David Moenning�s Daily State of the Markets: 01/24

It�s (Still) All Good

Good morning. The markets got a healthy dose of mixed messages during yesterday�s session, but from the bulls� perspective, it was all good. While Monday�s market was considered shaky at best and it appeared that the bears might finally be able to get something going, on Tuesday, the bulls once again demonstrated who�s really in charge of this game by stepping out to a 77 point gain by lunchtime.

On the earnings front, it was the likes of United Technologies (UTX) and Texas Instruments (TXN) that provided the bulls with a much needed boost of confidence with regard to this quarter�s parade of numbers. But the news wasn�t all sunny as Alcatel-Lucent warned that a profit just isn�t in the cards this time around.

Speaking of numbers, the economic data was a mixed bag as well yesterday. The Conference Board�s Index of Leading Economic Indicators was a positive surprise with a reading of +0.3%. It�s also positive that over the past six months, the rate of change for the LEI has climbed back above zero, which indicates that the economy is gaining some momentum. However, the Richmond Fed Index came in on the disappointing side with a reading of -11, which was far below expectations for +1. This data would indicate that manufacturing activity is contracting in the Richmond district.

But the big story of the day was found over in the oil pits. Energy prices spiked higher after Energy Secretary Bodman said that the U.S. is planning to double the size of the Strategic Petroleum Reserves over the next twenty years. This put a bid under the sagging oil market and sent the March futures up $2.46 to a close of $55.04.

Although the spike in oil did get trader�s attention long enough for a few sell programs to be run, the big jump in crude failed to curtail the bulls� enthusiasm on the day. In short, the batch of mixed messages simply wound up slowing the advance to 55 points. And while the market is hardly a rip-roaring affair at this point, you�ve got to give the bulls credit here for showing some spunk.

Turning to this morning, we don�t have any economic data to review before the bell. However, earnings continue to pour in and it looks like the bull party might continue this morning as the foreign markets are leading the U.S. futures higher.

Running through the rest of the pre-game indicators, the foreign markets were higher across the board overnight. Gold futures are a little lower this morning with the last trade down $1.70 to $644.20. In the oil pits, crude futures are pulling back a little so far with the latest quote showing the March contract off $0.34 to $54.66. Interest rates are a smidge lower this morning as the 10-year is currently trading with a yield of 4.79%. And finally, with a little more than an hour before the bell, stock futures in the U.S. are looking to open a bit higher. The Dow futures are currently up by 18 points; the S&P�s are 2.20 ahead of breakeven, while the NASDAQ looks to be about 10 points above fair value at the moment.

Stocks �In Play� This Morning:

Advanced Micro Devices (AMD) � Reported <$0.04> vs. $0.08
Allegheny Technologies (ATI) � Reported $1.63 vs. $1.61
AmerisourceBergen (ABC) � Reported $0.65 vs. $0.56
ConocoPhillips (COP) � Reported $2.08 vs. $1.97
Hershey (HSY) � Reported $0.67 vs. $0.71
McDonalds (MCD) � Reported $0.61 vs. $0.61
Sun Microsystems (SUNW) � Reported $0.04 vs. $0.00, Target raised at UBS
Yahoo (YHOO) � Reported $0.16 vs. $0.13
Novellus (NVLS) � Downgraded at Bear Stearns
EMC Corp (EMC) � Upgraded at Bear Stearns
Johnson & Johnson (JNJ) � Mentioned positively at Goldman Sachs
Level 3 Comm (LVLT) � Cowen starts with Outperform rating
Micron Technology (MU) � Upgraded at Credit Suisse
Coach (COH) � Downgraded at Credit Suisse
Occidental Petroleum (OXY) � Upgraded at Goldman Sachs
Continental Airlines (CAL) � Downgraded at JP Morgan
CBS (CBS) � Downgraded at Morgan Stanley
Clear Channel Comm (CCU) � Downgraded at Stifel Nicolaus

Disclosure: Long positions is stocks mentioned: BSC, MS, CSCO, BA

Note: All earnings reports compared to Reuters consensus estimates

** For More of David Moenning�s Market Analysis, Stock Portfolios, and Trading Ideas, visit: www.TopGunsTrading.com

The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management and Co-Founder of TopGunsTrading.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 of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM�s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

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