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Daily Newsletter, Monday, 02/25/2002

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PremierInvestor.net Newsletter                 Monday 02-25-2002
                                                  section 1 of 2
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In section one:

Market Wrap: Transports held tough.  Can they hold the spotlight?
Watch List:       GFF, IMCL, PH, COST, CAT, WMT
Market Sentiment: Optimism heading South.

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      02-25-2002          High     Low     Volume Advance/Decline
DJIA    10145.71 +177.56 10172.62  9966.36 1.30 bln   1931/1182
NASDAQ   1969.88 + 45.34  1776.61  1730.92 1.70 bln   1934/1658
S&P 100   563.78 +  9.74   565.83   554.04   Totals   3865/2840
S&P 500  1109.43 + 19.59  1112.71  1089.84             
RUS 2000  468.19 +  3.12   468.20   464.56
DJ TRANS 2777.39 + 51.74  2782.50  2727.01
VIX        23.28 -  1.61    24.69    22.75
VXN        44.07 -  4.50    48.08    44.07
TRIN        0.59 
PUT/CALL    0.75
-----------------------------------------------------------------

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

Transports held tough.  Can they hold the spotlight?

Today's existing home sales number had broader market bullishness 
in play as investors scrambled to buy some stocks with the 
thought that this early economic report might have a bullish 
impact on Wednesday's testimony of Federal Reserve Chairman Alan 
Greenspan.

Existing home sales were much stronger than the consensus 
estimate among economists that were looking for a number near 
5.19 million.  Instead, investors found that existing home sales 
jumped 16.2% to 6.04 million and that spurred a broad market 
rally.

In Friday's market wrap, we mentioned that some Fed watchers felt 
that this week's early economic data may have a significant 
impact on Mr. Greenspan's testimony on Wednesday and today's 
number sure looks like bulls got dealt an ace on their first 
card.

Not only did the stronger than expected existing housing number 
come into play on Mr. Greenspan's testimony, but market 
participants that have been playing the economic numbers from 
recent weeks may have gotten a boost from bears looking to cover 
some positions.

Subscribers need look no further than the Dow Transportation 
Average (TRAN) 2,777 +1.89% for some sign of confirmation that 
the economic cards are still being dealt and in play.  There is 
still quite a bit of work to be done, but investors continue to 
get some confirmation from this group that all today's broader 
market bullishness wasn't all short covering.  For the third time 
in as many weeks, this group of stocks is trying to break clear 
of our downward trend dating back to May of 1999 and in our book, 
these technicals still look rather bullish.

Dow Jones Transportation Average - Daily Interval




The Dow Jones Transportation Average (TRAN) has been here before.  
Breaking above downward trend dating back to 1999, only to be 
turned back lower.  Bulls may get a run this time as today's 
action has our MACD just crossing above the signal and this could 
bring some momentum players into the group.  The next hurdle to 
clear is the relative high from January 4th near 2,840.  If 
that's broken to the upside and holds on a closing basis, it will 
most likely get some market attention.

Leaving the gate!

Subscribers that have been biding some time and looking to hide 
out from the volatility in technology stocks see that one of our 
longer-running transportation plays in shares of Airborne Inc. 
(NYSE:ABF) $18.08 +8.91% left the proverbial "gate" today as the 
stock lifted off to a new 52-week high on heavy volume.  I can't 
find one bit of news to explain today's action and am left to 
believe that subscribers are simply holding a strong stock in a 
strong sector with very little overhead supply in the way.

Airborne Freight Chart - Daily Interval




Today's 8.9% gain in Airborne (ABF) is impressive and rivals many 
gains found in a lot of technology stocks.  Today's impressive 
volume undoubtedly came not only from bulls buying, but also some 
bears calling it quits as the stock has been setting 52-week high 
for the past week and may have been concerning to bearish traders 
that were losing resistance levels.  Today's existing home sales 
number undoubtedly created part of the catalyst for bears to 
close out some positions.  We're willing to let a winner run if 
she wants to, but under current market conditions we'll take a 
more cautious approach and raise our stop just under retracement 
of $17.73.  If the broader TRAN will cooperate, bullishness there 
should help serve as a waive and help push one of the stronger 
transports up into our target zone on retracement.

CNF Inc. Chart - Daily Interval




Subscribers that have been with us a while will find CNF Inc. 
(NYSE:CNF) $31.31 +2.95% a familiar name in the transportation 
sector.  This is a stock we first mentioned as bullish back in 
December of last year.  This stock represents a different bullish 
technical play as a "strong stock on pullback" in a group that 
has been holding tough.  One thing I liked about the trade was 
the level where the recent pullback came to at $30.  In past 
commentary we talked about the impressive volume in early 
December at the $30 level and bullish trades in CNF at current 
levels offered a very good risk/reward trade.  My thinking is 
"those institutions that took some meaningful positions from $28-
$30 probably weren't going to let those positions just collapse 
and would be around to support the stock at $30, if they still 
believed in the stock."  

We see some very similar technicals in CNF that we see in the 
TRAN, with CNF perhaps lagging a bit and ANF actually leading.  
Sometimes a bull that is having some success in a sector will 
spread some bets within the group.  

As Paul Revere said, "One if by land, two if by air."  Our play 
list has the ground and air transportation exposure if the 
transports are ready to confirm an economic recovery.

Only as good as....

The next day's rumor or economic report.  OK, that's enough 
"bull" now what about the bearish trades?  Well... a "rising tide 
can lift all boats" and that's what happened to just about every 
bearish play we are currently carrying as active on our play 
list.

With the NASDAQ Composite up 2.62% it would be tough to not have 
some technology bears seeing some daily losses today.  This is 
something we had planned for in Friday's market wrap when we 
discussed just how "uncertain" both bulls and bears were.

What made things a little more painful for the bears today was 
early session news out of Tyco (NYSE:TYC) $29.50 +7.27% that the 
U.S. District Court, District of New Hampshire, granted Tyco's 
motion to dismiss all of the claims asserted in shareholder suits 
brought against the company and certain officers and directors 
under the federal securities laws.  The allegations in the suits 
were based on criticisms of Tyco's disclosures and accounting 
practices.

There was undoubtedly some relief by the broader investment 
public in today's ruling that planted the seed that "maybe there 
has been an overreaction to some of the accounting allegations, 
and now a bear needs to worry about the economic data."  

Now, before some of our bearish subscribers try reaching across 
the table with their claws and taking an angry swipe at me, we 
have talked about the possibility that stocks have been under 
pressure due to "accounting concerns" and perhaps not necessarily 
some of the economic data.  We still feel as always that it is 
safer to trade bearish in stocks that are technically weak, but 
we've got some rather tight stops on trades that are showing some 
good profits and will stick with stops on our recent bearish 
trades.

But if I'm sitting at the same card table that the markets were 
today, then bulls were definitely dealt an ace card in the 
existing home sales data, while bears were dealt a duce if 
they're just counting on the "accounting worries" to keep stocks 
under pressure.

I had my eye on all of our plays today (long and short).  I was 
rather impressed that shares of PMC Sierra (NASDAQ:PMCS) $16.55 
+3.43% traded in negative or unchanged levels for the bulk of the 
session, but only turned decidedly to the upside in the last 90-
minutes of trading.  Action here really smelled of short covering 
into the close, just in case another ace card was dealt to the 
bulls tomorrow morning in the form of Consumer Confidence at 
10:00 AM EST.  I do note that the Semiconductor Index (SOX.X) 
gained an impressive 5.85% today and PMCS lagged that move most 
of the session.  Subscriber's have a nice gain going in this 
trade and we're protecting that with a tight stop at $17.26.

I'm not convinced that "all is well in technology land" at the 
end of today's trading.  While both of our "software" bearish 
plays in Check Point Software (NASDAQ:CHKP) $29.90 +5.17% and 
Microsoft (NASDAQ:MSFT) rallied against us, I'm focusing a bit 
more on Microsoft's action today as it represents a much broader 
pulse on the software market than does Check Point.

We have a diverse subscribership at PremierInvestor.net that has 
varying time horizons for their trades.  For a short-term trader, 
they may have been hard pressed to hold a short in MSFT after the 
first two hours of trading and stronger than expected economic 
data, but there may have been an interesting technical 
development right near the close that a shorter-term trader may 
want to watch for tomorrow, especially if they are a little 
nervous about Microsoft (MSFT) extending a run from our 
retracement level near $57.50.

Microsoft Chart - 60-minute interval




It sure looks like somebody was watching the 60-minute chart of 
MSFT and willing to be a seller at the still trending lower 50-pd 
moving average.  Throughout the day I was rather "surprised" that 
the bellwether in the software sector and largest weighted 
NASDAQ-100 component lagged a both the GSTI Software Index 
(GSO.X) $158 +3.89% and NASDAQ-100 Trust (AMEX:QQQ) $35.01 +4.04% 
gains.  Now, today's 1.87% gain isn't overly bearish from 
Microsoft (MSFT), but it does raise an eyebrow as to why this 
stock just didn't present itself as a leader the entire session.

At this point, I'm just not ready to get crazy about technology 
stocks.  In fact, it may take a couple of days or even weeks 
before I turn "crazy on technology stocks."

With that said, there is one stock that strikes me as interesting 
and its just the kind of "crazy" idea that might have some 
merit.

The stock is SanDisk (NASDAQ:SNDK) $15.15 +5.06%.  Last week I 
was looking for "triangle" patterns and found a triangle 
developing in the point/figure chart of SanDisk (SNDK).  What has 
me interested in the stock is a little blurb I heard on the radio 
this morning about the potential growth still to come in the 
digital camera market.  

I was just getting out of the shower and had the towel stuck in 
my ear, but there was something said on the radio about the 
number of homes in the U.S. that currently have a digital camera.  
I'm too familiar with this as I recently bought a new laptop 
computer and I had to buy some SanDisk flash memory cards and a 
flash memory card reader from SanDisk in order to download 
pictures from the digital camera.

I've written before how sometimes the "smoke stack smoking" 
theory that some old-time investors have used to identify 
investment opportunities happens to actually work.  The smoke 
stack smoking theory is based off of the thought that "if the 
industrial smoke stack at XYZ widget is really smoking" then that 
must mean they're hard and work and turning out widgets at a fast 
pace.  That must then mean that they're filling orders and 
earnings will flow to the bottom line.

I need to try and dig up some type of "fundamental" information 
on this one to see if there really is something taking place, but 
a trade at $16.50 may be a very bullish trade for shares of 
SanDisk (SNDK).  This would be a "very early" entry into a 
technology long and right now I'm in no hurry to get long 
technology.  There's plenty of time for that!

SanDisk Chart - $0.50 and $1 box




I've been keeping an eye on shares of SanDisk (SNDK) in recent 
sessions, as the stock has actually held rather tough despite 
some technology weakness.  Relative strength has been strong and 
a break of longer-term downward trend at $16.50 could have bears 
running for cover and bulls taking over.  This one can move when 
it gets going and might be a stock that aggressive technology 
bulls have been waiting patiently for.  Setting an upside alert 
at $16.50 for 1/2 bullish position, and targeting $21 on such a 
trade, with a stop at $13.50.  

Jeff Bailey
Premier Investor


==================================================================
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.

STOCKS WORTH WATCHING
---------------------------------

Griffon Corp - GFF - close: 18.44 change: +1.31

WHAT TO WATCH: Construction and manufacturing issues rose nicely 
today in response to the positive home-starts news, and GFF was 
no exception.  Moving over resistance just below $18, it rallied 
on high volume to new 52-week highs.  With no overhead supply, 
additional positive economic news this week could power shares 
higher.  Ideally, we’d like to see shares pull back and bounce 
from $18 before considering an entry.  However, it is sometimes 
seen as a bullish indicator for tomorrow when the stock closes at 
its high for the day.




---

ImClone Systems Inc - IMCL - close: 14.73 change -0.97

WHAT TO WATCH: Anticipation of a crucial meeting with the FDA 
tomorrow weighed heavily on IMCL, as it shed over 6%.  The 
purpose of the meeting will be to re-evaluate Erbitux, an 
experimental colorectal drug that the FDA refused in December.  
IMCL currently sits just above its yearly-lows at $13.77 from 
February 8th, 2002.  A negative reaction to the FDA conference 
could see this level abandoned quickly, as investors abandon any 
hope for the drug.  Alternatively, encouraging words from the FDA 
could see shares quickly bounce back to the upper-teens or more. 
We see two ways to play this meeting or more correctly the 
reaction to it (this means we would NOT take a position ahead of 
the meeting as that would be akin to gambling and you'd have more 
fun at Vegas).  Of course we would already consider this a high-
risk play just due to its nature.  After the meeting, if shares 
break down under $14.00 we'd consider a short play as the stock 
could quickly retreat to the $12 or $10 levels.  Likewise, if the 
reaction is favorable the a position near $15 (if you can get it) 
might be a good bullish entry with a relatively tight stop.  Our 
short-term upside target would be $19.75 to $20.00.  The problem 
with either attempt is that shares could easily gap one way or 
the other.  
 



---


Parker Hannifan - PH - close: 51.13 change: +1.01

WHAT TO WATCH: The breakout in PH began last week when shares 
started moving higher on rising volume.  It's that sort of action 
that has attracted even more bullish attention that has now 
culminated into a true high-volume breakout.  Friday's session 
saw PH close above the $50 level, which had acted as resistance 
for months.  The last time shares were near this level was back 
in May of 2001.  Monday's performance confirms the move with 
extreme volume nearing two million shares also confirming 
investor sentiment.  We searched for some sort of news lifting 
the stock and came up with an alliance and equity investment by 
PH in Japanese company Taiyo Ltd.  It is not within the scope of 
the watch list to research each stock in depth but we'd say Wall 
Street's reaction was positive.  A pull back to the $50 level 
might be an attractive entry point for a new long play.  The 
point-and-figure chart confirms the breakout above $50.




---

COSTCO - COST - close: $44.40 - change:  -0.83

WHAT TO WATCH: COST stuck out like a sore thumb during today’s 
trading session, as its price declined in the face of positive 
economic news and gains by most other retail stocks.  This 
relative weakness is intriguing, especially considering that the 
daily stochastics are looking bearish as well.  Most importantly, 
COST is threatening to break below its ascending channel that 
started in November.  However, we see this pull back to the 
bottom of the channel as a possible bullish entry point.  Our 
bias is bullish so we'd expect the stock to maintain support at 
$44.  Yet shares have dipped below the 50-dma more than once on 
its recent up trend and therefore we would need to give it a 
little more room.  A dip to $43.00 or $43.50 would not be out of 
the question but we would look for the beginnings of a bounce 
before committing any capital.  If shares do breakdown in the 
face of a bullish sector, bears might be able to scalp a couple 
of points to its 200-dma just above $40 but we're not sure it's 
worth your time to do so.  Optimistically, we'd like to see a 
move to the top of the channel near $48.  Keep an eye on the 
Retail Index (RLX.X), as a move over resistance at $950 may 
create a sector rally that lifts COST from the bottom of its 
channel.




---


Caterpillar Inc. - CAT - close: 56.06 change: +3.38

WHAT TO WATCH: CAT rallied today on heavy volume of 5.2 million 
shares versus the average of just 1.6 million and is now less 
than a point away from attacking new 52-week highs.  Given the 
strength of today’s rally, a move above last May’s high at $57 is 
not out of the question.  Aggressive traders may want to consider 
a position when CAT closes above $57.  However, we’re 
anticipating some consolidation before this occurs and would 
evaluate an entry on bounces from $54.




---


Wal Mart - WMT - close: 60.65 change: +0.70

WHAT TO WATCH:  WMT has been one of the strongest retail 
performers since late September and is now trading near new 52-
week highs.  We like how shares have continually bounced from the 
20-dma and 30-dma's.  Plus, the daily stochastics look positive 
despite a MACD that is vacillating sideways.  Shares have been 
consolidating between 59-61 recently and we suspect further 
positive retail sentiment will power WMT above $61.  Of course 
with WMT, as the biggest component in the RLX index, it could be 
vice versa.  A volume-confirmed breakout over this level would be 
a good time to evaluate an entry or look for a dip back to $59.  






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

Optimism heading South.
by Russ Moore

Another bear market rally is being played out on Wall Street 
while volume, and investor optimism, continue to fade.

The markets posted their second winner in a row thanks to upbeat 
earnings announcements from GM, Qualcomm and Eastman Kodak. The 
DOW closed the session with a gain of +1.8 percent. The NASDAQ 
was the beneficiary of a soaring chip sector (+5.85 percent), and 
ended the day with a +2.6 percent rise. The big cap NDX added 
+3.8 percent.

Volume was light with 1.32 billion shares moving on the NYSE and 
1.62 billion on the tech index. Market breadth was positive as 
winners outpaced losers by a margin of 19/12 on the big board and 
19/17 on the NASDAQ.

Most sectors rode the bullish wave with oil service and 
financials heading the list on the broad markets and the chip 
sector leading the tech side. Gold and drug stocks were under 
modest selling pressure.

The impact from an almost daily dose of "accounting issues" is 
starting to make its presence felt. A joint effort survey from 
UBS and Gallup organization shows investor optimism slipped 23 
points over the last month. When asked about the financial 
markets over the next 12 months, investor optimism came in with a 
reading of 50, down 10 from January’s level. More importantly, 34 
percent of those surveyed said they were less inclined to invest 
in stocks as a result of the various accounting challenges.

The rather negative sentiment portrayed in the survey will 
change, given enough time. Another factor which may lead to an 
increase in optimism is a move by the big players i.e. 
Commercials, in to an accumulation phase. Such a move would see 
volume levels return to normal and investors pushing the buy 
buttons, unwilling to miss out on the next rally.


VIX
Monday 02/25 close: 24.89


VXN
Monday 02/25 close: 48.57


10-yr Bonds
Monday 02/25 close: 4.85


Total Put/Call Ratio:  .75


Equity Option Put/Call Ratio:  .62


Index Option Put/Call Ratio: 1.88


===

NASDAQ 100 Index (NDX/QQQ)
52-Week High: 103.51
52-Week Low:   28.19
Current close: 35.00

Volume/Open Interest
Maximum calls: 40/129,622
Maximum puts : 37/132,270

Moving Averages
 10 DMA 35
 20 DMA 36
 50 DMA 38
200 DMA 39

Fibanocci Retracements
Relative High: 43.24 (12/06/01)
Relative Low:  34.97 (02/08/02)
38% 38.13
50% 39.11
62% 40.10

===

S&P 100 Index (OEX)
52-Week High:  834.93
52-Week Low:   491.70
Current close: 563.78

Volume/Open Interest
Maximum calls: 580/6,809
Maximum puts : 520/6,535

Moving Averages
 10 DMA  559
 20 DMA  559
 50 DMA  574
200 DMA  593

Fibanocci Retracements
Relative High: 600.80 (01/04/02)
Relative Low:  546.13 (01/30/02)
38% 567.00
50% 573.44
62% 579.99

===

S&P 500 (SPX)
52-Week High:  1530.01
52-Week Low:    965.80
Current close: 1109.43

Volume / Open Interest
Maximum calls: 1100/37,922
Maximum puts : 1100/43,726

Moving Averages
 10 DMA 1102
 20 DMA 1103
 50 DMA 1127
200 DMA 1155

Fibanocci Retracements
Relative High: 1176.97 (01/07/02)
Relative Low:  1077.78 (02/06/02)
38% 1115.67
50% 1127.37
62% 1139.27

==

DJIA (INDU)
52-Week High:  11,518.83
52-Week Low:    8,235.81
Current close: 10,145.71

Volume / Open Interest
Maximum Calls: 100/20,880
Maximum Puts    96/36,077

Moving Averages:
 10 DMA  9,927
 20 DMA  9,837
 50 DMA  9,916
200 DMA 10,048

Fibanocci Retracements
Relative High: 10,300.15 (01/07/02)
Relative Low    9,529.46 (01/30/02)
38%  9,823.86
50%  9,914.80
62% 10,007.28

==

Biotech Index (BTK)
52-Week High:  811.61
52-Week Low:   383.28
Current close: 487.52

Volume / Open Interest
Maximum Calls: 520/952
Maximum Puts:  520/932

Moving Averages
 10 DMA 497
 20 DMA 494
 50 DMA 534
200 DMA 543

Fibanocci Retracements
Relative High: 625.15 (12/06/01)
Relative Low:  450.20 (02/07/02)
38% 517.03
50% 537.67
62% 558.66

==

Semiconductor Index (SOX)
52-Week High: 1280.84
52-Week Low:   362.00
Current close: 538.74

Volume / Open Interest
Maximum Calls: 500/2,047
Maximum Puts:  500/1,397

Moving Averages
 10 DMA 542
 20 DMA 542
 50 DMA 544
200 DMA 547

Fibanocci Retracements
Relative High: 606.88 (01/09/02)
Relative Low:  499.09 (01/22/02)
38% 540.26
50% 552.98
62% 565.91

==

Pharmaceutical Index (DRG)
52-Week High:  455.28
52-Week Low:   339.49
Current close: 382.79

Volume / Open Interest
Maximum Calls: 400/300
Maximum Puts:  380/500

Moving Averages
 10 DMA 380
 20 DMA 376
 50 DMA 378
200 DMA 389

Fibanocci Retracements
Relative High: 403.83 (11/26/01)
Relative Low:  365.22 (02/08/02)
38% 379.93
50% 384.51
62% 389.17

*****

CBOT Commitment Of Traders Report: Friday, 02/22. 
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 
02/05/02     347,583   401,569   (53,986)   (4.3%)
02/12/02     355,276   412,868   (57,592)    6.6%
02/19/02     355,905   772,569   (60,759)    5.5%

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
02/05/02       128,235    64,404    63,831     1.1%
02/12/02       126,730    59,902    66,828     4.7%
02/19/02       130,856    63,311    67,545     1.1%

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 
02/05/02      32,357    35,405    (3,048)      2.5%
02/12/02      32,712    34,841    (2,129)    (30.1%)
02/19/02      33,871    35,690    (1,819)    (14.6%)

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
02/05/02       10,416     8,173    2,243     58.2%
02/12/02        9,009     7,415    1,594    (29.0%)
02/19/02        9,966     8,073    1,893     18.8%

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 
02/05/02      21,868    12,068    9,800     25.9%
02/12/02      26,811    16,488   10,323      5.3%
02/19/02      29,606    17,953   11,653     12.9%

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
02/05/02       5,764    10,528    (4,764)     24.2%
02/12/02       4,562    10,038    (5,476)     15.0%
02/19/02       4,654    10,431    (5,777)      5.5%

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        +67,545     +66,828        -60,759    -57,592

Total Open
Interest %       (+34.79%)  (+35.81%)      (-7.86%)   (-7.50%)
                 net-long   net-long       net-short  net-short


                     Small Specs             Commercials
DJIA futures     (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value          -5,777     -5,476          +11,653   +10,323
Total Open
interest %       (-38.29%)    (-37.51%)      (+24.50%)  (+23.84)
                 net-short   net-short       net-long    net-long


                     Small Spec              Commercials
NASDAQ 100      (Current) (Previous)    (Current) (Previous)
Open Interest
Net Value         +1,893      +1,594       -1,819    -2,129

Total Open
Interest %        (+10.49%)   (+9.71%)     (-2.61%) (-3.15%)
                 net-long   net-long      net-short  net-short


What COT Data Tells Us
----------------------
Indices:.Commercial and Small Spec positions remain virtually 
unchanged this week.

Gold:.Ditto for the gold market as Commercials continue to hold a 
good supply of net-short contracts. Gold has come off its highs 
but still remains relatively strong. In the past, Commercial 
activity has been reasonably accurate in determining the price 
movement on the precious metal however, this time we're stumped. 

01/22 50,959 contracts net-short
01/29 31,515 contracts net-short
02/05 58,180 contracts net-short
02/12 62,223 contracts net-short
02/19 60,054 contracts net-short

Data compiled as of Tuesday 02/19 by the CFTC.





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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 02-25-2002
                                                   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
=================================================================
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/022502_2.asp
=================================================================

In section two:

NetBulls Tech Stocks
  Closed Bearish Plays:    CLS

StockBottom Non-tech Stocks
  Stop/Notes adjustments:  ABF

High Risk/High Reward

Split Trader
  Announcements:           Update on CUB 3-for-1 Approval

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)

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

===============
NB Closed Play
===============

  -------------------
  Closed Bearish Play
  -------------------

Celestica - CLS - close: 34.05 change: +1.41 stop: 34.05 

We knew it would happen sooner or later.  CLS finally bounced 
after falling from $39.00 to a low of $31.76 during Friday's 
session.  The late day bounce in the Nasdaq on Friday continued 
into Monday's session fueled by a number of positive comments and 
brokerage upgrades of different tech stocks.  This lifted the 
Nasdaq by 45 points or 2.6%.  Celestica also rebounded with the 
market and added 4.3%.  The Premier Investor newsletter would 
have been stopped out at $34.05.  This closed the play with a 
move of $5.35 or a move of 13.5%.  From our point of view this 
looks like an oversold bounce and bears may do some short 
covering but they're probably already looking for new entries.  
The Nasdaq remains under its 10-dma at 1792 and round-number 
resistance at 1800.  CLS is also under a lot of resistance and 
failed to clear the 50% retracement level from its September low 
to its December high range.  Just above this 50% retracement is 
the $35 mark, which could also act as resistance but then a lot 
of stocks are bouncing back to their 10-dma before rolling over 
again.  As you can see our bias is still bearish for the stock.

Picked on February 5th at $39.40
Gain since picked:         +5.35
Earnings Date           01/31/02 (confirmed)






=================================================================
AT Active Trader/Non-tech plays
=================================================================

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

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

Airborne Inc - ABF - close: 18.08 change: +1.48 stop: 17.65 *new*

The transports section rally strongly today with the positive 
market lifting several stocks in the group.  The Dow Tranports 
rallied over 50 points and are quickly approaching the 2800 level 
of overhead resistance.  Strangely enough, shares of ABF rallied 
almost 9% on extremely heavy volume of 1.6 million shares.  This 
is an incredibly strong breakout for the stock with no company 
specific news to attribute to it.  Immediately one begins to 
wonder what institutions see in the future if they are willing to 
make this kind of bet today.  We strongly considered closing the 
play out tonight since our original target was close to the $18 
level.  Individual traders who have already done so or choose to 
take profits tomorrow should be congratulated for sticking to 
their trading plan.  With shares closing near the high for the 
day it would lead us to believe that shares will at least be 
strong again tomorrow morning.  However, the odds of at least 
some profit taking after such a big move are very high.  
Therefore we are going to raise our stop to $17.65, which should 
protect a move of 10% in the play.  One way to play the move 
today would be to take profits in ABF and rotate into a new 
bullish position on Fedex (FDX) since FDX just now broke out over 
its recent resistance level.

Picked on February 11th at $16.05 
Gain since picked:          +2.03
Earnings Date            02/01/02 (confirmed)






=================================================================
Split Trader / Stock Splits (ST) section
==================================================================

-------------------
Split Announcements
-------------------

Split Update:

Cubic Corp (AMEX:CUB), which had already announced a 3-for-1 stock
split on Feb. 13th, 2002, came out with an update for investors.  
At the time of the announcement, there was no payable date set as 
the split was tentative on shareholder approval.  The Board of 
Directors announced today the date of a special shareholders' 
meeting for April 17th, 2002 to ratify the 3:1 split.




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

BAC     Bank Of America            63.25     +1.93
RY      Royal Bank of Canada       31.18     +1.29
COC     Conoco                     27.98     +0.66
MAY     May Department Stores      36.45     +1.01
UCL     Unocal Corp                36.40     +0.87

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

ABF     Airborne Inc               18.08     +1.48
RKT     Rock-Tenn Co               19.55     +1.05
IWOV    Interwoven Inc              6.78     +1.22
GFF     Griffon Corp               18.44     +1.31
SNS     The Steak N Shake          15.10     +1.45
EFTD    FTD.com Inc                 8.74     +1.05

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

PG      Proctor & Gamble Co        87.37     +1.77
SLB     Schlumberger Ltd           59.68     +2.33
LOW     Lowe's Companies Inc       47.48     +1.44
GM      General Motors             55.48     +2.37
CAT     Caterpillar Inc            56.06     +3.38
MHP     McGraw-Hill Companies      67.16     +1.26

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

TJX     TJX Companies Inc          34.05     -1.72
MCK     McKesson Corp              33.96     -1.42
HGSI    Human Genome Sciences      21.90     -1.63

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

LLL     L-3 Communications         108.79     -2.01




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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

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