Prism Morning Call 10-22-09

DAILY MARKET HIGHLIGHTS 33431 1 2385 Executive Center Drive, Suite 400 • Boca Raton, Florida 3343 Phone: (561) 922& 922&5266 • Fax: (561) 623& 623&6235 www.prismtradingschool.com

Thursday

10.22.2009

CURRENT MARKET SENTIMENT

Presumably, a downgrade of Wells Fargo coupled with Wal-Mart Stores Inc., challenging holiday guidance triggered the sell off on the Dow of 92 points to 9949, and the S&P to 1081. The reality is, the financial statement of the banking sector is weak due to the housing meltdown. Loan losses seem to be accelerating and reserves to cover future loan losses are growing as confirmed by the Beige

Book–“All regions reported a weak or declining commercial real estate market”, thus the bullish sentiment is winding down fast. Technically, the indices are filling gaps on the downside which may lead to test 9800 and 1069. Failure to retake the weekly Pivot, today the upside for the bull will confirm yesterday’s sell off.

PRISM CALL

ECONOMIC CALENDAR

All world markets were in the red due to the sell off. Sell on the news has yielded nice profit. The question is will there be followed through? The best strategy is to sell the retracement as long as the indices are below the weekly pivot. The only reprieve might be the jobless claims and leading indicator; however, the market may use these numbers to take profit. After all, today is Thursday, usually a volatile and tradeable day.

INDU (DOW) SPUZ (S&P)

S2

S1

PIVOT

R1

R2

9828

9895

10004

10112

10179

1087

1100

1108

1067

1075

INDICATOR

RANGE

EXPECTATION

PRIOR

ACTUAL

8:30 AM

Initial Jobless Claims

500K to 540K

515K

514K

531K

8:30 AM

Continuing

5970K

5992K

5923K

10:00 AM

Leading Indicators

0.8%

0.6%

10:00 AM

House Price Index MoM EIA Natural Gas Storage Change

5895K to 6010K 0.3% to 1.1% -0.2% to 1.9%

0.3%

0.3%

5 to 27

21

58

10:30 AM

INDU & SPUZ TECHNICALS INDICES

TIME

Claims

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.

FOREIGN MARKETS NEWS 

%

5203.89

53.96

-1.03

DAX

5757.25

76.24

-1.31

HANG SENG

22210.52

107.59

-0.48

NIKKEI

10267.17

66.22

-0.64

CHINA

3051.412

19.177

-0.62

MARKET

PRICE

FTSE




DOW STOCKS TO WATCH STRONG

WEAK

MCD

IBM

MMM

BA

UTX

JPM

KFT

HD

EU steel market 'stuck in slow motion,' Eurofer says Reuters.com DO Diamond Offshore announces special cash dividend of $1.875 (105.88 ) Update-

COMMODITY PRICES COMMODITY

OIL

GOLD

PRICE




80.74



Pound drops on slow retail sales, BOE governor comments – WSJ

0.63

U.K. retail sales flat in September – WSJ 1058.2

6.30

European market summary; U.K. retail sales flat, pound lower: FTSE -1.29%, CAC 1.58%, DAX -1.58%

UPGRADES & DOWNGRADES

STOCKS UPGRADED COMPANY

BROKERAGE FIRM

RATINGS CHANGE

PRICE

TARGET

Freeport-McMoran (FCX)

Deutsche Bank

Hold >> Buy

79.72

72 >> 100

Motorola (MOT)

Thoma Weisel

Market Weight >> Overweight

8.20

7 >> 11

PRICE

TARGET

STOCKS DOWNGRADED COMPANY

BROKERAGE FIRM

Pepco Hldgs (POM)

J.12P Morgan

SAP (SAP)

Merrill Lynch

Neutral >> Underweight Buy >> Neutral

EOG Resources (EOG)

UBS

Buy >> Neutral

92.94

Chesapeake Energy (CHK)

UBS

Buy >> Neutral

28.83

RATINGS CHANGE

15 52.04

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EARNINGS

BMY Bristol-Myers beats by $0.01, reports revs in-line; guides FY09 EPS in-line (22.69 ) ESI ITT Educational beats by $0.03, beats on revs (110.43 ) MMM 3M beats by $0.20, beats on revs; raises FY09 EPS and revs guidance (76.33 ) CELG Celgene beats by $0.02, beats on revs (54.58 ) KMB Kimberly-Clark beats by $0.27, reports revs in-line; guides FY09 EPS above consensus (59.69 ) T AT&T beats by $0.04, reports revs in-line (25.94 ) MJN Mead Johnson Nutrition misses by $0.02, misses on revs; guides FY09 EPS below consensus (43.65 MRK Merck beats by $0.08, reports revs in-line; guides FY09 EPS in-line, revs in-line (32.68 ) SON Sonoco Products beats by $0.04, misses on revs (29.11 ) BDK Black & Decker beats by $0.09, reports revs in-line; guides Q4 EPS above consensus; guides FY09 EPS above consensus (48.91 ) AF Astoria Fincl beats by $0.01, misses on revs (10.85 ) JBLU Jetblue Airways misses by $0.01, reports revs in-line (5.74 ) ZMH Zimmer Hldgs beats by $0.02, beats on revs; reaffirms FY09 EPS guidance, revs guidance (52.23 ) NCR NCR Corp misses by $0.05, misses on revs; lowers FY09 rev and EPS guidance (12.22 ) HSY Hershey Foods beats by $0.06, misses on revs; guides FY09 EPS above consensus (40.67 ) CXG CNX Gas misses by $0.04, beats on revs (35.28 ) RTN Raytheon beats by $0.09, revs in-line; guides FY09 in-line; guides FY10 EPS below consensus, revs in-line (45.18 ) LH Laboratory Corp beats by $0.07, reports revs in-line; guides FY09 EPS above consensus (68.85 ) GR Goodrich beats by $0.09, misses on revs (54.65 ) ETR Entergy misses by $0.08, misses on revs; guides FY09 EPS in-line (80.75 ) PM Philip Morris International beats by $0.02, misses on revs; raises FY09 guidance (50.82 ) Page |3 www.prismtradingschool.com

EMC EMC Corp beats by $0.02, beats on revs; guides Q4 EPS and revs above consensus; guides FY09 revs and EPS above consensus (17.51 ) DAL Delta Air Lines reports Q3 (Sep) results, revs in-line (8.33 -0.69) WCC Wesco misses by $0.05, misses on revs (29.48 ) LM Legg Mason reports Q2 (Sep) results, beats on revs (31.71 ) DO Diamond Offshore beats by $0.32, beats on revs (105.88 ) XRX Xerox beats by $0.02, beats on revs; guides Q4 EPS in-line (7.72 ) PNC PNC Bank beats by $0.69, beats on revs (44.96 ) JCG J. Crew raises Q3 guidance above consensus (37.74 ) BG Bunge beats by $0.15, misses on revs; guides FY09 EPS below consensus (66.90 ) DOW Dow Chemical beats by $0.14, beats on revs (25.50 ) SGP Schering-Plough reports EPS in-line, revs in-line (29.01 ) PFS Provident Finl beats by $0.01 (9.85 ) OXY Occidental Petro beats by $0.06, reports revs in-line (81.55 ) RAI Reynolds American beats by $0.07, misses on revs; guides FY09 EPS above consensus (49.04 ) UNP Union Pacific beats by $0.02, reports revs in-line; volumes down 15% YoY (62.92 ) MCD McDonald's beats by $0.04, reports revs in-line (58.33 ) R Ryder System beats by $0.05, reports revs in-line (45.27 ) UPS UPS revs $11.15 bln vs $11.17 bln First Call consensus UPS UPS: Wires reporting EPS of $0.55 vs $0.52 First Call consensus UNP Union Pacific prelim $1.02 vs $1.00 First Call consensus; revs $3.67 bln vs $3.69 bln First Call consensus; Q3 volumes were down 15%++

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TECHNICAL ANALYSIS

Symbol

S7

S6

S5

S4

S3

S2

S1

PIVOT

R1

R2

R3

R4

R5

R6

R7

1095.72

1098.14

1100.57

1108.43

1116.30

1121.16

1129.02

Sectors SPX

1046.66 1054.53 1059.39 1067.25 1075.12 1077.55

1079.97

1087.84

INDU

9652.78 9719.90 9761.37 9828.49 9895.61 9916.34

9936.99

10004.20 10071.41 10092.05 10112.79 10179.91 10247.03 10288.50 10355.62

NDX

1701.93 1713.36 1720.42 1731.85 1743.28 1746.81

1750.32

1761.77

XBD

112.33 42.50 3713.78 671.44 193.33 514.67 749.06 390.92 287.17 362.09

BKX TRAN OIX OSX XNG CYC UTY DRG RLX

113.85 43.23 3764.66 678.27 196.39 519.67 755.45 393.23 288.87 366.89

114.78 43.68 3796.09 682.50 198.29 522.76 759.41 394.66 289.91 369.86

116.30 44.41 3846.98 689.33 201.35 527.76 765.80 396.97 291.60 374.66

117.82 45.14 3897.86 696.16 204.41 532.76 772.19 399.28 293.30 379.46

1773.21

1776.73

1780.26

1791.69

1803.12

1810.18

1821.61

118.29 118.75 120.27 121.79 122.26 122.72 124.24 125.76 126.69 128.21 45.37 45.59 46.32 47.05 47.28 47.50 48.23 48.96 49.41 50.14 3913.58 3929.23 3980.18 4031.13 4046.78 4062.49 4113.38 4164.26 4195.69 4246.58 698.28 700.38 707.22 714.06 716.17 718.28 725.11 731.94 736.17 743.00 205.36 206.30 209.37 212.44 213.38 214.33 217.39 220.45 222.35 225.41 534.30 535.84 540.85 545.85 547.39 548.94 553.94 558.94 562.03 567.03 774.17 776.14 782.54 788.94 790.91 792.89 799.28 805.67 809.63 816.02 400.00 400.71 403.02 405.33 406.05 406.76 409.07 411.38 412.81 415.12 293.82 294.34 296.03 297.73 298.25 298.77 300.46 302.16 303.20 304.89 380.95 382.42 387.23 392.04 393.52 395.00 399.80 404.60 407.57 412.37

Tradeables SPY DIA QQQQ QLD IWM OIH XLE FAZ FAS SRS SDS USO SKF

104.58 105.40 105.91 106.74 107.56 96.43 97.12 97.54 98.22 98.91 41.82 42.11 42.29 42.58 42.87 49.83 50.53 50.97 51.67 52.37 57.12 57.88 58.35 59.11 59.87 119.48 121.38 122.55 124.46 126.36 56.08 56.74 57.15 57.81 58.47 16.13 16.80 17.21 17.89 18.56 67.66 70.65 72.49 75.47 78.46 8.63 8.84 8.98 9.20 9.41 34.84 35.41 35.75 36.32 36.89 37.36 38.07 38.52 39.23 39.94 21.34 21.91 22.26 22.82 23.39

107.82 99.12 42.96 52.59 60.11 126.95 58.67 18.77 79.38 9.48 37.06 40.17 23.56

108.07 99.33 43.05 52.81 60.34 127.53 58.87 18.97 80.30 9.55 37.23 40.38 23.74

108.90 100.01 43.34 53.51 61.10 129.44 59.54 19.65 83.28 9.77 37.80 41.10 24.30

109.72 100.70 43.63 54.21 61.86 131.34 60.20 20.32 86.27 9.98 38.37 41.82 24.87

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109.98 100.91 43.72 54.43 62.10 131.93 60.40 20.53 87.19 10.05 38.54 42.04 25.04

110.23 101.12 43.81 54.65 62.33 132.51 60.61 20.73 88.11 10.12 38.71 42.26 25.22

111.06 101.80 44.10 55.35 63.09 134.42 61.27 21.41 91.09 10.34 39.28 42.97 25.78

111.88 102.49 44.39 56.05 63.85 136.32 61.93 22.08 94.08 10.55 39.85 43.68 26.35

112.39 102.91 44.57 56.49 64.32 137.49 62.34 22.49 95.92 10.69 40.19 44.13 26.70

113.22 103.59 44.86 57.19 65.08 139.40 63.00 23.17 98.90 10.91 40.76 44.84 27.26