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Reports of Cyanide in Euphrates has traders edgy

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The major indexes have turned fractionally lower with the Dow Industrials (INDU) 8,224 -0.19% slipping 16 points and off its highs after news reports that high levels of Cyanide poison have been found in the Euphrates River, in what some expect as an attempt by Iraq's military to poison coalition forces approaching Baghdad from the south.

There are also reports that tests revealed a deadly toxin ricn and botulinum at a laboratory in a remote mountain region of northern Iraq, which was allegedly used as a terrorist training camp by Islamic militants with ties to al-Qaida. While the U.S. Central Intelligence Agency is conducting its own tests at the area, MSNBC reported that its own tests at the now Tomahawk cruise missile-flattened site had their tests, in which a swab sample was taken from a boot tested positive for the deadly toxins.

According to experts, ingesting a pinch of ricin, which causes shock and respiratory failure, can kill a human within 72 hours. There is no cure for such ingestion. According to the U.S. Centers for Disease Control, botulism, the illness resulting from botulinum ingestion, is a muscle-paralyzing disease that can cause a person to stop breathing.

While equities relinquished earlier gains, Treasuries are still seeing fractional selling, but are off their lows of the session (price). The 10-year YILED ($TNX.X) has backed off its earlier session YILED high of 3.984%, and currently holds a 3.933% YIELD.

Technology sectors have been under pressure for the bulk of the session, with the NASDAQ-100 Index (NDX.X) 1,052 -1.1% holding right near its WEEKLY pivot of 1,050. Sector specific action has the Biotechnology Index (BTK.X) 346 -3.3% leading sector declines after last night's warning from Affymetrix (NASDAQ:AFFX) $18.23 -35% warned on earnings. The maker of commercialized biomedical testing equipment said it now sees revenues of $60-$62 million, which was well below prior guidance of $71-$73 million.

Also exhibiting weakness among technology sectors is the CBOE Semiconductor Index (SOX.X) 311.90 -2.3% and GSTI Software Index (GSO.X) 103.44 -2.07%. Networking (NWX.X) 147.79 +0.14% is the only technology-based sector currently showing a gain.

Financials are holding gains in today's session, and this perhaps bodes better for bulls in the S&P 500 Index (SPX.X) and S&P-100 Index (OEX.X). In last night's Index Trader Wrap, we made note that the S&P 500 Index (SPX.X) had made a "relative high" compared to its March 25 high of 880. With today's strength in the S&P Banks Index (BIX.X) 273 +0.75%, KBW Bank Index (BKX.X) 742 +1%, Securities Broker Dealer Index (XBD.X) 409 +0.36% and Insurance Index (IUX.X) 244 +1.4%, it becomes an observation that financials may be firming and with a greater representation in the S&P 500 and S&P 100, help these two major indexes holding firm in today's session.

In yesterday's market monitor, I noted that shares of Goldman Sachs (NYSE:GS) $72.06 -0.4% has broken above its bearish resistance trend and begins to show signs of bullishness with support building at $70. Goldman Sachs (GS) also broke above its longer-term 200-day SMA of $71.42 on Wednesday with volume of 7 million share, which is almost double average daily volume of 4 million shares. I currently hold a partial bullish position in GS at this time in the July $75 calls (GSGO), which are currently bid/offer $3.50-$3.80. I view this stock as a bullish name for those traders looking for some "financial" exposure.

Jeff Bailey

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