... The S&P 500 6.91, or 0.45 percent, to 1,553.08; its previous record of 1,552.50 occurred July 13th. Yesterday's gains extended a partial recovery that started late in Wednesday's session, when the Dow pulled itself up from a loss of 134 points to end with only a 53-point deficit. Stocks had ceded ground Wednesday after uneasiness about Bernanke's assessment of the economy. Yet, bad news means nothing to this market. Unraveling of subprime loans or the inflationary price of oil seem to be merely pinup posters to rally the troops. ... Light, sweet crude settled up 87 cents at $75.92 per barrel on the New York Mercantile Exchange, after briefly touching $76 for the first time in 11 months. The market's hole cards are anticipated robust corporate earnings and interest rates in neutral at 5.25%. ... In the current market climate continue to aggressively commit assets on both sides . ... A key post stock* in our proprietary subjective probability model - IBM - jumped $4.78, or 4.3 percent, to $115.86 after the technology company said strength in its software division and an improvement in its services business helped second-quarter profits. IBM raised its profit forecast for the year. Its stock surged past an earlier 52-week high of $111.88, rising as high as $116.48.

* GEN ELECTRIC CO (GE), MERCK CO INC (MRK), MICROSOFT CP (MSFT) and WAL MART STORES (WMT) are the other post stocks that comprise a forward indicator used specifically to tract general investor sentiment.

... July 19, 2007, 7:30am ...S&P 500 index was 3.20, or 0.21 percent, to 1,546.17, but did not compromise its underlying strength. While the Dow was down by as much as 134 points during the session, it closed off 53.33, or 0.38 percent, to 13,918.22. Yesterday's action underscore that investors must now how to handle volatility, manage emotions and remain focused to the near-term objectives. Indeed, with our market perimeters set within the range of 1590 to 1520, you can trade both sides of the market knowing in advance what to expect. ... Federal Reserve Chairman Ben Bernanke's comments on the economy and news that two Bear Stearns Cos. hedge funds were essentially worthless, causing only a moderate downturn in stocks. He spoke before the House Financial Services panel as part of the central bank's mid-year forecast, said that the economy should strengthen into 2008 and inflation risks remain the Fed's "predominant" concern, while "housing sector might get worse before it gets better" -- and remains a risk to consumer spending and overall economic growth. Nothing new! ... Bear Stearns' bad bets on subprime loans only shows that even the "experts" don't truly understand Wall Street dynamics, and are merely "spectators" to the forces of fear and greed. ... Corporate earnings reports continued in earnest. JP Morgan Chase & Co. posted better-than-expected numbers, but the bank said it increased reserves to cover mortgage losses. Also adding to investor concern, Intel Corp. reported lackluster profit margins for the second quarter, and Yahoo Inc. lowered its forecast. ... Bonds rose as fixed-income investors interpreted Bernanke's comments on housing as favorable; they're looking for interest rates to remain stable. The yield on the benchmark 10-year Treasury note fell to 5.03 percent from 5.07 percent late Tuesday. ... The Labor Department said its Consumer Price Index rose 0.2 percent in June following a big 0.7 percent jump in May. The reading was in line with market expectations and had little effect on index futures trading ... The dollar was flat against other major currencies, while gold prices rose. ... A barrel of light sweet crude rose $1.03 to $75.05 on the New York Mercantile Exchange, possibly from the U.S. Department of Energy report that gasoline stockpiles unexpectedly fell, despite a bigger-than-expected rise in refinery operations. ... The Commerce Department reported that home construction rose 2.3 percent in June following two consecutive months of declines. Wall Street was mildly surprised as consumer prices could help ease some concerns about inflation.

... Special Notice: July 18, 2007, 7:30am ... 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 ... July 18, 2007, 7:15am ... 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.

. .. . 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.