Option Investor
Newsletter

Daily Newsletter, Friday, 06/28/2002

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter          Weekend Edition 06-28-2002
                                                    section 1 of 3
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/f28b_1.asp
=================================================================

In section one:

Market Wrap:      Paradise Forgotten: Drought vs. Monsoon. 
Play-of-the-Day:  This Stock Isn't Standard
Watch List:       HCR, ERTS, AMZ, NVDA, RIG, NOK, and tons more!
Market Sentiment: Undressing False Positives and Bad Data

******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
        WE 6-28          WE 6-21          WE 6-14          WE 6-07  
DOW     9243.26 - 10.53  9253.79 -220.42  9474.21 -115.46  -335.58  
Nasdaq  1464.96 + 24.01  1440.95 - 63.79  1504.74 - 30.74  - 80.25 
S&P-100  490.12 +   .70   489.42 - 12.34   501.76 -  5.56  - 21.88 
S&P-500  989.82 +   .69   989.13 - 18.14  1007.27 - 20.26  - 39.61 
W5000   9384.03 -  5.95  9389.98 -159.74  9549.72 -202.97  -353.80 
RUT      462.66 +  1.59   461.07 +  2.00   459.07 - 11.44  - 16.96 
TRAN    2730.32 - 25.32  2755.64 + 82.50  2673.14 - 13.52  - 62.60 
VIX       29.13 -  2.15    31.28 +  1.35    29.93 +  3.28  +  3.75 
VXN       57.95 -  1.35    59.30 +  3.63    55.67 +  3.43  +  6.29 
TRIN       1.18             2.01             1.34             1.30        
Put/Call    .66             1.27             1.15              .79                 
******************************************************************


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

Paradise forgotten: drought vs. monsoon. 

Act I, Scene I. 
The geography traversed by mammals.

Thank God it’s Friday.  Today the Dow faded -26.66 to 9243, while 
the COMPX climbed an itty +4.01.  The 10-year bond yield remained 
unchanged at 4.823%.  Strong sectors in today’s market include: 
biotech, transports, and banks, while flailing bears were: oil 
services, semiconductors, pharmaceuticals, retail, and gold.  
NYSE advancers outpaced decliners 2154 to 1092, while NASDAQ 
advancers heeded 2105 to 1425 decliners.  The past week was 
scattered with scandals, earnings, economic news, an FOMC 
meeting, dollar worries, a US Treasury budget crisis, and 
speculation that market psychology might have put in a temporary 
bottom.  It certainly is hard to hear one particular voice when 
the entire crowd is screaming. 

Chart of the S&P 500 (daily)




The chart of the SPX.X shows the obvious descending channel we 
have been trading in.   Wednesday showed penetration of the lower 
channel line, and provided the technical bounce needed to 
potentially establish a higher low for the summer.  Although this 
technical point can be construed as a potential stop loss for 
gambling bulls, there is still quite a bit of conflicting data to 
be analyzed.  

Act I, scene II.
Drought creates dustbowl.

Of course we have to put WorldCom (NASDAQ: WCOM) on the top of 
our list.  The Telecom overstated EBITDA by 3.6 billion dollars. 
Such a huge accounting scandal could possibly make investors 
weary of putting their hard-earned dollars into stocks where a 
potential accounting landslide looms over their heads.  In the 
latest development, U.S. District Judge Jed Rakoff barred 
WorldCom from destroying financial records or paying executives 
"unjust enrichment" of more than $100,000. 

Xerox (NYSE: XRX) wrote off $1.9 billion in revenue which was 
reported too early between 1997 and 2000.  XRX finished down 
$1.03 at $6.97 although we did see a couple of quote feeds 
showing $7.01 and one even showed a last of $6.00.  The total 
decline amounted to 12.8% on volume of more than 48M.

Further, the average investor is starting to look at the year to 
date returns, and wonder whether the markets are truly better 
than the safety of tucking away money in their bedroom 
mattresses.   A wise man once said "the return of your principal 
is more important than the return on your principal".  Year to 
date the NASDAQ was off 25%, the Dow had fallen 9% and the S&P 
finished its worst first half of a year since 1970 sliding 21%.  
Ironically, treasuries have outperformed stocks for the third 
year in a row.

The University of Michigan’s consumer sentiment index fell to 
92.4 in June, down from 96.9 in May.  Although this number has 
fallen, it is noted that 92.4 is up from the 90.8 expected by 
economists.  Obviously some consumers will be slightly reluctant 
to spend money, particularly if they are one of the 17,000 people 
WCOM has just laid off.  

Act I, scene III.
Rain clouds on the horizon

Overall the dollar has fallen drastically from its high in late 
January.  However, there are confirmed reports of intervention by 
the fed, the Bank of Japan and the European Central Bank to lift 
the dollar.  The dollar closed at 106.15 up +.04 for the day.  

The week provided some decent economic numbers overlooked in the 
shadow of the "other" scandalous news of this week.  On Tuesday, 
Consumer Confidence exceeded expectations of 106, by landing a 
slight gain of 106.4.  Existing home sales beat estimates of 
5.70M, growing to 5.75M.  Durable Orders increased to 0.6% from 
0.4%, 0.1% above expectations.  New Home Sales jumped to 1.028M, 
beating a predicted 920K.  First quarter GDP was revised upward 
to 6.1%, from its previous estimates of 5.6%.  Initial Claims 
dwindled to 388K down from 398K.  Personal Income held stable at 
0.3%, though this was an increase from a previous 0.2%.  One of 
the only contrarian numbers, was the Help Wanted Index, which 
shrunk slightly to 45 from 47.  It would seem that the economy is 
attempting to take a stand in the face of the current recession.  

The Federal Open Market Committee (FOMC) left rates unchanged 
this week, where the Federal funds rate will stay at 1.75% and 
the Discount rate will remain at 1.25%.  The FOMC press release 
states that "the foreseeable future, against the background of 
it’s long run goals of price stability and sustainable economic 
growth and of the information currently available, the risks are 
balanced with respect to the prospects for both goals".

Gold has begun to come off of its highs, with the XAU.X drifting 
downward to close today at 71.46, falling -1.96.  This was the 
third down day for the index and it closed under previous support 
from early June near 73.40.  Looking at a chart of the index one 
might suspect bulls to consider buying at technical support near 
70.  Unfortunately, gold bugs are probably more concerned that 
the price of gold has fallen back under the $320 level and as of 
Friday's close back under its 50-dma as well (August contracts).


Act II, Scene I.   
Technical weather patterns and Freud.

Before we talk technicals, let’s examine the current 
psychological side of the market.  It has been said this week 
that while testing lows, an irrational event like the WorldCom 
debacle is the type of emotional windfall to capitulate a 
potential bottom.  Long story short, when all investors finally 
give up, it’s time to start buying.  The question is then, did 
this week force the psychological resignation that would infer a 
summer bottom?  Did you sell everything?  I for one took the news 
in stride, in fact, although I didn’t know it would be WCOM, I 
certainly expected this type of thing from any one of a number of 
different companies.  Is this psychological exhaustion?  Mr. 
Freud, I believe my mother would say no. We simply see that many, 
many companies are going to have to change their accounting 
models to stop cooking the damn books.  It doesn’t mean that 
investors are going to never put money into the market; they are 
simply going to be more choosey with companies who report 
accurately.  The bear market IS making the market MORE efficient 
and the bear market will probably CONTINUE to make the market 
MORE efficient. Whether that means many more companies fall out 
of bed or not, is yet to be seen.  Even with the bad news this 
week, the CBOE reports that the highest put/call ratio close was 
.98 on Wednesday.  On September 17th, the put/call close was 1.17.     

Chart of the VIX compared to the DJIA




Although the VIX.X has rallied over the last couple of months to 
its current level of 29.13, it could potentially go higher.  The 
above chart shows the inverse relationship between the Dow Jones 
Industrial Average and the VIX.X.  The Aroon Oscillator is a 
trend analysis tool which trades in a range from 100 to -100.  
The last time it traded at these levels was around September 
17th, or as we know it, just before post-9/11 bottom.  Keep in 
mind that this indicator is setup to evaluate the trend of the 
relationship between these two sets of data.  

The SPX.X pulled back into the afternoon, closing at 989.82.  The 
immediate trading range sees initial support at 988.83, 981.43, 
followed 976.34.  Keep in mind that these are immediate super 
short-term support levels and DO NOT serve as trading pivot 
points. 

I think most of the Bulls would like to see a staged recovery at 
this point; the question is whether such a feat of confidence is 
really viable.  Economic data next week includes: Auto Sales, 
Truck Sales, Construction Spending, ISM Index, Factory Orders, 
Initial Claims, Hourly Earnings, Nonfarm Payrolls, and the 
Unemployment Rate.  For a bullish outlook, the dollar will have 
to hold its ground, attempting to get well above 107 and beyond 
107.40 to close the window initiated by the gap down earlier this 
week.  Earnings next week are reasonably light with the shortened 
week for the Fourth of July holiday.  Assuming there is no 
scandalous accounting debacle, the market might try and hold its 
lows.  Generally holiday weeks don’t comprise enough volume to 
push highs, so for the most part; we can expect a reasonably slow 
and sideways market.  Savvy channel traders should have ample 
opportunity to scalp small profits.  Our biggest concern at the 
moment is the major indices are not acting any stronger than they 
have for the last few months.  Every rally appears to be just 
another shorting opportunity and there hasn't been strong enough 
volume on the bounces to really scare the bears.  Until we get a 
strong enough break from the current downtrend traders need to 
stick to their bear market strategies.

At this point to come out and say that "this is the bottom", or 
"we’re gunna dump like Enron" would be incredibly presumptuous.  
Even with strong economic data for the week, we still see 
uncertainty.  If the dollar can’t hold, even with central banks 
helping, the fed would have to raise interest rates in the future 
to fight potential deflationary pressures.  In this case, 
unfortunately, the amount of money put to work in the economy 
would become more limited, so recovery would take longer.  
However, at least at the moment, analysts speculate that the 
dollar could fall another 10% or more before the administration 
would seriously attempt to defend the greenback.  So far it's 
mostly been the Bank of Japan desperately trying to keep the Yen 
from getting any stronger against the dollar.  A stronger Yen 
makes their exports more expensive and America is a major 
importer of Japanese products.  Bottom line, we don’t have enough 
data to really say one way or another for sure.  So what to do?  
Pick several strategies and have multiple game plans.  Feeling 
bullish?  Buy something that has been fundamentally strong: good 
trend, high current ratio, low PE, low float, good dividends, 
solid management.  Then keep an incredibly tight stop loss.  
Feeling bearish?  Short something fundamentally weak: low current 
ratio, low quick ratio, negative earnings, exaggerated book 
value, or accountants wearing little black masks.  Then keep an 
incredibly tight stop loss.  Given the volatile swings it has 
been a real traders market.

If we start to break out early in the week, it’s not a bad idea 
to think about shorting gold.  If we travel sideways, watch 
defensive sectors like oil.  The price of oil per barrel has 
slowly been creeping higher again from its mid-June lows.  CVX 
has an incredible consolidation pattern right on the 200 day 
moving average, and the $XOI.X broke out above the 200-dma today.  
If the dollar begins to crumble, a potential play is to buy gold 
on the pullback.  The media is reporting that the gold market has 
been in a 20-year bear market.  For a potential rally, keep an 
eye on the financials; they should precede a major move in the 
market.

Bottom line, next week should showcase the doldrums of summer.        

Mark W.


=========================
Play-of-the-Day (BULLISH)
=========================
(( new Active Trader long play ))

Standard Pacific - SPF - close: 35.08 change: +0.91 stop: *text*

Company Description:
Standard Pacific is a homebuilder.  The company produces high 
quality single-family homes in the major metropolitan areas of 
California, Texas, Arizona, and Colorado.

Why We Like It:
We know that the stock market possesses the stability of a 
Colorado Mustang that's just heard a firecracker for the first 
time.  And we know, too, that there's a raging debate in economic 
circles about whether the housing sector--and home building 
stocks--can remain strong.  But when we look at Standard Pacific, 
we can't help but be impressed with its technical strength as 
well as the few tidbits of fundamental news that have appeared on 
it recently.

In addition to JPM Securities "Strong Buy" upgrade on June 6th, 
SPF reported on June 4th that new home orders for May had 
increased by a record 70%.  With a current PE of just over 10, a 
PEG (P/E to Growth Rate) of .82, one can hardly characterize this 
stock as over valued.  But let's face it: in an era of WorldCom 
and Enron, fundamentals offer more numbers than confidence.  For 
us, the most attractive aspect of Standard Pacific are this:  the 
stock is seemingly in the final stages of a healthy two month 
consolidation, and it is flashing a variety of technical signals-
-improving RSI, recent progressive movement above an upwardly 
trending 50-dma, an upwardly trending 200-dma, and today's 3% 
advance on hefty volume--which all suggest a breakout to new all 
time highs is imminent.  And we would like to be long this stock 
when that occurs.

Our strategy will be as follows: 1) we'll go long if shares of 
SPF trade above $35.40; 2) we will NOT take a long position if 
SPF gaps above $36.00; 3) once triggered, we'll employ an initial 
sell stop that is placed below the 50-dma and support, of $31.70.  
We believe that the stock is capable of an initial advance to the 
top its longer term channel near the $40 mark.  Shares are 
certainly capable of more but the $40 area could be psychological 
resistance and it also offers a good place for us to take profits 
and evaluate new entries.

Picked on June xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date         07/23/02 (unconfirmed)
 





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

Premier Investor Readers:   

When Assistant Editor Kent Barton and I conduct our daily stock 
scans, we also examine the technical health of major sectors.  
Our current review of sector indexes has identified negative 
technical patterns that are forming--or have already formed
--on recently popular sectors: 

XAU (Gold and Silver):  break down below recent support.
OSX (Oil Services):  broke through rising channel and preparing 
to break down below 200-dma and price support near 90.
HMO (Health Care Payors): double top & sharp break below 50-dma. 

Conversely, there are a few indexes that now seem to be flashing
 new positive patterns and these are:

DJUSHB (DJ US Home Building): has shown very good relative 
strength compared to the broader markets and could be preparing 
for another leg higher once it breaks resistance at 400.
XBD (Broker Dealer):  Has traded down to key Fibonacci 
retracement and bounced three times at support near 400.

We hope these observations are helpful as you scan tonight's Watch List.

Siegfried Brian Barger, Editor

------------------------------

Manor Care - HCR - close: 23.00 change: -0.12

WHAT TO WATCH: As noted in our introduction, the HMO index has 
weakened recently, and health care provider stocks have been 
hurt.  HCR is one of these.  The stock plunged below its 
declining 200-dma this week; although it attempted to rebound, it 
continues to trade under the 200-dma.  We think this stock could 
offer an attractive shorting opportunity in coming days.  Traders 
need to recognize that HCR may attempt to rebound back to the 
$24.80 resistance region, which is just below the 50-dma.  This 
could be one location at which to enter a short position.  
Otherwise, once HCR drops below $22.25 it moves into a region of 
limited support, and that region continues down to approximately 
$19.55.  A move below $22.25 may be the best location at which to 
short HCR.


 

---

Electronic Arts - ERTS - close: 66.05 change: -0.83

WHAT TO WATCH: ERTS has appeared on our Watch List in prior 
weeks.  This technology stock, involved in the production of 
entertainment software, has been edging every closer to new all 
time highs, which it has achieved in each of the last two days, 
before pulling back.  The stock is trading nicely above its 
rising 50-dma and ERTS represents an attractive long position--as 
long as the broader market remains reasonably positive.  
Potentially tradable support is just below $65.00, and a rebound 
off this level next week could represent a trigger point for 
entering new long positions; other traders may simply wait until 
new highs are reached again before taking a position, and this 
would be above today's high of 66.98.  A sell stop under the 50-
dma might be appropriate.  


 

---

MDC Holdings - MDC - close: 52.00 change: +1.52

WHAT TO WATCH: Since June 18th, home builder MDC Holdings has 
returned to a level back above its flat 50-dma, and the stock now 
seems to be using this moving average as a springboard for a new 
upward phase. We like this stock as a possible long position 
because of the sector it's in, its enhanced EPS estimates and the 
stock's improving technical pattern. Volume has been increasing 
this week, and today's pop pushed MDC out of its June 18th - June 
27th wedge-shaped consolidation.  After telling Wall Street on 
June 25th that it expects to beat Q2 consensus earnings 
estimates, MDC Holdings now seems to headed toward the $59.00 
level.  This represents both the top of its longer-term 
regression channel and the 161% Fibonacci retracement of its most 
recent decline (May 6th  - June 4th).  The stock obviously runs 
into psychological resistance at the $60.00 region, and we'd 
encourage traders to take gains once the stock nears the $59.00 
region. A sell stop below the 50-dma would be prudent.




---

American Medical Security - AMZ - close: 23.95 change: +0.32

WHAT TO WATCH: AMZ is an insurance company, providing health 
coverage to individuals and small employers.  In recent days this 
stock has been hitting all time highs, and volume has been 
spiking in the last two days.  AMZ lifted off a small two-week 
consolidation yesterday and it continued higher today.  If you 
elect to take a long position in this stock, please remember that 
it has low liquidity, frequently trading fewer than 100k shares 
per session and that it could be very volatile as short-term 
traders jump on its momentum bandwagon.  This stock is only for 
active traders.  Patient traders would probably do best waiting 
for a bounce at the 50-dma, which just so happens to coincide 
near the $20 level of support (for the moment).  Looking into our 
crystal ball shows a potential move to the $25 level before 
seeing any pull back and the nearest support level is actually 
$23.00.  We suggest tight stops.


 

---

Nokia Corp - NOK - close: 14.48 change: +0.63

WHAT TO WATCH: Cellular phone maker Nokia has been on an upward 
tear in the last few trading sessions, moving from a low of 
$11.85 to today's high of $14.77. News that Nokia was chosen by a 
Finland's Elisa Networks to provide it with next generation 
broadband network services may have contributed to today's 4% 
advance. This is a considerable five day move for a patently weak 
stock, a move that brought NOK right up to its declining 50-dma--
and the 61.8% retracement of its May decline--where it closed 
today.  On its longer-term weekly chart, NOK's price now sits 
just below the upper band of its regression channel.  All of this 
suggests that the stock may be very close to exhausting is good 
fortune.  Regardless of today's news, we think the stock could be 
vulnerable next week and the stock seems likely to begin another 
extended move downward.  Short positions might be taken once NOK 
moves back below today's low ($14.20); a buy stop could be placed 
a bit above the 50-dma at about $15.15.  If we're wrong, then a 
close over the $15 resistance level might be worth considering 
aggressive long positions.




---

Comerica Inc. - CMA - close: 61.40 change: +0.24

WHAT TO WATCH: Although Comerica received Moody's reaffirmation 
a "stable" credit rating on June 21st, the stock has been unable 
to improve its deteriorating technical picture.  CMA has been 
trading under a flat 50-dma since the first week in June, and the 
stock presently sits atop very thin support in the $60-$61 
region.  We think this stock will display considerable weakness 
once it begins to decisively break below this support region. The 
reason:  it moves into a negative "fast move region" that 
continues down until the 200-dma is reached, at $57.35.  Traders 
might elect to short the stock at current levels, placing a buy 
stop above the 50-dma, and resistance, at about $63.77.  If the 
stock declines as we think it might, gains should probably be 
taken as the stock approaches the 200-dma. Please remember that 
psychological support may appear at $60.00.


 

---

Transocean Inc. - RIG - close: 31.15 change: -1.19

WHAT TO WATCH: Like the Oil Services Index (OSX), RIG has formed 
what appears to be a potential head and shoulders topping 
pattern.  Acting on this pattern, though, is a bit complicated by 
the fact that 1) RIG closed right on top of its flat 200-dma and 
2) it also currently sits at the bottom--i.e., the point at which 
it might begin a rebound--of its 9 month regression channel.  
Traders should watch the stock for weakness into next week; if 
this occurs, an initial move to the 28.00 regions is likely, and 
then lower levels in coming weeks.




--- 

Boeing - BA - close: 45.00 change: +0.20

WHAT TO WATCH: After nearly a month of rangebound trading between 
$42-$44, BA is beginning to gain bullish momentum.  Today the 
stock broke to new relative highs on strong volume of 5.9M 
shares.  The uptrending MACD and daily stochastics hint at more 
buying in the near-term.  Aggressive entries can be gauged at 
current levels, although the most prudent strategy would be to 
wait for BA to clear resistance at $46.00.  If the stock remains 
strong we wouldn't be surprised to see a test of the $50 level 
within the next few weeks.


 

--- 

Xilinx Inc. - XLNX - close: 22.43 change: -0.58

WHAT TO WATCH: XLNX looks ripe for a breakdown to its September 
lows.  The stock has gyrated between $22-$25 in recent sessions, 
but odds are slim that it will be able to maintain this range if 
the semiconductor index (SOX.X) continues to flounder under 400.  
A move below $22.00 would open the door for a rapid test of the 
$20 level or even the September lows near $19.50.




--- 

Sabre Holdings - TSG - close: 35.80 change: +1.00

WHAT TO WATCH: The parent company of travelocity.com has been on 
one heckuva bad trip over the past two months, but the selling 
may have finally run its course.  Shares staged a bounce from 
historical support at $34 this week on rising volume.  Bullish 
action in the MACD and daily stochastics (5,3,3) suggests that 
this rally may be sustainable.  Aggressive short-term traders 
could go long TSG on a move above today's high of $36.34.  We'd 
be targeting a move to the 200-dma ($38.42) or the 50-dma at 
$39.72.




---

Boston Scientific - BSX - close: 29.32 change: -1.53

WHAT TO WATCH: BSX staged an impressive rally in mid-June that 
saw shares climb from $24 to $32.  The past two sessions have 
seen some of these gains evaporate, with today's 4.9% decline 
coming on the strongest volume in over a week.  BSX has now 
retracement roughly 38% of the recent rally.  The bearish MACD 
and daily stochastics indicate that there's a lot more potential 
downside remaining.  Short-term entries could be considered on a 
break below $29.00.  This could lead to a test of previous 
resistance at $28.00 or even a dip to the 50-dma at $26.64.




----

Lincare Holdings - LNCR - close: 32.30 change: 0.45

WHAT TO WATCH: Lincare began a consolidation in late April, and 
since then it has been forming a gentle "cup" from which it now 
appears ready to break out.  The stock is a bit extended at 
current levels, but the move up this week has been accompanied by 
improving volume.  In the last few days the stock used its 50-dma 
as a point of lift off, and it should be setting new highs in the 
next week or two--as long as the stock market does not simply 
fall apart.  A pull back to support at $31.25 would offer an 
attractive entry point for a long position in this stock.  Look 
for an initial move to $35.00. 





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

Undressing False Positives and Bad Data
By James B.

Are you surprised that the major averages didn't trade higher into
the close of the quarter?  You shouldn't be.  The Nasdaq composite
and the S&P 500 have retested their September lows but the overall
picture has not changed and neither has the trend.

The 400 point rebound in the Dow Jones Industrials from Wednesday
to Friday afternoon changed its bullish percent status from bear 
confirmed to bull alert.  While this looks like good news I 
strongly urge caution as the index has not broken its current 
downtrend and it could only serve to suck in bulls before
the next drop.

Chart of the DJIA (top is daily, bottom is hourly)




The VIX and the VXN also showed some movement late this week but it 
was the wrong way if you're still looking for a cataclysmic event 
to call a bottom.  The VIX has been falling since spiking higher on 
Wednesday and the VXN fell sharply in Friday's session.  The good 
news, if a rising "fear" index can be called good news, is that 
both of these volatility gauges are still in a short-term up trend 
and we may still get some sharp moves higher if the broader market 
averages continue to fall.

New COT data

Today's market sentiment report outlines the new COT data and we 
have some interesting observations.  The first of observation or 
disclaimer we want to bring forward is a potential error in the 
non-commercials or small traders' long positions for the S&P 500 
futures.  There is a drastic change that is truly hard to 
comprehend.  We are expecting the COT to publish a correction but 
in the meantime apply any meaning from the numbers carefully.  

Throughout the latest COT report we observed strong drops in 
overall positions for the S&P 500, Nasdaq 100 and the Dow Jones 
Industrials.  The most interesting change in the data we follow was 
the reversal in the NDX positions.  The commercials or professional 
traders who historically are on the "right" side of the trade 
switched sides and reversed into a bearish or net short position.  
Likewise the small trader reversed and went bullish or net long on 
the NDX.  This is probably not good news with the NDX index already 
trading below its September 2001 lows.

Now that the second quarter is over, any window dressing is done 
and we can look for a little undressing next week.  This will only 
play into the current technical picture, which shows a lot sectors 
in very similar positions to the DJIA.  That is they are all near 
the top of their descending channels and look like they are ready 
to roll over.  Looking ahead traders should be careful with the 
upcoming July 4th holiday.  The talking heads on T.V. will probably 
remind the markets of the potential terrorist threat here at home.  
Combine this with low volume due to traders on holiday and we could 
get some strong moves.  Let's not forget that earnings season is 
just around the corner once everyone comes back sunburned from 
their Fourth of July weekend.

-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     :  9243

Moving Averages:
(Simple)

 10-dma: 9368
 50-dma: 9836
200-dma: 9816

S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     :  989

Moving Averages:
(Simple)

 10-dma: 1001
 50-dma: 1055
200-dma: 1100

Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low :  979
Current     : 1051

Moving Averages:
(Simple)

 10-dma: 1069
 50-dma: 1200
200-dma: 1400



-----------------------------------------------------------------

Market Volatility

The VXN made it to pre-9/11 highs near 65 as the Nasdaq composite
flirted with the 1400 level.  Yet since the strong bounce higher in
the index the VXN suffered a large 8% drop in Friday's session.
The VIX has also been on a steady uptrend but again, the recent
bounce in the markets has the fear factor falling back.

CBOE Market Volatility Index (VIX) = 29.28 -0.74
Nasdaq-100 Volatility Index  (VXN) = 58.03 -5.10

-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume
Total          0.66        475,914       312,242
Equity Only    0.56        392,011       221,403
OEX            0.71         17,532        12,380
QQQ            0.52         34,889        18,307

-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          48      + 0     Bull Correction
NASDAQ-100    14      + 0     Bear Confirmed
DOW           30      + 4     Bull Alert
S&P 500       39      + 1     Bear Confirmed
S&P 100       36      + 1     Bear Confirmed

Bullish percent measures the number of stocks in an index 
currently trading on a buy signal on their point and figure 
chart.  Readings above 70 are considered overbought, and readings 
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend

-----------------------------------------------------------------

 5-Day Arms Index  1.34
10-Day Arms Index  1.41
21-Day Arms Index  1.44
55-Day Arms Index  1.34

Extreme readings above 1.5 are bullish, and readings below .85 
are bearish.  These signals don't occur often and tend be early, 
but when the do, they can signal significant market turning 
points.

-----------------------------------------------------------------

Market Internals

        Advancers     Decliners
NYSE       2089          1047
NASDAQ     2089          1383

        New Highs      New Lows
NYSE       164             89
NASDAQ     200            154

        Volume (in millions)
NYSE     2,392
NASDAQ   2,471

-----------------------------------------------------------------

Commitments Of Traders Report: 06/18/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the 
Chicago Mercantile Exchange and Chicago Board of Trade. COT data 
can be found at www.cftc.gov.

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 tend 
to be wrong.  

S&P 500

We see some very interesting numbers in the latest COT report.
The commercials have really reduced their long positions as
well as some of their shorts but remain significantly bearish.
The biggest change we see is the small-traders or non-commercial
numbers.  Honestly, we believe this data to be in error and 
would hesitate to put much stock in it at this time.  Hopefully,
the COT will catch the mistake and make a correction.  Otherwise,
small traders have drastically slashed their long positions and
made huge reversal.

Commercials   Long      Short      Net     % Of OI 
06/04/02      369,298   440,027   (70,729)   (8.6%)
06/11/02      388,751   457,018   (68,267)   (8.1%)
06/18/02      437,530   487,956   (50,426)   (5.4%)
06/25/02      378,214   438,775   (60,561)   (7.4%)

Most bearish reading of the year: (111,956) -   3/6/02
Most bullish reading of the year: ( 36,481) - 10/16/01

Small Traders Long      Short      Net     % of OI
06/04/02      167,713    58,885   108,828     48.0%
06/11/02      174,357    69,464   104,893     43.0%
06/18/02      181,178    88,517    92,661     34.3%
06/25/02       35,668    46,695   (11,027)   (13.4%) - error?
(This looks like an error in the data and we'll expect the 
COT to be reprinting a correction soon.)

Most bearish reading of the year: (11,027)- 6/25/02
Most bullish reading of the year: 114,510 - 3/26/02
 
NASDAQ-100

There was a big about face in the Nasdaq futures positions 
which may be a real clue as to where professionals think
the market is going.  Commercials slashed their longs which
left their overall posture decidedly bearish.  Conversely,
the small trader slashed positions both long and short (again,
this may be an error in the report) but the overall change
was a bullish shift in sentiment for the small trader.
Historically the commercials are correct so this is bad 
news for the NDX.

Commercials   Long      Short      Net     % of OI 
06/04/02       47,875     39,100     8,775    9.3%
06/11/02       45,946     36,878     9,068   10.9%
06/18/02       54,816     49,169     5,647    5.4%
06/25/02       27,238     35,926    (8,688)  13.8%

Most bearish reading of the year: (15,521) -  3/13/01
Most bullish reading of the year:   9,068  - 06/11/02

Small Traders  Long     Short      Net     % of OI
06/04/02       12,162    21,420    (9,258)    27.2% 
06/11/02       14,561    25,330   (10,769)    27.0%
06/18/02       20,883    29,153    (8,270)    16.5%
06/25/02       10,353     8,844     1,509      7.8%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:   8,460  -  3/13/01

DOW JONES INDUSTRIAL

The data for the Industrials shows a similar decline in overall
positions but the general trend remains the same.  Commercials
have a bullish outlook compared to a heavy short side for the
small trader.

Commercials   Long      Short      Net     % of OI
06/04/02       20,564    16,169    4,395     11.0% 
06/11/02       20,369    17,172    3,197      8.5%
06/18/02       25,995    19,115    6,880     15.1%
06/25/02       18,016    13,255    4,761     15.2%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
06/04/02        7,114     9,639    (2,525)   (14.7%) 
06/11/02        7,500     9,925    (2,425)   (13.9%)
06/18/02        5,379    11,813    (6,434)   (37.2%)
06/25/02        1,846     6,424    (4,578)   (55.3%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   1,909  -  1/16/01

-----------------------------------------------------------------




=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

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

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

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


Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter          Weekend Edition 06-28-2002
                                                    section 2 of 3
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/f28b_2.asp
=================================================================

In section two:

Net Bulls
  Bearish Play Updates:  AT, FDC

Stock Bottom / Active Trader
  New Bullish Plays:     RCII, SPF
  New Bearish Plays:     ZLC
  Bullish Play Updates:  N
  Bearish Play Updates:  AIG, CBE, GR
  Closed Bearish Plays:  ACF

High Risk/Reward
  Bullish Play Updates:  AMD, ORCL, SNE
  Bearish Play Updates:  ALO, CCK, MYG, PLCM, PPL

Long-term Plays
  Bullish Play Updates:  UHS

Split Trader
                         WSBK:  2-for-1 split announcement
  
                         

==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

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

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

Alltel Corp - AT - close: 47.00 change: +1.20 stop: 47.47

Strong performances by the Combined Telecom Index (IXTCX) and 
North American Telecom Index (XTC.X) translated into a 2.6% gain 
for shares of AT today.  The stock briefly traded above 
resistance at $47.00 but wasn't able to muster a close above that 
level.  A rollover from this area next week could lead to an 
eventual retest of the near-term low of $43.55.  The lack of 
strong volume behind today's move could be a sign that the recent 
rally may be petering out.  However, the hint of an upturn in the 
MACD and the reversal in the daily stochastics indicates that AT 
may continue to rise into next week.  The initial premise of this 
play was to take advantage of telecom weakness following the 
WorldCom disaster.  Thus far the sector seems to have digested 
that news in fairly bullish fashion.  Due to AT's unclear 
technical picture and lack of clearly-defined action points, we 
would not recommend taking new entries at this time.

Picked on June 26th at $44.50 
Change since picked:    -2.50
Earnings Date        04/25/02 (confirmed)
 



---

First Data Corp - FDC - close: 37.20 change: +0.62 stop: 40.55

Last night we discussed the likelihood that FDC would continue to 
make its way higher over the next few sessions.  Today's 1.6% 
gain confirmed our suspicions.  However, bears can take heart in 
the fact that FDC was unable to move above $38.00.  Even if this 
level gives way we think the 200-dma at $38.21 will keep a lid on 
the stock.  Traders looking for new entries can continue to watch 
for failed rallies at this region.  If this resistance does fall 
to the wayside, new short positions could also be considered on a 
rollover from the 50-dma at $39.60.

Picked on June 24th at $38.09
Gain since picked:      +0.89
Earnings Date        07/11/02 (confirmed)






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

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

  -----------------
  New Bullish Plays
  ----------------- 

Rent-A-Center - RCII - close: 58.01 change: +2.08 stop: *text*

Company Description:
Rent-A-Center, headquartered in Plano, Texas, currently operates 
2306 company-owned rent-to-own stores in 50 states, Washington 
D.C. and Puerto Rico. The stores offer high-quality, durable 
goods such as home electronics, appliances, computers, and 
furniture and accessories to consumers under flexible rental 
purchase agreements that allow the customer to obtain ownership 
of the merchandise at the conclusion of an agreed-upon rental 
period. (source: company press release)

Why We Like It:
RCII is a member of the Russell 3000, which underwent rebalancing 
today.  This may have been the catalyst for the unusually large 
amount of volume, as the stock traded to new relative highs on 
more than twice the daily average of 380K shares.  RCII may also 
have been the beneficiary of end-of-quarter window dressing as 
fund managers added strong stocks to their portfolios.  Although 
it could be argued that the buying will dry up once the new 
quarter beings, our analysis suggests otherwise.

Technically, RCII is a cornucopia of bullish delights.  Today's 
3.7% rally took shares above both the 50-dma and near-term 
resistance at $57.75.  It also produced a triple-top p-n-f buy 
signal.  Window dressing or not, we're also impressed with the 
amount of volume that backed today's gains.  It suggests to us 
that there was a good deal of conviction behind today's move.  
The daily stochastics and MACD are looking strong as well, with 
the latter displaying a fresh bullish crossover.  In terms of 
resistance, there's little to prevent RCII from retesting the May 
highs near $64.  Psychological resistance at $60 could pose a 
threat, but we don't anticipate much trouble at this level.  Our 
initial profit-target will be the $63.50-$64.00 region.  On a 
more fundamental note, RCII stands to benefit from continued 
strength in the homebuilding market.  After all, people need to 
fill their homes with furniture and appliances...but buying new 
stuff is easier said than done when you've just laid down tens of 
thousands of dollars on a down payment.  Hence, the rent-to-own 
route.  Sound like a stretch?  Check out the correlation between 
RCII and the DJUSHB Homebuilding Index.

In order to ensure that RCII is trading at new relative highs 
before we go long, we're placing an entry trigger at $58.13, just 
above today's high.  If the play is activated our stop-loss will 
be located at $55.24, two cents under today's low.  Ultra-
conservative traders may want to use a stop slightly below the
50-dma at $57.34.  

Picked on June xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date        07/29/02 (unconfirmed)
 



---

Standard Pacific - SPF - close: 35.08 change: +0.91 stop: *text*

Company Description:
Standard Pacific is a homebuilder.  The company produces high 
quality single-family homes in the major metropolitan areas of 
California, Texas, Arizona, and Colorado.

Why We Like It:
We know that the stock market possesses the stability of a 
Colorado Mustang that's just heard a firecracker for the first 
time.  And we know, too, that there's a raging debate in economic 
circles about whether the housing sector--and home building 
stocks--can remain strong.  But when we look at Standard Pacific, 
we can't help but be impressed with its technical strength as 
well as the few tidbits of fundamental news that have appeared on 
it recently.

In addition to JPM Securities "Strong Buy" upgrade on June 6th, 
SPF reported on June 4th that new home orders for May had 
increased by a record 70%.  With a current PE of just over 10, a 
PEG (P/E to Growth Rate) of .82, one can hardly characterize this 
stock as over valued.  But let's face it: in an era of WorldCom 
and Enron, fundamentals offer more numbers than confidence.  For 
us, the most attractive aspect of Standard Pacific are this:  the 
stock is seemingly in the final stages of a healthy two month 
consolidation, and it is flashing a variety of technical signals-
-improving RSI, recent progressive movement above an upwardly 
trending 50-dma, an upwardly trending 200-dma, and today's 3% 
advance on hefty volume--which all suggest a breakout to new all 
time highs is imminent.  And we would like to be long this stock 
when that occurs.

Our strategy will be as follows: 1) we'll go long if shares of 
SPF trade above $35.40; 2) we will NOT take a long position if 
SPF gaps above $36.00; 3) once triggered, we'll employ an initial 
sell stop that is placed below the 50-dma and support, of $31.70.  
We believe that the stock is capable of an initial advance to the 
top its longer term channel near the $40 mark.  Shares are 
certainly capable of more but the $40 area could be psychological 
resistance and it also offers a good place for us to take profits 
and evaluate new entries.

Picked on June xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date         07/23/02 (unconfirmed)
 



  -----------------
  New Bearish Plays
  ----------------- 

Zale Corporation - ZLC - close: 36.25 change: -0.93 stop: *text*

Company Description:
Zale Corp. is a specialty jewelry retailer that operates 2300 
stores and kiosks in the US, Canada and Puerto Rico. 

Why We Like It:
Zale began a consolidation in February 2002 and the stock has 
simply been unable to move out of it--until this week, that is, 
when this topping pattern finally cracked.  ZLC now has four 
consecutive daily closes under its 200-dma.  And if today was any 
indication--a 3% decline on very heavy volume--there will be more 
to come next week. ZLC's weekly RSI looks like a jet fighter 
that's just lost a wing, and its MACD histogram shows nothing but 
bearishness.  Our best calculation at this time is that the stock 
is headed to the 78.6% Fibonacci retracement of its last 
significant advance (Sept 2001 - February 2002), which should put 
it just under the $30 level.  Traders should be aware that ZLC 
does possess a raft of older support in the $34.00 region.  This 
may cause the stock to attempt to rebound in this region.  Our 
belief, though, is that the stock's accelerating downward 
momentum--as illustrated by its plunging weekly RSI--should be 
adequate to allow it to spike through this without undue strain.  
Below $34 it will enter a "fast move" area and could fall 
precipitously.  

Our strategy for taking a short position in ZLC is as follows: 1) 
we will short it on a move below today's low ($36.25), 2) as long 
as it does not gap below $35.75 and 3) once triggered, we'll use 
a buy stop that's placed above the 200-dma at $38.20.  Our 
official profit target is $30.50, which is a few percent above 
both the 78.6% retracement and psychological support at $30.00.   

Picked on June xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date         08/13/02 (unconfirmed)
 




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

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

Inco Ltd. - N - close: 22.64 change: +0.49 stop: 21.38 *new*

Yesterday's close above $22.00 had us speculating that N was 
about to move to new relative highs.  That's exactly what 
happened today, as shares outperformed the Dow Jones and tacked 
on 2.2%.  The stock is now trading well above the recent 
consolidation range between $21-$22.  About the only flaw we can 
find with today's performance is the fact that volume was 
somewhat light compared to the past two weeks.  

Based on the MACD (which is on the verge of a bullish crossover) 
and the uptrending daily stochastics (5,3,3), we're anticipating 
that the recent uptrend will continue into next week.  If this is 
the case, we may see a retest of the near-term high at $23.75 or 
even the top of N's regression channel near $24.00.  We will 
implement an "official" profit-target as shares approach this 
region.  Note that we're moving our stop up to $21.38, under the 
rising 50-dma.  Traders can continue to evaluate new positions on 
a pullback to this level.  Aggressive short-term traders could 
look for an entry on a move above minor resistance at $22.75.

Picked on June 14th at $21.42
Change since picked:    +1.22
Earnings Date        04/16/02 (confirmed)  




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

American Intl Group - AIG - cls: 66.23 chg: +1.33 stop: *text*

AIG is treading on very thin ice.  Shares traded higher with the 
IUX--the Insurance Index--today and finished with a gain of 
nearly 2%.  This was sufficient to push AIG's stock to the top of 
its descending regression channel.  Although we're not expecting 
AIG to break out of its channel, today's close above the 50-dma 
($67.52) suggests that the stock may not be as weak as we 
thought.  If AIG heads much higher we'll probably drop this play.  
For the time being we'll keep our entry trigger set at $65.48.  

Picked on June xth at $xx.xx <- see text
Gain since picked:     +0.00
Earnings Date       07/25/02 (unconfirmed)


 

---

Cooper Industries - CBE - close: 39.30 change: -1.42 stop: 41.87

The end of Friday's session was not pleasant for CBE bulls.  The 
stock dropped more than one dollar in the final 15 minutes of 
trading and closed at the lowest levels of the day.  It looks 
like some investors didn't take kindly to the failed rally near 
$41.00.  Technically, today's 3.4% decline has created some 
promising developments for those traders who are short the stock.  
The MACD (which had previously been showing signs of an upturn) 
is once again looking bearish, while the daily stochastics 
(5,3,3) are also hinting at a reversal.  It was also encouraging 
to see that CBE closed under the 200-dma ($39.58).  If shares 
continue to move lower next week, conservative traders can target 
new entries on a break below Wednesday's low of $38.70.  We'll 
probably tighten our stop if shares close under this level.  More 
aggressive traders could look for new positions as long as the 
current price remains under $40 and use a tight stop.
 
Picked on June 24th at $39.81
Gain since picked:      +0.51
Earnings Date        04/23/02 (confirmed)
 

 

---  

Goodrich Corp. - GR - close: 27.32 change: +0.08 stop: 29.68

Goodrich didn't do such a good job of maintaining its gains 
today.  Shares gapped sharply higher at the open, put in a double 
top on an intraday chart shortly after noon, and then proceeded 
to downtrend for the remainder of the session.  GR actually 
appeared to finish at $27.12, four cents under the 200-dma.  As 
much as we'd like to report that the stock officially closed 
under this moving average, two trades went off at $27.32 during 
the "trickle-in" period.  In any case, the afternoon downtrend 
bodes well for our short play.  New entries can be gauged on a 
break below today's low of $26.90, or a failed rally near $28.00 
(just like today).  Be aware, however, that the daily stochastic 
oscillator (5,3,3) is currently uptrending.  

Next week we'll also be watching for the Defense Index (DFX) to 
rollover from the 200-205 region.  We suspect that the sector may 
have received an artificial boost from end-of-quarter window 
dressing over the past three sessions.  

Picked on June 24th at $26.95
Change since picked:    -0.37
Earnings Date        07/24/02 (unconfirmed) 


 


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

  --------------------
  Closed Bearish Plays
  --------------------  

Americredit Corp. - ACF - close: 28.05 change: +1.11 stop: *text*

We added ACF to our Play List earlier this week in anticipation 
of a breakdown to new multi-month lows.  It looks like we were 
little early to the party.  Shares gained 4.1% today and moved as 
high as $29.25 in intraday trading.  The stock has staged a 
powerful bounce from support near $25.00.  In any case, shares 
did not hit our entry trigger of $24.74 and our play was never 
activated.  Although today's move was not backed by strong 
volume, the upturning oscillators suggest that the stock will 
continue to advance over the next few sessions.  We may give ACF 
a second look if it rolls over from the 200-dma at $29.79 (sort 
of like this afternoon's trading).

Picked on June xxth at $xx.xx <- see text
Change since picked:    +0.00
Earnings Date        08/06/02 (unconfirmed)






==================================================================
HIGH RISK/HIGH REWARD (HR) section
==================================================================

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

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

Advanced Micro Dev. - AMD - cls: 9.72 chg: +0.67 stop: 9.47 *new*

Our new long play in Advanced Micro Devices was triggered this 
morning in the first hour of trading.  As we mentioned last 
night, we are looking to principally capture AMD's move through 
its gap (between $9.25 and $10.30); anything above that will be a 
pleasant surprise.  

AMD moved higher from the open today, along with not only the 
Semiconductor Index (SOX) but the broader technology market as 
well.  Unlike both its sector and the market, though, AMD not 
only held on to its early gains, it inflated them right into the 
close.  The stock may have received a lift from the Japanese 
Semiconductor Equipment Association's report on Thursday that 
orders for equipment grew nearly 50% for May, and that the Book-
To-Bill (BTB) ratio spiked to 1.61 for the same month.  It was 
only in April the BTB climbed over 1.00.

Since AMD moved to an intraday high of $9.72, our trailing stop 
was moved to $0.25 away from that, or $9.47.  Please remember 
that once AMD reaches $10.00, the stop should be placed just 
$0.10 away from the highest intraday level, and we'll continue 
this process until the trade is stopped out. 

Picked on June 28th at $9.25 
Gain since picked:     +0.52
Earnings Date       07/17/02  (unconfirmed)
 



---

Oracle Corp. - ORCL - cls: 9.47 chg: -0.21 stop: *text*

Our strategy for taking a long position in ORCL continues to be 
as follows: 1) Long positions should be entered only if ORCL 
moves above historical and psychological resistance of $10.00.  
2) We will not take a position if ORCL gaps above $10.25. 3) Once 
triggered, we'll place a sell stop just below recent short-term 
support at $8.99.

Although ORCL closed lower today, we think that it may try to 
find support early next week at its 50-dma, which presently sits 
at 8.99.  

Our official price target for this long play continues to be 
$11.95, though a sharp spike through this level could have ORCL 
reaching much higher.  

Picked on June xth at $xx.xx <- see text
Gain since picked:     +0.00
Earnings Date       06/18/02  (confirmed)
 



---

Sony - SNE - close: 53.10 change: +2.80 stop: 47.48

In overnight trading, Japan's Nikkei soared higher on the coat 
tails of a firmer US market and, importantly, a Japanese 
government report saying that industrial production rose 3.9% in 
May, more than had been forecast.  Helping the Nikkei explode 
higher by 3.5% were major Japanese manufacturers like Hitachi 
(HIT), NEC (NEC), and Sony (SNE).

We said last night that we would not take a long position in SNE 
until it traded above $50.50, and we were triggered at the open.  
With SNE up 5% in Japanese trading, the stock opened sharply 
higher when the NYSE threw open its doors, and our entry price 
was SNE's opening trade at $52.70.  

Our stop is at $47.48, just under the 200-dma.  We expect that we 
will move this level up in the next day or two as the stock 
progresses toward our profit target.  As noted in our original 
write-up on SNE, our profit target is the area surrounding the 
50-dma, which sits at $54.64.

Picked on June 28th at $52.70 
Gain since picked:      +0.40
Earnings Date        10/24/02 (unconfirmed)
 



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

Alpharma, Inc - ALO - close: 16.98 change: +0.20 stop: 18.25

Although the Pharmaceutical Index (DRG) was hit for nearly a 3% 
decline today, Alpharma traded higher during today's session.  
The stock continues to trade slightly above an important rising 
trend line that has offered support to the stock since Mid-march.  
Our view continues to be that once the stock begins to drop below 
this trend line it is likely to experience a sharp decline in 
price. Although ALO ended the day with positive numbers, the 
stock failed to hold the intraday rally that took it to a high of 
17.43 this afternoon on relatively strong volume.  New short 
positions in ALO should be deferred until the stock is back below 
this trend line; that is, below $16.25.  More conservative 
traders may want to wait for ALO to fall under the $16 level (or 
even $15.75).

Picked on June 26th at $15.95 
Change since picked:    -1.03
Earnings Date        07/29/02 (unconfirmed)
 



---

Crown Cork Seal - CCK - close: 6.85 change: +0.18 stop: 7.41 

CCK slid down to $6.57 in late afternoon trading, narrowly 
avoiding a drop into a region of very limited support that has 
the potential to plunge the stock down rapidly, into the $6.00 
area. CCK reached an intraday high of 6.98 by following the lead 
of both the Dow and the Morgan Stanley Cyclical Index (CYC).  Yet 
it didn't take long before Crown Cork Seal gave back the entirety 
of its intraday gains during the afternoon hours.  Unfortunately, 
a couple of buy on close orders shot it back up to $6.85.  We 
continue to expect the stock to break down in coming days.  Given 
the new lower high, it could be soon.

Please remember that our official exit price is now $5.50.  If 
CCK experiences a sharp dip to this level, gains should be 
booked.  Traders seeking to add new short positions in CCK can do 
so once CCK moves below today's low of $6.57.

Picked on June 20th at $7.31 
Change since picked:   +0.66
Earnings Date        07/18/02 (unconfirmed)
 



---

Polycom - PLCM - close: 11.99 change: -0.36 stop: 12.88

In recent days, PLCM has simply been unable to hold on to its 
intraday gains.  Like Thursday, the stock sprinted higher during 
today's early trading, only to collapse in the last hour of 
trading--and particularly the last 10 minutes of today's session-
-ending with a 2.9% loss.  This is not a good sign for the stock-
-but it is a good omen for our short position.  

As we have noted previously, PLCM seems to be headed for the 
$8.25 level, or lower, and the ugly, deteriorating condition of 
both its daily and weekly RSI confirm the high possibility of 
such a decline.  While $8.25 remains the level to which we think 
the stock will trade, don't forget that it does possess support 
at $10.25, and psychological support at $10.00.  New positions 
can be added as PLCM moves below yesterday's low of $11.72. 

Picked on June 27th at $11.80 
Change since picked:    -0.19
Earnings Date        07/18/02 (unconfirmed)
 



---

PPL Corp - PPL - close: 33.08 change: +1.18 stop: 33.22

PPL roared higher by 3% today, backed by both a supportive Dow 
Jones Utilities Index (UTIL) and the company's own reaffirmation 
of earnings guidance for 2002.  As PI readers may recall, about 
two weeks ago PPL was accused of energy price manipulation by the 
Pennsylvania PUC; but that accusation did not affect today's 
renewal of credit with a consortium of banks, headed by Wachovia 
and Salomon Smith Barney.

Today's steep advance has now placed PPL outside of its most 
recent regression channel.  Moves of this nature usually result 
in either a strong breakout in a stock, or represent its last 
upward gasp before turning down again.  We continue to feel that 
the resolution of PPL's pattern will be to the downside for two 
specific reasons:  1) today's advance occurred on poor volume--in 
fact, volume has deteriorated almost daily as the stock has 
rebounded since June 17th, and 2) PPL's price is now into a 
region of resistance.

Our official profit target remains at $24.75, and we will cover 
this position in the event that it drops to this level.  We would 
discourage any new short positions in PPL until the stock has 
declined back below near term support at $31.00.

Picked on June 19th at $31.60 
Gain since picked:      -1.48
Earnings Date          7/18/02 (unconfirmed)




---

Maytag - MYG - close: 42.65 change: -0.05 stop: 45.67

Maytag seemed to follow the Dow Jones Industrial Average step-
for-step today.  After advancing in the morning, and reaching the 
$44.00 resistance region, the stock effectively collapsed 
intraday, heading lower into the close on increasing volume. We 
like this action; it implies that buyers lack conviction and turn 
tail at the first evidence of weakness, either in the stock or 
the market.

There is no change in our buy stop. As we mentioned the other 
night, our profit target on MYG is the 200-dma--now at $35.93. If 
this support can be easily pierced, we think that a further 
decline to $32.50 is possible.

Picked on June 56th at $41.82
Change since picked:    -0.83
Earnings Date        07/16/02 (unconfirmed)
 





==================================================================
LONG-TERM PLAYS (LT) section
=================================================================

===============
LT Play Updates
===============

Universal Health - UHS - cls: 49.00 chg: +0.65 stop: 45.99 

Morgan Stanley's Health Care Payors Index (HMO) has been 
attempting to rebound since its June 19th - June 26th thrashing, 
when it experienced a 15% drop.  The index is now struggling to 
return to its 50-dma. As a major player in the health care 
sector, Universal Health Services has fared much better than some 
of its counterparts--and the HMO index.  The stock did not 
pullback as harshly as the HMO, and it has successfully used its 
50-dma as support during its own recent pullback.    

Aggressive traders who want to add take new positions would 
probably be well advised to wait a few days and see if UHS 
retests its 50-dma. If it can successfully do this, new positions 
might then be considered as it rebounds.  We must admit that we 
are a bit uneasy with both the faltering state of the HMO Index 
and the general volatility of the broader market.  Traders taking 
new positions need to consider these issues.  Please remember 
that our sell stop remains at $45.99.   

Picked on April 19th at $46.60
Gain since picked:       +2.40
Earnings Date         04/18/02 (confirmed)






==================================================================
Split Trader (ST) section
==================================================================

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

Wilshire State Plans To Split Stock 2-for-1

Wilshire State Bank (NASDAQ: WSBK) announced on Friday morning 
that its Board of Directors had proposed a 2-for-1 stock split, 
pending approval from the Department of Financial Institutions 
(DFI) and mandatory filing with California's Secretary of State.

An official record and issue date for the split will be announced 
following authorization from the DFI.

The stock closed at $27.69 on Friday. For a current quote, click 
here:

http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=WSBK

About the company
Headquartered in Los Angeles, Wilshire State Bank has eight full-
service southern California offices in Koreatown, downtown Los 
Angeles, the San Fernando Valley, Cerritos, Gardena, Rowland 
Heights and Huntington Park. The bank is an SBA Preferred Lender 
in all locations, including San Jose, Seattle and Dallas, where it 
operates offices that are primarily SBA lenders. (source: company 
press release)




=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

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

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

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


Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter         Weekend Edition 06-28-2002
                                                   Section 3 of 3
Copyright  2002, 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/f28b_3.asp
=================================================================

In section three:

Market Watch for Week of July 1st
   - Major Earnings
   - Stock Splits
   - Economic Reports

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)

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


==================================================
Market Watch for the week of July 1st
==================================================

------------------------
Major Earnings This Week
------------------------

Symbol  Company               Date           Comment      EPS Est

------------------------- MONDAY -------------------------------

MLHR   Herman Miller          Mon, Jul 1  After the Bell    -0.06
SVU    Supervalu              Mon, Jul 1  After the Bell     0.58

------------------------- TUESDAY ------------------------------

BMET   Biomet                 Tue, Jul 2  Before the Bell    0.25
IBC    Interstate Bakeries    Tue, Jul 2  -----N/A-----      0.41

-----------------------  WEDNESDAY -----------------------------

None

------------------------- THURSDAY -----------------------------

None

------------------------- FRIDAY -------------------------------

None

----------------------------------------------
Upcoming Stock Splits In The Next Two Weeks...
----------------------------------------------

Symbol  Company Name              Ratio    Payable     Executable

STJ     St. Jude Medical, Inc.    2:1      06/28       07/01
JILL    J. Jill Group             3:2      06/28       07/01
MMC     Marsh McLennan Companies  2:1      06/28       07/01
CMC     Commercial Metals         2:1      06/28       07/01
FPU     Florida Public Utilities  4:3      06/28       07/01
BER     W.R. Berkley              3:2      07/02       07/03
COH     Coach Inc                 2:1      07/03       07/05
SII     Smith Inte                2:1      07/05       07/08
THO     Thor Industries           2:1      07/05       07/08
MLAN    The Midland Company       2:1      07/05       07/08
PROV    Provident Financial Hldngs3:2      07/11       07/12
KRB     MBNA Corporation          3:2      07/12       07/15
SBCF    Seacoast Banking Corp.    3:1      07/12       07/15


--------------------------
Economic Reports This Week
--------------------------

With an earnings vacuum this week, investors will have their 
monocles focused on the stamina of the economy.  And it all starts 
on Monday with Truck/Auto Sales, Construction Spending and the 
important ISM Index.  Wednesday gives us the ISM Services Index and 
Factory Orders.  Friday will offer the market plenty to shout--or 
scream--about when the employment stats, and unemployment rate, hit 
the wires an hour before trading begins.  The big question: do 
investors care about any of this anymore?

==============================================================
                       -For-           

Monday, 07/01/02
----------------
Auto Sales (NA)        Jun   Forecast:   6.1M  Previous:     5.7M
Truck Sales (NA)       Jun   Forecast:   7.2M  Previous:     6.8M
ISM Index (DM)         Jun   Forecast:   55.5  Previous:     55.7
Construction Spndng(DM)May   Forecast:   0.3%  Previous:     0.2%

Tuesday, 07/02/02
-----------------
None

Wednesday, 07/03/02
-------------------
Initial Claims (BB)   06/29  Forecast:    N/A  Previous:     388K
ISM Services (DM)       Jun  Forecast:   58.2  Previous:     60.1
Factory Orders (DM)     May  Forecast:   0.6%  Previous:     0.4%

Thursday, 07/04/02
------------------
None

Friday, 07/05/02
----------------
Nonfarm Payrolls (BB)    Jun  Forecast:    60K  Previous:     41K
Unemployment Rate (BB)   Jun  Forecast:   5.9%  Previous:    5.8%
Average Workweek (BB)    Jun  Forecast:   34.3  Previous:    34.2
Hourly Earnings (BB)     Jun  Forecast:   0.3%  Previous:    0.2%


Definitions:
DM=  During the Market
BB=  Before the Bell
AB=  After the Bell
NA=  Not Available


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

TOT     Total Fina Elf Sa          80.90     +2.48
NFB     North Fork Bancorp         39.81     +0.69
EC      Engelhard Corp             28.32     +0.72
CYN     City National Corp         53.75     +1.50
PNP     Pan Pacific Retail Prop    34.18     +0.88
CLP     Colonial Properties        38.95     +0.58

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

     .. none..          

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

PPG     PPG Industries Inc         61.90     +2.76
PFG     Principal Financial Group  31.00     +1.25
INTU     Intuit Inc                49.72     +2.28
GGP     General Growth Props Inc   51.00     +1.08
WAT     Waters Corp                26.70     +1.36
COCO     Corinthian Colleges Inc   33.89     +1.58
HUG     Hughes Supply Inc          44.90     +2.00

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

LLY     Eli Lilly & Co             56.40     -3.43
JNJ     Johnson & Johnson          52.26     -2.15
HCA     HCA Inc                    47.50     -1.60
YUM     Yum! Brands Inc            29.25     -1.58
AYE     Allegheny Energy Inc       25.75     -3.01
GAS     Nicor Inc                  45.75     -1.60

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

BSX     Boston Scientific Corp     29.32     -1.53
CPG     Chelsea Property Group     33.45     -0.45




=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

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

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

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


Copyright  2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





DISCLAIMER

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

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives