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The Dow rose 70.58 points, to close at 10,519.72. Besides, the Nasdaq rose 22.55 points, to close at 2,135.43. Meanwhile, the S&P closed at 1,219.44, after rising 7.58 points. This rise in the U.S. stock market was probably due to a lower price in oil. Crude futures fell to their lowest level since more than a week after Hurricane Dennis spared Gulf of Mexico oil rigs when it came ashore on Florida’s Panhandle on Sunday.

Among Dow components, Procter & Gamble rallied 1.8 percent, to close at $53.90. This rally was caused by an upgrade from Prudential Equity to overweight from neutral weight. Prudential said that Procter & Gamble will become both bigger and stronger after its acquisition of Gillette Co. closes. Also, DuPont rose 1.5 percent, to close at $44.15 after Deutsche Bank reiterated a buy rating on the chemical group, saying that the company is growing, and getting profitable returns.

Shares of Genentech Inc. rose more than 1 percent today in the evening, after the company reported quarterly earnings that were better than analysts’ expectations. Its shares increased 27 cents per share, to close at $84.65, after the company reported earnings of $296.2 million. Also, operating revenue jumped to $1.53 billion, compared with $1.13 billion in the year 2004.

According to Metropolitan Police Chief Sir Ian Blair, the death toll from last week’s terrorist attack in London will rise to 52 persons. It is very difficult to identify all of the people who died in the attacks that hit three London Underground subway trains. Authorities will be “implacable” in their efforts to catch those responsible for the attacks. According to the prime minister, about 700 people were hurt in the blasts, with 22 victims in critical conditions.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

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Is The Economy Doomed? Don’t bet on it. Read this.

Dear Trader and Investor,

I have no idea where people get the idea that our economy is in bad shape. Are they kidding?

There is nothing I can see to indicate the “doom & gloom” that some pundits spew.

Unemployment is under 6% and interest rates are near all time lows. Housing starts and new job creation are humming along and consumers shrug of 2 dollar a gallon gas like it does not even matter.

You know what… It doesn’t matter!

Why would I say that? It’s simple.

The last time we had oil prices this high ( inflation adjusted )… back in the 70’s… people were driving around in cars that got about 12 miles to the gallon. More importantly, most companies were victims of high oil prices because goods and services had to ship somewhere.

That is not the case today. Many companies do not have even a remote connection to oil prices and increasingly our economy is getting away from “shipping” goods and services.

Case in point – even companies that are subject to oil prices can produce “blow out” earnings even with high oil prices, take Alcoa for example.

How do you think high oil prices affect the earnings of lawyers, accountants, advertising agencies, software makers, newsletter writers and the list goes on and on. In today’s economy many businesses could not care less about oil prices. It simply doesn’t affect them.

That is why I am firmly in the bull camp and will stay there into the foreseeable future.

I would be remiss in my duties if I did not tell you that the big barrage of earnings numbers starts Monday, better still, if you had our newest earnings growth scanner, you could possibly trade your way to riches as these companies come out with the real data.

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Investing Systems Inc.

The rise in the U.S stock market erased almost all of the 2005 drop in the S&P. According to positive economic reports this month, the outlook of the economy will grow, without accelerating inflation. The Dow rose 146.85 points to close at 10,449.14. Besides, the Nasdaq rose 37.22 to close at 2,112.88, meanwhile the S&P closed at 1,211.86.

Today’s economic data showed that the economy is still growing. According to the Commerce Department, stockpiles at U.S. wholesalers rose for a 16th month in May. Also, the 0.1 percent increase followed a revised 0.7 percent gain in April. The Consumer Price Index (CPI) will be announced next week. Many economists expect the CPI to increase 0.3 percent, although it declined 0.1 percent in May.

After the market closed, Walt Disney Co. announced that shareholders Roy Disney, nephew of the company’s founder, and Stanley Gold have agreed to drop their lawsuit against the company and stop their rivalries between them. During this year’s annual shareholder meeting, Iger, the company’s Chief Operating Officer was named Chief Executive Officer, a role that he will assume on September 30. However, Roy and Gold opposed this election and sued the company claiming that the board made false statements about the search for a new chief executive. Disney shares closed at $25, after rising 55 cents.

Sahres of Alcoa rose $1.11 to close at $27.20, and its second quarter was up 46 cents, which showed a higher-than-expected result. However, oil futures declined after rumors that Hurricane Dennis might miss the majority of oil rigs and platforms in the Gulf of Mexico. Then, crude for August delivery fell 1.8 percent, to close at $59.63 a barrel in New York.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

U.S. stocks ended session high after investors decide to take stock of today’s attacks in London. However, news only decrease price of stocks temporarily. At the end of today’s session, the Dow rose 31.61 points, to close at 10,302.29. Besides, the Nasdaq rose 7.01 points to close at 2,075.66, while the S&P closed at 1,197.87, after rising 2.93 points.

Today, London suffered its deadliest attack since World War II, when terrorists set off four bombs in the city’s subway system. This attack killed at least 37 people and injured about 700. The terrorist organization of al-Qaeda claimed full responsibility for today’s attacks and defended itself by saying that they did it to retaliate “the massacres carried out by Britain in Iraq and Afghanistan”. These explosions occurred on trains traveling between stations including Liverpool Street and Aldgate East in the financial district, and on a double-decker bus in Russell Square. Hospitals admitted at least 300 injured people.

This week there were speculations that investors have been buying up call options on Charles Schwab & Co. amid rumors HSBC Holdings PLC is interested in a takeover of Schwab. But, according to Chairman and Chief Executive Charles Schwab, the company remains “firmly committed to its independence, and believe it serves stockholders best by continuing Schwab’s strategy as an independent company, that is focused on providing clients with great service at great value”.

Among companies that posted gains, Alcoa Inc. added 76 cents to close at $26.85 in extended trading. Also, many retailers added 0.6 percent after the industry reported higher June sales growth due to a warmer weather that increased purchases of air conditioners and summer clothing. For example, Gap, which is the largest U.S clothing chain, climbed 76 cents to close at $20.99 after the company announced its annual profit forecast of $1.44 to $1.48, which resulted in a higher-than-expected profit.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Today, the Dow finished session down triple digits due to record-high crude price. The index was down 101.12 points, to close at 10,270.68. Oil futures marked their first-ever close above $61 a barrel as a consequence of bad weather that shut down oil and gas rigs in the Gulf of Mexico. Therefore, crude for August delivery climbed high to close at $61.28 a barrel, up $1.69, or 2.8 percent. Besides, the Nasdaq fell 10.10 points, to close at 2,068.65. Meanwhile, the S&P closed at 1,194.94, after falling 10.05 points.

UnitedHealth Group Inc., the second U.S. medical insurance company, announced that it will buy PacifiCare Health Systems Inc. for $8.14 billion. Also, UnitedHealth will exchange 1.1 of its shares plus $21.50 cash for each share of PacifiCare. This acquisition will help UnitedHealth profit as Medicare, which is the government medical program. Shares of PacifiCare jumped $9.57, or 13 percent, to close at $82.85 in New York Stock Exchange composite trading, while shares of UnitedHealth dropped 27 cents to close at $52.96.

Aeropostale Inc., the retailer of teenage apparel, cut its second-quarter forecasts making its shares drop about 7 percent. Aeropostale stock dropped $2.36, to close at $31.45. The company announced that earnings this quarter will be about 19 cents a share, which is a lower result than its previous estimate of 23 cents. In general, U.S. stocks fell due to high energy prices, which curb corporate profits and consumer spending.

Among Dow components, Walt Disney announced that it is beefing up an operation in order to launch a national U.S wireless service for families, especially for children. Shares of Disney closed down 25 cents, to close at $24.79. Morgan Stanley’s shares also closed down. The stock ended down 41 cents at $53.36. Finally, shares of General Electric also fell 40 cents, to close at $34.32, after the company’s finance division announced that it will acquire $1 billion in aircraft assets from CIT Group.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

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DAN’S 10 GOLDEN STOCK RULES

1 – Make sure the stock has a well formed base or pattern such as one described on this web site and can be found on the tab “Understanding Chart Patterns” on the home page, before considering purchase. Dan highlights stocks with these patterns in his newsletter.

2 – Buy the stock as it moves over the trend line of that base or pattern and make sure that volume is above recent trend shortly after this “breakout” occurs. Never pay up by more than 5% above the trend line. You should also get to know your stocks thirty day moving average volume, which you can find on most stock quote pages such as eSignal’s quote page.

3 – Be very quick to sell your stock should it return back under the trend line or breakout point. Usually stops should be set about $1 below the breakout point. The more expensive the stock, the more leeway you can give it, but never have more than a $2 stop loss. Some people employ a 5% stop loss rule. This may mean selling a stock that just tried to breakout and fails in 20 minutes or 3 hours from the time it just broke out above your purchase price.

4 – Sell 20 to 30% of your position as the stock moves up 15 to 20% from its breakout point.

5 – Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. Remember stocks are only good when they are moving up.

6 – Identify and follow strong groups of stocks and try to keep your selections in the these groups

7 – After the market has moved for a substantial period of time, your stocks will become vulnerable to a sell off, which can happen so fast and hard you won’t believe it. Learn to set new higher trend lines and learn reversal patterns to help your exit of stocks. Some of you may benefit from reading a book on Candlesticks or reading Encyclopedia of Chart Patterns, by Bulkowski.

8 – Remember it takes volume to move stocks, so start getting to know your stock’s volume behavior and the how it reacts to spikes in volume. You can see these spikes on any chart. Volume is the key to your stock’s movement and success or failure.

9 – Many stocks are mentioned in the newsletter with buy points. However just because it’s mentioned with a buy point does not mean it’s an outright buy when a buy point is touched. One must first see the action in the stock and combine it with its volume for the day at the time that buy point is hit and take keen notice of the overall market environment before considering purchase. Are stocks moving briskly or are they acting sluggish or even worse, are we in a hefty sell off.

10 – Never go on margin until you have mastered the market, charts and your emotions. Margin can wipe you out.

Note: If you are new to trading or investing, I suggest reading these rules many times over until they become ingrained so you can act without emotions.

Stocks that breakout and move up with tremendous volume and close near the highs of the day seem to work out best. However many stocks that move up 15% or more on breakout day often fail. You’ll just have to watch your stocks action like a hawk and get to see and understand these things over a long period of time. If trading were easy everyone would be making millions. It’s not; it takes years and years of hard work and long hours.

Many traders employ a half hour rule, meaning that for the first half hour of the day many traders do not buy any stock that gaps up in price. If the price holds after the first half hour then often many traders will step in a buy the stock. I find this rule works good after the market has moved up for few strong weeks and is not very effective at the start of a new strong move.

If it’s earnings season then it’s an absolute must that you know the date that your company reports its earnings. Many traders prefer to be out 100% before a company reports its earnings in case the company misses its earnings or guides lower. Others I know reduce positions substantially before earnings are released to lower risk. The choice is up to you.

U. S. stocks ended session high, due to positive reports about the outlook of the economy. The Dow increased 68.36 points, to close at 10,371.80. Besides, the Nasdaq rose 21.38 points, to close at 2,078.75. Meanwhile, the S&P closed at 1,204.99, after rising 10.55 points.

Factory orders have increased 0.7 percent in March and April after small declines in January and February. In total, orders have risen 7.1 percent in the past 12 months. Also, orders for core capital goods, adjusted to exclude aircraft and defense goods, fell about 2.5 percent in May after a 1.7 percent gain in April. However, shipment of petroleum products fell 2.2 percent, likely because prices fell.

Besides, U.S stocks rose due to an announcement by Wal-Mart over the weekend, that June sales would be higher than forecasts. Wal-Mart said that it expects to post a 4.5 percent increase in same-stores sales, which is a gain it attributed to consumers buying summer merchandise. On the other hand, rival Target Corp. also announced that same-stores sales in June are expected to beat its projected 4 percent to 6 percent range. Wal-Mart stock rose $1.52, or 3.15 percent to close at $49.80 on the New York Stock Exchange, while Target rose $1.48, or 2.71 percent to close at $56.04.

Ford Motor Co. matched General Motors Corp. (GM) in offering all buyers the same discount to employees since Ford realized that incentives helped GM record its best sales month in 18 years in June. GM’s discounts helped the company’s sales to rise to 558,092 vehicles, which is 47 percent above a year earlier and the highest for any month since September 1986. GM shares rose 12 cents to $34.77 in New York Stock composite trading. They have fallen 13 percent this year, while Ford rose 9 cents, to $10.40 and has dropped 29 percent this year.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

U.S stocks ended the session high mainly due to positive economic reports. The Dow increased 28.47 points, to close at 10,303.44. Besides, both the Nasdaq, and the S&P ended the session high. The Nasdaq rose slightly 0.41 points, to close at 2,057.37. Besides, the S&P rose 3.11 points to close at 1,194.44.

Crude for August delivery closed at $58.75 a barrel, up $2.25. Last week, the benchmark contract closed at $59.84. Also, prices ended nearly 7 percent below Monday’s record Nymex close above $60. Energy trading closed early on the New York Mercantile Exchange, at 1 pm Eastern ahead of Independence Day, with electronic trading set to resume at 7 p.m. on July 4th. There are many worries ahead of the weekend about the price of gasoline, which stood at $2.227 on Friday.

Pfizer Inc. said today that it will discontinue the development of capravirine, drug meant for HIV/AIDS patients who failed antiretroviral therapies. According to a company spokesman, Pfizer has many potential HIV/AIDS drugs in early-stage studies, which it hopes “will lead into development”. After the news, Pfizer shares dropped 55 cents, or 2 percent, to close at $27.03 in early New York trading.

General Motors Corp., the world’s biggest automaker, announced that sales for the month increase by 47 percent by extending discounts to all buyers in June. GM sales rose rose to 558,092 vehicles from 380, 267 for the same month a year ago as light trucks gained 76 percent. The total was the largest for any month for GM since September 1986. GM began the employee-discount-for-everyone program on June 1, after losing 1.5 points of U.S market share through May. Now, the company still has to decide if it wants to extend the offer past its July 5 expiration.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter