Wednesday, October 25, 2006

October Suprise...

The beginning of the final week of October brings us into the seasonally favorable time of the year. Market factors which had been against us are now in our favor. Generally if we haven’t had a wipe out by now we are relatively safe by historical standards. The market itself seems to be slowly building on its recent gains. Confidence is beginning to creep back into the equation. My feeling is the FED will gain confirm what many market watchers already know; that there is little or no sign of long term inflation . Large Caps and Growth stocks continue to take the lead from Small Caps and Value. Mind you it is still very much a stock pickers market with the advance /decline line, the new high/new low line and volatility index still seemingly uninspiring. My view is that the DOW Jones Industrials has broken out of the 6 year Bear and I am waiting for confirmation from the DOW Jones Transports which need to move somewhere over 5000. The DOW Utilities is already long gone with a break out and is pointing to lower long term interest rates.

Tuesday, October 24, 2006

Indentity Fraud at E*Trade ,TD Ameritrade

E*Trade, TD Ameritrade Targeted in Brokerage Fraud (Update3)
By Bradley Keoun
Oct. 23 (Bloomberg) -- Customer accounts at online brokers including E*Trade Financial Corp. and TD Ameritrade Holding Corp. have been infiltrated by computer hackers in Eastern Europe and Asia in one of the biggest cases of identity theft to strike the U.S. securities industry.

The Federal Bureau of Investigation, the Securities and Exchange Commission and the NASD are trying to unravel the fraud, which has cost New York-based E*Trade at least $18 million and caused losses at Ameritrade of Omaha, Nebraska, company officials said. In one ``pump-and-dump'' scheme the SEC uncovered, thieves used customers' money to drive up the prices of little-traded stocks and then sold shares they bought earlier at a profit.

``The perpetrators were more organized, and it was a bigger issue this quarter than it had ever been before,'' E*Trade Chief Operating Officer Jarrett Lilien said in an interview. ``It wasn't just hitting one company, it was hitting everybody.''
The case shows how criminals who ply the Internet from countries beyond the reach of U.S. law enforcers are turning to financial markets to commit fraud. Online brokers are a growing target for identity theft, a crime that in all its forms will cost Americans $56.6 billion this year, according to Javelin Strategy & Research of Pleasanton, California, which has prepared similar estimates for the Federal Trade Commission.

``Identity thieves appear to be directing increased attention to the securities business, and their attacks are growing in sophistication,'' said John Walsh, chief counsel in the SEC's office of compliance inspections and examinations, at an industry conference in Phoenix on Oct. 5.

Customers Compensated
E*Trade disclosed on a conference call last week that it spent $18 million in the third quarter to compensate customers affected by trading fraud. The company, the fourth-largest discount broker by assets, is cooperating with the federal investigation and the probe by the NASD, E*Trade spokeswoman Pam Erickson said. NASD is the industry's self-regulator for more than 5,100 brokerages.
TD Ameritrade, the third-largest online broker, also suffered losses because of bogus trading by unauthorized users who pried their way into customer accounts, said spokeswoman Katrina Becker. She declined to specify an amount. TD Ameritrade may provide more details tomorrow when it reports fiscal fourth- quarter earnings.
Charles Schwab Corp., the biggest online broker, didn't experience ``anything unusual enough to warrant a financial disclosure,'' said spokesman Glen Mathison. The San Francisco- based company reported earnings on Oct. 16. Adam Banker, a spokesman for closely held Fidelity Investments of Boston, the second-largest discount broker, declined to comment.

`Global Problem'
Shares of E*Trade rose 88 cents, or 4 percent, to $22.73 in 11:58 a.m. composite trading on the New York Stock Exchange. Goldman Sachs Group Inc. analyst William Tanona raised the stock to ``buy'' from ``neutral'' earlier today. TD Ameritrade gained 4 cents to $16.80. Schwab rose 25 cents, or 1.5 percent, to $17.10.
E*Trade Chief Executive Officer Mitchell Caplan told investors that investigators traced the illicit trading to ``concerted rings'' in Eastern Europe and Thailand. The company hasn't determined whether the reimbursement costs will be covered by insurance, he said. TD Ameritrade also was targeted by cyber- criminals in Eastern Europe and Asia, spokeswoman Becker said.

``Internet crimes that result in the theft of personal and financial data from consumers continue to be a significant and global problem,'' FBI spokesman Paul Bresson said. ``We work closely with our foreign law-enforcement counterparts to pursue these cases with all applicable laws.''
Bresson declined to comment on the FBI investigation. John Heine, a spokesman for the SEC, and NASD's Herb Perone also declined to comment.

`Pump and Dump'
Some of the losses were straight theft. In his presentation, Walsh of the SEC explained how criminals use personal information such as Social Security numbers to break into accounts. Once in control, they loot the accounts by selling securities and wiring out the proceeds far from the U.S.
The online version of the ``pump-and-dump'' fraud sets off few security alerts at brokerage firms because no money is withdrawn from the compromised accounts, Walsh explained.

``This is an increasingly popular variation,'' he said in Phoenix. ``If you are looking for a single `hot topic' in the world of identity theft, this is it.''
In ``alias fraud,'' a thief opens an account in an individual's name, then uses it for illegal trading or money- laundering. Because the victim's name is on the account, he or she appears responsible for the crimes.

Reducing the Fraud
Walsh said the SEC recently began a ``sweep examination'' of brokerage firms to determine if they have adequate technology and staff training to prevent and detect online fraud.
``This thing is so widespread and has such a significant impact on the industry at large,'' E*Trade's Caplan said. `You're going to end up seeing structural changes in the industry.''

Caplan told investors E*Trade reduced the fraud to ``almost zero'' in the past three weeks after beefing up security for electronic trading. The company declined to say how many accounts were infiltrated or explain the security enhancements.
While the Federal Deposit Insurance Corp. covers bank accounts against fraud or insolvency for as much as $100,000, brokerages get no such protection.
E*Trade promised in January that it would reimburse customers for any losses due to fraud in an effort to allay concerns about trading over the Internet or keeping cash in online bank accounts. TD Ameritrade and Schwab offered similar guarantees in February and Fidelity followed in May.

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net .
Last Updated: October 23, 2006 12:07 EDT

Friday, October 20, 2006

Gotta Love October ...

Corporate America set another profit record this summer. Overall, the nation's 500 largest companies are on pace to report operating profits for the quarter ending September 30 that are almost 14 percent higher than the same period last year. (AP)

…companies have posted double-digit year-over-year gains for a record-setting 18 consecutive quarters, says Standard & Poor's analyst Howard Silverblatt.(AP)

Oct. 19 (Bloomberg) -- The U.S. Securities and Exchange Commission is investigating whether directors who sit on more than one company board may have spread the practice of backdating stock-option grants.
The oil cartel OPEC has decided to cut production by 1.2 million barrels a day, the United Arab Emirates' oil minister said Friday. (AP)

BERLIN (Reuters) - Sting said contemporary rock music is so stagnant that he prefers to sing 16th century English ballads.

Oct. 19 (Bloomberg) -- The United Nations is hitting Kim Jong Il where it hurts, cutting off trade in the luxury goods favored by the North Korean dictator and his entourage. Kim, his family and members of North Korea's ruling class fancy Mercedes-Benz cars, Hennessy cognac and French wines, says Michael Breen, author of ``Kim Jong Il: North Korea's Dear Leader.'' They buy the goods abroad and bring them back to a country locked in poverty where annual per capita income is $914.

TEHRAN (Reuters) - Iran's internet service providers (ISPs) have started reducing the speed of Internet access to homes and cafes based on new government-imposed limits, a move critics said appeared to be part of a clampdown on the media.

BEIJING (Reuters) - Internet users in southwest China who spread malicious rumors online face fines of up to 5,000 yuan ($630) and possible detention, state media reported on Wednesday in the latest crackdown on dissent.

(CBS) NEW YORK Airport workers are finding themselves subject to surprise screenings as the government issues new security tactics at airports nationwide. The changes are a direct response to this year's foiled plot to blow-up America-bound airplanes.

Almost 5,000 bottles of Lafite-Rothschild, Petrus, Margaux and other rare vintages laid up in Paris City Hall during Chirac's tenure as mayor are going under the hammer this week, marking a sign of either fiscal restraint or waning French prestige, depending on your perspective. (Bloomberg)

Thursday, October 12, 2006

U.S. stocks rally; Dow posts triple-digit gains to new record

NEW YORK (MarketWatch) -- U.S. stocks rallied Thursday on stronger-than-expected earnings from McDonald's Corp., Costco Wholesale Corp. and Yum Brands Inc, with a batch of new orders for Boeing Co. helping propel the Dow Jones Industrial Average to a new closing high.


AA
ALCOA INC
26.60 4:01PM ET
0.25 (0.93%)
13,811,100
AIG
AMER INTL GROUP INC
67.35 4:01PM ET
0.32 (0.48%)
5,560,600
AXP
AMER EXPRESS INC
57.89 4:01PM ET
0.44 (0.77%)
6,294,500
BA
BOEING CO
83.64 4:01PM ET
2.00 (2.45%)
4,028,800
C
CITIGROUP INC
50.18 4:02PM ET
0.20 (0.40%)
19,194,400
CAT
CATERPILLAR INC
69.25 4:00PM ET
0.93 (1.36%)
4,163,100
DD
DU PONT E I DE NEM
45.12 4:00PM ET
0.47 (1.05%)
3,564,300
DIS
WALT DISNEY-DISNEY C
31.30 4:00PM ET
0.01 (0.03%)
5,813,300
GE
GEN ELECTRIC CO
36.22 4:01PM ET
0.05 (0.14%)
23,017,900
GM
GEN MOTORS
32.66 4:02PM ET
0.53 (1.65%)
6,769,300
HD
HOME DEPOT INC
37.90 4:01PM ET
0.02 (0.05%)
13,095,500
HON
HONEYWELL INTL INC
42.31 4:01PM ET
0.21 (0.50%)
2,649,500
HPQ
HEWLETT PACKARD CO
38.42 4:00PM ET
0.55 (1.45%)
15,458,100
IBM
INTL BUSINESS MACH
84.70 4:01PM ET
0.51 (0.61%)
4,642,500
INTC
INTEL CP
21.49 4:00PM ET
0.60 (2.87%)
81,512,686
JNJ
JOHNSON AND JOHNS DC
64.84 4:01PM ET
0.26 (0.40%)
7,881,300
JPM
JP MORGAN CHASE CO
48.26 4:00PM ET
0.62 (1.30%)
14,940,500
KO
COCA COLA CO THE
44.05 4:00PM ET
0.07 (0.16%)
5,506,400
MCD
MCDONALDS CP
42.23 4:00PM ET
0.98 (2.38%)
18,958,900
MMM
3M COMPANY
75.43 4:04PM ET
0.04 (0.05%)
2,104,900
MO
ALTRIA GROUP INC
78.78 4:01PM ET
0.05 (0.06%)
7,741,700
MRK
MERCK CO INC
42.76 4:01PM ET
0.57 (1.35%)
8,508,900
MSFT
MICROSOFT CP
28.22 4:01PM ET
0.68 (2.47%)
119,914,355
PFE
PFIZER INC
27.65 4:01PM ET
0.36 (1.32%)
26,402,200
PG
PROCTER GAMBLE CO
62.41 4:01PM ET
0.07 (0.11%)
5,770,100
T
AT&T INC.
33.60 4:01PM ET
0.64 (1.94%)
28,682,600
UTX
UNITED TECH
66.38 4:01PM ET
0.86 (1.31%)
2,743,800
VZ
VERIZON COMMUN
36.99 4:02PM ET
0.39 (1.07%)
10,630,000
WMT
WAL MART STORES
48.32 4:00PM ET
0.01 (0.02%)
12,405,400
XOM
EXXON MOBIL CP
67.65 4:02PM ET
1.12 (1.68%)
16,603,600

Wednesday, October 11, 2006

News this week

The federal budget estimate for the fiscal year just completed dropped to $250 billion, congressional estimators said Friday, as the economy continues to fuel impressive tax revenues. The Congressional Budget Office's latest estimate is $10 billion below CBO predictions issued in August and well below a July White House prediction of $296 billion. The improving deficit picture _ Bush predicted a $423 billion deficit in his February budget _ has been driven by better-than-expected tax receipts, especially from corporate profits, CBO said. (AP)

The federal deficit in the budget year that just ended fell to a four- year low of $247.7 billion _ a figure President Bush touted Wednesday as "proof that pro-growth policies work." The deficit for the budget year that ended Sept. 30 was 22.3 percent lower than the $318.7 billion imbalance for 2005, handing Bush a welcome economic talking point as Republicans battle to hold onto control of Congress in the midterm elections. Bush called the outcome for Fiscal 2006 a "dramatic reduction" that redeemed his 2004 campaign pledge to halve the deficit earlier than his original 2009 target date.(AP)

McAfee, the No. 2 maker of anti-virus software, said Chairman and CEO George Samenuk resigned, fired President Kevin Weiss and announced plans to slash 10 years of previously reported profits by as much as $150 million. Cnet, the online publisher of technology news and reviews, said CEO Shelby Bonnie and two other executives stepped down after an internal probe found the company backdated some stock-option grants. (Bloomberg)

Oct. 11 (Bloomberg) -- Crude oil plunged to the lowest this year in New York on doubts that OPEC ministers will agree to cut production enough to stem falling prices.

Tuesday, October 10, 2006

The Markets continues its transition form value to growth

The Markets continues its transition form value to growth and from energy and commodities to technology and large caps. Right now it looks like we are encountering a tug of war between higher and lower energy prices. My analysis favors lower prices perhaps much lower in the short term. North Korea looks to have fired off a dud with it latest nuclear test and as I have said before the market has long since factored in acts of terrorism and local indiscretions by crack pot dictators like natural disasters ,hard to predict but you have to remain vigilant.

Monday, October 09, 2006

One Small Voice Celebrates Columbus day

Columbus Day is a holiday celebrated in many countries in the Americas, commemorating the date of Christopher Columbus's arrival in the New World in 1492. Similar holidays, celebrated as Día de la Raza (Day of the Race) in many countries in Latin America, Discovery Day in the Bahamas, Hispanic Day in Spain, and the newly-renamed (as of 2002) Día de la Resistencia Indígena (Day of Indigenous Resistance) in Venezuela, commemorate the same event.
Italian-Americans observe Columbus Day as a celebration of Italian-American heritage. Columbus Day was first celebrated by Italians in San Francisco in 1869, following on the heels of 1866 Italian celebrations in New York City. The first state celebration was in Colorado in 1905, and in 1937, at the behest of the Knights of Columbus (a Catholic fraternal service organization named for the voyager), President Franklin Delano Roosevelt set aside Columbus Day as a holiday in the United States. Since 1971, the holiday has been commemorated in the U.S. on the second Monday in October, the same day as Thanksgiving in neighboring Canada.
Italian-Americans feel pride in the day due to the fact that Christopher Columbus, an Italian sailor, sailed to the Americas. Many royal courts were interested in financing the voyage, but Spain financed the ships for Columbus' brainchild. Some Hispanics are embittered by this victory for Columbus. In the United States, Banks and government offices are closed on Columbus Day.

Friday, October 06, 2006

the US Economy adds fewer workers well maybe there are none to add?

So is the light jobs report really showing and increased slowing of the economy or is it simply that at a 4.6% unemployment rate leaves few people to hire? My bet is that unless more of you old folks come out of retirement or teenagers start to pick up on after school jobs there is not going to be much employment growth for sometime . You may not have the job of your dreams but you most likely have a job. The second issue that has gone virtually unnoticed by the press is the ability for more and more people to be able through the use of technology to work for themselves doing jobs you used to have to commute too. These small services stay at home type jobs are creating a larger and larger chunk of the general economy and are perhaps signifying the death of the commuter.

Thursday, October 05, 2006

It won’t go straight up but…

Look for the flood gates of cash to open wide in the next couple of weeks .What I am looking for is a significant increase in trading volumes on the major markets ,a very positive advance decline line and a constantly improving new high to new low ratio . As I said the other day in life as in the stock market getting even when you’re behind is far more difficult then getting a head when you’re even. I am currently looking for 13100 as my DOW target .

Wednesday, October 04, 2006

Hummm the begining .....

NEW YORK (AP) - Wall Street barreled higher Wednesday, propelling the Dow Jones industrials to their second straight record high close as investors shrugged off lackluster economic news and grew more optimistic that the Federal Reserve will lower interest rates as the economy cools.



COMPONENTS FOR ^DJI

Symbol
Name
Last Trade
Change
Volume
AA
ALCOA INC
27.16 4:00PM ET
0.06 (0.22%)
9,718,500
AIG
AMER INTL GROUP INC
67.15 4:01PM ET
0.46 (0.69%)
6,087,400
AXP
AMER EXPRESS INC
56.56 4:02PM ET
0.72 (1.29%)
5,254,200
BA
BOEING CO
83.96 4:02PM ET
2.18 (2.67%)
7,234,200
C
CITIGROUP INC
51.03 4:01PM ET
0.94 (1.88%)
20,936,100
CAT
CATERPILLAR INC
65.54 4:03PM ET
0.43 (0.66%)
7,107,400
DD
DU PONT E I DE NEM
43.21 4:01PM ET
0.25 (0.58%)
3,994,600
DIS
WALT DISNEY-DISNEY C
31.19 4:01PM ET
0.19 (0.61%)
9,934,500
GE
GEN ELECTRIC CO
36.10 4:01PM ET
0.39 (1.09%)
31,772,100
GM
GEN MOTORS
33.36 4:01PM ET
0.09 (0.27%)
18,384,300
HD
HOME DEPOT INC
37.49 4:02PM ET
0.66 (1.79%)
12,286,200
HON
HONEYWELL INTL INC
42.45 4:01PM ET
0.55 (1.31%)
3,668,600
HPQ
HEWLETT PACKARD CO
38.02 4:01PM ET
0.60 (1.60%)
15,179,800
IBM
INTL BUSINESS MACH
83.10 4:00PM ET
1.45 (1.78%)
6,231,900
INTC
INTEL CP
20.82 4:00PM ET
0.25 (1.22%)
79,483,726
JNJ
JOHNSON AND JOHNS DC
65.83 4:00PM ET
0.33 (0.50%)
6,168,600
JPM
JP MORGAN CHASE CO
47.49 4:01PM ET
0.08 (0.17%)
20,650,900
KO
COCA COLA CO THE
44.80 4:04PM ET
0.24 (0.54%)
5,121,500
MCD
MCDONALDS CP
40.00 4:00PM ET
0.32 (0.81%)
53,013,500
MMM
3M COMPANY
74.87 4:03PM ET
0.84 (1.13%)
3,025,200
MO
ALTRIA GROUP INC
76.90 4:00PM ET
1.26 (1.67%)
13,039,900
MRK
MERCK CO INC
41.94 4:01PM ET
0.05 (0.12%)
11,248,800
MSFT
MICROSOFT CP
27.94 4:00PM ET
0.57 (2.08%)
82,204,455
PFE
PFIZER INC
28.33 4:01PM ET
0.08 (0.28%)
27,527,100
PG
PROCTER GAMBLE CO
63.34 4:00PM ET
1.04 (1.67%)
15,130,400
T
AT&T INC.
32.72 4:02PM ET
0.17 (0.52%)
27,460,100
UTX
UNITED TECH
65.15 4:03PM ET
0.35 (0.54%)
3,482,300
VZ
VERIZON COMMUN
37.82 4:00PM ET
0.35 (0.93%)
13,816,500
WMT
WAL MART STORES
49.55 4:01PM ET
0.09 (0.18%)
24,777,900
XOM
EXXON MOBIL CP
66.61 4:10PM ET
1.20 (1.83%)
25,868,300

Tuesday, October 03, 2006

DOW GETS EVEN


The Dow Jones industrial average finally reached new heights Tuesday, extending Wall Street's seven-year recovery with a record closing level after climbing into uncharted territory in trading earlier in the day. (AP)

LONDON (Reuters) - Oil tumbled more than two dollars on Tuesday to below $59 a barrel, sinking to the lowest level since February and prompting OPEC's president to call on the exporter group to deepen supply cuts.

a new high well maybe ?

Perhaps a silver lining in the latest mess on Capitol Hill could be that former Congressmen Mark Foley could now run for Governor of New Jersey. And those of you who worry about your children playing on the internet can take comfort that the child predator maybe your local congressman. Mean while the New York City’s planed ban on trans fats is coming under attack by Police unions, who feel the result of this ban will be the closure of many Dunkin Donuts creating a negative impact on police morale. I an expansion of the Geneva Convention a Wisconsin women was arrested for Hamster neglect, like Gitmo she too forced the hamster to listen to hours of Justin Timberlake and Brittney Spears.

Yes it’s a “new high” on the DOW JONES INDUSTRIL AVERAGE; well it looks more to me like a new break even on the DOW back to where we were in early 2000, yikes! I don’t know if there is much to celebrate given it took almost 6 years to get back to where we were. So the question remains will the slow down in the housing market stop this economy in its tracks? Unlike most I say no ,it will certainly hurt many of the over inflated industries centered around housing and some investors who were late to the party will be stuck with overpriced real-estate and huge mortgages but unlike past real-estate slow downs interest rates are still relatively low and If you add all the new tricks the consumer has available to change their debt structure these should cushion some of the blow. Real Estate typically goes through a period of very low liquidity first then you get a period of price deflation. So much is based on the particular market you are in, but like everything else the formerly hottest markets often get hit the hardest when the uptrend ends.

Thank you again for all the referrals you have passed my way the last couple of months I really appreciate it.

Through www.jamesfoytlin.com I am entering in to an agreement with Elliott Wave International to provide additional content on Elliot Wave Specific strategy and commentary. Contact me if you are interested in using the Elliott Wave to more effectively manage your portfolio.

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James Foytlin
www.jamesfoytlin.com