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Daily Newsletter, Thursday, 12/20/2001

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PremierInvestor.net Newsletter               Thursday 12-20-2001
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap:      If it's not one thing, it's another
Market Sentiment: Christmas rally hits a wall of warnings.
Play-of-the-Day:  A Lump of Coal

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
       12-20-2001           High     Low    Volume Advance/Decline
DJIA     9985.18 - 85.31 10076.03  9985.18  1.4 bln   1264/1851
NASDAQ   1918.54 - 64.35  1972.32  1918.50  2.0 bln   1278/2410
S&P 100   584.30 -  4.42   590.34   584.26   Totals   2542/4261
S&P 500  1139.93 -  9.63  1151.42  1139.93
RUS 2000  474.08 -  7.99   482.07   474.08
DJ TRANS 2602.85 - 41.81  2659.21  2596.13
VIX        24.37 +   .80    24.76    23.70
VXN        52.91 +  3.23    53.07    50.50
TRIN        1.06
Put/Call Ratio       .92
-----------------------------------------------------------------

===========
Market Wrap
===========

If it's not one thing, it's another

If today's earning's warning from Juniper Networks (NASDAQ:JNPR) 
and 17% plunge isn't enough to test a bull's resolve, then 
Argentina's president resigning most likely will.  Those two 
items helped bring sellers to the table as the Dow Industrials 
closed back below the 10,000 level at 9,985 and technology stocks 
fell sharply as the NASDAQ Composite fell 3.2% to 1,918.

Reports out of Buenos Aires, Argentina are that President 
Fernando de la Rua will resign, taking responsibility for the 
turmoil that has engulfed the nation and left many investors in 
that region jittery about their investments in South America's 
second largest economy.

While mass rioting from citizens had investors nervous, it was 
Argentine bonds that took it on the chin after the country's 
Economy Minister Domingo Cavallo resigned.  Mr. Domingo's 
resignation brought sellers to Argentine government bonds on 
fears the government would most likely default on its massive 
debt.  While the regions bonds fell like a rock with the 
benchmark Global 2008 dollar bond traded down 5.8% to 26.375% of 
face value, stocks jumped as the MerVal Index rose 17.48% higher, 
gaining 47.7 points to 320.46.  Investors fearing a currency 
devaluation and the potential seizure of bank deposits, sought 
the safety of blue chip regional stocks and export-oriented 
companies.

Ratings agency Fitch said a "broad, disorderly" default on $97 
billion in Argentina's debt was imminent.  A default and 
devaluation could imply at least 50% writeoff of Argentina's 
debt.

U.S. Risk

For the most part, many analysts are saying that U.S. exposure to 
Argentina is limited or at least there is not any one company 
based in the U.S. that has excessive exposure.  That's not to say 
there aren't some companies that don't have interests there, but 
most believe that there isn't a lot of immediate risk at hand.  
Much of the currency or debt risk is spread across the globe and 
analysts feel that much of that risk has already been hedged, 
thus factored into things.

The U.S. dollar gained strength against the major foreign 
currencies today, but did jump in after-hours trading on the news 
that President Fernando de la Rua was resigning.  This action 
makes sense as the U.S. dollar is most often seen as one of the 
stronger currencies around the world.

The February 2002 Gold futures contract (gc02g) rose $0.40 
(+0.14%) to $276.90, while March Silver (si02h) rose $0.097 
(+2.25%) to $4.405.

From time to time we've monitored the Gold/Silver Index (XAU.X) 
to try and get a feel for the MARKET'S psychology toward 
inflation.  With today's news out of Argentina, this group may 
get active near-term.  There is an interesting wedge forming in 
the Gold/Silver Index (XAU.X) and it looks like some pressure is 
building here.  Unleashed, that pressure could drive a move in 
the direction of the break.  My current analysis before today's 
news out of Argentina was that gold stocks might be rising on 
some "fear" of inflation and potential economic growth here in 
the U.S.  Today's "political risk" and Argentine "currency" risk 
may have the underlying commodity moving higher that Gold stocks 
may benefit from near-term and perhaps longer term.  Here's what 
I'm looking at.

Comparison of Feb. Gold Futures and Gold/Silver Stock Index




The upper chart is that of Gold futures.  The price is depicting 
that of the gold commodity itself.  Current trading is 
$276.90/oz.  The chart below is that of a basket of "gold stocks" 
as characterized by the Gold/Silver Index (XAU.X).  As you can 
see, both charts look very similar.  This makes sense as gold 
mining companies derive their revenue from the production and 
sale of the commodity.  There are times when the relationship 
between gold stocks and the underlying commodity gets "out of 
sink," but right now, both look to be trading in unison.  (Note.. 
the upper chart shows very little data to the left of its chart.  
That's because back in June, most futures trading wasn't trading 
February 2002 futures.  The bulk of trading was concentrated in 
the months most near June.  Going forward of course.)

Near-term, I think there may now be two (2) catalysts for a move 
higher in gold.  One may be an active Fed that has been cutting 
rates to revive the U.S. economy and pumping massive amounts of 
liquidity into the system.  We have seen very little sign of 
inflation, but often times the MARKET is looking forward.  While 
many analysts believe there is not a great deal of U.S. 
financial/banking exposure to the Argentine situation, there may 
be those that may remember the "Enron debacle" when there was 
little concern for the company when that stock was trading $20.  
Only after "off balance sheet accounting" became known was the 
concern finally out on the table.

I've place my charting cursor on the December 18th date, which 
marks a recent relative high in both the Gold Futures $281.40 and 
the Gold/Silver Index (XAU.X) $56.85.  A move in unison above 
either of these levels could trigger a rally.  A bullish trader 
in a gold stock would want to see some type of confirming break 
in the futures market itself.

Stock symbols than comprise the Gold/Silver Index (XAU.X) are 
(NYSE:ABX), (NYSE:AEM), (NYSE:AU), (NYSE:FCX), (NYSE:GG), 
(NYSE:MDG), (NYSE:NEM), (NYSE:PDG) and (AMEX:SIL).

Freeport McMoran Chart - 




To be truthful, if I were overly worried about today's Argentina 
news (which has been building for months) I'd be hoarding gold.  
I'm not.  But that doesn't mean I won't show up for an occasional 
trade or two in the sector when it appears we've got a good trade 
setup and can control our risk.  One never knows how the market 
is going to respond, so I want to have a trade in my back pocket 
just in case we get a bullish run in some gold stocks.

I'm a supply/demand trader.  I've read several tidbits lately 
from some of these "gold newsletters" that tout the need for 
exposure to some gold.  One letter talks about major shorting in 
the commodity itself and if it trades above $XX.XX there is going 
to be a massive short-squeeze and gold prices will shoot up to 
$XX.XX.  Well, if that's the case, then I like a trade setup in 
Freeport McMoran.  No emotions here and now the risk reward 
before you enter a trade.  I like a bullish trade on a break 
above $13.26, stop at $12.45 and bullish target of $15, upper 
$15's if things get carried away.  As time progresses, if long at 
$13.26, I'd simply follow the trade higher with a stop just below 
the previous day's low.

The point and figure chart of FCX is bullish with a longer-term 
vertical count of $20.50.  The p/f chart has given two buy 
signals, one at $13 and the latest at $13.50.  Relative strength 
versus the S&P 500 is on a "buy signal" dating back to February 
of this year and is currently in a column of X's, meaning the 
stock has been outperforming the broader market.  The first sign 
of trouble on the p/f chart would be a trade at $11, but I want 
to limit risk for a bullish trade with a stop at $12.45.

The above trade won't be for everyone's liking, but I don't see a 
lot of new trades in the market that I like right now.  With 
tomorrow being "triple-witching" I really don't like to initiate 
new trades that day anyway.  Too much whipping around as 
institutions may roll some of their contracts forward, closing 
positions and all that stuff.  There is very little option open 
interest (open option contracts) on Freeport McMoran (NYSE:FCX) 
so I am less inclined to think the stock would be pushed around 
at an option strike price.

I still think a subscriber can use the above information in our 
discussion on gold to perhaps get a better feel for the market 
going forward.  If gold has a BIG day tomorrow or near-term, we 
may have a better understanding of why.  If gold just sits here, 
then my guess is that the Argentine news has already been 
factored into things and we will try and take advantage of 
further weakness is some good stocks next week after option 
expiration.

Just remember.... it is important for everyone to honor his or 
her stops.  Today's lower prices may be due to options 
expiration.  Today's lower stock price action may be due to 
developments in Argentina.  Today's lower price action may be due 
to some "tax loss selling."  Today's lower price action may be 
due to the "sudden realization" that some technology stocks are 
"overbought" as characterized by the NASDAQ-100 Bullish %.

Today I had the pleasure of talking on the phone with one of our 
subscribers.  He is a retired economics professor.  It was 
interesting to hear an economist actually talk about 
supply/demand.  He himself thought that the MARKET already new 
the bulk of the news and that smart money had placed its bets 
well before the "news" was known by most.

We try and use the charts/technical analysis, along with our 
knowledge of economics and various dynamics that impact stock 
prices to try and figure out what the heck the market is thinking 
and making bets on.  I've said before that it would be great to 
know for certain why things are doing what they're doing, but I'm 
the first to admit that I don't know everything and don't have a 
crystal ball.  Nobody does and you know this to be true.

Things like today's news out of Argentina creates uncertainty.  
Most traders close their profitable positions when they feel 
uncertainty.  This is smart, especially when you're profitable or 
have a small loss.

Please understand this.  On our play list, you may be holding a 
trade that is up X% and you're very happy with the gain.  If you 
feel uncertain, don't let our stopping price level below current 
levels keep you from closing the trade from your portfolio and 
sitting on the sidelines.  I will never criticize an 
investor/trader for taking a profit or keeping a loss small.  
Just understand that we have a diverse subscriber base and that 
not everyone has their own tolerance for risk.  Our stopping 
points are based not only on levels we feel would indicate a 
near-term breakdown (for bulls) or breakout (for bears), but also 
based on profitability.

Personal preference

I don't like to profile trades on option expiration days that can 
be moved around to the whims of an institution.  I'm not big 
enough to buy/sell a stock to get it to a desired level in order 
to save a position that I had previously hedged.  I've seen too 
many stocks swing 5-10% in a 60-minute time frame.  If you know a 
stock and can see a move developing, then you can trade it and 
make some money, but you've got to know what you're doing and be 
watching that stock pretty close.  If you're going to trade 
initiate a trade tomorrow, look for one where you can easily 
identify your risk.  The smaller the amount of risk to your stop, 
the better.

Psychology

Today's Argentina news is most likely going to weigh on investor 
psychology near-term.  But I think this is what will line up a 
patient bull for some very good trader going forward.  The 
NASDAQ-100 bullish percent ($BPNDS) from www.stockcharts.com is 
falling and after today's action now reads 59%.  Not long ago it 
was up at 78%!  That market (NASDAQ-100) is removing risk just as 
it has in the past.  Recent news on earnings from Ciena 
(NSDAQ:CIEN) and now Juniper Networks (NSASDAQ:JNPR) are making 
sure of that.

If you're account is flat, tomorrow may be a good day to go get 
that holiday shopping taken care of!

Jeff Bailey
Senior Market Technician


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

Christmas rally hits a wall of warnings.
by Russ Moore

An unconfirmed rumor notes that Scrooge has been seen visiting 
the offices of various corporate executives, including those of 
Juniper Networks (JNPR), and Jabil Circuit (JBL).

The NASDAQ was under pressure from the get-go thanks to another 
set of profit warnings. Juniper Networks (JNPR) announced it 
would miss its’ fourth-quarter profit forecast by fifty percent, 
while electronics manufacturer, Jabil Circuit (JBL), delivered a 
first-quarter profit that was short of expectations. The one-two 
punch sent the tech-index to the mat with a loss of -3.2 percent. 
The big-cap NDX plunged -4.4 percent.

The DOW hung tough for most of the day before giving way in the 
late going and closing with a loss of -0.8 percent. Volume was 
solid with 1.42 billion shares changing hands on the big board 
and 2.02 billion on the NASDAQ. Losers hammered winners by a 
19/13 count on the NYSE and 24/13 margin on the NASDAQ.

Retail, natural gas and healthcare sectors saw fractional gains 
while the gold sector surged +2.16 percent. All tech sectors were 
lighting the board with red arrows.

In a joint venture by UBS Paine Webber and Gallup organization, 
the Index of Investor Optimism declined to 112 from last month’s 
117. Short-term expectations fell to 8.1 percent from 8.7 percent 
in November. 

With only six trading days left in the year, investors/traders 
must grapple with several key issues including a mountain of 
mixed economic data, a growing list of corporate shortfalls, the 
Bin-laden factor, a stimulas package and concerns over 
Argentina’s economic woes. Given the potential impact of these 
factors, it behooves traders to remain extremely nimble and 
cautious in the coming weeks.


Thursday 12/20 close: 24.37


VXN
Thursday 12/20 close: 52.91


30-yr Bonds
Thursday 12/20 close: 5.44


Total Put/Call Ratio: .97


Equity Option Put/Call Ratio: .78


Index Option Put/Call Ratio: 2.03


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 38.79

Volume/Open Interest
Maximum calls: 40/149,971
Maximum puts : 40/139,625

Moving Averages
 10 DMA 40
 20 DMA 40
 50 DMA 38
200 DMA 40

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: 584.30

Volume/Open Interest
Maximum calls: 590/5,767
Maximum puts : 500/5,779
Moving Averages
 10 DMA  581
 20 DMA  584
 50 DMA  575
200 DMA  601

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: 1139.94

Volume / Open Interest
Maximum calls: 1150/54,282
Maximum puts : 1150/56,208
Moving Averages
 10 DMA 1138
 20 DMA 1142
 50 DMA 1119
200 DMA 1169

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:  9,985.18

Volume / Open Interest
Maximum Calls: 92/29,023
Maximum Puts   90/47,514

Moving Averages:
 10 DMA  9,927
 20 DMA  9,917
 50 DMA  9,658
200 DMA 10,106

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: 572.95

Volume / Open Interest
Maximum Calls: 620/  603
Maximum Puts:  540/1,167

Moving Averages
 10 DMA 577
 20 DMA 590
 50 DMA 565
200 DMA 537

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: 507.60

Volume / Open Interest
Maximum Calls: 600/2,698
Maximum Puts:  470/1,250

Moving Averages
 10 DMA 553
 20 DMA 545
 50 DMA 507
200 DMA 558

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: 382.95

Volume / Open Interest
Maximum Calls: 380/205
Maximum Puts:  360/325

Moving Averages
 10 DMA 382
 20 DMA 390
 50 DMA 392
200 DMA 390

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, 12/14. 
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 
11/27/01     371,336   421,405   (50,069)    8.7%
12/04/01     360,315   420,919   (60,604)   21.0%
12/11/01     367,397   429,640   (62,243)    2.6%

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
11/27/01       151,317    92,807    58,510     9.1%
12/04/01       159,336    86,534    72,802    24.4%
12/11/01       158,490    86,717    71,773    (1.4%)

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 
11/27/01      37,259    48,315   (11,056)   31.5%
12/04/01      42,191    51,426    (9,235)  (16.5%)
12/11/01      45,468    51,392    (5,924)  (35.9%)

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
11/27/01       12,540     8,359    4,181     (11.1%)
12/04/01       11,808     8,311    3,497     (16.4%)
12/11/01       12,425    11,754      671     (81.0%)

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 
11/27/01      24,243    11,496   12,747     (5.6%)
12/04/01      22,703    10,739   10,739    (15.7%)
12/11/01      23,135    12,576   10,559     (1.7%)

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
11/27/01       4,228    10,630    (6,402)     (8.0%)
12/04/01       3,677     9,799    (6,122)     (4.4%)
12/11/01       3,469     9,065    (5,596)     (8.6%)
 
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        +71,773     +72,336        -62,243     -60,604

Total Open
Interest %       (+29.27%)  (+29.61%)      (-7.81%)   (-7.76%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -5,596     -6,122          +10,559    11,964
Total Open
interest %       (-44.65%)    (-45.43%)      (+29.57%)  (+35.78)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +671      +3,497         -5,924    -9,235

Total Open
Interest %        (+2.78%)   (+17.38%)     (-6.12%) (-9.86%)
                 net-long   net-long      net-short net-short


What COT Data Tells Us
----------------------
Indices:.No significant changes this week.

Gold: Commercials reversed course and went net-long this week. 
Interesting to note the performance of the XAU (gold and silver 
index) over the last few days. The index has enjoyed a nice run 
since Tuesday.

11/13 23,637 contracts net-short
11/20  2,489 contracts net-short
11/27  1,738 contracts net-long
12/04  2,534 contracts net-short
12/11 13,626 contracts net-long

Data compiled as of Tuesday 12/11 by the CFTC.




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

S&P 500 Spiders - SPY - close: 114.65 chg: -1.14 stop: 116.05

Index Description:
Essentially, the S&P 500 SPDRS is a tracking stock that allows 
investors to trade the S&P 500 index like a stock instead of 
trading the SPX options or actually buying the S&P futures 
contracts.  The SPY trades just like a stock.

Why We Like It:
The SPY closed 10 cents above the worst levels of the day, 
maintaining the 10-dma of 114.43, but with the last option 
expiration of the year occurring tomorrow, markets could see some 
volatility.  With the likelihood of tax loss selling accelerating 
into the end of the year, we think that the coming days could 
show the SPY drifting lower.  Add the strife associated with the 
economic and political uncertainty that has reared its head in 
Argentina over the last couple of days and you might arrive at 
the same conclusion as we have: tomorrow might not be the best 
day to establish a new long position.  Thus our rationale for 
shorting the SPY.

The major markets sold off fairly consistently for the entire 
day, resulting in the SPY violating short-term support to close 
under its 15-dma of 114.78.  We're looking to 110.00 as a short-
term target, mindful that both the 100-dma at 112.49 and the 50-
dma at 112.38 should function as levels of support for the index 
(and thus resistance for our short play).  Neither are we 
forgetting that the index recently found support at 112 on Dec 
13-14th.  However, the current market weakness combined with 
economic worries overseas and earnings worries domestically may 
be too much for the Christmas bulls to carry.  Our current 
strategy allows us to risk $1.40 in an attempt to make $4.65 or 
more.

Picked on December 20th at $114.65
Change since picked:         +0.00
Earnings Date                  N/A






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

PremierInvestor.net Newsletter                  Thursday 12-20-2001
                                                     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
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To view this email newsletter in HTML format with imbedded
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In section two:

Net Bulls
  Bullish Play Updates: ACRT, XMSR
  Bearish Play Updates: TSM
  Closed Bullish Play:  RATL, TMPW

Stock Bottom / Active Trader
  New Bearish Play:     SPY
  Bullish Play Updates: JCP, SEIC

High Risk / High Reward
  Bullish Play Updates: MCTR, TDSC
  Closed Bullish Play:  LSTR

Split Trader
  - none -

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) / Tech Stock section
==================================================================

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

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

Actrade Fincl. Tech - ACRT - cls: 31.70 chg: -0.50 stop: 29.45

ACRT closed lower today as negative earnings news from JNPR and 
JBL helped drag the entire technology sector down.  Today's close 
marks the first time that ACRT shares have finished a session 
under the 10-dma since gaining it back on December 6th, but 
strong support remains at 30.00.  The decline, however, came on 
reduced volume and could simply be in reaction to today's broad-
based selling.  If shares were to break support at 30.00, we 
could see further selling and it's at this level that we advise 
caution.  At the same time, today's decline could simply be 
continuing consolidation.  The company will announce its second 
quarter fiscal 2002 earnings on January 24th.  Trading note: due 
to the stock's two weeks of horizontal trading we feel it may be 
best to wait for shares to close over the $32.50 level before 
considering any new positions.  More aggressive players can still 
target bounces near the $30.50 area.  

Picked on December 9th at   30.96
Change since picked:        +0.74
Earnings Date               01/24 (confirmed)




---

XM Satellite Radio - XMSR - close: 16.30 change: -1.00 stop: 15.99

The amazing levitating stock!  Shares of XMSR have continued to 
hold above new support at the $16.30 level as it digests its 
gains from the past two weeks.  The negativity in the broader 
markets today brought the stock back down to this support level 
and looking ahead to the weekend may bring some added volatility 
considering it is a triple-witching option expiration.  An 
article that came out after the close today discussed XMSR's and 
analysts' expectations that the company will sign up 20K to 30K 
subscribers to their subscription service by the end of this 
year.  XMSR said they were comfortable with those estimates but 
it will be interesting to see if investors will respond 
positively or negatively to the news.  We feel that the broader 
market weakness may give the edge to the bears on Friday and thus 
stop us out.  However, if XMSR can bounce above the $16 mark 
instead, more aggressive traders might see this as a new entry 
point.  

Picked on December 10th at 13.06
Change since picked:       +3.36
Earnings Date                N/A





  --------------------
  Bearish Play Updates
  --------------------

Taiwan Semiconductor - TSM - close: 17.01 change: -0.49 stop: 18.01

As expected the breakdown in the SOX.X index produced a follow 
through move today.  The chip sector fell 30 points or 5.58% to 
close on its 50-dma of 507.  TSM turned in a similar performance 
but only slipped 2.8% to bounce off its 30-dma (16.75).  Volume 
was very strong for TSM at 8M versus the average of just under 5M 
shares.  Considering the size of the breakdown in both the sector 
and in TSM, we would expect this new round of "consolidation" to 
last a few more sessions at the minimum.  However, we wouldn't be 
surprised to see a short-term oversold bounce in the SOX produce a 
small bounce in TSM.  We would look for a failed rally near 17.75 
if it occurs.  Speaking of consolidations, the downdraft in the 
semiconductor sector was given a big push when a report came out 
late last night claiming the chip industry is in (has seen) its 
biggest decline in history.  Sales are estimated to be down 33% in 
2001 with Intel's sales down an estimated 22% this year.  The 
magnitude of this slowdown has some analysts believing that there 
will be more "consolidation" in the chip industry.  

Picked on December 19th at $17.50
Change since picked:        +0.49
Earnings Date               01/25 (confirmed)





===============
NB Closed Plays
===============

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

Rational Software - RATL - close: 19.19 chg: -1.55 stop: 19.98

Wednesday was bad enough when shares of RATL opened below its 10-
dma but when UBS Warburg came out with their "coverage" around 
noon, the stock really began to feel the bears grip tighten 
further.  UBSW initiated coverage of the stock with a "hold" and 
a price target of $12, which was 45% below Tuesday's closing 
price.  Their analyst cited valuation concerns and didn't expect 
RATL to see improvement until 2003.  If I didn't know better I'd 
wonder if some "big" traders weren't short the stock before the 
announcement came out.  Nevertheless, RATL held above support at 
$20 like a champ and closed at $20.74.  Today was a different 
story.  This time the GSO.X software index chimed in with its own 
sizeable decline that put the index below its 200-dma and below 
expected price support at 180 (GSO.X closed at 179).  This sector 
wide selling was magnified in RATL for a 7.47% loss.  Our play 
was stopped out at $19.98.  We're curious to see if RATL will 
hold its 200-dma (19.02) or whether it will fall further.  Right 
now, we'd be betting on the bears.

Picked on December 11th at $21.11
Gain since picked:          -1.13
Earnings Date               01/09




---

TMP Worldwide - TMPW - close: 41.93 chg: -2.35 stop: 42.25

One might normally believe that a big strategic alliance with the 
likes of MSFT could offer enough oomph to push a stock through 
overhead resistance.  Unfortunately for TMPW this was not the 
case.  The company announced on Wednesday morning that they would 
work with MSFT and its .NET tools to highly customize its 
services.  The share price traded up to price resistance and its 
200-dma at $45 but couldn't break through.  Jump to Thursday's 
session and the stock gaps down at the open, tries to consolidate 
above $42.50, where I might add is where we expected it to, and 
then fails with late burst of afternoon selling.  We knew this 
was a little aggressive on Tuesday but dot.coms where supposed to 
have made a comeback (we're being sarcastic here).  Traders 
interested in following TMPW should watch the $40 level, which 
should be support.  A break below $40 could be painful.

Picked on December 18th at $43.91
Gain since picked:          -1.66
Earnings Date               02/04





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

============
AT New Plays
============

   ----------------
   New Bearish Play
   ----------------

S&P 500 Spiders - SPY - close: 114.65 chg: -1.14 stop: 116.05

Index Description:
Essentially, the S&P 500 SPDRS is a tracking stock that allows 
investors to trade the S&P 500 index like a stock instead of 
trading the SPX options or actually buying the S&P futures 
contracts.  The SPY trades just like a stock.

Why We Like It:
The SPY closed 10 cents above the worst levels of the day, 
maintaining the 10-dma of 114.43, but with the last option 
expiration of the year occurring tomorrow, markets could see some 
volatility.  With the likelihood of tax loss selling accelerating 
into the end of the year, we think that the coming days could 
show the SPY drifting lower.  Add the strife associated with the 
economic and political uncertainty that has reared its head in 
Argentina over the last couple of days and you might arrive at 
the same conclusion as we have: tomorrow might not be the best 
day to establish a new long position.  Thus our rationale for 
shorting the SPY.

The major markets sold off fairly consistently for the entire 
day, resulting in the SPY violating short-term support to close 
under its 15-dma of 114.78.  We're looking to 110.00 as a short-
term target, mindful that both the 100-dma at 112.49 and the 50-
dma at 112.38 should function as levels of support for the index 
(and thus resistance for our short play).  Neither are we 
forgetting that the index recently found support at 112 on Dec 
13-14th.  However, the current market weakness combined with 
economic worries overseas and earnings worries domestically may 
be too much for the Christmas bulls to carry.  Our current 
strategy allows us to risk $1.40 in an attempt to make $4.65 or 
more.

Picked on December 20th at $114.65
Change since picked:         +0.00
Earnings Date                  N/A





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

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

JC Penney - JCP - close: 25.00 change: +0.27 stop: 24.45 *new*

Shares of JCP opened nearly 4% higher this morning after Merrill 
Lynch raised its rating on the stock to a "strong buy" and JP 
Morgan chimed in, initiating coverage on the retailer with a buy 
rating of its own.  The ensuing spike in volume helped to send 
shares as high as 25.94 before enthusiasm was tamed and profit 
taking brought the share price back towards the $25 level.  
According to Merrill, "retailing stocks have outperformed the 
market in the first quarter 74% of the time over the last 38 
years, 86% percent of the time over the last 14 years, and 100% 
of the time during the past five recessions" (Reuters).  With 
MACD about to produce a bullish crossover, JCP appears ready to 
challenge resistance at 26.00 again and potentially aim for $28. 
We've decided to raise our stop to a more conservative $24.45 or 
just 5 cents under Tuesday's low of 24.50, to ensure that we walk 
away some kind of profit.  More aggressive traders willing to 
take a little more heat can probably get away with a stop under 
$24 and those seeking a middle ground might consider a stop near 
$24.10, which is under Wednesday's low.

Picked on December 13th at $23.08
Change since picked:        +1.92
Earnings Date               02/12 (unconfirmed)




---

SEI Investments - SEIC - cls: 43.55 chg: -0.54 stop: 41.99 *new*

Considering the weakness in the overall markets, the 1.2% decline 
in SEIC is that bad.  Shares have continued to consolidate 
sideways since trading above $44 in early December.  We are 
cautious on the stock given the broader market climate and would 
prefer to initiate new plays only if and when shares close back 
above the $44 or $44.50 level.  More conservative traders may 
want to wait for shares to close above $45, the resistance tested 
in Tuesday's session.  Aggressive traders may want to continue to 
target shoot entries on dips to above $42 but each dip is 
becoming more hazardous as the stock drags itself sideways.  The 
MACD has produced a bearish crossover that doesn't bode well for 
short-term gains.  We're inching our stop up to $41.99 to reduce 
our current exposure.

Picked on December 15th at $43.41
Change since picked:        +0.14
Earnings Date               10/16 (unconfirmed)






==================================================================
High Risk / High Reward (HR) section
==================================================================

===============
HR Play Updates
===============

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

Mercator Software - MCTR - close: 7.92 change: -0.27 stop: 7.45

MCTR traded in a very narrow range today.  The positive side to 
Thursday's performance is the stock's new higher low.  
Considering that the GSO.X fell -4.74% to close under both its  
15 and 200-dma, we think MCTR has proven itself to be somewhat 
resilient.  Additionally, today's dwindling downside volume in a 
rough market for tech stocks could suggest that investors are 
willing to hold on to MCTR at current levels.  The company 
announced the release of its Process Integrator software today 
and it never hurts to announce new products to the public.  We 
would be cautious about entering new positions given the broader 
market's sensitivity to tech stock earnings warnings and 
conservative traders may want to wait for MCTR to close back 
above the $8.50 level again.

Picked on December 11th at $ 7.68
Change since picked:        +0.24
Earnings Date               10/30




---

3-D Systems - TDSC - close: 12.86 change: +0.47 stop: 11.52 *new*

Shares of TDSC have finally begun to take off for us after days 
of consolidation.  Today's gains came on the heels of yesterday's 
strong move with the company announcing this morning that it had 
signed a joint venture agreement with DSM Desotech.  Shares 
settled down from the 13.47 high reached in early trading to 
close just above the 100-dma on strong volume.  Previous 
resistance at $12 should translate into new support for the 
stock.  The technical picture also improves with the MACD 
beginning to cross the zero line.  We've decided to raise our 
stop to cost in anticipation of a continued run up in the stock.  
The 200-dma looms at 13.65, less than 20 cents under today's 
high.  If shares capture this level in the coming days, we'll be 
sure to raise our stop to ensure a profit.  Currently, the 
newsletter is up over 11% in the play.

Picked on December 7th at $11.52
Change since picked:       +1.34
Earnings Date              10/17





===============
HR Closed Plays
===============

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

Landstar System - LSTR - close: 74.80 chg: -0.28 stop: 70.90

When we initiated this play, we anticipated an 8-10% move in LSTR 
in relatively short order.  Unfortunately, that scenario did not 
pan out and, instead, shares have taken the long way home.  
Shares gapped down this morning and volume was all but non-
existent today.  We do appreciate the short-term bullish trend 
but resistance at $76 may take too long to conquer.  Beyond $76 
bulls will likely encounter more resistance just north of $78.  

Picked on December 9th at $73.26
Gain since picked:         +1.54
Earnings Date              01/10 (unconfirmed)







==================
  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 

P       Phillips Petroleum Co      58.40     +0.55
CMA     Comerica Inc               55.00     +1.54
MTG     Mgic Investments Corp      59.70     +0.83
ABFS    Arkansas Best Corp         28.75     +0.70
URS     Urs Corp                   25.05     +0.65

--------------------------------------- 
Breakout to Upside (Stocks $5 to $20) 
--------------------------------------- 
Ticker  Company Name               Close     Change 

T       AT&T Corp                  17.85     +1.05
FTI     Fmc Technologies           15.45     +1.35
TUES    Tuesday Morning Corp       19.65     +2.00
ZQK     Quiksilver Inc             16.26     +1.04
IPIC    Interneuron Pharma Inc     10.76     +1.45
SFP     Salton Inc                 19.90     +1.15

--------------------------------------- 
Breakout to Upside (Stocks over $20) 
--------------------------------------- 
Ticker  Company Name               Close     Change 

BUD     Anheuser-Busch Cos         44.90     +1.12
TV      Grupo Televisa             41.90     +1.64
ACN     Accenture Ltd              27.05     +1.02
FDX     Fedex Corp                 52.10     +2.11
ABI     Applied Biosystems Group   37.00     +1.05
CC      Circuit City Stores Inc    25.87     +1.10

----------------------------------------- 
Breakout to Downside (Stocks over $20) 
------------------------------------------- 
Ticker  Company Name               Close     Change 

TXN     Texas Instruments Inc      26.50     -1.40
LLY     Eli Lilly & Co             80.03     -1.57
CMCSK   Comcast Special Stock      35.79     -2.28
PAYX    Paychex Inc                34.50     -1.11
KYO     Kyocera Corp               66.96     -3.22

----------------------------------------- 
Recently Overbought With Bearish Signals (Stocks over $20)
------------------------------------------- 
Ticker  Company Name               Close     Change 

SEBL    Siebel Systems Inc         26.93     -2.87
ADLAC   Adelphia Communication     27.34     -0.97
TEK     Tektronix Inc              24.30     -0.70
SLAB    Silicon Laboratories Inc   34.35     -2.53
AGY     Argosy Gaming Co           33.40     -0.70




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