David Moenning Daily State of the Markets: 12/13

Waiting on Mr. Greenspan (Again)

While the markets were mildly entertained by another upgrade to Google, some merger news, and another climb in oil prices yesterday, for the most part, traders twiddled their thumbs waiting on today�s Fed meeting. And for the fourteenth time, we will sit and wait until 2:15 p.m. eastern to hear what combination of verbiage Mr. Greenspan will come up with to make his point.

So with all eyes on the FOMC, stocks barely budged yesterday. There was some excitement in the early going over a new target for Google of $475 and speculation that ConocoPhillips was going to make a $30 billion bid for Burlington Resources. And the fact that crude traders noticed another snowstorm heading toward the Northeast was indeed enough to push oil futures up $1.91 to $61.30. But other than that, it was a day best spent working on the Holiday shopping list.

Without a whole lot going on, we took a look at some charts yesterday. And while we do not claim to be experts in reading the tea leaves, it is interesting to note that most of the indices, as well as a large number of individual issues, are forming a very nice consolidation pattern at the moment. After blasting higher for six weeks, stocks have taken a break on lighter volume. This has allowed the shorter-term moving averages to catch up and create a �test� of the trendline. The textbooks tell us that a break of the short-term downtrend should lead to another leg higher, which would fit in very nicely with the possible arrival of the Santa Claus rally.

Turning to this morning, as expected, things are fairly flat before the bell. Crude oil is responding to an IEA report which reduces Chinese demand for 2006 by 0.5% to 6.0%. In addition, the Retail Sales report came in a little on the light side. Retail Sales were reported to have gained +0.3% in November which was a bit shy of the expectations of +0.4%. And when you strip out autos, sales actually fell by -0.3%, when a drop of -0.1% had been expected. Stock futures have pulled back a bit on the news while bond yields are up ever-so slightly at 4.52%.

However, the key to the day will be the statement accompanying the Fed�s fourteenth straight rate hike. With everyone waiting to see if the words �accommodative� and �measured� will stay or go, and just one more opportunity after today to hear Mr. Greenspan spin a phrase, it will be very interesting to hear what the Fed has to say this afternoon.

Stocks "In Play" This Morning:
BR � COP confirms purchase for $35.6 Billion
IBM � Citigroup cuts estimates but retains Buy rating
NOK � Morgan Stanley points to NOK as new tech idea for 2006. Also highlights EMC, JBL, FLEX, LXK, VRSN, CHKP, and ACS

Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: IBM, ACS

To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI

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