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Big data today! The Fed gives us the "State of the Economy" message today in the form of the Beige Book, after skipping August (only out 8x a year). Expect traders to be all over this coming into the Sep. 25 Fed meeting.

In the June/Mid-July report we saw manufacturing picking up, and that spooked the markets that the Fed may tighten again. Consumer spending was dragging, but housing starts still looked strong, which gave builders a 10% bounce at the time.

Expect this report to be the directional trigger we've been waiting for, but I still expect a positive reaction as retail spending was strong over the summer.

Asia was off this morning, but mostly as a result of a rebalancing of the Hang Seng, so expect a lot of weirdness for the rest of the week out there (more so than usual). Europe is off a touch, waiting for the same Beige Book figures we are. I am very disappointed in the EU as it really has become nothing more than a shadow of the US markets!

Heineken had a 26% rise in first-half profits, and credited strong sales in "the Americas" during the World Cup as being a key factor. World Cup? When was that? They must mean South America—and boy those guys must have been drinking up a storm because I doubt that more than 20% of our U.S. readers this even know who won that thing, yet alone bought a case of Heineken to celebrate...

Denmark arrested 9 guys with bombs yesterday, but if it doesn't affect us you won't hear about it on the US news (to be fair, Japan's Princess did have a baby...).

I'm still expecting a pullback here, same as yesterday, so expect some determined selling ahead of the 2:30 Fed report. There are a lot of profits to be taken, and a lot of bears were reluctantly pulled into the market in the past month, so look for some nice entry opportunities if you are feeling brave this afternoon!

Let's keep an eye on yesterday's levels, but if the transports don't kick in, we may have a serious problem, as they are starting to look like the SOX did. But they may also be coiling for a very nice breakout. I'm watching that 2,400 line more closely than any other index!

Can Apple Computer Inc. (AAPL) hold this new level? Let's watch General Electric Co. (GE), Texas Instruments Inc. (TXN), Sears Holdings Corp. (SHLD) and Motorola Inc. (MOT) to get a good clue of the market's mood. We need positives from all 5 of these stocks in order to break up on the broader indices.

We can't ask oil to behave any better. This nice orderly sell-off is better, in the long run, than a steep drop, as it is unlikely to suffer a major correction. Still looking for $67.50 resistance but inventories are pushed off until tomorrow, and Brent Crude already hit $67.28 this morning!

The mystery of gold's upshot was two-fold yesterday. For some, unexplained reason, CNBC and others switched to the December contract early, giving gold the appearance of a sudden rise. The official COMEX gold price is still $640.70, even for Oct. delivery, but the forward months are on the rise, and a sudden rise in December orders at $646 ran the numbers up. The rise in December contracts masked a drop in October (-$3.20) and March (-$2.70) deliveries.

Unlike oil, gold prices climb with each forward month, and delivery in June 2011 will cost you $781/ounce, so the gold market is still in uber-bullish mode. There was a big, legitimate demand as jewelers in India began stocking up on gold ahead of buying season, but the last few months have been weaker than expected over there. Much like oil, gold traders are jumping on any excuse to pump up the price.

On a continuous-contract basis, gold closed yesterday at $637.94, still having trouble with the $640 level, which it bounced off mid-day. If gold falls back below yesterday's open of $627, it could get into some real trouble. Still, I think we learned our lesson in oil—never stand in the way of determined pumpers! Let's watch that $640 level closely...

Be very careful out there, both sides will be jumping all over the data today, and I'm going to be missing all the fun again as I have a very busy week this week.

Today's Picks:
I cannot emphasize enough how I am not buying anything until the book report is out and comes in positive. If our indices and our 5 tracking stocks are down by 3pm, I will be lightening up, not buying!

Coach Inc. (COH) is at the edge of the consolation zone, not really expensive enough to be a prize, but one of those things you don't deny yourself when you're wishing you had bought that new home. The Oct $32.50s should make us feel better too at .80.

TOM2OC points out that Garmin Ltd. (GRMN) is in a sweet spot, and I agree, but we differ on the direction! He sees a classic head and shoulders pattern, while I see a stock dragged down by a dead sector despite posting 30% growth so far this year. Who doesn't want a GPS? Well, if everybody wants one you can bet someone is buying one, and half of all GPSs sold are Garmins. They only sell about 1m per quarter, and there are still 6.4b people in the world who don't have one yet. GRMN has a P/E 30% below that of Apple, the only other company I can think of that charges whatever they want for a high-margin device that everybody wants for Christmas. I like the Oct $50s for $1.85, but I'm hoping for a pullback so I can get the $47.50s cheap!

Corning Inc. (GLW) is raising guidance yet again; Feb $25s for $1.45 are the most reasonable of the very expensive option choices.

All of my Boeing Co. (BA) buddies are up for except AAR Corp. (AIR) (and Boeing) so I like the Feb $25s for $1.25.

Speaking of BA, they just lost a buddy of their own. Alan Mulally, their Executive VP, opted to commit career seppuko (no not that silly number game!) by taking over Hindenburg, oops, I mean Ford Motor Co. (F). Alan has no automotive experience, but he did cut 70% of Boeing's workforce while he was there, so I'll bet you can guess what skill caught Bill Ford's attention! He also cut Boeing's fleet from 15 designs to 4, a move that turned the company around, so think Mustang, Explorer, Ranger and maybe 3 other cars. What ever happened to the Taurus anyway?

Hopefully we will get an entry on BA on this news. I have my eye on the November $80s for $1.65 but I'd feel better closer to $1.

You know I hate it when good stocks underperform. Target Corp. (TGT) is 8% behind Wal-Mart Stores Inc. (WMT) for the past 6 months, but is a full 30% behind Sears (SHLD). Granted, all their P/Es are lining up, but if WMT and SHLD continue up, then I really like the Oct $50s for $1.25.

Fairchild Semiconductor Intl. (FCS) raised guidance slightly, and are sitting right on the 200 dma, so it will be a nice directional indicator for the SOX. I like this company, which should be trading much higher, but the options are very pricey. Perhaps the Jan $20s for $1.10.

Taro Pharmaceutical Industries Ltd. (TARO) got a big drug approval, and the current $15s are risky, but .30 may be a bargain by next week. This stock was at $34 last year! A more patient player can take the Apr $12.50s for $2.65 (.50 premium). This one will jump out of the box!

Danisco A/S (DCO) is another beaten down company that just got the nod to get a small NASA contract to simulate a launch vehicle. These contracts tend to snowball over time so I like the stock at $17.77.

Source: Options Trader: Wednesday Morning Ideas