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OI Technical Staff : 3/20/2006 9:59:59 PM

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Jeff Bailey : 3/20/2006 8:40:01 PM

10 Yr Note (zn06m) down 0'030 at 107'190

Jeff Bailey : 3/20/2006 8:35:44 PM

Fed Chairman Bernanke (contd.) ... Headlines from DJ - Mkt Rates Not Best Guide To Rate Policy

Dollar Buying Not Big Factor in Yield Curve

Policymakers Should Use Many Economic Variables

Low Term Premium Would Argue For Tighter Policy

Inflation Expectations Anchored at Low Levels

Flat Yield Curve Does Not Signal Slowdown

Jeff Bailey : 3/20/2006 8:11:44 PM

10 Yr Note (zn06m) down 0'045 at 107'175

Jeff Bailey : 3/20/2006 7:57:13 PM

Fed Chairman Bernanke ... Headlines from DJ - Mkt Rates Not Best Guide To Rate Policy

Current Acct Def Poses Econ Risks For US

Welcomes Better Growth In Japan, Europe

Slower Housing May Aid US Savings Rate

China Makes Modest Steps To Forex Flexibility

Risks Seen From Slowing Housing Mkt

Not Worried By Rising Mortgage Debt

Consumer Spending Will Keep US GDP Near Trend

Jeff Bailey : 3/20/2006 7:14:47 PM

Sunoco (SUN) $75.37 -5.32% ... AP- Sunoco Shares Slide on Analyst Downgrade

AP Story Link

Jeff Bailey : 3/20/2006 5:29:10 PM

Current OPEN MM Profiles found at this Link

Stock Pivot Matrix for tomorrow at this Link

Jeff Bailey : 3/20/2006 4:54:27 PM

Swing trade long raise stop alert ... for the iShares Lehman 7-10yr (AMEX:IEF) $82.51 +0.19% ... to $82.30

Jeff Bailey : 3/20/2006 4:45:14 PM

Closing Internals found at this Link

Jeff Bailey : 3/20/2006 4:41:29 PM

Imperial Oil (AMEX:IMO) $101.33 -0.16% Link ... DJ - Reduced its purchase price for benchmark 40-degree gravity light crude oil at Edmonton by C$20 a cubic meter to C$420 a cubic meter, effective Monday.

In terms of barrels, the company is now offering C$66.78 a barrel, down from C$69.96. The new purchase price indicates an export price delivered to Chicago of about US$58.90 a barrel after considering transportation and import charges and foreign exchange rates.

Actual export prices are confidential but are believed to be closely related to the posted levels.

Imperial Oil is an integrated oil and gas company.

Jeff Bailey : 3/20/2006 4:36:54 PM

Husky Energy (TSE:HSE) $70.82 -1.32% Link ... DJ - To Double Capacity of its Lloydminster Upgrader

Jeff Bailey : 3/20/2006 4:25:22 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 3/20/2006 4:10:37 PM

Oracle (ORCL) earnings (updated) ... Reports Q3 GAAP EPS Up 40% To $0.14, Non-GAAP EPS Up 21% To $0.19

Q3 Rev $3.47B Vs $2.95B, +18%

Q3 Software Rev $2.8B

Q3 Services Rev $671M

Jeff Bailey : 3/20/2006 4:06:33 PM

Oracle Corp. (ORCL) $13.72 +0.88% Link ... Lower at $13.41 in extended on headline numbers.

Jeff Bailey : 3/20/2006 4:03:50 PM

02:12 PM EST Temperatures with April Nat. Gas and Heating Oil futures settlements at this Link

April Unleaded settled down $0.03, or -1.61% at $1.8301.

April Crude Oil settled down $2.35, or -3.74% at $60.42.

June Unleaded settled down 2.57% at $1.7683.

June Crude Oil settled down 3.07% at $63.06.

Jeff Bailey : 3/20/2006 3:44:05 PM

Fed's Minehan Says Saving Must Rise ... DJ - Although near-term outlook for U.S. economy is positive, Boston Federal Reserve President says consumers and government must save more to avert deficit-related trouble ahead. Minehan also warns of possible rate shock from adjustable mortgages.

Jeff Bailey : 3/20/2006 3:42:11 PM

Verizon (VZ) $34.20 -0.61% Link ... DJ - Company is no longer bound by rules limiting what it may charge businesses for access to high-capacity telecommunications lines after the FCC fails to reach agreement on a Verizon petition for exemption.

Jeff Bailey : 3/20/2006 3:41:00 PM

Delta Seeks to Reject Employee Stock Options ... DJ - Carrier asks judge to allow the company to void roughly 93 million stock options held by 70,000 current and former employees and directors.

Jeff Bailey : 3/20/2006 3:35:58 PM

Kerr McGee (KMG) $94.07 -3.38% Link ... Deepwater driller has filed lawsuit in U.S. federal court challenging Department of Interior's claims that the company needs to pay up for producing oil and natural gas in high-risk, high-cost areas beneath federal waters in the Gulf of Mexico.

Jeff Bailey : 3/20/2006 3:34:00 PM

Altria (MO) $73.55 (unch) Link ... Off session lows of $72.80 after the company said its Philip Morris USA unit has exhausted appeals to overturn a $50 million punitive damages award from deceased smoker lawsuit filed in California. Supreme Court rejects appeal without comment.

Jeff Bailey : 3/20/2006 3:18:20 PM

03:00 Internals found at this Link

Jeff Bailey : 3/20/2006 3:03:47 PM

03:00 Market Watch found at this Link

Jeff Bailey : 3/20/2006 2:40:59 PM

Wal-Mart (WMT) $47.89 +2.57% Link ... AP- Plans to Hire Up to 150,000 Employees in China Over Next Five Years

AP Story Link

Jeff Bailey : 3/20/2006 2:36:06 PM

Valero Energy (VLO) $56.44 -2.45% Link ... 60-minute interval chart with updated WEEKLY/MONTHLY Pivot retracement at this Link

Jeff Bailey : 3/20/2006 2:15:58 PM

Kerner Intl. Ltd (KZL) $79.34 +12.76% ... Taking Private ... DJ - Investor group led by Chairman Sol Kerzner and Chief Executive Butch Kerzner agrees to pay $76 a share in cash, or $3.6 billion, including the assumption of $599 million in debt for the resort and casino developer. Group also includes shareholder Istithmar PJSC, Whitehall Street Global Real Estate, Colony Capital and Providence Equity Partner. Shares jump 13%, topping $79 a share.

Jeff Bailey : 3/20/2006 2:13:26 PM

Oil Headlines ... DJ - Crude Drops Below $61/Bbl as Losses Top $2.00/Bbl

Jeff Bailey : 3/20/2006 2:11:53 PM

Bank of Japan's Mizuno ... DJ- Convincing Government on Hikes "Difficult"

Wants to Minimize Rate Impact on Markets

Not Just CPI to Determine Rate Moves

Economy Could Slow in 2nd Half of Fiscal 2007

Jeff Bailey : 3/20/2006 2:08:04 PM

IEF / TNX.X ... 60-minute interval charts with updated WEEKLY/MONTHLY Pivot retracement at this Link

Jane Fox : 3/20/2006 2:07:21 PM

Here is a chart I downloaded from ETFDigest.com. It shows how much program trading has become part of our life lately. But what is program trading you ask. Here is how this web site describes it. The Fed lends money to the primary dealers (Citigroup, Goldman Sachs, BOA etc.) through open market operations and takes Treasuries as collateral. The primary dealers invest these monies, buy government securities or speculate with it. Since the yield curve as inverted and these primary dealers cannot borrow at low rates and buy the longer term bonds at higher rates they choose to speculate. These primary dealers have trading desks, which they use for this speculation and program trading is just a convenient and neat way to engage in the speculation. Link

Jeff Bailey : 3/20/2006 1:33:15 PM

Sunoco (SUN) $76.62 -2.75% Link ... 60-minute interval chart with updated WEEKLY/MONTHLY Pivot Retracement at this Link

Jeff Bailey : 3/20/2006 1:17:00 PM

3-Month Treasury Auction ... DJ - The U.S. Treasury awarded $20.00 billion in three-month bills at Monday's auction at a high rate of 4.545%.

The Treasury received bids totaling $44.51 billion and accepted $20.00 billion, including $2.01 billion of noncompetitive tenders. The dollar price was 98.851125 and the investment rate, or bond-equivalent return, was 4.662%.

The Treasury also sold $285 million of bills to foreign and international monetary authority accounts on a noncompetitive bidding basis. Foreign and international noncompetitive tenders totaled $285 million.

The bid-to-cover ratio, an indication of demand, was 2.23, Treasury said.

Tenders submitted at the high yield were allotted 84.24%.

The median rate was 4.530%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate.

Of the competitive bids accepted, 5% were tendered at or below the rate of 4.505%.

Jeff Bailey : 3/20/2006 1:11:13 PM

01:00 Internals found at this Link

Jeff Bailey : 3/20/2006 1:02:50 PM

01:00 Market Watch found at this Link

Jeff Bailey : 3/20/2006 12:23:30 PM

PetroChina (PTR) $98.82 +0.02% Link ... 60-minute interval chart with updated WEEKLY/MONTHLY Pivot Retracement at this Link

Jeff Bailey : 3/20/2006 11:10:00 AM

11:00 Internals found at this Link

Friday's Internals found at this Link

Jeff Bailey : 3/20/2006 11:02:02 AM

11:00 Market Watch found at this Link

Jane Fox : 3/20/2006 10:35:11 AM

If the VIX is back to normal then this is really bearish. However, a normal VIX does not usually jump this much but it did predict a lower ES didn't it? Link

Jane Fox : 3/20/2006 10:32:14 AM

I am going to give this to the bears for now but I think it could change in a NY minute so make sure your stops are in place if short. Link

Jeff Bailey : 3/20/2006 10:29:47 AM

Sell Program Premium ... SPX 1,306.36

Jane Fox : 3/20/2006 10:28:18 AM

And now the rest of the story.

Once the housing industry starts to slow or (heaven forbid) reverse it is harder and harder to make a cash-out refinance where homeowners take money out of their homes for consumerism. Former Fed Chair Alan Greenspan estimated that over $600 billion in cash out refis took place in 2004 and Goldman Sachs estimated that in 2005, home owners withdrew $834 billion. The estimates are that consumers used between 50% (Greenspan) up to 68% (Goldman Sachs) of that money as discretionary spending. That amounts to over a trillion dollars in consumer spending over 2 years.

Another factor that has to be considered is the number of new homes that will be back on the market due to foreclosure. Many homes in the last 3 years have ARMs and now we are seeing more than $2 trillion of these mortgages coming up for a reset in their mortgage rates. How many of these homeowners will not be able to afford the new mortgage payment and have to walk away from their homes? The Mortgage Bankers Association announced last week that delinquency rates were up in the fourth quarter from the previous quarter and year over year. It is a rising tide of payment problems. Once these homes come back on the market the buyers will not be lined to buy them at their original price if at all.

A drop in housing prices and thus activity would lead to a potential drop in GDP of at least 2-3%. So as Maudlin says, "Iif we do see a housing slowdown coupled with a poor stock market, you could see a real slowdown in the economy, which is precisely what I think will happen in the latter part of the year and history suggests that the stock market will stumble when it does. That would make the current rally a sucker's rally, or a real opportunity to make a strategic re-positioning of your portfolio."

Jeff Bailey : 3/20/2006 10:11:32 AM

PetroChina (PTR) $100.02 +1.23% ... 2nd Half Profits Jump, Aims 5% Output Rise ... Reuters Story Link

Jane Fox : 3/20/2006 10:10:44 AM

Jeff Reported the Conference Board Index numbers but here is Market Watch's take on it. The U.S. index of leading economic indicators fell 0.2% in February after rising for four months in a row, the Conference Board said Monday.

"This could be a signal that the economy will continue to expand this spring before slowing later in the year," said Ken Goldstein, an economist for the research group.

"The economy is growing now, but not as fast as it did last year before the hurricanes," Goldstein said.

Economists expected the index to fall 0.3%, according to a survey conducted by MarketWatch.

Five of the 10 indicators declined in February, starting with vendor performance and consumer expectations. The biggest gainers were core capital equipment orders and money supply. The leading index increased a revised 0.5% in January, compared with a gain of 1.1% originally reported.

In the past six months, the leading index has increased 1.5%, with half of the indicators improving. The index is designed to forecast changes in the economy's direction six months ahead of time.

The coincident index rose 0.3% in February and the lagging index rose 0.1%

Jeff Bailey : 3/20/2006 10:09:29 AM

Sell Program Premium ... SPX 1,307.71

Jeff Bailey : 3/20/2006 10:06:04 AM

US Conference Board Feb Leading Index -0.2%

US Conference Board Feb Coincident Index +0.3%

US Conference Board Feb Lagging Index +0.1%

Jeff Bailey : 3/20/2006 10:03:39 AM

10:00 Market Watch found at this Link

Jeff Bailey : 3/20/2006 10:01:12 AM

Sector Bell Curve Comparison for 12/16/2005 and 03/17/2006 at this Link

Jeff Bailey : 3/20/2006 9:37:19 AM

10-year yield ($TNX.X) up 3.0 bp at 4.644%

iShares Lehman 7-10year (AMEX:IEF) $82.58 +0.27% ...

Jane Fox : 3/20/2006 9:37:14 AM

Ad line is -191 and AD volume is below 0 so although the bears have an edge I don't consider them to be in control of the reins. I have seen this kind of action reverse too many times.

Jane Fox : 3/20/2006 9:27:30 AM

John Maudlin, author of "Bull's Eye Investing," sends out a weekly newsletter and last Sunday he showed some pretty good evidence that the housing boom is definitely in its last stages of it run, if not the first stages of its decline. But Maudlin takes this slowdown one step further and goes on to show how the decline will affect the economy. He starts the email with a quote from Paul McCulley, Managing Director, Pimco, "The U.S. outlook is all about the property market, which has been the wind beneath consumers' wings this decade."

First of all let's look at housing. The rise in new home inventories year over year has hit the fastest pace since 1984 but demand is falling. Here are charts of the housing inventory. Link and here are some charts of demand. Link

This is simply due to the fact that houses are just getting overpriced and the average Joe cannot afford them any more. The median price of an existing home has risen from $170,000 in 2003 to over $210,000 today, with the qualifying income needed to buy a home rising from $38,000 to $50,000. Monthly payments likewise are rising to $1,048 from $793 just three years ago. Link More later...

Jeff Bailey : 3/20/2006 9:26:55 AM

April Crude Oil (cl06j) down 34 cents, or -0.54% at $62.43.

April Unleaded (hu06j) down 2 cents, or -1.07% at $1.84.

Jeff Bailey : 3/20/2006 9:25:50 AM

IRAN SEES NO GAIN IN USING OIL AS WEAPON Iran's OPEC governor says using oil as a weapon in the row between the country and the West over its nuclear program wouldn't be in the interest of either side.

Jeff Bailey : 3/20/2006 9:25:14 AM

GENENTECH BOOSTS '06 EARNINGS VIEW Biotechnology company expects 40% to 50% growth in 2006 non-GAAP earnings per share, excluding certain items, and says it expects 15 new products or new uses for existing drugs by 2010.

Shares of Genentech (DNA) $88.14 Link are edging down 44 cents at $87.70.

Jeff Bailey : 3/20/2006 9:22:16 AM

HERMITAGE CEO DENIED ENTRY TO RUSSIA In a move that could chill one of the world's hottest stock markets, Russian authorities deny entry to Hermitage Capital Management CEO William Browder, manager of the largest foreign investor in local stocks and a vocal Putin supporter.

Jeff Bailey : 3/20/2006 9:21:12 AM

Lucent Tech (LU) $2.90 Link ... Marked lower at $2.79 in active pre-market trade after weekend Barron's publication says the telecom-equipment maker faces long odds in its comeback effort.

Jeff Bailey : 3/20/2006 9:19:27 AM

CSC GETS ARMY PACT WORTH UP TO $1.5B Computer Sciences (CSC) $56.90 receives part of a five-year support-services contract for an Army facility at a soon-to-be-closed New Jersey base. Firm estimates its portion of the contract is worth $1.5 billion if a five-year option is exercised.

Jeff Bailey : 3/20/2006 9:16:31 AM

DELL TO DOUBLE INDIA STAFF IN 3 YEARS Chairman Michael Dell says the PC giant plans to increase its workforce in the country to 20,000, planning "a major recruitment push in engineering talents." Much of the hiring will be for call centers.

Jeff Bailey : 3/20/2006 9:15:36 AM

Michaels Stores (MIK) $33.96 Link ... Called higher at $38.33 in pre-market trade after the U.S.' largest arts-and-crafts retailer, is expected to announce that it is exploring "strategic alternatives," which could lead to the sale of the company, which has a $4.61 billion market capitalization, reports The Wall Street Journal.

Jeff Bailey : 3/20/2006 9:13:15 AM


Aviva CEO says the insurer doesn't plan to increase its $29.87 billion offer for U.K. rival Prudential PLC, which rejected the takeover bid in a battle that could affect insurance markets world-wide. Prudential shares climb 12% on bid. Aviva shares edge up; other U.K. insurers' shares also rise on the news.

Jane Fox : 3/20/2006 9:10:26 AM

The only econ report today is the 10:00 EST Feb Conference Board of Leading Indicators. This is not a real market mover but I would keep my eye on it.

Jeff Bailey : 3/20/2006 9:06:06 AM

Program Trading Levels for Monday ... HL Camp & Company has their computers set for program buying at $+11.46 and set for program selling at $+9.54.

Jane Fox : 3/20/2006 8:51:32 AM

Dateline WSJ Confronting criticism of the Bush administration's economic record, Treasury Secretary John Snow said the widening gap between high-paid and low-paid Americans reflects a labor market efficiently rewarding more-productive people. But he insisted Americans are still broadly sharing in the economic expansion.

"What's been happening in the United States for about 20 years is [a] long-term trend to differentiate compensation," Mr. Snow said in an interview with The Wall Street Journal last week. "Look at the Harvard economics faculty, look at doctors over here at George Washington University...look at baseball players, look at football players. We've moved into a star system for some reason which is not fully understood. Across virtually all professions, there have been growing gaps."

Mr. Snow said the same phenomenon explains why compensation for corporate chief executive officers has climbed so sharply. "In an aggregate sense, it reflects the marginal productivity of CEOs. Do I trust the market for CEOs to work efficiently? Yes. Until we can find a better way to compensate CEOs, I'm going to trust the marketplace."

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