TheLascone's MarketNews · THE NEWS THAT YOU CAN BENEFIT FROM "Politicians are
like diapers, they both need to be changed
for the same reason."
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WEEK IN REVIEW : This was a Options Expiration Pre-Holiday shortened week. The
Monday before expiration day was streaky with the Dow up five straight,
1994-1998, during the bulk of the last 20th Century bull market, down five in a
row, 1999-2003, and up in 2004. When France got Fried , it was obvious that the
world was looking for security for it's assets. They ran to the Dollar, US
Equities, Bonds, and Gold. Gains and losses were minimal Monday, and the
market's major averages spent the session surrounding the flat line. Comments
from Fed Chairman Greenspan, regarding the current account, provided a
short-lived spark, but following three weeks of broad based gains and amid a
dearth of data on the earnings or economic front, buyers stuck to the sidelines.
At the same time, sellers found little catalyst and similarly kept action in
check.

We had a minor rally attempt in early trade but it elicited no follow-through
interest with the market drifting slowly lower into the afternoon amid below
average volume. Sector weakness had been noted in Coal -3.8%, Steel -1.9%,
Airline -1.1%, Utility -1.1%, Gold -1% and Drug -0.9%. Groups on the plus side
are being led by Paper +1.8% (GP +36%), Oil Service +1% . An uptick in energy
prices helped direct some buying interest towards the Energy sector (+0.5%)
Nervous stock investors collected profits and sold stocks lower Tuesday, wiping
out an early advance amid conflicting signals about inflation and consumer
spending.The market gave back its gains after the Dow Jones industrials reached
an eight-month high. Investors have been uneasy for months about the economy and
the effects of inflation, rising interest rates and soaring energy costs. Wall
Street's retreat also came despite crude oil settling below $57 a barrel for the
first time since late June. A barrel of light crude dropped 71 cents to $56.50
on the New York Mercantile Exchange.

Stocks closed a zig-zag session down Wednesday as General Motors Corp.(GM) hit
an 18-year low. The EIA report released the latest energy inventory data;
unexpected drawdowns in crude and gasoline supply overshadow the effect of a
better than expected build in distillates. With this news, Crude futures
reversed course, rising 0.7% jumping over the $57 per barrel mark. .Rising oil
prices dulled investor enthusiasm. This also dragged down the Dow Jones
industrial average. Trading was light on the floor and some said last week's
strong closes came in anticipation of Wednesday's cheery inflation numbers,
leaving little to trade on during the day's session. Buy the Rumor Sell the News
? The Dow fell 11.68, or 0.11 percent, to 10,674.76. Broader stock indicators
were barely higher. The Standard & Poor's 500 index rose 2.20, or 0.18 percent,
to 1,231.21, and the Nasdaq composite index rose 1.19, or 0.05 percent, to
2,187.93.
Bonds rose sharply as stocks declined, with the yield on the 10-year Treasury
note falling to 4.47 percent from 4.56 percent late Tuesday. The U.S. dollar was
mixed against other major currencies in European trading. Gold prices were
higher. Watch for possible interest in bird flu plays BCRX, NVAX, HEB following
Tamiflu news.

After flatline readings throughout the week, the stock market finally reclaimed
some of the upside momentum that helped lift the major indices an average of
4.9% over the last three weeks. This will lend credence to the belief that a
traditional year-end rally will close the S&P 500 up 5% for the year. Thursday
was a tech rally ... NQ's were up 1.4% compared to DOW up only .4%. Overnight
there was talk of French selling truck loads of EUR/GBP over .6800 The morning
began with the Initial claims report , which was the lowest in 7 months. This
suggested a strong job market. Treasury Secretary John Snow , argued in a speech
prepared for delivery to the Tax Foundation, that Congress should extend a pair
of investment tax cuts due to expire in 2008. This action now would encourage
economic growth. The fact that about two thirds of the S&P 500 has either
surpassed or matched analysts' forecasts, suggesting a 14th consecutive quarter
of double-digit (about 15%) year/year EPS growth, positions the market for a
modest year-end rally.

A late rebound gave Wall Street modest gains Friday as two acquisitions and
upbeat earnings from Hewlett-Packard Co. helped lift the major indexes to
four-year highs. The Dow Jones industrial average climbed 46.11, or 0.43
percent, to 10,766.33, after retreating from a 76-point gain earlier in the day.
Broader stock indicators reached their highest levels since mid-2001. The
Standard & Poor's 500 index was up 5.47, or 0.44 percent, at 1,248.27, and the
Nasdaq composite rose 6.61, or 0.3 percent, to 2,227.07. For the week, the Dow
added 0.75 percent, the S&P 500 rose 1.1 percent and the Nasdaq gained 1.12
percent. However, while the indexes are at four-year highs, their performance
for the year to date is mediocre at best: The Dow is down 0.15 percent, the S&P
500 is up 3 percent and the Nasdaq is 2.37 percent higher. Crude futures fell to
five-month lows although the approaching winter weather still has many concerned
about oil and gas supplies. A barrel of light crude dropped 20 cents to settle
at $56.14 on the New York Mercantile Exchange. Bonds slipped, with the yield on
the 10-year Treasury note rising to 4.5 percent from 4.47 percent late Thursday.
The U.S. dollar was mostly lower against other major currencies in European
trading, while gold prices were little changed.

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Do you trade the futures ? Here are the ES technicals:The short-term and
intermediate trends are both higher. A close above 1241.00 keeps both of the
trend moving up. A close below 1228.25 moves the short-term trend down, with a
close below 1216.75 moving the intermediate trend down.
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Senator Clinton wants to levy a windfall profits tax on the oil companies.
It might surprise Senator Clinton to discover that oil company profits are much
less "obscene" than those of the nation's largest finance companies. Maybe she
should look at the chart below......
(Chart for subscribers)
As the chart above illustrates, the combined cumulative earnings of Citigroup
and Bank of America from 1995 through the third quarter of this year totaled an
astounding $223 billion, a sum which happens to be $14 billion HIGHER than the
combined cumulative earnings of ExxonMobil and Chevron over the same timeframe.
Maybe the Senator should think twice before throwing stones.
http://www.ezimages.net/upload/RUDE/WindfallProfits.gif
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Interest Rate Talk : Bill Gross says that while difficult to forecast, if rates
go much further, there could be absolute home price declines. At 4.25%, he
thinks the Fed will realize housing has cooled, and in 2006 the Fed will stop
4.25%.
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This week the " WSJ " ran a column on stocks that should be shorted.The top 7
Stocks with high short ratios : LEND OVTI RRGB CPN MSO WGO BZH
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Some of Mr Buffett's holdings ( part 2 ):

Berkshire Hathaway, of which he owns about 31%, is a large and complex business.
It has substantial stakes in Coca-Cola Co., Wells Fargo Co. and American Express
Co. PetroChina Co holds an 18.1% stake in Washington Post Co.
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If you trade or invest this newsletter is a Tax write off
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... GOOD LUCK MARKETTRADERS


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