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

August 18, 2009

The S&P 500 is up about 45% from its March 9, 2009 low.

Re-cap of the US Stock Market Action for August 17, 2009 US Stocks suffered their worst loss in seven weeks, however, the health-care sector outperformed other groups, with managed care companies boosted by the view that a public health-care plan was fading. The S&P managed health care index .GSPHMO rose 2.6%. The DJIA was off 186.06 pts, or 2%, to close at 9,135.34, the S&P 500 closed minus 24.36 pts, or 2.43%, at 979.73, and the NAS fell 54.68 pts, or 2.75%, to end the session at 1,930.84. Shares of heavy equipment maker Caterpillar Inc. fell 4.5% to US$43.95, leading the DJIA decliners, and shares of Home Depot Inc, a Dow component that is scheduled to report results on Tuesday, dropped 3.8%, or US$1.03, to US$26.11. The Home Depot (HD) is covered in Stock Talk below today. Volume and Breadth: Trade was light on the NYSE, with 1.22B/shrs changing hands, well below last year's estimated daily average of 1.49B/shrs, and on the NAS, about 1.95B/shrs traded, againbelow last year's daily average of 2.28B/shrs. Declining stocks outnumbered advancing ones on the NYSE by a ratio of 9 to 1, while on the NAS, more than 4 stocks fell for every 1 that rose. PS: The talking heads are broadcasting that the “bad” news from Japan was the reason for today’s decline, the fact is that the news from Japan is actually quite good, and IMO today’s selling is purely technical in nature. RR

Stocks to Watch Today

Deere & Company (DE), The Home Depot, Inc. (HD), Hewlett-Packard (HPQ), and Lowe's Companies (LOW).


Deere & Co. (DE) Up-date 5 August 18, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at Deere & Co. (DE), one of the World’s largest makers of farm equipment, from a Technical POV. The overall indications, after Monday’s (August 17, 2009) market action, are Neutral, in the near term Neutral, mid-term Neutral, and long term Neutral. The recent Candle Stick analysis is: Neutral

**Chart by: http://www.stockta.com

Latest News: Be Bullish for Deere Season

http://online.barrons.com/article/SB125050593499136571.html?ru=yahoo&mod=yahoobarrons Monday’s Market Action Close Volume 00/shrs


There is a Bullish Engulfing Candle on August 12 and two Gap open up on July 15 and 30, 2009 at 36.92/41.89, the near term resistance is 44.13, support at 41.72 and the 50 day (EMA) exponential moving average is 42.20. This is Deere & Company (DE): The company, one of the world's two largest makers of farm equipment (CNH Global is the other), is also a leading producer of construction, forestry, industrial, and lawn-care equipment. It is famous for its "Nothing Runs Like A Deere" brand marketing campaign. While the global financial crisis dented the company's sales in commercial and consumer equipment, Deere's agricultural equipment sales continued strong and remained highly profitable. Deere makes 60% of its sales in North America. Competitive Landscape Demand is driven by consumer income and demographics. The profitability of individual companies depends on the correct assessment of repayment likelihood and effective collections activities. Large companies have an advantage in using computers to serve large portfolios of mortgage and credit card loans and also have access to cheaper sources of funds, but small companies can compete effectively in the cash lending or sales finance segments, where personal contact is more important. Deere & Co. (HQ) Robert W. Lane ,Exec. Chairman, Chief Exec. Officer and President: One John Deere Place Moline, IL 61265-8098 United States Phone: 309-765-8000 Fax: 309-765-5889 http://www.deere.com


The Home Depot, Inc (HD) Up-date 7 August 18, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at The Home Depot Inc. (HD), the World’s Biggest Home Fixer Upper Store, from a Technical POV. The overall indications, after Monday’s (August 17, 2009) market action, are Neutral, in the near term Neutral, mid-term Neutral, and long term Neutral. The recent Candle Stick analysis is: Neutral

**Chart by: http://www.stockta.com

Latest News: Can Home Depot and Target improve the market's outlook when they report earnings Tuesday?


http://www.forbes.com/2009/08/17/briefing-americas-outlook-markets-equities-home-depot.html? partner=yahootix Monday’s Market Action Close 26.11 - 1.03

Volume 30,842,200/shrs

There is a Bullish Engulfing Candle on August 12 and one Gap open down on August 17, 2009 at 26.90/26.44, the near term resistance is 26.64, support at 26.03 and the 50 day (EMA) exponential moving average is 25.16. This is The Home Depot, Inc. (HD): The Company operates as a home improvement retailer primarily in the United States, Canada, and Mexico. The Home Depot stores offer building materials, home improvement supplies and lawn and garden products that are sold to do-it-yourself customers, do-it-forme customers, home improvement contractors, trades people and building maintenance professionals. The company also operates EXPO Design Center stores that provide products and services primarily related to design and renovation projects. As of January 26, 2009, it operated 2,274 retail stores in 50 states in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico, and China. The company was founded in 1978 and is based in Atlanta, Georgia. Competitive Landscape The industry is driven mainly by residential real estate construction and renovation. Large chains have expanded rapidly in recent years by focusing on the home improvement market, with contractor sales as a sideline. Smaller companies, often family-owned lumberyards, can compete effectively by catering to contractors (for whom price is less important than other services), through a wider range of specialty products and services, and by serving areas unattractive to the big-box stores because of limited customer concentration. Building Material Supply Industry Forecast The value of US private and public construction of buildings, which is a driver for building material supplies, is forecast to grow at an annual compounded rate of 5% between 2008 and 2013. Data Sourced: December 2008 The Home Depot, Inc. (HQ) Exec. Chairman and Chief Exec. Officer: Francis S. Blake 2455 Paces Ferry Road NW Atlanta, GA 30339 United States Phone: 770-433-8211 Fax: 770-431-2685 http://www.homedepot.com


Hewlett-Packard (HPQ) Up-date 4 August 18, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at Hewlett-Packard (HPQ), the World’s #1 personal computing company, from a Technical POV. The overall indications, after Monday’s (August 17, 2009) market action is Neutral, in the near term Neutral, mid-term Neutral, and long term Bullish. The recent Candle Stick analysis is: Neutral

**Chart by: http://www.stockta.com

Latest News: Fewer, and happier customers http://www.marketwatch.com/story/recessions-bright-spot-happier-customers-2009-08-18?siteid=yhoof


Monday Market Action Close 43.11 - .98

Volume12,521,500 /shrs

There is a Bullish Engulfing Candle on August 12 and three Gaps open up between Mar 11 and Jul 15, 2009 at 27.11/37.80, the near term resistance is 43.60, support at 42.44 and the 50 day (EMA) exponential moving average is 40.30. This is Hewlett-Packard (HPQ): the Company is a pioneer in providing affordable personal computing throughout the world. In PC’s, the company commands the number one position worldwide with a 19% share of the market. 2008 Revenues came approximately 78% from products and 22% from services. 1 st quarter 2009, approximately 30% of revenues came from services. 70% of HP’s customer base is located outside of the US. It operates in seven segments which are grouped together to form Technology Solutions Group: enterprise storage and servers, HP services, and HP software. HPQ has had a number of important improvements including a jump in ROE of 21.5% 08’ from 19% 07’ and 16.5% 06’.

Competitive Landscape Demand is driven by global unit sales of personal computers and services. Price competition which has accounted for a long-term trend in the industry has placed pressure on lower average selling prices. Streamlining of operations will provide larger corporations with economies of scale and wider profit margins. Smaller firms will keep the heat on with vigilant competition as far as new products that draw away market share from PC sales. Global appetite for technology products such as Smartphone’s, personal digital assistants and lightweight PC’s will fuel long-term growth in the industry.

Sub-Industry Index: Computer Hardware Index Year to date through May 8, the index gained 21.0%, as compared to 3.3 increase in the S&P 1500 Composite Index. In 2008, the sub-industry index declined 40.5%, versus a 38.5% decline for the S&P 1500 Composite Index.

Hewlett-Packard (HPQ) Chairman and Chief Executive Officer; Mark V Hurd 3000 Hanover Street Palo Alto, CA 94304 United States Phone: 650-857-1501 Fax: 650-857-5518 http://www.hp.com


Lowe's Companies (LOW) Up-date 1 August 18, 2009 Paul A. Ebeling, Jr. Analyst Today let’s look at Lowe's Companies (LOW): the #2 US home improvement chain, from a Technical POV. The overall indications, after Monday’s (August 17, 2009) market action, are :Neutral: in the near term Neutral, mid-term Bullish, and long term Bullish. The recent Candle Stick analysis is: Very Bullish

**Chart by: http://www.stockta.com

Latest News: Housing Takes Spotlight on Tuesday http://www.forbes.com/2009/08/17/briefing-americas-outlook-markets-equities-home-depot.html? partner=yahootix


Monday’s Market Action

Close 20.47

- 2.36

Volume 41,074,400/shrs

There is a Grave Stone Doji on August 17, and one Gap open down on August 17, 2009 at 22.57/22.29 the near term resistance is 20.67, support at 19.60 and the 50 day (EMA) exponential moving average is 21.03. This is Lowe's Companies (LOW): The Company has evolved from a regional hardware store operator into a nationwide chain of home improvement superstores bent on international expansion. The #2 US home improvement chain (after The Home Depot), Lowe's has about 1,640 superstores in 50 states and about a dozen outlets in Canada. The company's stores sell about 40,000 products for do-it-yourselfers and professionals for home improvement and repair projects, such as gardening products, home fashion items, lumber, millwork, plumbing and electrical supplies, and tools, as well as appliances and furniture. Lowe's is the second-largest US home appliance retailer after Sears. Competitive Landscape

The industry is driven mainly by residential real estate construction and renovation. Large chains have expanded rapidly in recent years by focusing on the home improvement market, with contractor sales as a sideline. Smaller companies, often family-owned lumberyards, can compete effectively by catering to contractors (for whom price is less important than other services), through a wider range of specialty products and services, and by serving areas unattractive to the big-box stores because of limited customer concentration. Building Material Supply Industry Forecast

The value of US private and public construction of buildings, which is a driver for building material supplies, is forecast to grow at an annual compounded rate of 5 percent between 2008 and 2013. Data Sourced: December 2008

Lowe's Companies Inc. (HQ) Robert A. Niblock Chairman, Chief Exec. Officer 1000 Lowes Boulevard Mooresville, NC 28117 United States Phone: 704-758-1000 Fax: 336-658-4766 http://www.lowes.com Disclaimer

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Stock Talk for August 18