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October 12, 2006

Intraweek Alert
by Mark McMillan

What a roller coaster...

It appears that there is enough bullish sentiment that the market continues to hold up with "bad" news out there daily. By this, I mean that many companies are achieving or over achieving versus analyst expectations for the quarters they are reporting on. It seems that most of these have been taking down future guidance.

As of last night, both McDonald's and PepsiCo suggested they see continued growth, counter to what most other companies have been reporting. Both of these companies are in the food/restaurant sector. As we have been discussing, in the weekly alerts, food industries continue to be performing well. This is related to their defensive nature and the fact that profits are up in this sector.

We entered two short trades yesterday. While an entry to SPY at the limit price ($135.00) left us behind by eleven cents, the entry into LRCX was really a difficult entry.

LRCX traded as high as $49.10 in the afternoon yesterday, and in after hours trading was up to over $51.00 before it sold off down to $51.40 when the company guided lower in the future. Our model entered the short trade at $47.00, but we are confident (based on responses from subscribers) that most subscribers had a significantly better entry point.

We expect some sloppy trading today for LRCX and we expect that SPY will open higher. Put a stop in for LRCX at $49.00. Recall that initial stops don't trigger with intraday trading, but rather, by a close over that amount. Once the stop gets moved lower, to protect profits, then it can be triggered by intraday trading prices.

We continue to believe we are near a market top, so please be patient.

Please feel free to send emails with any questions you may have.

Regards and Good Trading,

Mark McMillan
Fundamental Trader Alert

Please use fundamentaltrader@stockbarometer.com for questions/coments.

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