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  Jeff Bailey   4/17/02,  10:08:11 PM
Oakley (OO) $19.17 +0.89% ... I missed their earnings report from this morning and was part of the reason I profiled this as bullish back in mid-March to begin with!

Reason I mention all of this is that I had recently profiled as bullish for a day trade on 04/05/02 near $17.26 and may have some swing-traders still hanging in there. Sorry if I "dropped" the ball on this one today.

This morning, company reported earnings of $0.08 a share, which beat estimates by 3-cents. Revenues rose 16.8% year/year to $109.6 million versus the $99.2 million consensus. Company reaffirmed 2002 EPS estimage of $0.81, and sees revenue growth approaching 25%, a bit better than the 22.4% growth of analysts.

Well... stock traded a high of $19.74 and the trade at $19.50 put another X on the p/f chart as it slowly works its way higher. Link

Volume was pretty light today at 584,900 and I would have liked to have seen something north of 1 million. Stock looks strong, but previously I mentioned that a bull long the stock might want to consider writing a covered call as a "buy, run, write" (buy the stock, let it run, then write the covered call).

Unfortunately, the VIX.X is still rather low at 20.18 and there just isn't a lot of "jack" in the option premiums to be writing. Since volume was rather light today, a short-term trader that is/was playing this quarterly earnings report on seasonality should probably be looking to sell strength.

Trader/investors looking to still play the July earnings and looking for the summer seasonality may still get a bit of a run into June (like last year) and look to sell strength there.

Company has now beaten estimates 2 quarters in a row.

  Jeff Bailey   4/17/02,  9:52:53 PM
Freeport McMoran (FCX) $18.43 +4.59% ... stock jumped from earlier mentioning at 02:38 into the close. Interesting move as the company is due to release earning's tomorrow morning before the bell. Even more interesting is that the stock closed at a new 52-week high. Interesting still is that analysts are looking for FCX to report a loss of 10-cents a share, compared to a gain of 26-cents a share in the year-ago quarter. A year ago, the stock was trading the $14 level on its way to $9.55.

For Phelps Dodge (PD) bulls, we want to see a strong number from FCX and some bullish guidance forward. I would think that helps a bull in PD.

  Jeff Bailey   4/17/02,  6:21:26 PM
Advanced Micro Devices (AMD) $14.82 +3.27% ... stock trading lower at $14.00 after the chipmaker reported a Q1 net loss of $9.2 million, or 3-cents a share, on revenue of $902 million. Analysts were looking for a loss of 6-cents a share on revenue of $900.8 million. In the same period a year ago, AMD reported net income of $124.8 million, or 37 cents a share on revenue of $1.19 billion.

While losses were narrower than expected, AMD said it expects a seasonal pattern in Q2 with sales in the range of $820-$900 million, or slightly below Q1 results.

  Jeff Bailey   4/17/02,  6:15:19 PM
Intl. Business Machines (IBM) $84.81 -1.61% ... stock trading higher at $86.50 in after-hours trading following company met previously lowered earnings estimates for $1.19 billion, or $0.68 a share, which was down 32% from year-ago levels of $1.75 billion. First quarter sales came in at $18.6 billion, -12% from the year-ago quarter.

IBM said its 2nd quarter earnings were impacted by "continued weak global business environments."

  Jeff Bailey   4/17/02,  5:03:34 PM
Hmmmm... I "assumed" that the telecom sector as a whole would be "bear confirmed," but according to Dorsey/Wright and Associates, their Telecom Bullish % is "bull confirmed" at 32%! This is very interesting and hints at some internal strength building, despite the telecom indexes getting crushed lately.

Will have to check some things further, but what may well be happening is that some of the larger weighted telecoms like AT&T, SBC and even VZ have been getting crushed so much, that they've really impacted the weighted telecom averages. (XTC.X and IXTCX)

The telecom bullish % from Dorsey/Wright is "unweighted" where each stock's p/f chart gets one equally weighted "vote".

For instance... I'm looking at Advanced Fibre Communications (AFCI) which is classified as "telecom". This stock broke above a flat 200-day MA today. The p/f chart is bullish and current vertical count is to $27.50. Obvious resistance at the $21 level dating back to last fall, but may be a stock to be looking for bullish entry on pullback to $19. Link

I've also taken retracement from the $27.88 to $11.93 level and this really lines up nicely with some levels the stock has been trading. This retracement would have 38.2% at $18.02, 50% right here at $19.91 and 61.8% at $21.79.

  Jeff Bailey   4/17/02,  4:40:35 PM
Shaw Group (SGR) $32.43 +1.5% ... Jeff, SGR showing double top breakout on P&F chart and ready to break thru resistance trend line at 33. stochastics and macd is turning positive as well. Was wondering what your impression is of this play.

Stock looks bullish on the bar chart and I like the pick up in volume on the break above the 200-day MA. Link

Would have been a very good bullish trade on the break higher at $27.50 wouldn't it? Now look at this as we've see similar technicals in some other "boring stocks" like SGR.

Dorsey/Wright classifies SGR as a "steel" stock and this group is "bull confirmed" at 80% bullish. I can't show you a chart of the "steel bullish percent" but it was at 8% in late September, and has built a column of X clear up to 80% without any type of 3-box reversal (6% of sector giving a sell signal). For historical purposes, this sector did achive the 82% level back in September of 1997, but then reversed down to just 2% bullish by August 1998! Wow!

As such, I'm now aware that the "steel" sector is overbought (levels above 70% are considered overbought). This doesn't mean it can't go as high as 100%, but now we know that sector risk for the bulls is at a higher level.

OK... now lets look at the p/f chart of SGR. Hmmm... stock reached a high of $33.75 today so we'd chart 2 X's on the p/f chart to $33 with today's action. Link

See that "bearish resistance trend" at $34? Be very careful if looking bullish this stock at current levels. With sector at more overbought levels (as depicted by the bullish percent) I'd be monitoring the stock near-term for a pullback into support at/near the $29-$28 level. This might then correlate nicely with the stock pulling back in on its bar chart as the 50-day MA curls higher and then crosses the 200-day MA near $27.50.

Longer-term bullish vertical count for SGR is bullish to $49.50 and I can see the stock trading that if the economy were to be heating up about 12-months from now. Stock looks like she's under accumulation, but I don't think institutions are going to chase her here, instead looking to accumulate further on a pullback.

  Eric Utley   4/17/02,  3:58:21 PM
This Adaptec (NASDAQ:ADPT) is breaking down here into the close. Not sure what's going on, because the DDX is trading well...

  Leigh Stevens   4/17/02,  3:46:38 PM
Index Update - Final Hour: Nasdaq Composite (COMP) - Composite showing the best relative strength within Nas indexes; its trading just above its 21-day moving average at 1805; bullish if it holds it, near term bearish if not; support & downside objective in the COMP > upside gap area from 1763 to 1780 area; given downside momentum short term, the Composite may pull back into this 1763-1780 zone; Nasdaq 100 (NDX) Trading under its 21-day average at 1413, which is resistance; support area looks like 1360, below this, support should come in at prior hrly lows in 1323-1324 area. QQQ: - resistance came in at 35.5 area, which put it low end of 35.5-36.00 resistance zone; 34.40-33.90 is likely support area -- this is the area of upside price gap of yesterday. Gaps tend to get "filled in" by trade in that space, but not always. It's more bullish if it does not - fairly normal it is does, then rallies.

  Leigh Stevens   4/17/02,  3:27:44 PM
Index Update - Final Hour: S&P 500 (SPX) - Reversed at hourly resistance point I highlighted in 1130 area, which was level of recent prior hourly highs; This is key resistance now, in SPX; above this area, resistance is 1135 - 1140 zone; Near support anticipated at 1118 area, at previously broken hrly down trendline; support then extends down to 1112 area over course of trading tomorrow (Thurs); S&P 100 (SPX) - OEX reversed from below resistance at 565, consistent with the weaker technical picture presented by the 100 Index; OEX is about to test next support at 557-558, which is likely to give way, given downward momentum showing currently; next and likely better support is at prior hourly lows in the 547-548 area; if OEX should go to a new low, support is anticipated the lower trend channel boundary, at 540-541.

  Leigh Stevens   4/17/02,  3:15:38 PM
Index Update - Final Hour: Dow (INDU) The Dow Industrials, with the least relative strength of the Indices on this recent rally, has retreated from the top of its hourly downtrend price channel at 10,325 and from its 21-day moving average (10318) -- so, key resistance is 10318-10325. My hourly stochastic oscillator (length: 21) is on a downward momentum sell signal. Near support > 10,160; then, 10,100-10,080; support at low end of hrly downtrend channel is in the 10,000-10,025 area into tomorrow.

  Jeff Bailey   4/17/02,  2:38:55 PM
Freeport McMoran (FCX) $18.05 +2.44% ... another favorite among Copper "Hoppers" that like to trade some copper stocks. Link

Trader in PD will watch/monitor FCX as a trade at $18.16 would be new 52-weeker.

  Jeff Bailey   4/17/02,  2:36:54 PM
Phelps Dodge (PD) $40.62 +1.75% ... stock easing above the $40.60 level here. 1.5 hours left until the close. I like stock bullish here with a trader's stop just under the rising 50-day MA. Link

June Copper Futures (hg02m) did "gap higher" above their still trending lower 200-day MA today. Move above $0.75/lb would get contract above a trending higher 50-day MA (currently at $0.7412/lb.)

  Eric Utley   4/17/02,  2:06:21 PM
Adaptec (NASDAQ:ADPT) is a stock that I've recently established a small short position in. The stock is near a double-bottom, plus its bearish resistance line Link at the $15 level. It's working on an inside day today, which increases my conviction by two claws.

ADPT is a component of the Disk Drive Index (DDX.X), which broke above all of its meaningful short-term resistance today Link with its print at 104.00. The move in the DDX reduces my conviction by two claws, so I'm back to baby bear conviction.

I like the ease of risk management in ADPT at $15, with my stop at $15.50. Also, I think this position makes for a nice hedge against Bailey's bullish view on Western Digital (NYSE:WDC).

This is an aggressive trade, but one with favorable risk management. A break from the inside day tomorrow would increase my conviction, which would have me adding to my position. I'm using the $14.50 level as the inside day break point.

  Jeff Bailey   4/17/02,  2:06:03 PM
Phelps Dodge (PD) $40.60 +1.7% ... stock looks poised to make a move higher. Watching May Copper Futures (hg02k) tick higher at $0.7365/lb +1.44%. Last week I profiled PD as bullish and still like stock here.

I have retracement from $25.74 to $49.79, which has 61.8% serving as resistance right here at $40.60. If stock can close above this level look for a nice move higher to 80.9% retracement of $45.19.

I also have a regression channel on the stock from the Sept. lows and stock poking its head back above mid-point of this channel today.

  Jeff Bailey   4/17/02,  1:59:15 PM
Dell Computer (DELL) $27.32 +0.4% .... an "old favorite" of tech bulls. Just now testing long-term downward trend on the bar chart if anchored at the 03/22/00 high of $59.68 and attached to the 07/18/00 high of $54.65. Stock has been hugging the flat 200-day MA as support since March 14. Link

Stock has been building a nice base from $16-$30 for approximately 15 months. If we should ever get some type of "stock specific" news that creats a gap higher on BIG VOLUME above the $31 level, then I'd get aggressive with the stock from the bullish side. (Looking for something like we saw in OHP near $33). Link

  Eric Utley   4/17/02,  1:56:55 PM
In doing a bit of retracement work here this afternoon, I found a good fit for Hanover Compressor (NYSE:HC). I have a fit from $10.50 to $30. Lo and behold, the 50 percent level is at $20.25. Even more interesting, the 38.2 level below is at $18. These retracement levels fit very well with the levels we've been trading on the point and figure chart: Link ; namely, the triple top at $18, and bearish resistance at $20.

I've been hoping that HC would come back into the $18 level, where I'd look to get long again. But it hasn't happened just yet. Still waiting, but willing to trade on a move above the $20.25 area.

  Jeff Bailey   4/17/02,  1:45:31 PM
Metris (MXT) $13.70 -28.2% ... consumer lender lower after reporting Q1 net income of $0.54 a share, in line with estimates. However, company did guide lower and put full year 2002 earnings between $1.75-$2.25 a share, which was well below consensus of $2.75. "The weak economy, compounded by the events of Sept. 11, is causing some consumers to spend less and pay down their debt. This is resulting in slower receivables growth and projected lower revenues" the company said.

JP Morgan then comes to the table with a downgrade to "market underperform" from "market perform" based on the belief that the reduced guidance and new agreement with regulators will create too significant a headwind to overcome even with an improving consumer outlook.

This news putting some pressure on other "like names" in COF, KRB, HI and PVN today.

  Jeff Bailey   4/17/02,  12:24:42 PM
Intl. Game Tech (IGT) $55.00 -1.52% ... I've added a regression channel to my bar chart. This may be something a short-term put traders needs to be aware of.

I've taken regression (not retracement) from the highs in December. The extension lower does show regression (with 2 std. deviations) showing the base of regression channel right at/near today's low.

A short-term put options trader may indeed be looking to lock in a gain at current levels. I will discuss this in the 01:00 EST Update.

  Jeff Bailey   4/17/02,  12:21:44 PM
Here's that piece from PHYS regarding Fulcrum's comments back on 04/04/02 Link

  Jeff Bailey   4/17/02,  12:11:20 PM
Cisco Systems (CSCO) $15.88 +1.87% ... I have retracement from $21.80 to $11.24. This has 50% at $16.52 and 61.8% at $15.27 (level I thought bears from $17 should look to lock in gains).

Since some of us perhaps have 1/2 put position in SBC Communications (SBC) near $34 and that telecom rallies against us right now, we have good sense of some short-term strength, so not overly anxious to get short/put another telecom or equipment stock perhaps.

  Jeff Bailey   4/17/02,  12:07:52 PM
Cisco Systems (CSCO) $15.96 +2.5% ... lots of questions if I'm still looking short/put with stop above $16. This comes from past comments I believe when I suggested bears take some profits near $15.27 and look short/put above $15.75.

Right now, I'd be monitoring the North American Telecom Index (XT.X) 617.55 +2.41%. I think short-covering here and until I start to see some type of action to hint that bears are tired of locking in gains, want to wait on a short/put in Cisco (CSCO).

  Jeff Bailey   4/17/02,  12:02:55 PM
Hmmmm IGT is lower today while GS is higher. Maybe this kind of RS comparison is helpful. I wouldn't try to argue that it necessarily works on a more short-term basis like we perhaps see today, but does give hint perhaps of where some longer-term weakness/strength exists between two investment choices.

  Jeff Bailey   4/17/02,  12:00:32 PM
IGT versus GS short/put Did you know that you can perform relative strength comparisons between two stocks? Lets imagine that I've got a limited amount of capital and that I'm a trader that believes in shorting weakness and buying strength.

Here's a relative strength chart comparison of IGT vs. GS. Link as you can see, this comparison shows that IGT is "weaker" than GS as the relative strength chart comparison shows IGT giving relative strength sell signals against GS.

  Jeff Bailey   4/17/02,  11:56:33 AM
Intl. Game Technology (IGT) $54.75 -1.96% ... hi jeff got igt may 55 puts.....loser became slight winner , thinking of selling and buying may 85 puts on gs today....any thoughts or do u fell igt is still headed lower ?

I think you are "smart" trader. I still think IGT is lower. Did you use that technique I recently taught you about trend? Take the bar chart and draw a trend from the 03/04/02 high and attach to the 04/01/02 high. Now extend that trend out to the May 17th date on your chart (option expiration).

If I follow that trend lower to May 17th, I see it projects down to about $49. If this downward trend holds, then a put option trader with May expiration might think stock trades $49 or close to it by May 17th.

With that said (and potential target identified) lets look at retracement from $71.04 to $38.90. This has 50% at $54.97 (ooooo... broken to downside today!) and 38.2% at $51.17 (another bearish target for May expiration).

OK... I'd be a holder of the May puts in here and target the 38.2% retracement of $51.17. If she trades that level in the next week or so, I may not necessarily sit around and wait for May expiration to come around and let any premium erode. That is if the technique of using downward trend and projecting lower is of help to you. If I get a target near $51 achieved, is it then worth the potential risk of a recovery for potential further gain? Me thinks not, but that depends on everyone's own risk profile.

  Jeff Bailey   4/17/02,  11:44:46 AM
Trigon Healthcare (TGH) $76.97 +2.65% ... stock triggers bullish entry point of $76.91 here (see 11:00 Intraday update).

I like the October $80 calls (TGHJP) offered $5 and targeting $100 in next couple of months, but willing to hold longer-term as measure sector activity over coming months.

  Jeff Bailey   4/17/02,  11:43:51 AM
Overture (OVER) $24.99 +3.7% ... what's up with OVER today? It was the "Play of the Day" last night in the newsletter. Does it still look good to short here above 25?

I don't make the play selections on OI, but will give some input.

I've taken a conventional retracement from $15 to $43.15 that "defines the range" for this stock since it started trading 10/08/01. This retracement has 50% at $29.07, 61.8% at $25.75 (would expect market maker resistance) and 80.9% at $20.37 (support if recent lows of $23.06) were broken. Based on this retracment, I think good looking short in the stock with a stop just above $25.75.

On area of current support that doesn't show up on the bar chart can be found in the point and figure chart as bullish support trend is right at $23 and stock is sitting right on that. This has my attention. Link and I'm thinking the play picker for this one is counting on a break of $23.

I "learned" a long time ago that the first test of bullish support trend can be painfull for the bears, thus I advise caution in a bearish trade at this point.

While the recent trade at $24 is a spread-triple-bottom and bearish pattern, this may also be a "bear trap" as it comes close to resistance.

This can still be a good option trade, but I'd only risk in an option what I could afford to lose. The vertical count is bearish to $16 so you don't need to over leverage in a put option to make some coin if the stock were to eventually break bullish support.

  Leigh Stevens   4/17/02,  11:30:53 AM
Subscriber QUESTION: Gold "I let GOLD go yesterday, thinking weakness might continue, and today the stock broke out! oversold bounce or short squeeze? tempted to buy it on the breakout, but last time I did that I bought the near term high! Greenspan effect, maybe?:-)"

RESPONSE: I generally think gold will start trending lower over time, after last run up over 300. To sustain a trend over $300 in terms of the per ounce price, fundamentally, gold probably needs a significant rate of inflation or unrest to sustain this level, with an emphasis on inflation. Unrest, such as in the Mid-east with the threat to oil, will tend to keep prices up for periods of time. Technically, gold has made a double top in terms of the futures in the $307-308 area. Double tops are pretty reliable patterns -- however, to confirm a top would like to see a close under 50-day moving average at 297, basis April NY gold futures contract.

  Jeff Bailey   4/17/02,  10:52:12 AM
Trigon Health (TGH) $76.89 +2.54% ... I like this one bullish on the break of the 04/11/02 high of $76.90. Buy some time in the October $80 calls (TGHJP) offered $4.80. Link

P/F is bullish Link with vertical count of $118.

  Jeff Bailey   4/17/02,  10:45:56 AM
PacifiCare Health (PHSY) $24.89 +10.23% ... mentioned this one about a week ago and talked about investment firm Fulcrum that had been continuing to hammer the stock with "sell" recs. (latest was 04/04 and mentioned in market monitor). My thinking was that Fulcrum was big short in the stock and giving downgrade as stock looked to be moving higher against them at $19.

Wish I'd have taken my own advice and gotten long. If Fulcrum is short, they're in trouble.

  Jeff Bailey   4/17/02,  10:41:58 AM
HMO Index (HMO.X) components AET, MME, CI, OHP, PHSY (oh my!), (FHCC) (nice gap today), (TGH) (looks bullish here), (UNH), (HUM) and (WLP).

  Jeff Bailey   4/17/02,  10:37:41 AM
HMO Index (HMO.X) 560 +3.5% ... continues to impress the bulls. BIG break higher today and now extending itself above my upward regression channel. Equity bulls hunger for exposure to the group.

  Jeff Bailey   4/17/02,  10:30:59 AM
North American Telecom Index (XTC.X) 618 +2.53% ... telecom's continue to see some short covering (in my opinion) and have moved above retracement level at $603.6. 50-day MA just ahead at 634. MACD on daily just crossing above signal, but well below zero level. Levels of resistance should we see bullishness above the 50-day would be from "fitted retracement" (862.69 to 443.52) at 50% of 653 and 38.2% of 702.

  Jeff Bailey   4/17/02,  10:24:04 AM
Jeff, I was curious what you thought of MVSN at these levels. The stock has bounced almost 20% from the lows of four trading sessions ago. The stock touched its 50-dma intraday and closed below it yesterday. Where do you think MVSN is headed next? Thank you.

Point/figure chart on MVSN still bearish and vertical count is bearish to $15, so caution advised for bulls. Support looks to be firming at $23, but trade at $22 would be triple-bottom. Link

While recent bounce of 20% from the lows seems like a lot, that hasn't been enough to get a buy signal on the p/f chart. Would need to see a trade at $29 to start giving any hint of bullishness.

Relative strength is weak versus the broader S&P 500 Link

This has me thinking some bears are most likely shorting at the 50-day here, with tight stop just above. Link

In conclusion of all this, I'm left to think lower near-term direction.

  Jeff Bailey   4/17/02,  10:16:24 AM
Du Pont (DD) $47.96 -0.29% ... just took a regression channel on this cyclical stock from the September lows. This finds mid-point of regression serving as near-term resistance yesterday and then this morning. May take a close above the $48.10 level to get stock finding some momentum. Upper end of regression would currently be at $51.66.

  Jeff Bailey   4/17/02,  10:11:47 AM
Alcan (AL) $39.95 +1.08% ... deeper cyclical showing some strength early. I have a regression channel (with 2 std. deviations) from the September lows. This has stock in lower part of upward trending regression and shows stock recently consolidated right at the lower end of regression. MACD on daily interval just crossing above signal, but still below the zero level. Good place to be looking for bullish entry. Upper end of regression currently at $44. Link

  Leigh Stevens   4/17/02,  10:08:25 AM
Greenspan congressional testimony on State of Economy is being broadcast currently, so you can bet that traders who have TV access, are glued to the tube.

  Leigh Stevens   4/17/02,  10:06:07 AM
Contributing to the continued rebound in crude oil prices was the American Petroleum Institute report on crude inventories -- week ended April 12 saw a drop of 7.3 million barrels. Market expectations were for a fall of maybe 3 million barrels. The talk was that the likely cause of the drop was a loss of Venezuelan oil during the period there when the oil industry was not shipping due to strikes and work slowdowns. Nearby (May)crude oil futures are up 40 cents at $25.15.

  Jeff Bailey   4/17/02,  10:03:04 AM
Du Pont (DD) $47.98 -0.24% ... is stock I mentioned as bullish just before yesterday's close. If you are looking long like I am, then setting alert on CYC.X at $590 and looking for good performance out of DD.

As I started looking at various time-frames for Du Pont (DD) I looked at weekly interval and see MASSIVE reverse head and shoulders pattern with neckline at $50 and head at/near $33, if broken then gives longer-term projection of $67. Link

Point/figure is bullish with vertical count of $68, which is pretty close to reverse head/shoulder projection.

Does anyone remember Apache (APA) $56.36 +2% and comments dating back to its "reverse head/shoulder" with nickline at $50 and similar vertical count projection? Link

Good stock patterns for longer-term option traders.

  Jeff Bailey   4/17/02,  9:56:25 AM
Morgan Stanley Cyclical Index (CYC.X) 584 -0.5% ... In last night's PI wrap, I thought it important for equity bulls (especially technology bulls) to see this index trade the $590 level to help spur on further broader market rally. So far this morning, uptick at the open came to 588.64. Link

  Jeff Bailey   4/17/02,  9:53:15 AM
MGM Mirage (MGG) $38.25 +6.63% ... Casino operator reports Q1 net earnings of $0.52 a share, 18 cents better than Multex consensus. Revenue declined 4% to $1.02 billion, but still better than consensus looking for $0.99 billion.

  Jeff Bailey   4/17/02,  9:47:36 AM
Protein Design Labs (PDLI) $18.16 +0.77% ... In pre-market note, Fulcrum highlights stock on technical basis. Firm believes that stock and group are poised to move higher over next 10 trading sessions. Expects PDLI to "fill the gap" created 2/15 at $20.45, which is Fulcrums price target. Link

  Jeff Bailey   4/17/02,  9:42:51 AM
Hanover Compressor (HC) $19.97 +1.26% ... stock continues to trade strong and building a nice little "handle" at the $19-$20 range. Break above the 04/04/02 high of $20.33 could see the stock trading near the $23 level, which would correlate well with the 200-day MA and 38.2% retracement level (retracement from $40.37 to $12.17).

Current resistance looks to be coming from the point and figure chart and bearish resistance. Link

  Jeff Bailey   4/17/02,  9:38:30 AM
GSTI Software Index (GSO.X) 146.51 -2.32% ... leads sector losers. Next closest is Pharmaceutical Index (DRG.X) 366 -0.64%.

  Jeff Bailey   4/17/02,  9:36:28 AM
SAP Akeiengesell (SAP) $34.46 -2.68% ... stock trading lower, most likely in sympathy with Veritas (VRTS) outlook for software sales. I continue to like SAP short/put ahead of tomorrow morning's earnings report.

  Jeff Bailey   4/17/02,  9:33:47 AM
Applied Materials (AMAT) $27.18 +0.33% ... company splits its stock 2:1 at opening of trading.

  Jeff Bailey   4/17/02,  9:32:25 AM
Greenspan testimony Fed Chairman Alan Greenspan will testify before the Joint Economic Committee at 10:00 AM EST. Many will be listening to his assessment of the factors still weighing on the economy - his past mentions of these key factors (household spending "a number of cross currents," business investment recovery "likely to be gradual") were an indication of his reluctance to raise rates quickly. Any increase in optimism on either of these topics might indicate a greater willingness to tighten rates soon.

  Leigh Stevens   4/17/02,  9:31:09 AM
ON THIS DAY in 1860, New York began requiring fire escapes in rental houses or tenements. Also, on this day in 1941, Igor Sikorsky had the first successful lift off of a helicopter. What do these two events have in common? -- both are means of escape or exit. In honor of these events, on the next occassion you are in a losing and hopeless trade, exit by running or flying away.

  Jeff Bailey   4/17/02,  9:27:59 AM
Adelphia Communications (ADLAE) $8.01 ... New stock symbol is ADLAE (was ADLAC) to reflect company's announcement to delay its 10-K filing. Stock falling to $7.65 in pre-market after news of SEC formal order of investigation.

Any subscribers still holding the previously profiled January $25 puts (OFYME) or $22.50 (OFYMX) can lower stops to just above $10.

  Leigh Stevens   4/17/02,  9:22:11 AM
Index update: Semiconductor sector index should be up again on the opening after Intel reported last night at better than expected. Indices are overbought on a short-term basis, so after a probable higher opening, I would expect some profit taking and other selling to come in at some point, maybe mid-session. Resistance levels are not too far above closing levels: DXJ: Near resistance > 10,330-10,350; then, 10,400. Doubt we will get that far. SPX: Near resistance > 1130; then around 1134. Near resistance > 565; then, 570. QQQ: Near resistance > 36; Short-term traders looking to trade the minor 1-2 price swings, will want to consider shorting and put plays in the aforementioned resistance areas. For those with a longer view (next 2-3 weeks), I think we are heading higher and you can stay positioned in calls and/or look to buy on pullbacks to support areas as identified in the Index Trader wrap up last night at Link

  Jeff Bailey   4/17/02,  9:20:42 AM
Energy prices jumping higher as May Light, Sweet Crude futures (cl02k) gain 2.46% to $25.36 and May Natural Gas futures (ng02k) gain 1.54% to $3.34. Trader's citing last night's API report that showed larger than expected declines in inventory levels along with reports that OPEC has not yet made up the shortfall in oil output related to Iraq embargo.

I would also note this morning's 09:00 intraday update and information from the trade gap numbers which showed multi-year lows in oil imports.

  Leigh Stevens   4/17/02,  9:10:02 AM
It's showtime shortly! S&P futures are up 3 pts.; NAS futres + 14, DJ futures +16; Gold is trading back above $300 at 302; overseas markets are up on balance


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