Contributors

Good morning. The bulls tried mightily Monday to extend their streak of consecutive winning Monday’s to nine. But at the end of the day, worries about the PIGI’S and global growth prospects wound up pushing to Dow to another triple-digit loss.

After Friday’s big reversal, there was an awful lot of talk about the current corrective action having ended. The bullish technicians, who care little for the reasons why a move occurs, argued that after being down big on Friday, the spike higher into the close presented a “key reversal� on the charts. The glass-is-half-full crowd opined that this reversal meant a trend change was at hand and that it was time to get long.

The only problem with this theory is that the premise behind a “key reversal� didn’t appear to be evident on Friday. Instead of evidence that the sellers had become exhausted after a frenetic move to the downside, it appeared that a batch of buy programs were run in front of what was expected to be a ninth straight gain on Monday. So, while there is no telling when the current dance to the downside will end, yesterday’s crummy tape action proved that Friday was not likely a key reversal day.

The issues in the market yesterday were not exactly new. While things got started off on the right foot on the back of decent earnings, some upbeat analyst comments about tech, and a decline in the dollar (yes fans, the inverse dollar/stock linkage is still intact), talk of credit contagion in the PIGI’S as well worry about the Fed’s exit strategy proved to be too much for the bullishly inclined.

The big-picture situation with the PIGI’S isn’t good. They have too much debt, weak economies, and not a lot of options. And with the G-7 saying nary a word about helping the little out the PIGI’S over the weekend, countries like Greece have little choice but to implement austerity programs. While this sounds all well and good, the problem with this path is it basically prescribes a continuation (if not a deepening) of the recession. Apparently the Greek austerity plan did not sit well with the union workers as they have called for a strike in protest of the government actions.

Another concern yesterday had to do with the talk about the Fed’s exit strategy. The WSJ published an article about the Fed’s new tool – paying interest on bank reserves. The fear is that the Fed might be being encouraged by the politicos to get things moving faster than may be prudent at the present time.

So, when you look at the macro picture which includes the Chinese working to slow their economy, trouble with sovereign debt, and the Fed perhaps ready to take action, it is hard to see how we get robust economic growth. And with stocks having traveled a long way in a short period of time, some corrective action makes sense.

Turning to this morning, things are looking up all of a sudden and yes, it is still all about the PIGI’S. There is word that the EU’s Trichet’s made a change to his flight plans and is heading back to Europe instead of Australia. This is fueling speculation that the EU is working on a plan to backstop Greece’s debt. And since a lot of the current decline has been tied to the PIGI’S, any measures to help/fix the situation will be met with celebration in the markets.

Running through the rest of the pre-game indicators, the overseas markets are mixed but have been improving with the Trichet news. Crude futures are up $0.97 to $72.86. On the interest rate front, we’ve got the yield on the 10-yr trading higher at 3.60%. Next, gold is moving up by $10.40 and the dollar is lower against the Euro, the Pound, and the Yen. Finally, with about an hour before the bell, stock futures in the U.S. are pointing to a significantly higher open. The Dow futures are currently ahead by about 100 points; the S&P’s are up about 12 points, while the NASDAQ looks to be about 16 points above fair value at the moment.

Yesterday's Earnings After The Bell

BJ Services BJ -$0.03 -$0.05
Camden Property CPT $0.71 $0.63
Electronic Arts ERTS $0.33 $0.31
Evergreen Solar ESLR -$0.48 -$0.08
Harman Intl HAR $0.40 $0.07
Hartford Financial HIG $1.51 $1.51
Lincoln National LNC $0.90 $0.84
Principal Financial PFG $0.62 $0.66


Earnings Before The Bell

Biogen Idec BIIB $1.20 $1.05
Cameron International CAM $0.54 $0.53
Celanese CE $0.50 $0.47
Cognizant Technology CTSH $0.47 $0.46
Coventry Health Care CVH $0.74 $0.56
InterActiveCorp IAC $0.20 $0.18
International Flavors IFF $0.63 $0.60
Coco-Cola KO $0.66 $0.66
NYSE Euronext NYX $0.58 $0.48
Pulte Homes PHM -$0.31 -$0.39
Molson Coors TAP $1.17 $1.10


* Report includes items that make comparisons to the consensus estimate questionable

Wall Street Research Summary

Upgrades:


Monsanto (MON) – BofA/Merrill
Verizon (VZ) – Bernstein
PetSmart (PETM) – Credit Suisse
CarMax (KMX) – Credit Suisse
SAP (SAP) – FBR Capital
WABCO Holdings (WBC) – JPMorgan
Rockwell Automation (ROK) – Morgan Stanley
Caterpillar (CAT) – Morgan Stanley
Ingersoll-Rand (IR) – Morgan Stanley
Sierra Wireless (SWIR) – RBC Capital
PS Business Parks (PSB) – RW Baird
Lamar Advertising (LAMR) – Wells Fargo
Downgrades:

Air Products (APD) – Citi, Target reduced at UBS
Gamestop (GME) – Credit Suisse
Sinopec (SNP) – Goldman
PetroChina (PTR) – Goldman
Websense (WBSN) – JPMorgan

Long positions in stocks mentioned: CAT, LAMR, KO

Don’t forget, ego is the enemy… And until next time, “May the bulls be with you!�

David D. Moenning
Founder TopStockPortfolios.com

For more "top stock" portfolios and research, visit www.TopStockPortfolios.com

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The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is� without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Good morning. Market technicians like to say “the tape tells all.� The thinking among chart watchers is you should ignore the news and just watch the action on the charts. But perhaps one of the most difficult aspects of managing money in the markets is dealing with a fear-based panic such as we saw yesterday. The problem is that when your charts are plunging, those flashing red numbers don’t always tell you why the dive is occurring. And in my humble opinion, understanding why a move occurs is probably more important than deciphering the importance of trendlines, moving averages, and support/resistance zones.

If you glanced at the major press headlines and/or listened to the radio looking for answers about why the market was suddenly getting trashed yesterday, you may have been misled. Early in the day, we heard lots of talk about the weekly jobless claims being the primary reason for the market decline. Then there were stories about disappointment over the pace of the economic recovery. And one radio report in Chicago blamed the big drop on fears about this morning’s jobs report. Although all points may have been true, these were NOT the catalysts for the dance to the downside.

Nope, yesterday’s rather ugly action can be summed up with a little game we’ve probably all played with our kids when they were little. So, here goes… The story behind the 268 point tank job on the Dow can be summarized with the following, “This little piggy went to market… This little piggy stayed home.�

The concerns about sovereign debt problems in the PIGI’S (Portugal, Italy, Greece, Ireland, and Spain) is not new. However, on Thursday, the situation got worse as one of the PIGI’S “went to market� with a 500 million Euro t-bill auction. But unfortunately the rest of the PIGI’S (and just about every other country) apparently stayed home as only 300 million Euro worth of bills were purchased.

In short, it was Portugal’s “failed auction� that put the fear of credit contagion back on the table yesterday. Never mind that Portugal is a small country. Never mind that the EU had just given their stamp of approval on another PIGGI’S (Greece) plan to reduce their deficit. Never mind that there has not yet been the hint of a default on sovereign debts. And never mind that fact that the U.S. debt-to-GDP is no better, or even worse, than the PIGGI’S. The key here is that a sovereign debt auction failed because the risk was perceived to be too high.

One of the big reasons the credit crisis got out of hand in 2007/08 was the idea that traders/investors no longer were pricing risk properly in the debt markets. Thus, it is no surprise that the market might now be ultra sensitive to the risk of default.

The bottom line is traders and investors have seen this movie before and they did not care for the ending. So, instead of hanging around with the assumption that the EU won’t let any of the PIGGI’S fail, traders decided to sell risk assets instead.

We’re of the mind that this will likely wind up being a “bad-news panic� where stocks “whoosh� lower for a spell and then snap back when it becomes clear that the worst case scenario isn’t likely to transpire. But for now, it might be a good idea to take your foot off the gas pedal.

Turning to this morning, we’ve got the Big Kahuna of economic data – the Jobs Report – so, let’s get to it. The Labor Department reported that Nonfarm Payrolls in the month of January fell by 20,000, which was well below the consensus estimates for an increase of 15,000 jobs.

The nation’s Unemployment Rate was reported at 9.7%, which was below the consensus for 10% and December’s rate of 10.0%. This number appears to be out of whack. We should note that this is likely due to people “falling out of the workforce� and is not indicative of the jobs picture improving. We’d also point out that this data comes from a different source than the nonfarm payrolls.

There were revisions to the December payrolls as the Labor Dept. now shows December having lost 150K jobs, which was well above the prior report of 85K.

Running through the rest of the pre-game indicators, the overseas markets were lower across the board. Crude futures are down $0.53 to $72.61. On the interest rate front, we’ve got the yield on the 10-yr trading higher at 3.63%. Next, gold is moving down by $6.10 and the dollar is higher against the Euro and the Pound, but lower against the Yen. Finally, with about 45 minutes before the bell, stock futures in the U.S. are pointing to a slightly higher open. The Dow futures are currently ahead by about 15 points; the S&P’s are up about a point, while the NASDAQ looks to be about 5 points above fair value at the moment.

Yesterday's Earnings After The Bell

Con-Way CNW $0.00 $0.13
Dun & Bradstreet DNB $1.75 $1.69
Fidelity National Information FIS $0.44 $0.43
FMC Corp FMC $0.94 $0.91
Illumina ILMN $0.29 $0.20
National Fuel Gas NFG $0.78 $0.73
Pitney Bowes PBI $0.64 $0.61
PerkinElmer PKI $0.43 $0.41
Stericycle SRCL $0.55 $0.54
Sunoco SUN -$0.27 -$0.29
Vertex Pharmaceuticals VRTX -$0.85 -$0.85

Earnings Before The Bell

Aetna AET $0.40 $0.42
Aon Corp AOC $0.96 $0.82
Beazer Homes BZH -$1.09 -$1.03
Simon Properties SPG $1.66 $1.52
TECO Energy TE $0.25 $0.25
Tyson Foods TSN $0.42 $0.17
Weyerhaeuser WY -$0.52 -$0.39

* Report includes items that make comparisons to the consensus estimate questionable

Wall Street Research Summary

Upgrades:
# Portugal Telecom (PT) – BofA/Merrill
# Tenneco (TEN) – Barclays
# Motorola (MOT) – Barclays
# Ney York Community Bancorp (NYB) – Citi
# Urban Outfitters (URBN) – Added to Top Picks Live at Citi
# Gap (GPS) – Citi
# Spectra Energy (SE) – Citi
# Murphy Oil (MUR) – Collins Stewart
# Interpublic (IPG) – Credit Suisse
# MEMC Electronic Materials (WFR) – Credit Suisse
# Archer-Daniels (ADM) – Deutsche Bank
# LDK Solar (LDK) – HSBC
# Suntech Power (STP) – HSBC
# Best Buy (BBY) – Janney Capital
# Alkermes (ALKS) – Jefferies
# Choice Hotels (CHH) – RW Baird
# NCR Corp (NCR) – RW Baird
# Starwood Hotels (HOT) – RW Baird
# PerkinElmer (PKI) – RW Baird
# WABCO Holdings (WBC) – RW Baird
# MasterCard (MA) – Wells Fargo
# ResMed (RMD) – Wells Fargo

Downgrades:
# Ciena (CIEN) – Barclays
# Exelon (EXC) – Bernstein
# Meritage Homes (MTH) – Citi
# Coach (COH) – Goldman
# Nordstrom (JWN) – Goldman
# Dollar Tree (DLTR) – JPMorgan
# Leap Wireless (LEAP) – JPMorgan

Long positions in stocks mentioned: NFG

Enjoy your Friday, have a pleasant weekend, and until next time, “May the bulls be with you!�

David D. Moenning
Founder TopStockPortfolios.com

For more "top stock" portfolios and research, visit www.TopStockPortfolios.com

The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is� without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Good morning. As we opined on Wednesday, the reality that punitive legislation might be tough to actually accomplish helped stocks recover from a two week, -6.6% slide with a two-day celebratory pop of 260 Dow points. However, another reality may have hit traders smack between the eyes on Wednesday as reports showed that the economic recovery will likely be a long, slow slog from here.

There were other factors at work on Wednesday such as new concerns about sovereign debt, skepticism over the recent bounce, and my personal favorite; a rebound in the dollar. However, most of the attention was given to a couple of economic reports that, while containing positive aspects, highlighted the fact that the economy is not exactly sprinting ahead at the present time.

With the President’s healthcare plan on the backburner, the attention in Washington and on Wall Street has turned to the job market. Although we’ve got the Big Kahuna of economic reports (the Commerce Department’s monthly Nonfarm Payroll data) on Friday, the ADP report on private sector employment provided more hopeful signs that the jobs market is on the mend.

The bad news is ADP reported that corporate America lost another 22,000 jobs in January. But the good news is (1) the consensus guesstimate was for a larger loss of 30,000 jobs and (2) the December job loss total was revised lower by 23K.

The other report that had everyone talking yesterday was the ISM (Institute for Supply Management) Non-Manufacturing Index. In English, this report is designed to provide a look at the state of the services sector. Although the index came in a smidge below the consensus expectation (50.5 vs. 51.0), the simple fact of the matter is that readings over 50 are indicative of expansion. But in keeping with today’s theme, the January reading of 50.5 was only modestly higher than December’s 50.1. It was also positive that the new orders and employment components continued to move in the right direction.

Looking across the pond, the sovereign debt issue refuses to go away. No sooner had the European Commission decided to get behind Greece’s plan to reduce their deficit than new worries cropped up regarding some other PIGI’S; namely Spain and Portugal. The key here is to recognize that when traders in the U.S. are feeling upbeat, this situation can be brushed aside. However, should the bears begin to growl again anytime soon, you can bet your bottom dollar that sovereign debt worries will return to the top of the worry board.

Finally, what would a morning market missive be without a mention of the U.S. dollar? In case you don’t already know where I’m going with this, stocks were back to following the dollar around (inversely, of course) like a little puppy dog yesterday. So, with the greenback near its recent highs, traders on the long side might want to keep an eye on the exits should the buck break out to the upside again.

Turning to this morning, stocks are looking to continue yesterday’s pullback despite strong earnings out of Cisco (CSCO) in response to concerns about sovereign debt. In addition, we’ve got some economic data to sift through and a steady stream of same-store sales comps for January from the nation’s retailers.

On the economic front, the government reported Nonfarm Productivity in the fourth quarter increased by +6.2%, which was a bit below the consensus for +6.5% and Q3’s rise of +8.1%. On the inflation front, Unit Labor Costs were reported to have fallen -1.5% versus the prior reading of -2.5%.

Next up, the Labor Department reported that initial claims for unemployment insurance for the week ending January 30th increased by 8,000 to 480K, which was above the expectations for a reading of 455K. Last week’s revised total was 472K (from 470K). Continuing Claims for unemployment for the week ending January 23rd were in line with consensus at 4.602M vs. expectations for 4.581M and last week’s revised total of 4.600M (from 4.602M).

Running through the rest of the pre-game indicators, the overseas markets were lower across the board. Crude futures are down $0.60 to $76.38. On the interest rate front, we’ve got the yield on the 10-yr trading higher at 3.66%. Next, gold is moving down by $7.30 and the dollar is higher against the Yen, Euro and the Pound. Finally, with about 45 minutes before the bell, stock futures in the U.S. are pointing to a lower open. The Dow futures are currently off by about 70 points; the S&P’s are down about 8 points, while the NASDAQ looks to be about 11 points below fair value at the moment.

Yesterday's Earnings After The Bell 

Assurant AIZ $0.86 $1.00
Amerprise Financial AMP $0.91 $0.77
AvalonBay AVB $0.64 $0.64
Broadcom BRCM $0.11* $0.44
CB Richard Ellis CBG $0.28 $0.18
Cisco Systems CSCO $0.40 $0.35
Equifax EFX $0.61* $0.45
Monster Worldwide MWW -$0.01 -$0.01
Novellus NVLS $0.39 $0.33
Steel Dynamics STLD $0.12 $0.18
MEMC Electronic Materials WFR -$0.03 $0.01
YUM! Brands YUM $0.50 $0.48

Earnings Before The Bell

Allergan AGN $0.78 $0.77
Avon Products AVP $0.68 $0.68
Cigna CI $1.03 $0.95
CME Group CME $3.37 $3.43
Diamond Offshore DO $1.98 $2.32
Starwood Hotels HOT $0.51 $0.22
Hospira HSP $0.87* $0.69
Kellogg K $0.46 $0.49
MasterCard MA $2.43 $2.47
Moody’s MCO $0.42 $0.41
Northrop Grumman NOC $1.31 $1.27
Nu Skin Enterprises NUS $0.47 $0.40
Reynolds American RAI $1.10 $1.15
Spectra Energy SE $0.33 $0.33
Sara Lee SLE $0.36 $0.23
Snap-On SNA $0.63 $0.55
Unisys UIS $2.64* $0.83

* Report includes items that make comparisons to the consensus estimate questionable

Wall Street Research Summary

Upgrades:
# Visa (V) – Barclays
# Total System (TSS) – Barclays
# Pioneer Natural (PXD) – BMO Capital
# Morgan Stanley (MS) – Added to U.S. Focus List at Credit Suisse
# Research In Motion (RIMM) – Added to U.S. Focus List at Credit Suisse
# Teck Resources (TCK) – Credit Suisse
# BHP Billiton (BHP) – Credit Suisse
# Akamai (AKAM) - Goldman
# Janus Capital (JNS) – Goldman
# Lexmark (LXK) – Removed from Conviction Sell at Goldman
# US Airways (LCC) – JPMorgan
# MetLife (MET) – Keefe, Bruyette & Woods

Downgrades:
# Western Union (WU) – BofA/Merrill, Goldman Sachs
# Corinthian Colleges (COCO) – BofA/Merrill
# ITT Educational (ESI) – BofA/Merrill
# Verizon (VZ) – Credit Suisse
# Monster Worldwide (MWW) – Deutsche Bank
# Polo Ralph Lauren (RL) – Removed from Conviction Buy at Goldman
# Alaska Air (ALK) – JPMorgan
# Continental Airlines (CAL) – JPMorgan
# Delta Air Lines (DAL) – JPMorgan
# Zions Bancorp (ZION) – Keefe, Bruyette & Woods
# Investment Technology Group (ITG) – Keefe, Bruyette & Woods
# DreamWorks Animation (DWA) – Piper Jaffray

Long positions in stocks mentioned: CI, CO, AVP

Make the decision to have a great day and until next time, “May the bulls be with you!�

David D. Moenning
Founder TopStockPortfolios.com

For more "top stock" portfolios and research, visit www.TopStockPortfolios.com

The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is� without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Good morning. If Monday’s are starting to give you a feeling of déjà vu all over again, don’t be alarmed. In doing a little digging, we found that yesterday’s gain marked the eighth straight Monday in which the S&P has managed to find its way into the plus column. And if you look back a little farther, you’ll find that this trend appears to be a descendant of the Energizer Bunny. In short, stocks have not only finished higher for the last 8 Monday’s in a row, but the S&P has also finished in the green on 13 of the last 14 Mondays as well as16 of the last 18. (Okay, to be fair, we used one Tuesday due to a Monday holiday.)

While this does fit into the category of “fun facts to know and tell� and most people may be surprised to learn that Monday’s have been up days for two months straight, after Monday, it’s been downhill from there lately. Yep, despite the nice pop higher to start the week, stocks have finished the week lower for the last three straight weeks and in five of the last seven. So, will yesterday’s triple-digit sigh of relief we spoke of in Monday’s pre-market missive break the trend or turn out to be just another manic Monday?

Yesterday’s version of the Bangles’ second biggest hit was sponsored by a couple of reports that got very little attention and a couple more that did get some press coverage.

By now, I’m guessing you’ve heard that Personal incomes were up in December and that the ISM Manufacturing Index came in well above expectations. The latter was definitely good news as the report showed that manufacturing activity accelerated in January, hitting its highest level since August 2004. Plus, the reading of 58.4 marked the sixth straight month in which the index has managed to stay above the 50-mark, which is indicative of expansion in the nation’s manufacturing sector.

However, one of the driving forces behind the early strength in the market indices was the fact that nothing bad came out about Greece’s sovereign debt problems over the weekend. It was actually just the opposite as the EU said that the Greek deficit reduction play was “ambitious but achievable� and that the union would give Greece until the end of 2012 to bring its deficit down below 3% of GDP. In short, this eased concerns about imminent problems from one of the little PIGI’S.

However, the big story that nearly no one talked about came from the Financial Times. A Deal report stated that the “Volcker Rule� may be dropped. To review, the “Volcker Rule� would give bank regulators the power to put limits on bank size, the ability of commercial banks to participate in proprietary trading of financial securities, as well as investments by banks in hedge funds, real estate and private equity. And to many, the idea of the administration backing off its persistent attack of the nation’s biggest banks was a breath of fresh air.

So, with an oversold market and the correct day on the calendar, the bulls were able to once again get something going yesterday. But the big question is if our heroes in horns will be able to keep up the happy talk now that Manic Monday has passed.

Turning to this morning, we don’t have any economic data to review before the bell. The key event of the day will be Former Fed Chairman Paul Volcker’s testimony on his plans to put limits on the nation’s big banks. The so-called “Volcker Rule� is the center of attention in the markets these days, so this is definitely something to watch.

Running through the rest of the pre-game indicators, the overseas markets are mostly higher. Crude futures are up $0.75 to $75.18. On the interest rate front, we’ve got the yield on the 10-yr trading higher at 3.64%. Next, gold is moving up by $7.50 and the dollar is lower against the Yen and Pound but lower against the Euro. Finally, with about 45 minutes before the bell, stock futures in the U.S. are pointing to a modestly higher open. The Dow futures are currently ahead by about 15 points; the S&P’s are up about 3 points, while the NASDAQ looks to be about even with fair value at the moment.

Yesterday's Earnings After The Bell

Anadarko Petroleum APC $0.04 $0.03
Crown Holdings CCK $0.27* $0.23
Hologic HOLX $0.29 $0.26
Plum Creek PCL $0.19 $0.16
Rent-A-Center RCII $0.66 $0.57
Tupperware TUP $1.22 $1.04

Earnings Before The Bell

Archer-Daniels ADM $0.88 $0.72
Automatic Data ADP $0.60 $0.58
Cummins CMI $1.36 $0.78
DR Horton DHI $0.56 -$0.13
Dow Chemical DOW $0.18 $0.11
Emerson EMR $0. $0.42
Hershey HSY $0.63 $0.60
Lexmark LXK $1.16* $0.62
Pepsi Bottling PBG $0.59 $0.43
Scotts Miracle-Gro SMG -$0.73 -$0.83
UPS UPS $0.75 $0.74
Whirlpool WHR $1.64 $1.32

* Report includes items that make comparisons to the consensus estimate questionable

Wall Street Research Summary

Upgrades:
# American Express (AXP) – BofA/Merrill Lynch
# Capital One (COF) – BofA/Merrill Lynch
# CNOOC (CEO) – BofA/Merrill Lynch
# Discover Financial (DFS) – BofA/Merrill Lynch
# Exxon Mobil (XOM) – BofA/Merrill Lynch
# Alcoa (AA) – Citi
# Freeport-McMoRan (FCX) – Citi
# Southern Copper (PCU) – Citi
# Health Management (HMA) – Credit Suisse
# Palm (PALM) – Target increased to $20 from $19 at Deutsche Bank
# Qwest (Q) – Removed from Conviction Sell list at Goldman, Upgraded at Piper
# Thomson Reuters (TRI) – RBC Capital
# Motorola (MOT) – Societe Generale
# NetApp (NTAP) – Added to Most Preferred list at UBS
# Ciena (CIEN) – Removed from Least Preferred list at UBS
# Schnitzer Steel (SCHN) – UBS

Downgrades:
# Advanced Micro (AMD) – Added to Conviction Sell list at Goldman
# Rogers Communications (RCI) – Added to Conviction Sell list at Goldman
# Jacobs Engineering (JEC) – Goldman
# Google (GOOG) – Removed from Most Preferred list at UBS
# Wipro (WIT) – Added to Least Preferred list at UBS

Long positions in stocks mentioned: AXP, COF, FCX, GOOG

Remember to take time to enjoy your day and until next time, “May the bulls be with you!�

David D. Moenning
Founder TopStockPortfolios.com

For more "top stock" portfolios and research, visit www.TopStockPortfolios.com

The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is� without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Good morning. For the first time in nearly two weeks, stocks put on a pretty good show yesterday. It wasn’t so much the net result that got our attention, but rather the “tape action� that impressed us. In short, stocks had plenty of reasons to continue their dance to the downside yesterday. But instead, our heroes in horns were able to shake off some of the negativity and look on the bright side for a change.

Given the laundry list of bad stuff that was available to the bear camp yesterday, it wasn’t exactly surprising to see stocks spend most of the day in negative territory. And to the glass-is-half-empty crowd, there were signs that the day was going to end badly – especially on a chart basis.

Our furry friends pointed to the confirmation that Chinese banks had not only stopped lending in the middle of January, but were now being asked to take back some of the loans that had been made. Given that the Chinese economy has been the major driver of the global economy, this remains a worrisome situation as “fighting the Fed� is a bad idea in any language.

Speaking of China, the CEO of Caterpillar (CAT) had the line of the day by saying he hoped that China’s officials would be able to slow their economy’s expansion by gently tapping the brakes and avoid sending the global economy through the windshield. Well put.

Next up, the economic calendar provided a source of disappointment as New Home Sales fell unexpectedly for the second month in a row. Make no mistake about it; this was a lousy report and helped send stocks to the lows of the day after its release.

The bear camp could also point to the ongoing sovereign debt concerns across the pond as Greek 10-year yields moved to their highest level since December 1999 and CDS (credit default swaps – yep, they still exist) spreads widened sharply.

Then there was the rally in the dollar, which, while it didn’t seem to impact domestic stocks, did continue to take its toll on commodities and the emerging markets.

And finally, the bears could point to the uncertainty surrounding the President’s State of the Union speech as well as the Bernanke situation. On the political front, Barney Frank also said yesterday that the Financial Reform bill, which includes the taxes/penalties and potential new rules on banks, could become law in just a few months.

On the positive side of the ledger we had the hoopla surrounding the introduction of Apple’s (AAPL) “latest creation� the iPad and some modestly encouraging words about the economy from the FOMC statement. Both of which seemed to encourage traders after the requisite volatility following the Fed announcement.

A specific reason behind the late-day move was largely M.I.A., so we’re going to suggest that some of the uncertainty over the upcoming big, bad events may be waning. In short, it looks like Bernanke will be confirmed and the State of the Union contained no new populist attacks. So, with stocks oversold, it looks like it could be bulls’ ball for a bit. Let’s see what they can do with it.

Turning to this morning, we’ve got some economic data to sift through in addition to the slew of earnings. The Labor Department reported that initial claims for unemployment insurance for the week ending January 23rd fell by 8,000 to 470K, which was above the expectations for a reading of 450K. Continuing Claims for unemployment for the week ending January 16th were in line with consensus at 4.602M vs. expectations for 4.593M and last week’s revised total of 4.659M (from 4.599M).

Next up, orders for long-lasting goods rose less than expected in December. The Commerce Department reported that Durable Goods orders rose by +0.3% during the month, which was below the consensus expectations for +2.0% but above November’s revised reading of +0.2% When you strip out the volatile orders for transportation, orders in December were up +0.9%, which was above the consensus of +0.5%, but below November’s revised reading of 2.0%.

Running through the rest of the pre-game indicators, the overseas markets are higher across the board. Crude futures are up $0.13 to $73.80. On the interest rate front, we’ve got the yield on the 10-yr trading higher at 3.67%. Next, gold is moving up by $5.20 and the dollar is lower against the Yen and Pound, but higher against the Euro. Finally, with about 45 minutes before the bell, stock futures in the U.S. are pointing to a better open. The Dow futures are currently ahead by about 35 points; the S&P’s are up about 4 points, while the NASDAQ looks to be about 6 points below fair value at the moment.

Yesterday's Earnings After The Bell

AmeriCredit ACF $0.33 $0.08
BMC Software BMC $0.76 $0.68
Crown Castle CCI $0.04 -$0.01
Citrix Systems CTXS $0.66 $0.52
E*Trade ETFC -$0.04 -$0.04
Flextronics FLEX $0.17 $0.15
Green Mountain Coffee GMCR $0.27 $0.16
Harris Corp HRS $1.08 $0.95
Lam Research LRCX $0.47 $0.40
LSI Corp LSI $0.18 $0.11
Murphy Oil MUR $1.65* $0.85
Norfolk Southern NSC $0.82 $0.84
Owens-Illinois OI $0.49 $0.47
Qualcomm QCOM $0.62 $0.56
Symantec SYMC $0.40 $0.37
Varian Medical VAR $0.63 $0.56
Werner Enterprises WERN $0.25 $0.25

Earnings Before The Bell

Alaska Air ALK $0.12 $0.32
Baxter BAX $1.03 $1.03
Ball Corp BLL $0.84 $0.71
Bemis BMS $0.45 $0.34
Bristol-Myers BMY $0.47 $0.42
Cardinal Health CAH $0.57 $0.46
Celgene CELG $0.62 $0.62
Check Point Software CHKP $0.61 $0.57
Colgate Palmolive CL $1.21 $1.18
Cypress Semiconductor CY $0.16 $0.11
Rockwell Collins COL $0.76 $0.73
Dominion D $0.63 $0.60
Danaher DHR $1.12 $1.08
Eastman Kodak EK $1.36* $0.18
Estee Lauder EL $1.28 $1.28
Ford F $0.43 $0.26
Goodrich GR $0.82 $0.90
Invesco IVZ $0.25 $0.28
Janus Capital JNS $0.20 $0.20
Life Technologies LIFE $0.80 $0.72
L-3 Communications LLL $1.93 $1.86
Eli Lilly LLY $0.91 $0.91
Lockheed Martin LMT $2.17 $1.99
McCormick MKC $0.91 $0.91
3M MMM $1.30 $1.20
Altria MO $0.39 $0.40
Motorola MOT $0.09 $0.09
Occidental Petroleum OXY $1.30 $1.22
Procter & Gamble PG $1.49 $1.43
Potash POT $0.80 $0.78
Raytheon RTN $1.30 $1.24
AT&T T $0.51 $0.51
Time Warner Cable TWC $0.93 $0.89
Textron TXT $0.15 $0.08
Tyco TYC $0.65 $0.65
Waddell & Reed WDR $0.37 $0.38
Zimmer Holdings ZMH $1.12 $1.08

* Report includes items that make comparisons to the consensus estimate questionable

Wall Street Research Summary

Upgrades:
# Netflix (NFLX) – BofA/Merrill
# Illinois Tool (ITW) – Barclays
# Anadarko Petroleum (APC) – Barclays
# Rockwell Automation (ROK) – Citi
# Nabors Industries (NBR) – Credit Suisse
# SunTrust (STI) – Goldman Sachs
# Zions Bancorp (ZION) – Goldman Sachs
# CME Group (CME) – JP Morgan
# Caterpillar (CAT) – UBS
# Apache (APA) – Wells Fargo

Downgrades:
# Alliant Techsystems (ATK) – Credit Suisse
# Capital One (COF) – Removed from Conviction Buy at Goldman
# Piper Jaffray (PJC) – Removed from Conviction Buy at Goldman
# Burger King (BKC) – Janney Capital
# Warner Chilcott (WCRX) - Jefferies
# Kirby Corp (KEX) – JP Morgan
# Qualcomm (QCOM) - ThinkEquity
# Chesapeake Energy (CHK) – Wells Fargo

Long positions in stocks mentioned: CAT, QCOM, ACF, CCI, GMCR, ALK, CY, EL, MMM, AAPL

Be sure to keep everything in perspective and until next time, “May the bulls be with you!�

David D. Moenning
Founder TopStockPortfolios.com

For more "top stock" portfolios and research, visit www.TopStockPortfolios.com

The opinions and forecasts expressed are those of David Moenning, founder of TopStockPortfolios.com and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is� without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.