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Two Ways To Play: For Whom the Bell Tolls


Strengthen your portfolio in good times and bad.

Eyes on Lehman

Lehman Brothers (LEH) will likely raise $3-4 billion to shore up its balance sheet according to The Wall Street Journal. The new capital will likely be raised by issuing common stock diluting existing shareholders.

To date, the company has raised $6 billion including $4 billion in the last quarter. Yesterday' LEH shares fell 8% on negative comments by Wall Street analysts. LEH is set to report results on June 16, where analysts believe the company will report its first quarterly loss since going public in 1994. See Professor Bennet Sedacca's Credit Hurricane to Make Landfall.

From the Bull Pen: Bulls continue to see a play in New York Community Bancorp (NYB). The stock ended higher on a rough day for the financials. Sell-stops can be set below $20.

From the Bear Cave: Bears can choose the Ultrashort financials (SKF) which tracks twice the inverse of the D.J. financial index. Sell-stops can be set near $109.

Paying the Toll

According to the WSJ, Toll Brothers (TOL) reported better-than-expected results for its fiscal second quarter. The largest luxury-home builder in the U.S. reported a net loss of 59 cents a share and a 30% drop in revenues to $818 million. Analysts were expecting a 96 cent loss and revenues of $807 million.

CEO Robert Toll said demand continues to be weak and urged Congress to jumpstart demand by brining buyers off the sidelines. This would stop the downward spiral of home prices. "With a little motivation, the new home market could turn around, which would have a very positive impact on banks, bond prices and many other areas of the economy," Toll said. See Professor Charles Payne's Will Toll Brothers, Hovnanian Surprise?

From the Bull Pen: The bulls believe TOL will be the first homebuilder to turn around as it caters to the high-end sector. Near-term sell-stops can be set below $20.

From the Bear Cave: An option for the bears may be the Ultrashort Real Estate ETF (SRS) which tracks twice the inverse of the DJ real estate index. Sell-stops can be set near $84.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng -1.83%, Nikkei -1.60%, Sensex -0.63%, Taiwan -1.66% and Shanghai -0.65%.

Glancing towards Europe, we see the CAC +0.03%, DAX -0.49%, FTSE -0.06%

As of 8:00 AM, S&P futures are trading +3.30 points to 1388, and Nasdaq futures are higher +4.5 points to 2015.

A Look At Commodities

Commodities are mostly lower. At 8:00 AM crude oil is down -0.58 to 127.18. Gold is off -1.60 to 891.30. Silver is lower -0.135 to 16.775, and copper is down -0.80 to 360.10.

The dollar index is lower -0.148 to 72.781.

On the Radar

Auto Sales: 4.9M
Truck Sales: 5.6M
10:00 Factory Orders: 0.3%

Click here for this week's full trading radar.

Good luck!
No positions in stocks mentioned.

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