Schaeffer's Daily Market Blog Features: Cisco Systems, Best Buy, Home Depot, General Motors, and KLA-Tencor.

CINCINNATI -- Among the stocks featured in the July 11 edition of Schaeffer's Market Blog are Cisco Systems (NASDAQ:CSCO), Best Buy (NYSE:BBY), Home Depot (NYSE:HD), General Motors (NYSE:GM), and KLA-Tencor (NASDAQ:KLAC). 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 11, 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

9:54 AM 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/

10:00 AM Apple Computer Initiated at "Strong Buy"

While the major market indices show red ink this morning, and many tech stocks are making negative progress, Apple Computer (AAPL) is about half a percent ahead after JMP Securities initiated coverage of the stock at "strong buy." Is it time to buy? You might like to take a look back at my comments about this stock on Friday, because the indicators don't all point in the same direction.

11:09 AM Large Block of Cisco Calls

Cisco Systems' (NASDAQ:CSCO) July 20 call (.CYQGD) is popular in the options pits today. At 9:41 a.m. Eastern time, a block of 10,000 contracts traded on the American Stock Exchange at a price of a nickel. The bid price at the time was a nickel and the ask price was a dime, so it looks as if these contracts were sold. Open interest on that contract at the start of the day was more than 88,000 contracts. At last check, CSCO was down about three percent at $18.40. The stock is in a downtrend under pressure from its 20-day moving average.

11:10 AM Airlines Losing Altitude

The AMEX Airline Index (XAL - 53.06) has dropped nearly four percent already this morning. Merrill Lynch reduced its rating on three carriers to "neutral" from "buy," saying that although second-quarter earnings are expected to be strong, with solid third-quarter results on the horizon as well, the stocks in question were overvalued. Affected by the broad downgrade were Continental Airlines (CAL) , which has dropped 4.2 percent today, AMR. Corp (AMR), down 4.8 percent, and U.S. Airways Group (LCC), which is the worst for wear with a 7.3-percent pullback.

Technically speaking, CAL has tested support at its 10-day moving average this morning and is to this point holding above this short-term trendline. In yesterday's trading, CAL reached a new 52-week peak. AMR also continues to sit atop its 10-day trendline after an early test of this threshold. Even LCC, which gapped solidly lower out of the gate, has seen additional downside thwarted, at least so far, by its respective 10-day trendline. LCC shares are also fresh from a new annual peak, which they pegged on Monday.

1:08 PM Retail Very Weak

The retail sector is quite weak today as the Retail HOLDRs Trust (RTH) ETF is currently off more than one percent on the session. Both Best Buy (NYSE:BBY) and Home Depot (NYSE:HD) are getting hit particularly hard. I mentioned Home Depot in the blog yesterday as being vulnerable to further declines due to the high level of optimism amid weak price action. Such is the case again today, and I still wouldn't go near the shares anytime soon.

1:34 PM General Motors Bullish Options Play?

General Motors (NYSE:GM) options are trading actively today. The January 2007 22.50 call (VGN AX) has seen volume of 10,005 contracts on open interest of 20,673. Meanwhile, the January 2007 22.50 put (VGN MX) saw volume of 12,000 on open interest of 61,637. The action seems to be concerted. Looking at the calls first, at 10:13 a.m. Eastern time, two blocks of 4,875 contracts each, crossed the tape. They traded on the Pacific Stock Exchange, and went off at, or close to, the ask price, suggesting they were bought. On the put side, two blocks of 5,850 contracts traded on the Pacific at almost the same time, crossing nearer to the bid than the ask, which suggests they were sold. At last check, GM was trading at $29.46, so those 22.50 calls are deep in the money.

1:52 PM Revisiting Goldman

Goldman Sachs (GS) has begun to deteriorate since I spoke bearishly about it in this space back on June 30. The dynamic that could cause problems for the shares is still in place. A weak technical picture is not helped by a high level of optimism toward the shares. In addition, the trading environment has become much more difficult. Trading profits have helped Goldman to increase earnings at an above-average rate, and going forward may create difficult comparisons if performance slips a bit.

2:25 PM KLAC Sparks a Rally

"Thank you KLAC" is what the bulls should be saying right about now. Thirty minutes ago we were down about 55 points on the Dow Jones Industrial Average (DJIA), and now we're about even. Sparking the rally is KLA-Tencor (NASDAQ:KLAC) which announced that it beat on June bookings and went on to forecast orders up ten percent from the previous quarter. Add it up and we're seeing a broad-based rally the past 30 minutes. KLAC is up over five percent and the AMEX Semiconductor HOLDRS Trust (SMH) is actually up two percent, not bad given its been by far the weakest link to the market the past month or so.

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

Take advantage of the timely Schaeffer commentaries by signing up for their free e-newsletters -- Opening View, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB12M&PAGE=1

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.