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Phil Davis submits: Wow! War videos taken by insurgents showing them killing Americans on YouTube! This is new and intense -- not the just videos themselves (and warning when you click on them, they are very graphic!) but the concept that now both sides of the battle can put up their own home videos to bring the mayhem right to your screen. I'm old enough to remember how a single picture of children fleeing a napalm attack in Viet Nam, enraged the country back in the 70s:

Now we have videos by enemy soldiers (our soldiers aren't supposed to make home videos -- but they do) having a good time, planting a few bombs, firing weapons, taking out a convoy...

How much do you think the people are prepared to take? While we were momentarily angered by images from Abu Ghraib, times have changed, and still images just don't capture the imagination the way videos do.

Fortunately, there is a lighter side to YouTube.

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Regarding all picks on this post: I have tremendous reservations about the market despite many technical indicators pointing to a huge rally. My concerns are based on the underlying fundamentals in the U.S. economy and a general sense of paranoia that the markets have been manipulated of late in order to draw retail money in prior to a large dump.

I hope I'm wrong. I did call for a massive rally way back on 8/31 and I got it, but not quite the way I wanted it (with a nice pullback first), and it has bothered me ever since. Nonetheless, on Thursday I vowed to go with the flow and embrace the Meatball Rally -- where bad news just doesn't matter!

That being said, the flow (as we learned in Ghostbusters) swings both ways, so I am only advocating calls in a positive market environment; we are not going to try to fight the tide here! We'll keep a close eye on our levels next week.

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"Boeing Buddies" 10-day Hourly Chart
I was reading Tom's excellent blog, and he reminded me that I should be looking at Allegheny Technologies Inc. (NYSE:ATI) again! ATI is one of my Boeing Buddies™, a team which includes fellow titanium merchant Titanium Metals Corp. (TIE), BE Aerospace Inc. (NASDAQ:BEAV), Goodrich Corp. (NYSE:GR) and AAR Corp. (NYSE:AIR), all of whom benefit from BA's resurgence. As long as Boeing keeps tracking higher, the buddies should prosper as well.

Right now TIE and BEAV are lagging, and I like both stocks, although ATI is a little bit stronger than TIE on the whole. Purely because ATI broke out first and gives us a leading indicator, I would like to take the TIE Nov $30s for .75 as an earnings play, but I'll take all but the profits off the table before earnings.

I also like owning ATI for $65.48 and selling the Jan $65s for $7 -- that's 10% for 90 days with protection all the way down to $58.

BEAV is no slouch and, like TIE, I think they may beat their Q3 estimates on 10/30, so I like the Apr $25s for $1.75 which gives me a little time to recover if I'm wrong. The Jan $25s for $1.30 can be sold against them as a calendar spread, or picked up if you are more of a risk-taker. But as long as they get over the 50 DMA at $22.75 I like the $25s on their own.

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Rentech Inc. (NASDAQ:RTK) is an interesting company: They convert our 200-year supply of coal into fuel using an improvement of a process that's been around since the 1920s. They are a very small company and just got a contract from Montana to build, with General Electric Co. (NYSE:GE), a 22Kbd conversion plant that will also put out 300 megawatts of electricity. I like owning the stock at $4.42 but this is one of those long-term stocks that can go up and down 50% so, like Cambridge Display Technology Inc. (NASDAQ:OLED), I will buy it once a month over 24 months, cashing out on spikes.

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Cramer is on about Senomyx Inc. (NASDAQ:SNMX), a biotech company he says even Herb Greenberg likes (although he sounds neutral to me). They do have a cool additive that makes food taste sweeter or saltier, supposedly giving you more bang for less calories or sodium than normal. Cramer says Campbell's can cut close to half the sodium out of their soup with this (it's the main reason I don't drink it).

They sure didn't wow anyone with their July earnings and they have an accelerating loss that hit $6M last quarter. I really hate companies that have sales of $3.2M and SG&A of $3.98M as it indicates either someone is taking too much for themselves or they have no concept of a budget. The company has $78M in cash (from selling stock), but with a burn of $24M a year that's accelerating (they just leased 64,000 ft for $2.3M), I find it kind of scary. They made $10M on "investments" this past quarter, and I found that strange, but the 10Q cleared that right up:

"In conjunction with the Alexandria Lease agreement for our new facility, we received a tenant improvement allowance not to exceed $9.9 million. As tenant improvements on our new facility are constructed, we record the covered tenant improvements as fixed assets and an offsetting incentive lease obligation on our balance sheet. Payments that we make to the company constructing the new facility are classified for statement of cash flow purposes as investing activities."

That's not a gold-plated Jacuzzi in my office -- it's AN INVESTMENT!

I also get concerned when insiders hold only 3% of a company like this, but perhaps they got a rotten deal going public. Either way it leads to trouble more often than not. Insiders reduced their holdings by 8% in just the past 6 months, so forgive me for not jumping on this bandwagon, but let's keep an eye on this play as it should be interesting.

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I was looking for something else when I came across my predictions for 2006 from January 1st. I set forth conditions for a Dow breakout, and 5 of my 6 "best case" items seem to be on track -- no wonder everyone is so happy! Unfortunately, one of my 5 pillars was the resurgence of General Motors Corp. (NYSE:GM), something that may be reversing very quickly.

Among my major calls back in January: Bullish on oil, gold was far from done at $426, a 5% market correction (didn't come until May), and the 10 year at 4.34% catching up with mortgages at 5.76%.

What was I looking for? My old post on GM seemed appropriate as someone asked me who is buying this stock on the current plunge, and my year-old answer covered it quite well:

"GM wants to find a floor but zero is just so far away. Meanwhile your father keeps adding shares to his pension fund because it was such a good stock in the 60s. Maybe we will be doing that with Google Inc. (NASDAQ:GOOG) 20 years from now, heck I keep buying Microsoft Corp. (NASDAQ:MSFT) and that is just so 90s."

Read all of Phil Davis's articles on Seeking Alpha.

Source: Options Trader: Weekend Ideas