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Daily Newsletter, Friday, 08/16/2002

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PremierInvestor.net Newsletter          Weekend Edition 08-16-2002
                                                    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
=================================================================

In section one:

Market Wrap:      Hi Mom... Send money!
Play-of-the-Day:  Mars or Bust!
Watch List:       Through the Looking Glass
Market Sentiment: Convinced Yet?

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


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

Hi mom...  Send money!

If you're the parent of a young adult, age 18-22, you may be 
spending some time this weekend washing clothes, packing 
suitcases, fueling up the kids car with gas and sending them off 
to college.  

Depending on how the summer went, there will either be some hugs 
and tears, or hugs and big grins from both the parents and the 
kid(s) as the college clunker heads out the driveway en route to 
the college destination.

Upon leaving the family's permanent residence, Junior was 
instructed to call home upon safe arrival, but later that evening 
you find yourself staring at the phone, waiting for it to ring, 
but the call never comes.  Of course, no matter how rough the 
summer may have been, you pick up the phone and call the kid only 
to hear Junior say, "oh I got so occupied with things I just 
forget to call you when I got here."  This of course could be 
interpreted as "oh I got so busy partying and catching up on 
summer activities with my friends that I forgot you even 
existed."

Well, several weeks pass and you hear nothing.  Then, one 
Saturday afternoon you turn on the TV to watch your kid's college 
football game and there's Junior acting like a young adult and 
holding up a sign "Hi mom...  Send Money!"

Now the above is perhaps a long lead in to anything market 
related, but suffice it so say, a "young bull market" (in terms 
of point and figure bullish percentage) is underway as the market 
internals improve week by week.  

Per usual, the narrow and more volatile NASDAQ-100 Bullish % 
($BPNDX) was the first to turn "bull alert" back on July 8th from 
a low reading of 8% to 17%.

Then early this week (Monday) the still narrow, yet not as 
heavily technology-exposed S&P 100 Bullish % ($BPOEX) reversed up 
to "bull alert" status as did the broader S&P 500 Bullish % 
(%BPSPX) as the internal strength spread among stocks and demand 
started outstripping supply.  The same day (Monday), the very 
broad and more methodical NYSE Bullish % ($BPNYA) also reverse 
up, but from "bear alert" to "bull confirmed" status.  Only the 
broad NASDAQ Composite Bullish % ($BPCOMPQ) is still in a bearish 
phase and "bear confirmed" at 31.92%, but very close to reversing 
to "bull alert" should the 32% level be reached.

Without really looking at each of the NASDAQ-100 components, we 
can perhaps understand how "broad" the rally has been in this 
part of the market or the larger larger-cap NASDAQ stocks, how 
"oversold" this group of stocks was, and how weak the group has 
been and perhaps still is due to being so out of favor.  Some 
subscribers have noted that while the NASDAQ-100 Bullish % 
($BPNDX) reversed higher on July 8th to 17%, the NASDAQ-100 Index 
($NDX.X) closed at 1,014 that day.  

Here we are, several weeks later, with a close at 996.06 in the 
NDX.X, but the bullish % for this group is now at 46%.  That a 
gain of roughly 31 stocks to "buy signals" on the point and 
figure charts, yet an INDEX decline of -18 points is still found.

Perhaps the "main reason" we're seeing the internals (bullish % 
charts) improve rather markedly from their lows, yet not seeing 
an index like the NASDAQ-100 reflect the bullishness is due to 
the index weighting itself.  While the bullish % only allows for 
"one stock, one vote" the NASDAQ-100 Index itself along with the 
OEX, SPX, INDU which are "weighted indexes where certain stocks 
have greater weight than others" really skews the internal 
bullishness taking place.

What all of this "says" (marked improvement in the internals, but 
lesser improvement in the externals) is that the "young bull" is 
in need of "more money" if it is going to move forward.  Either 
that, or one heck of a lot more short-covering, but I'm not 
counting on that with less than stellar economic data still 
trickling in.

The KEY next week will be what the Treasury markets do.  We will 
talk about this later, but I think helps set the stage to 
understand this line of thinking.

Major Averages/Indexes - Weekly Changes




Since I've talked about the NASDAQ-100 and it is a round number 
of 100 stocks where we can more easily grasp the percentages of 
the bullish % (46% bullish % means 46 of the 100 stocks have a 
point/figure buy signal associated with their chart) and get a 
feel for why I think the Treasury Bond market plays an important 
role this coming week.  This WEEK, the NASDAQ-100 Bullish % 
($BPNDX) rose from 28% to 46% and the NASDAQ-100 Index (NDX.X) 
lead the major market averages with a 6.3% gain.  This tells us 
that a net gain of 18 stocks to new buy signals generated 6.3% 
worth of Index gain.  

A "classic example" to look at as it relates to "Index weighting" 
in the NASDAQ-100 and "bullish %" which is not weighted is what 
took place and has been taking place in the heaviest weighted 
NASDAQ-100 component, Microsoft (NASDAQ:MSFT) 49.99 +0.44%.  For 
the week, Microsoft (MSFT) gained $1.87 or 3.8%, generated a "buy 
signal" on its point and figure chart, which contributed 1 stock 
to the NASDAQ-100 Bullish %.  Remember, this is the MOST heavily 
weighted stock in the NASDAQ-100 with a 12.98% weighting.  Intel 
(NASDAQ:INTC) $18.75 +0.75% is the next most heavily weighted at 
6.09%.

Microsoft Chart - $1 box




Microsoft (MSFT) is perhaps "the key" stock in the NASDAQ-100 as 
it is the heaviest weighted.  It is also "the key" stock in the 
GSTI Software Index (GSO.X).  Remember last nights discussion of 
"sector bellwether" stocks and this week's action in Wal-Mart 
(WMT) $53.79 -1.68% and today's action in IBM (NYSE:IBM) $79.35 
+3.72%.

There's a lot of overhead supply "nearby" in the MSFT 
supply/demand chart, and most likely there are still some bulls 
looking to sell into the rally, and some bears willing to short 
and try to leverage off the overhead supply from $50-$55.  This 
may create the opportunity for a bull to look for an entry at 
lower prices between $46 and $47 (remember that "last" pullback 
WMT had at $46 before launching to $54 on Thursday).  

Now lets focus on the "red 5,6,7 and 8" points.  We're going to 
note some DIVERGENCE from the past as it relates to the 5-year 
Treasury YIELD chart ($FVX.X) (note: you will see similar in the 
10-year YIELD Chart $TNX.X) and DIVERGENCE from the past as it 
relates to the NASDAQ-100 Bullish %.

5-year YIELD chart - 0.5 box




One thing I really like about p/f charts is that we can quickly 
make correlations to time.  By following the 5,6,7 and 8 in the 
YIELD chart, we can correlate against a stock's price RELATIVE to 
how the stock we're tracking traded with YIELD action.  As you 
can easily see, from 5,6,7 and 8, YIELD is falling (money going 
toward the bond).  For the most part, good old MSFT tried to hang 
around the $51, $50 and $52 level (bouncing up to $56 sometimes) 
during May, June and July.  But in early August (red 8), the 
further rush of cash back into the 5-year Treasury had YIELD and 
MSFT falling (MSFT fell to $44 in early August).  Now we see MSFT 
give a "buy signal" on its p/f chart at $50 on Thursday, and the 
5-year YIELD chart also gave a "buy signal."  However, for MSFT 
and most likely other stocks, equity bulls need to see further 
selling. 

We can perhaps envision a slight pullback in Treasury YIELD, 
combined with a slight pullback in MSFT and then a rebound in 
both to the upside.  

A BEARSIH equity trader says, "Yeah, but I can also see a 
pullback in YIELD, another sell signal on the YIELD chart, just 
like the one in early August after the red 8, which has 
everything falling apart to the downside!"

This is a very good point and perhaps where the bullish % charts 
come into play.  Again, lets focus on the 5, 6, 7 and 8 and see 
what shape the bullish % was in and what it was doing.  I'll use 
the more volatile NASDAQ-100 Bullish % ($BPNDX), but I'd also 
suggest subscribers look at the S&P 500 Bullish % ($BPSPX) and 
even the NASDAQ Composite Bullish % ($BPCOMPQ) when trying to 
understand "risk" and "bullishness" in these markets of which 
MSFT is associated.

NASDAQ-100 Bullish % Chart - $2 box




Eeeee gad that's a lot of stuff to put on a chart.  Again, I've 
placed MSFT's approximate share price at the various beginning's 
of each month to try and show how the stock really hung tuff from 
November (red B) through March (red 3) despite the "overbought" 
conditions in December (red C) and even mid-March (after red 3).  
However, once that final "overbought" condition was reached in 
mid-March, the flood of cash that went back into the Treasuries 
as depicted in the 5-year YIELD chart ($FVX.X) starting in April 
(red 4) and May (red 5) and on through October (red 8), well that 
was more than MSFT could handle.

What most likely happened was that institutional holder were 
finally forced to sell MSFT as equity fund mutual fund 
redemptions came in as investors fled to the safety of 
Treasuries.  When you as a mutual fund manager have gotten rid of 
all the other garbage in the fund, you then have to sell you 
bellwether stocks, and as we often see, they are the last to 
fall.

But isn't it interesting how the NASDAQ-100 Bullish % ($BPNDX) 
improved internally from July (red 7) to August (red 8).  That 
HAD to be short covering driven in all the "garbage" stocks that 
have little weight in the NASDAQ-100 ($NDX.X).  I think it HAD to 
be short-covering only because Treasury YIELDS were still falling 
(caused by money flowing into those bonds).  

Currently, a larger cap technology stock like MSFT needs quite a 
bit of buying to get the stock moving higher.  Heck, IBM 
(NYSE:IBM) $79.35, which we noted broke downward trend and 
recently gave the powerful "spread-triple-top" buy signal at $75, 
really did well today and Treasuries cooperated with some selling 
and the gaining bullish % indicators also help has they depict 
still improving demand for stocks as more and more stocks 
generate "buy signals."

The main difference from a technical standpoint between IBM and 
MSFT is the "distance" from overhead supply.  Go back and review 
Thursday's market wrap and you will perhaps see how "overhead 
supply" above the $76 level was clear back to June.  The p/f 
chart of IBM shows it had been building a base for two-months.

Now we will understand that for IBM to continue higher, it too 
needs more cash.  In other words, "Hi mom... send money" would be 
needed also, otherwise IBM most likely pulls back to a support 
level near $75 (a bullish entry point, stop $70 on IBM p/f 
chart).

The 5-year YIELD chart ($FVX.X) did give a YIELD "buy signal" 
today and that is a positive.  The rather sharp move up today in 
the 5-year YIELD also depicts a strong round of selling, but an 
equity bull needs to see more of the same.

No, we can't expect it to happen day after day after day, but an 
equity bull does want to see some follow through, otherwise, look 
for bears to show back up and all the "garbage" stock that 
benefited from "short-covering" that lack relative strength, will 
most likely get shoved lower again.

This is why I feel the QQQ is such a poor "blanket" type of 
investment right now as it relates to current risk parameters.  I 
think some stocks are under a declining YIELD event have many 
NASDAQ-100 stocks just a little too risky for potential reward.

I'm much more "comfortable" with partial positions in the bigger 
"bellwether" stocks like IBM and even MSFT on a pullback.

Iraq News

One thing traders may be face with is talk of rising tensions and 
potential new that Saddam Hussein is up to "no good," which may 
trigger a response from the United States.  Here's some 
commentary that Jim Brown (Editor of OptionInvestor.com) made in 
today's market monitor at OI.

A middle east newspaper reported today that Saddam Hussein has 
decided to take pre-emptive military action rather than wait for 
the US to gather up forces and launch the attack on him. At his 
August 8th military briefing Saddam reportedly revealed plans to 
use up to 40 nuclear devices ranging from dirty bombs to as many 
as 10 nuclear bombs to attack Israel and Jordan and possibly even 
a US port city. First, I strongly disbelieve this report although 
it is making the rounds in the US today. If the US believed this 
to be true they would accelerate the attack plans immediately. 
According to this news source the US has moved 8,000 to 12,000 
troops into Jordan over the last two weeks to lay the groundwork 
for the coming attack. The truth about Iraq's capabilities is 
probably less than reported but more than most Americans believe. 
He has had 10 years to plot his revenge and his defense. He knows 
he can't win so inflicting the most damage on his way out are 
probably his highest priority. That damage will not be against 
military targets but against civilian targets. 

Jim Brown's (Editor of OptionInvestor.com) point in discussing 
this is that it is almost a certainty we will attack Iraq soon 
and probably with only one or two allies. This will be a very 
political move and will expose us to a potential oil fight with 
the rest of the Middle East. The fragile bullish scenario built 
over the last couple weeks could come crashing down at any time. 
With the increased administration comments against Iraq by 
everyone with a microphone it is evident the attack will be 
sooner than later. Add this to the 9/11 anniversary fears and I 
think the next four weeks could be rough in the markets. 

It should be noted by traders that the October 2002 Light, Sweet 
Crude Oil futures contract (cl02v) has been hitting new 52-week 
highs in recent sessions and now trades $28.51.  

The Oil Service stocks as depicted by the Oil Service Index 
(OSX.X) 86.03 +2.06% have been gaining strength ahead of the 
above news events.  One stock I have on my watch list is shares 
of BJ Services (NYSE:BJS) $33.59 -2.69%.  This stock just broke 
above its bearish resistance trend on Thursday, and gave a 
"triple-top buy signal" at $34.  Support is forming in the $28-
$32 range and a break to the upside from today's "inside day" 
could see an extended move higher.  The current bullish vertical 
count is $47.  A bullish trader looking for some exposure to the 
group could take 1/2 position here, stop $27, or look for a 
pullback to $30-$31 area as a good risk/reward entry point, with 
stop at $27.

Have a great weekend!

Jeff Bailey
Senior Market Technician
PremierInvestor.net


=========================
Play-of-the-Day (BULLISH)
=========================
(( new non-tech long play ))

Lockheed Martin - LMT - cls: 65.42 chg: +1.42 stop: 63.35

Company Description:
Headquartered in Bethesda, Maryland, Lockheed Martin employs 
about 125,000 people worldwide and is principally engaged in the 
research, design, development, manufacture and integration of 
advanced technology systems, products and services. The 
Corporation reported 2001 sales of $24 billion.
(source: company press release)

Why We Like It:
Just browsing through recent headlines, it seems that LMT has 
been getting one order after another.  Going back two weeks, 
Lockheed received a $163.7 million dollar order for TIGER 
Eyes(TM) for Korean F-15K Aircraft.  Then, on Friday August 9th, 
LMT won a $75 million deal for the Army War fighter Information 
Network.  On the following Thursday, August 16, 2002, Lockheed 
landed a $183 million package to retrofit F-16's with oxygen kits 
for the Air Force.  It's no secret that the big money in defense 
is in selling planes, however, the recent string of smaller deals 
can be seen as a whole lot of "base hits".  Bottom line, there 
are still many defense contracts to be had.  A few weeks ago, the 
market had worries that there would not be the type of defense 
spending that was anticipated after September 11th.  As a result, 
the Defense Indexes $DFX.X and $DFI.X sold off with speculation 
of limited spending.  Over the last few weeks however, the 
indexes have once again resumed their ascent, recovering lost 
ground.  Wall Street seems to be paying a lot of attention to 
recent signs that war with Iraq could be closer than may 
expected.  For example, there have been reports that the U.S. has 
already moved 8,000-12,000 troops into Jordan in preparation for 
a full-scale assault.

Lockheed Martin is the number 1 defense contractor in the world.  
Bottom line, this company makes big bucks.  In the most recent 
pullback, LMT showed how strong it is, by refuting bears at the 
200-dma.  Today, LMT closed above the 50-dma, indicating that 
bulls are certainly trying to push the stock higher.  Bar 
chartists will notice that LMT has been trading on an ascending 
trend line over the last few weeks, and could still have plenty 
of upside left.  The daily Stochastics (14,1,3) are elevating, 
and appear as if they could make another charge at the overbought 
region.  The weekly chart confirms the rising trend over the last 
two years, with the 50-Week MA steadily climbing to higher 
ground.  The newsletter is entering a hypothetical short position 
at current levels, where we would like to see the stock begin a 
sustained rally.  Next week could bring media oriented buyers in 
to LMT, as the company launches its Atlas V rocket on August 
21st.  The Atlas V is designed to lift payloads up to 8700 kg to 
geosynchronous transfer orbit, exactly where we are hoping the 
stock will go!  Our initial profit target for LMT will be in the 
$70.00 area, though if good news surfaces for the Defense 
company, we will move our objective up accordingly.  If the 
rockets under this defense contractor flutter out, we will put a 
stop loss protection point under our wings at $63.35.  Mars or 
bust!         

For Annotated Chart: Click Here
Chart of: LMT, Daily.



Picked on August 16th at $65.39 
Results since picked:     +0.00
Earnings Date          07/18/02 (confirmed)
 




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

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

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

Boise Cascade - BCC - close: 26.47 change: -1.26

WHAT TO WATCH: Look out below!  BCC has broken out of a wedge 
formation (on the daily chart) and is trading under its lows from 
last September.  Shares spiked to a new multi-year low today on 
the strongest volume in over a month.  The overall paper sector, 
as gauged by the FPP.X forest/paper products index, has recently 
displayed relative weakness versus the Dow Jones.  Short entries 
can be evaluated on a move below today's low ($25.87), although 
more conservative traders may want to wait for BCC to breach 
psychological support at  $25.00.  The descending MACD and daily 
stochastics (5,3,3) indicate that BCC has plenty of room to fall.  
The 2000 lows near $22.00 offer a possible profit target to aim 
for.




--- 

Borg Warner - BWA - close: 57.81 change: -0.59

WHAT TO WATCH: This company manufactures engineered systems and 
components mostly for vehicle power-train applications.  By the 
look of the stock, they seem to be doing a pretty good job.  The 
most recent move brought shares back above the 50-dma, and the 
200-dma.  Although a pullback could be in order, a move above 
yesterday's high at $58.80, could signal a further breakout.  
With the daily Stochastics in the overbought region, the stock is 
finding congestion resistance from this last June.  However, with 
the weakly Stochastics (14,1,3) ascending, BWA could see a retest 
of highs in the near future.  




---

Cree Inc - CREE - close: 16.20 change: +0.89

WHAT TO WATCH: The semiconductor index bounced sharply from the 
300 level this week and is now threatening to break above near-
term resistance at 350.  Although the 50-dma looms overhead at 
365, continued bullishness in the broader market could render 
that resistance level obsolete.  Shareholders of CREE are 
enjoying a similar breakout, as today's action saw the stock move 
above the July highs.  Upward movement in the MACD and daily 
stochastic oscillators suggests that a move to the next level of 
historical resistance at $18.50 could be in the cards.  Bulls can 
take additional encouragement in the point-and-figure chart, 
which is displaying a triple-top buy signal.  Aggressive traders 
can target entries on a move above today's high ($16.55), while 
others may want to wait for CREE to clear the 200-dma at $17.00.




---

Electronic Data Systems - EDS - close: 38.92 change: +0.99

WHAT TO WATCH: Fallout from the WorldCom disaster sent shares of 
EDS plunging in late June.  The stock has since retraced about 
61% of those losses and looks poised to break above psychological 
resistance at $40.00.  A move above this mark would clear the way 
for a test of the 81% retracement at $43.00, or pre sell-off 
levels near $46.50.  P-n-f chartists will note that EDS is 
currently on a triple-top buy signal.  




---

H&R Block - HRB - close: 50.70 change: +1.70

WHAT TO WATCH: With the exception of a brief spike lower in late-
July, HRB has spent the past three months in a steady uptrend.  
Shares broke out of this trend on Friday and plowed through the 
$50.00 level.  With the daily stochastics (5,3,3) uptrending and 
p-n-f chart signaling a double-top buy signal, we think it's just 
a matter of time before HRB tests its 52-week high at $51.46.  
Traders can think about legging into long positions if shares 
climb above this level.  How much upside is possible?  The 
current bullish vertical count (p-n-f chart) is $68.  A more 
realistic target for short-term traders would be psychological 
resistance at $60.




--- 

Henry Schein - HSIC - close: 51.86 change: +0.88

WHAT TO WATCH: Oh Henry!  Shares of this medical equipment 
company went vertical following a strong earnings report on 
August 6th.  Solid resistance at $50.00 gave way on Thursday, and 
today's action saw the stock hit an all-time high.  Looking at 
the daily bar chart, HSIC is looking awfully overbought.  The 
daily stochastics confirm this.  However, aggressive traders 
could target a move above today's high of $52.07.  With no 
overhead resistance, it's anyone's guess as to where the bulls 
will finally take a break.  A more prudent strategy would be to 
wait for a pullback to the $50.00 level before entering long 
positions.




---

Intel Corp - INTC - close: 18.75 change: +0.14

WHAT TO WATCH: Although the sustainability of the recent chip 
rally is questionable, Intel deserves a spot on our watch list.  
What we like is that the stock attempting to challenge the 50-
dma, with the MACD also ascending.  Daily Stochastics have been 
in an up trend, and look as if they could enter the overbought 
region. A move above the 50-dma could bring in enough bulls to 
push INTC above $19.00 and bring more buyers off the fence.  
Beware that there is a considerable amount of congestion 
resistance all the way through $20.00, though if institutions and 
mutual funds grab hold of this stock, anything can happen.      


 

---

Navistar - NAV - close: 22.94 change: -2.14

WHAT TO WATCH: Maybe this company should change its name to 
"FallingStar."  The stock has lost more than half its value from 
its April highs and is mired in a multi-month downtrend.  NAV 
reported earnings this morning that beat consensus estimates by 
one cent, but then proceeded to guide lower for the following 
quarter.  This news had shares tumbling to the tune of 8.5% on 
nearly three-times the average volume.  The bears are now licking 
their furry chops at the prospect of a breakdown below the 52-
week low of $22.29.  Although the 2001 low of $21.78 may provide 
some support, the declining MACD and daily stochastics (5,3,3) 
indicate that NAV could soon test the $20.00 level.




---

NVIDIA Corp - NVDA - close: 10.69 change: +0.40

WHAT TO WATCH: NVIDIA announced second-quarter results last night 
that met the company's July 30th earnings warning.  Citing weak 
demand for personal computers, NVDA reported an 84% revenue 
decline.  That's a pretty clear sign of fundamental weakness!  
However, today's action suggests that all the bad news may 
already be priced in.  RBC upgraded the stock this morning, based 
on the firm's belief that downside risk was limited.  Shares 
responded by posting a 3.8% gain and closing well above 
psychological resistance at $10.00.  The steadily increasing 
volume that has accompanied the nascent uptrend is exactly what 
the bulls want to see.  Rising action in the MACD and daily 
stochastics is also indicative of further upside.  The lack of a 
sell-off on last night's news and strong technicals suggest that 
NVDA may make its way to the $12 level within a matter of days.  
A move above this mark would have shares filling in the July 31st 
gap, the top of which lies at $15.00.




--- 

Omnicom Group - OMC - close: 61.16 change: +2.45

WHAT TO WATCH: OMC has caught quite a bid since the company 
reported impressive earnings on August 6th.  Shares have 
accelerated to the upside over the past three sessions, with 
today's action yielding a breakout above resistance at $60.00.  
OMC is now poised to begin retracing June's steep declines.  With 
the point-and-figure chart currently signaling a triple-top buy 
signal, a near-term move to $70.00 seems easily within reach.  
Given enough time, shares could even reach the 200-dma near 
$80.00.  Long entries can be evaluated on a move above today's 
high ($61.39) or a pullback to $60.00.  




---

Pinnacle Entertainment - PNK - close: 8.12 change: +0.41

WHAT TO WATCH: Traders looking for a high-risk/reward play might 
want to consider a long position in PNK.  The stock has broken 
out of a three-week consolidation range and is displaying 
uptrending oscillators.  Shares rose 5.3% today, moved above 
whole-number resistance at $8.00, and closed above the 200-dma at 
$8.05.  A break above $8.24 will put PNK in a potential "fast-
move" region that could lead to a rapid retracement of the mid-
July sell-off.  One caveat: Today's breakout came on relatively 
light volume of 22,000 shares.  Bulls should be looking for 
buying interest to pick up as PNK continues to distance itself 
from the 200-dma.





------------
RADAR SCREEN
------------ 

CLE - Clair's Stores Inc. is a retailer of specialty items such 
as costume jewelry, accessories, and cosmetics to teens.  With 
back to school sales in progress, this retailer has found the 
strength to ascend above the 200-dma and 50-dma.  Although CLE 
has stalled at resistance in the last few days, a breakout above 
$21.00 could bring more buyers into this equity.  On the weekly 
chart, CLE has moved above the 200-Week MA, and looks as if it 
could move to the top of the Keltner channel.  However, a move 
back below the 50-dma would certainly not bode well for bulls and 
could cause bears to pummel this stock down.    

CSCO - The networking behemoth rebounded sharply with the NASDAQ 
and is now approaching solid resistance at the $15.00 region.  A 
move above this level could lead to a retest of the May highs 
near $17.50.  The p-n-f chart is currently showing a double-top 
buy signal, and CSCO has recently broken through bearish 
resistance. 

DAL - Although the airline group rebounded from its lows this 
week, the fundamental picture for the sector remains downright 
ugly.  DAL has shown relative strength but must now contend with 
the top of its descending channel.  Further negative sector news 
could send shares plummeting back to the $14-$15 region.

FDP - Fresh Del Monte looks as if its fruit might be rotting.  
After a strong bull run since July 24th, FDP looks toppy to say 
the least.  The daily Stochastics are rolling under the 
overbought region, and look as if they could retest the 50-dma at 
24.79.  If the stock does fall beneath the 50-dma, the next 
support lies at $23.00, and then at $20.00.  The ascending trend 
line on the daily chart seems to have been enough support to hold 
the stock today, however, if bears continue to pressure this 
stock next week, Del Monte's fruit might not seem so fresh any 
more.   

PCAR - Shares of this truck manufacturer sold off from the 50-dma 
($39.75) on Friday, backed by the strongest volume in a month.  
The downtrending MACD and daily stochastics are hinting at a 
retest of the August lows near $34.50.  Entries can be targeted 
on a move under today's low of $36.97. 


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

Convinced Yet?

by Steven Price

The Markets have held onto the recent rebound in an impressive 
fashion this week.  Today the Dow gave back 40.08 points, to 
finish at 8778.06.  However, the index continues its pattern of 
higher highs and higher lows.  Although a look at the chart shows 
a triangle pattern, with a flat top and rising bottom, the 
successive tops formed over the last month have each been 
slightly higher than the previous one.  8850 appears to be the 
next significant level in the Dow, as it ventured over this mark 
only briefly, before being turned back on Thursday.  The bullish 
percentage reading has reached 50%, which shows that half of the 
stocks in the index are now giving buy signals.  This level 
provided support as the average sold off from overbought levels 
at the beginning of the year, and a break above it, showing a 
majority of stocks with buy signals, would look very bullish in 
the short term.

A look at the bullish percentage in the Nasdaq 100 shows an 
increase to 46%, just below the bearish resistance line at 48%.  
A break through this line (on a 2% box scale) would also put the 
NDX at 50%.  Interestingly, the 50% mark provided support for 
this index, as well, during the first part of the year.

Moving onto the SPX, which encompasses all 500 stocks, we have a 
similar percentage of 48% - just one box away from half of these 
stocks giving buy signals as well.

Lagging these percentages, however, is the Nasdaq Composite, 
encompassing a wider range of stocks, which is still showing a 
reading of 26%.  Today's finish of 31.92% is just 0.08% short of 
establishing a 3-box reversal up to 32%.  The argument here, 
however, is that the bullish percent gives each stock an equal 
weight.  The percentage of Nasdaq Composite stocks trading in 
single digits remains high, and market cap on these stocks is 
very low.  Therefore, the Nasdaq 100, which encompasses the more 
significant tech stocks, should be given greater weight. 

This alignment of bullish percent, between what I consider to be 
the most important broad market indices, continues to give 
bullish "vibes."  The lack of IT spending, and slow growth in the 
economy, however, may still pull the market down.  The question 
is whether stocks have been annihilated to the point where they 
are actually valued appropriately

Consumer sentiment numbers this morning seemed to indicate that 
consumers are no longer throwing in the towel.  The number was 
down slightly, from 88.1 in July to a preliminary reading of 87.9 
in August.  However after falling 8 points in the last 2 months, 
this could be viewed as stabilizing.  Of course stabilization at 
low levels doesn't seem overly encouraging.  One number, in 
particular, shows that the honeymoon may be over for the Bush 
administration.  The public rallied around the President after 
the 9/11 attacks.  However, patriotism appears to have given way 
to skepticism, as confidence in the administration's economic 
policies fell to the lowest level since Bush took office.  Only 
23% of consumers rated the administration's policies as good, 
while 22% rated them as poor.  In the end, consumer spending 
still makes up 2/3 of GDP, and any long-term recovery will have 
to begin at this level. 

There are certainly more reasons to have faith in the continuing 
rise of the markets, given the rising bullish percentages; 
however, we will have to get through the 9/11 anniversary first, 
when it is likely investors will be dumping long positions, just 
in case.  We can expect to see a continued tug-of -war between 
the bears and bulls, as the pressure builds around current 
levels.  The breakout, however, should be explosive, as we have 
now tested the current level on three separate occasions.  
Remember, the longer a pattern forms, the more significant the 
breakout.  This skeptic is being dragged kicking and screaming 
toward the middle, but hasn't yet put on his horns.

 




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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7702
Current     :  8778

Moving Averages:
(Simple)

 10-dma: 8574
 50-dma: 8863
200-dma: 9732

S&P 500 ($SPX)

52-week High: 1226
52-week Low :  797
Current     :  928

Moving Averages:
(Simple)

 10-dma:  895
 50-dma:  934
200-dma: 1073

Nasdaq-100 ($NDX)

52-week High: 1782
52-week Low :  892
Current     :  996

Moving Averages:
(Simple)

 10-dma:  935
 50-dma: 1001
200-dma: 1344


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


The Semiconductor Index (SOX.X): The Semiconductors have staged 
an incredible rally, rebounding 23% in 2 weeks.  This would be 
equivalent to a rebound of almost 2,000 points in the Dow over 
the past 2 weeks.  They sector has outperformed the S&P 500 by 
16% and the Dow by 14% over the same period. This could be a 
result of the sector being incredibly oversold, or we may have 
seen a round of short covering.  The fundamentals have not 
changed.  IT spending has not improved, and Dell's estimates for 
next year's growth were not overwhelming.  Look for a pullback to 
a more reasonable valuation in the sector, as most earnings 
releases are behind us and it should be a while before we receive 
any significant bullish news.

52-week High: 657
52-week Low : 282
Current     : 348

Moving Averages:
(Simple)

 10-dma: 313
 50-dma: 365
200-dma: 498


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

Market Volatility
When I see the VIX in the low 30s, I can't help but feel we are 
being lulled into a false sense of security.  The Dow and S&P 500 
seem to have stabilized over the last few days, but the flat 
line, after such wild volatility, only seems like a tightly 
fought battle between the bulls and bears.  Look for a breakout 
from the Dow's current consolidation, and a volatility spike some 
time between now and September 11. 

CBOE Market Volatility Index (VIX) = 32.82 -0.25
Nasdaq-100 Volatility Index  (VXN) = 50.65 -0.59

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.51      1,010,924       511,884
Equity Only    0.38        854,477       326,846
OEX            0.86         51,161        44,056
QQQ            0.30        113,534        33,885

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

Bullish Percent Data

           Current   Change   Status
NYSE          38      + 2     Bull Confirmed
NASDAQ-100    46      + 7     Bull Confirmed
DOW           50      + 7     Bull Confirmed
S&P 500       48      + 4     Bull Alert
S&P 100       51      + 5     Bull Alert

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  1.27
10-Day Arms Index  1.17
21-Day Arms Index  1.22
55-Day Arms Index  1.35

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       1547          1168
NASDAQ     1825          1376

        New Highs      New Lows
NYSE         11              32
NASDAQ       26              75

        Volume (in millions)
NYSE     1,499
NASDAQ   1,486

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

Commitments Of Traders Report: 08/13/02

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

Commercials have reduced positions on both sides of the coin, 
resulting in a net change of 700 short contracts.  Small Traders 
have reduced long positions by 3700 more contracts than shorts.


Commercials   Long      Short      Net     % Of OI 
07/23/02      405,969   471,704   (65,735)   (7.5%)
07/30/02      430,833   482,957   (52,124)   (5.7%)
08/06/02      431,590   478,879   (47,289)   (5.2%)
08/13/02      427,618   475,536   (47,918)   (5.3%)

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
07/23/02      166,713    73,778    92,935     38.6%
07/30/02      153,858    67,451    86,407     39.0%
08/06/02      159,561    67,434    92,127     40.5%
08/13/02      155,040    66,546    88,494     39.9%

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

Commercials have added to long positions by 1300 contracts, while 
short contracts increased slightly.  Small traders also added to 
long contracts, increasing positions by 1200 contracts, while 
leaving shorts virtually unchanged.


Commercials   Long      Short      Net     % of OI 
07/23/02       37,204     43,601    (6,397) ( 8.0%)
07/30/02       38,163     47,343    (9,180) (10.7%)
08/06/02       41,014     50,025    (9,011) ( 9.9%)
08/13/02       42,303     50,354    (8,051) ( 8.7%)

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
07/23/02       12,756    11,152     1,604     6.7%
07/30/02       13,159     9,237     3,922    17.5%
08/06/02       11,547     8,782     2,765    13.6%
08/13/02       12,797     8,933     3,864    17.8%

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

Commercials have maintained the status quo, subtracting 600 
contracts from the long side and 400 from their shorts.  Small 
traders got decidedly shorter, dumping almost 3,000 long 
contracts and only 900 shorts.


Commercials   Long      Short      Net     % of OI
07/23/02       22,369    14,745    7,624      20.5%
07/30/02       22,429    12,811    9,618      27.3%
08/06/02       23,491    14,290    9,201      24.4%
08/13/02       22,837    13,833    9,004      24.6%
 
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
07/23/02        9,101    12,604    (3,503)   (16.1%)
07/30/02        6,778     8,999    (2,221)   (14.1%)
08/06/02        7,981     9,258    (1,277)   ( 7.4%)
08/13/02        5,050     8,349    (3,299)   (24.6%)

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

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




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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter          Weekend Edition 08-16-2002
                                                    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
=================================================================

In section two:

Net Bulls
  Bullish Play Updates:  CA, IBM, MIL, RX

Stock Bottom / Active Trader
  New Bullish Plays:     LMT, SWFT
  New Bearish Plays:     AGN
  Bullish Play Updates:  MGG, NCEN, SBUX
  Bearish Play Updates:  CPG
  Closed Bearish Plays:  ALK

High Risk/Reward
  Bullish Play Updates:  FDRY
                        


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

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

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

Computer Associates - CA - cls: 10.33 chg: +0.02 stop: 8.99 

LET'S GO TECH!!!  It's true; we are currently cheerleaders for 
this company on the long side! The GSO Software Index struggled 
to find positive ground today, as poor outlook by Sun Micro 
Systems (Nasdaq:SUNW) last night hampered the indexes trading.  
SUNW reported earnings that were in-line with analysts, but 
lowered its outlook for the first quarter.  This news motivated 
bears to invite themselves into the broader tech sector.  Also 
restricting software makers was Microsoft's (Nasdaq:MSFT) 
tempered outlook for 2003.  In light of all things today, the GSO 
was able to recover its composure into the close, posting a 2.03% 
gain.  Thus, with some potential volatility on the horizon, we 
will be keeping a close eye on our stop at $8.99.  Bulls could be 
encouraged that there is no company specific news affecting CA 
today. It's still possible that if the broader market rallies, 
Computer Associates could be very strong.  To give CA plenty of 
room to breathe, we will not move our stop up quite yet.     

Picked on August 15th at     $10.31 
Results since picked:         +0.02
Earnings Date              07/22/02 (confirmed)




---

Intl Business Machines - IBM - cls: 79.35 chg: +2.85 stop: 74.49

Wow, giddy up!  After being removed from the Solomon Smith Barney 
recommendation list this week, Big Blue is on fire!  If there 
were ever a contrarian indicator, it might be the guys over at 
Solomon!  The move today can certainly be considered a "break 
out", as the stock has gained almost 19% in the last two weeks.  
Conservative traders could take half of their money off of the 
table if the stock hits $80.00.  However, the newsletter is 
putting our official profit target at $84.95.  With the last 
three days allowing our position to gain legs, we will now 
challenge the trade by moving our stop up to $79.49, eleven cents 
below yesterday's low!  Intraday support is currently in the 
$78.25-78.50 area.    

Picked on August 15th at $75.06 
Gain since picked:        +4.29
Earnings Date          07/15/02 (confirmed)




---

Millipore Corp - MIL - close: 36.98 change: +0.41 stop: 33.89

*TRIGGERED PLAY*

As shares of MIL ascended early in today's trading session, our 
play was triggered at $36.60.  Later in the day, MIL pulled back, 
though not enough to make us concerned about our position.  The 
trend over the last few days is "up", and we have not witnessed 
any news that would cause us to think otherwise.  Relative 
strength for our trade remains encouraging, as MIL was able to 
post a gain on a day where the Biotech Index lost -102%.  
Allowing this trade room to wiggle, we will leave our stop at 
$33.89.  
 
Picked on August 16th at $36.60 
Results since picked:     +0.38
Earnings Date          07/16/02 (confirmed)



---

IMS Health - RX - close: 17.42 change: +0.26 stop: 15.65 

The good doctor!  We are happy to see IMS Health continue to 
ascend during the last week.  The move above the 50-dma is 
greeted with open arms by bulls.  Although the daily Stochastics 
look extended into the overbought region, we think this trade 
could still have some legs.  In our original write up, we stated 
that we would put a profit target at $18.00.  However, given the 
stocks recent strength, we will close half of our position at 
$17.95, and let the remainder ride.  Because RX could bounce off 
the 50-dma still, we will leave our stop at $15.65.  Today did 
not bring and fresh news forward on IMS Health.     
           

Picked on August 9th at $16.21  
Gain since picked:       +1.21
Earnings Date         07/15/02 (confirmed)






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

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

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

Lockheed Martin - LMT - cls: 65.42 chg: +1.42 stop: 63.35

Company Description:
Headquartered in Bethesda, Maryland, Lockheed Martin employs 
about 125,000 people worldwide and is principally engaged in the 
research, design, development, manufacture and integration of 
advanced technology systems, products and services. The 
Corporation reported 2001 sales of $24 billion.
(source: company press release)

Why We Like It:

Just browsing through recent headlines, it seems that LMT has 
been getting one order after another.  Going back two weeks, 
Lockheed received a $163.7 million dollar order for TIGER 
Eyes(TM) for Korean F-15K Aircraft.  Then, on Friday August 9th, 
LMT won a $75 million deal for the Army War fighter Information 
Network.  On the following Thursday, August 16, 2002, Lockheed 
landed a $183 million package to retrofit F-16's with oxygen kits 
for the Air Force.  It's no secret that the big money in defense 
is in selling planes, however, the recent string of smaller deals 
can be seen as a whole lot of "base hits".  Bottom line, there 
are still many defense contracts to be had.  A few weeks ago, the 
market had worries that there would not be the type of defense 
spending that was anticipated after September 11th.  As a result, 
the Defense Indexes $DFX.X and $DFI.X sold off with speculation 
of limited spending.  Over the last few weeks however, the 
indexes have once again resumed their ascent, recovering lost 
ground.  Wall Street seems to be paying a lot of attention to 
recent signs that war with Iraq could be closer than may 
expected.  For example, there have been reports that the U.S. has 
already moved 8,000-12,000 troops into Jordan in preparation for 
a full-scale assault.

Lockheed Martin is the number 1 defense contractor in the world.  
Bottom line, this company makes big bucks.  In the most recent 
pullback, LMT showed how strong it is, by refuting bears at the 
200-dma.  Today, LMT closed above the 50-dma, indicating that 
bulls are certainly trying to push the stock higher.  Bar 
chartists will notice that LMT has been trading on an ascending 
trend line over the last few weeks, and could still have plenty 
of upside left.  The daily Stochastics (14,1,3) are elevating, 
and appear as if they could make another charge at the overbought 
region.  The weekly chart confirms the rising trend over the last 
two years, with the 50-Week MA steadily climbing to higher 
ground.  The newsletter is entering a hypothetical short position 
at current levels, where we would like to see the stock begin a 
sustained rally.  Next week could bring media oriented buyers in 
to LMT, as the company launches its Atlas V rocket on August 
21st.  The Atlas V is designed to lift payloads up to 8700 kg to 
geosynchronous transfer orbit, exactly where we are hoping the 
stock will go!  Our initial profit target for LMT will be in the 
$70.00 area, though if good news surfaces for the Defense 
company, we will move our objective up accordingly.  If the 
rockets under this defense contractor flutter out, we will put a 
stop loss protection point under our wings at $63.35.  Mars or 
bust!         

For Annotated Chart: Click Here
Chart of: LMT, Daily.



Picked on August 16th at $65.39 
Results since picked:     +0.00
Earnings Date          07/18/02 (confirmed)
 



--- 

Swift Transportation - 17.77 - cls: 17.77 chg: +0.37 stop: *text*

Company Description:
Swift is the holding company for Swift Transportation Co., Inc., 
a truckload carrier headquartered in Phoenix, Arizona. Swift is 
the largest publicly-held national truckload carrier in the 
United States with regional operations throughout the continental 
United States. (source: company press release)

Why We Like It:
To begin, Swift Transportation is one of the leading trucking 
companies in America.  SWFT has recently fallen with higher fuel 
prices, which have caused the trucking companies to see a gouge 
in their bottom lines.  However, the high price of crude oil now 
seems be priced into Swift's stock price.  Further, with slight 
bits of evidence surfacing about a possible economic recovery, 
transportation could begin to pick up.  

Viewing the chart on Swift Transportation, several potentially 
bullish factors jump out at us.  First, the weekly chart displays 
a clear up trend that has been in place over the last twelve 
years. Yes, twelve years!  If there were ever a "buy the dips" 
scenario, this could just possibly be it!  Making the weekly 
chart even more attractive, the Stochastics seem to be up 
trending out of the oversold region.  Since 1999, SWFT has traded 
at or just below the ascending trend-line six prior times, and 
has rebounded in every instance!  On the daily chart the MACD 
(12,26,9) is extended into the negative region at -1.00, and has 
just witnessed a bullish crossover.  Next, the daily Stochastics 
are noticeably up-trending, and look as if they could be heading 
towards the overbought region.  Given the above information, the 
newsletter is encouraged to trade with the trend of SWFT, and 
will put a trigger at $18.01.  If SWFT can make it above the 
whole number and activate a position, our initial profit target 
will be at $19.95.  Once triggered, we will be watching the first 
Fibonacci number as it could prove to be resistance.  The 38.2% 
Fibonacci retracement (see chart) is at $19.21.   However, if the 
bulls are able to break through, we could see a highway paved 
directly to our profit target.  Just in case SWFT gets a flat, we 
will put a strict stop at $17.24.  Keep on trucking!     

For Annotated Chart: Click Here
Chart of: SWFT, Daily.




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



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

Allergan Inc. - AGN - cls: 56.74 chg: -1.66 stop: *text*

Company Description:
The Orange County, California-based Advanced Medical Optics, Inc.
 will employ approximately 2,100 worldwide. The company has 
operations in about 20 countries and markets products in 
approximately 60 countries.  (source: company press release)

Why We Like It:
To discover why Allergan has had problems lately, we sifted 
through the news of last month.  Then, like a shining star, the 
troubling weight on this stock stood out in front of us.  Second 
quarter results were disappointing to say the least, as AGN 
incurred heavy costs associated with a spin off.  Further putting 
wrinkles in the Botox manufacturer, analysts said that sales for 
the year looked light.  Although Botox has proven itself to be an 
immensely trendy method for Hollywood stars (and other women) to 
remove facial aging, it hasn't been enough to offset the costs of 
corporate restructuring.

Bears will immediately recognize the descending trend on AGN.  
The stock has been sliding lower since its all-time high in 
December of 2000.  Daily Stochastics are down trending, while the 
50-dma trades beneath the 200-dma.  Bears will be encouraged by 
AGN's lack of relative strength in regard to the Pharmaceutical 
Index, $DRG.X.  The DRG has been rebounding since its most recent 
relative bottom on July 24th.  However, AGN has not displayed the 
same strength, which could possibly be a prelude to future 
weakness.  The DRG's daily stochastics have been pinned in the 
overbought region for several weeks now, and look as if they 
could move lower.  Before we enter our position in AGN, we will 
wait for the stock to move below todays low before we actually 
enter the trade.  Today's low was $56.60, and is lying right at 
horizontal support.  If we are triggered in the days to come, we 
will watch our trade closely with a stop above the high two days 
ago at $60.01.  If the trade does begin to sag in our direction, 
we will put our initial profit target at $50.10.  Two slight 
wrinkles in our trade are the support areas at $55.50, and 
$56.00, though with some Botox, we will hopefully see those 
blemishes disappear!  

For Annotated Chart: Click Here
Chart of: AGN, Daily.



Picked on August xxth at $xx.xx  <--- See text 
Results since picked:     +0.00
Earnings Date          07/24/02 (confirmed)
 




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

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

MGM MIRAGE - MGG - close: 36.65 change: -0.10 stop: *text*

Close, but no cigar.  MGG came within just four cents of our 
entry trigger ($37.02) at the tail end of today's trading 
session.  However, whole-number resistance at $37.00 proved to be 
more than the bulls could handle, and our play was never 
activated.  That's just fine with us.  After all, we don't want 
to take our hypothetical long position until the bulls have 
proved themselves.  MGG still looks strong on a technical basis, 
with shares setting a new relative high and the daily stochastics 
beginning to curl higher.  Remember that we'll use a stop at 
$34.99 if this play is triggered. 

Picked on August xth at $xx.xx <- see text
Gain since picked:       +0.00
Earnings Date         07/24/02 (confirmed) 




---

New Century Financial - NCEN - cls: 29.97 chg: -0.03 stop: 28.28

This long play was activated shortly after the opening bell on 
Friday when NCEN reached our entry trigger at $30.16.  Shares 
traded in a sedate fashion after briefly spiking to a new 
relative high of $30.45, finishing the session with a fractional 
loss.  Although we've been looking for a close above $30.00, the 
light volume behind today's pullback bodes well for the bulls.  
With the technical picture still looking strong, NCEN looks 
poised to move higher if the broader market continues to rally 
next week.  New entries can be gauged on a break above today's 
high.  Keep in mind that our stop is set at $28.28.

Picked on August 16th at $30.16
Results since picked:     -0.19
Earnings Date          07/25/02 (confirmed)




---

Starbucks - SBUX - close: 20.82 change: -0.46 stop: 19.98

After exploding for a 13% gain in just two sessions, some profit 
taking in SBUX could be expected.  The orderly nature of this 
pullback is very encouraging.  Shares declined by 2.1% on Friday, 
trading lower on nominal volume.  The stock remains safely above 
psychological support at $20.00 and our stop at $19.98.  A bounce 
from this region could provide short-term traders with an 
opportunity to add to their bullish positions.  Of course, bear 
in mind that we'll close this play if the stock trades at or 
above our profit target at $21.75.  SBUX traded an Inside Day, 
which may provide an alternate exit strategy for conservative 
traders.  A break under today's low ($20.50) could be used as an 
action point to take gains off the table.  Our current stop 
should protect a move of +3.0% from our original picked price.

Picked on August 8th at $19.39 
Gain since picked:       +1.43
Earnings Date         07/25/02 (confirmed)




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

Chelsea Property - CPG - close: 33.50 change: +0.49 stop: 34.11

Increasingly, it appears the bulls are gaining control of CPG. 
Looking at the 60-minute chart, one sees a slow but steady 
uptrend over the past ten days.  Shares tacked on 1.4% today and 
reached the highest levels of the month.  This isn't the sort of 
action we like to see in our short plays.  Bears can take comfort 
in the fact that volume has been somewhat weak over the past two 
sessions.  Shares will have a tough time moving above the $34.00 
resistance level if buying interest remains weak.  But until the 
aforementioned trend is broken, the odds are tilted in the bulls' 
favor.  Thus, we would not recommend taking any new short 
positions at this time.

Picked on August 2nd at $32.68
Results since picked:    -0.82
Earnings Date         08/12/02 (confirmed)





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

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

Alaska Air Group - ALK - close: 24.24 change: +0.65 stop: 24.01

The moral of the story is: you can't keep a good company down.  
Alaska Airlines certainly seemed to be a good short trade with 
the general decline in the airline sector.  However, with an 
increased market share resulting from the bankruptcy of Vanguard, 
and looming problems of United, ALK has been able to find a 
silver lining.  Alaska Air was able to reach a pact on Wednesday 
to solidify its contract with the Transportation Workers Union.  
This news did not bode well for bears, as the stock has been 
slowly gaining ground over the last few days.  With today's move 
bringing more bulls into the stock, we were stopped out of our 
position at $24.01.  The loss for bears was 3%, if trades were 
closed at our stop.  Bears currently still in positions should be 
concerned with today's move, and might want to consider 
tightening stops.  Given that the descending trend line has 
recently been broken to the upside, we might recommend that new 
positions not be implemented at this time.            
 
Picked on August 12th at $23.62
Results since picked:     -0.39
Earnings Date          07/22/02 (confirmed)






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

===============
HR Play Updates
===============
 
  --------------------
  Bullish Play Updates
  --------------------

Foundry Networks - FDRY - close: 9.14 change: +0.19 stop: 8.13

Led higher by a strong performance in shares of JNPR, the NWX.X 
networking index finished Friday's session with a gain of nearly 
1.0%.  FDRY outpaced the NWX and added 2.1%.  Not a bad finish to 
a bullish week!  Shares traded up to $9.47 on an intraday basis, 
reaching levels not seen since early January.  The uptrending 
daily stochastics (5,3,3) offer additional technical 
encouragement.  Continued upward movement will put our profit 
target of $9.94 within striking distance.  Our stop-loss remains 
set at $8.13.  Conservative traders looking to protect a small 
gain could place their stops just under today's low of $8.75.

Picked on August 9th at  $8.51 
Results since picked:    +0.63
Earnings Date         07/24/02 (confirmed)
 






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

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

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

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Copyright  2001  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter         Weekend Edition 08-16-2002
                                                   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
=================================================================

In section three:

Market Watch for Week of August 19th
   - 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 August 19th
==================================================

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

Symbol  Company               Date           Comment      EPS Est

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

A      Agilent Technologies   Mon, Aug 19  After the Bell   -0.15
CIG    Com Enr Mns Gerais     Mon, Aug 19  -----N/A-----    -0.24
GME    Gamestop Corp.         Mon, Aug 19  After the Bell    0.07
HAR    Harman Intl Ind        Mon, Aug 19  -----N/A-----     0.70
LOW    Lowe`s Companies       Mon, Aug 19  Before the Bell   0.54
TOY    Toys R Us              Mon, Aug 19  -----N/A-----    -0.11

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

HD     Home Depot             Tue, Aug 20  Before the Bell   0.47
MDT    Medtronic              Tue, Aug 20  After the Bell    0.32
PETC   Petco Animals          Tue, Aug 20  After the Bell    0.15
ROST   Ross Stores            Tue, Aug 20  Before the Bell   0.62
RY     Royal Bank of Canada   Tue, Aug 20  -----N/A-----      N/A
KPN    Royal KPN N.V.         Tue, Aug 20  Before the Bell    N/A
SKS    Saks                   Tue, Aug 20  After the Bell   -0.18
SPLS   Staples                Tue, Aug 20  Before the Bell   0.12

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

BLI    Big Lots, Inc.         Wed, Aug 21  -----N/A-----     0.01
BCM    Canadian Impl Bank Com Wed, Aug 21  -----N/A-----      N/A
CSB    CIBA SPCLTY CHEMICALS  Wed, Aug 21  Before the Bell    N/A
DT     Deutsche Telekom       Wed, Aug 21  -----N/A-----      N/A
EV     Eaton Vance            Wed, Aug 21  Before the Bell   0.44
JDEC   J.D. Edwards           Wed, Aug 21  After the Bell    0.06
SNPS   Synopsys               Wed, Aug 21  After the Bell    0.50
TLB    Talbots                Wed, Aug 21  Before the Bell   0.32

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

ADCT   ADC                    Thu, Aug 22  After the Bell   -0.06
BKS    Barnes&Noble           Thu, Aug 22  Before the Bell   0.10
BGP    Borders Group          Thu, Aug 22  After the Bell    0.03
CIEN   CIENA                  Thu, Aug 22  Before the Bell  -0.19
Z      Foot Locker, Inc.      Thu, Aug 22  -----N/A-----     0.22
ING    ING Groupe NV          Thu, Aug 22  Before the Bell    N/A
LTD    Limited Brands         Thu, Aug 22  Before the Bell   0.12
MRVL   Marvell Tech Grp LTD   Thu, Aug 22  After the Bell    0.09
PDCO   Patterson Dental       Thu, Aug 22  Before the Bell   0.36
SFD    Smithfield Foods       Thu, Aug 22  -----N/A-----     0.15
SCM    Swisscom AG            Thu, Aug 22  Before the Bell    N/A
TECD   Tech Data              Thu, Aug 22  -----N/A-----     0.56
TD     Toronto Dominion Bank  Thu, Aug 22  -----N/A-----      N/A
WSM    Williams-Sonoma        Thu, Aug 22  Before the Bell   0.08

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

CEP    Centerpulse AG         Fri, Aug 23  -----N/A-----      N/A
ZNH    China Sthrn Airlines   Fri, Aug 23  -----N/A-----      N/A
LANC   Lancaster              Fri, Aug 23  Before the Bell   0.56
PNY    Piedmont Natural Gas   Fri, Aug 23  -----N/A-----    -0.30

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

Symbol  Company Name              Ratio    Payable     Executable

SSD     Simpson Manufacturing     2:1      08/16       08/19
MYE     Myers Industries          5:4      08/29       08/30


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

In the week ahead, this market guide could help investors traverse 
the wild jungle of securities trading!

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

Monday, 08/19/02
----------------
Leading Indicator (DM)  Jul  Forecast:  -0.5%  Previous:     0.0%


Tuesday, 08/20/02
-----------------
Trade Balance (BB)      Jun  Forecast:-$37.5B  Previous:  -$37.6B
Treasury Budget (AB     Jul  Forecast:-$29.0B  Previous:    $2.8B


Wednesday, 08/21/02
-------------------
None


Thursday, 08/22/02
------------------
Initial Claims (BB)   08/17  Forecast:    N/A  Previous:     388K


Friday, 08/23/02
----------------
None


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 

PHM     Pulte Homes                49.44     +0.64
MHK     Mohawk Industries          48.50     +1.36
USM     U.S. Cellular              30.44     +3.24
ESST    Ess Technology Inc.        12.53     +1.02
GBBK    Greater Bay Bancorp        26.80     +0.78

--------------------------------------- 
Breakout to Upside (Stocks $5 to $20) 
--------------------------------------- 
Ticker  Company Name               Close     Change 
 
FFIV    F5 Networks Inc.           14.04     +1.89
JDEC    J.D. Edwards & CO.         13.08     +1.24
NET     Network Associates         13.70     +1.20
SNRA    Serena Software            12.75     +4.08
ADSK    Autodesk Inc.              12.67     +1.09

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

PPD     Pre-Paid Legal Services    22.23     +1.60
PGR     Progressive Corp.          54.06     +2.76

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

IP      International Paper        37.59     -1.65
NAV     Navistar International     22.94     -2.14
BCC     Boise Cascade              26.47     -1.26
TIN     Temple Inland              51.79     -1.17
SONC    Sonic Corp.                26.70     -1.29

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

UMBF    Umb Financial Corp         42.50     -1.00
RCI     Renal Care Group           32.20     -0.50
EC      Engelhard Corporation      25.55     -0.15




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=================================================================
DISCLAIMER
=================================================================

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

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

*****************************************************************
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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.

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