Schaeffer's Daily Market Blog Features: Best Buy, ITT Corporation, Microsoft, Nortel Networks, and GEO Group.

CINCINNATI -- Among the stocks featured in the July 18 edition of Schaeffer's Market Blog are Best Buy (NYSE:BBY), ITT Corporation (NYSE:ITT), Microsoft (NASDAQ:MSFT), Nortel Networks (NYSE:NT), and GEO Group (NYSE:GGI). Schaeffer's Market Blog is just one of the many free market commentaries written every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB12M&PAGE=1

Schaeffer's Market Blog for Tuesday, July 18, 2006:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

10:05 PM Free Stock Picks in our Podcast Interviews

Don't forget that many of our observations are available as audio presentations that you can hear on your computer or download from Apple's iTunes Music Store to play on a portable device such as an iPod. To see the full menu of observations, please visit http://www.schaeffersresearch.com/commentary/podcasts/.

2:18 PM More New Lows for Semis and Homebuilders

So far today we've seen more new lows across the board with extremely weak internals, but volume has been a little lighter. Tomorrow morning Bernanke will speak to Congress and that could have some traders on the sidelines. I don't see anything higher today, but the big losers are semis and homebuilders - as both are making new yearly lows. In fact, the AMEX Semiconductor HOLDRS Trust (SMH) is down 1.83 percent and the ISE Homebuilders Index (RUF) is down a whopping 3.58 percent. I continue to think these two groups are in trouble but, given the recent losses, a snap-back rally could happen at any time.

3:21 PM Best Buy or Best Sell? You Be the Judge

Shares of electronics retailer Best Buy (NYSE:BBY) finally broke through a long-term region of support/ resistance today. The 45 level, which had held as support since early January 2006, finally gave way this morning for BBY when A.G. Edwards lowered its opinion of the equity to "hold" from "buy." This region also hindered BBY's advances in around the turn of 2005, and could offer up some stiff competition for the shares now that it has been breached once again. Complicating matters is the fact that the 45 level is home to some heavy put activity for BBY in the front three months of options. The fact that the security breached this region today lends strength to the stock's recent decline. I would definitely keep an eye on BBY throughout the week, as the shares are bound to test this level again. A rejection would certainly set off a sell signal in my book, while a rebound back above 45 could lend itself towards a holding pattern.

3:28 PM ITT Updaded to "Buy"

ITT Corporation (NYSE:ITT) is a leader in the S&P 500 Index (SPX) today following an upgrade from Merrill Lynch to "buy" from "neutral." The broker said the company is well placed to weather a consumer downturn. The stock hit an all-time high in March but it fell below its 10-month moving average in May, and closed June below its 20-month moving average. It has just pulled its 10-day and 20-day moving averages into a bearish cross, another troubling sign. This afternoon, the stock is trading in the $47.00 region. I see signs of round-number resistance at the 50 level, and the stock's 10-week trendline has just descended to 50, to add a further layer of potential resistance, so I find it hard to agree with Merrill on this one.

3:30 PM Nortel Networks and Microsoft to Team Up

Earlier today, Microsoft (NASDAQ:MSFT) and Nortel Networks (NYSE:NT) announced that they plan to collaborate on developing software to make it easier for companies, employees, and customers to communicate with each other. The two companies are trying to create software-based technology that allows people to use one device to access all their phone calls, email, voice mail, or instant messages from either their office, at home, or from the road. The two companies do not have many products available yet, but the executives predict that they will start to generate "significant revenue" from the sale of the technology within a "few years."

Neither of these companies have been what you would call "stellar performers" of late. NT has been struggling with dual resistance at its 10-day moving average and the two level. What's more, NT's 10-day moving average recently completed a bearish cross of its 20-day moving average, signaling further technical downside in the future. Of course, the stock is currently trading at $2.07 per share after a gain of more than six percent today. MSFT's 10-day and 20-day trendlines have similarly completed a bearish cross, suggesting further technical struggles in the future. MSFT has inched higher this afternoon.

3:35 PM GEO Group Locks Up Earnings and Throws Away the Key

According to Hoover's, GEO Group (NYSE:GGI) is one of the largest operators of private correctional facilities in the U.S., operating about 60 correctional, detention, and mental health facilities with some 50,000 beds. As the top performer on the New York Stock Exchange today, GGI has locked up the competition with a single earnings update. The firm lifted its second-quarter earnings forecast to 67-70 cents per share due to higher occupancy levels at several facilities and new contract awards. GGI also boosted its revenue outlook for the quarter to $205-$210 million. Analysts were expecting earnings of 56 cents per share and revenue of $189.9 million.

So far today, GGI has rallied nearly 18 percent to once again challenge resistance in the 39-40 region. On the sentiment front, things are looking up for the equity. While GGI is not optionable, nearly five percent of its total float is sold short. Because of this, short sellers may be getting squeezed today following the stock's meteoric surge higher. Furthermore, analysts have yet to notice the shares, as only one brokerage firm offers up an opinion on the stock. Additional attention following today's report could be a boon for the security.

For more information on these stocks or any stock in your portfolio, feel free to visit our Schaeffer's Equity Scorecard feature. Click here to read all of today's Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

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Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method.