Justin’s “STREAM OF CONSCIOUSNESS” notes Friday April 28, 2006

... after all these dreary days, a fascinating one! Lots of cheering for the big banks, but we’ll bet those
people who hold them, as pleased as they may be, also own even more stocks that were collapsing.
The home builders, for example, remind us of the genome stocks collapsing in March 2000, to a
lesser degree, of course, but this isn’t a bubble, just a very vulnerable stock market.

Positives: BAC – new high, target 51; JPM!; LRCX ok so far; AMAT better – needs to cross (18¾) to
keep going to 19½-20 resistance; XLNX nice start to rising; ALTR; AAPL; LLY minor reversal from
this long-term support level; POT had an explosive day; CMCSA has rewarded our patience ... some
resistance at 31-32, however; WFC & WB (target 61-62) also in the okay big bank contingent;
Negatives: HPQ (32) – but alternatively with a (34½) buy stop; JNJ (37); WMT (44½); KLAC up but
closed poorly; CSCO shows lower highs – (20) breaks it; BNI increasingly serious decline; UNP ditto;
DELL still weak; AMR at 26; AMD potentially a bearish flag; PD sharply down on increased volume ...
sell at 85; PCU also quite weak; COP at 68; BJS*; AET zowie!!!; UNH still weak; NDAQ (35)*; CTX
gap down, major loss, and almost to 55, its April 2005 low ... can be measured to 40; HOV eroding;
BZH a lower low on a gap; KBH breaking! measures to 42; PHM (36); JOYG done for! sell this
bounce, measures to 48; BUCY & JLG also need to be sold into any rebound; EXPD broke badly but
certainly not a surprise;

Notes: AA down on increased volume, as China’s announcement took its toll everywhere – ACH, too,
as well as YZC & HDB; tests of overhead resistance coming in AIG, AXP, C, DIS, with MO already
failing; GM okay, but don’t hurry; HON quite discouraging – pick a seemingly good stock and trust it to
stay good, and this is what we get!; INTC “better” after having gotten sold out – could do 21; MSFT
took ‘em by surprise, no worry visible during the trading day, but clobbered after hours, taking it below
all lows since November ... should try to stabilize, but now has a problem overhead at 26¼; T’s
resistance is at 27; VZ’s is at 34; NSC worsening; as many different stocks did, TRN came right back
down from previous day’s new high; GENZ at 63-64; NUE at 111*; NEM some support at 54½; FCX
sliding, feels as if it won’t come back up well; other golds also got clobbered (GFI, MDG, GG ... but
the juniors didn’t seem as touched – AUY which we have felt was a leader seems to be holding well
so far); oil & gas stocks down sharply, recovered partly ... a disquieting day throughout the group; N
vulnerable to 50-52; BHP support is at 37, far away from here; FLR a minor but probably important
peak and reversal; GOOG about to close its gap of a week ago, has some support here... (400) would
be very serious; PAAS sideways in the 22-24 area would produce a long-term failure;

Indicators: this was the first day of noticeable increases in the number of new lows in the Common
Stocks Only pair of statistics – previous large numbers had been seen in the all-inclusives, due to the
rising rate pressure on non-equity equities. Our 30-day oscillators have plummeted since last Friday,
while the 10-days have been “better” so they have crossed upward. In theory, 3 or 4 or 5 down days
would get the market usefully over-sold again to match the Investors Intelligence retreat in bullish
sentiment. We mention that because we’d like an over-sold condition to lead to that “one more rally”
... with all these glaring failures already announcing that such a rally would be exhausting.

Sales and marketing ...……. Noah Financial • Rosanne Auslander

Trading ....................... Reynders, Gray & Co. • Bobby Gray, Fred Horan