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The Red Roadmaster’s US Market Re-cap + Stock Talk ™

21 January 2010

Date Line: Hong Kong (SAR) China

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Red’s Bull Alert: On Tuesday, the DJIA and the S&P 500 ended on 15 month highs on bets the The S&P 500 is up 68.2% since March 9, 2009

Re-cap of the US Stock Market Action for the week ending 20 January 2010 Wall Street drops on IBM profit taking, but eBay runs North into the close The DJIA closed lower Wednesday as US on China, and Tech worries. Yesterday It was reported in the US media that Chinese authorities have ordered some major banks to curb their lending over the rest of this month after an early burst of credit. Some believe that this action signals that China, the world's 3rd largest economy, may slow its economic expansion. Perhaps but in my opinion not likely, this has been in the International news for a week or so now. The DJIA shed 122.28 points, or 1.14%, to end at 10,603.15, S&P 500 lost 12.19 pts, or 1.06%, to close at 1,138.04, and the NAS tallied up a minus 29.15 pts, or 1.26%, to end the session at 2,291.25. The latest earnings season picked up pace after the Bell, when e-commerce company eBay Inc and coffee chain Starbucks Corp posted stronger-than-expected Q-4 earnings (covered in Stock Talk below) Advancing Sectors: (None) Declining Sectors: Energy (-1.7%), Materials (-1.5%), Tech (-1.5%), Telecom (-1.4%), Industrials (-1.3%), Consumer Discretionary (-1.2%), Utilities (-1.1%), Consumer Staples (-1.0%), Health Care (-0.5%), Financials (0.1%) Volume and Breadth: Volume once again on the NYSE, about 1.05B/shrs changed hands, below last year's estimated daily average of 2.18b/shrs, and on the NAS, about 2.39b/shrs traded, above last year's daily average of 1.63B/shrs. Decliners outnumbered advancers on both the NYSE and Nasdaq by about 3 to 1.

Stocks to Watch Today

Brocade Communications Systems, Inc. (BRCD), eBay (EBAY), Starbucks Corp. (SBUX), and US Bancorp (USB). 1

Brocade Communications Systems, Inc. (BRCD) Up-date 3 Last Look: June 25, 2009 January 21, 2010 Paul A. Ebeling, Jnr. Analyst Today let’s look at Brocade Communications Systems, Inc. (BRCD), the maker of fiber channel switches, from a Technical POV. The overall indications, after Wednesday’s (January 20, 2010) market action, are Bearish: in the near term Neutral, mid-term Bearish, and long term Very Bearish. The recent Candle Stick analysis is: Neutral

**Chart by:

Latest News and Opinion: Brocade Announces Closing of $600 Million Senior Secured Notes Offering


Wednesday’s Market Action Close 7.73

- .15 Volume 11,906,800/shrs

There a Bearish DOJI Star and one Gap open down on November 12, 2009 at 9.06/8.31 the near term resistance is 7.77, support at 7.25, and the 50 day (EMA) exponential moving average is 7.84. This is Brocade Communications Systems, Inc. (BRCD) The Company makes Fibre Channel switches and related software for connecting corporate storage systems and servers. Its products are used in storage area networks (SANs), which pool storage resources across enterprises for easier management and more efficient utilization of assets. The company's SilkWorm switches automatically reroute data upon path failure and reconfigure the SAN when new devices are added. Brocade sells its products primarily through equipment manufacturers, including EMC, Hewlett-Packard, and IBM, which together generate about 65% of revenues.

The Competitive Landscape The USA’s economy heavily influences business spending for software products. The success of programming companies depends heavily on strong technical expertise. The success of packagedsoftware companies depends on technical expertise and good marketing. Small software companies compete mainly by developing packaged products in small niches or producing custom products for individuals. Many small companies form alliances with larger ones to market their products.

Brocade Communications Systems, Inc. (HQ) Chairman David L. (Dave) House 1745 Technology Dr. San Jose, CA 95110 United States Phone: 408-333-8000 Fax: 408-333-8101

Brocade Communications Subsidiaries Foundry Networks, Inc.


eBay, Inc. (EBAY) Up-date 6

Last Look: December 1, 2009

January 21, 2010 Paul A. Ebeling, Jnr. Analyst Today let’s look at eBay (EBAY), the premier online (AKA World’s Biggest) marketer/seller, from a technical POV. The overall indications, after Wednesday’s (January 20, 2010) market action, are Neutral: in the near term Neutral, mid-term Neutral, and long term Neutral. The recent Candle Stick Analysis is: Very Bullish

**Chart by:

Latest News and Opinion: EBay’s Profit Rises Sharply, Aided by Sale of Skype


Wednesday’s Market Action Close 22.23

+ 7.73

Volume 36,688,700/shrs

There a Bullish Engulfing Candle on January 19, and one Gap open down on October 22, 2009 at 24.92/24.22; the near term resistance is at 22.40, support at 22.06, and the 50 day exponential moving average is 23.25. This is eBay, Inc. (EBAY): In the lexicon of the modern consuming idiom the term “I got it on eBay" has become fully establish and is making eBay online auctioneer the world leader. eBay is a cyber-forum for selling more than 50,000 categories of merchandise, from junk to fine antiques, and hosting about 500,000 online stores worldwide. eBay, which generates revenue through listing/ selling fees and advertising, has more than 27%MM registered users. In 2007, eBay acquired one of the fastest growing online ticket sellers, StubHub, for US$307MM. eBay, Inc. ranks #326 in FORTUNE 500 and #213 in FT Global 500. The Competitive Landscape. eBay competitors are primarily in the Auctions industry. eBay also competes in the Messaging, Conferencing & Communications Software, Transaction, Credit & Collections, and Fixed-line Voice Services Providers sectors eBay’s competition includes Google Yahoo!

eBay, Inc. (HQ)

Chairman Pierre M. Omidyar SVP & CFO Robert H. (Bob) Swan 2145 Hamilton Ave. San Jose, CA 95125 United States Phone: 408-376-7400 Fax: 408-376-7401

Starbucks Corp. (SBUX) Up-date 2

Last Look: July 21, 2009 5

January 21, 2010 Paul A. Ebeling, Jnr. Analyst Today let’s look at Starbucks Corp. (SBUX), the World's #1 specialty coffee retailer, from a Technical POV. The overall indications, after Monday’s (July 20, 2009) market action, are Bullish: in the near term Neutral, in the mid-term Bullish, and long term Bullish. The recent Candle Stick Analysis is: Very Bearish.

**Chart by:

Latest News and Opinion: Starbucks Corporation to Make First Entry Into The Ready-To-Drink Coffee Category in Europe with Arla Foods 6

Wednesday’s Market Action

Close 23.29 -.29

Volume 16,954,600/shrs

There is a Bearish Engulfing Candle on January 20, and one Gap open up on November 6, 2009 at 19.89/20.26, the near term resistance is 23.84, support at 23.24, and the 50 day (EMA) exponential moving average is 22.44. This is Starbucks Corp. (SBUX): The Company is the world's #1 specialty coffee retailer, Starbucks has more than 16,000 coffee shops in more than 35 countries. The outlets offer coffee drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks owns more than 9,000 of its shops, which are located in about 10 countries (mostly in the US), while licensees and franchisees operate more than 7,400 units worldwide (primarily in shopping centers and airports). The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products.

Competitive Landscape Consumer taste and population growth drive demand in the consumer sector, while economic growth of businesses, like restaurants and hotels, drives demand in the commercial sector. The profitability of individual companies depends on effectively managing raw ingredient costs, efficient operations, and effective marketing. Large companies have scale advantages in purchasing, distribution, manufacturing, and marketing. Small companies can compete effectively by offering specialized products or serving a local market. The industry is capital-intensive: average annual revenue per worker is about US$500,000.

Coffee and Tea Manufacture Industry Forecast The output of US coffee and tea manufacturing is forecast to grow at an annual compounded rate of 2 % between 2008 and 2013. Data Sourced: December 2009 Starbucks Corp. (HQ) Howard D. Schultz Founder, Chairman, Chief Exec. Officer and Pres 2401 Utah Avenue South Seattle, WA 98134 United States Phone: 206-447-1575 Fax: 206-682-7570

US Bancorp (USB) Up-date 1

Last Look: April 22, 2009 7

January 21, 2010 Paul A. Ebeling, Jnr. Analyst Today let’s look at US Bancorp (USB), the large regional US bank, from a Technical POV. The overall indications, after Wednesday’s (January 20, 2010) market action, are Neutral: in the near term Neutral. mid-term Bullish. , and long term Neutral. The recent Candle Stick analysis is: Very Bearish

**Chart by: Latest News and Opinion: Mortgage pain persists for BofA, Wells, U.S. Bancorp Wednesday’s Market Action Close 25.01

+ .52

Volume 18,602,100/shrs


There is a DOJI on January 19, and there are no Gaps open up or down on the Chart, the near term resistance is 25.39, support at 24.63 , and the 50 day (EMA) exponential moving average is 23.50. This is US Bancorp (USB): This US bank has approximately 2,800 locations and 5,000 branded ATMs in two dozen mid-western and western states. The bank holding company, one of the 10 largest in the country, owns U.S. Bank and other subsidiaries that provide consumer and commercial banking, as well as credit card and ATM processing, mutual funds, mortgage banking, brokerage, wealth management, equipment leasing, trust services, corporate payments, and insurance. In late 2008 U.S. Bancorp acquired the banking operations of the failed California-based banks Downey Savings & Loan and PFF Bank & Trust in an FDIC-assisted transaction. Competitive Landscape Demand for banking services is closely tied to economic activity and the level of interest rates. The profitability of individual banks depends on marketing skills, efficient operations, and good risk management. Large economies of scale exist in some segments of the industry, which has encouraged industry consolidation. Smaller banks can compete successfully in segments where customer service or knowledge of the local market is more important. The industry is capital-intensive and highly automated: annual revenue per employee is close to US$300,000. Banks and Credit Unions Industry Forecast The output of US banks and credit unions is forecast to grow at an annual compounded rate of 1 % between 2008 and 2013. Data Sourced: December 2009

US Bancorp (HQ) Richard K. Davis, Chairman, President and CEO 800 Nicollet Mall Minneapolis, MN 55402 United States Phone: 651-466-3000

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Red Roadmaster Stock Talk  

Red Roadmaster Stock Talk featuring BRCD, EBAY, SBUX, USB

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