Prism Morning Call 10-15-09

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CURRENT MARKET SENTIMENT The trifecta delivered a Dow of 10015 and S&P 1073 at the close which led to the celebration of the power chip, the crawling bunny rabbit. However, Thursday may be the perfect occasion for profit taking on the eve of options expiration and the earning day of Grand Daddy Goldman. All economic data is expected to show sign of bottoming out of the recession: from Empire State Manufacturing Index (expected 17.3) to Initial Claims(expected 525k). However, cash at hand is king. We expect greater volatility and a possible upside limit of 10015-20 and on the downside 9928.

MARKET HIGHLIGHTS 10/15/2009

PRISM CALL

ECONOMIC NUMBERS AND DATA Time (ET)

Indicator

Range

Estimate

Prior

Actual

8:30 am

Consumer Price Index (MoM)

-0.2% to 0.5%

0.2%

0.4%

0.2%

8:30 am

CPI ex Food & Energy (MoM)

0.0% to 0.2%

0.1%

0.1%

0.2%

8:30 am

Empire Manufacturing

12.00 to 22.10

17.50

18.88

34.57

8:30 am

Initial Jobless Claims

490K to 540K

520K

521K

514K

10:00am

Philadelphia Fed

8.0 to 17.0

12.0

14.1

10:30am

Natural Gas Storage Change

45 to 61

53

69

11:00am

US Crude Oil Inventories

-1500K to 4500K

1000K

-978K

11:00am

US Gasoline Inventories

-1500K to 2800K

1125K

2937K

11:00am

US Distillate Inventory

-3000K to 1700K

-100K

679K

11:00am

US Refinery Utilization

-1.10% to 0.50%

0.00%

0.42%

Even Goldman's (GS) strong earnings aren't enough for Wall Street this morning, as the whisper number was 10% higher than they acheived. Futures are indicating down on this news as GS is taking the entire financial sector with it. Use spikes today as an opportunity to sell this market. From the open interest, the bias is clearly on the call side, yet the house can only benefit if market ends around 9973, thus closing above 10,000 is relatively a slim chance.

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.

TECHNICAL Indices

S2

S1

Pivot

R1

R2

INDU (DOW)

9818

9877

9972

10067

10126

SPUZ (S&P)

1073

1079

1087

1096

1102

DOW STOCK TO WATCH Strong IBM

Weak AXP

MMM

JNJ

CAT

VZ

PFE

HD

COMMODITY PRICES Commodity

Price

OIL

75.02

0.16

GOLD

1048.8

15.90






FOREIGN MARKETS Market

Price



%

FTSE

5277.56

28.54

-0.54

DAX

5821.66

32.48

-0.55

HANG SENG

21999.08

112.60

0.51

NIKKEI

10238.65

178.44

1.77

CHINA

2979.788

9.256

0.31




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UPGRADES / DOWNGRADES Stocks Upgraded  JPM JP Morgan Chase upgraded to Outperform from In line at Fox Pitt- Reuters (47.16 ) FPL FPL Group upgraded to Buy at Argus; tgt $64 (52.99 ) DV DeVRY upgraded to Outperform from Sector Perform at RBC Capital Mkts (54.40 ) BPAX BioSante resumed with a Outperform at Oppenheimer; tgt $6 (1.82 ) XLNX Xilinx resumed with a Neutral at Credit Suisse; tgt $25 (24.00 ) CBI CB&I upgraded to Buy from Neutral at Goldman- DJ (19.09 ) Company

Ticker

Brokerage Firm

Ratings Change

Price Target

FPL Group

FPL

Argus

Hold » Buy

$64

DeVRY

DV

Acorda Therapeutics

ACOR

Par PRX Pharmaceutical

RBC Capital Mkts Sector Perform » Outperform Merriman

Neutral » Buy

Barclays Capital

Equal Weight » Overweight

OpenTable

OPEN

Citigroup

Hold » Buy

Sunpower

SPWRA

Robert W. Baird

Neutral » Outperform

$28 » $40

Acorda Therapeutics

ACOR

Robert W. Baird

Neutral » Outperform

$24 » $28

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Stocks Downgraded  WDC Western Digital downgraded to Hold at Stifel Nicolaus; removed from Stifel Select List (37.72 ) SCHW Charles Schwab downgraded to Neutral from Buy at BofA/Merrill (19.28 ) Company

Ticker

Brokerage Firm

Ratings Change

Western Digital

WDC

Stifel Nicolaus

Buy » Hold

Citigroup

Hold » Sell

ASML Holding ASML

Price Target

Host Hotels

HST

Robert W. Baird

Neutral » Underperform

$7 » $9

Travelers

TRV

Keefe Bruyette

Outperform » Mkt Perform

$51

Employers Holdings

EIG

Keefe Bruyette

Outperform » Mkt Perform $17 » $17.50

Kinder Morgan KMP Prtnrs Lazard

LAZ

Oppenheimer

Outperform » Perform

Oppenheimer

Outperform » Perform

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$45

NEWS ALERT ACOR Acorda Therapeutics announces positive vote by FDA Advisory Committee for Fampridine-SR (16.74 ) AAUKY Xstrata abandons Anglo American bid - WSJ (18.41 ) AIG AIG unit to repay a big loan, buying time - WSJ (44.41 ) NYT NY Times drops Boston Globe sale - Financial Times (8.67 ) Foreclosure activity increases 5% in Q3 according to RealtyTrac U.S. foreclosure market report GTN Gray Television raises 3Q09 revenue guidance (2.37 ) PLX Protalix BioTherapeutics announces positive top-line results from its Ph. III clinical trial fo UPLYSO for treatment of Gaucher Disease (8.88 ) NOK Nokia beats by EUR 0.04, misses on revs (15.39 ) LPS Lender Processing Services tgt raised to $45 at Oppenheimer as defaults are expected to drive another strong quarter (40.27 ) WGO Winnebago Inds reports Q4 loss better than consensus, misses on revs (14.36 ) ETR Entergy issues downside Q3 guidance (78.82 ) DSW DSW raises FY10 EPS guidance, sees 3Q comp store sales of approx 6-8% (17.66 ) BAX Baxter beats by $0.01, misses on revs; guides Q4 EPS in-line; guides FY09 EPS in-line (57.00 ) GVA Granite Constr cut to Neutral from Buy at Goldman- DJ (29.14 ) GS Goldman Sachs prelim $5.25 vs $4.24 First Call consensus; revs $12.37 bln vs $11.02 bln First Call consensus GS Goldman Sachs beats by $1.01, beats on revs (192.28 ) FCS Fairchild Semi sees Q4 gross margin of 28-30% vs the 27.5% consensus UpdateXLNX Xilinx resumed with a Neutral at Credit Suisse; tgt $25 (24.00 ) STBC State Bancorp reports 3Q09 EPS of $0.10 vs. $0.06 two analyst estimate; interest income fell 9.6% y/y to $19.6 mln (8.35 )

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NEWS ALERT JPM JP Morgan Chase 2009-2011 EPS ests raised at Collins Stewart following yesterday's earnings (47.16 ) CY Cypress Semi prelim $0.10, ex items vs $0.06 First Call consensus; revs $178.71 mln vs $174.38 mln First Call consensus APH Amphenol beats by $0.04, beats on revs; guides Q4 EPS above consensus, revs above consensus (41.29 ) HOG Harley-Davidson misses by $0.10, beats on revs (26.26 ) KNL Knoll beats by $0.02, beats on revs (10.89 ) C Citigroup beats by $0.11, beats on revs (5.00 ) ACOR Acorda Therapeutics: Color on positive Amaya (fampridine) FDA Panel; FDA approval expected (16.74 PPG PPG Industries prelim $0.97 vs $0.89 First Call consensus; revs $3.23 bln vs $3.13 bln First Call consensus BHI Baker Hughes tgt raised to $56 at Jefferies following an S-4 filing last night suggesting additional cost saving from the BJS acquisition (46.21 )

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