David Moenning�s Daily State of the Markets: 01/30

Waiting on the Fed, Really?

Good morning. Several media reports attributed Monday�s rather lackluster session to the idea that traders were waiting on the Fed. This theme has been a popular explanation for blas� days in front of every Fed meeting over the past couple of years. But, in reality, no one is expecting Mr. Bernanke and Company to do or say much of anything on Wednesday (yep, this is one of those two-day meetings).

Most players in the game recognize that the Fed is on hold at the present time until either the economy weakens to the point where a rescue is needed or until inflation heats up enough to where some cold water needs to be tossed. And as this stage of the game, a review of the economic data suggests that neither scenario has materialized. Thus, from where we sit anyway, the idea that traders would be hesitant because of the imminent FOMC meeting makes little sense.

But, just because traders weren�t really waiting on the Fed yesterday doesn�t mean there wasn�t some waiting going on. It is probably more appropriate to attribute the Monday Malaise to traders waiting on the bears to get their act together.

As we�ve mentioned on several occasions, our furry friends have been waiting patiently for a very long time for their turn to run with the ball. Unfortunately though, the bulls have been able to consistently come up with one positive after another to retain possession. I say unfortunately, because both teams would welcome a pullback in the near term. So, until the game evens out a bit, there just might be some hesitancy toward putting more money to work at these levels.

Yesterday, it was a handful of merger deals that encouraged the bulls to do some additional buying. And up until the time the 30-year T-Bond touched the magical 5% mark; it looked like the bulls were going to continue to march higher. But, while no one expects much out of the Fed this week, traders ARE watching the bond market closely because there isn�t much that can sink stocks faster than rising interest rates.

So with earnings still pouring in, rates on the rise, and the market rather extended to the upside, it is little wonder that the action didn�t knock anybody�s socks off yesterday.

Turning to this morning, once again, we don�t have any economic data scheduled for release before the bell, but we will get a report on Consumer Confidence at 10:00.

Running through the rest of the pre-game indicators, the foreign markets are flashing green screens this morning. Gold futures are a smidge higher this morning with the last trade up $0.40 to $643.60. In the oil pits, crude futures are a little higher so far with the latest quote showing the March contract up $0.33 to $54.34. Interest rates are little changed this morning with the yield on the 10-year currently trading at 4.88%. And finally, with an hour before the bell, stock futures in the U.S. are looking to head higher. The Dow futures are currently up 20; the S&P�s are 3.60 ahead of breakeven, while the NASDAQ looks to be about 2 points above fair value at the moment.

Stocks �In Play� This Morning:

Black & Decker (BDK) � Reported $1.38 vs. $1.32
Countrywide Financial (CFC) � Reported $1.01 vs. $1.03
Colgate Palmolive (CL) � Reported $0.79 vs. $0.77
Kellogg (K) � Reported $0.45 vs. $0.46
Lexmark (LXK) � Reported $1.05 vs. $0.95
3M (MMM) � Reported $1.10 vs. $1.14
Merck (MRK) � Reported $0.50 vs. $0.51
Procter & Gamble (PG) � Reported $0.84 vs. $0.84
Clear Channel Comm (CCU) � Downgraded at BofA
Tesoro (TSO) � Upgraded at Bear Stearns, Morgan Stanley
Goodrich (GR) � Upgraded at Citigroup
Deutsche Telekom (DTE) � Downgraded at Citigroup
Phelps Dodge (PD) � Downgraded at Friedman, Billings
Starbucks (SBUX) � Upgraded at JP Morgan
Telecom Italia (TI) � Downgraded at Lehman
Siemens (SI) � Upgraded at Merrill Lynch
Alcoa (AA) � Upgraded at Morgan Stanley
Conway (CNW) � Upgraded at Raymond James
US Bancorp (USB) � Downgraded at UBS
Anheuser-Busch (BUD) � Price Target increased at UBS

Disclosure: Long positions is stocks mentioned: BSC, MS, MO, WYNN, AMAT

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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