Bull Radar

Style Outperformer:

Mid-cap Growth (-.86%)

Sector Outperformers:

Oil Service (+.82%), Energy (+.61%) and Semis (-.12%)

Stocks Rising on Unusual Volume:

KWK, CHK, GLBL, SQNM, IPHS, MVSN, ASMI, EPAY, AMSC, SYNT, CIEN, CWEI, CSIQ, ENER, BUCY, PLLL, SOLF, STLD, CENX, NSM and ODC

Stocks With Unusual Call Option Activity:

1) SWN 2) DNR 3) FMCN 4) PX 5) CHK

Links of Interest

Market Snapshot Commentary
Market Performance Summary
Style Performance
Sector Performance
WSJ Data Center
Top 20 Biz Stories
IBD Breaking News
Movers & Shakers
Upgrades/Downgrades
In Play
Exchange Volume vs. Average
NYSE Unusual Volume
NASDAQ Unusual Volume
Hot Spots
Option Dragon
NASDAQ 100 Heatmap
DJIA Quick Charts
Chart Toppers
Intraday Chart/Quote
Dow Jones Hedge Fund Indexes

Friday Watch

Late-Night Headlines
Bloomberg:
- The cost of protecting company debt from default fell for the first time this week as stocks rallied the most in almost two months and Verizon Wireless(VZ) agreed to buy Alltel Corp.(AT) and assume $22.2 billion of debt.
- National Semiconductor(NSM) reported a smaller-than-expected drop in fourth-quarter profit and predicted earnings growth this year after it updated factories and focused on higher-priced chips. The shares surged 10% in after-hours trading.
- Lehman Brothers(LEH) may raise as much as $5 billion in capital by early next week. Lehman executives are talking to at least one US pension fund and an overseas investor to discuss terms of a transaction. “We are buyers of the stock on the assumption that CEO Dick Fuld will steady the Lehman ship and, with greater stability, the stock will appreciate,” said Deutsche Bank AG analyst Mike Mayo. Lehman shares already reflect “worst-case scenarios” for the investment bank, Mayo said.
- The Group of Eight industrialized countries may try to convince China and India to agree to monitoring of cuts in energy use that Japan says will fail without support from the world’s fastest-growing economies.
- Vietnamese stocks may extend this year’s worst slump among global markets as the government raises interest rates to quell inflation, Merrill Lynch said. The Ho Chi Minh Stock Index extended a record losing streak to 21 days on concern a widening trade deficit and inflation at a 16-year high will prompt overseas funds to sell local holdings. The benchmark index, at its lowest in 27 months, has lost 58% just this year.
- Short interest on the NYSE jumped 2.73% the last two weeks of May to a new record of 16,431,000,000 shares. Here are the top 5 short interest increases, decreases and total positions as of May 30^th.
- New NYSE short targets. Here are the 25 NYSE stocks with the largest percentage increase in short interest relative to their float from May 15^th through May 30^th.

MarketWatch.com:
- Bond timers are bearish. Dejected newsletters a good sign for contrarians.

Wall Street Journal:
- Chinese security forces are battling to contain antigovernment dissent across the Tibetan plateau, nearly three months after violent clashes started in Tibet’s capital, Lhasa.

BusinessWeek.com:
- Dimon May Go Shopping. The JPMorgan(JPM) CEO dodged subprime, bought Bear, and still has funds to spare.

NY Times:
- Airlines Rush to Go Small. With fuel prices almost double what they were a year ago, airlines have switched strategies from expansion to downsizing.

Forbes.com:
- Insiders Unload Energy, Buy Banks. Overall, insiders continue to be bullish, keeping the overall buy ratio at or near the historically high levels at which it has been perched for the past two quarters. Insiders in the banking industry group continue to remain bullish with extremely unusual buy ratios of well over 50%. Reversing from a bullish beginning of the year, the energy industry group’s insiders now appear to be taking profits. Some of the biggest examples of insider selling are at Hess Corp.(HES), Transocean(RIG) and Chevron(CVX).

c/net:
- BlueFire Ethanol expects to start construction of a plant within weeks that will convert landfill waste into the fuel ethanol. The company expects its first 3-million-gallon-per-year facility to be constructed this year in Lancaster, Calif. It expects to complete applications for a Department of Energy loan this year to build a second plant, capable of making 17 million gallons per year, in an undisclosed place. The third plant on the drawing board would produce 55 million gallons annually. After 2009, the company then intends to build more--at a pace between five and seven plants a year--in the Northeast and Southeast U.S. BlueFire also anticipates international expansion with its modular plant design.

redOrbit:
- In the UK, wind farms such as the Humber Gateway could help to make sure wind energy generates more power than the nuclear industry, according to industry leaders.

Automotive News:
- General Motors(GM) is close to a deal to buy Cobasys LLC, a supplier of batteries for some of the automaker’s hybrid-electric autos. Cobasys is jointly owned by Chevron Corp.(CVX) and Energy Conversion Devices(ENER).

Financial Times:
- Act now to prick the oil price bubble. Bubbles come to an end eventually but there is no guarantee that this will happen soon. The global economy is likely to be forced into a serious crisis if we do not explore the possibility that this is a bubble that needs to be burst quickly. Much of the rise in oil price is the result of activity on the New York Mercantile Exchange, the energy exchange. This is activity by index funds and pension funds that are investing in oil futures, not for direct use but as financial assets for profit. They have invested $260 billion in commodity markets, compared with $13 billion just five years ago. Much of this money is in oil. The Goldman Sachs Commodity Index is heavily weighted by oil - 78 per cent compared with less than 2 per cent for precious metals. The point is that this paper market is not driven by the pressures on demand and supply but entirely by price expectations. How large is the speculator activity? The total open interest - the number of open or outstanding contracts for which an individual is obliged to the exchange because that individual has not yet made an actual contract delivery - in the 2008 contracts on May 21 was 849.472 contracts, which equals 849 million barrels, or nearly 10 times the daily crude oil production. This is a problem that requires immediate action. There is no need for western governments to go down on their knees to Arab oil sheikhs, or to ration oil to the increasingly cash-strapped and angry consumers.

TimesOnline:
- The ECB's abrupt move to a state of high alert over inflation stunned markets and triggered a scramble by the City to reassess the outlook for interest rates on both sides of the Channel. Both the Bank and the ECB held rates yesterday despite worsening economic prospects, spurning pleas for action to buoy growth as they continued their fight to quell rising inflation.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (OI), target raised to $70.

Morgan Stanley:
- Reiterated Overweight on (NSM), target $28.

Night Trading
Asian Indices are -.25% to +1.25% on average.
S&P 500 futures +.01%.
NASDAQ 100 futures -.01%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (TSL)/.48

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for May is estimated at -60K versus -20K in April.
- The Unemployment Rate for May is estimated to rise to 5.1% versus 5.0% in April.
- Average Hourly Earnings for May are estimated to rise .2% versus a .1% gain in April.

10:00 am EST
- Wholesale Inventories for April are estimated to rise .5% versus a .1% decline in March.

3:00 pm EST
- Consumer Credit for April is estimated to fall to $7.2 billion versus $15.3 billion in March.

Other Potential Market Movers
- The Fed’s Evans speaking, Fed’s Bullard speaking, Canaccord Adams Diabetes/Obesity Conference and Sandler O’Neil Global Exchange Trading Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and commodity shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Sharply Higher, at Session Highs, Boosted by Airline, Financial, Commodity, Retail, Technology Shares

Evening Review
Market Summary
Top 20 Biz Stories
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Real-Time Stock Bid/Ask
After-hours Stock Quote
After-hours Stock Chart
In Play

Stocks Soaring into Final Hour on Short-Covering, Less Economic Pessimism

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Computer longs, Medical longs, Internet longs, Alternative Energy longs and Retail longs. I covered my (IWM)/(QQQQ) hedges and some of my (EEM) short today, thus leaving the Portfolio 100% net long. The tone of the market is very bullish as the advance/decline line is substantially higher, every sector is rising and volume is above average. Investor anxiety is slightly above average. Today’s overall market action is very bullish. The Morgan Stanley Tech Index is very close to a breakout from range it has been trapped in since early May. The VIX is falling 8.9% and remains above average at 18.93. The ISE Sentiment Index is below average at 126.0 and the total put/call is around average at .86. Finally, the NYSE Arms has been running around average most of the day and is currently .82. Despite news that S&P finally cut the ratings of (ABK)/(MBI), the (XLF) is trading at session highs, rising 1.8%. The European Financial Sector Credit Default Swap Index is falling 2.8% today to 73.09 basis points. A number of emerging markets remained under pressure overnight. The Vietnam Index is now down 65% from its high and down 58% just this year. The Citi US Economic Surprise Index is now up to -.9 from -100.0 in March, while the Eurozone Index has declined to -43.10 from 78.0 in March. The dollar’s weakness today seems more like profit-taking after recent gains rather than related to Trichet’s comments that the ECB may raise rates soon. I doubt the ECB will hike anytime soon and with eurozone data continuing to deteriorate, an eventual drop in rates is more likely, in my opinion. One of my longs, (AMSC), is close to hitting another new high today, which is very impressive considering the pullbacks many other alternative energy stocks have experience of late. Nikkei futures indicate an +200 open in Japan and DAX futures indicate an +47 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on less economic pessimism, diminishing credit market angst and short-covering.

Today's Headlines

Bloomberg:
- The cost of protecting leveraged loans from default fell the most in three weeks after Verizon Wireless(VZ) agreed to buy Alltel Corp.(AT) and assume $22.2 billion of debt that has been trading at a discount. Credit-default swaps on the Markit LCDX index, a gauge of investor confidence in the US leveraged loan market, jumped .4 percentage point to 99.3, according to Goldman Sachs Group(GS).
- Billionaire Warren Buffett’s fledgling municipal bond insurer may get a boost from a likely ratings cut for its two biggest competitors.
- Crude oil surged $4/bbl. on speculation that the US dollar would begin to weaken again after the European Central Bank said it may boost interest rates.
- UK house prices fell the most in 15 years in May as lenders restricted access to mortgages and the prospect of a recession deterred buyers.
- German manufacturing orders unexpectedly declined for a fifth month in April, adding to evidence that growth in Europe’s largest economy is slowing.
- Self-proclaimed al-Qaeda commander Khalid Sheikh Mohammed told a military tribunal at Guantanamo Bay Naval Base, Cuba, he would welcome the martyrdom of execution for masterminding the Sept.11 terrorist attacks that killed almost 3,000 people.

Wall Street Journal:
- Supporters of Senator Hillary Clinton suggested she would like to be Senator Barack Obama’s running mate, but close advisers to Senator Obama are signaling that an Obama-Clinton ticket is highly unlikely.
- Lehaman(LEH) Is Also Open to Big US Investors.
- Obama Must Go to Iraq to Witness Gains, Says Hegseth.
- Macquarie Group Ltd., the Australian asset manager and investment bank, is planning to start a US bond insurance company for municipal and infrastructure bonds.

USA Today:
- Senators from both parties are calling for an investigation into a move by unknown foreign investors to gain more control of one of the nation’s largest railroads, which serves military bases and transports nuclear materials across the country. The six members of the Senate Banking Committee expressed concern that The Children's Investment Fund (TCI), a London-based group, could be setting the stage for the foreign investors to take control of the CSX(CSX) rail line. The fund is trying to win five seats on CSX's 12-member board. "Very little is known about the investors in the TCI group or those investors' agenda," the senators wrote. "They are anonymous and invisible to government regulators" and could be fronts for foreign governments. The investment fund refuses to divulge the names of its foreign investors. The senators' letter cited a recent investigation by the Japanese government of the fund's attempt to increase its stake in a Japanese utility company from 9.9% to 20%. The government rejected the fund's effort based on national security concerns.

Silicon Alley Insider:
- We're six months into an economic slowdown now, and search spending has so far been mostly untouched, Citi's Mark Mahaney reports from the SMX search conference in Seattle. This is obviously good news for Google(GOOG), which continues to swallow the lion's share.
- Why Apple’s(AAPL) iPhone Apps Platform Could Spark Huge iPhone Sales.

Cattlenetwork.com:
- US lawmakers are increasing pressure on regulators to probe the role of some of the oil futures markets’ biggest traders, including large investment banks, in pushing oil prices to stratospheric levels. It could cast more of a spotlight on the role investment banks such as Goldman Sachs(GS) and Morgan Stanley(MS) may have played in the oil price rally. Ultimately they could be forced to unwind some long-dated crude futures trading positions, while one of the two main energy exchanges – ICE – may have to operate under the same regulations as its NY-based counterpart. We have investment banks up to their necks in futures markets…even buying oil storage capability,” said Senator Byron Dorgan, who’s drafting legislation to raise the cash collateral requirements for crude futures trading. He alleges the banks are “for the first time” intentionally holding crude off the market to influence prices. Mark Cooper, Director of Research at the Consumer Federation of America said that almost $40 a barrel could be cut out of the market overnight if regulators or Congress moved to shut down speculation beyond traditional levels. In the first quarter, Morgan Stanley calculated that it took more risks in commodities on a daily basis than in stocks. Under scrutiny by lawmakers now are two rules that allow institutional investors to funnel billions of dollars into the crude futures market, far beyond the speculation limits imposed on trading on the New York Mercantile Exchange, which is owned by Nymex Holdings Inc. (NMX). One is related to the foreign boards of trade - which aren't regulated by U.S. watchdogs - and the other to waivers given to Wall Street banks such as Goldman Sachs and Morgan Stanley that exempt them from speculation limits for certain kinds of trades.

Scotsman.com:
- A major expansion in offshore wind power has been announced, with 11 new sites identified around the UK, including two off the Scottish coast.