Position Statement: In our Prime Recommendation Letter we attempt to identify the recommendation with the highest probability of moving higher.  We recommend that stop orders be placed at the time of purchase,  and once the position has moved profitable we recommend a stop be placed a minimum of $0.25 above the purchase price and moved higher as the position moves higher.

Today’s Comments: The overall market finished Friday mixed with the Dow Jones Industrial Average and the S&P 500 finishing slightly higher; while the NASDAQ finished the day slightly lower. The strongest sectors on the day were the Oil & Gas, Natural Gas, Biotech, Commodities, Utilities, Telecom, Gold/Silver, Cyclicals, Broker/Dealers, Banking, Chemicals, Semiconductors, Internet, Interactive, Insurance, and High TEch indices. There was weakness in the Airlines, Retailers, Healthcare, Pharmaceuticals, and Computer indices. The Bottom Line: The overall market continues to look weak and should move lower.

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Sterling Calendar for August 22nd, 2005

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Recommendation: SELL/SHORT DR Horton, Inc. 'DHI'
Company: DR. Horton, Inc.		Symbol: 'DHI'	Closing Price: $35.01
YH: $42.82 YL: $20.40		EPS: $3.96 P/E: 9	Forecasted EPS: $5.24
Shares Outstanding: 312 Million		Float: N/A	Market Cap.: $11 Billion
Dividend: $0.37	Yield: 1.05%	Average Daily Trading Volume: 2.9 Million
Price Targets:  $33.13, and then $31.59			Upside Stop:  $36.08/share
Options Rec.: September 35 Puts @ $1.50/contract			Options Symbol: DHIUG

Company Description: D.R. Horton, Inc. engages in the construction and sale of single-family homes in the United States. As of September 30, 2004, the company owned approximately 24,000 homes under construction, including approximately 1,600 model homes and 200 unsold homes. It markets and sells its homes through commissioned employees and independent real estate brokers, located in 21 states and 63 metropolitan markets of mid-Atlantic, midwest, southeast, southwest, and west regions of the United States. The company also provides financial services, including mortgage banking and title agency services to its customers. D.R. Horton was founded in 1978 and is based in Fort Worth, Texas.

Recent News:	8/19 US CREDIT - Bubble won't demolish home builders at Reuters (Fri, Aug 19)
	8/11 D.R. Horton files $3 billion mixed shelf offering at Reuters (Thu, Aug 11)
	8/11 • Financial Gravity and Homebuilding at TheStreet.com (Tue, Aug 9)

Our Analysis: The shares of DR Horton, Inc. 'DHI' have been in a downward trend since early August. Friday they closed at a new monthly lower and below what appears to be a key support level. The shares of 'DHI' should continue to move lower and test $33.13/share, the point from which they gapped higher on the open of trading on May 26th. If the shares of 'DHI' close below $33.13/share, then they should continue to move lower and test $31.59/share, the point from which they gapped higher on the open of trading on May 18th. I see upside resistance on the shares of 'DHI' @ $35.78/share, and have set our stops accordingly at $36.08/share.

Dow Jones Industrial Average (INDU): Closed @ 10,559.23 Last Signal: Called Lower on August 5th with the previous day's close of 10,0610.10 Current Expectations: I am expecting the Dow Jones Industrial Average to pullback over the short term and move lower and test 10,432.51

S&P 500 (SPX): Closed @ 1,219.71 Last Signal: Called Lower on August 5th with the previous day's close of 1,235.86 Current Expectation: I am expecting the S&P 500 to to pullback over the short term and test 1,216.96

NASDAQ 100 (NDX): Closed @ 1,573.72 Last Signal: Called Lower on August 5th with the previous day's close of 1,608.74 Current Expectations: I am expecting the NDX to pullback over the short term and test 1,568.96

CBOE Ten Yr Treasury Index (TNX): Closed @ 4.211% Last Signal: Called Lower on August 15th with the previous day's close of 4.238% Current Expectations: The TNX should move lower and test 4.196% and then 4.177% on a closing basis.

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