Schaeffer's Daily Market Blog Features: Ford Motor, General Motors, Merck, Gilead Sciences, and...

CINCINNATI -- Among the stocks featured in the August 14 edition of Schaeffer's Market Blog are Ford Motor (NYSE:F), General Motors (NYSE:GM), Merck (NYSE:MRK), Gilead Sciences (NASDAQ:GILD), and Genesis Microchip (NASDAQ:GNSS). 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=PROB13M&PAGE=1 .

Schaeffer's Market Blog for Monday, August 14, 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=PROB13C&PAGE=1 .

11:20 AM Automaker News

This morning, Bear Stearns decided to take a stroll through the automotive sector, hitting its two biggest American names. The brokerage upgraded Ford Motor (NYSE:F) to "outperform" from "underperform," a full two-notch upgrade. At the same time, Bear Stearns downgraded General Motors (NYSE:GM) to "underperform" from "peer perform." The brokerage summed it up thusly, "we believe most of the good news is behind GM but ahead of Ford. At the margin, we're buyers of Ford's on-the-come restructuring news and sellers of GM's sales-dependent recovering, consistent with our thesis that the way to make money on the Detroit Big Three is to trade around turnarounds."

At last check, F is roughly four percent higher on the sizeable upgrade. Analyst rankings do afford F some room to move higher, as does its short-interest backdrop. Although the stock has moved ahead of peak call open interest at the 7.50 level, a close below this level could be considered a sign of weakness. Watch F today to see if this happens.

One would assume that the news would have had an adverse affect on GM, but we know what happens when we assume, don't we? GM is nearly one-half of one percent higher this morning, and has found support at the 30 level. GM bears would argue that it has trended lower throughout the past four weeks and, while that is correct, a bull should point out that the 30 level is acting as support. Not only did 30 provide resistance in the past, but it also is the site of heavy put open interest in the front two-month series. Watch for this level to act as a springboard for the shares. Finally, GM's 10-week moving average lurks beneath to provide support, the equity has not finished a week below this trendline the middle of April.

11:39 AM Merck and Gilead Join Forces

Dow component, Merck (NYSE:MRK) is more than 1.5 percent higher this afternoon. On Friday, MRK announced in a joint statement with Gilead Sciences (NASDAQ:GILD) that the two reached an agreement for the distribution of Atripla, a once-daily HIV treatment. Atripla will be distributed in developing countries. According to the agreement, GILD will manufacture the drug, and MRK will handle its distribution. GILD is also more than 1.5 percent higher in trading as investors digest Friday's news.

2:55 pm Afternoon Sell-Off

We've seen a pretty decent sell-off since lunch, with the Dow now up about 40 points, some 70 points from the highs earlier today. Internals are still strong, but well off their highs with rather light volume. All in all, a typical August day, and we'll have to wait a few more weeks until things change. Two sectors that are strong today are software and semis. It's always good to see leadership from technology and today we're getting it. One stock from this area that continues to look strong is Genesis Microchip (NASDAQ:GNSS). If you want to go long a chip stock this is the one to go with in my opinion.

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=PROB13C&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=PROB13M&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 .