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Daily Newsletter, Thursday, 09/26/2002

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PremierInvestor.net Newsletter                 Thursday 09-26-2002
                                                    section 1 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
=================================================================

In section one:

Market Wrap:      Headache?
Play-of-the-Day:  Broadcasting and Breaking Out
Market Sentiment: Window Dressing


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      09-26-2002           High     Low     Volume Advance/Decline
DJIA     7997.12 +155.30  8012.42  7844.62 1.90 bln   2311/ 892
NASDAQ   1221.61 -  0.68  1239.62  1206.91 1.62 bln   1813/1500
S&P 100   428.51 +  6.83   430.75   422.54   Totals   4124/2392
S&P 500   854.94 + 15.28   856.60   841.26 
RUS 2000  370.48 +  5.55   370.83   365.14 
DJ TRANS 2269.42 +102.34  2269.42  2167.41   
VIX        40.12 -  2.29    41.73    39.87   
VXN        59.09 +  2.40    59.75    56.64 
Total Vol   3,753M
Total UpVol 1,890M
Total DnVol 1,832M
52wk Highs   97
52wk Lows   385
TRIN        1.06
PUT/CALL    0.77
*************************************************************

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

Headache?

If you are a bull you should have a headache from bouncing off 
8000 several times. The Dow tried hard to make it two in a row
and succeeded. The Nasdaq did not go along for the ride and 
finished negative for the day. This divergence was due to more
negative remarks on the tech sector conflicting with positive
economic reports.

Dow Chart


Nasdaq Chart


The day started out with a better than expected Jobless Claims
report with only 406,000 new claims compared with estimates of
425,000. However the prior week was revised up again to 430,000
from 424,000. This was the fifth week over 400K. This pause in
the rise encouraged traders but I believe it is only temporary. 
The continuing claims numbers rose again and when matched
with the Help Wanted Index today they should continue to rise. 
The Index fell to .41 and its lowest reading in decades. Layoffs
may be slowing but nobody is hiring. This means the Oct Jobs
Report next week could be very bad. With job ads the lowest since 
the 1960s the outlook for continued consumer spending is negative.  

Durable Goods Orders came in much better than expected with a
decline of only -0.6% instead of -2.6% as expected. This number
is highly volatile and the loss evens out the +8.6, -4.5 numbers
for the last two months. This encouraged the markets on the 
surface but because of the volatility there will need to be
confirmation next month. 
 
The best news for the day was the New Home Sales, which soared 
to record highs at an annualized 996,000 pace. Sales in August
were up +1.9%. However, like most government numbers recently,
the past monthly records for May, June and July were all revised
downward again. Reports from readers from different areas of the
country indicate that builders are pulling out all the stops to
blowout new houses quickly and reduce inventory levels. Builders
are scared that interest rates will turn up once the stock market
turns up and they do not want to be caught with a lot of inventory.
California is the only area that has reported a continued demand
for new homes and only those well under $1 million. With winter
coming and inventory being rushed to completion the numbers in
November will be significantly less. Also, remember that many
houses are sold before they are built and/or completed. That
means many of the sales could have been contracted months ago.
Also, with the rate of foreclosures at a 30 year high there are
a lot more "distressed" houses on the market. This will also
lower the number of new houses sold. 

Friday will be another opportunity for economics to move the
markets. The Q2 GDP will be announced at 8:30 but this is not
expected to be a big miss. The estimates are for +1.1% growth.
This is a historical look back at the Q2 timeframe and not
relative to the current situation. The final Consumer Sentiment 
for September will also be announced. This is the second look at
these numbers and there is not likely to be a big drop below the
previously announced 86.2%. Neither of these reports are expected
to be surprises and that makes them dangerous. If we get a surprise
then the market should react accordingly. 

The earnings picture today was mixed. GE led the parade by affirming
estimates for the eighth time this year. Shorts covered and the Dow
headed for 8000. During the conference call the CFO admitted that
the improvement in short cycles businesses had stalled and the
plastics business was suffering. Also, they were losing money in
GE Equity and their reinsurance group GE RE. The $350 million loss
would be made up by a one time gain of $300 million from the sale
of another unit. Making up a three cent shortfall in operations
with a one time gain is not something that encourages traders. This
was the same as a three cent warning and the stock tanked. They
declined to give guidance for 2003 because the economic conditions
were much tougher than they expected and they wanted to wait until
early December before changing estimates. This was not accepted
well by the market. GE fell from $28 to below $26 in after hours. 
GE Capital said it was going to file to sell $50 billion in bonds
and estimated that would get them through the first half of 2003.

Phillip Morris chose the news of a favorable court ruling and +1.26
gain in the stock to announce a serious earnings warning after the
close. The company said 2002 earnings would now be in the range of
+3% to +5% growth vs the +8% expected. They also said it would carry
over into 2003 earnings as well. Lower volumes and higher costs were
given as the reasons. The stock dropped to $37.75 in after hours, a 
-$5 drop from the close. MO is a Dow component.

Another Dow component, SBC announced after the close that they were 
going to cut another 11,000 jobs with the majority in the 4Q. They
said they were slashing capex spending for 2003 to only $5 billion
from the 2002 rate of $8 billion. SBC has lost three million retail
access lines so far in 2002 and revenue dropped -$1 billion in the
first half. The company said it would take major charges against
earnings in both the 3Q and 4Q. This capex news will hit the already 
dying network sector with another round of estimate cuts. 

RBAK warned earlier in the day that it was experiencing an unusually
difficult quarter and would post almost double the loss that analysts
were expecting. Nortel also warned again that it would miss estimates
for the 3Q. LU, CIEN and TLAB have also warned recently. 

After the bell COGN beat estimates by a penny and affirmed guidance
that was roughly inline with estimates. MANU also beat by a penny
but announced that its president was leaving and they would be
cutting -10% more jobs. LBRT announced earnings that fell in the
midrange of their previous warning. They said they cut another 110
jobs and warned that earnings for the next quarter would be well
below estimates. They said the market had fallen off much more
quickly than anticipated during the quarter. SLR announced a loss
that was inline with estimates but said they were taking -$2.6
billion in charges. They lowered guidance for this quarter to as
much as a -3 cent loss and lower from estimates of a penny loss by
analysts. They said they were experiencing a difficult market for 
all types of electronics. No kidding?
 
The positive economic reports helped the Dow move back to the 8000
level but window dressing and short covering failed to hold above
it. This is critical for maintaining any rally. While I expect 
the Dow to start off in the cellar tomorrow there is a strong
possibility that we could see a rebound before the day is out. The
problem is the generally low prices of stocks. Many funds have 
fixed asset allocation values and with the monster bond run of
late there could be some asset allocation moves necessary before 
the end of the month. This means they have to sell bonds and buy
stocks to bring the ratios back into balance. How much this may
impact the markets is hard to tell. Most of the buying/shifting 
could already be over since very few funds shift money on Fridays
and Monday exposes their plans to more event risk. Better to bite
the bullet this week and get it out of the way. The strong volume
the last two days would bear out this premise. 

This is setting Friday up as an explosive day. A downdraft at
the open based on problems with GE, MO and SBC followed by any 
early morning moves by institutions squaring the quarter books. 
The morning volume is going to be heavy and the market direction
by days end will be anybody's guess. 

Enter Very Passively, Exit Very Aggressively!

Jim Brown

Check out the Traders Corner "Charting Gaps" by
Leigh Stevens in tonight's newsletter.  
http://www.optioninvestor.com/indexes/traderscorner.asp



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

Clear Channel Comm. - CCU - cls: 37.16 chg: +1.57 stop: *text*

Company Description:
Clear Channel Communications Inc., headquartered in San Antonio, 
Texas, is a global leader in the out-of-home advertising industry 
with radio and television stations, outdoor displays, and 
entertainment venues in 65 countries around the world. Including 
announced transactions, Clear Channel operates more than 1,200 
radio and 36 television stations in the United States and has 
equity interests in over 250 radio stations internationally. 
Clear Channel also operates approximately 770,000 outdoor 
advertising displays, including billboards, street furniture and 
transit panels across the world. (source: company press release)

Why We Like It:
If you live in the United States, chances are pretty good that 
you've listened to a Clear Channel radio station.  Government 
regulations limiting the number of frequencies one company could 
own were relaxed in the mid-nineties, and CCU quickly used this 
to their advantage by acquiring smaller companies and buying out 
competitors.  Several years of aggressive growth have turned 
Clear Channel into the most formidable player in the radio 
industry.  The company has also expanded into the concert 
business.  The latest press release touts the first Guns N' Roses 
tour in almost a decade - hopefully Axl won't throw too many 
tantrums!  CCU has done such an effective job that some smaller 
promoters have attempted (in vein) to sue them for holding a 
monopoly in some cities.  Despite its solid grip on the radio 
business, declining advertising revenues and a general Wall 
Street distaste for media stocks have taken their toll on shares 
of CCU.  Fortunately for shareholders the stock has bounced back 
nicely from its July lows.  

After spending more than a month gyrating in the $32-$36 range, 
shares broke to new relative highs on Thursday.  CCU was bid up 
by 4.4% on positive comments from J.P. Morgan, who increased Q3 
estimates from 30 cents/share to 33 cents.  The firm's analyst 
believes Clear Channel is positioned to take advantage of an 
upturn in radio advertising sales.  Today's rally created some 
very bullish technical developments.  Not only did CCU break 
above the $36.50 resistance level, but bearish p-n-f resistance 
was also broken.  Furthermore, the point-and-figure chart is 
displaying a fresh quadruple-top buy signal.  The rising volume 
behind today's breakout bodes well for the bulls, as do the 
rising MACD and daily stochastics.  Overall we're looking at a 
compelling list of positive technical indicators.  Given this 
bullishness, we believe odds are good that CCU will reach its 
200-dma ($43.27) within the next few weeks.  This long play will 
be activated if shares move above $37.50.  More conservative 
traders may want to wait for CCU to move above $38.00 before 
taking long positions.  Our stop (if we're triggered) will be set 
at $34.74, safely below whole-number support at $35.00.

For an annotated bar chart, click here:




For an annotated point-and-figure chart, click here:




Picked on September xxth at $xx.xx <-- see text
Results since picked:        +0.00
Earnings Date             11/06/02 (unconfirmed)
 




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

Window Dressing
by Steven Price

The rally continued today, on the heels of some positive economic 
data.  The rolling average for initial jobless claims finally 
dropped slightly, after seven straight weeks of increases. The 
four-week average decreased by 1,000 to 419,000, due to a drop of 
24,000 claims last week.  This sounded promising, until SBC 
Communications announced after the bell that they would be laying 
off 11,000 workers.  This follows the 10,000 positions it has 
already eliminated this year.  SBC said it lost 3 million retail 
access lines, its worst decline ever, leading to more than $1 
billion in losses in the first half of the year. The company said 
it could lose $2.3 billion in sales over the next four quarters 
at the current pace.

This news was followed by a profit warning from Philip Morris.  
Big MO said its 2002 earnings would increase only 3 to 5%, a far 
cry from analyst estimates of 19%.  The stock closed at $42.73, 
but traded as low as $38 after hours. The company cited lower 
than expected sales and higher promotional spending.  As a Dow 
stock, MO should weigh heavily on the average in the morning.

Durable goods orders fell 0.6% in August.  While this is negative 
overall, it is far less than the predictions of a 2.7% decline.  
Core capital goods orders were positive year-over-year for the 
first time since November 2000.

We also got some good news on new home sales. Sales rose 2% in 
August, to a record annualized rate of 996,000 units, in spite of 
a drop off in existing home sales, and record foreclosure rates. 

While the Dow tacked on 155.30 points, to close at 7997.12, it 
was repeatedly turned back on each venture over the 8000 mark. 
This can be viewed in two ways.  The failure under 8000 can be 
seen as bearish, as it was unable to hold a significant round 
number.  The break above 7900 can also be seen as bullish, since 
it walked its way down 100 points at a time and has now taken a 
couple of steps back up the last two days, in similar increments. 
However, after Philip Morris' warning, my guess is the former 
will prove more accurate.  At the same time the Dow was chugging 
along, the Nasdaq actually lost some ground, falling less than a 
point. 

The Semiconductor Index (SOX) had mounted a terrific rally from 
its intraday low of 231 on Tuesday, to close at 255 on Wednesday.  
The group gave back 8.10 today to finish back at 248.35.  Without 
much good news outside of the cell phone group, the rally 
appeared to be a compression bounce, after the index had lost 35% 
in a month.  

The SBC warning is in sync with the warning last night from 
Nortel, which said revenue would fall 15% sequentially, 5% worse 
than previously forecast.  The telecom equipment manufacturer 
took a hit as Nortel blamed the losses on major customers' 
reluctance to spend.  Nortel announced a reverse stock split, as 
it attempts to avoid being de-listed.  The sentiment was echoed 
by telecommunications equipment maker Redback, who said today 
that deteriorating spending by telephone company customers would 
mean lower revenue.  The whispers are now starting about Cisco, 
which derives 20-25% of its revenue from the telcos.

The rally of the last two days has given the bulls something to 
hang their hats on, as we bounced from July's lows, in what some 
see as a double bottom formation.  However, the bullish 
percentages of the broader indices paint a different picture.  
The Dow's bullish percentage, which shows the percentage of 
stocks in the index that are currently giving point and figure 
buy signals, is down to 16.7%, from a recent high of 60%.  The 
S&P 500 has fallen from 56% to 30.8%.  The Nasdaq 100 has fallen 
from 58% to 22%.  Each of these is in a bearish column of "O"s 
and would require a 6% reversal to signal a turnaround.  Until 
that happens, it is hard to buy into a rally.

Look for tomorrow to re-test 7900 to the downside in the Dow, 
after Philip Morris' warning.  However we will also be seeing the 
GDP and University of Michigan Consumer Sentiment numbers, which 
will have a big impact.  If GDP comes in below the 1.1% 
consensus, we may even re-test Tuesday's 7683 close.


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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7532
Current     :  7997

Moving Averages:
(Simple)

 10-dma: 8039
 50-dma: 8433
200-dma: 9549

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  775
Current     :  854

Moving Averages:
(Simple)

 10-dma:  856
 50-dma:  887
200-dma: 1040

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  843
Current     :  873

Moving Averages:
(Simple)

 10-dma:  880
 50-dma:  935
200-dma: 1255


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


The Semiconductor Index (SOX.X): The semis rallied convincingly 
on Wednesday, only to see the magic wear off on Thursday.  After 
trading as low as 231 on Tuesday, they hit an intraday high of 
261 on Wednesday.  Unfortunately, today's drop of 8.10 put the 
group back under 250, closing at 248.  The question is whether 
Wednesday's rally was just a dead cat bounce.  If the group can't 
bounce back again, it is likely that we will see a re-test of 230 
once again.  With news of layoffs from SBC after the close and a 
warning from Philip Morris', it is likely that the whole market 
will be dropping on Friday.  The SBC news underscored warnings 
from Redback and Nortel, which cited a lack of spending by 
telecoms.  Whispers are already beginning that Cisco may be 
seeing poor results ,as well, since they derive 20-25% of their 
revenue from the telecoms.  While these are not chip stocks, they 
will most likely give the Nasdaq a push downhill, which should 
take the SOX with it.

52-week High: 657
52-week Low : 236
Current     : 248

Moving Averages:
(Simple)

 10-dma: 255
 50-dma: 307
200-dma: 466


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

Market Volatility

The VIX dropped a couple of points on today's rally.  However, it 
still remains over 40, which is considered high.  It is also 
worth noting that it found support at its 50-dma of 39.62, 
although this is not as significant as it is in a stock, since 
the index is derived from the volatility levels of 8 different 
OEX options. The fact that it remains over 40 after a gain of 
over 300 Dow points in two days, shows that traders are not yet 
convinced that the rally is for real.  If the Dow can close back 
over 8000, I expect to see a drop under 40.  If we re-test the 
7532 level, we could see the 50 level again quickly.  


CBOE Market Volatility Index (VIX) = 40.12 -2.29
Nasdaq-100 Volatility Index  (VXN) = 59.09 +2.40

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.77        612,736       473,856
Equity Only    0.58        508,595       295,508
OEX            1.16         18,647        21,689
QQQ            0.45         56,714        25,325

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

Bullish Percent Data

           Current   Change   Status
NYSE          34      + 0     Bull Correction
NASDAQ-100    22      + 1     Bear Confirmed
Dow Indust.   17      - 3     Bull Correction
S&P 500       31      + 0     Bear Confirmed
S&P 100       25      + 0     Bear Confirmed

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

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

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

 5-Day Arms Index  1.20
10-Day Arms Index  1.47
21-Day Arms Index  1.48
55-Day Arms Index  1.30

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 they do, they can signal significant market turning 
points.

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

Market Internals

        Advancers     Decliners
NYSE       2026           724
NASDAQ     1714          1423

        New Highs      New Lows
NYSE         36              22
NASDAQ       51             185

        Volume (in millions)
NYSE     1,891
NASDAQ   1,650


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

Commitments Of Traders Report: 09/17/02

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 Increased long positions by a whopping 50,000 
contracts and shorts by 33,000.  Small traders followed suit with 
large increases, but leaned toward short position increases more 
heavily.


Commercials   Long      Short      Net     % Of OI 
08/27/02      425,982   469,087   (43,105)   (4.8%)
09/03/02      431,755   468,529   (36,774)   (4.1%)
09/10/02      426,230   470,537   (44,307)   (5.0%)
09/17/02      476,224   503,268   (27,044)   (2.7%)

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
08/27/02      153,152    72,408    80,744     35.8%
09/03/02      158,262    80,130    78,132     32.8%
09/10/02      166,696    85,259    81,437     32.3%
09/17/02      182,243   116,377    64,866     21.7%

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 increased long positions by 35% and shorts by 29%.  
Small traders increased longs by only 1,000 contracts, but 
increased short positions by 4,000, or 34%


Commercials   Long      Short      Net     % of OI 
08/27/02       45,354     50,634    (5,280) ( 5.5%)
09/03/02       46,712     53,287    (6,575) ( 6.6%)
09/10/02       53,309     58,745    (5,436) ( 4.9%)
09/17/02       72,522     75,815    (3,293) ( 2.2%)

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
08/27/02       10,156     8,040     2,116    11.6%
09/03/02       11,150     7,720     3,430    18.2%
09/10/02       14,024    10,494     3,530    14.4%
09/17/02       15,288    14,142     1,146     3.9%

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 increased their long positions by 4,000 contracts, 
while increasing shorts by 7,000.  Small traders increased longs 
by 6,000 contracts, almost doubling the position, while 
increasing shorts by only 1500, or 15%.


Commercials   Long      Short      Net     % of OI
08/27/02       21,023    14,328    6,695      18.9%
09/03/02       21,161    13,792    7,369      21.1%
09/10/02       22,946    14,936    8,010      21.1%
09/17/02       26,863    21,187    5,676      11.8%

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
08/27/02        6,825     8,438    (1,613)   (10.6%)
09/03/02        6,395     7,966    (1,571)   (10.9%)
09/10/02        7,568    10,129    (2,561)   (14.5%)
09/17/02       13,393    11,637     1756       7.0%

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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Do not duplicate or redistribute in any form.




PremierInvestor.net Newsletter                 Thursday 09-26-2002
                                                    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
=================================================================

In section two:

Net Bulls
  New Bearish Plays:     KLAC
  Bullish Play Updates:  CTSH, INVN


Stock Bottom / Active Trader
  New Bullish Plays:     CCU
  Bearish Play Updates:  AL, KMB
  Closed Bearish Plays:  AHC, CI, GE, NAV, WHR

High Risk/Reward
  Bearish Play Updates:  TSS

Split Runs
  Bullish Play Updates:  RMCI

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 New Plays
============

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

KLA-Tencor Corp. - KLAC - close: 28.42 change: -1.59 stop: *text*

Company Description:
KLA-Tencor is the world leader in yield management and process 
control solutions for semiconductor manufacturing and related 
industries. Headquartered in San Jose, Calif., with operations 
around the world, KLA-Tencor ranked #6 on S&P's 2002 index of the 
top 500 companies in the U.S. (source: company press release)

Why We Like It:
Here at Premier Investor we've talked at length about the 
negative fundamentals of the semiconductor industry.  We won't 
rehash those details here, but it certainly looks like the 
situation is not improving.  The latest round of bad news came 
from Micron, who reported a fourth-quarter loss of 27 cents.  The 
consensus estimate was for a loss of only 19 cents.  The company 
also said demand is weak (surprise, surprise) and the average 
selling price of its memory chips sank by 30%.  Those are exactly 
the sort of negative fundamentals that have dragged the 
semiconductor index (SOX.X) to 52-week lows.  Surprisingly, MU 
managed to shake off the bad news and finish yesterday's session 
with a gain.  This came on a day when the SOX rallied sharply 
after more than a week of losses.  Did Wall Street suddenly 
change its outlook for the industry?  Not a chance.  The chip 
sector was overdue for some short covering, and that's exactly 
what happened.  Unfortunately for the bulls, this rebound had 
absolutely no staying power.  Despite rising oscillators and 
persisting oversold conditions, the SOX couldn't even rise above 
yesterday's high.  All the bulls who rushed in to buy yesterday's 
rally are now faced with a possible retest of the relative lows 
near 230...Or even a decline to the 200 region.

Overall it's looking pretty bad for the chip group.  We like KLAC 
as a short because it's stuck in a descending channel and just 
rolled over from a declining trend of lower highs.  The rising 
MACD and daily stochastics may help soothe nervous bulls, but 
today's action indicates that the institutions are using any 
sector strength as an opportunity to scale out of long positions.  
In terms of action points, we'll enter this hypothetical trade on 
a move below today's low of $28.17.  Our upside risk will be 
limited by a stop at $30.61, just above yesterday's high.  
Although we'll initially target a decline to the $25.00 region, 
an eventual move to the bottom of the regression channel (near 
$23.00) wouldn't be out of the question if the bears really get 
their claws around KLAC.


For an annotated chart, click here:



Picked on September xxth at $xx.xx <- see text
Gain since picked:           +0.00
Earnings Date             10/22/02 (confirmed)
 




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

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

Cognizant Technology - CTSH - cls: 57.03 chg: +2.13 stop: 53.19

Dig that bar chart!  In keeping with its historical tendency to 
bounce from the 100-dma, CTSH moved higher today with a 3.8% 
gain.  Shares completely filled in Tuesday morning's gap and 
easily outperformed the NASDAQ, which finished with a fractional 
loss.  This play was activated at the opening trade of $55.59 
when shares gapped slightly above our trigger point. The 
technical picture continues to favor the bulls, with the MACD 
beginning to level out near the baseline and daily stochastics 
just starting to rise from oversold levels.  The 50-dma at $57.57 
may act as resistance, but we believe CTSH has enough upside 
momentum to crack through that moving average.  The recent three-
box point-and-figure reversal supports that outlook.  Traders 
still looking to go long can watch for a move above the 50-dma.  
Our stop is currently set at $53.19.

Picked on September 26th at $55.59
Results since picked:        +1.44
Earnings Date             10/14/02 (unconfirmed)
 



---

InVision Tech. - INVN - cls: 32.97 chg: +1.25 stop: 29.98 *new*

INVN traded somewhat flat on Wednesday, despite a large tech 
rally.  This had us a bit concerned.  Fortunately those worries 
were alleviated today after shares broke above stubborn short-
term resistance at $32.50.  INVN showed excellent relative 
strength versus the flat NASDAQ and posted a gain of nearly 4%.  
Shares closed just one cent off the best levels of the day, 
indicating that today's upward momentum will have staying power.  
Technical bulls can also be pleased with the rising daily 
stochastics and lack of overhead resistance levels.  Traders 
looking for new entries can watch for a break above $33.00.  
Volume does seem to be drying up a bit, so those thinking about 
jumping onboard may want to make sure any move to new relative 
highs is confirmed by renewed buying interest.  Note that we've 
bumped our stop-loss up to $29.98, just under the 50-dma ($30.03) 
and whole-number support at $30.00.

Picked on September 23rd at $31.70
Results since picked:        +1.27
Earnings Date             10/23/02 (unconfirmed)
 





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

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

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

Clear Channel Comm. - CCU - cls: 37.16 chg: +1.57 stop: *text*

Company Description:
Clear Channel Communications Inc., headquartered in San Antonio, 
Texas, is a global leader in the out-of-home advertising industry 
with radio and television stations, outdoor displays, and 
entertainment venues in 65 countries around the world. Including 
announced transactions, Clear Channel operates more than 1,200 
radio and 36 television stations in the United States and has 
equity interests in over 250 radio stations internationally. 
Clear Channel also operates approximately 770,000 outdoor 
advertising displays, including billboards, street furniture and 
transit panels across the world. (source: company press release)

Why We Like It:
If you live in the United States, chances are pretty good that 
you've listened to a Clear Channel radio station.  Government 
regulations limiting the number of frequencies one company could 
own were relaxed in the mid-nineties, and CCU quickly used this 
to their advantage by acquiring smaller companies and buying out 
competitors.  Several years of aggressive growth have turned 
Clear Channel into the most formidable player in the radio 
industry.  The company has also expanded into the concert 
business.  The latest press release touts the first Guns N' Roses 
tour in almost a decade - hopefully Axl won't throw too many 
tantrums!  CCU has done such an effective job that some smaller 
promoters have attempted (in vein) to sue them for holding a 
monopoly in some cities.  Despite its solid grip on the radio 
business, declining advertising revenues and a general Wall 
Street distaste for media stocks have taken their toll on shares 
of CCU.  Fortunately for shareholders the stock has bounced back 
nicely from its July lows.  

After spending more than a month gyrating in the $32-$36 range, 
shares broke to new relative highs on Thursday.  CCU was bid up 
by 4.4% on positive comments from J.P. Morgan, who increased Q3 
estimates from 30 cents/share to 33 cents.  The firm's analyst 
believes Clear Channel is positioned to take advantage of an 
upturn in radio advertising sales.  Today's rally created some 
very bullish technical developments.  Not only did CCU break 
above the $36.50 resistance level, but bearish p-n-f resistance 
was also broken.  Furthermore, the point-and-figure chart is 
displaying a fresh quadruple-top buy signal.  The rising volume 
behind today's breakout bodes well for the bulls, as do the 
rising MACD and daily stochastics.  Overall we're looking at a 
compelling list of positive technical indicators.  Given this 
bullishness, we believe odds are good that CCU will reach its 
200-dma ($43.27) within the next few weeks.  This long play will 
be activated if shares move above $37.50.  More conservative 
traders may want to wait for CCU to move above $38.00 before 
taking long positions.  Our stop (if we're triggered) will be set 
at $34.74, safely below whole-number support at $35.00.

For an annotated bar chart, click here:




For an annotated point-and-figure chart, click here:




Picked on September xxth at $xx.xx <-- see text
Results since picked:        +0.00
Earnings Date             11/06/02 (unconfirmed)
 




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

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

Alcan Inc. - AL - close: 25.28 change: +0.53 stop: *text*

Shares of Alcan may have rallied with the market but they are not 
doing a very convincing job for the bulls.  News yesterday 
revealed that Alcan was shutting down one of its mills in W. 
Virginia due to "global overcapacity".  The stock rallied on the 
news of course the broader indices were also in rally mode so 
it's hard to tell if bulls were buying on news of lowered 
expenses or shorts were covering due to a market bounce.  The 
Premier Investor Newsletter has not yet been triggered on this 
bearish play.  We had hoped that Wednesday's stall under the $25 
mark might offer a better entry point compared to our trigger to 
go short at $23.73.  Now that AL has traded and closed above the 
psychological level of $25 we are turning cautious.  We are not 
convinced the market is making a reversal and AL could run out of 
steam as it approaches its 50-dma near $27.  We're going to keep 
an eye on it during Friday's session.  If we don't think the odds 
are in our favor for an effective short play we'll drop it 
untriggered.

Picked on September XXth at xx.xx
Results since picked        +0.00
Earnings Date            10/16/02 (confirmed)




---

Kimberly Clark - KMB - close: 57.67 change: +0.76 stop: 58.63

Time for a strength test.  You've probably seen them on T.V. 
commercials.  Two actors compare the strength of their paper 
towels and how much they can absorb.  Well, shares of KMB are 
about to demonstrate their own strength test.  The stock traded 
as expected today and failed to rally past overhead resistance at 
$58.00.  The question now is will this resistance be strong 
enough to withstand another rally attempt?  Will the sellers at 
$58 be able to absorb any buyers and bears deciding to cover 
their shorts at $58.00?  At this point in the game we'd probably 
take a step back from KMB and see what happens.  Aggressive 
traders can target new bearish positions but we be careful to 
watch that $58 level.  We'd be surprised to see the market rally 
into the weekend but if it did some traders may see that as an 
exceptionally bullish sign for next week.  Should the DJIA trade 
significantly over the 8K mark tomorrow we'd probably expect to 
be stopped out in this play.

Picked on September 20th at 56.85
Results since picked:       -0.82
Earnings Date            10/22/02 (unconfirmed)





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

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

Amerada Hess Corp - AHC - cls: 68.41 chg: +2.51 stop: 68.02

On Thursday the OIX.X oil index posted its largest single-day 
percentage gain in over a month.  With crude oil prices (cl02z) 
remaining above the $30.00 level, the broader market rally may 
have prompted oil bears to throw in the towel.  AHC gapped higher 
in morning trading and moved steadily higher throughout the day.  
Our short play was closed in the final hour of trading when 
shares hit our break-even stop at $68.02.  The stock closed near 
its best levels of the day, offering hope to the bulls that the 
uptrend will continue on Friday.  However, those who are betting 
on an extended rally will have to contend with the falling 50-dma 
at $68.67.  This moving average coincides with the multi-week 
trend of lower-highs.  Traders still holding short positions in 
AHC should be watching for a rollover from this region.  A break 
above the 50-dma could precipitate another round of short-
covering.

Picked on September 17th at $68.02
Results since picked:        +0.00
Earnings Date             07/24/02 (confirmed)

--- 

Cigna Corp. - CI - close: 73.90 change: +2.70 stop: 75.05

Ouch!  The market rally today really took a chunk out of our 
paper profits for CI.  Shares had come within 54 cents of hitting 
our exit point on Wednesday - and this was while the market was 
going up!  We didn't see any outstanding news for the health 
insurers today so it looks like a sharp bout of short covering.  
The biggest stock in the group, UNH was flat to down today.  We 
saw the same performance in WLP and ATH.  Out of the big five 
(based on market cap) CI and AFL were the only ones to really 
rally today.  Dropping CI was a tough call.  We do not believe 
this market bounce will last.  Nor do we believe the hurricane 
damage in the south will help the insurance group.  We understand 
that CI is in the health insurance niche but investors won't be 
thinking "yeah, I'll buy insurance stocks" right before they have 
to pay out big for the hurricane claims.  The big up move in CI 
was also accompanied by some very strong volume and while the 
short-term down trend has not been broken we don't want to wait 
and watch it happen.  Thus we're going to close the play and look 
for a new entry point.  Technically the $75 level "should" be 
resistance but we would not be surprised to see it rally to $76 
or $77 before stalling.  As a matter of fact, should CI really 
bounce we'll look for a failed rally near $80 as a potential 
entry point for a new short (circumstances permitting).

Picked on September 20th at 74.98
Results since picked:       +1.08
Earnings Date            11/01/02 (unconfirmed)
 




---

General Electric - GE - cls: 26.17 chg: -0.83 stop: 27.65

The past two days have been quite interesting for GE.  Shares 
helped to lead the market higher on Wednesday after the company 
told analysts that Q3 earnings are "on track."  Investors, 
relieved of the possibility of a profit warning from the largest 
U.S. conglomerate, bid the stock up to an intraday high of 
$27.18.  Shares continued ascending on Thursday morning and 
violated our break-even stop at $27.65.   The bulls looked to be 
firmly in control until about 12:00, when the stock was hit with 
a sudden wave of sell orders.  The catalyst for this sell-off was 
a more detailed 2002 reaffirmation from GE, who said they were 
having were still having a very difficult quarter.  The company 
offered no 2003 guidance. Both CS First Boston and JP Morgan came 
out afterwards and said the quality of Q3 earnings may be 
suspect.  Overall this uncertainty had the bulls second-guessing 
themselves after buying into yesterday's rally.  Traders who are 
still short can be encouraged by today's reversal, and should not 
be watching for shares to fall below the $25.00 level.  With Dow 
components SBC and MO both reporting negative news after the 
bell, the Dow Jones will likely see weakness on Friday.  This 
should provide additional selling pressure in GE.
 
Picked on September 13th at $27.65 
Results since picked:        +0.00
Earnings Date             07/12/02 (confirmed)


 

--- 

Navistar Intl - NAV - close: 23.07 change: +1.32 stop: *text*

We added this short play on Tuesday in an effort to take 
advantage of Navistar's recent breakdown.  The stock looked like 
a good short on a move below the relative low, but shares have 
since bounced sharply with the broader market.  There was no news 
to drive NAV higher, so the bounce appears to be a simple 
oversold relief rally.  A continued advance could lead to a 
rollover near the 50-dma at $24.43.  However, the bullish MACD 
and daily stochastics suggest that NAV may eventually retest 
short-term resistance at the $26.00 level.  Since we're not 
willing to bet against the technical indicators, we're dropping 
this un-triggered play tonight.  Automotive bears looking for 
fresh ideas may want to take a look at GM, which has rebounded 
back to its descending trendline. 

Picked on September xxth at xx.xx
Results since picked:       +0.00
Earnings Date            12/03/02 (unconfirmed)
 



--- 

Whirlpool - WHR - close: 49.86 change: +1.51 stop: 50.11

Shares of WHR stabilized earlier this week after the company 
reaffirmed its third-quarter income expectations of $1.40-$1.45.  
With the broader market moving sharply higher over the past two 
sessions, the stock saw a rapid retracement of some of the recent 
downtrend.  This morning WHR popped its head above psychological 
resistance at $50.00 and took out our stop at $50.11.  At this 
point our paper trade was closed for a loss of 3.4%.  Although 
we've parted ways with this play, WHR may still offer a good 
shorting opportunity.  The light volume behind today's 3.1% gain 
is not a good sign for the bulls.  In another negative technical 
development, shares were unable to close above the $50.00 level.  
The uptrending oscillators are hinting towards more upside, but 
WHR will be hard-pressed to continue higher if the Dow Jones 
rolls over from the 8000 level.

Picked on September 23rd at 48.44
Results since picked:       -1.67
Earnings Date            10/15/02 (unconfirmed)






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

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

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

Total System Services - TSS - cls: 14.44 chg: +0.44 stop: 15.56

We were pretty encouraged when shares of TSS failed to respond to 
the market rally on Wednesday...but when shorts saw the major 
averages were going to make it two days in a row some of them 
decided to cover.  The 3% gain today isn't too concerning but the 
bounce may not be over.  Technical indicators, which had been 
extremely oversold, are now all looking somewhat ready for a 
bullish reversal.  The first test will be the $15.00 resistance 
level still overhead.  Conservative traders may want to consider 
exiting the play now or using a tight stop at breakeven and then 
looking for a new bearish entry if you get stopped out.  Those 
traders still considering new positions may want to wait a day or 
two and see if TSS gives us a better entry with a failed rally at 
$15.00 or $15.35, etc.  Until we see when and where the market 
bounce dies we would be sitting on the sidelines.

Picked on September 23rd at $14.49 
Results since picked:        +0.05
Earnings Date             07/16/02 (confirmed)
 





==================================================================
Split Runs / Split Trader (ST) section
==================================================================

===============
ST Play Updates
===============

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

Right Mgmt Consultants - RMCI - cls: 24.82 chg: +0.32 stop: 22.99 

Bullish traders looking for an entry point into RMCI might have 
an opportunity soon.  The stock has been rising in an ascending 
channel and after topping out near the top of this channel the 
stock has pulled back to support.  We would consider a move back 
over the $25 level as a potential entry point.  More conservative 
traders can tighten up their stop near the $24 mark if they seek 
to reduce their risk (say $23.99 or $23.89).  The newsletter will 
keep its stop at $22.99 for the moment and re-evaluate after 
Friday's session.

Picked on September 20th at $25.80 
Gain since picked:           +0.98
Earnings Date             10/21/02 (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 

EXC     Exelon Corp                47.96     +2.35
AEG     Aegon Nv                   10.47     +0.78
UB      UnionBancal Corp           42.60     +0.66
BBY     Best Buy Co                25.10     +0.80
DVA     Davita Inc                 23.91     +0.52
IBC     Interstate Bakeries        26.38     +0.64

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

WOR     Worthington Industries     19.15     +1.36
INGR    Intergraph Corp            18.40     +1.90
WMAR    West Marine                13.56     +1.77

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

GIS     General Mills              45.18     +1.45
FDX     Fedex Corp                 51.95     +2.55
AZO     Autozone Inc               80.85     +1.58
IGT     Intl Game Technology       70.09     +2.46
ROOM    Hotel Resvtn Network       51.70     +3.70
CYH     Community Health Systems   26.30     +1.45
DP      Diagnostic Products        45.35     +1.40

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

HRB     H&R Block                  42.25     -2.23
QLGC    QLogic Corp                26.58     -3.25
STZ     Constellation Brands Inc   22.72     -2.80
TECD    Tech Data Corp             28.38     -1.64

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

..NONE..




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