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Daily Newsletter, Monday, 08/05/2002

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PremierInvestor.net Newsletter                 Monday 08-05-2002
                                                  section 1 of 2
Copyright  2002, All rights reserved.
Redistribution in any form is strictly prohibited.

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In section one:

Market Wrap:      Double Trouble
Watch List:       BBH, C, CY, DAL, G, SNPS
Play of the Day:  Wireless Woes


******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************        
         08-05-2002        High      Low   Volume  Advance/Decline
DJIA     8043.63 -269.50  8312.92  8030.82 1668 mln   751/2400
NASDAQ   1206.01 - 41.91  1247.84  1205.68 1341 mln   954/2348
S&P 100   418.56 - 15.49   434.05   417.78   totals  1705/4748
S&P 500   834.60 - 29.64   864.24   833.44
RUS 2000  367.12 -  9.33   376.77   367.12
DJ TRANS 2132.27 - 69.76  2203.38  2127.70
VIX        49.31 +  3.92    49.83    45.46
VIXN       67.52 +  2.08    68.58    65.67
Put/Call Ratio      0.87
******************************************************************


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

Double Trouble

Today's market put some more ow in the Dow, as in OUCH! The 
Industrial Average slid -269.5 to close at 8043.63.  The Nasdaq 
fell -41.91, finishing at 1206.01, and the S&P 500 dropped -29.64 
to hit 834.60.  NYSE advancers totaled 751 versus 2401 decliners, 
while the Nasdaq viewed 953 champions and 2350 losers.  Lower 
volume characterized today's sell-off, with 1.6B shares traded on 
the NYSE, and 1.3B exchanged on the Nasdaq.  

In news of the day, Procter and Gamble (NYSE:PG) reported better 
than expected earnings, posting 77 cents a share, versus 75 
expected by analysts.  The company attributed part of the gain to 
the launch of several new products over the last year including: 
Crest Spinbrush, Whitestrips, and Thermacare heat wraps.  The 
acquisition of Clairol also helped with the growth in health and 
beauty care businesses.  In spite of the good news PG closed 
negative on the day, falling 2.67% to $87.44.

Unfortunately, the last five trading sessions have all had poor 
economic news.  As much as investors would like to see a market 
recovery, the current state of economics is making things very 
difficult.    

Today the Institute for Supply Management (ISM) reported that 
service sector activity fell from 57.2 in June to 53.1 in July.  
The report indicates continued expansion for the services 
sectors, though growth is definitely moving at a slower pace.  
Sectors reporting the highest job losses are: entertainment, 
agriculture, finance, banking, and mining.  Overall, job growth 
still remains weak, potentially indicating a slower recovery than 
originally thought. 

In other economic news not reported in the mainstream media was 
the Challenger Report.  Challenger, Gray, and Christmas (CG&C), 
is an executive outsourcing firm that compiles layoff 
announcements, while the Challenger Report attempts to depict 
trends in layoff activity.  In July, there were 80,966 job cut 
announcements.  Previous job cut announcements averaged 122,600 
per month in the first six months of 2002, though in 2000, the 
report averaged 50,000 job cut announcements per month.  Nearly 
one quarter of all layoffs were in the telecom sector, even 
though telecom only accounts for 1% of the total workforce.  The 
report also indicated that computer and electronics companies are 
still downsizing payrolls, and could still have significant 
restructuring ahead.

Alas it's time for the media fear factor du jour.  The word of 
the day is Double Dip Recession.  So what exactly is this second 
helping of the economic ice-cream cone?  A Double Dip Recession 
is defined as GDP sliding back to negative after one or two 
quarters of positive growth.  A recession is defined as two or 
more consecutive quarters of decline in GDP. (Source: Dictionary 
of Finance and Investment Terms)  

In the nine recessions since World War II, six of the nine saw 
double dip recessions.  In terms of economic health, analysts 
would like see a straight-line recovery, however, the ever-
hopeful straight-line continuous growth recovery has never 
happened. Ever.  Double Dip Recessions occurred in: 1948-49, 
1957-1958, 1960, 1969-1970, 1973-1975, 1981-1982.  In historical 
recoveries, the two contributing factors to economic rebounds 
were: personal consumption and government expenditures.  Thus, as 
a leading indicator of potential GDP, our current weakening 
Consumer Confidence numbers could help boost the potential odds 
of a future "Double Dip" becoming a reality.  

Helping the U.S. Economy through tough times in the last couple 
years has been the real estate market.  On average 2/3rds of 
Americans own real estate, where only 1/2 own stocks.  The 
average household real-estate value is $100,000.00, while the 
average household stock portfolio is a mere $25,000.00.  (Source: 
BoC) With the stock market plummeting, consumer's balance sheets 
have been able to weather the recession with an average 6% 
increase in real estate over the last few years.  Many Americans 
have used lower interest rates to re-finance their homes and/or 
pull cash equity out of their appreciated properties.  The 
problem lies in what could potentially happen if real-estate 
prices begin to see a broad decline.  Once interest rates begin 
to increase, home sales should begin to taper, as consumers could 
scoff at paying premium prices AND higher interest rates.  Thus, 
we might assume that homes occasionally act as bonds.  Once 
interest rates increase, the sale prices (principals) have to 
decrease in order to compensate for higher rates (yields).  
However, unlike bonds, real estate appreciates with time and 
inflation.  What if though, the dollar begins to see further 
weakening, or simply has no appreciation and trades sideways?  
On the bright side, the Fed has left itself room to cut rates 150 
basis points, allowing for three more potential rate cuts...  So 
many scenarios, so little time.

Bottom line, a fallout of consumer spending and/or real estate 
prices could be devastating to our economy.    

Chart of: 10-Year Treasury Note Index, Daily.





Evaluating the flee to Treasury safety, the chart says it all.  
On November 1st, 2001, the 10-Year note hit a yield low of 
4.096%.  After the November yield low, the stock market began 
to rally.  Further down the line, the 10-Year could not get 
above 5.4% in March and April of this past year.  Breaking 
recent relative lows today, the 10-Year Note closed at 4.238% 
indicating that bonds could go higher.  The break in bond 
yields has come with rumors of a Double Dip Recession and an
unfortunate lack of positive economic news.  The market is 
saying "Frankly, I'd rather have 4.2% per year than whatever 
stocks are returning". 

Four point two percent% !?!?!? - Not a good sign.

Chart of: 30-Year Treasury Index, Daily.




The 30-Year chart displays yields falling from previous highs 
above 5.8%.  With Stochastics entering the oversold region, it 
seems that yields could definitely go lower.  The 2-year note 
fell below 2% today, closing at 1.903%.  Today's final print is 
the first close under 2% EVER!  Factoring in the notion that 
short-term rates are falling quickly, the yield curve seems to be 
getting steeper.  Recent action in bonds has prompted economists 
to predict a fair chance of a near term rate cut by the fed, with 
the futures markets now pricing in a Fed cut possibility at 34%.  
If things continue to head in the direction of the wayside, there 
is a 100% chance of a January rate cut. (Source: CBS Market 
Watch) 
   
Chart of: Market Volatility Index, $VIX.X, Daily.





The above Market Volatility Index ($VIX.X) closed at 49.31 today.  
Today's close is certainly a warning sign for the market, as the 
VIX has only closed above 50 twice since the crash of 1987. The 
first of which was on September 20th, 2001, and the other was 
just two weeks ago on July 23rd; one day before the big "rebound 
rally".  The VIX is back at unreasonably high levels, creating an 
environment of extreme uncertainty.  It is important to point out 
that the last two times the VIX was this high, a very large 
relief rally (fueled strongly by short-covering) promptly ensued.  
Considering that the Dow is near the technical and psychological 
support of 8000, this could be where the market attempts to put 
in another short-term bottom.  However, the VIX could actually go 
higher, which normally occurs as the Dow falls lower.  Thus, 
traders should keep a wary eye on the 8K mark, as it could be 
nothing more than a sign post on the way down.

For the market rally, we would need some type of decent economic 
news to come forward in the next few weeks.  Our fears of a 
Double Dip Recession, mixed with fading yields, high volatility, 
and sinking investor sentiment could fuel a potential tougher 
market ahead.  The market is quickly growing more and more 
bearish, even though the bulls seem to still have legs.  What I 
mean is that there are still bulls that have not completely 
thrown in the towel yet.  On the sentiment side of things, the 
bulls will have to almost completely give up to truly allow this 
market to find a bottom.  Given the current situation, I would 
like to urge caution for investors currently in the market.  
Conditions are prime for a potential irrational move downwards.  
I don't want to say it, but the word I'm looking for begins with 
a C, ends with an H, and has a R, A, and S in the middle.  With 
the Dow's close at 8043.63, we are only 523.39 points away from 
the most recent low of 7520.24.  500 points can go by pretty 
quickly if the market begins to panic.  At this point anything 
can happen... The only message I would like to convey tonight is: 
please be careful, and make sure ALL of your trades have stops.  
Protect your portfolio by trading with rational calculated 
decisions.  It is not my intent to cause any fear, rather I would 
simply like to re-iterate money management for protection of 
investment principals.   

Mark Whistler
Editor
mwhistler@PremierInvestor.net

*Reader Poll*

Should the Fed raise or lower rates?  When, why, and how much?
Subscriber and free trial member's comments will be published on 
Wednesday.

****

Last week we did an informal poll to see what subscribers thought 
of the US invading Iraq...

We Asked:

The US has talked about an invasion into Iraq again. However, an 
invasion would cost approximately 80 billion dollars, which would 
certainly not help with our deficit, w hich is predicted to be 
165 billion by the end of the year. The gulf war had cost 
approximately 60 billion dollars, which the Allies paid almost 
80% of. Because the Allies do not currently support an invasion 
the way they had previously, the U.S. would get stuck paying 
almost the entire tab for a new strike. Can we afford this in the 
middle of a recession where our fight against terrorism has 
already increased our national deficit?

Readers are encouraged to respond on thoughts of a possible 
invasion. Should we, or shouldn't we? What are the economic and 
political implications?

A few reader responses:

UNCLE SAM NEEDS A NEMESIS.  SADAM IS A GOOD ONE.  IF HE IS 
ELIMINATED THAN WHO IS THE NEXT?  THE RED DRAGON? 
THE OTHER SIDE IS THE HUMAN LOSS.  BUT CERTAINLY THERE ARE THOSE 
LIKE THE SECRETARY OF DEFENSE THAT SEES A CHANCE THAT WON'T COME 
AGAIN. REGARDS

---

Should we attack Iraq?
Let's see, it would cost an estimated 70 to 80 billion dollars in 
a shaky economy with a rising deficit. It would undoubtedly kill 
thousands of innocent Iraqi civilians. It would likely foment 
anti-American sentiment throughout the Middle East, destabilizing 
nations like Saudi Arabia and Pakistan. It would probably 
exacerbate the Israeli/Palestinian conflict. It would leave a 
destabilized Iraq that would require massive amounts of attention 
and cash. And why would we do this? Because Iraq MIGHT be making 
weapons of mass destruction that they MIGHT (insert fat chance 
here) use against us? Oh yeah, that makes a lot of sense! Have we 
gone completely over the edge?  To make matters worse we're now 
considering attacking countries that we perceive to be a threat 
to us. Can anyone in Congress say PEARL HARBOR?
One irony of all this is that, though Hussein is reprehensible, 
he's no worse than most of the dictators in that region that we 
have FRIENDLY relations with. The ultimate irony and hypocrisy, 
though, is that America is the poster child for weapons of mass 
destruction. We invented them and we have more than anyone else. 
Plus we're the only nation to ever use them, which should make 
every other nation uneasy about us having them. Yet we now want 
to attack or punish any nation that tries to get them. We're like 
the rich kid who's jealous of anyone else making a buck. We 
should be complimented. They just want to be like us: powerful 
and terrifyingly lethal.

---
 
I think that it is imperative that we keep the pressure on 
Hussein to open his country to inspectors. I feel that we should 
proceed with a limited air war and an ultimatum to open to 
inspection or further build up will be necessary. We should 
target military targets and suspected sites for development of 
weapons of mass destruction in non-civilian areas. (if there is 
such a thing, since I am sure he has placed them in harms way of 
the public.
 
I do feel that an invasion of 200,000+ forces will be difficult 
and will significantly impact our economy negatively. We must 
protect the oil fields in the Middle East from Iraq's attempt to 
destroy them as a result of an air attack as they did in Kuwait 
in the Gulf War.
 
I do not feel that the government has adequately determined the 
financial impact on the economy of an all out invasion. This must 
be analyzed and scenarios presented to the public as the down 
side of an invasion.
 
We should stop Iraq's flow of oil completely and airdrop food and 
medicine to population areas as in Afghanistan, particularly to 
those groups like the Kurds in the north who oppose the regime.

---

Thanks to all of those who responded!

Editor
mwhistler@PremierInvestor.net


==================================================================
WATCH LIST
==================================================================

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

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

Biotech HOLDRs - BBH - close: 77.70 change: -3.04

WHAT TO WATCH: Strong earnings from sector leader AMGN gave the 
biotech group got a nice boost in late-July, but the bullishness 
has since faded.  Faced with a descending NASDAQ and a lack of 
more positive news, the BBH has rolled from its 50-dma ($80.81).  
The declining MACD and daily stochastic oscillators suggest that 
shares may soon revisit the $70 level.  A break of today's low 
($77.40) would provide a possible action point to get short.




---

Citigroup Inc - C - close: 28.65 change: -2.23

WHAT TO WATCH: Negative comments from LEH weighed heavily on this 
Dow component today.  The firm cut its price target on Citigroup 
from $55 to $43, based on their belief that economic uncertainty 
and a difficult operating environment would cause shares to 
underperform in the near-term.  With C closing below 
psychological support at $30.00 and the oscillators trending 
lower, a retest of the $25 level appears likely.  A move under 
today's low ($28.60) may offer an opportunity to open short 
positions.  An alternate strategy would be to wait for a failed 
rally at $30.00.


 

--- 

Cypress Semiconductor - CY - close: 9.61 change: -0.81

WHAT TO WATCH: With the SOX.X plummeting to multi-month lows, 
there's no shortage of ugly chip stocks.  We've singled out CY 
because it's just broken into the single-digit range and is 
currently signaling a double-bottom p-n-f sell signal.  High 
risk/reward entries could be evaluated at current levels, with a 
stop just above $10.00.  Potential downside is anyone's guess (CY 
hasn't traded this low since 1999), but we'd expect shares to at 
least reach the $8.00 area if the SOX.X keeps tanking.  Other 
possible semi shorts include TXN, MU, AMAT, and KLAC.  Also check 
out INTC, which fell to new multi-year lows on Monday!




--- 

Delta Airlines - DAL - close: 13.60 change: -0.30

WHAT TO WATCH: Things are going from bad to worse in the airline 
sector.  The XAL.X airline index is threatening a breakdown to 
all-time lows, UAL is flirting with bankruptcy, AMR and CAL have 
fallen to single-digit levels, and industry darling LUV is in 
danger of suffering the same fate.  DAL looks like a good way to 
take advantage of continued sector weakness because it's not as 
oversold as some of the aforementioned stocks.  We also have a 
clear action point at the multi-year low of $13.20.  By shorting 
a break under this level, traders could aim to capture a decline 
to the $10.00 region.  P-n-f chartists will note that a trade at 
$13.00 will create a double-bottom sell signal.




---

Gillette Co - G - close: 31.54 change: -1.06

WHAT TO WATCH: Gillette announced today that it was buying the 
naming rights for the New England Patriots' stadium from Internet 
has-been CMGI.  That's all fine and dandy, but we think that 
shares of G are vulnerable to a bearish onslaught...Just as the 
Bears dismantled the Patriots in Super Bowl XX.  Shares recently 
sold off from the converging 50-day and 200-day MA's near $33.45.  
The daily stochastics (5,3,3) have ample room to fall, and the 
MACD is starting to curl lower from below the zero-line.  
Considering the broader market weakness, odds seem good that G 
will retest its recent lows near $28.00.  Short positions could 
be evaluated at current levels.




---

Synopsys Inc - SNPS - close: 38.57 change: -1.67

WHAT TO WATCH: The GSO.X software index hit new all-time lows 
today, despite a relatively strong performance from MFST.  This 
sector weakness could become even more pronounced if the NASDAQ 
keeps falling.  Although there are many software shorts abound, 
SNPS looks especially intriguing because it isn't as near-term 
oversold as some of its weaker compatriots (gauged by the daily 
stochastics).  Shares closed under psychological support at 
$40.00 today and hit a new multi-month low.  The September lows 
near $36.00 offer a clearly defined profit target to aim for.  
Entries could be sought on a failed rally at $40.00 or a break 
under today's low of $38.27.





=========================
Play-of-the-Day (High-risk/High-reward BEARISH play)
=========================

QUALCOMM Inc - QCOM - close: 23.78 change: -1.77 stop: *text*

Company Description:
QUALCOMM Incorporated is a leader in developing and delivering 
innovative digital wireless communications products and services
based on the Company's CDMA digital technology. 
(source: company press release)

Why We Like It:
We've been watching QCOM over the past few weeks, eagerly awaiting 
a breakdown.  That's exactly what happened today when shares gave 
back nearly 7%, fell under support at $25.00, and closed at new 
multi-year lows!  Although it's possible that this dip could turn 
out to be a "bear trap," the technical picture is looking
decidedly weak.  In addition to the violation of psychological 
and historical support at $25.00, today's decline also created
a triple-bottom sell signal on the point-and-figure chart. 
A glance at the MACD shows rolling action from just below the
baseline.  This has been a reliable bearish indicator over the 
past five months.  Given the likelihood that the NASDAQ will 
soon be trading at multi-year lows of its own, we think QCOM could
see the $20.00 level in the near future.  While this provides
a reasonable profit target to aim for initially, the current 
bearish vertical count (p-n-f chart) suggests that an eventual 
decline to the $15-$16 region is not out of the question.  Of 
course, this play's "wild card" is tomorrow night's earnings
report from CSCO.  While the chances of an upside surprise seem 
pretty slim, we cannot rule out the possibility that a rosy 
forecast for future growth might trigger a short-covering rally 
on the NASDAQ.  Thus, we've elected to place QCOM in the 
high-risk/reward section and give this play a wide stop.  We 
will not enter our hypothetical short position until shares 
trade under today's low of $23.21.  If triggered, we'll use a 
15% stop at $26.68.  If this is more heat than you're willing 
to take, a stop just above today's high ($25.53) would be 
perfectly reasonable.

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





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The Premier Investor Network.
Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter                  Monday 08-05-2002
                                                   section 2 of 2
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/h05b_2.asp
=================================================================

In section two:

Net Bulls
  Triggered Plays:       XLNX
  Stop Adjustments:      CYMI
 

Stock Bottom / Active Trader
  Stop Adjustments:      DD,DIA,MER   
  Closed Bearish Plays:  MO

High Risk/Reward
  Stop Adjustments:      VRTS 
  New Bearish Plays:     QCOM
  Closed Bearish Plays:  HGSI

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)



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

===============
NB Triggered Plays
===============
  
Triggered Bearish Plays
--------------------


Xilinx - XLNX - close: 15.96 close: -1.45 stop: 17.62 *new*

The SOX.X plummeted to a new multi-year low on Monday after 
giving up support at 300.  Our short play in XLNX was triggered 
when shares hit $16.95 in morning trading.  In light of today's 
8.3% decline, we're going to tighten our stop to $17.62.  This 
will force the stock to trade above both today's high and shelf 
of resistance from Friday afternoon.  Slightly more aggressive 
traders could maintain a stop just above Friday's high of $18.23.




===================
NB Stop Adjustmnets
===================

Stop Adjustments
----------------

Cymer Inc. - CYMI - close: 23.66 change: -1.71 stop: 26.11 *new*

Shares of CYMI followed the SOX.X lower today and posted a 6.7% 
loss.  At this time, we think it would be prudent to tighten our 
stop to $26.11.  A more conservative strategy would utilize a 
stop just above today's high of $25.30.  New entries can be 
evaluated on a rollover from $25.00, but keep in mind that we'll 
exit this play if shares trade at or below $22.51.





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

===============
AT Play Updates
===============  
 
Stop Adjustments
----------------

DuPont - DD - close: 38.10 change: -0.99 stop: 40.26 *new*

DD followed the Dow Jones lower today and continued to gravitate 
towards our profit target at $37.01.  At this point, we're going 
to attempt to protect a small gain by moving our stop to $40.26, 
above psychological resistance at $40.00.  Short-term traders 
could target new entries on a rollover from this region. 


 

--- 

Diamonds - DIA - close: 80.47 change: -2.73 stop: 85.06 *new*

We'll leave the gory details of the latest market gyrations to 
tonight's Market Wrap, but it goes without saying that the bulls 
have had better days.  With the Dow Jones approaching 8000, DIA 
has almost reached our initial profit target of $80.00.  While 
traders may want to consider booking gains on a bounce from this 
level, we're anticipating that the Dow will eventually move to 
retest its July lows.  We'll set an official profit target 
if/when the Dow closes under 8000.  Our stop-loss is now set at 
$85.06, just above psychological resistance at $85.00.


 

--- 

Merrill Lynch - MER - close: 31.56 change: -1.86 stop: 35.01*new*

Weakness in the financial sector helped to pull MER within 
striking distance of new 52-week lows.  With this trade 
continuing to work in our favor, we're going to tighten our stop 
to $35.01.  More cautious traders could use a stop just above 
Friday's high ($34.54) or today's high ($32.84).  Although our 
initial profit target was the $30.00 region, we feel that this 
level may eventually fall.  We'll re-evaluate our exit strategy 
based on how shares trade tomorrow. 


 


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

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

Philip Morris - MO - close: 47.50 change: +2.29 stop: 47.62

Shortly after 1:00 this afternoon, a decision came down from the 
California Supreme Court supporting immunity for tobacco 
companies in cases where claims fell between 1988-1998.  In other 
words, it'll now be more difficult to sue tobacco companies in 
California.  MO went vertical after this news hit the wires, 
blowing through its short-term shelf of resistance at $46.50 and 
quickly reaching our stop-loss at $47.62.  Our play was closed 
for a loss of 1.8%.

It's difficult to gauge how much staying power today's bounce 
will have.  After all, the California decision has no bearing on 
cases in other states.  On a technical basis, MO still faces 
overhead resistance at the 50-dma ($49.28), 200-dma ($50.15), and 
the psychologically important $50.00 level. A rollover from the 
region might actually present another action point to go 
short...Especially if the Dow Jones continues to freefall. 
 
Picked on July 25th at $46.76 
Results since picked:   -0.86
Earnings Date        07/18/02 (confirmed)
 





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

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

Stop Adjustments
----------------

Veritas Software - VRTS - cls: 14.99 chg: -0.60 stop: 16.31 *new*

VRTS fell another 3.8% on Monday, closing just below 
psychological support/resistance at $15.00.  This is not an 
encouraging development for the bulls.  Aggressive traders could 
target new entries on a break under today's low ($14.52), but 
keep in mind that we have an official profit target set at 
$12.56.  Our stop is now located at $16.31, just above Friday's 
high.





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

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

QUALCOMM Inc - QCOM - close: 23.78 change: -1.77 stop: *text*

Company Description:
QUALCOMM Incorporated is a leader in developing and delivering 
innovative digital wireless communications products and services 
based on the Company's CDMA digital technology. (source: company 
press release)

Why We Like It:
We've been watching QCOM over the past few weeks, eagerly 
awaiting a breakdown.  That's exactly what happened today when 
shares gave back nearly 7%, fell under support at $25.00, and 
closed at new multi-year lows!  Although it's possible that this 
dip could turn out to be a "bear trap," the technical picture is 
looking decidedly weak.  In addition to the violation of 
psychological and historical support at $25.00, today's decline 
also created a triple-bottom sell signal on the point-and-figure 
chart.  A glance at the MACD shows rolling action from just below 
the baseline.  This has been a reliable bearish indicator over 
the past five months.  Given the likelihood that the NASDAQ will 
soon be trading at multi-year lows of its own, we think QCOM 
could see the $20.00 level in the near future.  While this 
provides a reasonable profit target to aim for initially, the 
current bearish vertical count (p-n-f chart) suggests that an 
eventual decline to the $15-$16 region is not out of the 
question.  Of course, this play's "wild card" is tomorrow night's 
earnings report from CSCO.  While the chances of an upside 
surprise seem pretty slim, we cannot rule out the possibility 
that a rosy forecast for future growth might trigger a short-
covering rally on the NASDAQ.  Thus, we've elected to place QCOM 
in the high-risk/reward section and give this play a wide stop.  
We will not enter our hypothetical short position until shares 
trade under today's low of $23.21.  If triggered, we'll use a 15% 
stop at $26.68.  If this is more heat than you're willing to 
take, a stop just above today's high ($25.53) would be reasonable 
also.

For annotated chart: Click here.
Chart of: QUALCOMM Inc, Daily.



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





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

Closed Bullish Plays
--------------------


Human Genome Sciences - HGSI - cls: 15.00 chg: -1.02 stop: 15.49

With no positive sector news to speak of on Monday, the BTK.X 
biotech index continued to move lower with the NASDAQ.  Shares of 
HGSI saw heavy selling shortly after the opening bell and posted 
a 6.3% decline.  This short play was closed for a 9.9% loss when 
the stock hit our stop at $15.49.  Although the past three days 
of selling have come on relatively lighter volume, the 
downtrending daily stochastics and MACD histogram are not 
encouraging for the bulls.  Longer-term traders should be now 
watching for the 50-dma ($14.17) to provide support.
 
Picked on July 30th at $17.20 
Results since picked:   -1.71
Earnings Date        07/25/02 (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 

RJR     RJ Reynolds Tobacco        56.14     +1.54

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

None

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

CARS    Capital Automotive         24.35     +1.10
GILD    Gilead Sciences Inc.       30.86     +1.95
ENR     Energizer Holdings         29.24     +1.87

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

ROST    Ross Stores Inc.           32.76     -1.38
HUG     Hughes Supply Inc.         32.10     -1.94
UCBH    Ucbh Holdings Inc.         38.40     -1.25
CACI    Caci International         27.49     -4.11
KSS     Kohl's Corporation         62.85     -1.74
KRON    Kronos Inc.                26.45     -2.14

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

AXP     American Express Co.       30.36     -2.66
BBH     Biotech Holders Trust      77.70     -3.04
RGA     Reinsurance Group of Amer. 27.40     -0.83
ONE     Bank One Corp.             35.09     -1.98
MCY     Mercury General Corp.      43.74     -1.03
TMK     Torchmark Corp.            33.73     -0.93




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