Schaeffer's Daily Market Blog Features National Oilwell Varco, North American Palladium, MicroStrategy, Pilgrim's Pride, and Redback Networks.

CINCINNATI -- Among the stocks featured in the January 3 edition of Schaeffer's Market Blog are National Oilwell Varco (NYSE:NOV), North American Palladium (NYSE:PAL), MicroStrategy (NASDAQ:MSTR), Pilgrim's Pride (NYSE:PPC), and Redback Networks (NASDAQ:RBAK). Schaeffer's Market Blog is just one of the many free market commentaries written everyday 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, January 3, 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.

3:11 PM Oil Service HOLDRS Trust Skies Toward an All-Time High

The oil service sector is one of today's biggest winners. On the heels of crude oil prices that are more than three percent higher today, the Oil Service HOLDRS Trust (OIH) is also doing well. In fact, OIH is outpacing oil's rally today. The continuous oil futures contract (OIL - 63.10) is up 2.06 per barrel, or 3.4 percent. OIH has tacked on 5.2 percent though. That's taken OIH back within a chip shot of mid-December's all-time high of 136.16. The May and October pullbacks are now only blips on the weekly chart. OIH is up more than 59 percent since the beginning of 2005, using the support of its 20-week and 50-week moving averages. Some of the stock's receiving a boost from this development include National Oilwell Varco (NYSE:NOV), Occidental Petroleum (OXY), EOG Resources (EOG), Marathon Oil (MRO), and BJ Services (BJS).

2:46 PM North American Palladium is Halted

One stock that I've been watching closely today is North American Palladium (NYSE:PAL), as the shares were halted at the open and just started trading around 1:00 p.m. As the name suggests, PAL mines for palladium -- and trust me, there aren't that many companies that do this. Like other metal stocks, PAL has been on a tear the past few months, gaining nearly 100 percent since mid-October. Given there was no news earlier on the halting, I turned to the message boards to see what they had to say. As you might have expected, there were some comical reasons for the halting. I don't think you should ever trade based on what you read on a message board, but sometimes they can give you a clue as to what is happening when no where else knows. None the less, the news was simply that PAL was shutting down a primary crusher and production should be back up next week. In other words, a non-even really -- PAL is currently up more than one percent.

12:32 PM MicroStrategy Continues to Make Gains

I've written here on a couple of occasions about business software firm MicroStrategy (NASDAQ:MSTR). The stock has caught my eye today as it makes yet another 4-1/2-year high, its sixth in seven sessions. Today's high of 84.97 is its highest since March 2001. Back then, the stock was retreating from its technology-bubble-induced high of a split-adjusted 3,330. That's right, the stock traded as high as 3,330 in March 2000 before falling back to Earth in 2001. In fact, in October 2001 it fell as low as 11.00 before recovering. MSTR ultimately dropped to 4.20 in July 2002 before starting its long climb back. The stock enjoyed a good 2005, gaining more than 37 percent.

11:31 AM Pilgrim's Pride Lower on Earnings Guidance

According to Yahoo!Finance, Pilgrim's Pride (NYSE: PPC) produces poultry products in the United States, Mexico, and Puerto Rico. This morning before the market open, PPC guided first-quarter earnings lower. The company now sees earnings per share of 36-41 cents per share, versus the Reuters consensus estimate of 83 cents per share. PPC stated that worse-than-expected performance in its Mexico operations as well as lower sales prices on chicken leg quarters had an adverse impact on its results. This negative news has sent shares of PPC more than 20 percent lower to $26.28.

11:00 AM Puts Trade Briskly on Redback Networks

On Friday, puts traded actively on Redback Networks (NASDAQ:RBAK), as put volume was four times heavier than average. Approximately 2,250 contracts crossed the tape, with the most active being the March 15 strike (RBU OC). Investors exchanged more than 2,100 RBU OC contracts Friday. A check on today's open interest configuration shows that 1,425 of these contracts translated into new open positions. Implied volatility on the contract increased seven percent, indicating that the contracts were likely purchased. With the stock trading at $14.04, this in-the-money put purchase could represent an investor or firm trying to hedge their exposure to RBAK.

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

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

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.