Prism Morning Call 09-15-09

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CURRENT MARKET SENTIMENT A quiet and forgetful number, S&P 1050 is equally important for the street as the Dow 9600. We came close yet finished short of the target. This is the center piece of today and with some added extra prior to considering a trip southward. Thus, the pivot 1044 and 9600 are the supports. The selling pressure did not materialize on the initial move yesterday, hence be cognizant that the same may occur today.

MARKET HIGHLIGHTS 09/15/2009

ECONOMIC NUMBERS AND DATA Time (ET)

Indicator

Date

Actual

Expectation

Range

Prior

8:30 AM

Producer Price Index MoM

Sep 15

1.7%

0.8%

-0.3% to 2.0%

-0.9%

8:30 AM

PPI Ex Food & Energy MoM

Sep 15

0.2%

0.1%

-0.1% to 0.4%

-0.1%

Advanced Retail Sales

Sep 15

2.7%

1.9%

0.8% to 3.8%

-0.1%

8:30 AM

Retail Sales Less Autos

Sep 15

1.1%

0.4%

-0.1% to 1.0%

-0.6%

8:30 AM

Empire Manufacturing

Sep 15

18.88

15.00

5.00 to 18.00

`12.08

10:00 AM

Business Inventories

Sep 15

-0.9%

-1.4% to -0.5%

-1.1%

8:30 AM

TECHNICAL Indices

S2

S1

Pivot

R1

R2

INDU (DOW)

9502

9539

9597

9656

9693

SPUZ (S&P)

1029

1035

1044

1053

1059

PRISM CALL

PPI and retail numbers came out strong, indicating an up opening on the market. I am looking at fading this up open. I expect them to start up, than take the market down. The market will probably sell off then slowly move back up, like it did yesterday, with the Dow being up at least 50 points at some point in the day.

Page |1 RISK DISCLAIMER: There is a very high degree of risk involved in trading equities. Trading is not for every investor and only risk capital should be used. Past results are not indicative of future returns. Prism Trading School, LLC (“Prism”) and all individuals affiliated with Prism assume no responsibilities for your trading and investment results. The indicators, strategies, articles and all other features are for educational purposes only and should not be construed as investment advice. Any person who chooses to use this information as a basis for their trading assumes all the liability and risk for themselves and hereby and absolutely agrees to indemnify and hold harmless Prism, its principals, agents and employees. All of the material contained herein is believed to be correct, however, Prism will not be held responsible for accidental oversights, typos or incorrect information from sources that generate fundamental and technical information. Prism does not warrant the completeness or accuracy of such information, and does not warrant any results from the use of the information. Your use of Prism materials is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade and make your own independent decisions regarding any securities mentioned herein. Prism affiliates may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

DOW STOCK TO WATCH Strong MMM

Weak UTX

DD

AXP

JPM

WMT

KO

PG

UPGRADES / DOWNGRADES Stock Upgraded
Novartis (NVS) Ebay (EBAY) Yahoo! (YHOO) OSI Pharm (OSIP_ Cardinal Health (CAH) Stock Downgraded  Arena Pharma (ARNA) Goodrich (GR) FLIR Systems (FLIR) UBS (UBS)

House

Current Price

Price Adjustment

Target Price

Jefferies & Co UBS

47.70

Buy

23.82

Buy

$28

Bernstein

15.59

Outperform

$21

Goldman

34.51

Neutral

Goldman

26.63

Buy

House

Current Price

Price Adjustment

Rodman & Renshaw

4.95

Market Perform

BofA/Merrill

56.48

Neutral

JP Morgan

27.31

Neutral

Exane BNP Paribas

18.13

Neutral

Target Price

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COMMODITY PRICES Commodity

Price




OIL

69.31

0.45

GOLD

998.80



2.30

FOREIGN MARKETS Market

Price




FTSE

5042.99

24.14

0.48

DAX

5620.34

0.10

0

NIKKEI

10217.62

15.65

0.15

HANG SENG

20866.37

CHINA

3033.728



65.83 6.987

%

-0.31 0.23

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NEWS ALERT German ZEW Index disappoints – WSJ German economic expectations rose by less than forecast in September, indicating that it may take a while before the economy returns to a sustainable growth path KFT Kraft Foods may sell assets for Cadbury bid - NY Post (26.11 ) KFT might sell assets like Maxwell House and Oscar Mayer in order to raise enough cash to finance an acquisition of Cadbury (CBY). Jefferies & Co upgrades Novartis (NVS 47.70) to Buy from Hold saying Novartis offers good near term underlying growth, some potentially positive catalysts during the next six to twelve months and a relatively safe haven for investors from wider economic issues. The firm says with most, if not all, divisions now looking fundamentally stronger, they are more optimistic on 12 month earnings momentum UBS upgrades Ebay (EBAY 23.82) to Buy from Neutral and raises their tgt to $28 from $24 saying recent data from top eBay vendor ChannelAdvisor and other channel checks suggest eBay same store sales may be starting to turn a corner. Bernstein upgrades Yahoo! (YHOO 15.59) to Outperform from Market Perform and raises their tgt to $21 from $18 saying they think YHOO's current price is too low because it implies the operating business is worth only $4.50 after cash and Asian assets have been stripped out. Firm says this stands in contrast to their view that the core business is worth at least $9.50 per share. They further think that the market is not giving sufficient credit for Yahoo!'s 40% stake in Alibaba where they expect at least two of the four remaining operating businesses to be taken to an IPO within the next 2 years. BOE mulls lowering reserve rate – WSJ NVS Novartis AG investigational bronchodilator QAB149 improves lung function and reduces breathlessness compared to tiotropium in patients with COPD (47.70 ) COF Capital One reports Aug U.S. Card (~70% of the Trust) Net Charge-Off Rate of 9.32% vs 9.83% in July 2009 (38.32 ) Co also reports U.S. Card 30+ Days delinquent rate of 5.09% vs 4.83% in July C Citigroup Explores Bid to Pare U.S. Stake - WSJ (4.52 ) China lodges WTO complaint over US tire tariffs – AFP

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NEWS ALERT OSK Oshkosh Truck awarded additional 352 M-ATVs worth $189 mln (32.10 ) MRK Merck announces European Union Commission approves expanded Use of ISENTRESS, from MSD, in Adult Patients with HIV-1 infection (32.89 ) LZ raises 2009 EPS guidance to $6.10-6.40, excluding charges, vs $5.92 First Call consensus, up from $5.70-6.00, ex charges U.S. Chain store sales increased 0.02% in Sep 12 week vs +0.6% in prior week, according to ICSC/Goldman Sachs PARD Poniard Pharma Announces Pivotal Phase 3 SPEAR Trial Evaluating Picoplatin in Small Cell Lung Cancer 320th Event Target; Event Enables Overall Survival Analysis of Registration SPEAR Trial BBY Best Buy misses by $0.05, beats on revs; guides FY10 EPS in-line, revs above consensus ITW Illinois Tool raises Q3 guidance 3 New York residences raided in terrorism probe – AP U.S. Chain store sales increased 0.02% in Sep 12 week vs +0.6% in prior week, according to ICSC/Goldman Sachs Wells Fargo upgrades CBS (CBS 11.86) to Outperform from Market Perform Wells Fargo upgrades Cooper Industries (CBE 36.63) to Outperform from Market Perform Citigroup upgrades Arcelor Mittal (MT 40.27) to Buy from Hold

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