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Daily Newsletter, Tuesday, 07/09/2002

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PremierInvestor.net Newsletter                 Tuesday 07-09-2002
                                                   section 1 of 2
Copyright  2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap:      Investor Confidence, US Dollar and Stocks All Sink Lower
Market Sentiment: Retrace Or Rollover?
Play-of-the-Day:  See Bull Run


-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------        
      07-09-2002           High     Low     Volume Advance/Decline
DJIA     9096.09 -178.80  9318.10  9081.96 1.31 bln   1113/1845
NASDAQ   1381.12 - 24.50  1415.31  1379.57 1.65 bln   1511/2016
S&P 100   475.24 - 11.05   488.75   474.33   Totals   2624/3861
S&P 500   952.83 - 24.15   979.63   951.71 
RUS 2000  429.25 -  4.36   435.19   428.61 
DJ TRANS 2576.57 - 39.20  2647.63  2575.43   
VIX        33.92 +  2.39    34.23    31.15   
VXN        62.12 +  2.83    62.25    60.05
Total UpVol   650.7M
Total DnVol 2,343.2M
52wk Highs  137
52wk Lows   324
TRIN        2.72
PUT/CALL     .87
-----------------------------------------------------------------

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

Investor confidence, US dollar and stocks all sink lower

It was another tough session for bulls as a lack of investor 
confidence had the U.S. dollar weak in early morning trading that 
really depicted a market environment of distrust.  The U.S. 
dollar never did show any type of rebound, despite efforts by 
President Bush to try and boost investor confidence with some 
tough talk on stamping out corporate fraud in the wake of a 
market pummeling partially brought on by recent string of 
scandals and uncertain earnings outlook.

While the U.S. dollar as depicted by the US Dollar Index (dx00y) 
105.65 -0.61% attempted a rebound last week, today's close and 
new 52-week low once again becomes a concern to equity bulls of 
just how fragile and damaged investor confidence may be.

Tonight, I'm going to "roll down" my retracement bracket once 
again to get a perspective of potential downside risk in the U.S. 
Dollar, with the thinking of "if the Dollar is going there due to 
lack of confidence, then the broader U.S. stock market may 
follow."

US Dollar Index Chart - Weekly Interval




The weekly interval chart of the US Dollar Index (dx00y) sure 
looks like the MARKET is waiting for some type of "shoe to drop" 
that would have the Dollar weakening further.  As such, a break 
much below current levels will most likely be a sign that 
confidence not only in the U.S. Dollar, but stocks continues to 
erode.  

Note:  When I'm talking about "confidence in the U.S. Dollar," I 
should make it very clear that I'm talking in regards to GLOBAL 
confidence (investors outside U.S. borders).  

S&P 500 Index - Weekly Interval




The S&P 500 Index (SPX.X) is really trying to hold its September 
lows.  A break much below the 953 level, coupled with a 
"confirming" break lower in the U.S. Dollar Index (dx00y) sets 
the stage for a potential decline to the 817 level.  

Before bears get too big of a grin, understand that a rebound in 
the U.S. Dollar, and a break back above the 1,000 level in the 
SPX could easily find the SPX sprinting back to its 40-week 
moving average (200-day MA) near 1,100.  

As you can see, we look to be at some pretty critical near-term 
levels for support for both the broader S&P 500 (SPX.X) and the 
U.S. Dollar.

While we could argue back and forth that the weakness in the US$ 
is due to future/current economic conditions or investor 
psychology, traders can be monitoring both the stock market and 
currency markets to get a feel for things going forward.  Current 
outlook is technically bearish and traders (bullish and bearish) 
are going to be jittery.  Until some type of break from the above 
identified range is found.

The "range" I'm talking about for the U.S Dollar Index (dx00y) 
would be high= $108.50, low= $105.50 and the S&P 500 would be 
high= 1,000, low=950.  Both on a closing basis.

The word "jittery" as it relates to near-term market trading may 
also be an understatement.  Today's 7.45% jump in gold stocks as 
represented by the Gold/Silver Index (XAU.X) on top of 
yesterday's 4.5% gain and out performance of the gold commodity 
itself as depicted by the December Gold futures (gc02z) 318.60 
+1.2% (up 1.69% in past two sessions) hints that stock traders 
are rushing back to gold stocks in anticipation of a weaker U.S. 
Dollar or some type of "scandal" showing itself once again.

Gold/Silver Index Chart - Daily Interval




I'll confess that while I thought gold and gold stocks might find 
a "bid" (buyers) in this morning's 09:00 pre-market update, 
today's 7.45% gain in the XAU.X surprises me a bit.  I thought to 
myself that a test of $75 was likely, with $78 as the upper 
reaches.

In past trading history (I'm talking years) I've found that the 
gold stocks themselves pushed higher and lower on a short-term 
basis and move in advance of the commodity futures themselves.  
The "reason" I think this happens, is that there are a lot more 
"speculators" in the gold stocks part of the market than in the 
gold futures market.  

While I feel (based on past/current observations) that gold 
stocks have gotten ahead of a move in the gold futures (the 
actual commodity that gold stocks derive their revenue and 
earnings from) watch for a confirming move higher in gold futures 
tomorrow.  If the December Gold futures (gc02z) can break above 
the $320.50 level (perhaps fueled by a weaker dollar?) then the 
Gold/Silver Index (XAU.X) could attempt a test at its past 52-
week high.  

Tonight's action from the December Gold futures (gc02z) however 
aren't confirming at this point.  Remember, the chart shown below 
is the "futures" chart.  This is for December delivery and the 
current bar and price action is already trading for tomorrow's 
prices.

December Gold Futures Chart - Daily Interval




Tomorrow's trading is already underway in the December Gold 
Futures (gc02z) and hovering right near Tuesday's close.  It will 
be interesting to see what takes place between now and tomorrow 
morning before the U.S. equity markets open.  

I will make some notes here.  If we compare the XAU.X (basket of 
gold stocks) and Gold futures in relation to their 50-day MA's, 
everything looks pretty much in unison doesn't it?  In fact, one 
might think that gold stocks (XAU.X) may have been a little 
"oversold" relative to what gold futures (gc02z) had been doing 
up until now.  This hints, that up until two days ago, gold stock 
investors were actually anticipating a further decline in the 
underlying gold stocks and selling them, but the recent two 
session decline in the U.S. Dollar (dx00y) has brought some "gold 
bugs" back to the stocks.  

Now, it becomes very important in my opinion to be able to 
monitor gold futures.  "Why is that?" you may ask.  If you think 
it is difficult to trade gold stocks, then try trading gold 
futures where the trader has NOTHING to trade against or monitor 
against for any type of confirmation.

A gold futures trader is either "a speculator" or "in the know" 
as it relates to gold prices.  

We've talked before about how major gold producers like Barrick 
Gold (NYSE:ABX) $19.54 +5.9% will actually turn to the futures 
markets and sell future production in the futures markets.  I'd 
argue that Barrick probably has a better idea of gold demand than 
you or I and most market participants.  In fact, they probably 
don't discuss their current "hedge strategies" with anyone and 
consider any hedging activities as a potential competitive 
advantage.

If December Gold futures were to break above the $320.50 level, 
then I'd have to turn bullish on gold stocks and gold near-term.  
I would NOT go crazy and load my account up on the sector 
however.

Conversely, I'd have to remain near-term bearish this group as 
long as December Gold futures stay below the $320.50 level.

S&P 500 reshuffling

I've been informed by our play writers that we were all set to 
profile shares of Placer Dome (NYSE:PDG) $11.45 +4.09% as a 
bullish play, but late tonight it was announced that the stock 
was being removed from the S&P 500 Index (SPX.X) along with 6 
other stocks.

The reshuffling by Standard & Poors is to pull out overseas 
firms, replacing them with U.S. firms, saying the change would 
make the index a better guide to the performance of large-cap 
U.S. stocks.

The move means that deletions will be Royal Dutch Petroleum 
(NYSE:RD), Unilever (NYSE:UN), Nortel Networks (NYSE:NT), Alcan 
(NYSE:AL), Inco (NYSE:N), Barrick Gold (NYSE:ABX) and Placer Dome 
(NYSE:PD).

Replacement to the 7 stocks above will be Goldman Sachs 
(NYSE:GS), United Parcel Services (NYSE:UPS), Principal Financial 
(NYSE:PFG), Prudential Financial (NYSE:PRU), eBay (NASDAQ:EBAY), 
Electronic Arts (NASDAQ:ERTS) and SunGard Data Systems 
(NYSE:SDS).

S&P said the switch avoided duplication in the calculation of its 
global index, and would make the S&P 500 easier for U.S. 
investors to use.

The above changes will be effective after the close of trading on 
July 19th.

What I'll do between now and then

Since we won't have a "gold stock" in our play list due to the 
uncertainty of impact that a reshuffling may have on a bullish 
play in Placer Dome (NYSE:PDG), I'll work on a potential play for 
tomorrow morning's 09:00 Update.

This will also allow us to observe tomorrow morning's U.S. 
Dollar, Gold futures and bond market action before stocks open 
for trading.

Hey!  I'm also going to look at a bearish gold stock play.  My 
candidate there is Anglogold (NYSE:AU) $28.97 +7.82%.  No 
surprise here as it too has rallied right up under its rolling 
50-day moving average (just like the XAU.X and Gold futures) and 
I tried trading this one bullish in my own account, lost a little 
money and the stock just seemed to be a laggard.

We will see what tomorrow morning's pre-open looks like and go 
from there with gold stocks.

Jeff Bailey
Senior Market Technician
PremierInvestor.net


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

Retrace Or Rollover?
By Eric Utley

It’s that simple.  If you have the correct answer to that
question, then you’re making money this week.  Unfortunately
I’m not privy to future events.  So which way she goes is
unknown to me.

But you do have to hand it to this market for the way it
continues to confuse as many participants as possible.  The
holiday rally, or whatever that was late last week, was
pretty much wiped off the books in the last two days as the
major averages came back down to fill the gaps from last week.
Sure there’s a little more downside to be demonstrated, but
judging by the way things closed today downside shouldn’t
be a problem for this market in tomorrow’s session.

But not is all gloom and doom in this market.  In fact in
the last two days we’ve seen some encouraging developments
in the bullish percent data.  Recall that the Dow Jones
Industrial Average Bullish Percent ($DJINDU) was already
in a bull alert position coming into this week.  In yesterday’s
session, the Dow was joined by the Nasdaq-100 Bullish
Percent ($BPNDX) in bull alert mode.  That puts two of the
major averages in bull alert, while a third in the NYSE
Composite Bullish Percent ($BPNYA) is still in a bull
correction phase.  Let me put this all another way.  Three
of the five markets that we track bullish percent figures for
are in a bullish position.  Does that mean we’re heading higher
after the last two days of pulling back?  Not necessarily, but
the risk has shifted to the upside in the Dow and Nasdaq-100,
which could bring some bulls out of hiding or at least push
the bears to the side for the time being.

All we need now is some confirming price action to reinforce
what we’re seeing the bullish percent figures.  Although I
don’t like to rely too heavily on one indicator, the bullish
percent is the one that I give the most credence.  We’ll see
where the Dow and NDX take us this week.

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

Market Averages

DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     :  9096

Moving Averages:
(Simple)

 10-dma: 9168
 50-dma: 9726
200-dma: 9820

S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     :  953

Moving Averages:
(Simple)

 10-dma:  972
 50-dma: 1039
200-dma: 1098

Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low :  950
Current     :  990

Moving Averages:
(Simple)

 10-dma: 1017
 50-dma: 1162
200-dma: 1393


Gold and Silver ($XAU)

Pay attention here, very big move in the XAU.  The index was
by far the best performing sector in today’s session with
it 7.45 percent gain.

The sector’s best performing components included Harmony
Gold (NASDAQ:HGMCY), Gold Fields (NYSE:GFI), Anglogold
(NYSE:AU), Meridian Gold (NYSE:MDG), and Newmont Mining
(NYSE:NEM).

52-week High: 89
52-week Low : 49
Current     : 78

Moving Averages:
(Simple)

 10-dma: 74
 50-dma: 79
200-dma: 65


Drug ($DRG)

The DRG was the worst performing sector for the day.  A
double dose of negative news from Merck (NYSE:MRK)
concerning the delay of its Medco IPO and the study
concerning Wyeth (NYSE:WYE) pressured the DRG 4.38 percent
lower.

The worst performing components of the DRG included the
aforementioned WYE, King Pharmaceuticals (NYSE:KG), Forest
Labs (NYSE:FRX), and Merck.

52-week High: 404
52-week Low : 283
Current     : 284

Moving Averages:
(Simple)

 10-dma: 299
 50-dma: 326
200-dma: 369

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

Market Volatility

The VIX spiked higher, not by surprise, during today’s session
to tune of nearly 8 percent.  A big move indeed!  We’ll see if
it can take out its previous relative highs this week.

The VXN returned to rally form as well with its nearly 5
percent pop today.

CBOE Market Volatility Index (VIX) - 34.05 +2.52
Nasdaq-100 Volatility Index  (VXN) - 60.08 +2.79

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

          Put/Call Ratio  Call Volume   Put Volume
Total          0.87        505,279       437,681
Equity Only    0.71        407,680       287,790
OEX            1.00         24,070        24,307
QQQ            1.04         43,676        45,360

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

Bullish Percent Data

           Current   Change   Status
NYSE          46      + 0     Bull Correction
NASDAQ-100    16      - 1     Bull Alert
DOW           33      + 3     Bull Alert
S&P 500       35      - 1     Bear Confirmed
S&P 100       33      + 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  1.56
10-Day Arms Index  1.53
21-Day Arms Index  1.43
55-Day Arms Index  1.41

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       1257          1975
NASDAQ     1492          1994

        New Highs      New Lows
NYSE        48             97
NASDAQ      41            145

        Volume (in millions)
NYSE     1,343
NASDAQ   1,703

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

Commitments Of Traders Report: 06/25/02

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

Commercial interests added back about 10,000 contracts to their
net bearish position.  Small traders dropped a number of longs
and a smaller number of shorts for a reduction in their net
bullish position by more than 20,000 contracts.

Commercials   Long      Short      Net     % Of OI 
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
06/11/02      174,357    69,464   104,893     43.0%
06/18/02      181,178    88,517    92,661     34.3%
06/25/02      134,380    62,792    71,588     36.3%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 114,510 - 3/26/02
 
NASDAQ-100

The roles reversed.  Commercials went decidedly short, while
Small Traders went decidedly long.

Commercials   Long      Short      Net     % of OI 
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) -  3/13/02
Most bullish reading of the year:   9,068  - 06/11/02

Small Traders  Long     Short      Net     % of OI
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       14,749     7,570     7,179     32.2% 

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

DOW JONES INDUSTRIAL

Dow commercials dropped about 2,000 of their net long
position.  Small traders eased into a bullish position.

Commercials   Long      Short      Net     % of OI
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
06/11/02        7,500     9,925    (2,425)   (13.9%)
06/18/02        5,379    11,813    (6,434)   (37.2%)
06/25/02        6,414     6,597       183     1.40% 

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

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


===============
PLAY-of-the-Day  ((new High-Risk/Reward BEARISH play))
===============

Siebel Systems - SEBL - close: 12.49 change: -0.70 stop: *text*

Company Description:
Siebel Systems, Inc. is the world's leading provider of eBusiness 
applications software. Siebel Systems provides an integrated 
family of eBusiness applications software, enabling multichannel 
sales, marketing, and customer service systems to be deployed 
over the Web, in call centers, in the field, through reseller 
channels, and across retail and dealer networks. Siebel Systems' 
sales and service facilities are located in more than 32 
countries. (source: company press release)

Why We Like It: 
It wasn't too long ago that Tom Siebel showed up on CNBC with a 
sunny forecast for his company and tech spending in general.  
Such a prediction didn't seem too far-fetched during the first 
four months of this year.  The NASDAQ and SEBL had both recovered 
dramatically from their September lows, and the consensus on Wall 
Street seemed to be that the economic rebound would quickly 
translate into more revenue for tech companies.  Unfortunately 
for tech bulls, Tom was wrong.  Very wrong.  The promise of 
increased IT spends continues to loom on the horizon like a 
distant fuzzy mirage, and both the NASDAQ and SEBL recently 
breached their September lows. And the worse may not be over yet.

SEBL has traded in a declining regression channel after forming a 
double-top near $37 last March.  Shares briefly fell under the 
September lows last week, bounced back to the top of the channel, 
and sold off once again.  We suspect this recent decline could be 
the beginning of a more severe selloff.  Specifically, we're 
looking for a move under the $12.00 support level to open the 
door for a rapid decline to psychological support at $10.00.  The 
MACD and daily stochastic oscillators indicate that SEBL has not 
yet reached oversold levels, and a trade at $12.00 will create a 
double-bottom point-and-figure sell signal.  SEBL lost 5.3% today 
after Bear Stearns initiated coverage on the stock with an 
"unattractive" rating...Also known as the "we wouldn't touch this 
stock with a ten-foot pole" rating.  That's pretty bad when a 
brokerage goes out of their way to advise against holding a 
particular stock.  Then again, maybe they're just parroting the 
recent negative comments from Wachovia, Pacific Growth, and 
Goldman Sachs.  The software group, as gauged by the GSO.X 
software index, is also looking extremely weak.  It has given 
back most of last week's gains and is teetering above crucial 
support at 100.  A break under this level would likely create 
additional selling pressure in SEBL.

Our strategy for playing SEBL will be as follows: We will enter 
the play if shares trade at or below $11.94.  If triggered, we'll 
use a stop at $13.21, just above today's high.  This is slightly 
more than 10% from our entry trigger.  Conservative traders may 
want to wait for the GSO.X to fall under 100 before taking any 
positions and/or use a very tight stop just above $12.00.  We'll 
close this play if SEBL trades at or below $10.06.  Also note 
that SEBL announces earnings on July 17th.  We will probably 
close this play ahead of the announcement to avoid getting caught 
in any, however unlikely, upside surprise.

Picked on July xxth at $xx.xx <- see text 
Gain since picked:      +0.00
Earnings Date         7/17/02 (confirmed)
 






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Do not duplicate or redistribute in any form.




PremierInvestor.net Newsletter                  Tuesday 07-09-2002
                                                    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/g09b_2.asp
=================================================================

In section two:

Stock Bottom / Active Trader
  Bullish Play Updates:  N
  Bearish Play Updates:  ABT, FLR, XL

High Risk/Reward
  New Bearish Plays:     SEBL
  Bullish Play Updates:  SNE
  Bearish Play Updates:  ALO, CHKP, QLGC
  Closed Bearish Plays:  MYG

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)



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

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

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

Inco Ltd. - N - close: 22.45 change: +0.25 stop: 22.19 *new*

The trend truly is your friend.  Although the Dow has sold off 
both Monday and Tuesday, Inco Ltd. has hung in there, posting 
positive gains both days.  We certainly can't complain.  Trading 
over the next week is expected to be relatively slow with the 
company shutting down its Manitoba operations for maintenance and 
labor negotiations.  The mine in Thomson Manitoba produces 100 
million pounds of finished nickel a year.  Assuming the company 
does not run into any possible labor disputes (leading to a 
lockout), trading should remain relatively stable.  Unfortunately 
the charts still show resistance at 22.70; this will be a 
critical level, which must be broken by bulls with volume.  
Conservative traders could pull up their stops to 21.50, or the 
bottom of last week's gap window at $21.86.

Late breaking news!  This just in - S&P has decided to make the 
S&P 500 an U.S. companies only index.  This means that RD, UN, 
NT, AL, ABX, PDG and N will be removed from the index.  In their 
places will be added GS, PRU, UPS, EBAY, ERTS, SDS and PFG - all 
American companies.  This is bad news for our bullish play in 
Inco (N).  Index managers who have to own the stock to track the 
index will sell shares of N to replace them with the incoming 
components.  While the switch isn't effective until the close of 
business on July 19th the selling of equities leaving the index 
and buying of equities entering the index will actually begin 
tomorrow.  We are going to RAISE our stop to $22.19, just under 
today's low.  More conservative traders will want to consider 
just exiting at tomorrow's open in hopes of booking a larger 
gain.       

Picked on June 14th at $21.42
Change since picked:    +1.03
Earnings Date        04/16/02 (confirmed)  


 

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

Abbott Laboratories - ABT - cls: 35.41 chg: -1.59 stop: 35.61*new*

Triggered today, we are currently short Abbott Laboratories.  
Abbot was attempting to put in a ascending bottom with slow 
support gaining on the trend-line.  However, today's loss in the 
Dow and Drug index $DRG.X pushed Abbott down to test its most 
recent support at $35.13.  Support at this level should show 
whether the stock is in for an immediate bearish sell-off or not.
On our radar screen is the earnings announcement scheduled for 
this week on Thursday, July 11th.  The earnings call is then 
scheduled to start that afternoon, but the numbers could be out 
by 10:00 AM Eastern time.  Here is what we plan to do.  Given our 
current market outlook is bearish for tomorrow (Wednesday), we'll 
keep the ABT trade alive but attempt to protect gains with a 
tight stop at $35.61, which was near the late afternoon spike 
higher before declining into the close.  This should shield a 
gain of $1.17 or 3.1%.  If ABT does not spike higher and stop us 
out at $35.61, we (the newsletter) will close ABT at tomorrow's 
closing price.  Obviously traders will need to attempt to exit a 
few minutes before the close.  This will remove any risk for an 
earnings surprise.  While we don't expect any positive news from 
their earnings report, there is no reason to hold over the 
announcement.  If the announcement doesn't bring any reaction by 
investors then a close under the $35 mark could have us looking 
for a new bearish entry point.

Picked on July 9th at $35.84 
Gain since picked:     +0.43
Earnings Date        07/11/02 (unconfirmed)




---

Fluor Corp. - FLR - close: 35.95 change: -0.80 stop: 37.36

Still trading below the daily 50-day MA and the 200-day MA, Fluor 
Corporation is again approaching the $35 area.  After the low 
volume bull rally on Friday, FLR failed to breach the technical 
and psychological 37 area.  Bullish technicals to be merited 
though, is the bullish bottoming hammer formed on Wednesday July 
03, 2002.  Although this is a chart pattern to be watched, we are 
not overly concerned, as the following days did not prove 
confirmation of the pattern.  Bears are probably encouraged that 
the news of FLR winning a contract from PFE worth $113 million 
did little to prop up the stock price on Tuesday.  The previous 
resistance below $37.36 still holds true as our stop for this 
particular position.   A trader who wishes to hold onto a bit of 
the position, given a rally, could use a scaling stop.  The 
trader would cover HALF of the position at 37.36, putting a final 
stop for the REST of the position at 38.65, or just above the 200 
day MA.  To use this type of scaling stop, one must understand 
and expect that potential losses may increase as shares trade 
toward the second alternative stop placement. This is merely an 
alternative as the newsletter will continue to use $37.36 to 
close the play.

Picked on July 3rd at $35.94
Change since picked:   -0.01
Earnings Date       07/30/02 (confirmed)
 



---  

XL Capital - XL - close: 79.77 change: -2.11 stop: 83.06 *new*

You never go broke booking profits.  Although XL Capital may well 
be heading towards the 200 week-MA near $70, it has a bit of 
support to get through to get there.  Looking at a five-year 
weekly chart, there is a substantial amount of choppy price 
support, widely through the 72-81 area.  An immediate break will 
probably not occur in one massive drop, but now that shares are 
under the psychological level of $80 we might begin to see an 
acceleration to the downside.  We would consider new bearish 
entries below today's lows but would suggest a tighter stop 
placement.  Maybe something above $82.00 or even just above 
$83.00.  The stock might find supports near the $75 level so 
short-term traders could book half their profits between $76 and 
$75 and keep the other half of the position as we aim for the $70 
region.  Truly conservative traders fearing this is a bear-trap 
or a bounce is imminent could tighten their stops to breakeven 
meanwhile the Premier newsletter will lower our stop to $83.06.

Picked on July 3rd at $80.89
Gain since picked:     +1.03
Earnings Date       04/29/02 (confirmed)






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

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

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

Siebel Systems - SEBL - close: 12.49 change: -0.70 stop: *text*

Company Description:
Siebel Systems, Inc. is the world's leading provider of eBusiness 
applications software. Siebel Systems provides an integrated 
family of eBusiness applications software, enabling multichannel 
sales, marketing, and customer service systems to be deployed 
over the Web, in call centers, in the field, through reseller 
channels, and across retail and dealer networks. Siebel Systems' 
sales and service facilities are located in more than 32 
countries. (source: company press release)

Why We Like It: 
It wasn't too long ago that Tom Siebel showed up on CNBC with a 
sunny forecast for his company and tech spending in general.  
Such a prediction didn't seem too far-fetched during the first 
four months of this year.  The NASDAQ and SEBL had both recovered 
dramatically from their September lows, and the consensus on Wall 
Street seemed to be that the economic rebound would quickly 
translate into more revenue for tech companies.  Unfortunately 
for tech bulls, Tom was wrong.  Very wrong.  The promise of 
increased IT spends continues to loom on the horizon like a 
distant fuzzy mirage, and both the NASDAQ and SEBL recently 
breached their September lows. And the worse may not be over yet.

SEBL has traded in a declining regression channel after forming a 
double-top near $37 last March.  Shares briefly fell under the 
September lows last week, bounced back to the top of the channel, 
and sold off once again.  We suspect this recent decline could be 
the beginning of a more severe selloff.  Specifically, we're 
looking for a move under the $12.00 support level to open the 
door for a rapid decline to psychological support at $10.00.  The 
MACD and daily stochastic oscillators indicate that SEBL has not 
yet reached oversold levels, and a trade at $12.00 will create a 
double-bottom point-and-figure sell signal.  SEBL lost 5.3% today 
after Bear Stearns initiated coverage on the stock with an 
"unattractive" rating...Also known as the "we wouldn't touch this 
stock with a ten-foot pole" rating.  That's pretty bad when a 
brokerage goes out of their way to advise against holding a 
particular stock.  Then again, maybe they're just parroting the 
recent negative comments from Wachovia, Pacific Growth, and 
Goldman Sachs.  The software group, as gauged by the GSO.X 
software index, is also looking extremely weak.  It has given 
back most of last week's gains and is teetering above crucial 
support at 100.  A break under this level would likely create 
additional selling pressure in SEBL.

Our strategy for playing SEBL will be as follows: We will enter 
the play if shares trade at or below $11.94.  If triggered, we'll 
use a stop at $13.21, just above today's high.  This is slightly 
more than 10% from our entry trigger.  Conservative traders may 
want to wait for the GSO.X to fall under 100 before taking any 
positions and/or use a very tight stop just above $12.00.  We'll 
close this play if SEBL trades at or below $10.06.  Also note 
that SEBL announces earnings on July 17th.  We will probably 
close this play ahead of the announcement to avoid getting caught 
in any, however unlikely, upside surprise.

Picked on July xxth at $xx.xx <- see text 
Gain since picked:      +0.00
Earnings Date         7/17/02 (confirmed)
 




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

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

Sony - SNE - close: 52.75 change: +0.77 stop: 49.79

Shares of SNE continue to look strong.  What's fueling the recent 
uptrend?  Investors may be applauding the impressive performance 
of Sony's movie division.  Aided by huge box-office takes from 
Spider-Man and Men In Black II, Sony Pictures is approaching $1 
billion in domestic ticket sales for 2002.  Typically it takes 
the entire year for movie studios to reach that mark.	

Moving from the silver screen to our computer screen, we see a 
promising technical picture for SNE.  The stock continues to 
distance itself from the $50 support level and looks poised to 
move above the relative high of $53.60.  The uptrending MACD and 
daily stochastics (5,3,3) indicate that the stock has not yet 
reached overbought levels.  It's also encouraging to see that SNE 
remains strong despite recent weakening in the U.S. Dollar 
(DX00Y).  Conservative or short-term traders may want to consider 
taking profits if SNE falters near the 50-dma at $54.35, while 
aggressive traders can consider new entries on a move above this 
level.  We're still targeting a rally to our profit-target at 
$59.50.

Picked on June 28th at $52.70 
Gain since picked:      +0.05
Earnings Date        10/24/02 (unconfirmed)
 



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

Alpharma, Inc - ALO - cls: 15.37 chg: +0.10 stop: 16.25

ALO has spent the past two sessions trading in an increasingly 
narrow range.  Although this could be the result of a simple lack 
of investor interest, the rising volume suggests otherwise.  This 
type of coiling behavior often precedes a large move.  In the 
event the move is an upside breakout, our relatively tight stop 
at $16.25 should prevent us from taking heavy losses.

In terms of sector strength, it's encouraging to see that the 
DRG.X drug index has given back all of its gains from Friday.  A 
move under 284.97 will take it to new multi-year lows.  Although 
ALO is displaying bullish daily stochastics, shares will have a 
difficult time moving higher if the DRG.X is tanking.  Traders 
still looking to get short can use the "inside day" strategy to 
open new bearish positions on a break below today's low of 
$15.20.  A more cautious approach would be to wait for a move 
under Friday's low at $14.90.

Picked on June 26th at $15.95 
Change since picked:    +0.58
Earnings Date        07/29/02 (unconfirmed)
 



---

Check Point - CHKP - close: 13.41 change: -0.42 stop: 15.06

The GSO.X software index is dangerously close to setting new all-
time lows.  Today's 3.5% decline was halted only by the closing 
bell.  Given the fact that the GSO closed at the lows of the day, 
a test of critical support at 100 seems inevitable. 

CHKP moved lower with the sector and finished with a 3% loss.  
The stock has trended steadily lower over the past two sessions 
and has found eager sellers with each intraday rally.  Traders 
can look for new entries on another rollover from the $14.00 
level, which acted as resistance on Tuesday.  Although we're 
currently keeping our profit-target (exit point) set at $12.06, 
we may lower that target if the GSO falls under 100.  CHKP could 
easily retest the relative low of $10.37 if the sector as whole 
begins to plummet.  The daily stochastics (5,3,3), which are just 
beginning to fall from overbought levels, support this notion.  
On a related note, we'll also be keeping a close eye on MSFT.  
Thus far shares of the number one software company have held up 
relatively well.  A breakdown would be extremely negative for not 
only the software group, but the entire tech sector. 

Picked on July 8th at $13.99
Gain since picked:     +0.58
Earnings Date        7/22/02 (confirmed)




---

QLogic Corp - QLGC - close: 37.51 change: -1.01 stop: 40.06 *new*

The chip sector was weak from the get-go this morning after 
Merrill Lynch slashed its fiscal year 2002 capex forecast for the 
semiconductor equipment sector and downgraded several related 
stocks.  The SOX.X (semiconductor index) traded down by 3.5% on 
the news, and in the process erased what was left of Friday's 
gains.  QLGC fared somewhat better than the SOX but still gave 
back 2.6%.  Thus far we're satisfied with this week's trading 
action.  Shares experienced a sharp selloff on Monday morning 
after failing to move over resistance at $40.  That doesn't 
inspire much bullish confidence.  The daily stochastics (5,3,3) 
are hinting at a rollover from overbought levels, which indicates 
that last week's buying momentum may be completely exhausted.  In 
light of the repeated failed rallies near $40.00, we're going to 
inch our stop down to $40.06.  More cautious traders could use a 
stop just above today's high of $38.58.  QLogic announced last 
night that they'll be announcing earnings after the bell on July 
18th, a week from Thursday.  We'll probably be closing this play 
ahead of the announcement.

Picked on July 2nd at $34.68
Gain since picked:     -2.83
Earnings Date       07/18/02 (confirmed)
 




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

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

Maytag - MYG - close: 41.12 change: -0.37 stop: 42.11

Maytag's strong bounce from last Wednesday's relative low and 
bullish "morning star" candlestick pattern had us feeling 
cautious on this play.  Accordingly, we tightened our stop to 
$42.11 on Friday.  Shares reached that level this afternoon, thus 
closing our play for a loss of 29 cents.  Considering that both 
the MACD and Daily Stochastic oscillators (5,3,3) are trending 
higher, it's possible that shares may trade up to the 50-dma 
($44.43) within the next few sessions.  Bears can point to the 
fact that MYG is currently trading near declining resistance on 
the 60-minute chart, which has been created by the stock's 
pattern of lower highs over the past month.  A move above $42.50 
would be a clear violation of this trend while a move back under 
$40 would reinforce the thought that MYG will retest its 200-dma.  

Picked on June 26th at $41.82
Change since picked:    -0.29
Earnings Date        07/16/02 (confirmed)





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

FVB     First VA Banks Inc         55.55     +0.89
ANF     Abercrombie & Fitch Co     26.26     +0.88
COLM    Columbia Sportswear Co     34.06     +1.46
GGG     Graco Inc                  25.62     +0.73
SLGN    Silgan Holdings Inc        42.14     +1.43
DCOM    Dime Community Bancshare   24.90     +0.70
JOSB    Jos A Bank Clothiers       20.87     +1.87

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

NWRE    Neoware System Inc         12.13     +1.39

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

FOSL    Fossil Inc                 21.25     +1.48
PSUN    Pacific Sunwear            24.48     +2.01
ZQK     Quiksilver Inc             26.80     +1.80
BEBE    Bebe Stores Inc            21.06     +1.10
JILL    J.Jill Group Inc           26.76     +2.75

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

PEP     Pepsico Inc                45.27     -3.58
MRK     Merck & Co                 45.75     -2.06
WYE     Wyeth                      37.30     -11.94
FDC     First Data Corp            33.00     -2.42
CEFT    Concord EFS Inc            27.50     -1.43
PEG     Public Service Enterprise  39.14     -1.91
PBG     Pepsi Bottling Group       27.75     -4.64
ABC     AmerisourceBergen          62.78     -8.02
TIF     Tiffany & Co               30.49     -3.09
DLTR    Dollar Tree Stores Inc     33.31     -2.88
TROW    T. Rowe Price Associates   29.99     -1.78
SNPS    Synopsys Inc               48.52     -3.86

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

SBCF    Seacoast Banking           55.52     -0.54




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