Wednesday Morning, September 26th

   SITE NEWS

New IceMD Recording:

Omega-3 fatty acids protect against diabetes;

   Dow Stock News

GM and the UAW said they reached a tentative agreement on a new national contract for about 74,000 U.S. auto workers that includes a historic restructuring of GM's obligations for UAW retiree health care. - WSJ

Microsoft CEO Steve Ballmer is adopting new strategy to compete with rivals by turning to outside talent rather than relying on home-grown managers. - WSJ

Bloomberg writes that GM (GM) and the UAW have reached a tentative contract.

Reuters writes that Microsoft (MSFT) will replace a number of damaged disks from its new Halo 3 game.

The Wall Street Journal writes that Microsoft (MSFT) has begun to turn to outside talent rather than fill key management jobs from within.

   Ice Man Stocks

Breakouts the Ice Man may consider trading:

STRA - 170
HPQ - 51
NOK - 37.20
ONNN - 13
ADSK - 50.05
ACH - 70
CHT - 19.10
FOSL - 38

Regular Trades the Ice Man may consider:

VMED - 24* Best Bet
GYI - 27.70
BAX - 57
FIG - 21.30
QSII - 36.10
AMKR -12
FRPT - 20 = 22.89 Gap
MEDX - 14.90 =  15.60
ESLR - 9.25
GRRF - 9.45
YRCW - 30.20
AEIS - 15.75, 16
ALU - has 10.04 upside Gap
ELN - 20.70
MTRX - 22
NVTL - 24
CRDN - 75

Depressed stocks the Ice Man may buy:

JWN - 47 Gap
MPEL - 15.21 Gap

Dollar Man Ideas:

BCTE - 1.30
VIV - 5
CBAK - 5.25
GRRF - 9.45
ESLR - 9.25
NWD - Interesting Chart

Depressed Dollar:

BNSO - 2.20 Gap * Best Bet

Extended Shorts:

FMCN - 64
CHL - 81

   Media Commentators

Cramer's Comments:

Bullish: CBRL, TXT, HON, NAVZ, ACM
Bearish: BIDU, FMCN

   Ice Cold Commentators

Break Man Video Summary:

Break out buy (or short sell) watch list for short term gains September 26 includes:  ABG, AHS, OTEX, SAIA, WCI, BSCI, FOSL.

Several candidates for break out or short sell  plays for at least short term gains by buying the break out (or selling the break down) on good volume and closing at least some on the  first day.

Swing Man Market Recap:

On The Road To Unwinding.........

Stocks gapped down at the open this morning on overnight selling. By 10:00 the SPX hit pivot support as it neared 1506, held, and then rallied. The rally was short lived as the SPX topped within the next hour at 1518. Then the rest of the day was spent going sideways in a narrow 1512 - 1517 range, until a small pop nearing the close. At the close the SPX/DOW were mixed, and the NDX/NAZ were 0.75% higher.

Overall, today's action was pretty boring if you're watching the Dow trade in such a narrow range for most of the day.  It doesn't exactly excite the senses and get my blood boiling. I do understand, however, that it does accomplish something good for the markets. It allows things to settle down and get calmer thus helping to unwind from overbought. So far it's doing so without much price erosion. The Macd on the 60 minute chart on the Nasdaq, the fast line, has gone from near the top at 22 to just a drop over 6. That's solid unwinding yet there has been virtually no erosion of price. That doesn't mean a more meaningful pullback won't occur and bring that fast line down well below zero. It easily could. If it does, the selling will still be shorter lived as the fast line has already unwound so decently. The point being that we can still sell here but the bears are losing their grip on how deep the selling could occur. The same story is true in terms of the other oscillators such as Stochastic's and the RSI. These oscillators were also overbought but that is no longer the case. Far from oversold I grant you that but no longer at nose bleed levels of overbought. In up trends the market has a tendency to unwind without much erosion off the top while in bear markets the market will tend to unwind oversold without much of a rise in actual prices. So far so good if you have a bullish bias but again I remind you that we are still vulnerable to some selling as the 60 minute divergences aren't exactly screaming buy. It's nothing terrible but they aren't as good as the daily divergences.

The internals weren't great today. More losers than gainers by 17-12 on the Nasdaq and you can't get too excited about the near term when you see that type of action. On the other hand, it shows that a lot of stocks were able to pull back while enough of the heavier weighted stocks kept a bid under the market. It wasn't just selling in all the sectors. It was very sector specific and there's nothing bad about that. Money was simply rotating and the better weighted sectors like hardware kept the market up. As long as money doesn't leave the market altogether the breadth indicator doesn't have to be perfect every day. The key is the overall trend and that has been getting better and better for many months. Today's poorer breadth reading, therefore, isn't necessarily a harbinger of bad action to come.

The key level to watch in this market on any pull back, especially since it's lagging the most of any sector, is SP 1490 where we have the 20 day and the old triangle breakout. On top of that, the 50 day is just below those levels. This area should hold on all selling. If it were to break that would be a wake up call that something else may be going on that we're not aware of now. A small breach of course is always possible but I really don't think we'd see anything worse than that. With Target (TGT) and Lowe's (LOW) warning and the market holding up so well it seems the market is already pricing in a lot of warnings, especially in those areas affected by the housing decline. On the up side, 1530 on the SPX  has stopped us cold a few time thus it's important to get over that level and then make the move to the 1556 area. From there we will have to study things intensely and decide if a stronger pullback is likely to form a final handle before a massive breakout occurs. We will take it one day at a time as always and try to find objective set ups that have the best risk reward for the coming days and weeks.

Good Trading.

   CNBC Fast Money Review

1. INVINCIBLE TAPE

  The headline: Dow Closes Up Despite Lowest Confidence in 2 Years, Worst Home Sales in 5 Years
  Najarian says all the stocks that were down early in the day came back and rallied. The tech sector especially gathered steam for the rest of the market.

  2. TECH, INTERNET NAMES STRONG

  The headline: AAPL, GOOG Shares Rise to New Records Today Amid Dismal Consumer.
  Najarian says gadget names like GRMN have been strong because of overseas demand, Pete Najarian. He expects more upside in tech names on the back of the global growth story.
  Macke notes that online travel-booking site PCLN has been rocketing, but other travel-related companies like HTZ and AMR have been getting crushed. He would take the safe road and short names like AMR rather than getting long Priceline.

  3. NON-EXISTENT HOME SALES

  The headline: Homebuilders in Downward Spiral as Existing Home Sales Fall to 5-Year Low
  Finerman would consider CTX as a short-term trade.
  Adami says if KBH trades north of 10 million shares and makes a 52-week low, which he expects it to do Thursday, investors could “jump in with both feet’ for a short-term trade.
  Macke stresses that none of the homebuilders should be thought of as investments.
  
4. THREE MONTHS TILL CHRISTMAS

  Holiday sales could be as weak as they were during the recession of 2002, according to a CNBC snap survey. It´s too early to shop, but it isn´t too early to trade the Christmas season. Who will be the Christmas winners amid such dismal forecasts?
  Margaret Brennan, CNBC´s chief retail correspondent, says the expectations are that consumer electronics will drive demand this holiday season. It won´t just be on the high-end. While discount retailers like TGT and WMT have been performing poorly as of late, they have still seen high demand for electronics. Both retailers had strong back-to-school season, which is generally a good indicator of how they will perform going into the holidays. She also reports that retail accessories like handbags and shoes show signs of strength ahead of the season.
  Macke agrees, saying he liked COH as a way to get ahead of Christmas.
  Adami recommends SKS for a “wealth trade’ as well as a trade on the weaker U.S. dollar.
   Finerman says investors should be alright if they stick with high-end retailers, which don´t seem to get bogged down by a weak economy.
  Najarian reiterates his call on UA, saying sports apparel is “red hot.’
  
5. DETROIT, DAY TWO

  The headline: GM Strike Sparking Cost Concerns As It Stretches Into Second Day
  Najarian says if the strike extends past four or five days, it could start to have an effect, based simply on how much money GM is losing.
  Adami says if you want an auto-related trade, get long BWA. Its auto components are geared toward better fuel efficiency and that´s the future of the auto sector.
  
6. POPS AND DROPS

  VCLK popped 13% and FMCN popped 19%. On Monday, Pete Najarian said the online advertising trade was on in full force. – Pete Najarian likes these stocks.
  USU popped 6%: Adami says own this stock but stop out on any close below $9.75
  NVT popped 11%: Finerman likes the GPS trade.
  TSO popped 3%: Adami doesn´t like refiners and recommends staying away from TSO.
  JRJC popped 13%: Finerman jokes that for China, 13% isn´t high enough to be a pop!
  VG dropped 34%: Finerman says hang up on this stock.
  WHR dropped 5%: Macke says there´s no reason to own this stock.
  ARNA dropped 2%: Najarian likes this stock and says keep an eye on ARNA.
  FCX dropped 2%: Macke says FCX is going to take the elevator down.

  7. YOUR FIRST MOVE FOR WEDNESDAY

  Macke likes EBAY
  Adami recommends USU
  Finerman prefers CVMT.PK
  Najarian says DRIV is a buy.

   News and Events Digest

Breaking News

Highland Capital Management sent a letter to PDL BioPharma (PDLI) calling for an auction and for the company's chairman to resign. - WSJ

BHP Billiton Ltd. (BHP) could double the size of the expansion of its giant Olympic Dam copper/uranium mine in South Australia after boosting resources at the mine Wednesday, analysts said. - MarketWatch

Drug maker Amgen Inc. (AMGN) said Wednesday that a Phase 2 study of Aranesp suggests extended dosing of the drug paired with chemotherapy treatment appeared to be efficacious, with no unexpected adverse events compared to weekly dosing. Additionally the firm said results from two combined patient level analyses suggest that patients treated with Aranesp experienced a decrease in blood transfusions and improvement in hematologic response. - MarketWatch

Timberland (TBL) plans to close about 40 specialty retail stores in the U.S., Europe and Asia. The Stratham, N.H., footwear maker said the action is part of its strategy to concentrate on smaller, footwear-focused stores in the U.S. and in certain international markets. Timberland also plans to close several underperforming U.S. outlet stores. The majority of the store closures are expected to occur in the first several months of 2008. The company said the reduction in stores is anticipated to increase annual operating profits by about $6 million and lower annual revenue by about $40 million. Timberland said it will incur pretax restructuring costs of roughly $17 million to cover noncash charges from property and equipment, severance and other costs associated with the retail store closures. - MarketWatch

Xinhua Finance Media Ltd. (XFML) said investment firm Yucaipa Cos. agreed to purchase a block of Xinhua's existing shares from shareholders coming out of Xinhua's initial public offering lock up. The Beijing company Xinhua said Yucaipa partner David Olson will join its board as an independent director. - MarketWatch

Media Summary:

According to Reuters, Toyota (TM) says that its sales in the US may not rise this month.

Reuters writes that Nasdaq (NDAQ) and Borse Dubai have won approval to buy the OM.

The Wall Street Journal writes that Moody's and S&P will go before Congress today to defend their ratings of sub-prime instruments and other investments.

The New York Times reports earnings at Redhat (RHT) rose sharply.

The FT reports that Amazon (AMZN) has launched it competition to Apple (AAPL) iTunes.

The FT also reports that Nintendo is now the second largest company in the US based on market cap.

Barron's reports that quarterly revenue fell at CMGI (CMGI).

M&A Activity:

Canadian National Railway Co. (CNI) has agreed to purchase the major portion of Elgin, Joliet & Eastern Railway Co. for $300 million. Elgin, Joliet & Eastern, a Class II railroad owned by United States Steel Corp.'s (X) Transtar subsidiary, operates more than 198 main line miles of track encircling the city of Chicago. Transtar will retain railroad assets, equipment, and employees that support its Gary Works site in Northwest Indiana and the steelmaking operations of U. S. Steel. Transtar's remaining operations will become the Gary Railway. The companies said the acquisition is subject to regulatory review by the U.S. Surface Transportation Board (STB). If approved, closing is expected in mid-2008. Canadian National said it plans to invest about $100 million for integration, new connections, and infrastructure improvements to add capacity on the EJ&E line and allow network synergies to be realized over time. - MarketWatch

Economic Data:

8:30 Durable Goods
10:30 Crude Inventories

Wednesday Split Update:

summary of recent stock split announcements:

On September 20, Rush Enterprises, Inc. (Nasdaq:RUSHA) announced that its board of directors approved a 3:2 stock split to be payable on October 10, 2007.

On September 20, Arena Resources, Inc. (NYSE:ARD) announced that its board of directors approved a 2:1 stock split to be distributed on or about October 26, 2007.

On September 25, Denbury Resources, Inc. (NYSE:DNR) announced that its board of directors approved a 2:1 stock split pending shareholder approval on November 19, 2007.

Companies that have previously announced stock splits which become effective in the next several trading days.

Ex-Date Split Symbol Company
9/28 5:4 LPHI Life Partners Holdings
9/28 3:2 FCSX FCStone Group, Inc.
10/1 2:1 NOV National Oilwell Varco, Inc.
10/2 2:1 SLP Simulations Plus, Inc.
10/2 3:2 CLDA Clinical Data, Inc.
10/2 5:4 OPOF Old Point Financial Corp.
10/2 3:2 MNRO Monro Muffler Brake, Inc.
10/2 3:2 PH Parker Hannifin Corp.

   Upgrades and Downgrades by Sector:

Apparel
 UA Under Armour UBS Downgraded from Buy to Neutral

Audio-Video Equipmnt
 UEIC Univ Elec Deutsche Securities Initiated at Buy $35

Biotech
 AMLN Amylin Pharms Jefferies & Co Initiated at Buy $58
 MEDX Medarex Jefferies & Co Initiated at Hold $14

Broadcasting
 DISH EchoStar Kaufman Bros Price Target Raised Hold $46 to $48

Business Services
 RECN Resources Connect Stifel Nicolaus Downgraded from Buy to Hold
 RECN Resources Connect Robert W. Baird Downgraded from Outperform to Neutral $40 to $29
 RECN Resources Connect Bear Stearns Downgraded from Outperform to Peer Perform
 RECN Resources Connect JMP Securities Downgraded from Mkt Outperform to Mkt Perform
 RECN Resources Connect Piper Jaffray Downgraded from Outperform to Market Perform

Chemicals
 CE Celanese BB&T Capital Mkts Upgraded from Hold to Buy $43
 MON Monsanto Jefferies & Co Initiated at Buy $100
 AGU Agrium CIBC Wrld Mkts Downgraded from Sector Outperform to Sector Perform $56

Computer Hardware
 SPEC Spectrum Control Needham & Co Price Target Raised Buy $17 to $18
 SYNA Synaptics Oppenheimer Initiated at Buy $60
 TEL Tyco Electronics Credit Suisse Initiated at Outperform
 PALM Palm Citigroup Initiated at Sell

Computer Services
 NAVI NaviSite RBC Capital Mkts Price Target Raised Outperform $10 to $11
 GSIC GSI Commerce Deutsche Securities Initiated at Buy $31

Computer Software
 CNQR Concur Tech Cantor Fitzgerald Price Target Raised Buy $25 to $34
 COGN Cognos Broadpoint Capital Price Target Raised Buy $46 to $49
 DBTK Double-Take Software Needham & Co Initiated at Buy $20
 VRSN VeriSign Credit Suisse Downgraded from Outperform to Neutral

Finance Companies
 CIT CIT Group Credit Suisse Upgraded from Neutral to Outperform

Foods
 WINN Winn-Dixie Stores HSBC Securities Initiated at Underweight

Gaming Operations
 MGM MGM Mirage Jefferies & Co Price Target Raised Buy $115 to $118

Healthcare
 PGNX Progenics Pharm Banc of America Sec Initiated at Buy $31
 TEVA Teva Pharm Citigroup Initiated at Buy $52

Healthcare Equipment
 BIO Bio-Rad Labs Banc of America Sec Initiated at Buy $110
 TMO Thermo Fisher Banc of America Sec Initiated at Buy $65

Homebuilders
 LEN Lennar Pali Research Cut Price Target Sell $30 to $20

Household Goods
 TPX Tempur-Pedic Stifel Nicolaus Upgraded from Hold to Buy $42

Industrial Equipment
 MTD Mettler-Toledo Banc of America Sec Initiated at Buy $120

Manufacturing
 APH Amphenol Credit Suisse Initiated at Outperform

Oil and Gas
 CRZO Carrizo Oil & Gas RBC Capital Mkts Price Target Raised Outperform $50 to $51
 FTI FMC Tech Stifel Nicolaus Price Target Raised Buy $53 to $63
 CXO Concho Resources Lehman Brothers Initiated at Overweight
 ALJ Alon USA Energy Credit Suisse Downgraded from Outperform to Neutral
 CEO CNOOC Ltd Bear Stearns Downgraded from Peer Perform to Underperform
 STO Statoil ASA JP Morgan Downgraded from Overweight to Neutral
 TSO Tesoro Petroleum Credit Suisse Downgraded from Outperform to Neutral $56 to $51
 GW Grey Wolf RBC Capital Mkts Cut Price Target Sector Perform $8.50 to $7.50

REITs
 HCP Health Care Ppty UBS Downgraded from Buy to Neutral
 HCP Health Care Ppty Friedman Billings Downgraded from Outperform to Mkt Perform $34

Restaurants
 MSSR McCormick & Schmick's McAdams,Wright,Ragen Cut Price Target Buy $32 to $29

Retail Trade
 AEO American Eagle Wachovia Upgraded from Mkt Perform to Outperform
 CVS CVS Corp JP Morgan Upgraded from Neutral to Overweight
 ODP Office Depot JP Morgan Upgraded from Neutral to Overweight
 WFMI Whole Foods RBC Capital Mkts Resumed Coverage Outperform
 BKRS Bakers Footwear Roth Capital Price Target Raised Hold $3.60 to $5
 SPLS Staples JP Morgan Downgraded from Neutral to Underweight
 WAG Walgreen JP Morgan Downgraded from Overweight to Neutral
 DFS Discover Financial Services Calyon Securities Cut Price Target Neutral $24 to $23

Savings & Loan
 TSL Trina Solar Ardour Capital Initiated at Buy $75

Semiconductors
 PXLW Pixelworks Jefferies & Co Upgraded from Underperform to Hold $1.25
 AATI AATI - recent favorable ruling is positive catalyst for the stock says Jefferies Ruling
 SMSC SMSC Needham & Co Price Target Raised Buy $44 to $46
 TUNE Microtune Roth Capital Price Target Raised Buy $6.50 to $7
 ONNN ON Semiconductor Oppenheimer Initiated at Buy $16

Solar Technology
 SPWR Sunpower Ardour Capital Initiated at Accumulate $91

Telecommunications
 GRMN Garmin Deutsche Securities Initiated at Buy $125
 RIMM Research In Motion Citigroup Initiated at Buy $115
 S S - downgraded to Neutral at Goldman Sachs with $21 price target Downgraded

Transpo-Railroads
 UNP RailRoad sector profit outlook is lowered as a whole at Citi but they raised estimates on CP, and UNP

Utilities
 CNL CLECO Corp Calyon Securities Initiated at Buy $32