It's so easy

Traders,

It's so easy to fall in love

It's so easy to fall in love

People tell me love's for fools

So here I go breaking all of the rules

-- Buddy Holly, It’s So Easy

Our current position:

BUYERS' EDGE INTACT

In this week's edition you will find:

• Where We Are
• What Was Important About Last Week
• What We Are Watching For This Week
• A Word On Discipline

The following sections can now be found on our home site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans

Where We Are:

Taking a look at the overall markets:

The markets appeared to be on cruise-control as broad market indexes trended higher in the holiday shortened week.

Continued leadership in Biotech, Broker Dealers, and Transportation is paving the way for a technically strong market.

Technology and Banking appear to be on strong footing which is exactly what we want to see when we’re long.

When things look good there is a tendency to want to jump on the train in fear of missing out. Don’t.

Keep things simple and wait for optimum setups.

Winners will take care of themselves, it’s our job to take care of the losers.

Technically speaking:

The Dow Industrial Average ($INDU), +4.58%, closed just under the year’s high of 10,984.86.

The S&P 500 ($SPX), +3.56%, cruised to a new high for the year.

Nasdaq ($COMPQ), +1.69%, also hit a new high for the year.

Russell 2000 ($RUT), +1.65%, closed just under the year’s high of 688.51.

Volume indications for the past three weeks illustrate a bullish institutional bias.

New Highs - New Lows continue to improve over the past three weeks, though the ratio has yet to come back to the year’s highs in step with the broad market indexes.

Investors Intelligence shows the bullish money managers dominating the bearish money managers at a ratio 0f 2.31. This contrarians indicator has been bearish for the past few months.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The 20+-year Note Holdr (TLT) remains under its major moving averages as it attempts to rally off recent lows.

The U.S. Dollar Index ($USD) was little changed on the week, though remains trend-up after breaking out of a two-year base.

The Gold Miners Index ($XAU) followed through on its breakout from a two-year base. The question is how long will the historical inverse relationship between miners and bonds continue its counter trend? We’re siding with Gold.

The Dow Jones AIG Commodity Index ($DJAIG) was little changed as the index remains between its major moving averages with the 50-day above the 200-day.

Consumer Staples ($CMR) hit a new high for the week, though were sluggish against the broader markets. Consumer Cyclicals ($CYC) moved nicely higher, though are short of the year’s highs.

Technology ($DJUSTC) put in a fourth week of solid rallying.

The Semiconductor Index ($SOX) poked north of a down trend-line, and face further resistance around the 500 level.

Banks ($BKX) impressed with a new high for the year.

Broker Dealers ($XBD) cruised to another new high.

Retail ($RLX) as been trending higher for the past month, though has yet to take out the year’s high.

Internet ($IIX) hit another new high for the year.

Healthcare ($HCX) was little changed for the week, as it failed to take out last week’s high, and is short of the year’s high as well.

Biotech ($BTK) squeezed another new high for the year.

REIT's ($DJR) moved higher as they attempt to regain the year’s high.

Homebuilders ($DJUSHB) moved further aboveits major moving averages, thugh are far from the year’s high.

Transportation ($TRAN) hit another new high for the year.

Airlines ($XAL) retreated for the week as they continuer to flirt with a major trend-line.

Defense ($DFX) continues to consolidate in a five month base.

Energy ($IXE) moved higher as it attempts to get back on track with a trend up after topping out a month ago. Oil Services ($OSX) managed to put in a new high for the year.

Utilities ($UTY)

The top 10 industry groups from the 6 month RS screen are:

• GOLD
• DRUGS - GENERIC
• INVESTMNT BROKERAGE-RE
• DRUG DELIVERY
• SEMICONDUCTR-MEMORY CH
• INVESTMNT BROKERAGE-NA
• INSURANCE BROKERS
• ELECTRONICS WHOLESALE
• SEMICONDUCTOR EQUIP MA
• INDUSTRIAL ELECTRICAL

What Was Important About Last Week

STOCKS:

• Deere (DE) said it earned $232.8 million in its fiscal fourth quarter, down 35% from a year ago, though ahead of Wall Street forecasts.

ECONOMY:

• Leading economic indicators rose in October after four straight months of declines as it beat economists expectations.
• Unemployment claims rose by 30,000 to 335,000 last week, which is higher than economists expected, and the biggest in two months.

Key earnings releases:

• MONDAY: none
• TUESDAY: Chico's FAS, Inc. (CHS).
• WEDNESDAY: Dress Barn (DBRN), Smithfield Foods (SFD), Synopsys (SNPS), Tiffany & Co. (TIF).
• THURSDAY: none
• FRIDAY: Quanex (NX).

On the economic front we have potential market movers with:

• MONDAY: Existing Home Sales
• TUESDAY: Durable Orders, Consumer Confidence, New Home Sales
• WEDNESDAY: Chain Deflator-Prel., GDP-Prel., Chicago PMI, Crude Inventories, Fed's Beige Book
• THURSDAY: Auto Sales, Truck Sales, Initial Claims, Personal Income, Personal Spending, Personal Spending, Construction Spending, ISM Index.
• FRIDAY: Average Workweek, Hourly Earnings, Nonfarm Payrolls, Unemployment Rate.

The Following Sections Are Now On Our Home Site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans: • SETUPS • BREAKOUTS • BASE BUILDING • SHORTS

This Week's Word On Discipline:

"To think bad thoughts is really the easiest thing in the world. If you leave your mind to itself it will spiral down into ever-increasing unhappiness. To think good thoughts, however, requires effort. This is one of the things that discipline - training - is about."-- James Clavell, in his novel "Shogun"

Who Woulda Thunk It?

Traders,

we've all got wheels to take ourselves away

we've got telephones to say what we can't say

we've all got higher and higher every day

come on wheels take this boy away

we're not afraid to ride

we're not afraid to die

-- The Flying Burrito Brothers, Wheels

Our current position:

BUYERS' EDGE INTACT

In this week's edition you will find:

• Where We Are
• What Was Important About Last Week
• What We Are Watching For This Week
• A Word On Discipline

The following sections can now be found on our home site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans

Where We Are:

Taking a look at the overall markets:

As the market ticked higher, top dog Transportation issues provided leadership – Who woulda thunk it?

While Transportation stocks are not making the grade with exceptional earnings growth, they are considered a key component in broad market weighting, and are significant to Dow Theory practitioners. This is a major plus for the market.

The S&P 500 and the Nasdaq hit levels not seen for more than four years

Continued leadership in Broker Dealers and Biotech has provided attractive buying opportunities for us.

Add in a follow through in Tech stocks in breaking out of a two-year base, and continued strength in Banking – we’re looking good.

So what are going to be afraid of now?

The market has a habit of falling a part just when everything is looking sweet.

We would not be the least bit surprised to see some shake out occur – but just when and where is not for us to predict – or anything we pretend to control.

What we can control is our stop losses and buy entries.

Is the market rallying because it’s the end of the year? – sure why not.

Is technology going to usher us in to an unprecedented era of economic expansion? – maybe or maybe not they say.

Is the American consumer going to continue increasing debt while buying like there’s no tomorrow? – the retailers say so.

We have no answers to these questions because we know smarter folks than ourselves disagree here - our opinions are just opinions.

What we’re concerned with is making money when we’re right - and putting a limit on when we’re wrong.

We won’t be right all the time, but adopting a bias due to some opinion that sounds appealing is a sure fire way for us to start arguing with prices when we’re wrong.

When we argue with the market we get stubborn and insist things will turn around to our liking. That’s when small losses turn into big losses - and we end up losers.

We don’t care what the experts say, we don’t even care what the market will do.

We don’t think, we trade.

Technically speaking:

The Dow Industrial Average ($INDU), +0.75%, continued to make progress above its major moving averages and is around 200 points from the year’s high.

The S&P 500 ($SPX), +1.10%, cruised to a four-year high.

Nasdaq ($COMPQ), +1.12%, also cruised to a four-year high as it pierced a triple top.

Russell 2000 ($RUT), +0.83%, is above its major moving averages, though around 10 points from the year’s high.

Volume indications over the past three weeks continue to portray an institutionally supported long bias for the market.

New Highs - New Lows have been trend up over the past three weeks – though the technical picture continues to show a line on the cusp of breaking a bearish channel. If the market continues to move higher we expect to see the channel broken – if not the indicator will in retrospect be dubbed a leading indicator of a market not strong enough to sustain recent highs.

Investors Intelligence for the fourth week in a row reported an increase in bulls over bears with the ratio now at 2.32.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The 20+-year Note Holdr (TLT) came higher off recent lows, though remains under its major moving averages.

The U.S. Dollar Index ($USD) made another high since breaking out of a two-year base, though ended the week little changed.

The Gold Miners Index ($XAU) broke out of a two-year base.

The Dow Jones AIG Commodity Index ($DJAIG) posted a loss on the week and is parked under between its major moving averages with the 50-day above the 200-day.

Consumer Staples ($CMR) failed to follow through on its breakout from a year long base. Consumer Cyclicals ($CYC) cruised further above its major moving averages though is just shy of August’s high and further short of the year’s high.

Technology ($DJUSTC) continued to make progress since breaking out of a two-year base.

The Semiconductor Index ($SOX) is now solidly above its major moving averages, though will face a significant technical level at between the year’s high and the 500 level where a bearish trend line is in place.

Banks ($BKX) gave a modest follow through to last week’s strong rally.

Broker Dealers ($XBD) edged to another new high.

Retail ($RLX) made a modest gain on the week, and remains roughly half way between recent lows and the year’s high.

Internet ($IIX) poked out to a new high.

Healthcare ($HCX) poked above its 50-day average, though is still a relative strength loser from the past three months.

Biotech ($BTK) moved to another new high.

REIT's ($DJR) posted a gain on the week and is roughly half way between recent lows and the year’s high.

Homebuilders ($DJUSHB) regained ground lost a week ago as it attempts to make a stand at its major moving averages.

Transportation ($TRAN) blazed to another new high.

Airlines ($XAL) took out last week’s high after falling back for a slight loss on the week.

Defense ($DFX) continues to consolidate – in what some may argue to be a bearish rounding top.

Energy ($IXE) gained for the week, and is sandwiched between its major moving averages with the 50-day above the 200-day.

Utilities ($UTY) continue to consolidate in what is now a five-week range.

The top 10 industry groups from the 6 month RS screen are:

• GOLD
• DRUGS - GENERIC
• SEMICONDUCTR-MEMORY CH
• DRUG DELIVERY
• INVESTMNT BROKERAGE-RE
• STAFFING OUTSOURCING S
• INVESTMNT BROKERAGE-NA
• INDUSTRIAL ELECTRICAL
• SEMICONDUCTOR EQUIP MA
• SEMICONDUCTOR-INTGRTD

What Was Important About Last Week

STOCKS:

• The world's biggest retailer Wal-Mart (WMT) said profits were up 3.8% from a year ago.
• The No. 2 U.S. home-improvement retailer, Lowes (LOW, said it earned $649 million in the quarter, up 26% from a year ago.
• Conglomerate Tyco International (TYC) reported profits more than doubled from a year ago.
• Homebuilder D.R. Horton (DHI) said earnings were up 61% from a year ago.
• Hewlett-Packard said it earned said third-quarter profits were down 62% from a year ago – excluding a one-time restructuring charge, sales were up 7%.
• Walt Disney (DIS) said earnings were down 27% from a year ago, due largely to losses in its home-video business.
• Vivendi reported a 35% drop in quarterly earnings - due largely to one-time charges – though beat Wall Street forecasts.
• Gap (GPS) said earnings were down 20% from a year ago.

ECONOMY:

• The "core" producer price index fell for its biggest decline since April 2003. A decline in motor vehicle prices weighed in heavily.
• Retail sales slipped in October due to auto sales, other sectors were healthier.
• The consumer price index rose 0.2% in October month - higher than economists expected.
• New-home construction in the U.S. fell 5.6% last in October - the biggest one-month drop since March.
• Building permits fell 6.7% for the sharpest decline in more than six years. The number is a leading indicator of construction activity.
• Industrial production surged 0.9% in October for its biggest gain in 17 months.

Key earnings releases:

• MONDAY: none
• TUESDAY: Albertson's (ABS), Deere & Company (DE), Michaels Stores (MIK).
• WEDNESDAY: none
• THURSDAY: none
• FRIDAY: none

On the economic front we have potential market movers with::

• MONDAY: Leading Indicators
• TUESDAY: FOMC Minutes
• WEDNESDAY: Initial Claims, Mich Sentiment-Rev., Help-Wanted Index, Crude Inventories
• THURSDAY: none
• FRIDAY: none

The Following Sections Are Now On Our Home Site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans: • SETUPS • BREAKOUTS • BASE BUILDING • SHORTS

This Week's Word On Discipline:

“ Beware of endeavoring to become a great man in a hurry. One such attempt in ten thousand may succeed. These are fearful odds ” -- Benjamin Disraeli

We have the technology

Traders,

Steve Austin, astronaut: a man barely alive

Gentlemen we can rebuild him

We have the technology

We have the capability to make the worlds first bionic man

Steve Austin will be that man

Better than he was before

Better, Stronger, Faster

-- Theme from TV show The Six million Dollar Man

Our current position:

BUYERS' EDGE INTACT

In this week's edition you will find:

• Where We Are
• What Was Important About Last Week
• What We Are Watching For This Week
• A Word On Discipline

The following sections can now be found on our home site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans

Where We Are:

Taking a look at the overall markets:

Evidence continues to support a bullish bias for the broader market.

Biotechnology was the flavor of the week as new highs from key names made headlines.

We see biotech trading opportunity – though by no means expect anything.

We never expect anything - but instead take high probability trades that have a good chance of making us money.

Biotech stocks are notorious for their skittish behavior. There is much unproven technology in the field, and one FDA announcement is all it takes to spoil the party.

Leadership in Broker/Dealers and Transportation continues to gather steam.

A dramatic turn around from the Banking sector is impressive - and essential if we’re going to move higher.

A breakout in Technology led by Disk Drives is another significant event weighing in for the Bulls.

We want to see Semiconductors stay strong. Without the support of the chip makers, we lose faith in the durability of this buying environment.

The Cyclcal Index is not displaying a strong trend as its 50-day moving averages is below its 200-day average. This tells us that as strong as the market has been, we’re a ways from calling the move part of a significant leg up. These things take time.

Our analysis is rooted in the technical structure of the market.

We are not pure technicians in the sense that we believe past price action is all we need to tell us the future.

We listen to technical analysis as if it were a language telling us what the innards of the market are doing. The message we get isn’t always the truth, but when lied to, that’s a message in and of itself.

Breakouts don’t always turn into trends higher, but we buy them because they hold an edge for us.

We will not be right all the time, but as long as we’re cutting our losses short, letting our winners run, and staying out when there is no edge in place – we believe we’re going to continue to profit.

This is Zen.

Technically speaking:

The Dow Industrial Average ($INDU), +1.47%, continues to trade above all its major moving averages and faces important resistance from this past summers highs.

The S&P 500 ($SPX), +1.19%, continues to trade above all its major moving averages and is approaching the resistance of this year’s highs.

Nasdaq ($COMPQ), +1.52%, continues to trade above all its major moving averages and is approaching the resistance of this year’s highs.

Russell 2000 ($RUT), +1.29%, continues to trade above all its major moving averages.

Volume indications continue to collect evidence of institutional sponsorship for the long side of this market. .

New Highs - New Lows dipped back into negative territory for the week with an increased number of lows and a decreased number of highs. We’re not giving this bearishness a whole lot of weight at this juncture.

Investors Intelligence more than half of money managers surveyed are now bullish. We never like to see this when taking a long position, though keep it in perspective that this contrarians indicator is more like a thermometer, and not a signal to trigger action.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The 20+-year Note Holdr (TLT) came off of last week’s lows, though continues to hold trend down character.

The U.S. Dollar Index ($USD) pushed higher out of its two year base.

The Gold Miners Index ($XAU) rallied for the week, and is set to challenge the highs of a two year base. Should gold breakout, we want to watch the dollar closely as the two seldom trend together.

The Dow Jones AIG Commodity Index ($DJAIG) slipped below last week’s low, and is caught beneath its 50day average and above its 200-day average.

Consumer Staples ($CMR) broke out of a year long base as Consumer Cyclicals ($CYC) pushed higher also rose, though are well below the years high with no strong trend intact.

Technology ($DJUSTC) broke out of a year long base.

The Semiconductor Index ($SOX) moved above its major moving averages, though remain below the year’s high.

Banks ($BKX) had a huge week and are now just shy of the year’s highs.

Broker Dealers ($XBD) hit another new high.

Retail ($RLX) is above its major moving averages and now roughly half way between the year’s high and recent lows.

Internet ($IIX) inched higher, though are below the years highs.

Healthcare ($HCX) continued to move off its recent low and is now trading on its 50-day moving average.

Biotech ($BTK) notched in another new high.

REIT's ($DJR) are trading above the major moving averages, though down significantly from the year’s high.

Homebuilders ($DJUSHB) are below the major moving averages after posting a loss on the week.

Transportation ($TRAN) made another new high.

Airlines ($XAL) moved further north of a key trend line which may serve as a cyclical low for the sector.

Defense ($DFX) was relatively unchanged for the week as the sector is now just below its 50-day moving average, though above its 200-day average.

Energy ($IXE) was a loser for the week, and is currently sandwiched between its major moving averages.

Utilities ($UTY) traded lower and are caught between its major moving averages.

The top 10 industry groups from the 6 month RS screen are:

• SEMICONDUCTR-MEMORY CH
• OIL GAS DRILLING EXPLO
• INVESTMNT BROKERAGE-RE
• STAFFING OUTSOURCING S
• OIL GAS EQUIPMENT SVCS
• OIL GAS REFINING MRKTN
• DRUGS - GENERIC
• INVESTMNT BROKERAGE-NA
• HEAVY CONSTRUCTION
• INDEPENDENT OIL GAS

What Was Important About Last Week

STOCKS:

• The world's No. 1 computer maker, Dell (DELL), said revenue rose 11% to $13.9 billion, though came short of Wall Street forecasts.
• Homebuilder Toll Brothers (TOL) warned of decreasing demand for homes.
• Cablevision (CVC) reported a third quarter loss of $62.9 million.
• Satellite provider EchoStar (DISH) reported third quarter profits up more than two-fold from a year ago, though fell short of Wall Street forecasts.
• Video-rental chain Blockbuster (BBI)posted a $491.4 million quarterly loss.
• Networker Cisco (CSCO) announced quarterly profits down 10% from a year ago.
• The No. 2 U.S. discount retailer, Target (TGT), said it earned $435 million in the third quarter, down 18% from a year ago.

ECONOMY:

none

Key earnings releases:

• MONDAY: Lowe's Companies (LOW), Tyson Foods (TSN), Wal-Mart Stores Inc. (WMT).
• TUESDAY: Abercrombie & Fitch Co. (ANF), Staples, Inc. (SPLS).
• WEDNESDAY: Big Lots, Inc. (BLI), PetsMart (PETM), Network Appliance (NTAP).
• THURSDAY: Gap Inc. (GPS), H&R Block, Inc. (HRB), Hewlett-Packard (HPQ), Limited Brands (LTD), Nordstrom (JWN), Starbucks (SBUX), Walt Disney (DIS).
• FRIDAY: AnnTaylor Stores (ANN).

On the economic front we have potential market movers with:

• MONDAY: none
• TUESDAY: Core PPI, NY Empire State Index, PPI, Retail Sales, Retail Sales ex-auto.
• WEDNESDAY: Business Inventories, Core CPI, CPI, Net Foreign Purchases, Crude Inventories
• THURSDAY: Building Permits, Housing Starts, Initial Claims, Capacity Utilization, Industrial Production, Philadelphia Fed.
• FRIDAY: none

The Following Sections Are Now On Our Home Site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans: • SETUPS • BREAKOUTS • BASE BUILDING • SHORTS

This Week's Word On Discipline:

“ Success isn't measured by money or power or social rank. Success is measured by your discipline and inner peace. ” –Mike Ditka

hell yeah

Traders,

Hey now, it is high time we moved onward.

Yeah, we have seen it a thousand times.

Is it so sweet to the taste, this load of junk?

-- Uncle Ho , Solid

Our current position:

CAUTIOUS UPSIDE BIAS

In this week's edition you will find:

• Where We Are
• What Was Important About Last Week
• What We Are Watching For This Week
• A Word On Discipline

The following sections can now be found on our home site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans

Where We Are:

Taking a look at the overall markets:

Events over the past week have sparked a “hell yeah” response from traders.

Whenever the market rallies on a rate hike and weak employment report - it sends the signal that market players don’t care about bad news.

Recent strength in the Technology sector is most encouraging - we love to see leadership from this speculative industry.

A breakout from the Transportation sector is another key event.

There is also leadership in Biotech taking form.

In looking at the nature of markets from a historical perspective, Healthcare and Biotech issues tend to do better in a weak economy. If this is where we’re heading, we expect to see a stronger trend established here.

We’re not so quick to raise the Green Flag because we still need to see technical barriers in the Dow Average and Banking sector overcome.

A major area of concern is Bonds - which have been crumbling for the past two months. A collapse would send a very bad message for the U.S. economy, and the equities market would no doubt suffer.

This is a stock pickers market. Trends may very well be short lived in response to conflicting signals.

We continue to cautiously stalk opportunity, and lock in profits as they come.

Technically speaking:

The Dow Industrial Average ($INDU), +1.23%, broke north of its major moving averages, though remains in a bearish head and shoulders pattern. A breakout above 10720 will likely trigger short covering.

The S&P 500 ($SPX), +1.16%, traded above its major moving averages as the third low in an upward trend becomes more discernable.

Nasdaq ($COMPQ), +3.81%, blasted above its major moving averages and is poised to head into new high territory for the year.

Russell 2000 ($RUT), +3.59%, is trading above its major moving averages and is also poised for new yearly highs.

Volume indications continued to pack in evidence to suggest recent broader market lows are supported by institutional money.

New Highs - New Lows continued to improve, and is presently in neutral territory after coming off the lows of the year.

Investors Intelligence the number of bullish money managers over bearish money managers improved. This contrarians’ indicator has been bullish for the majority of the year.

Key chart action for the week:

Charts courtesy of Stockcharts.com

The 20+-year Note Holdr (TLT) tumbled for the week, and may be an area of concern for the equities market should weakness endure.

The U.S. Dollar Index ($USD) broke out four month base.

The Gold Miners Index ($XAU) consolidated for the week, though are in trouble if the Dollar Index picks up upside traction.

The Dow Jones AIG Commodity Index ($DJAIG) slipped further below its 50-day moving average.

Consumer Staples ($CMR) remain stuck in its year long trading base as Consumer Cyclicals ($CYC) while strong on the week’s session, are in technical limbo.

Technology ($DJUSTC) is poised to breakout of two year long base – which if successful would be a strong signal for the broader market.

The Semiconductor Index ($SOX) posted an impressive move off its recent lows, though remains below its 50-day moving average.

Banks ($BKX) are now trading above its major moving averages, though still possess a bearish head and shoulders technical pattern.

Broker Dealers ($XBD) hit a fresh high for the year.

Retail ($RLX) is trading above its major moving averages, though is technically neutral as far as pattern is concerned.

Internet ($IIX) is trading above its major moving averages and is closing in on new high for the year.

Healthcare ($HCX) is trading below all its major moving averages and is not offering much bias insofar as chart pattern.

Biotech ($BTK) hit a new high for the year.

REIT's ($DJR) are sandwiched between major moving averages and are showing little signs of life.

Homebuilders ($DJUSHB) are also sandwiched between major moving averages and are showing little signs of life.

Transportation ($TRAN) broke out to new highs – a very strong sign for the broader market.

Airlines ($XAL) moved above a very key trendline. We’re looking at a potential cyclical low in place.

Defense ($DFX) remains range bound in a five month base.

Energy ($IXE) has been inching higher. We suspect consolidation may be in order after falling from its year highs. However, Oil Services hit new highs for the year – clearly strength has not been completely sapped from the sector, though it remains suspect.

Utilities ($UTY) are sandwiched between its major moving averages.

The top 10 industry groups from the 6 month RS screen are:

• SEMICONDUCTR-MEMORY CH
• DRUGS - GENERIC
• STAFFING OUTSOURCING S
• PRINTED CIRCUIT BOARDS
• SEMICONDUCTOR-INTGRTD
• SEMICONDUCTOR EQUIP MA
• INVESTMNT BROKERAGE-NA
• NETWORKING COMMUN DVCS
• INVESTMNT BROKERAGE-RE
• HEAVY CONSTRUCTION

What Was Important About Last Week

STOCKS:

• Time Warner (TWX) posted third-quarter profits up 80% from a year ago, beating Wall Street forecasts.
• Valero Energy (VLO) reported quarterly profit almost double from a year ago as it beat Wall Street forecasts.
• Procter & Gamble (PG) announced earnings up 4% from a year ago.
• GM (GM) and Ford (F) each said their U.S. sales in October fell 26% from a year ago.

ECONOMY:

• Fed policy makers raised their target for the federal funds rate to 4%.
• Nonfarm payrolls grew by 56,000 jobs in October, this is half what economists expected. force.
• Federal Reserve Chairman Alan Greenspan said the U.S. economy was in good shape, but warned of growing inflation risks.
• The ISM's factory index posted its second-highest level of the year to mark 29th-straight increases.
• S&P 500 earnings, so far, are up 16.1% from a year ago – beating expectations. According to Thomson Financial, The third quarter was the ninth straight quarter of double-digit profit growth, a streak matched only three other times in the past 55 years, in 1972-74, 1987-89 and 1992-95.

Key earnings releases:

• MONDAY: El Paso Corp. (EP), Netease.com Inc (NTES), Ryanair Holdings (RYAAY).
• TUESDAY: Alcan Inc. (AL), Blockbuster Inc. (BBI), EchoStar Communications Corp. (DISH), LAMAR ADVERTISING CO (LAMR), Toll Brothers (TOL).
• WEDNESDAY: King Pharmaceuticals (KG), Mittal Steel Company (MT), Swift Energy (SFY), Taro Pharmaceutical Industries (TARO), Whole Foods Market (WFMI).
• THURSDAY: Dell, Inc. (DELL), DreamWorks Animation SKG, Inc. (DWA), Kohl's (KSS), Target Corporation (TGT).
• FRIDAY: none

On the economic front we have potential market movers with:

• MONDAY: Consumer Credit
• TUESDAY: none
• WEDNESDAY: Wholesale Inventories, Crude Inventories
• THURSDAY: Export Prices ex-ag., Import Prices ex-oil, Initial Claims, Trade Balance, Mich Sentiment-Prel., Treasury Budget
• FRIDAY: none

The Following Sections Are Now On Our Home Site:

• The Growth Stock Landscape
• What We Like - What We Have
• This Week's Scans: • SETUPS • BREAKOUTS • BASE BUILDING • SHORTS

This Week's Word On Discipline:

“ Champions keep playing until they get it right. ” -- Billie Jean King