Microchip and ON Semi. On the other side, software and service names were weak and saw deep declines. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- MU: Q4 Adj EPS (27c) vs (18c) Misses (23c) Est
- SMSC: Q2 Adj EPS 46c vs 59c Misses 47c Est
- AKAM: Goldman Sachs Cuts to Sell from Neutral
- ATML: Microchip, ON Semi Make $2.3B Offer To Buy Atmel
- CVLT: Goldman Sachs Cuts to Neutral from Buy
- DRIV: Goldman Sachs Ups to Neutral from Sell
- STX: Calyon Cuts to Reduce from Add; Cuts Tgt to $11 vs $14
- ELX: Calyon Cuts to Reduce from Neutral
- QLGC: Calyon Cuts to Reduce from Neutral; Cuts Tgt to $13 vs $19
- HPQ: Calyon Cuts to Add from Buy
- KLAC: RBC Capital Cuts to Underperform from Sector Perform
- JNPR: Morgan Keegan Cuts to Mkt Perform from Outperform; Analyst Notes
- EPIC: Jefferies Cuts to Hold from Buy; Sets Tgt @ $9; Analyst Notes
- ASML: Goldman Sachs Ups to Neutral from Sell
- VRSN: Lazard Freres Starts @ Buy; Sets Tgt @ $36
- AKAM: Wedbush Morgan Cuts to Hold from Buy; Analyst Notes
- KLAC: Lehman Cuts to Underweight from Equal-weight; Analyst Notes

Telecommunication Services

The Telecom sector saw earlying buying interest at the open but lost that level and traded lower throughout the remainder of the session. Fixed line names were all lower while mobile names were laggards and sported the deepest declines. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- GSAT: Class Action Lawsuit Dismissed with Prejudice

Utilities

The Utilities sector saw early buying interest at the open but lost that level and traded lower throughout the remainder of the session. In the final hour, the sector saw another leg down and finished near its low. Electricity names were lower on the day. CEG was a lone bright spot after reporting their first merger related regulatory filing. Gas and water names also were mostly lower though a few smaller caps saw marginal gains. Negative economic data caused investor sentiment to sour early on while uncertainty on the House's impending vote on the rescue package also limited buying interest. Overall, the markets were in a 'wait and see' mode until a House resolution was passed.

- LNT: Prices $250M Senior Debt Offering
- CEG: MidAmerican and Constellation Energy Announce First Merger-Related Regulatory Filing

[la-onda]

from IV board:

Credit Markets, US Govt and Precious Metals
Wow what a week that was with all of the drama that was occurring in the markets.  There are a huge number of dispirited commodity investors that are likely throwing in the towel.  I too am quite exhausted, but not broken.  The beating we have been taking in the markets has been brutal.  What I am going to do is step back a little to review what has been going on and highlight why I think we should be bullish now.

This past week was for sure a roller coaster in the markets.  Almost complete attention was placed upon will they or won't they pass the $700, I mean $850 Billion credit market rescue package.  It is quite interesting that Paulsen, Bush, Pelosi et al were all about we must pass the bill now else the market is going to tank.  Now over this weekend they are all trying to down play the effects of the package.  In other words, they lied to the American public to pass a real bad piece of legislation loaded with tons of pork projects for reluctant House members.  The rescue package was oversold to the point, IMO, that if the credit market does not "unfreeze" the passage of the bill will in fact induce market panic for its ineffectiveness.

The rescue package will not work as planned.  Why?  Well lets take a look at the behind the scenes numbers.  The cash for trash program sponsored by the Federal Reserve is going into hyperdrive.  The Fed's balance sheet has exploded from roughly $900 Billion six weeks ago to $1,500 Billion today.  In other words, they have loaned out (liquefied) the credit markets to the tune of $600 Billion and credit markets are actually worse now.  The TED spread is near or at all-time highs.  The graph of the spread looks like a hockey stick.  Credit professionals have often said recently that the high TED spread means banks simply do not want to lend to each other.  Upon the US House passing the rescue package, the TED spread fell an inconsequential amount.  World wide liquidity injections by the US and many other Central Banks have exceeded $1,200 Billion; yet the credit markets are still frozen.  Now we have a rescue package that apparently will take about 4 weeks before any money is spent is going to add a paltry $700 Billion into the markets and save them?

I want to point out that the US Federal Budget Debt has exploded in recent weeks.  I don't believe that the increase in the Federal Debt is part of the liquidity injections because liquidity is put out into the markets as a loan from the US Federal Reserve to the borrower.  If this is a correct interpretation in addition of $1,200 Billion injected in the last two weeks, we have also had an additional $500 Billion spent by the US Government to help the credit markets.  I took data from the following link and had to divided it by 10 to the 12th power to make it more user friendly.  Note that the US Federal Debt has increased $1,000 Billion in the last fiscal year.  More alarming is that in the last 18 days, the US Federal Debt has increased $520 Billion!

Link:  http://www.treasurydirect.gov/NP/BPDLogin?application=np

Hence, this so called rescue package will not work to unfreeze the credit markets, IMO, as the sheer magnitude of the money already injected in the last two weeks has done nothing at all.  It would appear that the markets agree with my position.  The broad market indexes are in terrible technical shape.  Friday the Dow sold off to three year lows.  I think that part of the reason why the bailout package proponents are back peddling this weekend is due to how poorly the stock markets reacted.  Now there is a big risk that the broad markets sell off on Monday.  We saw plenty of huge up moves due only to talk of the rescue package being passed.  Now it has been passed, what do the markets have to look forward to?  More poor economic data, the TED spread staying at near record levels and the US Federal Debt exploding.  You can get a real sense of fragility of the markets are right now in the following charts:

Dow Jones - Short Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p60563103857&a=135845786&listNum=3

Dow Jones - Medium Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=2&mn=4&dy=0&id=p27573491325&a=143726068&listNum=3

Dow Jones - Long Term,
http://stockcharts.com/h-sc/ui?s=$INDU&p=M&yr=7&mn=0&dy=0&id=p12624099644&a=128643446&listNum=3

Nasdaq - Long Term,
http://stockcharts.com/h-sc/ui?s=$COMPQ&p=M&yr=7&mn=0&dy=0&id=p44235340514&a=128643093&listNum=3

S&P 500 - Long Term,
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=6&mn=4&dy=0&id=p80176889041&a=128643678&listNum=3

Commodity Markets
We commodity investors are all battered and bruised by everything that has gone on since July 15th, the day when many commodity prices hit their near term high and have sold off since.  With all of this turmoil in the credit markets where paper promises are melting down, why are hard assets selling off?  There is some evidence that hedge funds have had to liquidate positions.  It is interesting that hedge funds by their nature can go long and short, however, when they liquidate it is only long commodity positions.  We never hear how a hedge fund was short and liquidated by being forced to buy positions back.  We also see in the Unleaded Gasoline market that US inventories are at the lowest levels since 1966 yet despite this and shortages reported in the Southeast, Gasoline's price continues to slump.  The buzz word in the Oil market is that there has been demand destruction.  The amount of the so called demand destruction is being offset by the reduction in supply.  Yet again, we see crude oil struggling to catch a bid.

Unleaded Gasoline Futures,
http://stockcharts.com/h-sc/ui?s=$GASO&p=W&yr=2&mn=6&dy=0&id=p86244906657&a=131181422&listNum=3

Crude Oil,
http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=0&mn=6&dy=0&id=p17649591410&a=131180076&listNum=3

We hear of insatiable demand from investors for physical gold and silver.  Stories have surfaced for the last six months that inventories of silver were depleting.  At first, skeptics thought it a short term phenomena but now we see physical off take being quite acute.  The only way you can purchase silver in 1, 10 and 100 ounce coins or bars is to pay hefty several dollar premiums to spot.  Gold is 60 times more expensive than silver but investors have been depleting 1 ounce coin and bar products throughout the world.  Many dealers are completely out of American Eagles, Australian Kangaroos and Canadian Maple Leafs.  Despite a very obvious and well published shortage of both gold and silver, both of the paper prices continue to sell off.

Gold Futures,
http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=6&dy=0&id=p05362961313&a=125323719&listNum=3

Silver Futures,
http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&yr=0&mn=5&dy=0&id=p15675868608&a=131179498&listNum=3

Many investors have begun the question Gold's safe haven status in light of the worst financial crisis to hit in the last 70 years, as it has not responded favorable.  While this may be true in the US, Gold is playing its safe haven role in the prices of many other countries who are being ill-affected by the credit crisis.  The following are charts of Gold in the prices of the Australian Dollar, British Pound, Canadian Dollar, European Union Euro, Japanese Yen and the New Zealand Dollar.

Australian Gold,
http://stockcharts.com/h-sc/ui?s=$GOLD:$XAD&p=W&yr=1&mn=6&dy=0&id=p72053822415&a=152604877&listNum=3

British Gold,
http://stockcharts.com/h-sc/ui?s=$GOLD:$XBP&p=W&yr=1&mn=6&dy=0&id=p72053822415&a=152601899&listNum=3

Canadian Gold,
http://stockcharts.com/h-sc/ui?s=$GOLD:$CDW&p=W&yr=1&mn=6&dy=0&id=p72053822415&a=152629793&listNum=3

European Gold,
http://stockcharts.com/h-sc/ui?s=$GOLD:$XEU&p=W&yr=1&mn=6&dy=0&id=p72053822415&a=126422002&listNum=3

Japanese Gold,
http://stockcharts.com/h-sc/ui?s=$GOLD:$XJY&p=W&yr=1&mn=6&dy=0&id=p72053822415&a=152604983&listNum=3

New Zealand Dollar,
http://stockcharts.com/h-sc/ui?s=$GOLD:$NZD&p=W&yr=1&mn=6&dy=0&id=p72053822415&a=152605012&listNum=3

So why are Gold, Oil, Silver, Unleaded Gasoline and several other commodities selling off?  I find it interesting that many explain it away by saying it is hedge funds liquidating or some sort of demand destruction phenomena.  In Gold, we find the Gold ETF holds record amounts of metal and inventory is increasing every week indicating strong demand.  Yet, in the Gold futures pits the open interest is 260,000 contracts below its all-time high and shrinking weekly.  I guess hedge funds are liquidating futures contracts and buying physical at the same time.

My answer to the commodity question can be summarized by what US Treasury Secretary has been quoted several times over the past week that he "will use all the tools at his disposal to protect the financial markets".  It has been stated that the simplest explanation is the most correct.  I believe the reason why markets such as gold and silver are acting so counter-intuitively is due to active price management by the US Government.  They have done it two times before in the 1930's and then again to defend the Bretton Wood's agreement in the late 1960's.

Late in the 1970's Fed chairman Paul Volcker was trying to battle inflation and to prop up the dollar from falling into the abyss.  Remember, floating exchange rate currencies were relatively new back then.  In his memoirs, Volcker lamented that every time gold would rise it would take the psychological underpinnings out from under the dollar.  He mentioned that they did not control gold's price and that was a mistake.

Several years ago Alan Greenspan was testifying before Congress.  He was defending why derivatives on gold should not be regulated.  (Greenspan, FYI, has been adamant about not regulating the very derivatives that are now destroying the banking industry.)  Greenspan told Congress that "Central Banks stand at the ready to lease ever increasing amounts of gold into the market in the event gold should rise".  For those newbies, this is the practice where CB's charge about 0.20% annual interest on gold leased to bullion banks (JP Morgan, Goldman Sach's) to sell the metal on the open market then use the proceeds to invest elsewhere.  It is evident that Greenspan already knew and was confident in gold being leased out to suppress the price to slow or even prevent it from rising.

Gold has not only been the traditional safe haven investment for 6000+ years but in today's economy it is the most widely recognized inflation and financial health barometer in the world.  When this barbarous relic rises, it gets noticed everywhere and its rise does not signal nor does it give the world confidence that the markets are safe and sound.

The price action in Gold in the Wednesday to Thursday period of last week was perhaps one of the most blatant examples of price management in the five years I've followed this market.  Gold on Wednesday closed up at 12:30 CST.  Then out of the blue at 1:00 CST, Gold immediately fell $20.  Later that day we found the US Senate approving the financial rescue package.  Gold was only down slightly and continued that way until early Thursday morning.  Then when New York opened, Gold was immediately drilled for a $40 loss.  The excuse was that Gold dropped due to the Senate vote.  Why did the markets take 12 hours to digest the news then suddenly drop when New York opened?  I believe the reason is to show the world that ithe credit markets have now has been saved by the US bailout package.

We commodity investors particularly those who share my view that these markets are being priced managed by the US government, wonder what will it take for their manipulative backs to be broken?  Many have thrown in the towel as losses have mounted to intolerable levels.  I believe instead of throwing in the towel, we should know that the reasons why we should be investing and holding hard assets are the most bullish we have seen in a generation.  The price management game can only go on for so long before it breaks.  Physical demand for gold and silver are simply superb.  Confidence in the financial system is nearing 1930 levels with key market stress indicators of the TED spread confirming it.  The US government has the printing press going white hot with liquidity injections and Federal spending at unprecedented levels.  We also see there may be cracks in the gold and silver leasing market.  It used to be that interest charged by Central Banks to lease physical metal was near zero and had been that way for years.  Today this mechanism for dumping metal on the spot market and investing the proceeds in paper instruments is losing its charm.  Lease rates are approaching 1.5%, putting strain on the yield spread between the money to pay the lease rate and that generated by investing in Treasury bonds.  I believe that if lease rates exceed 4% for a few months, that gold and silver will simply explode to the upside since huge amounts of leased metals have placed price caps on both.

Folks, gold, silver and commodities in general are not acting in their safe haven roles at the moment in the US.  Gold in particular is soaring in many other key currencies.  It is only a matter of time before we see the same in the US dollar price.  I believe that the US government has put tremendous amount of pressure on the commodities sector since July to alleviate broad market health concerns.  They have repeatedly trashed Gold in thinly traded market hours, raised Gold margin requirements to nearly three times where they should be with the present level of open interest and simply taken Gold, Oil & Gas and Silver equities to the woodshed to punish those of us who are prudently trying to protect our wealth.  The huge volatility in the shares also serves the purpose of making them less desirable investments.

While we are down and discouraged, let's not give them the pleasure of breaking us.  Come on guys its time to rally and not let the Wall Street crooks to get the better of us.

http://www.investorvillage.com/smbd.asp?mb=144&mn=7654&pt=msg&mid=5790274

all the best
Oliver

[la-onda]

Markets See Final Hour Rally to Move Stocks Off Session Lows
Monday , October 06, 2008 16:15ET

The end to a crazy day. Today's market action had a little bit for everyone. An early morning selloff led to the major indices moving lower by 7 – 8%  through early afternoon action. As some traders hoped to close near the session lows in order to create a possible bottom, other traders saw those lower levels as a buying opportunity and began moving into the market. The final hour of trading saw the DJI move off a nearly 800 point loss to end the day off only 360 points. The selloff today did not discriminate and led to a large variety of stocks from every sector moving to new recent lows. As the selloff was broad based so was the final hour rally which helped many stocks move off earlier session lows. All ten sectors ended the day in negative territory with the Industrials sector showing the least decline. Traders will keep a watchful eye tomorrow on the direction of the market in hopes that a bottom can soon be reached.

TOP STORIES
- Fed to Pay Interest on Banks' Required & Reserve Balances
- Overnight Libor Rate Rises as Demand Increases
- Hartford Financial Gets $2.5B Investment from Allianz
- Wachovia Acquisition on Hold as Potential Buyers Battle
- Eli Lilly Agrees to Acquire ImClone for $70/Share
- Ebay Set to Acquire Bill Me Later & 2 Denmark Sites; Plans Workforce Cut

ECONOMIC DATA
- No Major Economic Data

US MARKET
- Nasdaq (1862.96; -84.43)
- Dow (9971.91; -353.47)
- S&P 500 (1057.84; 56.44)

COMMODITIES/BONDS
- Crude ($87.81; -6.07)
- Gold ($866.20; +33.00)
- 2-Year Treasury Note (1.47%; -0.18)
- 5-Year Treasury Note (2.47%; -0.19)
- 10-Year Treasury Note (3.48%; -0.12)

FOREIGN MARKET RECAP
Asia
- Nikkei 225: (10,415.76, -522.38, -5.28%)
- Shanghai Comp: (2,173.74, -120.05, -5.85%)
- Hang Seng: (16,859.26, -823.14, -5.13%)
- Dollar/Yen: (1 Dollar = ¥101.43)

Europe
- DAX: (5,387.01, -410.02, -8.24%)
- FTSE 100: (4,617.24, -253.10, -5.80%)
- CAC 40: (3,711.98, -368.77, -11.03%)
- IBEX 35: (10,726.00, -692.50, -6.90%)
- Euro/Dollar: (1 Euro = $1.35)

ENERGY
The Energy sector was the hardest hit today losing nearly 9%. As with the overall market, the sector took a major plunge at the open as oil prices fell below $90 per barrel. The sector attempted to make a comeback during midday trading but was unable to make it back to its opening levels. A late day selloff was strong and paralleled the afternoon selloff of oil to its lowest levels below $88, but the final hour rally moved the sector off its lows of the session. Aside from the overall market decline, company specific news did not seem to play a factor in today's broad based selloff. Two downgrades for the sector included BRNC and ENT and OMNI was a stock out with news as it reported its Q3 revenue guidance.

MATERIALS
The Materials sector was one of the hardest hit in the market today losing over 9%. The overall market forces pushed the sector lower at the open. Midmorning trading attempted to move the sector back to its opening levels, but sellers in the afternoon took the market lower. Despite the late day selloff, a small rally in the last hour of trading helped the sector move off its lows of the day. Gold and Silver moved higher today as traders continued to move toward safer investments. MON was the lone upgrade in the sector while AVY, ECL and MT were all downgraded during morning ratings action.

INDUSTRIALS
The Industrials was not missed by today's sharp selloff. Even though oil and gasoline prices fell to their lowest levels in several months, the energy dependent sector was not helped. The broad based selloff began early in the trading day as the sector plunged lower at the open before rebounding through midday trading. The late day selloff in the overall market also applied to the Industrial sector but a final hour rally in helped the sector close off its lows of the session. CRDN was among the news makers in the session as the company announced a $2.73 billion, 5-year ID/IQ contract. Upgrades within the sector included LSTR while the downgrade list included SANM, VMC, ITW, CLS and BHE.

CONSUMER DISCRETIONARY
The Consumer Discretionary sector made a major move to the downside today as investors continue to fear a slowdown in consumer spending. The move lower today in the sector mirrored that of the overall market as the selloff was very broad based. A early morning decline was reversed in midmorning as the sector found a few buyers, but this rally was short lived. The sector continued its slide lower in afternoon trading before a final hour rally helped the sector end the day well off its lows of the session. News stocks in the sector included guidance announcements from NFLX and WYN. Ratings action was slow in the sector as DLTR was upgraded while SPF was downgraded.

CONSUMER STAPLES
If a sector can be considered best performing and still move to the downside, the Consumer Staples sector wins the award. A 4% move to the downside was much better than the overall market and the other sectors. Despite the general move down, the sector reacted differently in today's trading than other sectors. A continuous slide throughout the day was only interrupted by brief pauses. As with the broader market the final hour of trading did help pair some of the earlier losses and helped move the sector off its lows of the session. EBAY was a major news story in the sector as the company announced the acquisition of Bill Me Later and two other Denmark websites along with a workforce reduction plan.

HEALTHCARE
The Healthcare sector was one of the better performing sectors in the market despite moving to the downside. A downward move through most of the day was reversed in the final hour of trading to help the sector recover some of its earlier losses. IMCL was a major news maker in the sector as Ely Lilly announced that it had agreed to buy the company for $70 per share which led Bristol-Myers to end its bid for the company. Positive Phase III trial data from DNDN, DNA and SLXP were other major newsmakers in the sector. Upgraded stocks included NVO and AMLN while VAR and VARI were among those that were downgraded.

FINANCIALS
The Financial sector was a middle of the road performer today despite the continuing news of a global financial crisis. Even though the sector was not the worst performer, individual Banks and Insurance companies were among the hardest hit. Wachovia and its potential buyers were among the leading news stories not on in the sector but the overall market. In an early morning announcement, Citi indicated that it had filed a complaint seeking at least $60B in damages relating to the scrum with Wells Fargo for the right to acquire Wachovia. On the flipside, Hartford Financial was one of the markets better performers after Allianz announced that it would invest $2.5B in the company. Upgraded stocks included ALD, ING, WFC and PBCT while those downgraded included AMB, PLD, ACF, KEN and SFI.

TECHNOLOGY
The Technology sector was a big decliner in the sector today and was a contributing factor in the Nasdaq reaching levels not seen since 03 and 04. After the strong move to the downside in early trading and the continued slow selloff during the day a final hour rally helped move the sector off its lows of the session, but it was still unable to reach its opening levels. The selloff and then rally were broad based with no one piece of news contributing to the move. Traders will begin looking forward to next week as many of the sectors components will begin reporting results from the September ended quarter. Upgraded stocks in the sector included SINA and MRVL while OMTR, ADBE, NVDA, BLKB, ERIC, ALU, ISIL FCS and RFMD were all downgraded in morning ratings action.

TELECOM
The Telecom sector was not left out of the selloff today but neither did it miss the late day rally. All the companies in the sector traded to the downside today but thanks to the final hour rally, those stocks and the sector were able to move well of the lows of the session. There were no downgrades in the sector today while PCCWY and BRP were upgraded.

UTILITIES
The Utilities sector was not helped much by today's selloff in crude oil and gasoline. The sector was a middle of the pack performer and ended the session off nearly 5%. As with the overall market the sector moved lower for most of the day before a rally in the final hour of trading moved the sector off its lows of the session. The lone upgrade in the sector was ATO while PNY was listed as the only downgrade.

&

Elliot Wave lives on....
monday update
SHORT TERM: European banking crisis spreads, DOW -370
Over the weekend Germany announced that they had moved to rescue Hypo Real Estate, after a $35 bln rescue plan had fallen through. This sent financial tremors throughout Europe's banking system. Sunday night US index futures opened sharply lower, and the Asian markets were all substantially lower. Europe's market gapped down at the open and closed down 7.45% on the day. At 8:15 the FED announced expansions in several of its lending programs, and some new initiatives: http://www.federalreserve.gov/newsevents/press/monetary/20081006a.htm. At the open the market gapped down to SPX 1089, broke through the long term support at SPX 1061 by 10:00, and continued lower nearing 11:00 when the SPX hit 1027. A sharp rally followed to 1054 within the next half hour. But when the market failed to break above 1061 it headed lower again. After a bounce from SPX 1030 to 1041, the market made new lows for the day at 1008 just before 3:00. This new low was followed by an even sharper rally heading into the close as the SPX hit 1062. But "sell on close" orders took the market below 1060. At the close the SPX/DOW were down 3.70%, and the NDX/NAZ were down 4.20%. Bonds gained about 1.5 points, Crude dropped $5.15, Gold rallied $27.50, and the Euro was sharply lower. This morning the SPX took out our lowest support pivot at 1061 within the first hour, and headed lower. Urged by a few emails I posted the next lower support pivots on the SPX daily chart. With todays activity the SPX traded down through the support pivots at 1053, 1041, 1031 and 1018. The next support pivot is SPX 990. For now support is at SPX 1053, 1041 and then 1031, with resistance at 1061 and then 1090. Short term momentum blew out the positive divergences and was extremely oversold at the lows. The near term indicators are the most oversold they have been in the entire bear market. Tomorrow FED chair Bernanke gives a speech at 1:15, the FOMC minutes are released at 2:00, and the Consumer credit report is released at 3:00.
It was quite disappointing today when the market did not find support in the 1070 area, and then broke through the long term support at SPX 1061. The downtrend from SPX 1313 has now dropped 305 SPX points, the largest downtrend in this bear market to date. The last hour of trading was encouraging, but the SPX failed to close above 1061. This is a key level! This market is extremely oversold on many timeframes, except oddly enough, on the daily charts. Until this market can get back above SPX 1061, we will just have to monitor the lower pivots. Also keep an eye on the XLF financial sector. It led the market lower after the bull market top, and has been holding support during this entire downtrend. If this sector should give way the market will almost certainly follow. Best to your trading!
MEDIUM TERM: downtrend makes new lows at SPX 1008
LONG TERM: neutral, awaiting the start of Primary wave B
CHARTS:  http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987 

[Terliso]

Now we are seeing line of 9 in the Dow Jones....

[la-onda]

Knobias Sector Commentary
Tuesday , October 07, 2008 16:00ET

Energy

The Energy sector took a wild ride today. After a positive open the sector began to fall throughout the day but did attempt a rally late in the afternoon. This rally failed however and the sector ended the day in negative territory. Oil prices helped contribute to the decline in the sector as the price per barrel also fell throughout the day. In early trading oil had moved above $91 but through midday trading fell back below $90 but remained above yesterdays close. Crude did recover in late day trading and ended the day back above the $90 mark. The sector had limited ratings action with only one downgrade reported for the sector.

- APC: Expects Free Cash Flow to Cover Additional Buybacks in 2009
- Upgrades: none
- Downgrades: SU

Materials

The Materials sector finished the day in the middle of the pack closing off by over 4%. As with the overall market the sector opened the day on a positive note, but the rally which began yesterday afternoon did not have staying power. The sector fell through most of the trading day before catching a small rally in late afternoon trading. This rally however was unable to bring the sector back into positive territory. Gold and copper were higher among commodities related to the sector which helped the Mining industry post gains within the down sector. Chemicals and Industrial Metals were hardest hit among the industries within the sector. Ratings action was limited in the sector with only one upgrade reported.

- Upgrades: FCX
- Downgrades: none

Industrials

The Industrials sector was toward the lower end of the sector rankings as it ended the day posting losses of over 4%. As with the overall market the sector continued yesterdays rally at the open but it was short lived. Industrials tumbled through the day with a brief rally later in the day. The final hour of trading saw the sellers come back which pushed the sector back down towards its lows of the session. Aerospace & Defense looked to be one of the better performing industries within the sector, while Construction and Electronic & Electrical Equipment were among the hardest hit. Industrial Transportation was also lower as oil and gas prices inched higher after yesterdays selloff. Ratings action for the sector included downgrades for TRMB, FAST and SPWRA.

- Upgrades: none
- Downgrades: TRMB, FAST, SPWRA

Consumer Discretionary

The Consumer Discretionary sector was one of the hardest hit today as the sector moved lower by over 6%. The sector began selling off closely after the morning bell and only attempted a brief rally late in the afternoon but this was thwarted as sellers came back and pushed the sector back toward the lows of the session. Chain Store Sales and Redbook data was not grossly negative today but did show a decline in traffic but not necessarily a consumer disinterest. The sector could also be hampered as the Federal Reserve reported today that consumer debt dropped in August which has taken away from those hard fought for consumer dollars between retailers. TRW and AAP were out today and reported the expectation of lower sales for the recently ended quarter. Ratings news for the sector included downgrades for DIS while ERTS and THQI were upgraded.

- TRW: Withdraws FY 2008 Sales & Earnings Guidance; Now Expects Loss for Q3 on Lower Sales
- AAP: Sees Q3 Results Lower Than Expected
- GT: Awarded 7-Yr Contract w/ NYC Transit
- Upgrades: ERTS, THQI
- Downgrades: DIS

Consumer Staples

The Consumer Staples sector was one of the better performers in the market today but still closed in negative territory. Chain Store Sales and Redbook data did not have much of an effect on the sector as the data indicated that pockets of strength were noticed for value retailers catering to staples and basics. Upcoming same store sales reports could give a better indication of how the consumers spending habits have changed due to the credit crisis. The sector was hit hard at the open as it moved sharply lower and continued its move lower through the day but not at the same pace as other sectors. Heading into the close the sector reversed from a previous move up and ended the day at the session lows. Ratings action for the sector was nonexistent as no upgrades nor downgrades were reported.

- MNRO: Reaffirms Comp Store Sales Growth of 3% - 5%
- SWY: Q3 EPS 46c vs 44c Misses 47c Est; Guidance In-Line with Consensus
- Upgrades: none
- Downgrades: none

Health Care

The Healthcare sector was one of the only sectors to linger in positive territory for much of the morning before selling off during midday trading. Due to the late fall the decline was sharp and was not helped by the overall markets late day pause. During the final hour of trading the sector continued to move to the downside and ended the day at new session lows. The Pharma & Biotech industries were mixed, but a majority of the components were lower. Positive trial results from several Biotech companies helped ease some of the fall for the overall sector. DNA and BIIB reported positive data from a Phase III trial relating to the combination use of Rituxan with chemotherapy. Ratings action for the sector included upgrades for AMLN, LLY and SHPGY while downgrades included TLCV, CYH, UHS, BKD and FRX.

- DNA/BIIB: Positive Phare III Trial Results of Rituxan in Combination w/ Chemotherapy
- CMED: Enters Asset Acquisition Agreement for HPV-DNA Biosensor Chip & SPR Based Analysis System
- Upgrades: AMLN, LLY, SHPGY
- Downgrades: TLCV, CYH, UHS, BKD, FRX

Financials

As expected the Financial sector continues to be one of the leading movers to the downside. As widely reported, before the bell today the Fed announced that it is creating a new program to backstop issuers of commercial paper but this was not enough to stem the selloff which began shortly after the opening bell. Traders are looking for a globally coordinated effort to help with the impact of the credit crisis but it seems that the US along with many countries in the EU will be going at it alone. The Fed also indicated in the minutes from the most recent policy meeting that there could be an interest rate cut if financial market turmoil significantly hurts the economy. In stock news in the sector BAC was out after the bell yesterday with preliminary results which led to a selloff in the stock. BAC also reported that it would cut its Q4 dividend from 64c to 32c and is in the process of a $10B capital raise which is expected to close at the end of trading today. Ratings action in the sector included upgrades for JEF, BPOP and AXA while MFC was downgraded.

- BAC: Prelim Earnings Disappoint, Cuts Dividend, and Plans $10B Capital Raise
- Upgrades: JEF, BPOP, AXA
- Downgrades: MFC

Information Technology

The Technology sector ended the day mid pack among the other sectors but still closed over 4% lower. As with the overall market the sector opened up higher after the late rally yesterday but the selling pressure began almost immediately. Throughout most of the day the sector moved to the downside with a couple of brief pauses and slight bounces. The final hour of trading saw the sector move lower to end near the lows of the session. Both the Hardware and Software segments were hit during today's move lower that saw only a handful of the sectors components end the day in positive territory. AMD had the big news of the sector as the company announced the planned spinoff of its manufacturing operations to a joint venture which will include an investment from Advanced Technology Investment Co of Abu Dhabi. Ratings action in the sector included upgrades for ADCT, ERIC and SAP while downgrades included ELX, FSLR, CRM IBM, EMC and STX.

- FFIV: Announces Prelim Q4 Results
- AMD: Plans Spinoff of Manufacturing Operation to a New Joint Venture
- SONS: Expects Decrease in Y/Y Revenue for Q3
- CHINA: Reiterates Second Half 08 Guidance
- Upgrades: ADCT, ERIC, SAP
- Downgrades: ELX, FSLR, CRM, IBM, EMC, STX

Telecommunication Services

The Telecom sector followed the general direction of the market and ended the day near the session lows. The sector attempted a late day rally but the final hour of trading saw a selloff that saw it close over 4% lower. All but a couple of the sector components ended the day to the downside with the Fixed Line segment struggling the most in today's market action. Earnings news in the sector included results from CYCL before the market opened. Ratings action for the sector included upgrades for WIN and TU while no downgrades were reported.

- CYCL: Q1 EPS 7c vs 6c Misses 10c Est
- Upgrades: WIN, TU
- Downgrades: none

Utilities

The Utilities sector followed the momentum of the general market and moved lower throughout the day. The sector was able to bounce slightly but was never able to overcome the downward trend. During the final hour of trading, the sector moved sharply lower along with the overall market to close at the lows of the session. The Electricity segment was hit hard with only a handful of companies having the ability to survive the downward move of the market to close in positive territory. Gas, Water and Multiutilities did not fare so well as only a couple of these companies were able to end the day in the green. Ratings action for the sector included downgrades for ORA and VE.

- Upgrades: none
- Downgrades: ORA, VE


   
down again

over and out

Oliver

[Terliso]

Bad, bad market.... going for $7000!!

[Terliso]

This is the monthly chart of INDU, one candlestick represents a whole trading month. As you can see, INDU is trading below 9ema for 10 consecutive months... still bearish. The next strong support would be at $7000 area and it looks like we are heading that way (I hope not), this is going to be a slow process...little ups & big downs through 2009. T2T

[la-onda]

fyi:
Knobias Sector Commentary
Wednesday, October 08, 2008 16:01ET

Energy

The Energy sector was able to fight off today's decline in the price of to end in positive territory. Crude oil has been on the downside for the day but the commodity did inch up in late afternoon trading. Oil & Gas Producers showed the largest reversal as most spent most of the day lower before moving higher late in the day to end mostly in the green. The Oil Equipment & Services segment was mixed as the market made its huge swings during the day. DNR was in the news today as the company announced that it increased its bank commitment and that it would not pursue the Conroe acquisition. Ratings action for the sector was slow with the downgrade of RIG.

- ACGY: Q3 EPS 58c vs 38c Beats 43c Est
- DNR: Increases Bank Commitment; Will Not Pursue Conroe Acquisition
- KMP: Expects to Increase Quarterly Distribution
- Upgrades: none
- Downgrades: RIG

Materials

The Materials sector was the big winner today as it ended the session over 3% higher and near its session highs. All segments of the sector where higher with only a handful of individual stocks moving to the downside. As with the overall market the sector took a hit through midmorning but has been able to rally back through the afternoon. Both gold and silver were able to move to the upside today while platinum and copper moved lower. AA kicked off earnings season yesterday but reported disappointing results. MON reported earlier today and was one of the big gainers in the sector. Ratings action for the sector included upgrades for NUE, SXT and GOLD while downgrades were issued for X and STLD.

- MON: Q4 Adj EPS (3c) vs (18c) Beats (4c) Est
- AA: Q3 Adj EPS 43c vs 38c Misses 51c Est
- Upgrades: NUE, SXT, GOLD
- Downgrades: X, STLD

Industrials

The Industrial sector has had a mixed day. A strong open which was followed by a hard selloff along with the overall market but an afternoon rally carried the sector back into positive territory. The sector ended the day in the middle of the back and battled but was unable to remain in positive territory. The Industrial Transportation segment was helped today with the falling price of oil and gas. Other segments in the sector were mixed but were all higher as a whole. GE was a strong part of the sectors higher move as the company moved over 7% higher during the session. Ratings action for the sector included no upgrades while several companies were on the downgrade list.

- Upgrades: none
- Downgrades: AYI, BNI, FDX, CSX, UPS

Consumer Discretionary

The Consumer Discretionary sector ended the day lower but off the lows of the session. The sector was a major focus during early morning action as retailers reported September sales results. WMT, TGT and other discount stores seemed to be the big winner today, while some of the higher end retailers were not as fortunate. The sector had a rocky first half of the session today before making a sharp climb during afternoon trading. The freeing up of the credit market is expected to help ease worries of consumers and retailers are expected to do their part by offering earlier discounts for the upcoming holiday seasons. Ratings action for the sector included downgrades for VCLK, GM, F, ODP, OEH DISAD, LTM and JCP and no upgrades were listed.

- COST: Q4 Adj EPS 97c vs 91c Beats 93c Est
- Comp Store Results from PSUN, WMT, PLCE, DDS, BJ, AEO, TGT, SKS, KSS, ODP, JCP, JWN
- Upgrades: none
- Downgrades: VCLK, GM, F, ODP, OEH, DISAD, LTM, JCP

Consumer Staples

The Consumer Staples sector had a battle on its hands for much of the day but was eventually able to break into positive territory late in the day but was unable to remain there. A sharp gap down greeted the sector but it recovered quickly to make a move higher, but the move was short lived. The sector moved back to its session lows during midday, but the rally in the overall market helped pull Staples higher. Retail sales numbers out today seemed to show that while discretionary spending may still be slow, purchases of everyday and other discounted items remain strong. Several companies were upgraded in the sector while only one made the list of downgrades.

- Upgrades: APOL, SWY, EBAY, SCI
- Downgrades: ENR

Health Care

The Healthcare sector was another that ended the day in negative territory after attempting to make it back to the green. Even though the sector ended lower, it did make an effort to move back into the green late in the day but was unable to breakthrough. Pharma and Biotech companies were the strongest in the sector while the Equipment & Services segment were mixed with some components moving sharply to the downside. News for the sector included an FDA approval by AKRX of its Ophthalmic Gel 3.5%, and interim results from a phase II trial from OMRI. Ratings news for the sector included upgrades for BMY, PFE, DVA and CYH while MNT was downgraded.

- AKRX: FDA Approval of Akten Ophthalmic Gel 3.5%
- OMRI: Interim Results from Phase II Fibrin Pad Trial
- Upgrades: BMY, PFE, DVA, CYH
- Downgrades: MNT

Financials

The Financial sector was able to rally in late day trading but a slide in the final 30 minutes did not allow the sector to close higher. As with the overall market the sector had to recover from an early morning selloff and fought all day to move higher. Banks were in positive territory for the most part and also dominated the news for the sector. Wells Fargo, Citi and Wachovia announced that they have extended their standstill agreement until Friday and it is expected that a resolution will be found. BAC was in the news for different reasons as it reported that its 455M share offering priced at $22 per share and the stock ended the session hovering at this level. Ratings action for the sector included SPG, JEF, BAC, CLI while HST was the only downgrade on the list.

- Wachovia, Citi and Wells Fargo extend standstill agreement until Friday
- BAC: Prices 455M Share Offering at $22/Share
- Upgrades: SPG, JEF, BAC, CLI
- Downgrades: HST

Information Technology

The Technology was another sector effected by today's volatility in the overall market. After opening lower the sector was able to move higher only to lose those gains through midday trading. The afternoon rally that carried the market back into positive territory also helped the Tech sector move back into the green but it was unable to maintain. The final hour of trading took some of the earlier gains, but the sector still managed to end the day higher. The Hardware & Equipment segment was mainly higher with only a handful of its components ending the session lower. Software & Services segment was hurt by IBM moving down but MSFT helped pair some of those losses by ending to the upside. ORCL was in the news today as the company announced an agreement to acquire Primavera Software, and NTGR lowered its Q3 revenue estimates due to weaker demand. Upgrades for the sector included PTI, SYMC, BMC, CDNS, CTXS, INFA and TSM while KLAC, SAY, WIT, and CPWR were all downgraded.

- ORCL: Agreement to Acquire Primavera Software Inc
- NTGR: Lowers Q3 Revenue Outlook Due to Weak Demand
- Upgrades: PTI, SYMC, BMC, CDNS, CTXS, INFA, TSM
- Downgrades: KLAC, SAY, WIT, CPWR

Telecommunication Services

The Telecom sector was the laggard in today's market and ended over 2% lower on the session. The Fixed Line segment was hit with only a couple of companies being able to end the day in positive territory. The Mobile segment also had a bad day with a majority of the companies ending the day to the downside. As with the overall market the sector made a rally after its opening losses, but the late afternoon rally was not enough to bring the sector all the way back into positive territory. Ratings action for the sector included upgrades for TKAGY and downgrades for T and TSU.

- Upgrades: TKAGY
- Downgrades: T, TSU

Utilities

The Utilities sector followed the basic trend of the market today. After opening lower the sector rallied before sliding lower in late morning trading. When the market turned, so did the sector. The final hour of trading saw the sector move toward its earlier highs before losing steam and moving back well into negative territory. News for the sector included Yankee Gas Services Company reporting that it completed its $100M bond sale.

- NU: Yankee Gas Services Company Completes $100M Bond Sale
- Upgrades: none
- Downgrades: AWR

Charts from Tim Knight (Oct 7th):