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Daily Newsletter, Monday, 02/04/2002

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PremierInvestor.net Newsletter                 Monday 02-04-2002
                                                  section 1 of 2
Copyright  2001, All rights reserved.
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In section one:

Market Wrap:      Enron digs the hole and Tyco climbs in.
Market Sentiment: Confidence eroding.
Play-of-the-Day:  Sell First, Ask Questions Later.
Watch List:       KYO, DCLK, LGND, PSFT

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
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     02-04-2002          High     Low     Volume Advance/Decline
DJIA     9687.09 -220.17  9905.46  9677.54 1.45 bln    937/2200
NASDAQ   1855.53 - 55.71  1907.58  1849.13 1.77 bln    956/2644
S&P 100   553.43 - 15.92   569.35   552.05   Totals   1893/4844
S&P 500  1094.44 - 27.76  1122.20  1092.25
RUS 2000  470.09 -  9.95   480.08   469.44
DJ TRANS 2711.24 - 48.09  2759.92  2700.58
VIX        26.85 +  3.98    26.94    23.99
VXN        45.85 +  2.77    45.86    43.89
TRIN        2.81
Put/Call    0.89
-----------------------------------------------------------------

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

Enron digs the hole and Tyco climbs in

I'm sorry, but when Tyco's CEO Dennis Kozlowski goes to the press 
and tells everyone (including the bears that say there are 
accounting problems) that Tyco has done nothing out of the 
ordinary with their accounting and then announces that the 
company spent $8 billion on more than 700 acquisitions in the 
past three years, that it did not announce to the public, 
investor confidence in Tyco (TYC) and the broader market is going 
to be shaky.

In what many now call a "post-Enron" market environment that 
records one of the biggest debacles in off balance sheet 
accounting.  Enron looks to have dug the hole and now Tyco is 
climbing in.

I'm not saying that Tyco (TYC) is headed down the same road of 
disparity, but today's revelation at least plants the seed of 
uncertainty.

Tyco International Chart - Daily Interval




As mentioned in last Wednesday's market wrap 
http://www.PremierInvestor.net/markets/marketwrap/013002_1.asp, 
what's taking place at Tyco (TYC) is going to "rival the best 
plot of any daytime soap opera."  Will Suzie Bull leave Tyco and 
turn to revenge, as they can't seem to get a straight answer from 
the powers that be inside of Tyco?  The stock market is little 
different than the relationship between two lovers in a daytime 
soap opera.  When one party (the bulls) feels they've been 
wronged or perhaps led astray, they'll find a new lover and 
change the locks on the doors.  Short sellers on the other hand 
will stick around as long as the company spins a yarn that 
everything is on the up and up, but then discloses details that 
hint the company may be hiding something.

There are those that have come to the defense of Tyco (TYC).  It 
may be true that Tyco didn't feel the need to report "just" $8 
billion in merger charges as it represented a small piece of the 
acquisition pie.  The $8 billion amount represented in total 
approximately 10% of all the acquisitions (roughly 700 
acquisitions in total) and these numbers were filed with the SEC, 
but not reported individually to investors in the form of press 
releases.  But Albert Meyer, an analyst for David W. Tice and 
Associates, whose Prudent Bear Fund is a prominent short-seller 
of Tyco said it best.  "Being in a post-Enron environment you 
cannot disclose enough these days."  Meyer also added, "While 
Tyco may be abiding by the rules, it appears to be violating the 
spirit of good accounting disclosure."

As if Tyco didn't have a big enough shovel with which to dig a 
hole, this afternoon's downgrade of Tyco's debt by S&P gave 
sellers even more excuse to dig for lower depths.  S&P cut its 
rating on Tyco's senior unsecured debt three notches to "BBB" 
from "A."  "BBB" is an investment grade two notches above junk 
status.  S&P also cut Tyco's commercial paper rating two notches 
to "A-3," one notch above junk, from "A-1."

Are all conglomerates now "linked?"

So far, there doesn't look to be any legal wrongdoing by Tyco 
(NYSE:TYC).  So why are we talking about it?  To inform you, the 
subscriber, of just what in the heck is taking place in the 
market.

Back in early November (November 6th to be exact), I put my 
finger on shares of General Electric (NYSE:GE) as a "key stock" 
for equity bulls to be looking at on the bullish side near $40.  
My thinking was that this stock could well be an indicator for 
the broader market.  After all, not unlike Tyco (TYC), General 
Electric (NYSE:GE) has its finger in a lot of pies as it relates 
to the economy.  Often times considered a "conglomerate" with 
many business units and complex accounting methods, it's no 
stretch to the imagination that this Dow components 5% decline to 
$35.00.

We played GE from the bullish side back in November and weeks 
later were stopped out of the trade with a rather small loss just 
below the $40.00 level at $39.90 as the stock just couldn't get 
above resistance at $42.  As I go back and review that "scenario" 
for a bullish stock environment based on GE trading above $40, an 
unbiased view now looks at the stock and begins to understand 
that another leg down may well be at hand.

General Electric Chart - Daily Interval




One of my "key stocks" I feel traders/investors should be 
monitoring looks quite weak.  Look for short-sellers to be 
leveraging with all their might off of our short-term downward 
trend, which is almost parallel to trend dating back to last 
summer.  Should GE break the lows found last week at $34.49, I'd 
look for the stock to fall and retest the lows found in September 
near $30.37.

General Electric Chart - $1 box




With channel lines drawn, it looks like GE may be at a critical 
near-term level of support.  Just as our retracement bracket on 
the bar chart shows retracement at the $34.76 level, the point 
and figure chart show two crisscrossing lines creating a 
potential "cradle" at the $34 level.  A trade at $33 would be a 
break of bullish trend and have the stock vulnerable to the 
September lows of $29.  With a vertical count of $28 and S&P 
bullish percent ($BPSPX) signaling a more defensive market 
posture, I'm thinking shares of GE are headed lower.  From 
current levels, I'd be looking to short at market $35.00, stop of 
$37.10 and target $30.50 near-term.  If bearish target is 
achieved, I would look to pay myself for the risk taken by 
locking in at least 1/2 position gains.  I would then lower stop 
on remaining 1/2 position to break-even and then target bearish 
vertical count from point and figure chart, which is currently 
$28, but could grow if more O's are added to current count 
column.

Equity bulls won't like this

Market participants were bullish on bonds today and the 10-year 
YIELD ($TNX.X) has broken back below the 5.0% level I felt this 
bond's YIELD needed to stay above for bullishness in equities to 
prevail.  As this relates to my scenario for 
bullishness/bearishness for the broader stock market, this action 
is bearish in my mind.

10-Year YIELD Chart - Daily Interval




Bonds were attracting capital again today and the 10-year 
Treasury YIELD ($TNX.X) found buyers and that drove YIELD lower.  
Day by day we're getting more signals that the market is getting 
more defensive and that correlates rather well with what the 
bullish percent data started telling us back in mid-December.  
With a break in the 10-year YIELD back below the 5.0% level, I 
will now monitor the 4.8% YIELD level closely.  A potential 
trigger for further downside action in stocks would be the 4.786% 
level.  

Economic data tomorrow

The economic data as of late hasn't been terrible, but it hasn't 
been so bullish to push the recent accounting concerns to the 
back burner either.

To take some attention away from accounting issues near-term, 
tomorrow's 10:00 AM EST report on factory orders is expected to 
show a 1.1% gain and if achieved would show a rebound from 
November's 3.3% decline.  The 1.1% gain has most likely been 
factored into things, as we already know that durable goods 
orders increased 2% in December.  

Also due out tomorrow at 10:00 AM EST is the Institute for Supply 
Management's (ISM) non-manufacturing diffusion index.  Economists 
are looking for the index to come in around the 51.8% level.  We 
will note that this index doesn't have the same track record that 
the manufacturing survey does, so it doesn't get a lot of 
attention by participants.

I still feel that Wednesday's productivity number is going to get 
the most attention from economists.  I don't care if you're a 
broader market bull or bear, I think you need to understand the 
potential implications of this number.  An increase in 
productivity above the 3.1% level will give the Fed some room to 
potentially cut interest rates as productivity is one of the key 
components to combating inflation.  Right now, equity bears are 
getting some mileage out of the "accounting issues" and a strong 
productivity number could have some short-term buyers in stocks, 
especially for some where bearish traders have some substantial 
percentage gains that they don't want to see taken away on the 
possibility of a rally.  At the same time, a poor productivity 
number of less than a 2% gain could see some economic bears show 
up with the thinking that the Fed's hands may be tied toward 
further rate cuts.  If there's one thing the Fed hates more than 
a slow economic environment, it's inflation.

Current analysis

I still feel there are two things at work right now that have the 
broader market averages going lower.  The simplest to "explain" 
is the market was just too risky for the bulls.  The NASDAQ-100 
bullish % ($BPNDX) was up at the 78% level and now its down at 
36%.  A large amount of risk has been removed from this portion 
of the market, but we can still see some downside in this 
indicator.  Add to that the recent reversal in the S&P 500 
bullish % ($BPSPX) recently reversing into O's as more stocks in 
this market generate sell signals and we've got market internals 
equivalent to the tide going out to sea.

What I felt was a market environment in December/January that was 
getting "overbought" (as indicated by the bullish percent) and 
market risks were high for bullish traders/investors, is now 
being sold and using accounting worries as a backdrop to sell and 
ask questions later.  This can be very disheartening to the 
"fundamental bull" that bases their investment strategies 
strictly off of numbers derived from balance sheets and income 
statements.

As I've mentioned before, psychology is very important to 
consider when analyzing a market environment.  Investors buy/sell 
stocks partially based off of emotion.  As levels of support 
begin to be violated or investors begin to get the perception 
that they are not being told the truth, the initial response is 
to sell a long position in order to avoid a potential loss or 
further loss of capital.

Depending on your level of risk tolerance and financial 
situation, you need to do what's right for your account.  If you 
booked some early gains during the rally of October, November and 
December and have some profits set aside, but also have some 
bullish trades still showing gains, then you have a bit of a 
luxury to give a stock some room.  What you don't want to do is 
be complacent if you've seen a nice gain from November to 
December turn break even, then turn to a small loss and let it 
become a big one.

I focus here on the "bullish" trader only because market studies 
show that the bulk of traders/investors tend to only buy a stock 
or view it from a bullish perspective.

For those trading short, perhaps keep some of the above comments 
in mind.  The bullish percent data is in the favor of bearish 
traders and so is the "worry" of accounting issues and investor 
confidence is shaky.  Right now we're not seeing a mad rush back 
into bonds, so be willing to lock in some profits on stocks that 
hit your bearish target.  Be willing to pay yourself for bearish 
trades that the bulk of market participants usually never take.

Jeff Bailey
Premier Investor


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

Confidence eroding.
by Russ Moore

Investors are starting to think that the light at the end of the 
tunnel is a train coming their way.

The "E" word continued its domination of market news and that put 
investors in a sour mood. The DOW dropped -2.2 percent while the 
NASDAQ fell -2.9 percent and the NDX -3.2 percent. Volume was 
moderate with 1.42 billion shares trading on the NYSE and 1.76 
billion on the tech index. Losers outdistanced winners by a 22/9 
count on the NYSE and a 26/10 margin on the NASDAQ.

Broader markets had biotech, financial, and natural gas sectors 
feeling the heat while gold continued to shine. Networking and 
Internet sectors were the hardest hit tech sectors.

In my last market sentiment I pointed out that investor 
bullishness will mean very little unless the corporate side 
climbs on board. A research note from Trim Tabs president Charles 
Biderman would seem to suggest that investors are the only 
passengers on the bullish train, "several liquidity measures have 
not been this bearish since August 2000. Sell-side market 
strategists are saying the recession is over, investors should be 
buying stocks here. The only problem with that is corporate 
investors - who have a better view of the U.S economy than Wall 
Street - are heavy sellers".

In light of the current "accounting enlightenment", investors may 
be getting off the train at the next stop. With each passing "day 
in the dark", investor confidence is eroding. Corporate American 
will need to show its’ better side soon or we could be in for 
further declines ahead.


VIX
Monday 02/04 close: 26.85


VXN
Monday 02/04 close: 45.85


30-yr Bonds
Monday 02/04 close: 5.35


Total Put/Call Ratio: .98


Equity Option Put/Call Ratio: .91


Index Option Put/Call Ratio: 1.38


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 36.92

Volume/Open Interest
Maximum calls: 40/56,517
Maximum puts : 37/58,211

Moving Averages
 10 DMA 38
 20 DMA 39
 50 DMA 39
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: 553.43

Volume/Open Interest
Maximum calls: 580/7,541
Maximum puts : 520/9,428

Moving Averages
 10 DMA  568
 20 DMA  576
 50 DMA  582
200 DMA  598

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: 1094.44

Volume / Open Interest
Maximum calls: 1150/26,288
Maximum puts : 1100/26,497
Moving Averages
 10 DMA 1120
 20 DMA 1133
 50 DMA 1141
200 DMA 1165

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:  9,687.09

Volume / Open Interest
Maximum Calls:  98/11,954
Maximum Puts    90/17,072

Moving Averages:
 10 DMA  9,784
 20 DMA  9,874
 50 DMA  9,932
200 DMA 10,101

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: 485.67

Volume / Open Interest
Maximum Calls: 520/322
Maximum Puts:  560/530

Moving Averages
 10 DMA 512
 20 DMA 529
 50 DMA 564
200 DMA 546

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: 545.21

Volume / Open Interest
Maximum Calls: 660/780
Maximum Puts:  540/505

Moving Averages
 10 DMA 536
 20 DMA 549
 50 DMA 545
200 DMA 554

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: 372.05

Volume / Open Interest
Maximum Calls: 390/690
Maximum Puts:  380/825

Moving Averages
 10 DMA 376
 20 DMA 376
 50 DMA 383
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, 02/01. 
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 
01/15/02     340,005   397,024   (57,019)  (11.7%)
01/22/02     342,841   394,041   (51,700)   (9.3%)
01/29/02     345,583   401,923   (56,340)    9.0%

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
01/15/02       129,987    64,311    65,676    (5.5%)
01/22/02       125,451    65,423    60,028    (8.6%)
01/29/02       128,826    63,127    63,127     5.1%

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 
01/15/02      32,068    34,859    (2,791)    (58.1%)
01/22/02      30,671    34,103    (3,432)     23.0%
01/29/02      31,577    33,651    (2,974)    (13.3%)

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
01/15/02       10,230     9,782      448    (87.8%)
01/22/02       11,885     8,787    3,098  
01/29/02        9,709     8,293    1,416    (54.2%)

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 
01/15/02      15,866     9,175    6,691    (15.7%)
01/22/02      18,152    11,013    7,139      6.6%
01/29/02      19,956    12,171    7,785      9.0%

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
01/15/02       4,979     8,747    (3,768)    (21.6%)
01/22/02       5,424     8,969    (3,545)     (5.9%)
01/29/02       5,872     9,709    (3,837)     11.1%
 
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        +65,699     +60,028        -56,340    -51,700

Total Open
Interest %       (+34.23%)  (+31.45%)      (-7.54%)   (-6.95%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -3,837     -3,545          +7,785    +7,139
Total Open
interest %       (-24.63%)    (-24.63%)      (+24.23%)  (+24.48)
                 net-short   net-short     net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +1,416      +3,098         -2,074    -3,432

Total Open
Interest %        (+7.86%)   (+14.99%)     (-3.18%) (-5.30%)
                 net-long   net-long      net-short  net-short


What COT Data Tells Us
----------------------
Indices:.On a percentage basis we saw little change in the S&P 
Commercial activity. The Commericals have been fluctuating 
between 4 and 9 percent net-short for months, while the Small 
Specs float between 28 and 38 percent net-long. .

Gold: The gold index (XAU) continued its bullish move this week 
closing at 62.80. We did see the Commercials unload 40 percent of 
their short contracts while still remaining in a net-short 
position.

01/01 14,555 contracts net-short
01/08 24,042 contracts net-short
01/15 53,938 contracts net-short
01/22 50,959 contracts net-short
01/29 31,515 contracts net-short

Data compiled as of Tuesday 01/29 by the CFTC.




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

General Electric - GE - close: 35.00 change: -1.85 stop: 37.51

Company Description:
GE is a diversified services, technology and manufacturing 
company with a commitment to achieving customer success and 
worldwide leadership in each of its businesses. GE operates in 
more than 100 countries and employs 313,000 people worldwide. 
(source: company press release)

Why We Like It:
If Wall Street's new reaction to the Enron scandal is to go on a 
witch hunt for big conglomerates with any possibilities for 
creative accounting then the biggest target out there is General 
Electric.  We are not alluding to in any way that GE is or ever 
did practice questionable accounting doctrine but if Wall Street 
just believes, even for just a few days, that GE might have done 
so then a short play may be a profitable move.  There is no 
clearer example of trading investors perceptions versus 
realities.  Investors only need to perceive possible issues at GE 
and the stock could drop substantially.  Today's 5% loss is just 
the beginning and this was merely guilt by association after the 
Tyco (TYC) news today.  The low last Wednesday was $34.49 
however, if shares breakdown below this level we might see a 
retest of September's lows.  We're going to start the play with a 
stop at $37.51.  We're also going to initiate the play with an 
actual exit price of $30.50 since we think $30 might be very 
strong round-number psychological support.  It would not surprise 
us to see GE trade up to $36 before rolling over again and that 
might be a good entry point to consider a short.  The worst news 
of this strategy is that for the longest time, where GE went so 
went the market.  We could have a tough week ahead of us.  We 
placed this strategy in the high risk/reward section since we're 
completely focusing on investor emotions more than usual.

Picked on February 4th at $35.00 
Change since picked:       +0.00
Earnings Date           01/17/02 (confirmed)






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

The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have 
time to fully read pertinent news stories, due background 
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's 
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.

-----------

Kyocera Corp - KYO - close: 54.94 change: -1.72

WHAT TO WATCH: If you haven't heard by now, the wireless sector 
is not the best place to be invested in at the moment.  The group 
has been falling steadily for weeks and KYO is no exception.  The 
$60 level was a very important support level for the stock.  KYO 
had been struggling maintain it for the last couple of weeks, but 
shares gave up on Friday.  Today's market weakness just helped 
confirm the move down even more.  It would be tough to pick a 
bottom for this one but $59 or $60 might be a good place to 
consider a stop on a short play.  Expect KYO to gap up or down 
each day at the open as the American shares react to trading on 
the Japanese markets.




---

DoubleClick Inc - DCLK - close: 9.94 change: -0.29

WHAT TO WATCH: Internet stocks were no stranger to finger 
pointing about financials but the biggest accusation in the past 
was always a lack of earnings.  Analyst may feel that the 
advertising drought may be over but shares of DCLK may not feel 
any relief for sometime to come.  Friday's drop put it under the 
200-dma and Monday's drop put it under the crucial $10 support 
level.  Both trading sessions saw heavy volume.  We would look 
for the next leg down to $9.00 with a potential second leg down 
to $8.00.




---

Ligand Pharmaceuticals - LGND - close: 14.10 change: -1.70

WHAT TO WATCH: Shares of LGND lost over 10% today while the 
majority of the biotech sector took their lumps due to negative 
news on Cephalon (CEPH).  CEPH was hammered for a big loss too as 
investors questioned some off-balance sheet accounting (is that 
an oxymoron?).  LGND has retreated back to the $14 support level, 
which was major resistance in the past.  A breakdown below $14 
could portent a very strong drop still to come.




---

PeopleSoft, Inc. - PSFT - close: 30.51 change: -2.15

WHAT TO WATCH: Word that company president and CEO of PSFT was 
looking to spend some of its $1.7 billion in cash on acquisitions 
did not come on a good day.  Most of the accounting questions 
investors were punishing on Wall Street had to deal with 
accounting.  While we don't think PSFT lost 6.5% because of 
accounting issues, investors chose to sell first and ask 
questions later.  The GSO.X software index was weak today, which 
did little to support PSFT.  Traders should be watching the $30 
level for the software company.  A breakdown from here may lead 
to a test of $25.00 or worse.









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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
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Do not duplicate or redistribute in any form.



PremierInvestor.net Newsletter                  Monday 02-04-2002
                                                   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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charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/8598_2.asp
=================================================================

In section two:

NetBulls Tech Stocks
  Stop adjustments:     NETA

StockBottom Non-tech Stocks
  Stop adjustments:     CHS, TGH, C

High Risk/High Rewaard
  New Bearish Play:     GE
  Closed Bullish Play:  INCY

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)

=================================================================
PLAY EDITOR COMMENTS:

Jeff and I agree that Monday's market performance makes it 
increasingly difficult to play longs with the broad market 
dropping so violently.  We would be very cautious and definitely 
consider taking a wait and see approach.  I would much rather sit 
on my capital and wait for the market to find a bottom than try 
and guess where it might rebound and immediately lose X% of my 
investments.  Therefore we are raising stops on a lot of plays 
just to reduce our current exposure.

- James

===================
NB Stop Adjustments
===================

Bullish Plays
-------------

Network Associates - NETA - cls: 28.65 chg: -1.61 stop: 27.98 *new*


===================
AT Stop Adjustments
===================

Bullish Plays
-------------

Chico's F A S Inc - CHS - cls: 29.22 chg: -0.18 stop: 27.95 *new*

---

Trigon Healthcare - TGH - cls: 74.39 chg: +0.78 stop: 71.42 *new*


Bearish Plays
-------------

Citibank - C - close: 44.30 change: -2.19 stop: 48.01 *new*



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

============
HR New Plays
============

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

General Electric - GE - close: 35.00 change: -1.85 stop: 37.51

Company Description:
GE is a diversified services, technology and manufacturing 
company with a commitment to achieving customer success and 
worldwide leadership in each of its businesses. GE operates in 
more than 100 countries and employs 313,000 people worldwide. 
(source: company press release)

Why We Like It:
If Wall Street's new reaction to the Enron scandal is to go on a 
witch hunt for big conglomerates with any possibilities for 
creative accounting then the biggest target out there is General 
Electric.  We are not alluding to in any way that GE is or ever 
did practice questionable accounting doctrine but if Wall Street 
just believes, even for just a few days, that GE might have done 
so then a short play may be a profitable move.  There is no 
clearer example of trading investors perceptions versus 
realities.  Investors only need to perceive possible issues at GE 
and the stock could drop substantially.  Today's 5% loss is just 
the beginning and this was merely guilt by association after the 
Tyco (TYC) news today.  The low last Wednesday was $34.49 
however, if shares breakdown below this level we might see a 
retest of September's lows.  We're going to start the play with a 
stop at $37.51.  We're also going to initiate the play with an 
actual exit price of $30.50 since we think $30 might be very 
strong round-number psychological support.  It would not surprise 
us to see GE trade up to $36 before rolling over again and that 
might be a good entry point to consider a short.  The worst news 
of this strategy is that for the longest time, where GE went so 
went the market.  We could have a tough week ahead of us.  We 
placed this strategy in the high risk/reward section since we're 
completely focusing on investor emotions more than usual.

Picked on February 4th at $35.00 
Change since picked:       +0.00
Earnings Date           01/17/02 (confirmed)






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

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

Incyte Genomics Inc - INCY - cls: 13.80 chg: -1.15 stop: 14.49

The biotech sector was hammered today when Cephalon (CEPH) woke 
up Monday morning with a case of Enronitis.  CEPH lost 13% today 
while feeling forced to explain some off-balance sheet programs.  
Investors hit the sell button to avoid an Enron-style decline in 
the stock price.  The drop in the biotech sector was not lost on  
INCY who opened lower and fell from there.  Thus it never traded 
anywhere close to our trigger to go long.  We are going to drop 
the play now and keep an eye on it to see just how low it might 
go.  The drop last week was $13.65 and shares ended just above 
this level today.  As a point of reference, the September lows 
were near $10.50.

Picked on February 1st at $xx.xx <-- see text above
Change since picked:       +0.00
Earnings Date           02/12/02 (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 

CGI     Commerce Group Inc         35.55     +0.52
BZH     Beazer Homes               85.96     +2.76
ESE     Esco Technologies          34.81     +1.61

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

GG      Goldcorp Inc               15.70     +1.09
FINL    Finish Line Inc            16.62     +1.57
HCOW    Horizon Organic            16.78     +1.13

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

AMAT    Applied Materials          43.98     +1.03
ACDO    Accredo Health Inc         51.25     +3.23
FRK     Florida Rock Industries    39.98     +2.18
ATMI    ATMI Inc                   30.01     +1.06
PNRA    Panera Bread Co            64.65     +3.28
EDO     E D O Corp                 28.89     +1.54
RMCI    Right Mgmt Consultants     23.31     +2.37

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

C       Citigroup                  44.30     -2.19
TYC     Tyco Intl. Ltd             29.90     -5.73
GE      General Electric Co        35.00     -1.85
FTE     France Telecom             29.15     -1.25
DCX     Daimlerchrysler            38.47     -1.53
CEPH    Cephalon Inc               55.99     -8.63

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

ROP     Roper Industries Inc       47.13     -2.71
KNGT    Knight Transportation      21.37     -1.03




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




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