... Special Notice: Private equity firm Kohlberg Kravis & Roberts is considering a bid for retailer Macy's Inc., according to the online edition of trade paper Women's Wear Daily .Sources cited by the magazine said KKR, which has filed for an initial public offering, was partnering with Goldman Sachs & Co. on an offer valued at $52 a share, or about $24 billion, and which may or may not exclude Macy's debt.

... As reported under Best Idea on July 2, 2007 , 10:14am . BUY Macy's Inc. (M) - last $40.07. . M trades at 12.75 forward earnings with potential takeover value at $52.50 suggests an excellent opportunity to participate in future growth with limited downside. BUY with near term target of $52.00. Check call options MKH.X at $3.30; MKV.X at $2.75 and MKI.X at $1.55 to leverage advantage of proposed T/O. ...

... Morning Commentary ... Off 0.15 (0.01%), the S&P 500 index closed at 1,549.37. Technically, nothing happened yesterday to change Dartline's trading range of 1520 to 1590. Continue to aggressively participate in U.S. equities with bias to the upside. ... Since late May '07 systematic increases in the market's short base has guaranteed its current robust posture, only to explode further late week that forced a "mini-panic" when many so called "experts" were forced to cover. Furthermore, new data released by the Commodity Futures Trading Commission (CFTC) confirmed short positions in S&P 500 futures have increased, along with S&P 500 E-Mini contracts. Thus, the experts are wrong again and betting on a major decline. Can they be right? Not for the foreseeable future. Near-record oil prices and the increasing inflationary pressures which they have created globally are causing the multinational players to buy U.S. equities because they are cheap and the best value overall. Besides gold, what else can give them a guaranteed hedge return against the quasi-debated U.S. currency? ... Just stay focused to how the S&P index reacts, and act accordingly by applying cautious optimism to your stock picks. ..Bernanke will present the Fed's latest economic forecast to congressional committees in a pair of appearances on Wednesday and Thursday. Nothing will happen but the same old - "inflation remains the biggest risk but we are watchful to the economic data and will respond in either direction regarding rate policy, if necessary." Indeed, the Fed doesn't want to say something that is going to cause the market to react violently and doesn't want to create a bubble of any sort. Look for Bernanke to be reasonably vague when describing U.S. economic activity. As Dartline declared since October 06, the Fed will retain its target interest rate at 5.25% for the rest of the year. For the first time consensus of Wall Street economists now sees the Fed on hold for at least the next 6-months.. Maybe, they're reading our pages? Remember, these same experts in JJanuary '07 had called for a decrease in rates to "stimulate the economy." ... Following the dramatic run up in Treasury bond yields last month, the financial markets and the Fed now appear to be on the same page, with both seeing moderate growth ahead. With the markets and the Fed have become more closely aligned, 5.25% rate will hold into mid-2008.

July 17, 2007, 7:30am ... The S&P 500 closed at 1,549.52 2.98 - 0.19% as the index consolidated last week's gains. While the current market conditions should be profitable for investors who can handle the volatility, managing emotions and remaining focused to the near-term objective cannot be executed unless you have a well defined plan. With our market perimeters set within the channel of 1590 to 1520, you can trade both sides of the market knowing in advance what to expect. Indeed, the bias favors the upside to commit more long assets, but you have a reasonable idea of how far to extend your stock positions. ... Even though Dartline features the broad S&P 500 index, a look at the stocks that pulled back in the second half of trading Monday, and the relationship of blue chips that helped the Dow mark a record high and its fourth straight up session, would be prudent. While U.S. stocks finished mixed Monday, the Dow Jones Industrial Average closing in record territory helped by take-over speculation over Verizon Corp., as the broad market fell ahead of key earnings later in the week. The rally continued from last week towards the key 14,000 level, as investors put money in multi-nationals that benefit from global growth and a weak dollar. Pushing a new milestone when a near term psychological barrier is about to be breached usually takes a few day to adjust to the event. Investor enthusiasm will pulls the general market higher. ... While investors park more money into equities, two jokers remain in the deck: (1) crude oil prices, and (2) sub-prime loans. ... (1) Crude-oil futures' benchmark contract closed above $74 a barrel Monday for the first time in 10 months, but finished below the day's peak as reformulated gasoline futures fell to their lowest level in a month. The oil market expects data due later this week to reflect a rise in U.S. refinery activity and an increase in motor gasoline supplies, prompting a decline of more than 4% in gasoline futures. However, continuing concern about oil production in the North Sea and recent predictions for growth in oil demand will keep crude prices high. The $75 level for oil is a near-term resistance level that will be jumped on its way to $80 within the next two months. Indeed, oil is undoubtedly bullish, especially when the recent run-up in price cannot really be tied to any one significant event, but a combination of forces that have moved the market. This has particularly frustrated bears who are throwing up their hands trying to figure out how they got things so wrong. Yet, the facts are clear: The bears underestimated demand and demand going forward will accelerate - a no brainier! ... (2) The sub-prime scenario has caused Financial shares to work lower ahead of key earnings from JP Morgan Chase (JPM ), which could reveal an impact from the meltdown in the subprime mortgage market. Expected earnings in two weeks to give us a better incite into the housing and sub-prime mess. While they will be poor, the revenues generated from the takeover activity should cushion the blow. In the same boat are Goldman Sachs (GS) , Lehman Brothers (LEH), Bear Stearns (BSC ) , which saw two of its hedge funds brought to near-collapse due to their exposure to subprime markets. If JPM, GS, LEH and BSC do reasonably well in this quarter, the general market will move up accordingly to thrust above 1590 in the S&P 500 index.

... July 16, 2007, 7:30am ... Starting the week at 1552.50, the S&P 500 index is strategically position to test 1590 in the near term. Retain support at 1520.47, while seeking long mid-term investments candidates. Further gains in equities are likely as corporate earnings will meet expectations. The major catalyst to Dartline's projections is the weaker dollar, which helps U.S. exports by making them cheaper in overseas markets, while enhancing the overseas profits of multinationals when repatriated into dollars. Cheap dollars attracted foreign investors to American stocks. Thus, a major shift in asset preferences - buy stock, sell bonds - has occurred. Bonds are not a risk averse alternative because interest rates are going higher, even though the Fed will hold rates at 5.25% . ... Last week the dollar weakened 1.2% against the euro and 1.1% against the yen. Look for a near-term test on the $1.40 level for the euro. Indeed, the US dollar is the single biggest exception to the robust domestic and international equity and commodities markets, which the global investment bankers have demonstrated by accumulating U.S. equities and rising values for primary commodities. This trend has been effectively pursued since March 19, 2007 when the S&P stood at 1386.95. The desire to convert U.S. dollars (paper) to U.S. equity is very compelling, and usually not the case for the country issuing the paper. But the U.S. is in a very unique position as the only superpower with its international footprint of the multinational companies based in the U.S. ... Earnings growth consensus is expected to rise 4.2% in the second quarter (Dartline 6.7%), marking the second straight period in which earnings growth falls below 10%. Up until this year, earnings grew more than 10% for 14 consecutive quarters. The economy slowed to 1.7% in the first quarter, but investors remain optimistic that global growth will help multinational companies, which are heavily represented on the S&P 500 index, to continue fueling earnings growth. For now, don't worry about the softening economy and continue to participate in U.S. equities providing that 1520.47 holds. ... Even with earnings taking center stage, remained focused on economic data that may offer important clues to the direction of the economy and the U.S. dollar. Two measures of inflation -- the Producer Prices Index are due on Tuesday and the Consumer Prices Index on Thursday; including statistics on housing starts. Reviewed in part or whole, represent a potential market-mover. ... On the carry trade front: The lower U.S. dollar, following the Bank of Japan's decision to leave rates alone, reinforced the liquidity of the carry trade and helped boost those large-cap, multinational companies that benefit the S&P 500 index. The yen carry trade refers to borrowing the Japanese currency at lower interest rates to invest in higher yielding assets, such as U.S. stocks and bonds.

... . Purpose of the arrows: - projecting that DJIA, Nasdaq and S&P barometers will close higher at the end of the day. - projected consolidating barometers with limited directional action. - projecting all three barometers declining for the days.