The Option Investor Newsletter Tuesday 12-02-2003 Copyright 2003, All rights reserved. 1 of 3 Redistribution in any form strictly prohibited. In Section One: Wrap: Like Moths to a Flame Futures Markets: Dollar Devastation, Equity Obfuscation Index Trader Wrap: Treading water Market Sentiment: Treading Water Posted online for subscribers at http://www.OptionInvestor.com ************************************************************ MARKET WRAP (view in courier font for table alignment) ************************************************************ 12-02-2003 High Low Volume Advance/Decline DJIA 9853.64 - 45.40 9900.45 9837.27 1.77 bln 1582/1608 NASDAQ 1980.07 - 9.80 1996.08 1978.23 1.78 bln 1580/1696 S&P 100 524.71 - 1.89 527.02 523.85 Totals 3162/3304 S&P 500 1066.62 - 3.50 1071.22 1065.22 W5000 10441.68 - 29.40 10492.66 10432.96 RUS 2000 553.60 - 0.99 557.42 553.28 DJ TRANS 2936.36 - 25.20 2964.24 2935.45 VIX 16.27 - 0.50 16.89 16.17 VXO (VIX-O)16.42 + 0.45 16.90 15.99 VXN 26.72 + 0.43 26.94 25.81 Total Volume 3,824M Total UpVol 1,496M Total DnVol 2,270M 52wk Highs 1106 52wk Lows 23 TRIN 1.31 NAZTRIN 1.33 PUT/CALL 0.71 ************************************************************ Like Moths to a Flame The bulls gravitated to overhead resistance at 9900/2000 again and like moths dodging a flame they were careful to stay just out of touch. The Dow just nicked the 9000 level by .45 of a point right at the open and then wandered lower but within reach the rest of the day. The Nasdaq traded less than four points from 2000 before getting its wings singed by a sell program that could have been triggered by a proximity fuse. Dow Chart Nasdaq Chart The day started out on a bad note after the weekly Retail Sales dropped -0.1% despite two of the strongest sales days of the year. Not a good sign in my opinion. There were all kinds of excuses about weather, inventory shelving and competition but the bottom line was weaker than expected sales. All the smoke about the improved employment picture suddenly cleared and analysts saw that the change of 200,000 jobs over the last couple months did little to give consumers cash to buy gifts. Yes, the trend has changed but not strong enough to produced a new wave of broad based employment. Consumers are still hoarding cash. While the news reports were full of early bird specials on Friday the rest of the weekend was tame in comparison. 31% of consumers surveyed said they were going to spend less this year. Only 22% said they were going to spend more. 35% said they were going to wait until the last two weeks of the holiday season. Wal-Mart fell to a new five-month low of 53.02 on the disappointing news. That employment picture continued to improve with the November Challenger Layoff report showing a drop of 40% in the numbers from October. In November there were 99,452 job cuts announced compared to 171,870 in October. This was encouraging but the number was still well above the 60-70,000 levels from last summer. The elevated levels still show that companies are trying to cut costs rather than staff up for the recovery. We will get another look at employment on Friday with the November Jobs report. The estimate is for a gain of +140,000 jobs compared to +126,000 in October. This will be a critical report. If the number falls but remains positive it may not be disastrous but a negative number would be a disaster. Also, we need to watch for a revision of the number from last month. The November whisper number is nearing +200,000 and is way out of line in my opinion. This is setting us up for a serious disappointment. If we get a blowout number then the FOMC meeting on Tuesday will be a major market event. A strong jump in jobs would insure a removal of the "considerable period" statement and possibly a change in the bias to tightening. A drop in the number of jobs to +50K or so would keep the recovery on a tentative basis and the Fed may feel more comfortable in leaving things alone. This is a critical report and the outcome will directly impact the Tuesday Fed meeting. This puts the markets on notice that things could change quickly and could stimulate some cautionary selling. The Auto Sales data was mostly positive today with only Ford posting negative numbers for the month. GM posted a +22% gain in overall sales and +30% gain in trucks. DCX showed a minor +3% gain with Nissan up +15%. Ford fell -2% for the period. Cadillac was a strong GM performer with a whopping 40% gain. GM raised production targets by 10,000 units for the quarter. Incentives are also creeping up with the average expected to be +$4000 in December. The automakers were mostly optimistic about coming quarters and are looking forward to strong sales in the 1Q boosted by the next $150 billion in tax stimulus to consumers. Another fund was hit with charges today but unlike the others vowed to fight the charges. Invesco Funds said they had done nothing wrong despite the charges levied on them for late trading and market timing. The war of words flew both directions all day and Invesco posted a strongly worded rebuttal on their website. They said they had done nothing wrong and the charges will be "vigorously contested". They claim they never participated in late trading and that their market timing trades were permissible and not contrary to the best interests of the shareholders. The Dollar plunged again on the currency markets and with the drop in the dollar came the rise in gold to a high of $407 and a close at 404.80. All commodities continue to rise on the recovery hopes and in some cases terror threats. Oil rose over $30 a barrel once again after a three day dip under that technical level. Cold weather also helped jack up oil prices but new terror threats continue to put strain on potential availability of future supplies. The markets today were very cautious. The initial Dow tick to 9900 triggered some light selling that pushed the index back to support at 9850 and it spent the rest of the day between 9850-9890. Well within striking distance of 9000 but maintaining a cautious distance away. The Nasdaq struggled to within 4 points of 2000 around 2:PM and after lingering in the area for about 15 min a very strong sell program triggered that knocked it back to just above 1980. What I believe we are seeing is fear of round numbers. That is fear of round number targets. Nasdaq 2000 is obviously a target that has been in trader sights since Jan-2002 when we dipped below that level. After nearly two years the Nasdaq is drawing back to that now strong resistance and there are a lot of investors that will be very happy to just get out alive when that number is reached again. They have been holding for this event to get even for two years. The last rebound over 2000 came on Dec-5th 2001 from the post 9/11 Nasdaq low of 1387. Euphoria was high and techs were soaring. They traded in the 2000 range for a little over a month before slipping back below 2K on Jan-15th. Traders were sure it was just a profit taking dip from the +600 point bounce and many held their positions until it was too late or too expensive to exit. Now two years later and after a dip to 1100 they are almost back to where they started. With memories of a +50% bounce failing at 2000 in 2002 they are probably plenty of fears of the current +81% bounce to 2000 in 2003 failing as well. Many funds have accumulated huge profits with this bounce and they are probably very worried that somebody will blink before Dec-31st and start a cascade of profit taking. I have speculated that a touch of 2000 would trigger some sell programs from profit takers. When the Nasdaq stalled only 4 points away from 2000 for about 15 min this afternoon I suspect the pressure was too much to bear for whomever pulled the trigger on the big program. If you have been waiting for months for that target to be hit and your bonus is riding on your funds performance then cheating by four points makes sense to me. Did that relieve the performance anxiety for the next touch of that level? I doubt it. The same thing has been happening at Dow 9900 but not in the same volume. The big programs are probably waiting for D10K and as long as we linger in in the 9850-9900 range they may not decide to adjust the triggers. The danger here is a perceived lack of progress. We have been stopped dead at 9900 on every attempt since November 3rd. 9900 is the down trend resistance since Jan 2000 and very strong resistance. However this is December and typically the second strongest month of the year. The economy is exploding according to most economic reports and investors are throwing money at mutual funds despite the scandals. This scenario is setting the markets up for massive end of year confusion. Retail investors are buying and institutional investors, hedge funds and mutual funds are trapped in high flying stocks with no easy way out. With cash flowing into funds in near record amounts it is tough to justify selling winners. It is tougher to find a place to put the new money. Hedge funds may have large profits but are paid on year end results. They do not want to sell now unless they have to. What we have is a confluence of major buying pressure and major selling pressure with the calendar counting down to the year end deadline. This has caused stagnation at the 52-week highs. There is not enough buying pressure to push us over 9900/2000 top. They are happy to buy the dip but they do not want to buy the top. The market is perceived as fully priced despite the exploding numbers. It is fully priced because the market expected the economy to recover. It expected double digit earnings growth in the 3Q and 4Q because all the analysts had been predicting it since January. It was the 3rd year they predicted it but that is another story. You could make a case for a stronger than expected gain due to the GDP but very few traders believe that number anyway. This leaves us in serious confusion. Over the last 50 years the S&P has gained an average of +1% in December. Last year the S&P lost -6%, -80 points in December. The high for the month was set on 12/2. In Dec-2001 the high was set on 12/5 and then the S&P dropped -60 points into the middle of the month. In 2001 the high was set on the 11th and the S&P dropped -136 points by the holidays. The bottom line here is that we have a recent historical trend that suggests the high for the month could be set early and then portfolio rebalancing, year end profit taking, etc puts pressure on the market. We definitely have profits to take. To be fair the prior three years for comparison were all bear market years. Somehow when traders look back to see prior seasonal patterns they tend to overlook the bigger trend. While that bigger trend would work in favor of the analysts when just looking a the prior three Decembers there is a bigger trend that works against us. That is the downtrend from Jan-2000. It intersects at Dow 9900 and is serious resistance. Dow Weekly Chart I would also note that three of the last four Januarys have seen significant losses. 2003, nearly -900 points off its highs, 2002, nearly -800, 2001, -550. 2000 had two separate drops in January of -600 and -1050 points. A very volatile month. I have gone to great lengths to paint the picture for the next six weeks. We have rebounded +80% on the Nasdaq and +34% on the Dow. The rebound has stalled exactly at strong downtrend resistance. There is very strong overhead supply at D10K and N2K. Portfolio managers are looking at the recent January trends and thinking "how much longer should I hold" or "how much farther can we go?" In each case they are risking a lot with very little upside left. I say very little upside because any move over 9900 will draw the D10K sellers that are getting out early. In my previous commentaries I wrote that I expected a bounce to 9900 this week and then a slight sell off for a week or so, then a bounce into the holidays. That holiday bounce rarely reaches the prior highs for the month. I suggested that any breakout to 10,000 would be sold heavily. At present I am not seeing any catalyst to produce that breakout. We have ISM Services tomorrow but that is not a big report. After ISM Manufacturing the services number is assumed to be ok and traders look elsewhere. Friday is the big one with the Jobs Report. With the whisper number around +200K we could be disappointed. Add in the rate anxiety for next Tuesday and traders have more to worry about than they do to be excited about. The prediction for the rest of the week is high risk. We could move up but I think the bulls are starting to weaken. They have over indulged on good news for weeks and the Jobs Report is the desert. The harsh reality of the FOMC meeting could be the heart attack that shocks them awake and begins the slim down diet. I would love to see them get their second wind and race off into the holidays and bust through 10,000 like a marathon runner through the tape but that only sets up another "what now" scenario. I would suggest we don't get our hopes too high and not be surprised if December is disappointing. Keep the faith until the red candles begin to appear but keep one eye on the exit. Enter Very Passively, Exit Very Aggressively! Jim Brown Editor *************** FUTURES MARKETS *************** Dollar Devastation, Equity Obfuscation Jonathan Levinson The US Dollar Index broke to new multiyear lows below the widely watched 90.00 level, and equities reacted by making marginal new highs before selling off in the afternoon. But the selloff was short-lived. Treasuries finished at their session highs, with gold and silver advancing fractionally. Daily Pivots (generated with a pivot algorithm and unverified): Note regarding pivot matrix: The support, pivot and resistance levels above are derived from the high, low and closing price levels by a simple mathematical formula. They are not intended to be predictive of market turning points or to serve as targets, but rather represent the range retracement levels as generated by the pivot algorithm. Do not think of them as market "calls" or predictions. Like any technically-derived indicator or price level, the pivot matrix values should be regarded as decision points at which to evaluate current market conditions. Visit us in the Futures Monitor for our realtime views of the various markets covered here. 10 minute chart of the US Dollar Index I'll let the chart speak for itself. The US Dollar Index was trading 89.65 as of this writing. Gold and silver advanced, as did the CRB, gaining 2.29 at 256.66. As the Fed continues to deny the existence of inflationary risks, the CRB and precious metals markets continue to make multiyear highs. Daily chart of February gold Amidst reiterations of Barrick's intention of unwinding all its hedges and the US Dollar Index getting smoked, gold printed a new multiyear high at 407. Maria Bartiromo, that limitless fount of market insight and financial savvy, wondered aloud "how much higher it could realistically go". You couldn't ask for a bigger anecdotal buy signal than that. February gold closed at 404.70, up .90 against a low of the day at 400.40. The daily cycle oscillators are trending, but the 10 day stochastic is at a lower oscillator high against the higher price high. We need to be attentive to the possibility of a negative divergence here, with 399 key support in this current leg of the gold rally. Daily chart of the ten year note yield Ten year notes Got whipped around but closed positive, with the ten year note yield closing lower by 1.2 basis points at 4.38%. I note this with utter amazement, given the vertiginous drop in the US Dollar Index as well as the hefty 7.75B repo drain from the Fed. I don't know from whence the money came, although Fukui-san at the Bank of Japan comes quickly to mind. Nevertheless, the move was countertrend, and did nothing to impede the yield upphase currently in progress. Daily NQ candles The NQ was the stronger index all day long in what appeared to be a foreign liquidation of blue chips, but that changed with the afternoon selloff following a large NDX put buy. The NQ finished lower by 8 or .55%, compared with 2.25 or .21% for ES and 33 or 33% on YM. The current daily cycle upphase on the NQ has to be one of the more troublesome signals with which we've had to contend. It came at a time when the index was most apt to collapse, and has been fighting synchronous weekly and intraday sell signals every step of the way. As on the chart of the TNX, the daily NQ suffered no technical damage from today's pullback, and the uptrend is still well-established. That said, the broken wedge trendline remains unbroken so far, and the confluence of resistance makes this a prime candidate for an early end to the upphase. For the time being, however, there is no indication that such will occur. A break back 1415 could change that, but support at 1425 will have to fail first. 30 minute 20 day chart of the NQ The 30 minute chart affords bears a brighter ray of hope, with the afternoon selloff taking out the rising wedge trendline with authority, and confirming several bearish oscillator divergences in the process. This wedge breakout projects all the way to 1358, but the whole area from 1415 to 1428 is strong support, and with the 30 minute downphase already well-advanced, bears might run out of time before the daily cycle upphase reasserts itself. Daily ES candles I haven't drawn the steeper wedge trendline on this daily ES chart, but 1070 now has a number of trendlines intersecting to form stiff resistance at that level. Today's correction retraced part of yesterday's strong move, and as with the NQ, did little to alter the bullish tenor of this chart. 1056-58 is immediate support, although 1062-64 has yet to be meaningfully tested. Bears need to understand that, despite the abundance of factors signaling a precipitous drop from current levels, bulls have managed to build a strong uptrend with plenty of downside support. The bear wedge targets of 987 and 955 seem like a long way down, and bears do not need to rush their entries above that support. 20 day 30 minute chart of the ES As with the NQ, the 30 minute ES broke wedge support, bringing in a downside target of 1030. 1064 has held all week, and though I expect it to fail, I've left the horizontal trendline setting up a reverse head and shoulders of sorts. Note that reverse h&s patterns are bottom, and not top formation, but the rounded bottom / cup and handle tone to the price pattern is sufficient to keep bears on guard. With the VXO this low, it's dangerous to bet on 1070 getting broken, but the index flirted with that level several times today and yesterday. 150-tick ES Against the 30 minute cycle downphase, we have the ES in a short cycle upphase. This could result in an upside pop at the open. Daily YM candles Nothing to add on YM, which most closely matches the ES. 20 day 30 minute chart of the YM The markets alternated between boring and treacherous again today, with deep currents stirred up by the support break on the US Dollar Index. The buying in bonds and, initially, in equities was surprising, as has been the lack of reaction from equities overall. The charts tell us to be patient, because the technical conditions for a violent failure are all lined up. But the strong market forces in play lead me to wonder how long the unidirectional equities market will remain intact. The consistently low volatility readings are not sustainable, and bullish optimism remains very high. While the break could come at any time, the charts tell us not to begin holding our breath just yet. ************************Advertisement************************* No time to follow the Market Monitor? Tired of missing good Trades because you stepped away from your computer? OneStopOption Group can follow the Market Monitor for you. You choose the number of contracts, we take care of the rest!! Trade Stock Options, Stocks and ALL Futures with the same Group. Call us 888 281-9569 to see if you qualify to have us rebate your subscription cost. http://www.OneStopOption.com ************************************************************** ******************** INDEX TRADER SUMMARY ******************** Treading water The major indices spent the better part of the day treading water after outplacement firm Challenger, Gray & Christmas said announced layoffs in November fell to 99,452 in November after reaching a 12-month high of 171,874 in October. Economists' made special note that the Challenger survey only captures a tiny fraction of all layoffs. According to government data, about 1.5 million workers lost their jobs in the first four weeks of November and filed for state unemployment benefits. John Challenger, CEO of the employment firm also noted that November's figures are not seasonally adjusted to account for the large number of job cuts typically announced at the beginning of the fourth quarter, and that announced layoffs are just that, announced, and may not necessarily be immediate, but take place over weeks if not months. Still, the Challenger survey, which isn't necessarily viewed as a major economic report lacks any real discernable trend in corporate downsizing, where Mr. Challenger said "is indicative of uncertainty associated with the current economy." The world's largest maker of automobiles had General Motors (NYSE:GM) $43.28 +0.34% posting the strongest year-over-year increases in U.S. auto sales for the month of November, as most automakers uncovered improved sales results driven by incentives and an improving economic outlook and consumer confidence. GM said sales jumped 22% to 363,181 vehicles, number 2 automaker Ford Motor (NYSE:F) $12.92 -1.52% said sales were off 4% from last year to 255,533 vehicles, while DaimlerChrysler (NYSE:DCX) $38.54 -0.43% said U.S. sales rose 3% from last year to 157,212 vehicles. Meanwhile, Honda Motor (NYSE:HMC) $20.25 -1.02% said total sales rose 0.7%, Volkswagen's sales rose 28% to 29,257, Audi's sales slipped 0.4% to 7,107, Porsche's sales hit record levels and rose 58% to 2,654, while Subaru said monthly sales fell 5% to 13,088. I can't say that any of the above economic-related data had much impact on today's trade. As I was reviewing a timeline on today's late session fade lower, the only timeline I can put together with any meaning would be the sell program premium alert triggered just after 02:00 PM EST, which unbeknown to me at the time came about 20-minutes after the S&P 500 Index (SPX.X) 1,066.62 -0.32%, which closed 3.5-points lower on the session, had traded its MONTHLY R1 of 1,070.83, and marks the first equity index to trade its MONTHLY R1 in October. I would only suggest that this 1,071 level might be a near-term level where some institutional profit taking would be found, and wouldn't get too excited about this afternoon's late fade. After barely meeting publisher deadline for last night's Index Trader Wrap, I made some notes in the Market Monitor that the NYSE Composite had recorded an annual high number of new 52-week highs in yesterday's trading session at 619 and when looking at tomorrow's pivot matrix and some stacking up of correlative resistance in the DAILY/WEEKLY levels, being offset by stacked correlations in the WEEKLY/MONTHLY levels, it gives me the impression that the major indices may have gotten a little "too bullish" near-term, but pullbacks will most likely be bought with some vigor. Pivot Matrix - If there is one concern of mine, and perhaps a concern of other market analysts, its the continued drubbing the U.S. dollar continues to take, despite a more positive economic backdrop. One very complex trade I continue to hear mentioned on the weakening dollar versus euro is a three-way trade by European market participants where euro-based participants that are not intervening to weaken their currency against the dollar, are using the strength of the euro to buy oil, using the leverage of the stronger currency, to then sell the dollar. I dare say this complex trade, which I don't fully understand, nor portend to, would at least make some sense on the directional play of the dollar, whereas our friends in Asia seem more set on trying to sell their stronger currency, and buy the weaker dollar and Treasury bonds. I must then chuckle to myself in regards to things being "too bullish" as the weaker dollar most likely has to be associated with the growing deficit, but one would think at some point that the strengthening economy should be finding some offset to the deficit with improving government tax receipts. The inability of the dollar to find any type of prolonged bid of stability (for more than a week) still has the bullish side of me rather cautious. Heck, even Barton Biggs said tonight on CNBC that he hasn't a clue at this point what to expect from the markets, with the dollar being one of his greatest perplexities. One chart we haven't looked at in awhile is the December S&P 500 Futures contract (sp03z) with my fitted retracement overlaid. Last night I was also working on this chart after it settled at a new contract high, where I felt the need to once again place a new upside retracement on it, should the 1,073.30 level be violated to the upside. We were using the PINK retracement and levels within the retracement to establish bullish or bearish biases based on where this contract settled each closing night. Using the EXACT principles of anchoring at a relative low close, then "fitting" the 38.2% retracement at a relative high close, that for whatever reason seemed to be a significant level of resistance, I've added a new BLUE retracement level, then colored in YELLOW what I would deem zones of support and resistance. The YELLOW zone from 1,001.80 to 1,007.80 was established months ago, and I would currently associate the 1,046.20-1,051.20 zone as a similar zone, where a backfill after a new contract high might have futures traders looking to buy a pullback. Remember, futures create GREAT leverage, and you can well bet that there are some futures traders just as short the futures market as there are traders short the S&P Depository Receipts (AMEX:SPY) $107.33 -0.25%. S&P 500 December Futures contract (sp03z) - Daily Intervals While I captured this chart earlier this morning, it may tie in rather well with the S&P 500 Index (SPX.X) 1,066.62 -0.32%, or cash market, in our pivot matrix. Today's trade did see the above futures contract trade a session high of 1,071.00, where as the cash (SPX.X) saw a session high trade of 1,071.22. Note how narrow the futures/cash spread becomes as we now near December expiration, and how today's trade of a rather major MONTHLY R1 level may have had some institutional sell programs selling a large basket of stocks at a level. With the levels shown above, the bullish bias would remain above 1,058.50, but it is the YELLOW zone from 1,046.20-1,051.20 that grabs my attention as it relates to the MONTHLY Pivot of 1,051.20 and WEEKLY Pivot of 1,051.37 in our pivot matrix, which may well mark a bullish level of support for a pullback bullish entries. Some may argue "But Jeff, all your doing is making the future chart match your pivot matrix levels." However, this is why I'm using the EXACT SAME discipline of attaching to a relative low settlement in the futures, then attaching, or fitting the 38.2% retracement at a relative high settlement, that for some reason was deemed SIGNIFICANT for resistance by the market. S&P 500 Index Chart - Daily Intervals The SPX has been the STRONGEST index of late, not only as it relates to our observations in the pivot matrix, but also on its pure technical merits of trading a new 52-week high in the manner that its has. Right now, this is the HEAD of our animal (inchworm and snake analogy has been used) and we want to monitor it for strength, but also for any near-term weakness. A pullback to the 1,058 level would simply be a very normal digesting of gains, where a pullback into the 1,051 level becomes what I begin to observe a very good bullish entry point. In the above chart I've noted a tie in with the YELLOW zone of support, with the S&P futures chart and my latest fitted BLUE retracement of 1,058.50. This 1,058.50 level in the futures was resistance for all of November, but broken solidly to the upside on Monday. As such, I still have to deem it a level where trade above still keeps a BEARISH trader very defensive as overhead supply is relatively nonexistent. Dow Industrials (INDU) Chart - Daily Intervals Some bears seemed more eager to short the INDU at 9,900 last week, but from what I saw in today's market monitor, were very tentative about such a trade. I don't blame them. The first inkling of weakness would be back below 9,832 and I'd probably have to add 10-point to that given the larger price scale of the INDU. Still, while bears were tentative to short the INDU at 9,900, bulls seemed just as tentative, but there was little in the way of economic data to really build a conviction. NASDAQ-100 Tracking Stock (QQQ) Chart - Daily Intervals I just couldn't get behind a bullish QQQ trade, nor a bearish trade in today's market monitor until after the sell programs brought QQQ weakness down to a level I thought we might get a little bounce to the close, which never really took place. The Q's felt a little heavy today, but I would look for a bullish entry back near $35.14, but I'm a very short-term bear right now with very modest downside intra-day targets. Jeff Bailey ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** **************** MARKET SENTIMENT **************** Treading Water - J. Brown It was a relatively quiet day on Wall Street. There were no major economic reports. No corporate earnings and very little on the scandal front today. Stocks and major averages merely churned sideways as if digesting a portion of Monday's big gains. This is in essence another victory for the bulls. With such a clear lack of sellers it could instill even more confidence for investors. Technical fans will note that the ARMS index's 5-dma has dropped to a bearish reading of 0.81. Traditionally readings under 0.85 are bearish and indicate a market top is close by. Of course the real question now is will anyone take notice? Traders have been ignoring the VIX, another technical indicator, for months. Tomorrow brings the revised Q3 productivity numbers and the ISM services index. Both pale under the importance of Monday's ISM factory number and investors are probably looking ahead to Friday's employment report and next Tuesday's FOMC meeting. Trade carefully and watch those stops. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 9903 52-week Low : 7197 Current : 9853 Moving Averages: (Simple) 10-dma: 9665 50-dma: 8882 200-dma: 9740 S&P 500 ($SPX) 52-week High: 1071 52-week Low : 768 Current : 1066 Moving Averages: (Simple) 10-dma: 1050 50-dma: 1040 200-dma: 968 Nasdaq-100 ($NDX) 52-week High: 1453 52-week Low : 795 Current : 1431 Moving Averages: (Simple) 10-dma: 1403 50-dma: 1396 200-dma: 1232 ----------------------------------------------------------------- As the markets churned sideways so followed the volatility indices. There is little change and they all continue to urge caution for bullish investors. CBOE Market Volatility Index (VIX) = 16.27 -0.50 CBOE Mkt Volatility old VIX (VXO) = 16.42 +0.45 Nasdaq Volatility Index (VXN) = 26.72 +0.43 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.71 735,096 524,620 Equity Only 0.52 601,278 314,983 OEX 1.13 20,089 22,789 QQQ 1.11 21,419 46,036 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 73.8 + 1 Bull Confirmed NASDAQ-100 75.0 + 2 Bear Correction Dow Indust. 80.0 + 0 Bull Correction S&P 500 81.6 + 2 Bull Confirmed S&P 100 79.0 + 1 Bull Correction Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-dma: 0.81 10-dma: 1.11 21-dma: 1.11 55-dma: 1.14 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals -NYSE- -NASDAQ- Advancers 1378 1467 Decliners 1436 1652 New Highs 536 408 New Lows 13 10 Up Volume 709M 408M Down Vol. 956M 10M Total Vol. 1689M 1771M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 11/18/03 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 Will it never end? The commercial traders refuse to move any positions or make any more big bets in the full S&P futures contracts. They've been oscillating in the current range for weeks. Small traders have bumped up both their short and long positions but they remain relatively equidistance from each other. Commercials Long Short Net % Of OI 10/28/03 391,596 412,498 (20,902) (2.6%) 11/04/03 391,079 415,136 (24,057) (3.0%) 11/11/03 389,965 415,259 (25,294) (3.1%) 11/18/03 393,893 414,442 (20,549) (2.5%) Most bearish reading of the year: (111,956) - 3/06/02 Most bullish reading of the year: 18,486 - 6/17/03 Small Traders Long Short Net % of OI 10/28/03 137,791 76,791 61,000 28.4% 11/04/03 137,829 78,206 59,623 27.6% 11/11/03 136,072 74,249 61,823 29.4% 11/18/03 147,842 80,047 67,795 29.7% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 The e-minis are seeing some action. Commercials upped their short positions but not by too much. Small traders also raised their short positions by 10K contracts (almost 20% of outstanding shorts). Commercials Long Short Net % Of OI 10/28/03 220,171 260,644 (40,473) ( 8.4%) 11/04/03 242,409 270,785 (28,376) ( 5.5%) 11/11/03 249,864 258,503 ( 8,639) ( 1.7%) 11/18/03 249,286 264,083 (14,797) ( 2.9%) Most bearish reading of the year: (354,835) - 06/17/03 Most bullish reading of the year: 133,299 - 09/02/03 Small Traders Long Short Net % of OI 10/28/03 123,569 59,742 63,827 34.8% 11/04/03 135,525 63,006 72,519 36.5% 11/11/03 94,649 51,815 42,834 29.2% 11/18/03 95,119 61,975 33,144 21.1% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders are still stuck in limbo with outstanding longs and shorts in NDX futures barely budging the last few weeks. Meanwhile small traders have turned more bullish with a nice jump in outstanding long positions. Commercials Long Short Net % of OI 10/28/03 36,168 46,272 (10,104) (12.3%) 11/04/03 34,159 48,293 (14,134) (17.1%) 11/11/03 35,889 49,201 (13,312) (15.6%) 11/18/03 35,608 49,689 (14,081) (16.5%) Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 9,068 - 06/11/02 Small Traders Long Short Net % of OI 10/28/03 21,640 8,830 12,810 42.0% 11/04/03 24,132 9,703 14,429 42.6% 11/11/03 26,212 10,730 15,482 41.9% 11/18/03 32,034 10,356 21,678 51.3% Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Ditto here as well...commercials are not making any new big bets and keeping the number of long and short contracts relatively unchanged. Small traders appeared to have scaled back on longs and inched up their shorts. Commercials Long Short Net % of OI 10/28/03 20,504 11,366 9,138 28.7% 11/04/03 21,756 11,903 9,853 29.3% 11/11/03 20,209 11,660 8,549 26.8% 11/18/03 20,746 11,080 9,666 30.4% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 10/28/03 5,295 8,864 (3,569) (25.2%) 11/04/03 5,099 9,160 (4,061) (28.5%) 11/11/03 6,105 8,201 (2,096) (14.7%) 11/18/03 5,655 8,607 (2,952) (20.7%) Most bearish reading of the year: (8,777) - 10/12/01 Most bullish reading of the year: 8,523 - 8/26/03 ----------------------------------------------------------------- ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. 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The Option Investor Newsletter Tuesday 12-02-2003 Copyright 2003, All rights reserved. 2 of 3 Redistribution in any form strictly prohibited. In Section Two: Dropped Calls: None Dropped Puts: None Call Play Updates: AMZN, BBY, DGX, DHR, HOV, PGR, ANDK, UTX, ZMH New Calls Plays: BCR Put Play Updates: KSS New Put Plays: NUE **************** PICKS WE DROPPED **************** When we drop a pick it doesn't mean we are recommending a sell on that play. Many dropped picks go on to be very profitable. We drop a pick because something happened to change its profile. News, price, direction, etc. We drop it because we don't want anyone else starting a new play at that time. We have hundreds of new readers with each issue who are unfamiliar with the previous history for that pick and we want them to look at any current pick as a valid play. CALLS: ***** None PUTS: ***** None ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. Licensed Option Principals Andrew Aronson and Alan Knuckman specialize in live assistance of stock*, option* and futures traders. The combination of the proven Man Financial global presence and the convenience of one group for all trading needs provide customers with the tools needed for success. Live Broker and Online Trading Available 888-281-9569 http://www.OneStopOption.com ************************************************************** ******************** PLAY UPDATES - CALLS ******************** Amazon.com - AMZN - close: 53.93 chg: -0.72 stop: 48.99 We're scratching our heads in confusion. The NASDAQ roars to a new high on Monday and AMZN barely budges. That's not the kind of action we were expecting. It does not appear that AMZN is languishing alone. The INX Internet index has not done much the last two days either. Probably not so odd is the similar patterns between AMZN's chart and the INX's chart. Considering that just about everyone is expecting pretty strong online sales this year (up 10% compared to just 5% for normal retail sales) we would expect bulls to continue buying the dip throughout December. From the looks of AMZN's intraday chart odds are building for a short-term pull back. Traders can look for a bounce from the $52.00 level. We'll keep our stop loss at 48.99. Picked on November 30 at $53.97 Change since picked: - 0.04 Earnings Date 10/21/03 (confirmed) Average Daily Volume: 10.7 million Chart = --- Best Buy Co - BBY - close: 58.52 chg: -2.35 stop: 57.95 Ouch! The last two days of declines have really stung. Traders came back on Monday and decided to "sell the news" that retail sales were doing pretty well. Granted some analysts thought they weren't doing THAT well the general mood is very positive. Monday's big red candle almost looked like a Japanese bearish engulfing pattern but ended with an equally bearish "dark cloud cover". What makes it worse is Tuesday's follow through on Monday's failed rally. BBY came within 5 cents of stopping us out today but shares bounce from the $58 mark in the last half hour. Odds are VERY good that we'll be stopped out tomorrow at $57.95 (assuming it doesn't gap down). However, we're not going to drop BBY just yet as shares could continue their afternoon bounce from minor support at $58 (this is why we put our stop below support). The low today also happened to coincide with its simple 30-dma. We would NOT suggest any new plays at this time unless BBY bounced back over $60.00. Picked on November 25 at $60.36 Change since picked: - 1.84 Earnings Date 12/17/03 (unconfirmed) Average Daily Volume: 3.6 million Chart = --- Quest Diagnostics - DGX - cls: 74.12 chng: +0.28 stop: 72.00*new* Continuing to push higher on a daily basis, our DGX play has been a bastion of strength, gaining ground steadily ever since breaking out above the $72 level last week. The early rally this morning propelled the stock to $74.99, a penny below our $75 profit target and as mentioned in the Market Monitor, that would have been a good time to lock in some gains. After that early bullish move, DGX weakened throughout the day, ending just above $74. There's a distinct possibility of more profit taking before the next upward push and conservative traders still may want to harvest gains on any early strength tomorrow. We're sticking with our initial target, recommending exits be taken on a rally into the $75-76 area, and if that target is reached, we'll be looking to close the play for a nice gain. Since the current price is so close to that eventual target, we're once again raising our stop, this time to $72, which is just below the 10-dma ($72.05). Note that we are not recommending new entries at this time. Picked on November 13th at $69.46 Change since picked: +4.66 Earnings Date 1/20/04 (unconfirmed) Average Daily Volume = 876 K --- Danaher Corp - DHR - close: 82.99 chg: -1.15 stop: 81.65 *new* News continues to be scarce for DHR but the stock did enjoy a nice jump higher on Monday with the markets in rally mode. Shares did pull back today in profit taking but nothing serious. Should the weakness in the markets and DHR continue then traders may want to look for a bounce from the $82.00 level. Meanwhile we're going to raise our stop loss to 81.65, just 30 cents from break even. Picked on November 23 at $81.95 Change since picked: + 1.04 Earnings Date 10/16/03 (confirmed) Average Daily Volume: 829 thousand Chart = --- Hovnanian Enterprises - HOV - cls: 95.55 chg: -0.05 stop: 92.49*new* This is it! We originally added HOV with a profit range of $95 to $100. Now shares are above the $95 level and traders should be SERIOUSLY considering what their next move is. We had a hard time tonight deciding what to do. Considering how shares are right at the top of its ascending channel the easy decision is to cut it loose, close the play and take our profits home. The stock is up 10 points from our trigger price at $85.51 and well overdue for some profit taking. But therein lies the conundrum. The markets slipped back in profit taking today and the best sellers could do to HOV was a 5 cent loss. That's it! Which is an amazing display of relative strength, lack of willing sellers, or whatever else it is you'd like to call it. So here's our plan...we suggest that traders strongly consider closing the majority of their positions and only keeping a small position open. If that doesn't work or maybe you only have a small position then we suggest the following. We're going to raise our stop loss to $92.49, which should protect a large gain. If we get stopped out, then great. If we don't then we've given HOV room to move and it can still make a run for the $100 level. Keep in mind that HOV is due to announce earnings next Tuesday and we'll probably close this play this weekend if we don't get stopped out. Picked on November 21 at $85.51 Change since picked: +10.04 Earnings Date 12/09/03 (confirmed) Average Daily Volume: 827 thousand Chart = --- Progressive - PGR - close: 80.11 chg: -0.69 stop: 77.75 *new* Ah-hah! We just needed to offer a veiled threat that if PGR didn't perform soon we'd cut it. If only it were that easy. Actually, shares of the insurance stock jumped strongly on Monday along with the rest of the market. Fortunately, for PGR investors the move on Monday broke resistance at $80 and closed at a new all-time high. The stock has actually reached our initial profit target of $80. Taking profits here is not a bad idea. We're going to raise our next target to $82. We wouldn't be surprised to see PGR pull back and retest the $79 or even the $78 level if the broader markets turned sour. In the mean time we're going to raise our stop loss to 77.75. Picked on November 07 at $76.25 Change since picked: + 3.86 Earnings Date 10/22/03 (confirmed) Average Daily Volume: 654 thousand Chart = --- Sandisk Corp. - SNDK - close: 78.21 change: -0.85 stop: 75.50 In light of the strength in the rest of the market, our new play on SNDK has definitely gotten off to a disappointing start. Last week's rebound back into the rising channel got reversed yesterday and the stock continued to weaken today. Yesterday's early surge over the $81.50 level satisfied our entry trigger and it looks like we may have gotten caught by setting that trigger a bit too low. The best approach for new entries now would be a rebound from above the 50-dma ($76.21), although that is an aggressive strategy. More conservative traders will want to wait for confirmed strength with SNDK moving over $82. The advantage to buying the rebound from above the 50-dma is that risk is more easily controlled, with our stop set at $75.50, just under the 11/21 intraday low. Picked on November 30th at $80.82 Change since picked: -2.61 Earnings Date 1/14/04 (unconfirmed) Average Daily Volume = 3.63 mln --- United Tech. - UTX - cls: 87.56 chng: +0.17 stop: 85.00*new* Demonstrating the strength of resistance at $88, UTX has been struggling to clear that level for two days now. It looked like the bulls might actually succeed this afternoon with price just peeking above that level, but the late day sell program once again kept the rally in check. UTX still managed to close in the green though and a breakout over resistance seems likely later this week. In addition to the historical resistance at this level, UTX is also battling with the midline of its rising channel, along with the upper Bollinger band at $88.29. Buying the breakout over resistance is clearly an aggressive choice and the more conservative approach would be to enter the uptrend on a pullback to support in the $85.50-86.00 area. Once UTX breaks out over $88, our focus will turn towards locking in gains as price nears our target in the $90-91 area, with the top of the rising channel now edging over $91. Note that we're once again raising our stop, this time to $85.00, which is just under the 10-dma. Picked on November 23rd at $83.90 Change since picked: +3.66 Earnings Date 1/15/04 (unconfirmed) Average Daily Volume = 1.84 mln --- Zimmer Holdings - ZMH - close: 67.66 chg: -0.14 stop: 64.00 If you missed the move on Monday you may get another chance. Shares of ZMH powered to yet another new all -time high yesterday but could not build on that move as the general markets slipped backwards. The intraday chart has a rounding-pattern to it and a pull back and retest of the $66 level may be the next bullish entry point for traders. As a side note, ZMH rival Stryker (SYK) looks ready to break out over the $83.00 level. A positive move here could help lift ZMH too. Picked on November 30 at $65.92 Change since picked: + 1.74 Earnings Date 10/22/03 (confirmed) Average Daily Volume: 1.8 million Chart = ************** NEW CALL PLAYS ************** C R Bard - BCR - close: 77.35 change: +0.60 stop: 74.99 Company Description: C.R. Bard, Inc., (www.crbard.com) headquartered in Murray Hill, N.J., is a leading multinational developer, manufacturer, and marketer of innovative, life-enhancing medical technologies in the fields of vascular, urology, oncology, and surgical specialty products. (source: company press release) Why We Like It: It's a strong market for medical device makers so we'd thought it might be time to look at one that's been around the block a couple of times. BCR was founded about 96 years ago and it continues to perform year after year. The company has managed to deliver seven consecutive quarters of double-digit earnings growth and a full year of double-digit sales growth. This is on top of a management change this past August. Now the stock has pulled back from new all time highs in late October and investors are finally buying the dip again. The stock bounced off the $74.00 level in late November and has broken back above its simple 50-dma and what should have been resistance at $76. The stock's technical oscillators look bullish with stochastics, RSI and momentum shooting higher and its MACD is about to produce a new buy signal. However, there is some resistance at $78 and we want to use a TRIGGER at $78.01 to open the play. Until shares trade through our trigger we're content to watch. Once initiated our first target will be $85 with a stop loss at $74.99. Split fans will note that BCR has not split its stock since 1988. Shares are well over there previous split price and the company could announce one at any time. Suggested Option: There are only 2.5 weeks left for December options so our preference will be the January strikes. Our favorite is the January 75 call. BUY CALL DEC 75 BCR-LO OI= 78 at $3.10 SL=1.50 BUY CALL DEC 80 BCR-LP OI= 19 at $0.50 SL= -- BUY CALL JAN 75*BCR-AO OI= 68 at $3.90 SL=1.85 BUY CALL JAN 80 BCR-AP OI=678 at $1.25 SL=0.65 Annotated Chart: Picked on December 02 at $xx.xx Change since picked: + 0.00 Earnings Date 10/15/03 (confirmed) Average Daily Volume: 322 thousand Chart = ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ******************* PLAY UPDATES - PUTS ******************* Kohl's Corporation - KSS - cls: 46.67 chng: -1.87 stop: 50.25*new* After a few days of the bulls defending the $48 support level, KSS finally got hit with a serious round of selling on Tuesday, plunging below that support level on strong volume (50% above the ADV). Aggressive traders could have entered on the rejection at the 10-dma (currently $48.70) yesterday afternoon, while the more conservative approach was to wait for the breakdown under support this morning. After the support break, there was only a token bounce from the $47 level before the stock continued down to close at the low of the day. There wasn't any news to explain today's sharp slide, but it is interesting that it coincided with the Retail index (RLX.X) rolling over from strong resistance just below $390, also the bottom of the ascending channel that initially broke in late November. KSS is likely to find some support near $46.25 near the March lows, and then should continue its slide towards the $44 October 2002 lows. Failed rebounds below $48 should be used for initiating new positions. Note that we've lowered our stop to $50.25, keeping it just above the 20- dma, now at $50.23. Picked on November 18th at $48.75 Change since picked: -2.08 Earnings Date 2/12/04 (unconfirmed) Average Daily Volume = 3.97 mln ************* NEW PUT PLAYS ************* Nucor Corporation - NUE - close: 52.66 change: -4.01 stop: 56.00 Company Description: Nucor Corporation manufactures and sells steel products, including hot-rolled steel, cold-rolled steel, cold-finished steel, steel joists and joist girders, steel deck and steel fasteners. The company produces its rolled sheet steel to satisfy customer orders, while other products are manufactured in standard sizes and inventories are maintained. While the rolled steel products are sold primarily to steel service centers, fabricators and manufacturers throughout the United States, steel fasteners are sold to distributors and manufacturers. Steel joists , joist girders and steel deck are primarily sold to general contractors and fabricators in the United States. Why we like it: Shares of the steel stocks have been trading strongly in recent months, helped in part by the tariffs imposed on foreign steel manufacturers. It appears that tailwind is about to be removed though as the Bush administration is now looking at lifting those tariffs this week, 16 months ahead of schedule. While there was a news report out yesterday indicating that the premature end to the protective action is unlikely to hurt U.S. steelmakers, investors apparently had a change of heart today, helped along by some notable downgrades in the sector this morning. Before the open, McDonald Investments cut their rating on NUE (the largest domestic steel producer) from Buy to Hold this morning, citing concerns about the company being able to pass along higher scrap metal costs to customers. Whether the catalyst was the downgrade or concerns over the end of the tariffs on foreign producers, the stock got hit very hard on Tuesday, losing more than 7% on volume that more than tripled the ADV. NUE has been trading in an increasingly volatile manner for the past several weeks, building an expanding wedge pattern that hints of future price weakness. Today's slide dropped the stock to the lower bound of that pattern, also right at horizontal support near $52.60. Should that support fail, NUE should have downside potential to the $47-48 area, which is right at the 200-dma ($47.06), as well as the top of the 10/03 gap. We'll use a $52.50 trigger for the play and aggressive traders can enter on the initial break below that level. There's the potential for a near- term bounce from the 50-dma ($51.49), which is right at historical resistance-turned support. So the more conservative entry strategy would be to look for a rebound off that support level to roll over from new resistance in the $53-54 area. Due to the recent volatility, we're starting coverage with a wide stop at $56, just over today's opening high. Our recommended profit target will be for a drop into the $47-48 area. Suggested Options: Aggressive short-term traders can use the December 50 Put, while those with a more conservative approach will want to use the January 50 put. Our preferred option is the January 50 strike, which has ample time until expiration. BUY PUT DEC-55*NUE-XK OI=134 at $3.30 SL=1.75 BUY PUT DEC-50 NUE-XJ OI=332 at $0.85 SL=0.40 BUY PUT JAN-50 NUE-MJ OI=568 at $1.70 SL=0.75 Annotated Chart of NUE: Picked on December 2nd at $52.66 Change since picked: +0.00 Earnings Date 1/22/04 (unconfirmed) Average Daily Volume = 655 K ************************Advertisement************************* No time to follow the Market Monitor? Tired of missing good Trades because you stepped away from your computer? OneStopOption Group can follow the Market Monitor for you. You choose the number of contracts, we take care of the rest!! Trade Stock Options, Stocks and ALL Futures with the same Group. Call us 888 281-9569 to see if you qualify to have us rebate your subscription cost. http://www.OneStopOption.com ************************************************************** ********** DISCLAIMER ********** Please read our disclaimer at: http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html ************************************************************** ADVERTISING INFORMATION For more information on advertising in OptionInvestor Newsletter, or any Premier Investor Network newsletter please contact: Contact Support
The Option Investor Newsletter Tuesday 12-02-2003 Copyright 2003, All rights reserved. 3 of 3 Redistribution in any form strictly prohibited. In Section Three: Play of the Day: CALL - BCR ********************** PLAY OF THE DAY - CALL ********************** C R Bard - BCR - close: 77.35 change: +0.60 stop: 74.99 Company Description: C.R. Bard, Inc., (www.crbard.com) headquartered in Murray Hill, N.J., is a leading multinational developer, manufacturer, and marketer of innovative, life-enhancing medical technologies in the fields of vascular, urology, oncology, and surgical specialty products. (source: company press release) Why We Like It: It's a strong market for medical device makers so we'd thought it might be time to look at one that's been around the block a couple of times. BCR was founded about 96 years ago and it continues to perform year after year. The company has managed to deliver seven consecutive quarters of double-digit earnings growth and a full year of double-digit sales growth. This is on top of a management change this past August. Now the stock has pulled back from new all time highs in late October and investors are finally buying the dip again. The stock bounced off the $74.00 level in late November and has broken back above its simple 50-dma and what should have been resistance at $76. The stock's technical oscillators look bullish with stochastics, RSI and momentum shooting higher and its MACD is about to produce a new buy signal. However, there is some resistance at $78 and we want to use a TRIGGER at $78.01 to open the play. Until shares trade through our trigger we're content to watch. Once initiated our first target will be $85 with a stop loss at $74.99. Split fans will note that BCR has not split its stock since 1988. Shares are well over there previous split price and the company could announce one at any time. Suggested Option: There are only 2.5 weeks left for December options so our preference will be the January strikes. Our favorite is the January 75 call. BUY CALL DEC 75 BCR-LO OI= 78 at $3.10 SL=1.50 BUY CALL DEC 80 BCR-LP OI= 19 at $0.50 SL= -- BUY CALL JAN 75*BCR-AO OI= 68 at $3.90 SL=1.85 BUY CALL JAN 80 BCR-AP OI=678 at $1.25 SL=0.65 Annotated Chart: Picked on December 02 at $xx.xx Change since picked: + 0.00 Earnings Date 10/15/03 (confirmed) Average Daily Volume: 322 thousand Chart = ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ********** DISCLAIMER ********** Please read our disclaimer at: http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html ************************************************************** ADVERTISING INFORMATION For more information on advertising in OptionInvestor Newsletter, or any Premier Investor Network newsletter please contact: Contact Support
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