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Daily Newsletter, Monday, 10/01/2001

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PremierInvestor.net Newsletter                 Monday 10-10-2001
                                                  section 1 of 2
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In section one:

Market Wrap: NAPM declines with PMI at 47%
Market Sentiment: Slowdown, you are now in a Fed Zone
Play-of-the-Day: Phillip Morris - MO (Bullish)
Watch List:.DRG.X, TXN, PCS, VZ, AXP, 

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       10-01-2001          High      Low     Volume Advance/Decline
DJIA     8836.83 - 10.73  8850.67  8732.14 1.36 bln   1295/1871
NASDAQ   1480.46 - 18.34  1491.45  1458.41 1.50 bln   1394/2489
S&P 100   533.40 +  0.05   534.34   526.88   Totals   2689/4360
S&P 500  1038.55 -  0.22  1040.94  1026.76             
RUS 2000  397.60 -  1.79   404.87   393.00 
DJ TRANS 2142.16 -  2.39  2196.33  2119.77 
VIX        34.78 -  1.16    36.55    34.71 
Put/Call Ratio      0.94
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===========
Market Wrap
===========

NAPM declines with PMI at 47%
by Jeff Bailey

Today's National Association of Purchasing Management's (NAPM) 
reports was about as mixed as today's stock trading.  The report 
measures monthly change and depicts the state of U.S. 
manufacturing for September and today's reading of 47% was below 
the 50% level signifying expansion, but remained above the 42.7% 
level which over time has indicated a period of growth.  

Many survey respondents (those purchasing managers that fill out 
the survey), felt that it was too early to determine the full 
effects of the terrorist attacks on the U.S. economy.  Overall, 
the report indicated that the manufacturing sector continues to 
decline, which has been the trend since August 2000.  The report 
showed that backlogs for new orders declined for the 17th 
consecutive month.

Of the 20 industries in the manufacturing sector, eight reported 
growth (leather, petroleum, paper, food, tobacco, fabricated 
metals, glass/stone/aggregate, and miscellaneous).  
"Miscellaneous" is a grouping of (jewelry, toys, sporting goods, 
and musical instruments.).

There were no commodities reported on the "short supply list."  
Coal, diesel fuel, and propylene showed some price increases, 
while commodities like aluminum, copper, natural gas, steel and 
zinc showed price declines.

For a more detailed report of today's NAPM, subscribers can visit 
http://www.napm.org/NAPMReport/ROB102001.cfm

Income and spending

Other data released today showed that many consumers may have 
pocketed their recent tax rebate checks, rather than spending 
them.  The Commerce Department said personal income was flat in 
August while spending rose just 0.2%.

S&P Retail Index (RLX.X) - last eleven months





With incomes showing little growth, and personal spending up just 
0.2%, the retail index gives hint of just how "forward looking" 
the markets can be.  In the latter part of August, the RLX.X 
began falling noticeably below our upward trend and eventually 
broke below the 830 level and 38.2% retracement.  The most recent 
sharp decline below the 696 level and the October 2000 low of 696 
was brought along by recent terrorist activities.  

Near-term, we'll be monitoring the RLX.X trading as one of the 
Dow components we've noticed since September 10th that has shown 
some nice upside gains is Wal-Mart (NYSE:WMT).  The discounting 
retail giant is up 7.6% since its September 10th close of $46.23 
and was a stock we had noticed was acting strong in our Dow 
Industrials "hypothetical portfolio."  

There are 35 stocks that make up the S&P Retail Index (RLX.X) but 
shares of Wal-Mart (WMT) account for 33.46% of the sector 
weighting.  Next in line is Home Depot (NYSE:HD) at 15.49%, with 
a steep falloff from there in Walgreen (NYSE:WAG) at 4.94%.

Nothing new

Tomorrow's FOMC meeting has many traders/investors and economists 
factoring in a 50-basis point rate cut.  Today's PMI data was not 
as bad as some had feared, but tomorrows FOMC data and release of 
interest rate news at 02:15 PM EST will most likely have stocks 
trading sideways during the bulk of the session.

The toughest question to answer is, "Which way will stocks go?"  
This is tough, but there are some "good things" still in play for 
higher stock prices.  I think the market direction will be up to 
bearish traders and right now its a matter of "will they cover or 
stay their course?"

In the market wrap on September 27th, I felt the Biotechnology 
Index (BTK.X) had to assert some leadership and that a break 
above the 452 level could find some nervous bears in the group 
"rushing to cover."  On Friday, we did see a spike in this index 
to the 469 level and today's 1.12% gain to 455 gives some hint 
that there's still an interest from the buy side of things.  
Subscribers will note that PremierInvestor.net has profiled 
bullish shares of Genentech (NYSE:DNA) and bearish shares of 
Gilead Sciences (NASDAQ:GILD) and this offers the trader/investor 
two ideas to still be playing depending on tomorrow's action.

While the Retail Index (RLX.X) is more economically sensitive, 
the Biotech's aren't.  I think they (the biotechs) give us some 
insight to the psychology of the market (is it willing to buy 
something.... anything?) As of today's close, there still looks 
to be some buy side interest in the group and this is a positive 
for the bulls.  For any market to advance you need some type of 
group to lead and right now, this group continues to show signs 
of strength.  Therefore, I place it in the category of "leader."  
I think this is a group to be following tomorrow to perhaps get 
an early read on things before the FOMC results are known.

I think bearish traders are going to try and sit tight early 
tomorrow and take a wait and see approach to things.  They've 
locked in some gains on those stocks where they had some handsome 
profits where risk/reward became too unfavorable to not lock in 
some profits.  The stocks they don't want to be short are those 
in upward trends.  If there's any doubt, they'll get out and this 
is where bullish traders need to be focusing.

Bulls on the other hand are going to be a bit nervous.  They've 
had it up to the base of their horns with buying a stock, 
watching it appreciate, not selling and then finding they've held 
onto a losing trade as the broader markets have moved against 
them.  We understand this and is one reason why we've been fairly 
aggressive with our raising of stops once we get a profit going.  
Today for example, traders may have pulled the plug on the Suiza 
Foods (NYSE:SZA) at $62.50.  This is ok in my book.  The trade 
resulted in a gain and that's what we wanted to see.  Perhaps 
this type of action is a "positive" near-term as other market 
participants lock in some profits and may provide another bullish 
opportunity on a pullback to the $57.75 level, which would be 
right near upward trend.

One stock I might mention that we've had profiled on the bullish 
side since August 30th is Philip Morris (NYSE:MO).  This stock is 
a Dow component and another stock we've notice has been showing 
very good relative strength in the Dow (kind of like T, SBC and 
WMT).  In today's NAPM report, one of the 8 industries showing 
growth was "tobacco" and "big MO" could see a nice advance should 
the stock get above the $50 level tomorrow.  Today's close was 
$49.37.  

Another stock we've talked about lately has been shares of WebEx 
Communications (NASDAQ:WEBX).  On Friday, the stock set up an 
"inside day" after gaining nearly 14%.  Today's break above 
Friday's high was a bullish break for those trading the "inside 
day" and by sessions end, the stock had added another 4.3% gain.  
Friday evening, we added WEBX to the watch list "Two Bulls and 
Three Bears" and those that are getting familiar with the inside 
day trading technique may want to follow this stocks progress.  
Friday morning (09:00 EST Update) we weren't sure which way the 
stock was going to go, but we were leaning to the bullish side.  
Today's break to the upside of the inside day gives hint that we 
might have been leaning the right way.  We'll be looking for 
similar patterns and volume similarities for some other trades in 
coming sessions


================
Market Sentiment
================

“Slowdown, you are now in a Fed Zone”
by Russ Moore

“Slowdown, you are now in a Fed Zone”

A tedious, low volume session ushered in the new quarter, as 
investors chose to abstain ahead of tomorrow’s FOMC release. Compared 
to recent volume levels, today’s 982 million shares on the NYSE, and 
1.26 billion shares on the NASDAQ were very light. Trading action was 
tight, as evidenced by the 14 point intraday move on the SPX.

The DOW ended the day with a minimal loss of –0.5 percent. The 
NASDAQ and NDX were off –1.2 percent. Losers out-dueled winners 
by a 19/12 count on the NYSE and 23/13 on the NASDAQ.

Positive sector action was limited to gold, biotech, utility, 
healthcare and drugs.

Economic data included the National Association of Purchasing 
Managers Index coming in at 47, down from the previous months 
reading of 47.9, but much better than the 44.8 forecast. The sub-
50 reading marked the fourteenth consecutive month of contraction.

Personal income was flat while personal spending rose +0.2 percent.
 Economists were expecting both numbers to show a gain of +0.3 percent.

August construction spending showed some increased weakness with a 
decline of –1.1 percent. Expectations were for a flat performance.

Another batch of profit warnings made their way to Wall Street with 
Compaq Computers heading the list. The company now expects to lose 
–0.05 to –0.07 cents versus expectations for a gain of +0.05 cents. 
Revenue is expected to come in at 7.4 billion dollars, a 12 percent 
sequential decline.

Fed funds futures are now showing an 80 percent chance of a .50 
basis point cut when the FOMC meets tomorrow afternoon. The Fed 
action may not have much of an impact with investor focus on 
verseas events and corporate earnings.




VIX 
Monday 10/01 close: 34.78


VXN
Monday 10/01 close: 64.98


30-yr Bonds
Monday 10/01 close:  5.30


Total Put/Call Ratio: .72


Equity Option Put/Call Ratio: .65


Index Option Put/Call Ratio: 1.10


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 28.73

Volume/Open Interest
Maximum calls: 30/104,479
Maximum puts : 25/ 39,321

Moving Averages
 10 DMA 29
 20 DMA 32
 50 DMA 37
200 DMA 47

Fibanocci Retracements
Relative High: 51.95 (05/22/01)
Relative Low:  27.00 (09/21/01)
38% 36.60
50% 39.57
62% 42.59

===

S&P 100 Index (OEX)
52-Week High:  834.93
52-Week Low:   491.70
Current close: 533.20

Volume/Open Interest
Maximum calls: 600/6,230
Maximum puts : 440/5,670

Moving Averages
 10 DMA  517
 20 DMA  543
 50 DMA  584
200 DMA  634

Fibanocci Retracements
Relative High: 680.03 (05/22/01)
Relative Low:  480.07 (09/21/01)
38% 556.14
50% 579.65
62% 603.55

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:    965.80
Current close: 1038.24

Volume / Open Interest
Maximum calls: 1050/17,271
Maximum puts : 1050/20,118

Moving Averages
 10 DMA 1011
 20 DMA 1064
 50 DMA 1140
200 DMA 1228

Fibanocci Retracements
Relative High: 1315.93 (05/22/01)
Relative Low:   944.75 (09/21/01)
38% 1086.75
50% 1130.62
62% 1175.23

==

DJIA (INDU)
52-Week High:  11,518.83
52-Week Low:    8,235.81
Current close:  8,836.56

Volume / Open Interest
Maximum Calls: 100/26,413
Maximum Puts   100/42,733

Moving Averages:
 10 DMA  8,647
 20 DMA  9,232
 50 DMA  9,938
200 DMA 10,423

Fibanocci Retracements
Relative High: 11,350.05 (05/22/01)
Relative Low    8,062.34 (05/21/01)
38%  9,308.92
50%  9,693.99
62% 10,085.60

==

Biotech Index (BTK)
52-Week High:  811.61
52-Week Low:   383.28
Current close: 454.52

Volume / Open Interest
Maximum Calls: 520/ 301
Maximum Puts:  440/2000

Moving Averages
 10 DMA 435
 20 DMA 477
 50 DMA 500
200 DMA 551

Fibanocci Retracements
Relative High: 811.61 (09/25/00)
Relative Low:  383.28 (03/22/01)
38% 546.22
50% 596.57
62% 646.71

==

Semiconductor Index (SOX)
52-Week High: 1280.84
52-Week Low:   362.00
Current close: 362.49

Volume / Open Interest
Maximum Calls: 370/ 393
Maximum Puts:  390/2,120

Moving Averages
 10 DMA 390
 20 DMA 462
 50 DMA 538
200 DMA 599

Fibanocci Retracements
Relative High: 710.78 (05/22/01)
Relative Low:  343.93 (09/27/01)
38% 484.50
50% 527.18
62% 570.57

==

Pharmaceutical Index (DRG)
52-Week High:  455.28
52-Week Low:   339.49
Current close: 394.09

Volume / Open Interest
Maximum Calls: 400/531
Maximum Puts:  360/660

Moving Averages
 10 DMA 374
 20 DMA 379
 50 DMA 388
200 DMA 397

Fibanocci Retracements
Relative High: 448.43 (12/29/00)
Relative Low:  339.49 (03/22/01)
38% 382.22
50% 395.69
62% 409.03

*****

CBOT Commitment Of Traders Report: Friday 09/28
Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts on the 
Chicago Board Of Trade. 

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 are not. 
Extreme divergence between each signals a possible market turn in 
favor of the commercial trader’s direction.   

S&P 500
Commercials   Long      Short      Net     %Change 
9/11/01      359,360   442,070   (82,710)     3.4%
9/18/01      406,387   471,823   (65,436)   (20.8%)
9/25/01      357,873   407,036   (49,163)   (24.9%)

Most bearish reading of the year: (111,956) - 3/6/01
Most bullish reading of the year: (41,144)  - 5/1/01

Small Traders   Long      Short      Net      %Change
9/11/01        156,500    69,090    87,410       2.7%
9/18/01        172,988   100,531    72,457      (5.6%)
9/25/01        122,613    71,721    50,892     (29.7%)

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year:  91,122 - 3/06/01

NASDAQ-100
Commercials   Long      Short      Net     %Change 
9/11/01       26,784    37,912   (11,128)   18.9%
9/18/01       35,497    45,731   (10,234)   (8.0%)
9/25/01       26,761    36,812   (10,051)   (1.8%)

Most bearish reading of the year: (15,521) - 3/13/01
Most bullish reading of the year:  (1,825) - 1/02/01

Small Traders  Long      Short      Net      %Change
9/11/01        15,263    12,555    2,708       6.8%
9/18/01        22,876    21,702    1,174     (56.6%)
9/25/01        10,699     6,580    4,119     251.0%)

Most bearish reading of the year:  (1,028) - 1/02/01
Most bullish reading of the year:   8,460  - 3/13/01

DOW JONES INDUSTRIAL
Commercials   Long      Short      Net     %Change 
9/11/01       25,445    13,033   12,412     32.6%
9/18/01       28,425    15,077   13,348      7.5%
9/25/01       20,013     7,806   12,207     (8.5%)

Most bearish reading of the year: (8,322) - 1/16/01
Most bullish reading of the year:  8,925  - 5/22/01

Small Traders  Long      Short      Net      %Change
9/11/01        7,460    12,735    (5,275)     (8.9%)
9/18/01        7,335    15,044    (7,709)     46.1%
9/25/01        4,530    12,621    (8,091)      4.9%
 
Most bearish reading of the year:  (7,572) - 5/08/01
Most bullish reading of the year:   1,909  - 1/16/01


                    Small Specs               Commercials
S&P 500         (Current)  (Previous)     (Current) (Previous)
Open Interest
Net Value        +50,892     +72,457        -49,163     -65,436

Total Open
Interest %       (+26.19%)  (+26.49%)     (-6.43%)   (-7.45%)
                 net-long   net-long      net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -8091      -7709          +12207     +13348
Total Open
interest %       (-64.11%)    (-34.45%)      (+43.88%)  (+30.68%)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +4119      +2708         -10,051    -11,128

Total Open
Interest %        (+23.84%)   (+9.73%)     (-15.81%) (-17.20%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.Both the Commercials and Small Specs held steady on 
their S&P net-short positions. The big move came on the DJIA 
where the Commercials added on to their net-longs while the Small 
Specs were loading up on net-short contracts.

Gold:.Talk about a shift in contracts    the Commercials went 
from 49,456 contracts net-short to 36,638 contracts net-long. 
Gold has been relatively flat since Tuesday so we’ll have to keep 
on eye on this one and see if they reverse their positions next 
week..

8/28  50,852 contracts net-short
9/04  49,839 contracts net-short
9/11  No Data.
9/18  49,456 contracts net-short
9/25  36,638 contracts net-long

Data compiled as of Tuesday 09/25 by the CFTC.


=========================
Play-of-the-Day (Bullish)
=========================

Phillip Morris - MO - close:$49.37 change:+1.08 Stop:$45.00

Original Comments When Selected on August 30th:

Company Description:
Philip Morris is the world's largest tobacco firm.  It owns half of 
the US tobacco market and the Marlboro name is one of the world's 
most recognizable brands. It also makes the Benson & Hedges, 
Parliament, and Virginia Slims brands.  Outside of tobacco, Philip 
Morris owns 84-percent of Kraft Foods, the world's second largest 
food company that makes leading brands such as Jell-O, Kool-Aid, 
Maxwell House, and Post cereal.  In 2000 the company bought 
Nabisco, adding brands such as Chips Ahoy, Oreo, and Ritz to 
Kraft's food portfolio.  In addition, Philip Morris owns Miller 
Brewing, the second largest US beer producer.

Fundamentals: 
Analysts project Phillip Morris will earn $4.05 per share in 2001 
and $4.57 in 2002.  Last year, the company produced earnings of 
$3.71 per share.  This gives the company a low forward 2001 P/E of 
11.81, which is in line even with the industry average P/E of 11.7. 
Other valuation ratios such as Price/Book, Price/Cash Flow and 
gross profit margin are also inline with industry averages.

Why We Like It: 
It's tough to go long when Kodi the Bear is on the prowl, but if 
you do, a company that just fattened its dividend by 9.4-percent 
should be high on your shopping list.  In a world of plunging 
equity prices  getting a safe 4.8-percent with the potential for 
equity appreciation is not a bad option.  More aggressive 
investors may even consider selling some out-of-the-money 
calls to earn an additional premium.  On Wednesday, Phillip 
Morris announced shareholders of record on September 17 would 
receive a quarterly dividend of 58-cents a share.  On an 
annualized basis, this increases their dividend from $2.12 to 
$2.32 per share and gives MO shares the highest dividend of the 
30 companies in the Dow Jones Industrials.   For short-term 
traders, it also means that between now and September 17th, Phillip 
Morris shares are more likely to go up than down.  This bullish 
momentum is not new.  The shares have been rising since bouncing 
off of $43.05 support on August 16th.  An opportunity to take a 
position at a better price than the $47.94 close may occur on 
Friday.  Although the shares were up strongly in the morning hours 
to a $48.46 high they did fade somewhat before the close.  Although 
we are unlikely to see significant downward pressure, dips are 
possible and should be considered buying opportunities.  We will 
start this play with a stop at $45.00, which is just below the 
$45.80 200-day moving average.

Updated Comments:
Sporting a handsome and stable dividend, an expected FOMC interest 
rate cut on Tuesday will make these defensive shares look even 
better.  On Monday the shares began to inch past significant 
resistance in the $49.25 to $50.00 range.  If these shares can make 
the break above $50, a test of the $54.40 52-week high is a likely 
next move.  If you are already in this play you've got a $1.42 per 
share gain and can afford to sit tight.  New entrants should wait 
for a close above $50. 

Picked on August 30th at $ 47.94
Gain since picked          +1.43 
Earnings Date              10/17 (Confirmed)





==========
Watch List
==========

Pharmaceutical Index - DRG.X - close: 394.09 change: +4.57

WHAT TO WATCH:  The symbol may be a little different on your
charting service but looking at the AMEX drug index shows the
drug sector is up six days in a row making a full 10% gain.
It is not surprising since most investors have been taught that
the drug sector is a classic defensive play in recessionary
times.  However, that is a pretty big move and looking at the
point-and-figure chart on the index shows it right at its
overhead resistance.  The daily chart also shows overhead
resistance is close with the 200-dma at 397 and price resistance
near 400.  We think traders should be watching this group for
a strong retracement of these gains or a breakout.  Stocks to
be watching are PFE, MRK, BMY, LLY, and JNJ just to name a few.
(FYI, your charting service might use $DRG as the symbol)




---

Texas Instruments - TXN - close: 24.99 change: +0.01

WHAT TO WATCH:   The semiconductor sector is extremely oversold
but it has been bouncing along the 350 level and closed at 362
today (down 11 points).  TXN is also very oversold from its late
August highs but the last few days the stock appears to be showing
strength compared to its sector.  Now it is never a good idea to
go long a stock that is stuck in a sector with a clear downtrend...
at least not for short-term trading.  So we highlight TXN as a
speculation play for traders quick enough to move in and out of
an equity before they do too much damage to their accounts.  We
see TXN trying to build a bullish wedge with higher lows as bulls
battle resistance near $25.  Volume has been sliding from recent
highs and the MACD is about to produce a bullish crossover.  MACD
followers would note the histogram had been showing a divergence
for days now which is typically a clue that momentum in the current
direction is changing.  A close over $25 or $25.75, depending on
your risk tolerance, might be the entry point to go long.  We're
not looking for too much as overhead resistance looms at the
28.50 to 29.00 range.  Keep your eyes on the SOX while watching
TXN.




---

Sprint Corp - PCS - close: 27.40 change: +1.11

WHAT TO WATCH:  This stock has been basing in a volatile sideways
pattern for months.  Its 200-dma finally caught up with it in 
the middle of July and hopefully the same long-term moving 
average might begin to curve up in the coming weeks.  Shares of
PCS have been struggling with overhead resistance at $27.00
since late February.  Today is the first day shares have closed
over this level in seven months.  The question now is will there
be a follow through.  More than once we've seen stocks make a 
technical breakout only to be crushed by the bears the very
next day.  Therefore we cautiously add this to the watch list.
Aggressive traders can see this as a play now or conservative 
traders can consider a long position but only do so with a 
relatively tight stop.  Shares of PCS have been in a decent up
trend since the Sept. 11th attack as more and more people see
the need for mobile phones.  Today, PCS announced they will be
offering mobile phones with GPS functionality in the Rhode Island
area for users that make 911 calls.  This will allow emergency
services to pinpoint the location of the caller instead of relying
on the caller's ability to identify landmarks to direct emergency
or law enforcement vehicles to the scene.  

Chart


---

Verizon Comm. - VZ - close: 55.30 change: +1.19

WHAT TO WATCH:   Playing to the same interest in mobile services,
we highlight Verizon.  This is another stock that has been in 
a volatile up trend since the attacks but an up trend nonetheless.
The close over $54.50 is encouraging and the bulls will be looking
for $54 to offer some support if we see profit taking.  We're 
adding it to the watch list now but don't see it as a potential
play until VZ can overcome very strong resistance at the $57 mark.
VZ has been unable to hold above the $57 mark since late 2000.
Thus we're probably a few days away from an entry point to go
long unless you want to try and scalp a few points between here
and $57 (if $54 doesn't hold, VZ might get a bounce at 53.25).




---

American Express - AXP - close: 29.38 change: +0.32

WHAT TO WATCH:  AXP was already in a down trend before the WTC
attacks.  Unfortunately, they were directly affected as their
New York headquarters were located in the WTC towers.  When
the markets opened up again the stock dropped from $35 to the
$30 level and traded down to the $25 level during one of the
worst weeks in the Dow's history (AXP is a Dow component).  These
last several sessions have seen a slow rebound with Friday
and Monday showing the greatest gains but the stock is now looking
at overhead resistance at $30.  Normally, financial companies
tend to benefit when the Fed cuts rates but most believe the
markets have already priced in a 50 bps cut tomorrow.  The cut
should benefit AXP's credit card business' profit margins but
the hit to America's psyche will still do a lot of damage to 
AXP's travel services division.  We all know there has been an
extreme drop off in corporate travel.  Don't forget that AXP
now has to find new space for their New York offices.  We are
highlighting AXP because we see it at a crossroads.  Investors
might discount the bad news and the coming earnings disaster  
because they already expect earnings to be bad.  That could mean
AXP could trade back up to $35 or more.  On the other hand, the
new stream of info that appears to confirm we are in a recession
could prove too much and the stock could rollover from here and
back to the $25 mark.  Keep AXP on your watch list and see if a
bullish or a bearish play develops.  A close over $30 might be
the entry to go long (with a tight stop) or another failed rally
under the $30 mark might be tempting to go short (w/ a tight stop).




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This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.


PremierInvestor.net Newsletter                 Monday 10-10-2001
                                                   section 2 of 2
Copyright ) 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/484_2.asp
=================================================================

In section two:

Split Trader
  Split Announcements: none
  New Plays: none
  Play Updates: none
  Closed Plays: none

Net Bulls
  New Plays: SunGard Data Systems - SDS (Bearish)
  Bullish Play Updates: Stop updated
  Bearish Play Updates: none
  Closed Plays:none

Stock Bottom / Active Trader
  New Plays: none
  Bullish Play Updates: See Phillip Morris - MO Play-of-the-Day
  Bearish Play Updates: none
  Closed Plays: Suiza Foods - SZA

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


==================================================================
Net Bulls (NB) section
==================================================================

============
NB New Plays
============

  ------------------------
  New Bearish (Short) Play
  ------------------------

SunGard Data Systems - SDS - close: $20.53 change: -2.84 Stop: $22.50

Company Description:
SunGard Data Systems supplies a high availability IT infrastructure
for the financial services industry. . The company has more than
10,000 customers, including nearly all of the world's 50 largest
financial services institutions.   Almost 70-percent of  Nasdaq
trades are handled by SunGard's investment support systems (75-
percent of sales), which process transactions, supply calculations,
and track assets.  The company also provides data collocation and
disaster recovery services, and sells workflow and document imaging
systems to the health care industry.  Top competitors are Reuters,
ADP and DST.

Fundamentals:
Last year, the company earned 82-cents per share on sales of $1.66
billion. Analysts project the firm will earn 96-cents per share on
sales of $1.9 billion in 2001 and $1.15 on $2.1 billion in 2002.
This gives the firm a forward 2001 P/E of 21.  The industry average
P/E is 31.  Early Monday the company warned that third-quarter
earnings would be just 21 to 22 cents per share, less than the 23
to 26 cents estimated by analysts.  They cited the business
disruptions that took place after the Sept. 11 terrorist attacks,
saying it expects lower revenue from trading, software licenses and
professional services.   They added it is unlikely to make up the
shortfall in the fourth quarter

Why We Like It:
Monday's warning pushed SunGard's shares through critical long-term
support at $22.  If the shares can continue through support in the
$19 to 18 range there is little stopping them from testing the July
lows in the $13.50 to $15 area.  Bargain hunters may cause an early
morning pop, so more aggressive traders can use this as an
opportunity to get a more attractive entry point.  We will start
this play with a stop at $22.50, which is just above the before
mentioned $22 long-term support.

Picked on October 1st at $20.53
Earnings Date             10/18 (Not Confirmed)





===============
NB Play Updates
===============

  -----------------------
  NB Bullish Play Updates
  -----------------------

Stop updated for Genentech (DNA) from $41.50 to $42.75


==================================================================
Stock Bottom / Active Trader (AT) section
==================================================================

===============
AT Play Updates
===============

  -----------------
  Bullish Play Updates
  -----------------

See Phillip Morris - MO - Play-of-the-Day


===============
AT Closed Plays
===============

  -------------------
  Closed Bullish Play
  -------------------

Suiza Foods - SZA - close: 62.32 change: -0.82 stop: 62.50

We identified $63 as being big-time resistance for shares of this
dairy giant.  Since we were sitting on a handsome gain on this
long selection, and it did not seem to make sense to get greedy
during a bear market, we tightened up our stop to $62.50 in
preparation for a dip.  Today, we got that dip and stopped out
with a $5.49 per share gain.  We will look for a move to the $57
to $58 range to present an attractive entry point to reenter this
play.  However, once the shares reached the session low of $61.00
at about 10:00 EST the shares rallied nicely through to the
close.  This indicates we may not see a move to those levels.  We
do not have the confidence or the risk/reward to jump back in
just yet without more evidence of bullish momentum, but if we
were still holding shares we'd consider hanging on little longer
with a tighter than tight stop to see if today's strength carries
into Tuesday's trading.

Picked on September 19th at $57.01
Gain since picked:           +5.49
Earnings Date                 N/A





==================
  Trading Ideas
==================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

  ---------------------------------
  Value Plays With Bullish Signals
  ---------------------------------

Ticker    Company Name              Close  Change
AEE       Ameren Corp               38.92   +0.52
GPC       Genuine Parts             32.90   +1.04
CCR       Countrywide Credit        44.69   +0.76
RNR       Renaissance Holdings      94.00   +5.09
PWR       Quanta Services           15.91   +1.66

  ---------------------------------------
   Breakout to Upside (Stocks $5 to $20)
  ---------------------------------------

Ticker    Company Name              Close  Change
NWAC      Northwest Airlines        12.74   +1.33
PWR       Quanta Services           15.91   +1.66
ISSX      Internet Security System  12.08   +2.97
MCAF      Mcafee.com Corp           13.75   +2.20
BEAV      Be Aerospace               8.65   +1.05

  ---------------------------------------
   Breakout to Upside (Stocks over $20)
  ---------------------------------------

Ticker    Company Name              Close  Change
VZ        Verizon Communications    55.30   +1.19
WPI       Watson Pharmaceuticals    56.54   +1.83
HRB       H&R Block Inc             40.01   +1.45
GPC       Genuine Parts             32.90   +1.04
AZO       Autozone Inc              53.46   +1.60

  -----------------------------------------
   Breakout to Downside (Stocks over $20)
 -------------------------------------------

Ticker    Company Name              Close  Change
TRB       Tribune Co                30.23   -1.17
GP        Georgia Pacific           27.30   -1.49
DOV       Dover Corp                28.77   -1.34
SDS       Sungard Data Systems      20.53   -2.84
YUM       Tricon Global Resturants  38.12   -1.10

  ------------------------------------------------------------
   Recently Overbought With Bearish Signals (Stocks over $20)
  -------------------------------------------------------------

Ticker    Company Name              Close  Change
none

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DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************


Copyright ) 2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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