Stockscom Report for Sunday Oct 8 2006

Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)

Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)

· Employment report speaks of 51K new jobs in September

Market Synopsis

September’s employment report was released on Friday to mixed reaction caused by the low initial estimate of new jobs created – 51K – balanced by the 62K in additions accounted for in the revisions of both July and August’s job reports. Also playing a factor in the perception of the employment situation across the country was the annual benchmark revision based on the March 2005-March 2006 period that estimated that another 810K new jobs were created than had been previously accounted for.

The increase in employment combined with the revision to earlier numbers was sufficient to encourage investors to buy dollars (versus other currencies) on ideas that the Federal Reserve would not be lowering interest rates at their next meeting on October 24. Some earlier speculation had brought forward this possibility however job growth continues to be adequate at the very least and inflation remains comfortably lower than measurements taken earlier this year.

Moving forward, housing and construction are the key question marks concerning the third quarter GDP whose estimate will be released later this month on Oct 27. Many analysts are keen to get a handle on the trend for construction spending over the next twelve months and while the GDP numbers should provide some details, quarterly reports to be released over the course of the next 2-3 weeks will also offer up some clues to the future.

Technically Speaking

The soft economic landing is still the favorite outcome of the list of possibilities that analysts have come up with to determine the future. And we are seeing this in stock market prices whose bullish strength is quite remarkable. Most importantly though is that rising prices in advance of quarterly reports indicates a certain confidence that results will at least match the double digit growth expected.

The large cap indexes have had impressive performances since bottoming in June and July and this past week we saw some evidence that the bullishness is expanding to the small cap and midcap markets. This diversification of bullish activity is a sign of a healthy bull market when participation expands to include smaller cap issues.

This week of course the Dow Jones broke a record for its all-time high beating out the previous high left from early 2000. Reaching a milestone such as this is likely to ensure a bullish perspective of the overall market for several more weeks at the very least.

New Buy Recommendations (in order of preference):

DuPont (DD) – The innovative chemical giant has gained more than 10% since the beginning of September but Friday’s move of more than 3.5% on extraordinarily heavy volume, almost culminating in a new high for 2006, strongly suggests much greater things lie ahead especially with quarterly results expected in the next couple of weeks. Except for a brief period in 2005, DD has been entrenched in a trading range of mostly $34-46 for the past few years but the momentum we’ve seen recently indicates much greater power and a very good opportunity to break away from this range.

Rediff.com India (REDF) – This internet service provider completed a strong week missing by a couple of pennies its August high, which would go far to convince investors that the basing of its share price has finished. From February to June, its share price steadily declined and the process of building a base began. This week completed a Lindahl buy signal on the weekly chart and the monthly has been supported by the 25-month moving average.

Hi-Shear Technology (HSR) – This speculative stock gapped higher on heavier than normal volume on Friday and appears likely to continue its progression next week. Its share price volatility is a function of its small float so patience is required, but should be rewarded.

New Short Sales

None.

Stock Positions to Sell/Exit:

Citrix Systems (CTXS)

Kendle Int’l Inc (KNDL)

ON Semiconductor (ONNN)

XM Satellite Radio (XMSR) –

We were exited from these positions at our stops. While we consider that there could be an argument to remain in the positions of the first three listed, the first and foremost technical indicator is price and having seen these fail in an environment which appears to be conducive to rising prices, there is no valid reason to keep them.

Portfolio Comments:

New stops have been added to the list while others have been modified. Those that have blanks are being carried unstopped for now. Please see our complete list of stops in the table below.

List of Current Stock Recommendations:

Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S where positions should be retained. S+ and S++ indicate stocks for which there is a technical case to add to the positions with plusses adding weight similar to long positions. The maximum number of plus signs is 2.

N.B. There are no longer restrictions on foreign stocks held in Canadian retirement savings accounts.

Date of Entry	Name	Symbol	Entry Price	Current Price	Stop	Action Rating
09/25/06	Citrix Systems	CTXS	35.70	36.21	34.00	SOLD
09/25/06	Cognos Inc	COGN	35.20	36.38	33.00	B
10/02/06	Global Payments	GPN	43.80	42.16	40.00	H
09/18/06	Kendle Int’l Inc	KNDL	31.00	29.80	29.80	SOLD
10/02/06	NII Holdings	NIHD	62.27	63.70	59.00	B
09/18/06	ON Semiconductor	ONNN	6.36	5.75	5.75	SOLD
09/18/06	XM Satellite Radio	XMSR	13.60	12.90	12.50	SOLD

Short Sales:

Date of Entry	Name	Symbol	Entry Price	Current Price	Stop	Action Rating
08/21/06	Caterpillar	CAT	68.25	65.80	67.50	Covered

New stops in BOLD

* Stop on a closing basis

** Buy if above entry price

*** Split-adjusted price