TUES. SEP. 2 THOUGHTS

One of the conversations late last week around the office centered around the fact that leaves were already falling from trees. Another observation was that it is football time! Schools are back in session in the New York area today post- Labor Day. And there was actually a nip in the air a couple mornings during the weekend. Yes, it is autumn. Everybody comes back from the beach and goes back to work (except for a few stragglers who stubbornly enjoy the golf courses which are suddenly empty). And suddenly the tone and pace of the market changes, something akin to the feel on the first trading day of the year. There is a surge of energy as everyone is ready…but for what? In general, news flow remains light after the Labor Day holiday (no major earnings today, for instance). Therefore, everyone is looking for things to do and waves of activity around nothing events can often occur. Thus, it can become a fun week to trade, but a period in which one as to be particularly quick at the trigger. The action will pick up today, but use that extra adrenalin with precision and care as it will be a dangerous atmosphere for day traders.

Markets throughout the world fell yesterday, but Europe rebounded overnight with Asia down still more. The main story, of course, has been the failure of Hurricane Gustav to cause widespread havoc thus oil prices are sharply lower (over $7/ barrel as of this writing). The markets will open higher today. If markets stay higher (as they likely will), it will be a difficult day trading day because prices will level off and churn. If the financials reassert their downtrend, there will be a lot to do. Unfortunately, with no rush to buy commodities, the first scenario seems much more likely.

Reiterating-If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 based on direction of the market unless specified

Good-

MBI/ABK- looking for continued momentum

LEH- more takeover rumors

BDSI/SIGA- both way up on Friday; would love A-B-A2 to upside if possible

IRBT- announced $200 million government contract

Airlines- very strong on weak oil prices


Bad-

Solars- weak on oil prices

Almost no news flow. Again, certainly a day to be very careful day trading.


No earnings before-hours; only one after close.

TUES SEP 2 AFT

DCI .61/604M .60/584M 2.12/2.22B 2.44/2.44B

Good luck today.

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