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CURRENT MARKET SENTIMENT

End of quarter, the need to finish with a bang! The bull mounted a
relative good defense restraining a fall of only 47 Points to finish
9742, the weekly pivot. This implies a move on the upside with an
MARKET
expected better than GDP revision. This will achieve the following
objectives:
HIGHLIGHTS
• Profit taking 09/30/2009
• End of quarter booking and rebalancing
• Squeezola for the bears.
A triple whammy with one stroke! However, sale pressure or failure
to hold the weekly pivot, may lead the Dow to revisit 9700.
PRISM CALL

The market is still trying to reach

ECONOMIC NUMBERS AND DATA
10,000, albeit not today. Market
Time Indicator Date Actual Expectation Range Prior
(ET) is going to do its best to stay
8:15 ADP Sep -254K -200K -300K -298K positive all day, so everyone can
AM Employment 30 to - end there quarter on a high note.
Change 133K The market should defend its
8:30 GDP QoQ Sep -0.7% -1.2% -1.5% to -1.0% pivot, which is yesterdays close.
AM 30 -1.0%
Market has a lot of room to move
8:30 GDP Price Sep 0.0% 0.0% 0.0% to 0.0% up, but beware of selling
AM Index 30 0.1% pressure. As long as selling
9:45 Chicago Sep 52.0 49.5 to 50.0 pressure doesn’t exist, the market
AM Purchasing 30 55.0 can and will march forward, but
Manager
when we start to see that
10:30 US Crude Oil Sep 2000K -3100K 2855K
AM Inventories 30 to pressure, then the market will
4200K come in. Look towards
10:30 US Gasoline Sep 1000K -1000K 5409k commodity stocks on the long
AM Inventories 30 to side, healthcare on the short side.
3180k
10:30 US Distillate Sep 1200K -1900K 2961K
I’m looking to fade the first move
AM Inventories 30 to on the futures, while bidding to
4640K buy the commodities.
10:30 US Refinery Sep -0.50% -1.25% -1.36%
AM Utilization 30 to
1.30%

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TECHNICAL
Indices S2 S1 Pivot R1 R2

INDU 9676 9712 9771 9830 9867

(DOW)

SPUZ 1050 1055 1062 1069 1074

(S&P)

DOW STOCK TO WATCH

Strong Weak
HPQ IBM

PFE BA

KO KFT

TRV WMT

COMMODITY PRICES
Commodity Price


OIL 67.65 0.94

GOLD 1003 8.50

FOREIGN MARKETS
Market Price
 %

FTSE 51160.13 0.41 0.01

DAX 5713.95 0.43 0.01

HANG SENG 20955.25 57.92 -0.28

NIKKEI 10133.23 33.03 0.33

CHINA 2779.426 24.886 0.9

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UPGRADES / DOWNGRADES
Stocks Upgraded


NKE Nike upgraded to Neutral at Sterne Agee (60.09 )

GS Goldman Sachs tgt upped to $210 at Credit Suisse (183.58 )

CVH Coventry Health Care upgraded to Outperform from Market Perform at BMO
Capital Markets (19.94 )

NKE Nike upgraded to Buy from Neutral at Goldman- Reuters (60.09 )

Deutsche Bank upgrades Huntington Bancshares (HBAN 4.40) to Buy from Hold

Stocks Downgraded


WLP WellPoint downgraded to Market Perform from Outperform at BMO Capital

Markets (49.28 )

HUM Humana downgraded to Underperform from Market Perform at BMO Capital

Markets (38.02 )

HS Healthspring downgraded to Underperform from Market Perform at BMO

Capital Markets (12.86 )

UBS downgrades Target (TGT 47.28) to Neutral from Buy...

Citigroup downgrades Global Crossing (GLBC 15.40) to Hold from Buy

UBS downgrades Affiliated Computer Services (ACS 55.32) to Neutral from Buy

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 NEWS ALERT
FBR Capital is cautious on Chinese economy near term, but believe that
intermediate-term and long-term secular growth are very much intact (41.36 )

FTSE, CAC, DAX all modestly better

Nikkei gains modestly; Hang Seng drops slightly

ICON Iconix Brand issues downside guidance for Q3 and FY09 revs and EPS (15.80 )

ICON Iconix Brand sees Q3 EPS of $0.26-0.28 vs $0.36 First Call consensus; Q3 revs
$53-56 mln vs $61.83 mln First Call consensus

MYL Mylan Labs receives FDA Approval for Generic Version of Parkinson's Treatment
Sinemet (16.45 )

DSCO Discovery Labs and FDA establish path for potential Surfaxin approval (1.11 )

ECONX MBA Mortgage Applications -2.8% vs +12.8% Prior

NLS Nautilus Grp: Divesting unprofitable commercial division; sale/closure would

improve profitability and cash flow outlook - Merriman (1.70 )

They note their consumer divisions have shown improving profitability trends; the
potential valuation for NLS once divested could be $3.90-4.20 per share, but they
remain Neutral although bankruptcy is less of a likely outcome than they previously
feared

Gapping down: CIT -34.5%, DRI -6.1%, FR -4.9%, SSS -4.7%, SKS -4.6%, CLP -3.3%,
WOR -1.8%, MU -1.0%.

Gapping up: HOKU +58.9%, SRLS +14.6%, CPD +11.6%, OREX +10.9%, HDY +9.1%,
AMSC +8.7%, ZZ +8.4%, JBL +7.5%, NKE +5.8%, RBS +3.1%, NVS +2.8%, RTP +2.0%,
BHP +1.2%

VVUS Vivus tgt range raised to $16-18 at Merriman following positive Qnexa results
and equity-offering (10.20 )

I.M.F. calls for restructuring of financial system - NY Times

IMF cuts global debt writedown estimate to $3.4 trillion – Reuters

TM Toyota plans huge U.S recall for dangerous floormats - Reuters (79.32 )

CIT CIT Group near plan to turn over company to bondholders - Reuters (2.20 )

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 NEWS ALERT
COV Covidien receives FDA clearance for its Mallinckrodt TaperGuard Evac
endotracheal tube (42.87 )

CHBT China-Biotics prices public offering of 4,600,000 shares of its common stock at
$15.00 per share (17.21 )

WOR Worthington beats by $0.07, misses on revs (15.84 +0.07)

DRI Darden Restaurants beats by $0.01, misses on revs; guides FY10 EPS in-line, revs
in-line (36.15 +0.01)

COMDX API crude oil inventories show a build of 2757K compared to last weeks build
of 276K

NKE Nike beats by $0.07, misses on revs (60.09 +1.09)

NKE Nike prelim $1.04 vs $0.97 First Call consensus; revs $4.8 bln vs $4.90 bln First
Call consensus

JBL Jabil Circuit beats by $0.08, beats on revs; guides Q1 EPS in-line, revs in-line
(12.28 -0.10

MU Micron beats by $0.09, beats on revs (8.40 -0.04)

SKS Saks files for $100 mln common stock offering (7.17 +0.13)

Fed's Plosser says policy shift may need to be aggressive - Reuters.com

Federal Reserve will have to act quickly, and "perhaps aggressively" when the time
comes to pull back its extraordinary support for markets in order to avoid stoking
inflation. "I believe we will need to act well before unemployment rates and
other measures of resource utilization have returned to acceptable levels." "Just
as the Fed has taken aggressive steps in flooding the financial markets with liquidity
during this crisis to reduce the possibility of a second Great Depression, it will also
have to take the necessary steps to prevent a second Great Inflation,"

CBY Cadbury Schweppes: UK sets Kraft November 9 deadline for Cadbury bid -
Reuters.com (50.77 )

UBS UBS revamp on track, but warns on 3Q credit losses - DJ

ECONX September ADP Employment Change -254K vs -200K consensus

ECONX August ADP Employment Change revised to -277K from -298K

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