The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.

TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today:

1. Prepping for the first big test ... this summer.

Dan Fitzpatrick
1/26/2009 10:59 AM EST

The market remains pleasantly firm in light of Home Depot ( HD - Get Report), Caterpillar ( CAT - Get Report), Sprint Nextel ( S - Get Report) and others announcing layoffs. While this is heartening to the bulls, I continue to believe that the time frame for a trading thesis is important.

The current pattern is amounting to a sideways channel that rewards traders and not "buy-and-holders". I posted this link over the weekend, but for those who weren't around, here is my take on the market, along with a projected time frame.

Note: I agree with Steve Gear. So much pessimism out there by the retail public that the chances of this being a "bottom" are higher than you might expect. The question on my mind is whether this will be a "V" bottom ... or an "L" bottom. I'm betting on the latter and not the former (though I am enjoying the newfound optimism that we can indeed do what no nation in history has done before by spending and printing our way out of a severe economic contraction. Thank goodness for color laserjet printer technology which allows us to print a neverending stream of new money. I just hope they're using the good quality paper so that the dollar is ultimately worth something).

2. Kick the Tires and Light the Fires in CAT

Jon Najarian
1/26/2009 10:08 AM EST

Following bearish options activity that we reported earlier, Caterpillar ( CAT - Get Report) posted fourth-quarter profit of $661 million, or $1.08 per share, this morning, compared with $975 million or $1.50 per share in the prior-year period.

That's about 23 cents of EPS under Wall Street estimates.

Caterpillar, which also says it is will offer buyouts to 25,000 employees, is already down more than 8% to about $32.50 five minutes after the open. The shares closed at $35.66 Friday and fell another 1.4% in after-hours trading.

I am covering half of my position in the puts by purchasing stock. If it bounces, we may make money on our stock hedge and on the puts. Other than waking up and having my kids hug me, this is about as good as it gets!

3. McDonald's Numbers -- Ignore the Media

Scott Rothbort
1/23/2009 12:50 PM EST

McDonald's ( MCD - Get Report) numbers look solid. Unfortunately, the media is playing on the headline that EPS fell year over year. That is misrepresenting the results. In the prior year, MCD booked 33 cents (net) of tax benefits. So, when you factor that out, on a comparable basis, EPS rose from 73 cents to 87 cents, which is a 19% gain. I will discuss more in the LakeView Restaurant and Food Chain Report later today after I digested the earnings report and conference call.

4. Pfizer, Wyeth and Alzheimer's

Adam Feuerstein
1/26/2009 7:55 AM EST

Pfizer ( PFE - Get Report) is buying Wyeth ( WYE) for $68 billion. The details can be found everywhere, so I won't repeat them here.

An angle to this story that I do find most interesting, and will be following up on, is what seems like a over-stuffed "family bed" of Alzheimer's disease drugs that Pfizer now at least partly controls due to the Wyeth deal.

Recall, that Wyeth was partnered with Elan ( ELN) for two AD drugs, most notably bapineuzumab, which is currently in global phase III clinical trials. Now, bapineuzumab is a Pfizer drug.

But will bapineuzumab under Pfizer be treated differently, considering the company's existing partnership with Medivation for Dimebon, also in phase III studies? Recall that Pfizer paid handsomely last year to gain rights to Dimebon, paying $225 million up front to Medivation.

On the one hand, you can say that Pfizer is the envy of the drug world because it now controls two phase III Alzheimer's drugs. If one or both work, the commercial potential could rival peak sales of Lipitor.

But Elan and Medivation are competitors, certainly not friends, yet now share the same partner. How is that going to work?

5. Are We Sowing the Seeds of Another 1979?

Christopher Atayan
1/26/2009 7:00 AM EST

One of the themes that is playing itself out over the business landscape is that formerly productive loan officers are being told not to initiate new loans due to lack of capital. Similarly, those businesses that have access to capital are seeing their credit rationed. The net result of this process is that only the best projects are getting funded. Marginal projects are not able to get off the ground. On the whole, this is not a bad outcome for the economy.

Politically, allowing the system to work is not a tenable position. The media have invested too much into the new administration; with a congressional election every two years, there is no patience to let the system cleanse itself. Hence, we will get some form of stimulus, as well as further debasement of the currency. As a result, we may be headed toward a 1979-style scenario with massive inflation only cured by draconian interest rate increases. We need to be focused on this scenario and what investments make sense if it occurs. Remember, Paul Volcker who is one of Mr. Obama's economic gurus, was the architect of the high-interest-rate policy.

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This article was written by a staff member of RealMoney.com.