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FBI terrorist alert has stock futures lower

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The FBI issued a terrorist alert last night, asking the public and law enforcement officials to be on the lookout for a Yemini man and several associates who might be plotting a terrorist attack as early as today. This looks to have the U.S. markets jitter and stock futures are lower.

S&P futures are currently trading down 6.2 points at $1,104, while NASDAQ futures are lower by 16 points at $1,457. Dow futures are giving back some of yesterday's gains and trading off 44 points at $9,821.

Fair value for the S&P 500 today is $0.16. HL Camp & Company has their computers set for program buying at $1.47 and set for program selling at $-0.95.

PacifiCare Health reiterated as "sell" by Fulcrum

In recent sessions we've been bullish on shares of PacifiCare Health Systems (NASDAQ:PHSY) and talked about the rather large amount of stock that has been sold short. This morning, Fulcrum reiterated its "sell" rating on the shares on news of Texas Attorney General suit. Fulcrum believes these events could be the beginning of a domino effect whereby cash needs in Texas precipitate either a draw down of the equity line or transfers from other states that force increased regulatory scrutiny. Fulcrum says it is not sure that PHSY will make it as a company and sets a preliminary bearish price objective of $11, which the firm says is the lowest price the equity line can be drawn down.

On Friday, shares of PHSY spiked to the $23.35 level in early morning trading, only to be hit with some selling later in the session as the stock fell right back to Thursday's close. Yesterday's action also found selling despite broader market bullishness and the stock closed lower at $18.98. This morning's pre-market action is at the $17.95 level. Yesterday's action did have the stock giving a sell signal at $18.00 on its point and figure chart. While the stock is still trading above longer-term bullish trend (currently at $15.50) the sell signal would have us taking a more defensive posture with the stock at current levels. I also think we now have an idea of what firm may also be short the stock (Fulcrum).

Jeff Bailey
Senior Market Technician
Option Investor

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