If you took the advice from the McClellan Osc. It gave a great sell signal. The
Dow is down over 400 points since the signal.

Good Luck Market Traders

I always watch the big picture. The McClellan Osc. went below the zl in the 3rd
week of Sept. until it crosses back above the zero line. I really don't trust
the upside in the Dow.I would hold off buying until the dots on the Summation
index (chart below) change direction.

McClellan Oscillator  http://www.stockcharts.com/charts/indices/McSumNYSE.html

Crap Game @ Goldman Sachs anyone?

Do you want to invest your hard earned money in a Crap Game ? Sometimes I feel
that the odds of an average person making big money on Wall Street are worse
than gambling at the Crap table. I know that America voted for "Change", but I
don't think they were referring to what is left in their pockets after the
latest "Stimulus". I received an e-mail  from my Brother-in-law (a former
Option's Floor Trader) about an article that was written by Matt Taibbi.  It was
very enlightening and  I thought I would recommend it to the Yahootrader Group .


From Matt Taibbi's "The Great American Bubble Machine" in Rolling Stone Issue
1082-83.


The first thing you need to know about Goldman Sachs is that it's everywhere.
The world's most powerful investment bank is a great vampire squid wrapped
around the face of humanity, relentlessly jamming its blood funnel into anything
that smells like money.


Any attempt to construct a narrative around all the former Goldmanites in
influential positions quickly becomes an absurd and pointless exercise, like
trying to make a list of everything. What you need to know is the big picture:
If America is circling the drain, Goldman Sachs has found a way to be that drain
— an extremely unfortunate loophole in the system of Western democratic
capitalism, which never foresaw that in a society governed passively by free
markets and free elections, organized greed always defeats disorganized
democracy.


They achieve this using the same playbook over and over again. The formula is
relatively simple: Goldman positions itself in the middle of a speculative
bubble, selling investments they know are crap. Then they hoover up vast sums
from the middle and lower floors of society with the aid of a crippled and
corrupt state that allows it to rewrite the rules in exchange for the relative
pennies the bank throws at political patronage. Finally, when it all goes bust,
leaving millions of ordinary citizens broke and starving, they begin the entire
process over again, riding in to rescue us all by lending us back our own money
at interest, selling themselves as men above greed, just a bunch of really smart
guys keeping the wheels greased. They've been pulling this same stunt over and
over since the 1920s — and now they're preparing to do it again, creating what
may be the biggest and most audacious bubble yet.


The basic scam in the Internet Age is pretty easy even for the financially
illiterate to grasp. Companies that weren't much more than pot-fueled ideas
scrawled on napkins by up-too-late bong-smokers were taken public via IPOs,
hyped in the media and sold to the public for megamillions. It was as if banks
like Goldman were wrapping ribbons around watermelons, tossing them out 50-story
windows and opening the phones for bids. In this game you were a winner only if
you took your money out before the melon hit the pavement.


The history of the recent financial crisis, which doubles as a history of the
rapid decline and fall of the suddenly swindled-dry American empire, reads like
a Who's Who of Goldman Sachs graduates. By now, most of us know the major
players. As George Bush's last Treasury secretary, former Goldman CEO Henry
Paulson was the architect of the bailout, a suspiciously self-serving plan to
funnel trillions of Your Dollars to a handful of his old friends on Wall Street.
Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at
Goldman before becoming chairman of Citigroup — which in turn got a $300 billion
taxpayer bailout from Paulson. There's John Thain, the asshole chief of Merrill
Lynch who bought an $87,000 area rug for his office as his company was
imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout
from Paulson, who used billions in taxpayer funds to help Bank of America rescue
Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia,
scored himself and his fellow executives $225 million in golden-parachute
payments as his bank was self-destructing. There's Joshua Bolten, Bush's chief
of staff during the bailout, and Mark Patterson, the current Treasury chief of
staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former
Goldman director whom Paulson put in charge of bailed-out insurance giant AIG,
which forked over $13 billion to Goldman after Liddy came on board. The heads of
the Canadian and Italian national banks are Goldman alums, as is the head of the
World Bank, the head of the New York Stock Exchange, the last two heads of the
Federal Reserve Bank of New York — which, incidentally, is now in charge of
overseeing Goldman.

For more :
http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_ma\
chine/1

Today is Thursday July 9th 2009. The Newspaper's have finally started printing
the real story today. Former New York Mets outfielder Lenny Dykstra has sought
bankruptcy protection in Los Angeles, citing more than $31 million in debts.
    Federal court documents show Dykstra filed for Chapter 11 status Tuesday. He
listed assets of $50,000 or less and liabilities of between $10 million and $50
million.

I watch The Fox Business shows. When Lenny would come on, the other so called
experts would tell him to go back to baseball. They would grand slam him pretty
good. I never knew who to believe till I saw Bernard Goldberg expose him on HBO
this week. People wanted to believe Lenny and for a while they gave him the
benefit of the doubt. Below I have put together a combination of the
investigative work of  Bernard Goldberg , Ben McGrath and ESPN's Mike Fish.
These men have punctured the final holes into Lenny Dykstra's supposed financial
genius

If ever a major leaguer perfectly fit the personality of his team, it was
animated outfielder Lenny Dykstra, who served as the "Energizer bunny" of two
freewheeling World Series squads: the 1986 New York Mets and the 1993
Philadelphia Phillies.  Leaving the game in 1996, Dykstra went head-first into
the business world, embarking on another winning career. Most recently, he
became a prominent, remarkably successful stock investor and consultant, writing
a column for TheStreet.com, and serves as president of several privately held
companies.

The first time Ben McGrath met Lenny Dykstra, the former Mets and Phillies star,
he nearly stood me up for lunch at the St. Regis Hotel, in New York. Dykstra is
a luxury-hotel junkie—a self-proclaimed "robes-and-room-service kind of guy."
When I finally reached him, forty minutes after our scheduled appointment, he
wondered what time it was, and said that he'd be down as soon as he could put on
a suit. Five minutes later, he called back and, to assuage his guilt, suggested
that I go ahead and order steak and lobster. He still had to put on his suit. I
waited a few minutes longer, then ordered. The food arrived. I let it sit, and
eventually—slowly—began to eat. I finished. The waiter cleared away my plate. At
last, as I was about to signal for the check, Dykstra emerged from the elevator,
lugging three briefcases. For reasons that were not immediately evident, he
started showing me glossy photos of airplanes, and mentioned something or other
about Dubai. "Sorry about the hecticness," he then said. "I shaved. I cleaned up
for you."

Mets fans of a certain age will recall a popular poster from 1986, bearing the
word "Nails" in bold letters across the top, and featuring a shirtless Dykstra,
wearing eye black and holding a bat against his shoulder. The nickname referred
to his tenacity and also to his peculiar Southern California lexicon. He was
wiry then; he used to complain that Lenny might as well have been his middle
name, given how often it was preceded by the word "little": Little Lenny
Dykstra. He is lumpy now. Referring to his suit, which was pin-striped, he said,
"It gets a little tighter, you know?" His hands tremble, his back hurts, and his
speech, like that of an insomniac or a stroke victim, lags slightly behind his
mind. He winks without obvious intent. In his playing days, he had a term for
people like this: fossils. Nothing about his physical presence any longer
suggests nails, and sometimes, as if in joking recognition of this softening, he
answers the phone by saying, "Thumbtacks."

For many ballplayers, the growing-up point does not arrive until after
retirement, when all the freebies vanish and equipment managers and hotel maids
can no longer be relied upon for regular laundry service. Dykstra last played in
the majors in 1996, at age thirty-three. Improbably, he has since become a
successful day trader, and he let me know that he owns both a Maybach ("the best
car") and a Gulfstream ("the best jet"). The occasion for our lunch, however,
was a new venture: Dykstra was launching a magazine, intended specifically for
pro athletes, called The Players Club. This idea was not very successful and
shut down after he started losing over $500 thousand a month. Finally we have
the evidence that completely undermines those phonie stories with disturbing
facts. One of the most disturbing: Dykstra recently used his mother's credit
card to charge $23,000 to order to charter a plane ride back to his home in
California from Cleveland. She has not been paid back. Nor have his brothers,
many of his business partners, and plenty of other people who became seduced by
Dykstra's supposed business acumen. Although it's not like Madoff, Dykstra's
financial recklessness is lengthy and deliberate, dating back to his car wash
days.

Some of the carnage:

• "Just in the past two years, Dykstra has been the subject of at least 24 legal
actions, including 18 since November. Three suits hit the courts on Jan. 29.
He's been sued by publishers and print companies, by three different groups of
pilots and by a Maryland-based financial and litigation consulting firm that
offered expert testimony on his behalf in an earlier lawsuit. He's even been
sued by a die-hard Mets fan who was the best man at his wedding 20-some years
ago, though that New York investor claims there is no bad blood."

• "Dr. Festus Dada, a Nigerian-born gastric bypass specialist, who filed a
fraud/breach of contract suit and alleges Dykstra kept a $500,000 deposit after
a deal fell apart to purchase a Southern California car wash and retail center
then owned by Dykstra. Dada walked away from the transaction, claiming in the
suit that Dykstra had made significant changes to the final escrow agreement,
including the insertion of a five-year contract for Dykstra's old Phillies
teammate, Pete Incaviglia, to serve as general manager under the new ownership."

• "Two Players Club vice presidents filed claims for unpaid wages after they
quit in January. The Minneapolis-based firm hired to design his Players Club Web
site alleges Dykstra stiffed it on a $1 million contract, and then bounced two
separate $125,000 checks."

• "Dykstra borrowed $250,000 from New York literary agent David Vigliano last
May with an agreement to repay him $300,000 in November — a robust 40 percent
annual percentage rate. Vigliano filed suit after Dykstra didn't come up with
the money."

• "The high-powered global law firm K&L Gates, which waged many of the legal
skirmishes on Dykstra's behalf, withdrew its representation late last year
because it was "not paid current," according to his former lead counsel, David
Schack."

• "The Gretzky estate that Dykstra bought for $18.5 million — he planned to flip
it for a sweet profit before the housing market belly flopped — now sits vacant
and is listed at $16.5 million. According to public records, four notes and
deeds of trust are held against the property, totaling more than $13 million.
One of the note holders, Index Investors LLC, filed a default notice in March,
alleging Dykstra was behind on his payments in the amount of $422,436."

That's not all. Fish isn't charitable at all with Dykstra's unpolished demeanor
— the dude-isms, the farts, the loopy mannerisms — and keeps them in the proper
context at all times.

What's sad is that some people have their money tied up in Dykstra's "Nails On
The Numbers" financial scheme. The newsletter costs $1,000 a year and is
something that Dykstra has handed off to many of his magazine employees in lieu
of actual payment for work.. When asked if his articles were accurate,one
individual said, if anything, it didn't come close to revealing some of the
bizarre things Dykstra pulled with The Player's Club: non-payment, constant
dropping of racial epithets, overpaid employees, underpaid employees, and an
utter lack of any sort of editorial vision or oversight. It's a disaster of epic
proportions and is hurting a lot of people Dykystra's used everyone in his
family to funnel money and, according to my friend, paid him for one story out
of the checking account from his son, Cutter Dykstra.

Please be careful when choosing a financial advisor. Just because someone is
famous doesn't mean they can manage money.

Good Luck MarketTraders

Obama's Robin Hood Approach

Did you know that the $787 Billion Stimulus Package signed into law is
so big that if you were born at the time of Christ, and spent $1 Million every
day through the end of 2009, you would have spent about $733 Billion. In fact we
could go until the year 2160 and still not quite reach it. That is a crazy
number, and to think they spent a measly month and a half coming up with it.

Don't get me wrong, I am for 'A' stimulus package.I am just disappointed that
there is so much stupid waste in this bill. These are
not things you spend money on when you are trying to avoid the biggest
economic catastrophe since the Great Depression.When will our politicians
actually serve the interest of the common good and the
American people, instead of themselves and their own reputations and
wallets?

Two Trillion Tons (A Parody of the Stimulus Package)
http://www.youtube.com/watch?v=M17BrrgrHBI&feature=related


       GoodLuck Market Traders


[Non-text portions of this message have been removed]

When times get tough ... the tough get going. We all know about the
original Ten Commandments, but have you ever heard of "The Second Ten
Commandments"? Read them ; apply them to your life. It just might help
you through the hard times.

I. Thou shall not worry, for worry is the most unproductive of all human
activities.

You can't saw sawdust. A day of worry is more exhausting than a day of
work. People get so busy worrying about yesterday or tomorrow, they
forget about today. And today is what you have to work with.

II. Thou shall not be fearful, for most of the things we fear never come
to pass.

Every crisis we face is multiplied when we act out of fear. Fear is a
self-fulfilling emotion. When we fear something, we empower it. If we
refuse to concede to our fear, there is nothing to fear.

III. Thou shall not cross bridges before you come to them, for no one
yet has succeeded in accomplishing this.

Solve the issues before you right now. Tomorrow's problems may not even
be problems when tomorrow comes!

IV. Thou shall face each problem as it comes. You can only handle one at
a time anyway.

In one of my favorite "Peanuts" comic strips, Linus says to Charlie
Brown, "There is no problem so big it cannot be run away from." I
chuckle every time I think about it because it sounds like such a simple
solution to a problem. Problem solving is not easy so don't make it
harder than it is.

V. Thou shall not take problems to bed with you, for they make very poor
bedfellows.

Just remember that all your problems seem much worse in the middle of
the night. If I wake up thinking of a problem, I tell myself that it
will seem lighter in the morning and it always is.

VI. Thou shall not borrow other people's problems. They can better care
for them than you can. I must confess that I have broken this
commandment because I wanted to help someone out, without being asked,
or I thought I was more equipped to handle a situation. But I wouldn't
have to deal with the consequences, either.

VII. Thou shall not try to relive yesterday. For good or ill, it is
forever gone.

Concentrate on what is happening in your life and be happy now! We
convince ourselves that life will be better after we get a better job,
make more money, get married, have a baby, buy a bigger house and so on.
Yet the accomplishment of any of those events may not make any
difference at all. The Declaration of Independence says we are endowed
"with certain unalienable rights that among these are life, liberty and
the pursuit of happiness." You are responsible for your own happiness.

VIII. Thou shall be a good listener, for only when you listen do you
hear ideas different from your own.

You can win more friends with your ears than with your mouth. Hearing is
one of the body's five senses, but listening is an art. Your success
could hinge on whether you have mastered the skill of listening. Most
people won't listen to what you're saying unless they already feel that
you have listened to them. When we feel we are being listened to, it
makes us feel as if we are being taken seriously and what we say really
matters.

IX. Thou shall not become "bogged down" by frustration, for 90 percent
of it is rooted in self-pity and will only interfere with positive
action.

Seriously, has frustration ever improved a situation? Better to take a
break, collect your thoughts, and redirect your attention to a positive
first step. Then go on from there.

X. Thou shall count thy blessings, never overlooking the small ones, for
a lot of small blessings add up to a big one.

We all have something to be grateful for, even on the worst days. Hey,
you're still on the green side of the grass, aren't you?

Mackay's Moral: These may not be chiseled in stone, but try them --
they'll make your life less rocky.

This was written by Uncle Harvey MacKay. Uncle Harvey ... you are a
smart man.



[Non-text portions of this message have been removed]

Each presidential candidate has givin their rendition of the changes
they want  for America. Norma White from Amarillo Tx. knows what
changes we need. Here are a few suggestions that she believes all
Americans want.

1. Limit Congress from serving more than two terms. That is all that
presidents are allowed.

2. Stop Congress from voting for their own raises. How did that ever
get started?

3. Stop paying for lawmakers' high-priced insurance premiums. After
all, they are only part-time employees. They might pass some law
changes on the insurance companies, if they had to find one.

4. Stop paying lawmakers their full salary after serving just one
term, or at retirement. We need to get rid of that pension plan;
they've let other companies get rid of theirs. You were lucky to get
40 to 50 percent of your salary after working somewhere for 35
years, but they get 100 percent.

5. Make Congress pay into the Social Security system. They make laws
for it. If they spent some of their own money, they might be
interested in making it solvent.

6. Stop handing out aid to illegal aliens. If we did, then Medicaid
and the food stamp program would have enough money to aid the aged
and the poor.

7. Secure our borders.

8. Stop allowing babies born to illegal aliens in the United States
automatic U.S. citizenship.

9. Stop the abuse of our benevolent welfare system. We feed children
free meals three times a day until they are 17. Churches give away
good, clean clothes. Companies buy and donate school supplies.
Emergency rooms provide health care at taxpayer expense and the food
stamp program is buying food at home. What are parents doing for
their children?

10. Have a computer program that cross checks Social Security
numbers with fingerprints to stop fraud on many fronts. Use it on
voter registration, too.

11. Stop bailing out mortgage companies and banks that give loans to
people who cannot afford them.

12. Stop companies from paying CEOs and other executives outrageous
salaries and bonuses while doing away with workers' pensions.

13. Stop all unnecessary spending so we will have the money for our
nation's security, and to help needy and elderly Americans.

14. Stop permitting anyone to have a photo with their face covered
on driver's licenses.


Whoever wins the presidency will not be able to make these
changes.Only members of Congress can do this, as they are the
lawmakers.I don't believe Congress is interested in changing
anything, do you?

Subject: Important message from Nigeria, no wait I mean the U.S.A.


Dear American:

I need to ask you to support an urgent secret business relationship
with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country
has had crisis that has caused the need for large transfer of funds
of 700 billion dollars US. If you would assist me in this transfer,
it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my
replacement as Ministry of the Treasury in January. As a Senator,
you may know him as the leader of the American banking deregulation
movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need
the funds as quickly as possible. We cannot directly transfer these
funds in the names of our close friends because we are constantly
under surveillance. My family lawyer advised me that I should look
for a reliable and trustworthy person who will act as a next of kin
so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund
account numbers and those of your children and grandchildren to
wallstreetbailout@... so that we may transfer your
commission for this transaction. After I receive that information, I
will respond with detailed information about safeguards that will be
used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

The Berkshire Hathaway annual meeting has become a big event, like a
financial Super Bowl. People fly in from all over the world to hear
Buffett and Munger field questions from the audience. There were
over 31,000 folks packed in the Qwest Center . "We like businesses
that drown in cash," Charlie Munger declared during the Berkshire
Hathaway shareholder meeting in Omaha, Nebraska last weekend. Warren
Buffet promptly agreed.

Throughout the meeting, Buffett and Munger repeatedly stressed the
importance of investing in companies that provide ample cash flow or
some other essential "margin of safety." These dreary investment
precepts might not sound like the kind of stuff that would provide a
weekend full of entertainment. But the Buffet-Munger show is like no
other. It is witty and quirky. And yet, it never fails to reiterate
the essential techniques that enabled these two billionaire-
investors to amass their incredible fortunes.

Buffett invoked Benjamin Graham's name several times throughout the
day, as people sought to discover Buffett's influences and mentors
over the years. The life-changing book for Buffett was Ben Graham's
The Intelligent Investor – in particular, Chapters 8 and 20. These
chapters deal with the crucial "margin of safety" concept and how
the investor ought to view market fluctuations. If you've never read
the book, get a copy and read those two chapters.

The idea of passion came up several times during the day. Buffett
advised people to "find their passion in life" and pursue that. (To
which Munger added that it would be helpful if you had an aptitude
for your particular passion.) Buffett said that when he meets the
managements of companies in which he might invest, he has to "see
the passion" and to see that they "love the business." He also added
that track records are an important factor. Drawing on a baseball
analogy, Buffett advised: "Look for the guys hitting .400 and put
them in the lineup."

To those just starting out in their careers, Buffett also
recommended working for someone you admire (and then joked that for
many people, that means working for themselves). He pointed to his
own experience working for Ben Graham and how much he learned during
that time. Finally, he said it is important to "have the right
spouse." He then quipped: "You may find the perfect woman, but you
may find she is looking for the perfect man, in which case, you have
a problem."

One of the recurring themes from the meeting was the utter
uselessness of mainstream financial theories taught in schools.
Buffett said there are really only two things you need to focus on
in school as far as investing goes: How to value a business and how
to think about market fluctuations.

Investors should not let short-term fluctuations derail their long-
term investment strategies, Buffett explained. Market prices are not
always the "right prices." That's why market fluctuations often
create investment opportunities for value investors like Buffett and
Munger.

There were many comments throughout the day about what kinds of
businesses Buffett and Munger like. The most memorable line here
goes to Munger, who said: "We like businesses that drown in cash."

Buffett added: "We like ideas you don't have to carry to three
decimal places." In other words, the best ideas do not require great
precision. "If someone walked in here and weighed 350 pounds," he
joked, "I might not know he weighed 350 pounds, but I would know he
was fat." Similarly, he's looking for obviously "fat" ideas.

He used PetroChina as an example of this idea. Buffett bought
PetroChina back in 2002, when it was a $35 billion company that he
thought was worth $100 billion. He bought the stock, having done
nothing more than read the annual report. With that big a gap, it
doesn't matter whether the company was worth $80 billion or $120
billion. There was a wide margin of safety.

Both men had lots of critical things to say about the so-called risk
managers of our day. Risk managers, as the name implies, are
supposed to ensure the safety and soundness of the investments made
by financial institutions. "But too often," Buffett complained, "a
risk manager is a guy who makes you feel good while you do dumb
things."

Someone asked whether the big investment banks are too complex for
even their managers to understand the risks the banks are exposed
to. Buffett said: "Probably yes." He also pointed out that the
managers have little incentive to worry about certain risks. His
example went like this: Say there is a 1-in-50 chance of a company
going out of business. If you are a 62-year-old executive planning
on retiring at 65, it's not in your best interest to worry about it.

By contrast, the 77-year old Buffett and 84-year old Munger DO worry
about risk. But they manage risk primarily by avoiding investments
they don't understand. "Risk comes from not knowing what you're
doing," Buffett once remarked. So because they avoid complex ideas,
they sometimes miss winning investments.

Buffett did not apologize for Berkshire Hathaway's conservative
investment principles. "We don't worry about the ones we miss," he
said. Getting an extra point or two in return is often not worth the
extra risk. "We do well enough and we sleep well at night," he said.

Moving to macroeconomic themes, Buffett said he doesn't see the
policies that lead to a weaker dollar changing anytime soon. So he
expects the dollar to remain weak against other currencies. He said
he is happy to own companies that earn their sales in currencies
other than dollars. Buffett is looking into Germany and has a trip
there coming up. Asked if he would buyout an Indian or Chinese
company, he said he would like to, but implied that the size of
those markets -- and legal restrictions on foreign ownership -- make
it difficult.

On the oil question, Buffett said spare capacity is as low as he can
ever remember. While he said the world would adjust, he
added, "Nothing we can do in any short period of time will wean the
world off oil." Munger added that he confidently predicts there will
be pain in making the transition to a world less dependent on carbon-
based energy sources. He also put in a good word for solar, saying
that, ultimately, solar will be an energy source we will learn to
rely on a great deal more.

As for ethanol, Munger said: "Turning American corn into motor fuel
is one of the dumbest ideas I've ever seen." He went on to say it
is "so monstrously dumb" that he thinks the idea is on its way out.

One shareholder asked how he should invest if he can't spend any
time on his investments because he has another job and his knowledge
of finance is limited. Buffett told him something I'm sure he didn't
want to hear: "Put your money in an index fund. Why should you
expect to make more than an index fund if you don't bring anything
to the table?"

Investing well requires time and commitment. That's why serious
individual investors need to commit serious time and effort to their
investment process if they hope to succeed consistently. But here's
a shortcut: Study the tactics of Buffett and Munger.

Buffett asked the employees in his office to calculate the
percentage of their income that they pay in income and payroll
taxes. Buffett, who said that he does his taxes without an
accountant and does not use tax shelters, revealed that he paid 17.7
percent of his income in taxes,while the average for his office
staff was 32.9%. None of Buffett's employees paid as low a rate as
he did.

Buffett then issued his CEO challenge: Buffett will donate a million
dollars to the favorite charity of any member of the Forbes 400 list
of wealthiest Americans who can successfully challenge Buffett's
claim that the average tax rate paid by the Forbes 400 billionaires
is lower than the average tax rate of their receptionists.  THX for
the help ... Derek G.

So far, no one is biting. http://www.cnbc.com/id/21708265/

Potential investors can research the company they want to put their
money into on their computers at home.Here are some tips on
researching companies for investment. We'll use The IPOD as an
example. I see alot of people buying IPOD's. How can I benefit from
this trend ?

First, start off by figuring out who owns the company that makes the
IPOD.

Hoovers' Web site can really help you uncover some very basic
information about almost every product that's sold in America.
The first thing that you want to know about IPOD is who owns the
company. It's owned by Apple  (AAPL.) You need to find out whether
this is a company that you can invest in -- if it is a company that
has gone public. On the front page of Hoovers' Web site, you will
see a ticker that tells you right away whether a company is public.

Ask yourself, what does the company do?

Click on Apple. One of the first things that you see is an overview
of the company, which tells you about all the brands that Apple
owns.

Most importantly, check Investor's Business Daily

Look to to see if RSI (relative strength ) and EPS (earnings per
share) are above 80. If the numbers are below 80... find another
company.Currently Apple's overall rating is 93

Find out who runs the company.

This is really important. People matter. First, I see the chairman
and CEO, and his name is Steven Jobs. He is a founder, and
that says he knows a lot about the business. That's reassuring.

Now that you know who runs the company, find out how the company has
done.

Go to Morningstar.com. Sometimes you have to pay to subscribe, so
everything you may want to know is not free. A lot of it is free,
though. The first thing you will see on the Apple page is the
current stock price. Here's the info you should look for. How has it
done, for example, over the last five years? Apple's stock has been
doing really well. Now that's something that actually might give you
pause because you want to buy low, not high.

Find out whom the company competes against?

Yahoo! Finance is another great site. Click on competitors, and you
will see a page that shows a chart indicating who Apple's
competitors are. The site has a bunch of information devoted to the
Tech industry. You can read the headlines and see whether
anything interests you. It's just a great way again to get more
information about the company.


Find out what the company has to say about itself.

Every single public company has an investor section on its Web site.
Go right to that section because that's the information you
need to know in order to make an investment decision. You also
always have the option of calling the company directly for
information. Companies are happy to share that information because
they are always looking for new investors.

1. Low levels of business inventories: For decades, business
inventories have been at the root of fluctuations in the business
cycle. Part of the so-called "Great Moderation" in  economic growth
relates to improvements in inventory management.In the current
situation, inventories have been extraordinarily well-managed,
falling to their lowest level ever relative to sales. This means
that businesses won't have to cut production much in order to bring
inventories to desired levels. Importantly, lean inventories mean
that any uptick in spending will quickly lead to increases in output
and boost economic activity. I can't say enough about how important
this dynamic is.


  2. Fed rate cuts: Trillions of dollars of debt are being refinanced
at lower interest-rate levels and the cost of new borrowing is now
much lower. Fed rate cuts work with a lag, but the   benefits begin
to accrue immediately. In the current situation, rate cuts will help
alleviate mortgage-reset problems and help banks to expand their
balance sheets.Commercial banks currently have about $10 trillion in
assets, some of which has been needed to write off bad loans as well
as bad bets in securities markets. In some cases, banks were forced
to absorb complicated off-balance-sheet vehicles, constraining their
ability to lend. Fed rate cuts will help banks to grow their assets
by at least $1 trillion this year and improve their ability to lend
again. Banks have actually seen a faster-than-usual 10% rate of
growth in their assets since the summer months.


  3. Corporate cash: Corporations hold vast amounts of cash relative
to the amounts they are spending. This may buffer the economy
against weakness and sow the seeds for increases in capital spending.


  4. U.S. exports: U.S. exports have run about $500 billion more in
the past 12 months compared to the same period five years ago. This
is expected to continue in light of strength in the global economy
and the weaker U.S. dollar, which tends to boost exports by making
U.S. products more affordable.

  5. Construction spending should flatten: The construction of new
homes has been shaving about a percentage point off of the U.S.
gross domestic product. This should slow at some point this year
because construction can only fall so much given basic needs for
shelter, unless we are going back to living in caves again.


  6. Bye-bye, subprime: Roughly $40 billion of subprime mortgages
have been resetting each month, but this figure will move nearly to
zero by early next year because banks stopped making subprime loans
with two-year teaser rates, so there will be no loans to reset.

  7. Sovereign wealth funds: China holds nearly $1.5 trillion of
international reserves and Russia has $475 billion. Many other
countries hold vast amounts of money, particularly countries in the
Middle East, thanks in part to strength in the global economy and
increases in commodities prices, particularly oil. This means that
if these countries wish to boost economic activity, they need only
dip into their reserves.


  8. Fiscal stimulus: This is a controversial one, but I am hopeful
that the spending uptick that results will spark the production
cycle. With inventories lean, any uptick in spending will
quickly boost output and hence boost the growth in personal income.


  9. Innovation: Companies are still making interesting things that
people want to buy, don't you agree? This is a major plus for the
economy. Another growth area in this regard is alternative energy.


10. New administration: This is not meant as a statement on the
current administration, but it is a fact of American life that there
tends to be a sense of optimism in the U.S. when a new
administration takes office. Perfect timing for the economic
recovery.

I thought you might find this very interesting. For many years I
have told others about the games that are played on Wall Street with
investor's money ! I have spoken to investors about how they must do
their own research and learn to think for themselves. After 18 years
as an analyst on Wall Street, stock analyst McClellan has written
a "tell-all" book revealing how analysts and corporate executives
are not the best sources for information about a company's health.
McClellan makes it clear his book is not for mutual fund investors,
but those who want to pick their own portfolio of individual stocks.
And by avoiding what Wall Street says, investors can find success by
doing their own research.  "Full of Bull: Do What Wall Street Does,
Not What It Says, to Make Money in the Market." (FT Press, $22.99).
Too often, investors are misled by corporate spin and analyst views,
when instead they should tune out the noise and focus on finding
their own stocks that can provide yields for the long term. His
questions that stock buyers need to answer by doing their own
research include:

1. Is the company in a new or niche market? If it is, its growth can
be higher by being in the first stage of growth and not having much
competition.


2. Is the company's product or service specialized and simple? If
you can't understand what it does or sell, move on.


3. Is its revenue growth consistent?


4. Is its profit margin at the high end of its peers?


5. Does it have low debt? If debt is less than 20 percent of its
assets, it has a better chance of avoiding financial problems and
has the cash for growth.


6. Does it have strong management? Look for managers with a long
tenure and record of success.


7. Is its annual revenue in the $1 billion to $2 billion range?
McClellan believes that a company in this range is small enough to
still have growth ahead and at the same time making enough money to
support itself now.


8. Is it in a rising industry? Obviously, investing in a declining
industry is something to avoid.


9. Does it have a low price-to-earnings ratio? A common belief is
company stock with a high PEs can be overpriced. Under 20 is a good
rule of thumb.


10. Does it pay a dividend? McClellan prefers dividend-paying stock
as a sign of an established company and one that is stable.


11. Is the stock listed on the New York Stock Exchange? While not a
necessity if it meets most of the above criteria, a stock listed on
the NYSE is a sign of a more stable company.


12. Are the executives overpaid? Some of the worst companies have
overcompensated executives, which can indicate arrogance. Also watch
for backdating of stock options and lucrative severance packages.

TheLascone's MarketNews · THE NEWS THAT YOU CAN BENEFIT FROM




  " Intelligent people have more zinc and copper in their hair  "
---------------------------------------------------------------------

Its a new year and subscribers are already making money. Last few
weeks we recommended WYNN GE FXI PHO GLD MO NASD. Subscribe today and learn how
to beat the market.

WEEK IN REVIEW :


http://a.abcnews.com/images/Business/nm_markets_080129_ms.jpg

On Monday, the major indices closed with significant gains, at their
best levels of the session.  The advance was broad-based with nine
of the ten sectors posting a gain in excess of 1%, although
financials showed significant strength. It was shaping up to be
another negative day on Wall Street. Asian markets closed sharply
lower on fear of a U.S. economic slow down, and an economic reading
on new home sales disappointed. The stock market managed rebound
into positive territory, though, as traders upped their bets for a
rate cut and embraced several better than expected earnings reports.
Fed funds futures currently indicate an 88% chance of a 50 basis
point rate cut, with a 25 basis point cut full priced in.

Wall Street advanced sharply Tuesday as the Federal Reserve opened a
two-day meeting expected to bring another interest rate cut to
revitalize the U.S. economy. The probability of a 50 basis point
rate cut was reduced in the fed funds futures market to 72.0% from
86.0%.  A cut of at least 25 basis points to 3.25% is fully
expected. Government bond prices fell as stocks rose, indicating
that investors feel less need for the safety of Treasurys. The 10-
year Treasury note's yield, which moves opposite its price, was at
3.66 percent,up from 3.58 percent late Monday.The dollar was mixed
against most major currencies, and gold prices fell. Oil prices
moved higher as traders waited to see what the Fed's next move will
be. A barrel of light sweet crude rose 65 cents to $91.64 a barrel
on the New York Mercantile Exchange.


Most of the excitement in Wednesday's session happened in the last
two hours of trading after the FOMC decided to cut both the fed
funds and discount rates by 50 basis points. The major indices
rallied in the wake of the decision.  The Dow, Nasdaq and S&P, which
were all down ahead of the announcement, gained as much as 200, 38,
and 24 points, respectively. Then, the music stopped when CNBC ran a
report that one of the two major bond insurers was going to be
downgraded by a credit rating agency, perhaps as early as today.
Selling activity quickly accelerated in the wake of these
developments and it was pretty much a one-way trade in the final 30
minutes of the session.  The major indices all closed in negative
territory, led lower by the financial sector, which dropped 1.1%.

On Thursday, the major indices were able to rally, despite opening
sharply lower in the wake of a disappointing unemployment claim
report. Sentiment was lifted due to a bond insurer's positive
outlook. This is in contrast to Wednesday, when concerns over bond
insurers caused the stock market to give up all of its FOMC induced
gains. The stock market was led by financials (+2.7%), retailers
(+4.4%) and consumer discretionary (+3.4%). These three areas were
the main laggards in 2007, and stand to benefit from the recent rate
cutting cycle. The Investor's Business Daily's general market chart
page rates the accumulation / distrIbution ratings   NASDAQ  D-  /
S&P 500  D-  /  NYSE  D-. If you are buying stocks, you want the
index to be B or higher.

After volatile trading on Friday, stocks proved to be resilient by
ending on a high note.  The stock market's 1.2% gain today capped
off a strong 4.9% gain for the week.Traders were encouraged that the
stock market was able to hold up in the face of a worse than
expected jobs reading. Word of the largest tech acquisition in
history and a better than expected manufacturing reading helped
sentiment. Nine of the ten economic sectors finished
higher, led by materials (+2.2%) and financials (+1.9%). Telecom (-
0.3%) was the sole sector in the red. The big news of the day was
that Microsoft (MSFT) offered to buy Yahoo! (YHOO) for $44.6 billion
in cash and stock. The $31 per share offer represents a 62% premium
over Yahoo's Thursday closing price. It would be the largest
technology acquisition ever. For the week, the Dow gained 536.02
points or 4.4%, the Nasdaq added 87.16 points 0r 3.7%, and the S&P
gained 64.81 points or 4.9%
---------------------------------------------------------------------

MUTUAL FUND FLOW :

Jan 30 - Equity Fund Outflows -$7.5 Bil; Taxable
Bond Fund Inflows $628 Mil

---------------------------------------------------------------------
TRADING TIPS

Out of all the athletes in the world the ones that win the gold are
the select few who are dedicated to their sport. They put in
countless hours of hard work
and dedication constantly working on tweaking their techniques and
enhancing their style.  To "get the gold" in trading you have to
have a similar mindset.
Work on tweaking your style, dedicate yourself to become a "student"
of the markets, and put in the time to achieve success, and you will
find that the harder
you work the more success you will find.

---------------------------------------------------------------------

Do you want to invest in Green Ideas? part 2

Why buy GE ? Maybe because General Electric is an American icon. We
all know that GE has been a leader in power generation systems since
the dawn of the
Electric Age. GE is a manufacturer of systems for coal-fired steam
turbines, as well as hydropower systems, and has been doing this for
nearly a century.
GE is also a leader in the manufacture of gas turbine systems, as
well as nuclear power generation systems. Now it seems that GE is
getting ready for the future.

Water
Water scarcity and shortages are becoming acute in many regions of
the world. So water-related industries are growth sectors. I believe
that moving and
treating water will, in the future, typically carry high profit
margins. GE Water & Process Technologies is a fast-growing business
unit that provides
system-based solutions to problems concerning water and wastewater
treatment and related water processes. GE has had a long history as
an industrial
manufacturer, in which the company had to deal with its own
wastewater and other pollution issues. (Remember PCBs in the Hudson
River?) Now GE can
capitalize on its own internal corporate experience by offering
water-related services to commercial and industrial users. GE water
systems include desalination
equipment, membrane filtration and industrial pollution control . I
was in China, GE is there helping with polution problems ... and do
they have polution problems.

---------------------------------------------------------------------

  The wisdom of Benjamin Franklin

This is the 302nd birthday of Benjamin Franklin, author of the
famous phrase, "A penny saved is a penny earned." If Franklin were
alive today, he
might have added a few words about protecting ones pennies from the
ravages of inflation and reckless monetary policies. Franklin is
among the best-known
Americans throughout the world. Certainly, Franklin's intellect and
accomplishments are the foundation of his fame. But one aspect of
Franklin's
worldwide fame comes from the fact that his image is printed on the
U.S. $100 bill. Thus, Ben Franklin is ubiquitous in international
trade and commerce.

This monetary aspect of Franklin's fame is worth bearing in mind.
Because it now takes about one of those $100 bills to purchase one
of these barrels of
oil. And it takes nine of those $100 bills to purchase an ounce of
gold.Just a year ago, a "Benjamin" would buy nearly two barrels of
oil, not one. And it
took just a bit more than six Benjamins to buy a Liberty gold coin .
While we are thinking about it, how much food can you buy this year
at the grocery
store for the amount indicated on one Ben Franklin $100 bill? Less
than you could last year, right? Simply put, the value of your U.S.
currency is declining,
while the costs for the things you buy are rising. What is the
answer ? Gold,Oil ,and Gas stocks seem like excellent candidates to
preserve the value
of your pennies.

---------------------------------------------------------------------

Rising on Unusual Volume / Falling on Unusual Volume


FLOWSERVE CP     FLS        14.29 (17.40%)     Vol. % Change     298%

MICROS SYSTEMS  MCRS    5.86 (9.52%)         Vol. % Change     259%

INTUITIVE SURG INC    ISRG   51.61 (20.32%)   Vol. % Change     229%

---------------------------------------------------------------------
---------------------------------------------------------------------

OMNICELL INC      OMCL     5.47 (21.81%)    Vol. % Change     1,351%

AVID TECH INC     AVID       5.04 (19.44%)    Vol. % Change
1,462%

MILLIPORE CP       MIL       5.53 (7.88%)      Vol. % Change
679%
---------------------------------------------------------------------

Airlines Adding In-Flight WiFi Internet Access This Summer

One of the United States' best-known, no-frills airlines may be
getting a bit, well, frilly, as Southwest has just announced it will
be testing a new broadband,
satellite-delivered Internet access service to its passengers
starting this summer.Dallas, Texas-based Southwest is working with
Row 44 (self-described world
leader in airborne broadband communication) to equip four aircraft
for trials this summer so customers can have access to e-mail,
music, shopping, and virtual
private networks (VPN) via a high-speed connection.Row 44 is the
same company working with Alaska Airlines to implement its in-air
wireless access tests this
Spring.Virgin America is also promising in-air internet access,
although the timetable for that service has not yet been set.
American Airlines and JetBlue
have also announced plans for in-flight Internet access, although
JetBlue's plans may be limited to a few types of devices and
services. American is working
with AirCell, a competitor to Row 44. No exact timetable is
available for their full service roll-outs, either.
http://www.row44.com/
---------------------------------------------------------------------

In-Depth Review of the MacBook Air With Photos


  Engadget has the first really in-depth review of the MacBook Air
that I have seen with plenty of great photos and specifics. They do
a great job of highlighting the highs
and the lows with plenty of concrete examples to back their claims
up. It seems that while the MacBook Air is a great step towards
ultra-portable computing, overall the
pricepoint is just too high. Which is not surprising from a new
Apple gadget I guess. http://www.engadget.com/2008/01/25/macbook-air-
review/
---------------------------------------------------------------------
Watch this Alexander Paul Morris video :
http://www.vlogolution.com/vlog/archives/147-WARREN-BUFFETT-SUCKS-
HILLARY-CLINTONS-C-GO-RON-PAUL!.html?vid=flv&moMONEY

----------------------------------------------------

Sovereign wealth funds 8 Countries with the largest sovereign wealth
funds

1.ADIA  Abu Dhabi Investment Authority
2. GIC   Government of
Singapore Investment Corporation
3. GPF  The Government Pension Fund
of Norway
4. SAMA  Saudi Arabian Monetary Authority
5. KIA
Kuwait Investment Authority
6. CIC    China Investment Corporation
7. SFRF Stabilization Fund of the Russian Federation
8. FFMA Australian Government Future Fund
------------------------------------

  The Super Bowl Indicator.

As many of you know, the Indicator says that when a team from the
original NFL wins, the market will go up. When a team from the
former AFL wins, the market will go down.Below is a break down of
the years these two teams have won and what happened to the Dow that
year. With many predicting a recession, it looks like the Indicator
will be right again if the oddsmakers are right in calling for a
Patriots win.

New York Giants:

1987 -- Open: 1,897.36, Close: 1938.83 -- Yearly Pct. Change: +2.1
percent 1991 -- Open: 2,633.66,
Close: 3,168.83 -- Yearly Pct. Change: +20.3 percent

Avg. Pct. Change in Dow when Giants win Super Bowl: +11.2 percent

New EnglandPatriots: 2002 --

Open: 10,021.71, Close: 8,341.63 -- Year Pct.
Change: -16.8 percent 2004 -- Open: 10,452.74, Close: 10,783.01 --
Year Pct. Change: +3.16 percent 2005 -- Open: 10,783.75, Close:
10,717.50 -- Year Pct. Change: -.6 percent

Avg. Pct. Change in Dow when Patriots win Super Bowl: -4.81 percent

---------------------------------------------

Online Trader Talk :

MarketGuy2 : ZF has been good for me. I have used it for 6 months.
Fast and reliable

DrRaj : GM everyone....can any one say when
exactly we will have the orientation session by Finn TODAY./...I
have been eagerly waiting to hear from him about his software.

MikeWinfrey : oh gee finn you already said that. just call me the
parrot  ty8 : u can reload data from within NT, Tools--->Historical
Data. This will do much better than F5,assuming you are connected of
course, lol

TheLascone : The McClellan Osc. is back above the 0 line
In My Opinion ... looks like the bottom is in on the NYSE
http://www.stockcharts.com/charts/indices/McSumNYSE.html

Gabriel H.: macci will deflattenize if we start going up

tahoetim : plunge protection team working overtime trying to prop
this pig up

franz : I've cut my size way back today as the ranges of the bars
are very big.

Try a Trading system that works :  Free for the first 14 days
http://www.ttwmacci.com/


*********************************************************************
DOGBERT

http://epaper.ocregister.com/Repository/getimage.dll?
path=Orange/2008/01/30/14/Img/Pc0141800.jpg

-------------------------------------------
Conference/Events Calendar for the week of February 4th - 8th:

Monday: MSFT Strategic
Update; JAVA Analyst Meeting; ADCT, HTCH, ARRS, IKAN, NVLS, PAR at
Thomas Weisel Partners 2008 Technology Telecom Internet Conf; Banc
of America Securities MBA CREF Multifamily Housing Client Event;
CPF, PG at CFO.com Performance Management Analytics: How to Drive
Fact-Based Strategy, Resource Management, and Operating Decisions
Conf; SD, XTO at Credit Suisse Group Energy Conf...

Tuesday: STT Analyst Meeting; UAUA Analyst Meeting; Banc of America
Securities MBA CREF Multifamily Housing Client Event; Credit Suisse-
2008 Financial Services Forum; DLM at Goldman Sachs Consumer/Retail
Leveraged Finance Conf; DNR, HAL, CHK, CXG, HERO, STG at Credit
Suisse Group Energy Conf; GR, DCO, RTN, ATRO at Cowen and Company
Aerospace/Defense Conf; JAVA Analyst Meeting - Sun's Annual Analyst
Summit (SAS;); MIPI: The Future of Radiopharmaceuticals: Improved
Imaging and Treatment for Serious Diseases; MSFT, CHK, AMGN, SUN at
American Legal Media (ALM) Legaltech-NY Conf; RHT, ACS, MSCC, MSPD,
NETL, TTMI, ITRI, NSM, CSGC at Thomas Weisel Partners 2008
Technology Telecom Internet Conf; ZMH, CMED, BRL, SGEN, ALKS, ALXA
at Merrill Lynch 19th Global Pharmaceutical, Biotechnology & Medical
Device Conf.

Wednesday: JAVA Analyst Meeting - Sun's Annual Analyst Summit (SAS);
AXP Financial Community Meeting; CTXS Analyst Day 2008; AMAG, SVNT,
XNPT, ZGEN, CELG, BSX, MCK at Merrill Lynch 19th Global
Pharmaceutical, Biotechnology & Medical Device Conf; APC,
RIG, CPX, FE at Credit Suisse Group Energy Conf; Banc of America
Securities MBA CREF Multifamily Housing Client Event; CR, AME, BEZ,
CIR, FLS, ROP at Gabelli & Company, Inc. 18th Annual Pump, Valve &
Motor Symposium; GS, TCB, SNV, KFN, LEH at Credit Suisse Group
Financial Services Forum; IVAC, SYMC, SONS, VSEA, AVT at Thomas
Weisel Partners 2008 Technology Telecom Internet Conf; LEH at IBF
(International Business Forum) Nano Applications & Advanced
Materials Forum; NCIT, BEAV, PCP, KTOS, NOC at Cowen and Company
Aerospace/Defense Conf; SONE BAI Transpay Conference & Expo...

Thursday: Credit Suisse- Alternative InvesELY Analyst Meeting; EMR
Annual Investment Community Update; PETD Analyst Meeting tment
Seminar; CSCO, DELL, CS, PNY, RTN, MFE, CITI at American Legal Media
(ALM) Legaltech-NY Conf; CSE at ACG Capital Connection-Atlanta Conf;
DRIV, PAET, MOLX, VSH at Thomas Weisel Partners 2008 Technology
Telecom Internet Conf; DVN, OXY, BRS, CAM, DVN, SWN at Credit Suisse
Group Energy Conf; PRGS, BCSI, BEAS, FRE at Forrester Research
Enterprise Architecture Forum; RF, JPM, SLM, ZION, MF at Credit
Suisse Group Financial Services Forum; SIRT, TSCM, BKR, BMTC at
Emerald Research 15th Annual Groundhog Day Investment Forum; THRX,
XRAY, EW at Merrill Lynch 19th Global Pharmaceutical, Biotechnology
& Medical Device Conf; WTS and RBC at Gabelli & Company 18th Annual
Pump, Valve & Motor Symposium...

Friday: GLW Inverstor Meeting;
SRVY Investors Meeting; STJ Analyst Meeting; PXD, PDE, NBR at Credit
Suisse Group Energy Conf.
-------------------------------------------
  The above is a compilation of some of the best minds we have to
offer.
If you trade or invest this newsletter is a Tax write off
---------------------------------------------------
... GOOD LUCK MARKETTRADERS

" Change is the law of life. And those who look only to the past or
present are certain to miss the future "

If you would like to subscribe to this newsletter you can get all the
info at the website.  Newsletters are not sent through  YahooGroups.
With this format you don't get all the charts and color graphics.

======================================================================
http://a.abcnews.com/images/Business/ap_wall_street_070911_mn.jpg

WEEK IN REVIEW :
The stock market started the fourth quarter on a high note. The Nasdaq
closed at its highest level since 2001 and the Dow finished at an
all-time high despite negative early-morning news. The fact that the
market rallied in the wake of these warnings is a reflection of the
improvement in sentiment that followed the Fed's rate cuts last month. Today's
action suggested that investors are feeling that the worst of the credit crisis
is already priced in the market. That consideration, along with early quarter
inflows, short-covering, and arguably, a fear of missing out on the next leg
higher, bolstered Monday's gains. The Transportation index got above 50 dma
Monday. It needs a sustained break of this range top/200 dma (4964/4967) to
improve the intermediate term neutral bias. OEX stocks that were bought the most
during buy programs executed by program trading firms: KFT, BA, HAL, SLB, JNJ,
GD, TXN,GOOG, MDT, UTX, INTC, VZ, EP, T, RTN, CVX, DELL, COP, ORCL, PG, CSCO,
CL.OEX stocks that were sold the most during sell programs executed by program
trading firms:CMCSA, CI, FDX, GM, MSFT, HNZ, LTD, HD, CPB, MS,F, MCD, AMGN, CBS

It was an unusual day of trading Tuesday. Most days , the major stock
indexes closely track one another. Today the Dow Jones industrials
closed with a moderate loss while the Nasdaq composite had a moderate
gain. Given the market's quick, sharp rebound from August's credit
market squeeze and stock selloff, it was to be expected that investors would
pause to adjust their portfolios as the fourth quarter gets under way. The Dow
fell as investors sold some of their large-cap stock holdings, which have
recently performed well. Also, with commodities prices retreating and the dollar
rebounding, big mining and oil companies such as Dow component Exxon Mobil
Corp.(XOM) may see dampened profits.

The Market extended its pullback Wednesday as investors,
retrenched from an optimistic stance early in the week and waited to see how
well corporate earnings and the job market have held up in an uneven economy. ( 
September employment report was due out Friday)  Two days of choppy, negatively
biased action has inflicted no technical damage yet with the short term support
zone of interest at the highs from late last week.  Wall Street appears to be
taking many economic readings in stride, perhaps expecting some slowdown before
the Federal Reserve's rate cut is reflected in economic data. Often, such cuts
can take more than a year to fully work themselves into the economy. OEX stocks
that were bought the most during buy programs executed by program trading firms:
USB, DOW, ATI, RF, WY, GM, CAT, WFC, UPS, CVX, AIG, MMM, CSCO, XOM, JPM, F, AA,
ROK, VZ, UTX, CL, WMT. OEX stocks that were sold the most during sell programs
executed by program trading firms:TXN, SLE, CMCSA, CI, XRX, MSFT, BA.

With little market-moving economic and corporate news on Thursday, the market
was in wait-and-see mode ahead of The Department of Labor employment report due
out on Friday. After a positive start, and then a dip into negative territory,
the major indices steadied to the unchanged mark around 12:00 ET and held there
until the final half hour of trading. At that time, modest buying interest
helped the indices finish with small gains. Eight of the ten economic sectors
finished the day in positive territory. The utilities
(+0.8%), telecom (+0.6%) and industrial (+0.4) sectors provided
leadership today. The underperformance from the consumer discretionary (-0.3%)
and technology (-0.1%) sectors helped prevent the stock market from making
further gains today.

Stocks surged on Friday following a better than expected employment report. As
the chart shows, the markets gapped up at the open and never looked back.
http://charts.dacharts.com/2007-09-15/Thelascone-269.png
     The S&P finished at a new all-time closing high while the Nasdaq finished at
its highest level since February, 2001. The Dow was on pace for a record close,
but some profit taking in the final 20 minutes caused it to close roughly 30
points below its highest level. For the week , the Dow gained 170.38 points ,
the Nasdaq added 78.81 points, and the SP500 added 30.84 points. All in all, it
was a bullish end to the week and a bullish start to the fourth quarter.
---------------------------------------------------------------------
MUTUAL FUND FLOW :
Oct 3 - Equity Fund Inflows $4.5 Bil; Taxable Bond Fund Inflows $1.8 Bil
--------------------------------------------------------------------- US Housing
Derivatives

Commodity traders have a new toy, long-term bets on house prices. And the
initial results (analysis from admittedly light trading at Chicago's Merc)
aren't pretty for homeowners.According to TFS Derivatives of New York, traders'
actions translate to a bet that home prices will fall a lot further.This is how
regional housing indexes would fare, if the bets are correct, through Nov. 2011:

Miami, down 29.1% San Francisco, down 26.2% USA (10 cities), down 23.2%
Washington, D.C., down 20.7% Las Vegas, down 19.5% San Diego, down 19.2%
Denver, down 19.2% New York, down 18.3% Boston, down 17.7% Chicago, down
10.8%
---------------------------------------------------------------------
Watch the Transports

I have warned you about the transport index in the past. It needs to rally soon
or the rest of the complex will correct
to the downside. ( Dow Theory)
http://content.rightside.com/13390/1821_244ee43c2d8d31c9_MW_100307_10.gif


---------------------------------------------------------------------
Cash is King

When selecting a good stock , " Cash Flow " is a key financial gauge. Below is a
list of companies with good Cash Flow. Wynn
Resorts (WYNN) one of my favorites has a cash flow of more than 5 times its
annual earnings. HNP  CHU  AKS  WYNN  HK  TEN  TEF  OI



---------------------------------------------------------------------
THIS WEEKS BREAKOUT / BREAKDOWN ALERTS

Check Point Sftwr - (CHKP)  - 52 week high Stock notches new Friday session high
of 26.03, and closed just under the July/52-wk high of 25.99

General Electric - ( GE ) - 52 week high.  Early run approaches Monday/52-wk
high at 42.15--Friday session high 42.05

Xerox- (XRX) - Testing its 200 sma. Stock notches minor new Friday session high
of 17.57, hovering modestly under its 200 sma and the early wk high at
17.67/17.73

S&P 500  - ($SPX) - all time high. Index clears July peak at 1555.90 to set new
all time high. The nasdaq comp needs to rally roughly 80% from current levels to
reach its all time high from 2000.

General Motors - (GM) - weekly high tests/breaks its previous high for the week
at 37.98-- Friday session high 38.26 Next level of note is  its 52-wk high from
June at 38.66

Coca-Cola  - (KO) -  52 week high  approaching morning high and
Monday/52-wk peak at 58.27/58.33

Dow Transports - ($TRAN) - 200ema test. Stock test/pauses near early week high
and 200 ema at 4919/4927-- session high 4921
---------------------------------------------------------------------
------------------------------------------------------------------
Dentsply - (XRAY) -  attempting to stabilize near its 20 day ema after 4 day
decline Stock was down for the fourth session in a row this morning for roughly
a 3.3% decline off Monday's 52-wk high.
--------------------------------------------------------------------
China's state forex investment company debuts

CHINA Investment Corporate Ltd, the country's long-awaited state forex
investment company set up to make better use of its huge foreign exchange
reserve, was inaugurated this week.The CIC, with a registered capital of US$200
billion, is a solely state-owned company. The company, to be operated in a
completely commercial way despite its governmental backup, will mainly pursue
combined investment in overseas financial markets. The company will try to
maximize the proceeds via long-term investments within a range of acceptable
risks. It will deal with its forex investment business independently by
persisting in the principle of separating
government functions from company management.
--------------------------------------------------------------------
Online Trader Talk :


Ron :  Gabe - cud u give me 7 of ur profits so i can cover my loss for the day?
please

TheLascone : nobody .. I mean NOBODY offers you live charts with instruction
(for free) like this room does !!

JP : I'm sorry I had to bring this up but Colorado 27 OU 24

Doug77 :  Lasc, 2 funny things I heard: one was the head of Nareit saying, "Now
is an excellent time to use a broker" (like, when have they ever changed that
tune?) and 2, now is a great buying opportunity to get a house... asking a
broker if you need to use a broker is like asking a barber if you need a haircut
. . . lol.

sally : markets anticipating another interest rate cut

MikeWinfrey :  speaking of shorts, Bets and i were looking at RVs
this weekend and some lady left her underwear in one of the bedrooms. i thought
the salesman was going to choke.


Try a Trading system that
works :  Free for the first 14 days     http://www.ttwmacci.com/
************************************************************************\

http://epaper.ocregister.com/Repository/getimage.dll?path=Orange/2007/09\
/17/40/Img/Ad0400300.gif

---------------------------------------------------------------------
Companies reporting earnings the week of Oct 8th-12th include:

Monday:MERX, QMED, and YUM.

Tuesday: CMN.. , OXM, AA...

Wednesday: ACGY,
COST, HELE, HST, INFY, MON, PGR, CREL, EMKR, and RT...

Thursday:
FAST, PEP, SLM, WGO, and CAMP...

Friday: GE
---------------------------------------------------------------------
Conference/Events Calendar for the week of October 8th - 12th:

Monday: TEG Financial Analyst Meeting; ROC Analyst Meeting; HRL Analyst Meeting;
SFE Biotech 2007 Symposium; ARNA, JAZZ, OREX, TRGT, BABY, EPIX,CYTR, BIOD, CRXX,
BTRX, VPHM, BVF, MEDX, OSCI, ZOLL, NRGN, PFWD, ADLS,KNDL, IOMI, SOMX, VNDA,
AFFY, MITI, CPST, IART at Arena Pharmaceuticals at Natixis Bleichroeder Hidden
Gems conference ...

Tuesday: SFE Hosts "Analyst Day 2007"; JCI Strategic Review and 2008 Outlook
Analyst Presentation; HRL Analyst Meeting; HME Investor/Analyst Day; MMM 2007
Investor Day; FOMC Minutes Released; GENR at Biotech 2007 Symposium, RTK at
Chadbourne & Parke LLP Coal-to-Liquids Conference; WSTM at Human Resource
Executive Magazine Technology Conference; HLX, BDE, IAR, WTI,SFY, RTK, ANR, MVL,
GTLS, WLL, PLLL, TIVO, CRK, DVR, BEXP, LBTYA, LINTA,HOLL at Helix Energy
Solutions Group, Inc. at Natixis Bleichroeder Hidden Gems Conference; HERO at
Hercules Offshore at Pritchard Capital
Partners One-on-One Conference; Fed: Yellen...

Wednesday: HRL Analyst Meeting; PETM Analyst Meeting; MSCC Investor Analyst Day;
MMM 2007 Investor Day; WBSN M&A Calls/Presentation; CEGE, FVRL, NKTR, OLGC,
TGEN,GLOB, KBP, RXI, LNS, ACI, CYT, TGD, AMBT, CLB, PEP, NEOP, NEX, KOR,
FRP,MRN, TWT, AVID, GERN, GTCB, IMGN, TRGT, ZIOP, BPA, GNVC, ONXX, RIGL,AFFY,
ANDS, EBS, EPCT, NTEC, QTRX, AVGN, ACAD, CADX, CYCC, NVD, SUPG,ARNA, GNTA, INFI,
TRCA, ACUS, BIOM, EXEL, PTN, OREX, INSM, PARD, VICL,BMTI, DOW, INO, MHA, PPHM,
XOMA, BOL, OLGX, KG, MITI, SPPI, YMI, ALSE,CRIS at Biotechnology Industry
Organization Investor Forum; HERO, PLLL
at Hercules Offshore at Pritchard Capital Partners One-on-One
Conference; MDY at Moody's Investors Service Conference; Fed:
Rosengren...

Thursday: HRL Analyst Meeting; IHS Host Second Annual
Investor Day; MSCS Analyst/Investor Meeting: Management Presentations;LMNX,
CHAK, VVUS, ALBA, DERM, IVIO, MEDP, INGN, MDVN, OXGN, PPCO, OSP,AVGO, DRRX, IDP,
AVRX, BIOD, IMRX, SBIO, LXRX, SYI, VIAP, ERC, SLZ,IDMI, SGXP, DIO, KAI, ALXA,
NFLD, OCLS, ZGEN, INMX, REP, ACEL, ANLY GENR, VQPH, CG, MNTA, RHEI, CRXX, IVPH,
HEPH, SGL, AIS, CYTO, GHDX, KAL,NVB at Biotechnology Industry Orgnization
Investor Forum; CIT at Argyle Executive Forum 2007 CEO Leadership Forum; GAS at
AGA Mini-Forum for the New York Financial Analyst Community; LUV at i2
Technologies Aerospace & Defense Industry Day; GORX at EdgeWater Research
Partners LLC Investor Conference; BRLC at DisplaySearch HDTV Conference 2007;
SPAR at Spartan Motors at Oppenheimer Hidden Gems Investor Conference...

Friday: HRL Analyst Meeting; Fed: Bernanke, Fisher, Yellen, Kohn
---------------------------------------------------------------------
The above is a compilation of some of the best minds we have to offer.
If you trade or invest this newsletter is a Tax write off
---------------------------------------------------------------------
... GOOD LUCK MARKETTRADERS


[Non-text portions of this message have been removed]

While everyone is celebrating the big push over 13,000 The Dow's
gain Friday marked the 37th record close for the index since
October. But  I would rather talk about what you should have done so
you will be ready next time that happens. When everyone was running
around in March saying, " the world was coming to an end .... "
That's the time I like to buy. If you look at our last post we told
you about the worst crashes in American history. Amazing isn't
it .... we bounced back from each one. Large drops are the time to
buy. Did you ever ask yourself , when the public is selling .... who
is buying ?  YOU ... I HOPE   My subscription newsletter started off
with a quote,  " Tough Times Never Last , Tough People Do ". Well
this is a very good example of that. The stock market might have had
a tough March ... but a month later we are at all-time highs ... and
only" the tough people" are still around.

=====================================================================


If you look at the chart posted below ( iShares Trust FTSE China
(NYSE: FXI) you can see an example of a nice pullback .. if bought
(like some of my subscribers ) you would have made a nice
investment. http://tinyurl.com/25a8lu

=====================================================================

Most of the buying strategies in the CAN SLIM investing model call
for buying into strength. But sometimes you can buy a stock on a
dip. The trick is, you can't buy just any stock on any dip.

This is where the 10-week moving average becomes an important
tool.After a stock rebounds from a test of its 10-week (or 50-day)
line, it creates a new buying range: as low as that line, and as
high as 5% above the previous high, plus 10 cents.

Here's what you need to look for - and guard against.

1.  A pullback is no excuse to buy a less-than-perfect stock. The
stock you buy on a pullback must have the same solid fundamental
underpinnings as a stock you'd buy during a breakout from a cup-with-
handle or any other base.

2. The volume rules turn upside down. CAN SLIM investors are
accustomed to buying into strength - higher prices on big volume
surges. If you're buying a dip, you want below-average
volume.Ideally, look for a stock to drift lower as volume dries up.
It should be a quiet, gentle decline, not a panic-driven rush for
the exits.

3. Look for a solid Accumulation/Distribution Rating. You want to
see no less than a C Acc/Dis Rating.

Think of the 10-week line as a safety net. With the biggest and best-
performing funds holding their shares, there's a better chance they
will take advantage of a dip to buy more.But if that Acc/Dis Rating
starts falling apart, those same funds may start unloading. If that
happens, you should sell too.

4. Beware of one too many trips to the well. A stock's first and
second pullbacks to its 10-week line during an uptrend mark the
safest such test. Starting with the third trip to that support
level, a failure becomes more likely.

5. If the 10-week line fails, bail out. If the stock just dips
slightly below it, don't panic. But if the stock crashes through the
line in huge volume, there's no reason to wait for the maximum 8%
loss permitted under CAN SLIM investment rules.

For more information about what CAN SLIM means , and how to become a
better investor by using it ,click this link
http://www.investors.com/learn/c.asp

Should I buy ? ... Should I sell ?  I'm sure that a lot of you are
asking yourself that now. Those big day plunges have usually been
followed by higher prices a few months later. Below is a link that
shows the 10 worst drops in the Dow. http://tinyurl.com/3dlan2


===================================================================
With Tax season starting soon I thought you might want to write
these down .....

The 13 Most Overlooked Tax Deductions

1. State sales taxes. As part of the last-minute tax package last
December, Congress resurrected the chance for taxpayers to deduct
state and local sales taxes. Although all taxpayers have a shot at
this write-off, it makes sense primarily for those who live in
states that do not impose an income tax. You must choose between
deducting state income taxes or state sales taxes and, for most
citizens of income-tax states, the income-tax deduction is a better
deal. You won't find this break mentioned on the tax forms, but
here's how to claim this deduction: Enter your write-off on line 5
of Schedule A and write "ST" on the dotted line to the left of that
line. IRS even has a calculator on its Web site to help you figure
the deduction, which varies by your state and income level

2. $250 educators' expenses. This break, too, lost its place on the
tax forms because it expired at the end of 2005 and wasn't
reinstated until the 2006 forms were set. Still, teachers and their
aides can deduct up to $250 they spent in 2006 for books and
classroom supplies. If you qualify, put your deduction on line 23 of
the Form 1040, the line now used for the Archer medical savings
account (MSA) deduction, and write "E" on the dots to the left. If
you also claim the MSA deduction, write "B" (for both) on the line
and attach a breakdown of how much you're claiming for each. You get
this deduction regardless of whether you itemize.

3. College tuition. You won't find this one on the forms, either,
but you may qualify to deduct up to $4,000 you paid in college
tuition in 2006 for yourself, your spouse or a dependent. This break
can pay off if your income is too high to qualify to claim the Hope
or Lifetime Learning credit. For 2006 returns, the deduction is
taken on line 35 of the Form 1040, the line for the domestic
production deduction. Write "T" to the left of that line. If you're
claiming the production break, too, write "B" on the dotted line and
attach a breakdown of how much you're claiming for each. You also
get to claim this deduction regardless of whether you itemize.

4. Student loan interest paid by mom and dad. Until recently, if
parents paid back a student loan incurred by their children, no one
got a tax break. To get a deduction, the law held that you had to be
both liable for the debt and actually pay it yourself. But now
there's an exception. If mom and dad pay back the loan, IRS treats
it as though they gave the money to their child, who then paid the
debt. So, a child who's not claimed as a dependent can qualify to
deduct up to $2,500 of student loan interest paid by mom and dad.

5. Out-of-pocket charitable contributions. It's hard to overlook the
big charitable gifts you made during the year, by check or payroll
deduction. But the little things add up, too, and you can write off
out-of-pocket costs you incur while doing good works. Ingredients
for casseroles you regularly prepare for a nonprofit organization's
soup kitchen, for example, or the cost of stamps you buy for your
school's fundraiser count as a charitable contribution. If you drove
your car for charity in 2006, deduct 14 cents a mile, unless you
were doing Hurricane Katrina relief work. In that case, you get 32
cents a mile.


         DID YOU KNOW :    http://tinyurl.com/24bauf



6. Moving expense to take first job. Here's an interesting
dichotomy: Job-hunting expenses incurred while looking for your
first job are not deductible; but moving expenses to get to that
first job are. And you get this write-off even if you don't itemize.
If you moved more than 50 miles, you can deduct the cost of getting
yourself and your household goods to the new area, including 18
cents a mile (and parking fees and tolls) for driving your own car.

7. Military reservists travel expenses. If you are a member of the
National Guard or military reserve, you may deserve a deduction for
travel expenses to drills or meetings. To qualify, you must travel
more than 100 miles and be away from home overnight. If you qualify,
you can deduct the cost of lodging and half the cost of your meals,
plus 44.5 cents a mile (and any parking or toll fees) for driving
your own car. You get this deduction regardless of whether you
itemize.

8. Child-care credit. A credit is so much better than a deduction:
It reduces your tax bill dollar for dollar. So missing one is even
more painful than missing a deduction that simply reduces the amount
of income that's subject to tax. But it's easy to overlook the child-
care credit if you pay your child-care bills through a reimbursement
account at work. Until a few years ago, the child-care credit
applied to no more than $4,800 of qualifying expenses. And, the law
allows you to run up to $5,000 of such expenses through a tax-
favored reimbursement account at work. Now, however, up to $6,000
can qualify for the credit ... but the old $5,000 limit still
applies to reimbursement accounts. So, if you run the maximum $5,000
through a plan at work, but spend more for work-related child care,
you can claim the credit on up to an extra $1,000. That would cut
your tax bill by at least $200.

9. Estate tax on income in respect of a decedent. This sounds
complicated, but it can save you a lot of money if you inherited an
IRA from someone whose estate was big enough to be subject to the
federal estate tax. Basically, you get an income tax deduction for
the amount of estate tax paid on the IRA balance. Let's say you
inherited a $100,000 IRA, and the fact that the $100,000 was
included in your benefactor's estate added $45,000 to the estate tax
bill. As you withdraw the money from the IRA and pay tax on it, you
also get to deduct a proportional amount of the estate tax paid. If
you withdraw $50,000 in one year, for example, you get to claim a
$22,500 itemized


10. State tax you paid last spring. Did you owe tax when you filed
your 2005 state tax return in the spring of 2006? Then remember to
include that amount with your state tax deduction on your 2006
return, along with state income taxes withheld from your paychecks
or paid via quarterly estimated payments.

11. Refinancing points. When you buy a house, you get to deduct
points paid to get your mortgage in one fell swoop. When you
refinance a mortgage, though, you have to deduct the points over the
life of the loan. That means 1/30th a year if it's a 30-year
mortgage -- that's $33 a year for each $1,000 of points you paid.
Not much, maybe, but don't throw it away. And, in the year you pay
off the loan -- because you sell the house or refinance again -- you
may get to deduct all as-yet-undeducted points. You do unless you
refinance with the same lender. In that case, you add points on the
latest deal to the leftovers from the previous refinancing and
deduct the expense ratably over the life of the new loan.

12. Reinvested dividends. This isn't really a deduction, but it is a
subtraction that can save you money ... and this is the break former
IRS Commissioner Fred Goldberg told Kiplinger's that lots of
taxpayers miss. If, like most investors, you have mutual fund
dividends automatically invested in extra shares, remember that each
reinvestment increases your "tax basis" in the fund. That, in turn,
reduces the taxable capital gain (or increases the tax-saving loss)
when you redeem shares. Forgetting to include the reinvested
dividends in your basis -- which you subtract from the proceeds of
sale to pinpoint your gain -- means overpaying your tax.

13. Jury pay paid to employer. Here's a break that's not as easy to
miss this year as in the past: Jury pay you turned over to your
employer. Some employers continue to pay employees' full salary
while they are doing their civic duty but ask that they turn over
their jury fees to the corporate treasury. The only problem is that
the IRS demands that you report those fees as taxable income. You've
always had a right to deduct the amount, so you weren't taxed on
money that simply passed through your hands. But this is the first
year the tax forms include a line dedicated to this deduction. Enter
it on line 13 if you file the Form 1040A or on line 34 if you use
the full-fledged 1040.


From Kiplinger.com

Everyone wants to be a winner; at least, they think so.
Unfortunately, most are not willing to perform the tasks necessary
to become a consistent winner.

Winners generally achieve success by being focused on a goal. Being
focused allows winners to remain committed to the tasks at hand.
Most winners perform a lot of hard work; including a willingness to
deal with sometimes mundane duties. Most of all, winners perform
with an "I am responsible for both my failures and successes"
attitude.

So, where does the would-be trader start to become a success? By
focusing on the tasks at hand. Most of all, treat trading as a
business. And, as in any business, money management is critical.

Money management, next to trend, is probably the aspect of trading
most overlooked by smaller investors. Man, by nature, is an
optimistic creature and the amateur trader often acts instinctively.
Unfortunately, this instinct or optimism is often the undoing of the
smaller trader.

When a person enters a trade, he does so with the hope it will be a
winner. When the position goes against him, he keeps thinking (or
hoping) "it will come back." He knows he should have a stop in
place, but hope keeps telling him to stay just a little longer since
everybody knows "you always get stopped out the day the market
turns." Eventually, hope turns into frustration, desperation and,
finally, panic, prompting the trader to issue a GMO (get me out)
order.

If the trader hasn't learned his lesson by this point, he develops
the "I have to get it back" syndrome. He generally rushes into
another poorly planned trade, throwing good money after bad.

Winners show several different characteristics. They enter the
market knowing they can be wrong and, in fact, are wrong as often as
they are right. They have learned markets don't run on hope. They
understand markets tell them when they are right or wrong. When a
trade is losing money and getting worse, the market is telling them
to get out. A bad trade is like a dead fish: The longer you keep it,
the worse it smells.

When a trade is making money, the market is telling them they are
right and to let the position ride. Winners don't add to,
or "average", losing positions. They dump the trade and go looking
for a new opportunity. Successful investors may add to the winning
trades. When ahead, they press their advantage while remembering
that at any time the market can turn on them and prove them wrong.

In 2007 ... when you are looking for the most current information ...
where will you turn ?

http://tinyurl.com/y98juy


Happy New Year from TheLascone

Market Seasonality: November to April a Good Period


Like many market adages, the phrase "Sell in May and go away"
carries with it an uncanny historical bias to substantiate it.
Typically, conjecture doesn't mature into adage without this being
the case, but market seasonality still remains one of the more
impressive market trends in terms of its magnitude and longevity.

We've discussed seasonality many times over the years and as we
enter another of those seasonal periods,November - April, we want to
revisit the subject today.Years ago I began using the reference
tool, Stock Trader's Almanac,published by Yale Hirsch, and for years
this has been a fantastic source of entertainment and information on
the stock market.

The premise of their "Market Seasonality" study is essentially that,
historically speaking, the market performs far better during the
November through April time period than it does from May through
October. On its own, that isn't a particularly profound statement or
a particularly bold assertion, but when we examine the magnitude
with which this effect has been chronicled over the years it becomes
a very significant underpinning indeed. Consider this,If you were to
buy the Dow Jones on May 1st and sell it on October 31st each year
since 1950, you would have been in the red for the past 5 years! As
a matter of fact, as you will see below, based on hypothetical
portfolios starting at $10,000 based on the price of the Dow Jones
Industrials starting in 1950 the average annual compounded return
for the seasonally strong periods (November through April) is more
than twice the total return for the seasonally weak period (May
through October).

The Six-Month Switching Strategy mentioned above for the Dow Jones
that begins in 1950 and now shows 56 years of history (57 years for
the seasonally weak period). On a compounded basis, a theoretical
$10,000 initial investment in 1950 is actually up only $331
during the May 1-October 31 period using data thru Oct. 31, 2006;
that is an annualized compounded rate of return of roughly 0.06%. On
the other hand, in looking at the seasonally strong period between
November 1- April 30 each year, an identical $10,000 initial
investment grew to $534,595 at an average annual rate of 7.55%
on a 6-month compounding basis.

There's no question that the November to April period has provided
substantially better returns. Whether you average it out, annualize
it, compound it, or complicate it further; there is clearly a wide
spread between an average 6- month return of 7.55% and 0.06%. Taking
this a step further, the strong six- months of the year have
actually kept pace with the average annual compounding return of the
Dow overall since 1950. The Dow began 1950 at 200.13 and closed
October 2006 at 12,080.73, an average annual compounded return of
about 7.5%. The seasonally strong six- months of the Dow have
essentially the same historical return, and have done so
while having been invested only 50% of the time; leaving the other
50% of the year to be invested in risk-free vehicles to enhance
returns further.

Along the way there have been down periods in the seasonally strong
stretch and up periods in the seasonally down period, but what we
are referring to is simply a historical bias. As a matter of fact,
this most recent six month weak period ending October 31st was up
6.2% with more than half of this return came during the month
of October. Consequently, the last months rally in the Dow has
carried the index to new highs on the Point & Figure chart at
12,150, which is above the top of the ten week trading band. As
well, the weekly momentum of the Dow has been positive for the past
14 weeks. This suggests that we could see a near-term consolidation
in the Dow heading into the seasonally strong six months. While on a
longer term basis, we remain in a column of X's with respect to our
main coach suggesting an environment that is conducive to long plays
for capital appreciation. Market seasonality is not the end all, be
all, for market risk management but the bias is clear and begs your
attention.


Market Seasonality Notes:

1· Most investment professionals would quickly identify the most
recent Bear Market to include, at a minimum, the years 2000-2002.
Those who only invested during the seasonally strong periods of
those years however, actually escaped with profits!

2· Over the last six years the Dow is up 23% cumulatively during the
seasonally strong stretch, and down 8% during the seasonally weak
period.

3· During the May to October periods there are 23 out of 57 years
that finished down in this study, while there were only 12 down
years out of the other six months – and only 1 in the last 20 years.

4· There have been only two times when the November 1st to April
30th
period has lost more than 10% (1969 and 1973, while the S&P also
lost more than 10% in 2000) but with respect to the May to October
time period there have been ten losing efforts that were costly to
the tune of 10% or greater; or five times as many.

5· There have been ten times in the past 25 years that the periods
from November to April have posted a double digit return while five
out of the ten times this strong period returned more than 20%.

Again, this study is not the end-all for risk management, but the
study is very interesting and does expose a bias that many investors
are not aware of. It is no coincidence that we often see the market
bullish percents find bottoms in the September-October time period,
and ready for reversals near the beginning of the seasonally
strong run. Today, however, we see a different picture as the NYSE
Bullish Percent remains in a column of X's after having reversed up
back at the end of June. As for our short term indicators all four
of them are currently positive, albeit at very high levels, which
has been the case for some time now. We have not only seen the Dow
Jones move into overbought territory, our short term indicators are
showing the a broad range of stocks are overbought on a near term
basis as well; therefore, a strategy when initiating new positions
in this market would be to scale into positions here and add to the
positions as they begin to pullback or consolidate. Historical data
like the Six-Month Switching Strategy for the DJIA suggests that we
are entering the seasonally strong period for the market, but as we
know there is no holy grail in this business, so be sure to adhere
to your risk management principles by maintaining adequate stop loss
points, and choosing new positions with advantageous reward-to-risk
situations.

Good Luck Market Traders

A Cyclical Assessment Of The Markets From John Bollinger

We are getting ever more nervous about the financial markets.  A few
of the reasons for this are:  gold soaring, crude at new highs,
interest rates trending higher, strong commodities, strong cyclical
stocks, etc.  The interesting thing is that all these factors seem
like typical late-cycle market behavior and late-cycle is not the
time to own stocks:  it is a time to be selling stocks.

I first learned that there is a relationship betweens stock prices,
interest rates, and commodity prices.  In an idealized depiction of
this cycle we start from the bottom of the cycle, and stock prices
start up, followed by a trough in interest rates.  Then, interest
rates begin rising also.  Next, commodity prices trough, and then
turn higher.

We are now in the main expansion phase of the cycle with all three
elements trending higher.  Next, rising interest rates start to
worry stocks, which flatten out.  Interest rates continue higher and
stocks turn down in earnest as they begin to sense an economic
slowdown.  Demand for money starts to slacken and interest rates
peak.  We are now into the down portion of the cycle.

Now interest rates turn down, as the monetary authorities perceive
weakness and commodity prices top out and start to weaken, leading
to the heart of the down-cycle period.  Interest rates are now
falling and stocks are beginning to think about a recovery so their
downside momentum wanes.  Then, commodities start exhibiting strong
downside momentum, and the trough of the cycle is looming.

Next stocks start to sense the effects of lower interest rates,
trough, and we see the first signs of strength.  Interest rates
continue down but the pace decelerates and stocks begin to rally
seriously.  Next, interest rates begin to firm up followed by a turn-
up in commodity prices.  At this stage of the game, we are back to
where we started and the cycle repeats.  Of course, this is an
idealized cycle and we never see anything quite like it in real
life.  But, the relationships and ideas do hold together and from
these relationships we can often estimate where we are in the cycle
and estimate how the future is likely to look.

One of the more interesting aspects of this process is that
different groups of stocks tend to behave differently in different
phases of the cycle.  Defensive sectors such as health and consumer,
non-cyclicals, tend to be late-cycle performers, while technology
tends to be an early cycle mover.  There are other stock market
facets to the puzzle that can be of interest as well.  For example,
value typically has an advantage later in the cycle while growth
does better early on.  Likewise, smaller stocks tend to do well
early on, and larger stocks later in the cycle.

As a global recession is not in the immediate cards, you can assume
that oil prices will remain high and that a variety of excuses will
continue to be trotted out to explain it.  Thus, oil prices will
remain a problem for the foreseeable future .  The bottom line is,
that oil stocks remain attractive and can be bought on pullbacks.

As expected, our commodity composite has risen to a new high.  Our
composite is an equal-weighted index comprised of the CRB, Moody's,
and Reuters indexes.  It is very heavily biased toward industrial
commodities and has relatively little energy exposure.  In short, it
is a good, basic, measure of commodity prices.  We note that all 3
components recently made new highs and there is very little to
suggest any end to the uptrend as of yet.  The inflationary
implications of this are being ignored for now.  But they will
become  a topic of conversation before we are done with this cycle.


Good Luck MarketTraders

Buy or Rent a home ?


The national median mortgage payment is $1,687 a month — nearly
double the median rent payment of $868 a month. Yet people are often
told that buying property is one of the strongest investments they can make.
What is the best option?  Below is information about buy vs. rent,foreclosures
and mortgage rates.



Rent Pros:

   Mortgage payments exploded during the real estate boom, but rents
haven't kept pace, often running half as much as what homeowners pay.

   Home prices recently rose to skyscraping heights in cities like New
York, San Francisco, Los Angeles and Washington. Rents have not gone up
as much.

   For a family making the U.S. median income of $46,913, owning the
median-price home of $224,739 would eat up 51 percent of its income.
Renting would require just 25 percent.

   By renting, you gain the flexibility of a lease and freedom from home
repairs. You can also invest more money in stocks, bonds, and other
assets that could appreciate faster than real estate over the next
couple of years.

   With real estate agent commissions, loan fees, title insurance,
inspections, and all sorts of other costs, your property must appreciate
approximately 15 percent just for you to break even and recoup these
costs.

   If you choose to rent, you can sit out potential drops in market value.
In June, condo prices fell 2 percent nationwide and single-family home
prices dipped in several markets, including San Diego, Boston and
Washington. Who wants to find out they've lost equity just a month into
a new mortgage?

   If you rent, you can live "beyond your means" in a sense. You can live
in a location where you would be unable to buy a home. One broker told
us he was renting a house in Santa Barbara, Calif., for $3,000 a month.
The house has an estimated market value of $1.4 million. That would give
you a mortgage of $6,000 or more per month.



Rent Cons:

   Nationally, rents are expected to climb 5.3 percent this year,
according to the National Association of Realtors. They could go even
higher in strong labor markets like Washington, D.C., where rents have
climbed by 7 percent over the last year.



Buy Pros

   Homeowners can argue that they're building wealth by investing in an
asset that appreciates over time, while renters are throwing money out
the window.

   Homeowners can also enjoy stability (with a fixed-rate mortgage), tax
advantages, and financial security.

   Home sales are falling, and in some cities, prices have started
dropping, too. In June, condo prices fell 2 percent nationwide, and
single-family home prices dipped in several markets, including San
Diego, Boston and Washington

   As more people take a wait-and-see attitude, they put pressure on home
sellers to cut prices. At the same time, as renters swarm the apartment
market, they force up rents. This year, rents are expected to climb
about 5 percent, and by even more in such expensive markets as Seattle,
New York and San Francisco.

   Rents in New York City have already climbed 5 percent to 20 percent
over the last year.

   In San Francisco, where the median home costs about $760,000, apartment
rents have jumped 15 percent in the last two months.



Buy Cons

   For the first time ever recorded, Americans owe more money than they
make.

   Millions of Americans bought into the real estate boom with adjustable
mortgages and home equity loans. Now rising interest rates are forcing
them into agonizing financial choices.

   Families who never thought they'd be able to buy into the American
dream now have a home, thanks to creative mortgage structures and low
rates. More than one out of every 10 home buyers with this type of
mortgage, however, is behind in payments.



Foreclosures:

   Nearly 850,000 homeowners faced foreclosure last year, and the number
is expected to climb even higher this year.

   Foreclosures nationwide were up 72 percent in the first quarter from
the same period in 2005.

   By the second week in August, nearly 520,000 properties were in some
stage of foreclosure; at that rate, nearly 1 million properties will
have entered foreclosure this year.



Mortgage Rates:

   The average rate for the popular 30-year fixed rate mortgage jumped to
nearly 7 percent last month — the highest level in more than four
years.

   Nearly one-third of the total outstanding mortgage debt is set at an
adjustable rate, according to Fannie Mae, the largest source for home
mortgage funding in the United States.

Goodluck Market Traders



[Non-text portions of this message have been removed]

Negotiating 101: 25 tips for success

   If you ask me what one skill has made the biggest difference in my
career, hands down I would say: negotiating. It applies to selling,
purchasing, hiring, firing, expanding, downsizing
and every other phase of business you can name. It's part of the
game that I am particularly fond of, and it's not just to see how
much I can get the other person to give. I like to learn from the varied
strategies that other people use.

     Here are some of the lessons I have learned over a lifetime:

     1. You can't negotiate anything unless you absolutely know the
market. Only then will you be able to recognize a good deal when you see
it.

     2. If you can't say yes, it's no. Don't sugarcoat it.
Don't talk yourself into yes just to seem like a nice guy. No one
ever went broke because he or she said "No" too often.

     3. The single biggest tool in any negotiation is the willingness to mget up
and walk away from the table without a deal.

     4. Always, always, before you begin any negotiation, look beyond the title
and make sure the person you're dealing with is in a position of authority to
sign off on the agreement. If not, don't deal until you can negotiate with
someone who is.

     5. It's not how much it's worth. It's how much people
think it's worth.

     6. Many people listen ... very few actually hear. You can't learn
anything if you are doing all the talking.

     7. In any negotiation, the given reason is seldom the real reason. Find out
the real reason, and your probability of success goes up dramatically.

     8. No one ever choked to death swallowing "his" or
"her" own pride.

     9. In the long run, instincts are no match for information.

    10. There's no more certain recipe for disaster than a decision
based on emotion. Or another way of saying this is: Make decisions with your
heart, and you'll end up with heart disease.

    11. A dream is always a bargain no matter what you pay for it. If it's
something you've always wanted, and this is your big chance to get it, go for it
and make it work.

     12. The most important term in any contract isn't "in"
the contract. It's dealing with people who are honest. As the old
adage goes: You lie down with dogs ... and you get up with fleas. Rotten wood
cannot be carved.

     13. There is no such thing as a "final offer."

     14. Try to let the other person speak first.

     15. Never give an ultimatum unless you mean it.

     16. You cannot get dealt in with a straight flush unless you are in the
game.

     17. Smile and say no, no, no, no, no ... until your tongue bleeds.

     18. Agreements prevent disagreements. You have to fight your guts out for an
agreement and then you won't have a disagreement.

     19. If you can afford to buy your way out of a problem, you don't
have a problem.

     20. More deals result from whom you know than what you know. And
it's not just whom you know but how you get to know them.

     21. The walls have ears. Don't discuss any business where others
can overhear it. Almost as many deals have gone down in elevators as
elevators have gone down.

     22. People don't plan to fail, they fail to plan. Top negotiators
debrief themselves. They keep a book on themselves and their opponents.
You never know when that information may be gold.
     23. Your day usually goes the way the corners of your mouth turn.
Your attitude determines your altitude.

     24. People go around all their lives saying: What should I buy? What should
I sell? Wrong question: When should I buy? When should I sell? Timing is
everything.

     Mackay's Moral: 25. When a person with money meets a person with
experience, the person with the experience ends up with the money and
the person with the money ends up with the experience.
THX  Uncle Harvey  www.mackay.com <http://www.mackay.com>

Twice a year, Omaha is beholden to large swarms of out-of-towners.
In June, thousands stay for two weeks to see the College World
Series. But in May, Omaha belongs to Berkshire Hathaway's
shareholders.


This year about 24,000 made the pilgrimage to see the Oracle of
Omaha and his witty, if reticent, wingman Charlie Munger. The two
did not disappoint, as they dished out generous amounts of their
folksy wisdom and humor.


Many of the people that come here are...well, how can I put this
kindly? Sheep. They are mindless followers. They laugh hysterically
at every corny joke. They laugh at every tired, worn-out aphorism.
They say sappy,syrupy, sentimental and silly things about these two
old billionaires.

And when it's time for the Q&A, they ask fawning pointless
questions. Of course, only after they're done saying how wonderful
Buffett is and how wonderful Munger is and how they are a beacon of
some kind or another and... well, you get the picture.

Anyway...

Buffett and Munger had lots of interesting things to say, and not
all the rabble that lined up to ask questions were sheep. For
example, some of the good questions focused on drawing out their
thinking on the current investment climate and in specific areas
such as commodities, newspaper stocks, South America and more.

Some value investors have been digging around in the market's
discard pile and coming up with newspaper stocks. Many of the
nation's once great franchises are suffering and their stocks are
making new lows. Advertising revenue is falling. Readership is
declining.

What does Buffett, a long-time newspaper investor think? Buffett
thinks the current woes are part of a longer-term trend that is not
likely to reverse. And valuations on newspaper stocks don't reflect
this. As he says, there is always somebody who thinks he sees a
robin and the first day of spring.

Instead, newspaper stocks face a long, perhaps permanent, winter. He
said he was wrong in thinking newspapers were a bulletproof
franchise. It is clear they are not. Munger added that he once
thought, years and years ago, that General Motors was a bulletproof
franchise.

Bulletproof franchises are a rarity in the investment world. Nearly
all businesses face long-term competitive pressures. But the idea of
bulletproof franchises reflects Buffett and Munger's basic desire to
own businesses where the fundamentals will not change, or are not
likely to change, over a 5-10-year span.

Buffett cited the telecom industry as an example where substantial
change is likely. And he also talked about Intel, which Buffett said
he could not figure out at its birth and can't figure out now.
That's another business that is likely to face a lot of change in
the future.

Indeed, a good part of Berkshire's success over the years is in
sticking to what they know. Munger added, "We know the edges of our
competency better than other people know theirs." This helps limit
mistakes, though all investors make mistakes and lose money at times.

One of the great pieces of advice Buffett and Munger gave was in how
they would manage a small amount of money - say, several million,
instead of tens of billions: Go to your best idea and measure
everything against that. That's because it is very rare to find an
idea that's going to give you 20% per year for 40 years. In the real
world, you have to go with the best ideas you have. And they may
not, and are probably not, the best ideas you will eventually
uncover. Things change. (As the newspaper saga shows, once-thought
bulletproof franchises can suffer major reversals of fortune.)

Buffett sprinkled his talk with lots of other investment wisdom,
too. In another instance, he invoked one of the key ideas of his
famed mentor,Benjamin Graham: You are right because your facts and
reasoning are right and not because somebody agrees with you. This
goes back to the idea that you can't let the market sway you. "Make
the market serve you," Buffett advised, "it's not there to instruct
you."

And this is one key difference between a bottoms-up (micro) investor
and a top-down (macro) approach. The top-down, macro approach takes
its cues from the market -- hence, the common use of charts.

Buffett said investors should focus on things that are important and
knowable. One attendee asked Buffett and Munger a big-picture
question involving currencies, interest rates and current account
deficits.

I loved Buffett's answer and I think it helped illuminate some of the
differences between his and Munger's approach (rooted in the old-
school tradition of investing) and the more populous speculative
arena: "We don't play big trends. That's a bit too macro for us," he
said.

Asked about the viability of ethanol as a fuel additive and as an
investment, Buffett said it was easier figuring out if more people
were going to drink Coca-Cola and eat more See's Candies. Plus, the
fact that ethanol is so hot right now is a deterrent to Berkshire
getting involved.

Munger opined that since it takes more energy to produce ethanol than
ethanol itself delivers, he didn't think it was a good idea. He also
rolled out his oft-used concept of three buckets. "At Berkshire we
have three buckets," he said, "Yes, no and too hard."

Ethanol goes in the "too hard" bucket. This is a great concept that
I use regularly in investing. You don't have to investigate
everything, or have an opinion on everything. Some investment ideas
are just too hard, too difficult, too complex to forge a good, safe
investment opinion. On these difficult questions, the investor
always has the ultimate safeguard: He can just walk away.

On the question of whether or not commodities were in a bubble, the
famed duo had some wise advice. Buffett said, excluding agricultural
products, they do see something of a bubble in metals (especially
copper) and oil. He said, like most trends,the fundamentals drive it
in the beginning. And what the wise man does at the beginning, the
fool does at the end. As trends form and gather momentum, they
attract a speculative element. Eventually, that element takes over,
and then you are in the danger zone. "We are seeing that in the
commodity area," Buffett opined.

How high is it all going to go? Nobody knows. But commodities,
Buffett concluded, were a "speculative football."

On to other topics... What about South America? Buffett said the
problem is they have to put a lot of money to work to move the
needle at Berkshire, and that greatly limits the number of countries
they can invest in. Brazil, for example, is a big country and is not
off limits, but they'd have to get a lot of money in a business that
they understand at a price lower than comparable U.S. stocks.

They were asked many other questions (What about Russia? "Not
interested," Buffett said), but the above were some of the more
interesting topics to me. Since this letter is getting long, I'm
going to wrap things up.

I would say the only thing that irritates me about this pair is when
they talk politics. For example, is there any more ridiculous
spectacle than a billionaire (in this case, Buffett) complaining
about how he pays fewer taxes as a percentage of his income than the
secretary in his office?

My message to Warren: Hey, nobody's stopping you from writing a
bigger check to Uncle Sam anytime you feel you want to pay more.
Sheesh, a billionaire whining about how he wants to pay more taxes!

The other dopey thing Buffett said was about Social Security. When
Buffett praises it as "the most successful program in the history of
our government," I can feel the hairs rise up on the back of my
neck. And I wonder what he's drinking besides a can of Coca-Cola.
Social Security is a disaster that is bankrupting this country. The
sooner people realize that,the better. It also proves the point that
genius in one area (in this case, investing) does not necessarily
translate into other areas.

Of course, I forgive him for such transgressions. At the end of the
day, he and Munger have taught us all a lot about investing over the
years. Serious investors will study their careers as long as there
are markets.

Good Luck Market Traders

Yahoo (YHOO) has turned over a draft e-mail from one of its users to
Chinese authorities, who used the information to jail the man on
subversion charges. It was the third time the Internet company has
been accused of helping put a Chinese user in prison.  Jiang Lijun,
39, was sentenced to four years in prison for subversive activities.
Jiang also was one of five activists who signed an open letter
calling for political reform that was posted on the Internet ahead
of the Communist Party congress." Little by little we are piecing
together the evidence for what we have long suspected, that Yahoo is
implicated in the arrest of most of the people we have been
defending,"  Reporters Without Borders" (a civil rights group) said
in a statement. The group said there were other cases that were
similar, but it could not release any details because they were
still being investigated.
While China encourages use of the Internet for business and
education, it also tightly controls Web content, censoring anything
it considers critical or a threat to the Communist Party. Blogs
often are shut down, and users who post articles promoting Western-
style democracy and freedom are regularly detained and jailed under
vaguely worded subversion charges.  American lawmakers have taken
the company to task, accusing them at congressional hearings of
helping China crush dissidents in return for access to its lucrative
and rapidly expanding Internet market.

As some of you know , during the stock market bubble I became a yhoo
trader exclusively. I really believed in the company. I have even
used it as my homepage for 10 years. But friends, the time has come
to boycott yhoo. Please stop buying yhoo stock . If you own it ...
sell it. If you use them as your homepage change it. Try using
http://news.google.com/nwshp?hl=en&tab=wn&q=  I feel that something
has to be done to make this company realize that personal freedom is
one of our most important rights.

" A Friendship Founded On Business  Is Better Than a Business
Founded On Friendship "


WEEK IN REVIEW :

The market traded with a sense of caution Monday as investors stayed
close to the sidelines ahead of the first FOMC meeting not chaired
by Alan Greenspan in 19 years. While a 15th consecutive 1/4% hike in
the overnight lending rate has already been priced into the market,
uncertainty as to the whether or not the accompanying policy
statement will offer clues about the direction for interest rates
underpinned a sense of nervousness and stalled some of the wishful
thinking behind recent market strength. The S&P 500, which is up
4.5% in 2006, is positioned to record its biggest first-quarter gain
in seven years. The McClellan Oscillator slipped below the 0 line
today.

It was anticipation of, and then digestion of, Tuesday's FOMC event
that dictated trade. For the fifteenth consecutive time, the Fed
raised the fed funds rate by 25 basis points. As had been expected,
it wasn't today's tightening that sparked selling. The rate hike, to
4.75%, had been fully expected. The catalyst was instead the
accompanying policy statement. Some participants had been hoping
that the Fed would signal an imminent end to the current monetary
tightening cycle. The directive's diction was little changed,
though, and provided no signal that rate hikes are coming to an
end.  Dow Jones industrials dropped  95 points after the Federal
Reserve disappointed investors by suggesting that more interest rate
hikes were on the way. Today we saw the effect on the market when
the McClellan Oscillator slips below the 0 line. OEX stocks that
were sold the most during sell programs executed by program trading
firms: HCA, PFE, MCD, PG, CL, MDT, DELL, MO, PG, AMGN, MER, T, TWX ,
PG, TXN, MDT, HNZ, PEP, BAX, HET.

The market reclaimed the ground it had lost Tuesday. The S&P and
Nasdaq fully erased their FOMC-induced losses, and the Dow came
close to doing the same. The Technology sector's leadership was the
muscle behind the advance, but buying was broad-based and took
virtually every area of the market higher.  Buyers dominated the
trading action from start to finish. On the NYSE, advancing stocks
outpaced decliners by an eight-to-three ratio. On the Nasdaq,
meanwhile, advancers had a 22-to-nine lead over declining issues.
The market's internals Wednesday were starkly different than
Tuesday. Yesterday, decliners led by 21-to-12 on the NYSE and three-
to-two on the Nasdaq.  There was not much meaningful news to account
for investors' bullish bias. As such, it appeared to be a result of
the stock market's hopeful view that the Fed is near the end of its
tightening cycle.The Department of Energy's weekly inventory report
was a mixed picture.  In its report, the Energy Dept. announced a
greater than expected build in crude but bigger than expected
drawdowns in gasoline and distillate supply.

  Two factors to which the stock market turned a blind eye yesterday
came back into focus today. Fresh signs of inflation risk left
stocks mixed Thursday as new data on the nation's gross domestic
product bolstered the Federal Reserve's view that the economy
remains strong. Treasuries came under increased pressure as crude
hurdled $67 per barrel, and investors began to sell. By the close of
trade, each of the indices had recovered from their lows. Still, a
lack of leadership left the Dow and Nasdaq with losses.  The UN
Security Council issued a warning, giving Iran 30 days to freeze its
uranium enrichment program.

Stocks closed out a solid first quarter with a modest decline Friday
despite lower oil prices and a round of temperate economic data that
mitigated concerns about inflation and higher interest rates. The
major indexes finished mixed for the week, but were higher for the
month and the quarter. Crude Oil futures pulled back as investors
took profits following several days of sharp gains on concerns about
political instability overseas. A barrel of light crude fell 52
cents to settle at $66.63 on the New York Mercantile Exchange.The
Dow Jones industrial average dropped 41.38, or 0.37 percent, to
11,109.32. The broader stock indicators were also lower. The
Standard & Poor's 500 index fell 5.42, or 0.42 percent, to 1,294.83;
the Nasdaq composite index dropped 1.03, or 0.04 percent, to
2,339.79, after reaching a five-year high the day before.
Despite suffering sharp losses this week, the major indexes ended
with modest gains for the month of March, giving them their best
first-quarter performances in several years. For the week, the Dow
lost 170 points  or 1.51 percent and the S&P 500 dropped 0.62
percent, while the Nasdaq surged 1.17 percent. But in March, the Dow
rose 1.05 percent, the S&P 500 added 1.11 percent and the Nasdaq
climbed 2.56 percent. For the quarter, the Dow gained 3.66 percent,
the S&P 500 rose 3.73 percent and the Nasdaq is 6.1 percent higher.


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Tax Tips for Traders


Whenever we consider the benefits of trader tax status, the one item
that tops the list is the ability to elect a special accounting
method known as mark-to-market, or MTM for short. While mark-to-
market won't automatically turn your losing positions into winners,
it can have an almost magical effect on your after-tax earnings and
day-to-day record keeping.

Sound too good to be true? Actually, for most traders, MTM is indeed
the magic bullet that enables them to fully deduct their business-
related expenses, avoid the time-consuming wash sale rule and remain
exempt from self-employment tax.

But there is a catch or two to this otherwise generous gesture from
the Internal Revenue Service that could cost you dearly. We'll soon
see why it's a good idea to contact a Traders Accounting tax
professional before you make this one-time, irrevocable election.

Let's take a closer look at the all-important mark-to-market
accounting method election and the trapdoors you need to avoid to
make it work for you.

The Mark-to-Market Method

Since 1997, mark-to-market accounting has enabled traders to change
the tax status of their earnings from capital gains/losses to
ordinary income/losses. This occurs on the last day of the year, at
which time you tally all of your open holdings as if you were
selling them at the market price that day; in other words, they
are "marked to market." On January 1st, you re-tally your holdings
as if you were repurchasing them at the current price. The basis of
each holding is then adjusted to reflect these hypothetical gains
and losses for tax purposes.

Advantages of Mark-to-Market

The advantages of mark-to-market accounting include:

No wash sales: MTM traders are exempt from the wash sale rule;
because holdings are tallied at year's end, there is no need to
account for gains or losses that might occur within the 30-day wash
sale restrictions. Many traders elect MTM specifically to avoid
cumbersome wash sale accounting.
Losses are fully deductible: Because your income/losses are treated
as ordinary income and not capital gains/losses, you are not bound
by the $3,000 capital loss limitation. This means you can deduct all
losses in the year they occur, providing tax relief when you need it
most. Here's how a $40,000 loss would impact Janet Trader (with
trader status and MTM) versus Johnny Investor (without both). Note
that Janet Trader was able to offset her regular $100,000 income
with her $40,000 loss, while Johnny Investor was limited to the
$3,000 capital loss deduction:
Total household income: $140,000
Trading loss: <$40,000>
Trading expenses: $24,230

Janet Trader's tax savings: $19,269
Johnny Investor's tax savings: $984
Benefit of trader tax status & MTM: $18,285

No change to self-employment exemption: Even though MTM income is
not considered capital gain, traders who elect MTM remain exempt
from self-employment tax, the same as investors and non-MTM traders.
Disadvantages of Mark-to-Market

There are three potential disadvantages to electing mark-to-market:

No capital loss carryover: Capital losses can only be offset by
capital gains. If you are carrying forward a substantial capital
loss, beware: by selecting MTM, your gains would be considered
ordinary income moving forward, hence only $3,000 per year could be
used to offset your capital loss.
Loss of long-term capital gains: Forex/futures traders who deal
mainly with 1256 contracts typically avoid MTM in order to retain
the advantageous long-term capital gains tax rate on 60% of their
earnings.
Election is permanent: As an individual trader, once you've made the
MTM election, you're stuck with it. You can petition the IRS, but
don't expect leniency, especially if there is a tax advantage to
you. Below, we'll see how a Traders Accounting tax professional can
help you around this obstacle.
How to Elect Mark-to-Market

To elect mark-to-market as your accounting method, you must enclose
a statement of intent with your tax return or extension request and
file by the appropriate tax deadline (March 15 or April 15) the year
prior to beginning MTM accounting. For example, to use MTM for your
2005 return, you would have had to elect mark-to-market by April 15,
2005. The one exception: if you're filing as a new business entity
(i.e., general or limited partnership, limited liability company or
C Corporation), you have 75 days from opening to note your
accounting preference in your meeting minutes.

Your first year using MTM, you will fill out IRS Form 3115
(Application for Change in Accounting Methods) and submit it with
your tax return. This form contains an adjustment, Section 481(a),
which captures duplications and omissions resulting from the change
in accounting methods. If the adjustment is $25,000 or less, you may
deduct the full amount on your return; if it exceeds $25,000, you
may deduct 25% each year for the next four years.

Exempt Your Investments Before You Elect MTM

Before you elect mark-to-market, be sure to separate your investment
holdings from your trading stocks and options. Why? Because unless
they are clearly separated, you will be required to mark them to
market at year's end and report any gain as ordinary income. That
could prove disastrous for stocks that have greatly increased in
value over the years.

The IRS lets you exempt your personal investments from your trading
business, but only if you identify those investments up front. Like
the MTM election itself, this designation is irrevocable; you cannot
decide later to fold your investment losers into your trading stock
for ordinary losses or cherry-pick your trading winners for capital
gains treatment.

Under the IRS guidelines, you must clearly identify your investment
stock as such in your records by the close of the day on which you
acquired it or when the MTM election was made. There are two ways to
do this: you may establish a separate account for your investment
stocks (the wisest course of action for MTM traders), or simply note
in your records which securities are not part of your trading
business.

Be prepared to convince the IRS that your investments have no
connection whatsoever to your trading business; otherwise, you'll be
required to mark them to market at year's end and report any gains
as ordinary income.

What If You Miss the Election Deadline?

Did you miss the mark-to-market election deadline? You can file for
an extension of up to six months to make your mark-to-market
election via the private letter ruling procedure under IRS Section
301.9100-1 (Extensions of Time to Make Elections). The IRS may
charge a fee for this. In practice, however, most traders who miss
the MTM deadline don't realize it until the following year, and
hence miss the election extension deadline as well.

The tricky business of meeting the MTM election deadline is one
reason we at Traders Accounting encourage individuals to trade under
the umbrella of a business entity. One of the best ways in general
to secure and protect your trader tax status is to trade as a
business entity, but it comes in particularly handy where the mark-
to-market deadline is concerned. The IRS allows newly formed
business entities (including general and limited partnerships, LLCs
and C Corporations) 75 days from formation to note their accounting
preference in their meeting minutes.

Down the road, should the MTM election prove undesirable (say you
shift to trading predominately forex/futures, for example), you may
simply dissolve the business entity and form a new one, thereby
avoiding the one-time-only election rule.

Get Advice Before You Elect MTM

Is the mark-to-market method right for you? Because every trader
faces different circumstances, there is no cookie-cutter approach
when it comes to this all-important decision. For some, MTM is the
obvious solution to the time-consuming task of tracking wash sales.
For others, the ability to fully deduct their losses in the year
they occur can make a big difference starting out.

If you find yourself carrying forward a capital loss or have other
questions relating to mark-to-market accounting, be sure to consult
a Traders Accounting tax professional about your situation before
you decide.



                       FROM the desk of  Fred Meissner

Here's a simple true-false quiz designed to help get to the bottom of
common computer misconceptions. Finally, here's some information you can
feel good about e-mailing to your friends.



True or false? My PC will start behaving worse than a tired toddler if I
don't power it all the way down at night, every night.



False. Your PC doesn't need to be shut down fully every day to stay
healthy. Many people hate to wait for Windows to shut all the way down.
And they really hate to wait for it to boot all the way up again. The
more programs and utilities you have running, the worse that boot time
becomes. One answer: Use  Windows XP's Hibernate option (look for it in
your Control Panel under Power Options). This will make your PC go to
sleep instead of shutting all the way down.



=================================================================

True or false? If I spill a drink on my keyboard, it's totaled.



False. A desktop computer's keyboard will usually survive a spill
(though you Big Gulp types should be extra careful). Turn the keyboard
upside down on top of a kitchen towel and leave it alone for a while.
Then you can wipe the top of the keys down with a slightly damp cloth
and be back in business.



Disclaimer alert: You can try the same drill with a laptop's keyboard,
but it may not fare as well because critical parts live beneath the
keyboard and some liquid may ooze down. And beware, spills typically
void a laptop's warranty, so some owners may find it worth the money to
buy an extended warranty or accidental damage coverage that specifically
covers drops and spills. Get it from the manufacturer who sold your
equipment to you. I'm not sure about this answer... I once spilled a
diet coke on my keyboard.  a lot of the keys got stuck and I had to
replace the keyboard.



=================================================================

True or false? If I stick a magnet near a floppy disk, it will erase the
contents.



True. You've never seen James Bond do it, but it works. If you rush to
the refrigerator, grab a magnet, and stick it on a floppy disk, you'll
probably destroy the files.

=================================================================



True or false? My PC is running slow and I have strange icons in my
system tray, therefore I probably have a virus.



False. If you are running antivirus software and keep it updated, you
probably have spyware instead. These nasty little invaders run in the
background, slow down your PC, change your Web browser settings, and
leave weird stuff lying around that can be harder to remove than
dishwasher gunk.

==================================================================



True or false? I can't have spyware, because I ran an anti-spyware
program and it erased several items.



False: Anti-spyware programs vary greatly in effectiveness. In PC
World's recent tests, these programs grabbed as much as 90 percent of
spyware and as little as 66 percent. You may need to run a couple of
programs to remove it all. (Fortunately, a few good spyware removers are
free.) For the scoop on which products to consider and how to kill all
the spies, see PCWorld.com
<http://us.rd.yahoo.com/dailynews/ttpcworld/tc_techtues_pcworld/storytex\
t/124807/18179482/SIG=12134usml/*http://www.pcworld.com/reviews/article/\
0,aid,122496,pg,1,00.asp> .

===================================================================



True or false? There's no way for me to remember all my passwords, so I
need to make crib notes on a piece of paper and hide it well.



False. Some people write passwords on Post-It notes and stick them
someplace near the computer, but this is a really bad idea. Sure, you
have to remember a ridiculous number of user names and passwords these
days, for dozens of programs and sites. But there's a better solution to
the problem. Check out Password Safe
<http://us.rd.yahoo.com/dailynews/ttpcworld/tc_techtues_pcworld/storytex\
t/124807/18179482/SIG=126tg7p09/*http://www.pcworld.com/downloads/file_d\
escription/0,fid,23779,00.asp> , a free utility that creates strong,
unique passwords and saves all the info in an encrypted database. You
don't have to remember all your passwords, just one.

===================================================================

True or false? If my PC breaks under warranty, my PC company will
replace the parts good as new.

True. But the key phrase here is "good as new," not "new." Many PC
owners are surprised the first time a part fails, and they learn this
lesson. But most PC companies have language in the warranty that allows
them to send you remanufactured parts as replacements. These parts are
not strictly brand new, though they go through some reconditioning and
testing. I once had to replace my mother board twice in one year. Dell
finally sent me a new computer.

===================================================================

True or false? My laptop's batteries will become less effective if I
keep recharging them before they're empty.

False. That is, unless you have an ancient notebook PC with a nickel
cadmium battery. Today's lithium ion batteries do not suffer from this
problem. You don't have to run them down to empty all the time, but you
should occasionally.

===================================================================

True or false? I don't need to pay for tech support because my cousin's
kid works with computers and helps me out when I have questions.

False. Your little helper will never tell you, because he or she is too
polite, but no one likes being the "computer kid" to the extended family
or neighborhood. Here's the good news: Great tech-support services now
exist where you pay a reasonable monthly fee, or buy a block of
phone-support minutes, with a company that can use the Internet to
remotely peek at, control, and fix your PC--or just quickly answer your
PC-care questions.

====================================================================

True or false? I'm ready to give away my old computer after I've deleted
all the files.

False. Deleting files isn't good enough. You'd be amazed what people can
pull from the hard drives of secondhand or donated computers if the hard
drive hasn't been completely reformatted and Windows reinstalled. (And
if you pass along the PC to a family member, you're probably not going
to do this.)

PC World did a story where we found :  Social Security numbers, income
tax returns, and other personal and important information on old,
discarded hard drives. Once you pass along your old PC, you have no idea
where it will travel down the line. To erase your info, try a free
utility program, such as Eraser
<http://us.rd.yahoo.com/dailynews/ttpcworld/tc_techtues_pcworld/storytex\
t/124807/18179482/SIG=111ld1omg/*http://www.tolvanen.com/eraser/> , to
zap documents into oblivion. There's also Webroot's Window Washer
<http://us.rd.yahoo.com/dailynews/ttpcworld/tc_techtues_pcworld/storytex\
t/124807/18179482/SIG=12668du44/*http://www.pcworld.com/downloads/file_d\
escription/0,fid,25803,00.asp>  for cleaning up the many little nuggets
that lurk elsewhere. For this article and more information go to :
www.PCWorld.com <http://www.PCWorld.com>





[Non-text portions of this message have been removed]

Throughout my life, I've rarely encountered anyone who has ever said
they took "too many" chances. Quite the contrary, they often say if
they had it to do over again, they would have taken more risks.

As a nation, we've begun moving away from risk-taking. Increasingly,
Americans are becoming unwilling to accept risk of any kind. Fear of
failure. Every outcome must be perfect.

Risk aversion is eventually going to drive America into second-class
status in our increasingly global economy. Guaranteed outcomes mean
lowering our expectations. And lowered expectations lead to
mediocrity and sub-par performance.    If you aren't afraid to
succeed, you can't be afraid to fail. This reminds me of a story
that provides a lot of wisdom....

    Once upon a time, there was a little acorn that wanted to be the
best acorn in the world. It went to acorn meetings and attended
acorn classes at the University of OAKlahoma, where it discovered
that the ultimate goal for an acorn was to grow into a mighty oak
tree.  However, it had to give up its identity as an acorn –
something it was not ready to do.

So it spoke to a butterfly and a frog about the situation. Both told
the acorn they had been through the same dilemma and were happy now
they had risked taking a chance.Finally, the little acorn gave up
its attachment and fell to the ground. Later the acorn awoke and, to
its amazement, found itself transformed into a grand oak tree.

Over the years, many would come to hear the mighty oak tell stories
of how great it is to take risks and have the courage to venture
beyond the imaginary limits we impose on ourselves. We need to
realize that all the wonders we seek are within ourselves. Thx Uncle
Harvey

Good Luck MarketTraders

THE THREE AMERICAN VICES

A reader approached me last month at the Investment U conference in
Delray Beach and said, "You sure have a knack for picking winning
stocks. How do you do it?"

"It's very simple," I said. I then whispered in his ear, "Lin
Yutang."

"Lin Yutang?" he asked. "Is that a new Chinese trading system?"

"No, I'm afraid not. It's a philosophy of life."

He seemed intrigued. I went on to explain that Lin Yutang was a very
unusual Chinese philosopher and writer who lived in both China and
the United States, and understood both cultures. He is known as the
philosopher of leisure and "letting go." I quoted his most famous
line - a line that usually angers Americans:

"The busy man is never wise, and the wise man is never busy."

I made the mistake of writing this statement on the blackboard on
the first day of class at Columbia Business School. A third of the
students left and dropped the class immediately. [But those who
stayed said it was the best class they ever took at Columbia. As one
student said, "We've never been taught anything like this before at
Columbia!"]

Yet there is wisdom in Lin's statement. If you are too busy in your
work, you don't have time to learn new ideas, to discover new
truths, to enjoy life's little pleasures, or perhaps to pick a
winning stock! Beating the market requires you to look down un-
trodden paths, and you need the free time to do it.

Lin Yutang criticized most Americans for being too busy, and
therefore too subservient to the business culture and the old ways.
Slaves to their work, they worry themselves to death. In another
startling statement, Lin states, "The three American vices seem to
be efficiency, punctuality and the desire for achievement and
success. They are the things that make the Americans so unhappy and
so nervous." Gee, I thought they were American virtues!

Lin goes on to say, "O wise humanity, terribly wise humanity! How
inscrutable is the civilization where men toil and work and worry
their hair gray to get a living and forget to play!"

Lin offers the secret to success for the businessman [busy man?] in
this following statement: "Actually, many business men who pride
themselves on rushing about the in morning and afternoon and keeping
three desk telephones busy all the time on their desk, never realize
that they could make twice the amount of money, if they would give
themselves one hour's solitude awake in bed, at one o'clock in the
morning or even at seven. There, comfortably free, the real business
head can think, he can ponder over his achievements and his mistakes
of yesterday and single out the important from the trivial in the
day's program ahead of him."

Lin Yutang is a champion of the individual - "its unreasonableness,
its inveterate prejudices, and its waywardness and
unpredictability." But in today's society, the individual free
thinker is being replaced by the soldier as the ideal. "Instead of
wayward, incalculable, unpredictable free individuals, we are going
to have rationalized, disciplined, regimented and uniformed,
patriotic coolies, so efficiently controlled and organized that a
nation of fifty or sixty millions can believe in the same creed,
think the same thoughts, and like the same food." Lin goes on to
warn, "Clearly two opposite views of human dignity are possible: the
one believing that a person who retains his freedom and
individuality is the noblest type, and the other believing that a
person who has completely lost independent judgment and surrendered
all rights to private beliefs and opinions to the ruler or the state
is the best and noblest being."

Lin dislikes the popular trend of compartmentalizing people in
groups and classes. "We no longer think of a man as a man, but as a
cog in a wheel, a member of a union or a class, a 'capitalist' to be
denounced, or a 'worker' to be regarded as a comrade...We are no
longer individuals, no longer men, but only classes."

Lin Yutang experienced the brutality of Chinese communism and the
heavy-handed bureaucracy of Washington during the New Deal era.
Needless to say, he has a low opinion of government. "I hate censors
and all agencies and forms of government that try to control our
thoughts."

He also questioned the establishment economist and
forecaster: "Perhaps I don't understand economics, but economics
does not understand me, either. The sad thing about economics is
that it is no science if it stops at commodities and does not go
beyond human motives...It remains true that the stock exchange
cannot, with the best assemblage of world economic data,
scientifically predict the rise and fall of gold or silver or
commodities, as the weather bureau can forecast the weather. The
reason clearly lies in the fact that there is a human element in it,
and when too many people are selling out, some will start buying
in...this is merely an illustration of the incalculableness and
waywardness of human behavior, which is true not only in the hard
and matter-of-fact dealings of business, but also in the shape of
the course of history."

Lin Yutang was probably unfamiliar with the one school of economics
that does take into account human behavior: the Austrian school of
Ludwig von Mises and Friedrich Hayek. That's why Mises's magnum opus
is called Human Action!

Lin Yutang has many more things to say about our culture and how to
live a happy and fulfilling life...about growing old gracefully
("The East and West take exactly opposite points of view. In China,
the first question they ask is, 'What is your glorious age?'I've
only scratched the surface of this brilliant Chinese philosopher.

This was from an article that was written by Mark Skousen



p.s. ( From The Lascone ) We can learn so much from Lin Yutang. In life  (as
well as trading ). Try to be patient, sit like the tiger in the brush. When
opportunity comes along ... Pounce quickly. I encourage readers to
buy Lin Yutang's book, The Importance of Living. It was written in
1937, but in today's' hustle and bustle world, it is even more
relevant.

Good Luck Trading in the New Year MarketTraders