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Week in Review: November 16, 2007


A look back at the week that was...


Market Recap

Uncertainty remained the primary concern on investor's minds this week as the bulls and bears continued their back and forth struggle. The bears were off to an early start on Monday as discount broker E-Trade (ETFC) dropped 50% on fears of bankruptcy and mortgage market exposure. Commodities experienced mild profit taking as gold and oil both were under pressure. After a volatile week the bulls seemed poised for a rebound on Friday but were halted by lingering retail fears as Kohl's (KSS) and J.C. Penney (JCP) lowered their end of year outlooks.

On a technical stance, the bears gained an early victory as last week's SPX low was broken by Monday`s 1439 close. However the bulls battled back but the rally failed at the SPX's firm resistance level at 1490. As the holiday season draws near I expect uncertainty and heightened volatility to persist within these technical levels.

The Four Sisters Performance

ETF Watch

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Top Headlines

E-Trade (ETFC) continued to fall further in early trading Monday as Citi downgraded the broker to a sell rating, citing the company's lowered earnings forecast, bankruptcy rumors and substantial losses from mortgage market exposure. (11/12)

Pending Home Sales were surprisingly positive for the month of September as the index rose 0.2%. While the index is off 20.4% from a year ago, analysts were not expecting an increase on the month. (11/13)

Retail Sales came in at a moderate 0.2% for the month of October versus a 0.1% consensus. Sales excluding autos have now risen 5.2% in the past year. (11/14)

The Labor Department reported a 0.1% increase in PPI and no change in Core PPI for the month of October. Energy and food prices both saw substantial price slowdowns from the month prior. CPI was also reported this week at 0.3%, highlighted by a 1.4% increase in energy prices, the fastest rise since May. Core CPI came in slightly lower at its consensus of 0.2%. (11/14)

Earnings Snapshot

Home Depot (HD) stayed in line with expectations this week as the home improvement retailer saw $1.1 bln in 3Q income. Down from the same quarter a year ago, the company cites deteriorating housing indicators for the decline in revenue. (11/13)

Wal-Mart (WMT) continued its dominance as the world`s largest retailer with an impressive 8.8% increase in 3Q net sales. Strong performance in Wal-Mart and Sam`s Club stores in the United States reflected the positive results for the quarter. (11/13)

J.C. Penney (JCP) furthered uncertainty about the upcoming holiday season after reporting a 9.1% drop in 3Q profit and cutting its end of the year outlook. (11/15)

Starbucks (SBUX) saw record growth for 4Q as revenue grew by 22% and fiscal year revenue increased by 21%. Despite posting record results, share prices dropped in early trading Friday as the company lowered its outlook on concerns over a slowing economy. (11/15)

Market Movers: Winners & Sinners

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No positions in stocks mentioned.

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