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Daily Newsletter, Friday, 10/04/2002

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PremierInvestor.net Newsletter          Weekend Edition 10-04-2002
                                                     section 1 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 one:

Market Wrap:      October Madness 
Play-of-the-Day:  No Appetite For Construction
Watch List:       CB, COCO, CTX, IBM, LEH, PCAR, TDS and more!
Market Sentiment: Does a Flat Basketball Bounce?

========================================================================
MARKET WRAP  (view in courier font for table alignment)
========================================================================
            WE 10-4      WE 9-27          WE 9-20          WE 9-13
DOW    7528.40 –63.58  7701.45 -284.57  7986.02 -326.67  8312.69 -124.51
Nasdaq  436.31 – 9.13  1199.08 - 22.00  1221.08 - 70.28  1291.36 -  3.94
S&P-100 403.22 – 4.03   413.22 - 10.68   423.90 - 20.34   444.24 -  2.43
S&P-500 800.28 –14.70   827.36 - 18.03   845.39 - 44.41   889.80 -  4.12
W5000  7598.62-175.00  7872.54 -150.63  8023.17 -417.71  8440.88 - 40.32
RUT     347.98 –14.29   361.77 -  5.51   367.28 - 22.70   389.98 - 40.32
TRAN   2137.68 –13.39  2185.17 +  1.15  2184.02 - 62.85  2246.87 - 10.20
VIX      46.28 + 3.14    43.14 -  1.41    44.55 +  5.24    39.31 -   .73
VXN      60.28 + 2.42    57.86 -  1.22    59.08 +  3.23    55.85 -   .69
TRIN      1.98            2.09             0.86             1.53        
Put/Call  0.97            0.90             1.16             0.89        
========================================================================

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

October Madness 
By John Seckinger 
jseckinger@OptionInvestor.com 

An initially hard-to-interpret September payroll report tried to 
give bulls some hope during trading on Friday.  However, it was 
not long before the pattern of lower equity and higher Treasury 
prices took over once again. 

The Nikkei had closed above 9000 (9027), futures were mixed due 
to anticipated warnings from EMC and SGP, and November Federal 
Funds were showing a 100% chance of an ease by the Fed by the 
FOMC meeting on November 6th.  Then the much-anticipated 
payroll report was released.  . 

The Labor Department reported a decrease in payrolls by 43,000 
during the month of September, much worse than the 6,000 expected 
by economists.  However, August’s reading was revised much higher 
to 107k from the previous 39k increase.  Also encouraging for 
bulls was a decrease in the unemployment, falling to 5.6% from 
5.8, month prior.  Economists were expecting a 5.9% unemployment 
rate, and it was only April when unemployment reached six 
percent. 

Since the jobs report household survey during 2002 has been 
extremely volatile, traders’ initial nervousness following the 
release was understandable.  Therefore, did it make sense to 
simply follow the bond markets’ lead (higher yields) and send 
equities higher?  Some equity traders apparently thought so.  The 
December 30-year Bond (USZ2), at 9:30 a.m., was trading at 112-14 
and lower by 1 full point (32/32).  Furthermore, it seemed as 
though fixed-income traders were also rushing out of five-year 
notes, freeing up cash for more productive assets, possibly 
including equities.  

With the initial bid in stocks was unable to reach 7800 level 
(intra-day high of 7784) during the first few minutes of trading, 
traders evidently began to become nervous.  This nervousness 
spread to the bond pits, as short covering quickly began to 
materialize.  First 7000 in the Dow was taken out, then 7683, 
7600, and then 7553.  Selling pressure took place in the Nasdaq 
as well, with the index hitting new multi-year lows and solidly 
falling under the psychologically-important 1200 level.  

By sessions end, the Dow had lost 188.79 points to close at 7528 
on volume of 1.8 billion.  This was the lowest close in the blue 
chips since mid-November 1997.  Down volume beat up volume by a 
6:1 margin, while decliners easily outpaced advancers by a ratio 
of nearly 3:1.  Also noteworthy was that 364 stocks hit new lows 
as only 35 managed to set a new high.  Turning to the tech-laden 
Nasdaq, the Index shaved 25.67 points to close at 1139 on 
impressive volume of 1.6 billion.  Down volume handily beat up 
volume by a 4:1 margin, and only 16 stocks set new highs while 
365 companies recorded a new low.  The S&P 500 Index closed lower 
by 18-points, or 2.2 percent, but did manage to remain above the 
psychologically important 800 level (closed at 800.58).  

With the Dow losing 2.5 percent during trading on Friday, sectors 
that underperformed the blue chips included Healthcare (-4.50%), 
Biotech (4.30), Utility (4.00), Airline (3.25), Semiconductor 
(2.90), and Banking (2.67) issues.  Sectors showing strength 
included the Gold and Silver Index (+0.56%) and Treasury Bonds 
(0.16).  

As far as specific companies are concerned, EMC was halted after 
the close on Thursday and initially took the storage sector down 
with it (QLGC, BRCD, and NTAP).  On Friday, shares closed down 
23.55% at 3.83 on volume of almost 70 million.  Other companies 
that entered the spotlight on Friday included SAP, FDC, AMAT, CI, 
UPS, and MO.  

Beginning with SAP AG, Lehman believes that the company should 
lower their annual guidance as overcapacity remains an issue 
while pricing in Europe continues to decline.  Shares of this IT 
service provider fell 4.19% to 10.28.  It was in mid-March when 
shares were near 40.  First Data (FDC) made headlines when shares 
were downgraded to “underweight” from Morgan Stanley.  Reasons 
included a material slowdown from Western Union within the next 
12 months.  Shares of FDC rallied on Friday from a low of 23.75 
to close at 26.40 and higher on the session by 0.45 percent.  

Morgan Stanley was also responsible for getting AMAT into the 
spotlight, since the investment house cut estimates for semi 
equipment stocks due to weak seasonality readings, lower 
utilization rates, and reductions to capital expenditure plans.  
AMAT, after having estimates cut for 2002-2004, fell 1.47% on 
Friday to close at 11.33.  

Shares of Cigna (CI) lost over 10% to 62.18 after being 
downgraded by Salomon Smith Barney to “underperform”.  Company’s 
2003 estimates were cut to 8.10 from 8.90, while the price target 
on CI fell to 81 from 89.  Salomon also cut 2003 estimates for 
United Parcel Service (UPS), worried about a weak retail sector 
and delayed profitability within their logistics unit.  Shares of 
UPS fell 3.75% to 61.60.  

With a few hours left in Friday’s trading session, news hit the 
wire that a jury in the Los Angeles Superior Court ordered Philip 
Morris to pay 28 billion dollars as punishment for causing lung 
cancer of a California woman.  At the announcement, shares were 
trading near 40.  By the close, shares of MO had fallen 7.36% to 
36.59 on massive late-day sell orders.  

One other noteworthy event occurred late in trading as well, 
centering on the West Port strike apparently costing the US at 
least 1 billion dollars a day.  The news was actually a rumor 
that dockworkers were nearing a settlement.  Before the rumor, 
the Dow was near 7500; however, word of a possible settlement 
sent equities higher and blue chips to 7636 within 25 minutes.  
It would have been interesting to see the Dow’s reaction to the 
rumor if stocks were significantly higher at the time.  

Speaking of the Dow, a look at a monthly chart shows prices 
actually outside a regression line beginning in January 2000.  
This should signal to bears that oversold conditions exist; 
however, it certainly does not mean that a “third standard 
deviation” lower cannot materialize.  The nice thing for traders 
is that there is a proverbial line in the sand: 7442 (give or 
take a few points, since stops could be just underneath).  

Chart of Dow Jones Industrials, Monthly 




It would be nice to have an RSI Bullish Divergence (RSI remaining 
high as prices set a relative low); nonetheless, the current 
30.71 reading should have bears analyzing risk/reward going 
forward.  If 7442 is taken out, there is a good chance this area 
will become strong resistance and market pundits, including 
myself, will expect an explosive move to 7000.  Note:  To get 
back inside the Regression line, the Dow would have to rise above 
7689 (a downward sloping trend line, so this level will continue 
to fall).  Once back inside this channel, shorts should be forced 
to cover en masse.  

Turning to the tech-laden Nasdaq, new multi-year lows place the 
index solidly under 1200 and forcing technicians to use 
regression analysis for downside objectives (yes, the H&S 
formation on a daily chart can be used as well).  Least 
resistance clearly remains lower for this tech index; however, 
the new relative low was accompanied by a relatively high RSI 
reading.  This bullish divergence only means that shorts could 
potentially cover at any time.  What level could be the catalyst 
for such a rally?  I would look first at 1153 and then 1192.  If 
such a rally fails to materialize and shorts remain aggressive, 
the downside objective according to the regression line comes in 
at 1000.  Note:  This 1000 level will decrease daily, since the 
regression line is downward sloping.  

Chart of the Nasdaq Composite, Weekly




With earnings light next week and no real economic events due out 
until Friday, the catalyst during the second week of October may 
come from the Gold Index (XAU).  Currently at a pivotal juncture, 
Gold is close to testing it 50% retracement from 54.67 to 77.34 
(66) and currently under an intermediate support/resistance 
(read: pivotal) level of 67.48.  On Friday, the XAU index rose 
0.56% to 67.05.  If 67.48 can be closed above during trading next 
week, enthusiasm in the commodity might pick up and a test of 72 
(blue line) would become the near term objective.  With the 22, 
50, and 200 DMA’s all converging near 70, there is a good chance 
an explosive move will take place (could theoretically be higher 
or lower).  Therefore, before entering a trade, take a look at 
this commodity (which trades inversely to the dollar) in order to 
gauge risk.  

Chart of Gold and Silver Index (XAU), Daily 




Speaking of earnings and a light economic docket, notable 
earnings next week includes PEP before the open on Tuesday, while 
RMBS, RBAK, and most-importantly YHOO is set to release earnings 
after the close on Wednesday.  On Friday, GE is scheduled to 
report before the market opens.  Estimates for GE’s 3Q Net Income 
is at 0.40 versus 0.33, year ago.  Turning to the economic 
releases, the August Consumer Credit report is due out at 3:00 
p.m. on Monday, and then there are no more releases until 
Thursday morning (only Initial Claims seems noteworthy).  
Friday’s economic releases should take center stage, as Retail 
Sales, PPI, and Preliminary Michigan Sentiment numbers will be 
released at 8:30 and 8:45 a.m., respectively.    

With the term “new multi-year low” becoming commonplace within 
financial publications, traders can continue to play the trend of 
lower equity prices; however, risk is certainly becoming high and 
tight stops have to be used effectively.  Easier said than done, 
especially with the volatility index at 46.28 and bonds trading 
in a two-point range on Friday alone; nevertheless, as a trader, 
support/resistance lines have to be respected and used regardless 
of nervousness between market participants.  Moreover, now could 
be the time to begin paying close attention to Intermarket 
relationships, especially bonds and gold issues.  It only takes a 
second to pull up a chart of the December Bond (USZ2) or Gold 
Index (XAU) before pulling the trigger.  This extra step could be 
the difference between capturing a sizable move or being caught 
in a vicious bear trap.  

Good luck.  


=========================
Play-of-the-Day (BEARISH)
=========================
(( new non-tech short ))

Ryland Group Inc - RYL - close: 34.65 change: -1.68 stop: 37.26

Company Description:
With headquarters in Southern California, Ryland is one of the 
nation's largest homebuilders and a leading mortgage-finance 
company. The Company currently operates in 21 markets across 
the country and has built more than 190,000 homes and financed 
over 165,000 mortgages since its founding in 1967. (source: 
company press release)

Why We Like It:
Has the home construction market formed a bubble?  That 
question has been hotly debated in recent months.  Some may 
argue that investing in new homes offers an attractive 
alternative for a shell-shocked public that's been scared away 
from equities.  Others would counter that the gloomy economic 
climate has made it impossible for the housing market to 
sustain its robust growth.  In any case, the latest economic 
data shows that the bloom may be wearing off.  Construction 
spending numbers released this weak showed a 0.4% reduction, 
representing the fourth straight month of declines.  New 
residential construction (single family) fell by 0.7%.  That's 
the third consecutive month that the indicator has dropped.  
This concrete evidence of slowing demand has not fallen on deaf 
ears.  Wall Street is becoming less impressed with blowout 
numbers that indicate current strength but reveal little in the 
way of future growth.  For example, on Thursday morning HOV 
reported an impressive 94% increase in new home orders for 
September.  Previously this sort of announcement would've lent 
the stock a bullish bias.  However, investors seemed to be 
oblivious to the news, and shares ended the day with a loss.  
On a similar note, on Wednesday RYL announced a 68% increase in 
new home orders for the same month. Shares briefly spiked above 
40.00 but were quickly smacked down after failing to move above 
the 50-dma at $41.16.

The past two days of declines have created what we think is an 
attractive shorting opportunity in RYL.  Shares have broken 
below both the $35.00 support level and the July lows.  With 
the daily stochastics descending and p-n-f chart looking weak, 
a near-term decline to the $30.00 level appears likely.  Also, 
the current downtrend could accelerate if the DJUSHB home 
construction index breaks below critical support at 280.  For 
the purposes of this play, we'll enter a hypothetical short 
trade at current levels.  Our stop is set at $37.26, safely 
above today's high.  We'll set an official exit price as RYL 
approaches the $30.00 region.  On one more fundamental note, 
you might've noticed from the company description that Ryland 
is also in the mortgage-financing business.  That fact is not 
going to help the bulls.  Recent data indicates that 
foreclosures are occurring at record rates.  This equates to 
lost revenue for mortgage companies.

Click here for an annotated chart of RYL:


 
Picked on October 4th at 34.65
Results since picked:    +0.00
Earnings Date         10/22/02 (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
---------------------------------

Chubb Corp. - CB - close: 53.50 change: -0.49

WHAT TO WATCH: Shares of Chubb took a beating last week after 
the company's CEO left to join competitor Alleghany Corp.  Wall 
Street took a very dim view of this news, as shown by the 
ensuing brokerage and credit downgrades.  The stock has since 
resumed its short-term downtrend (most easily visible on the 60-
minute chart), with today's action producing a new multi-year 
low.  Shares rebounded into the close, but this bounce probably 
won't last if the broader market keeps tanking on Monday.  The 
insurance sector is looking particularly weak, with the IUX.X 
insurance index heading for a retest of its July lows near 220.  
Should CB continue lower, bearish traders can consider entries 
on a move under today's low (52.10).  An alternate strategy 
would be to target another rollover from the $55.00 level.  As 
far as exit targets are concerned, we'd be looking for a short-
term decline to the $45.00 region.




--- 

Corinthian Colleges - COCO - close: 32.21 change: -3.69

WHAT TO WATCH: Ouch!  COCO was whacked for a 10% loss today 
after competitor DeVry warned for the first quarter.  DV said 
that declining new-student enrollments and high costs would 
result in lower-than-expected earnings.  COCO traded down in 
sympathy, but the daily chart shows that shares may have been 
due for a pullback anyway; shares had been hovering near all-
time highs and the oscillators were looking extended.  We 
wouldn't be buyers just yet, but if the stock works off a little 
more steam a bounce from $30.00 might offer an entry point.  
This level acted as resistance last Spring and support in 
August.  A rebound from the 200-dma at $27.58 would also offer a 
potential action point to get long.




---

Centex Corp. - CTX - close: 41.52 change: -1.80

WHAT TO WATCH: We added RYL as a bearish play tonight, but CTX 
also looks like a great short.  The stock was hit for a 4.1% 
loss today and it closed at the worst levels of the year.  
Although possible support lies at the $40.00 region, the fresh 
triple-bottom point-and-figure sell signal and falling daily 
stochastics suggest that CTX could make its way down to $35.00.  
Short entries can be targeted at current levels, but 
conservative traders may want to wait for a move below $40.00.  
Also keep an eye on the DJUSHB home construction index, which is 
threatening a breakdown below support at 280.




---

Intl Business Machines - IBM - close: 56.60 change: -3.40

WHAT TO WATCH: Big Blue is battered and broken!  IBM has been 
trending lower ever since the EDS earnings warning in mid-
September.  Investors seem to have absolutely no desire to hold 
the stock ahead of the company's earnings report on October 
16th.  After all, who knows what bearish surprises might be 
revealed?  The stock is trading at multi-year lows and appears 
to be headed for a test of the $50.00 region.  Aggressive 
traders could target a move to this level if shares fall below 
$55.00.  Others could watch for a failed rally near $60.00.  By 
the way, the current bearish count on the p-n-f chart is $44.00!




---

Lehman Brothers - LEH - close: 44.91 change: -1.23

WHAT TO WATCH: Investment banking and brokerage stocks have been 
getting hammered.  JPM, LEH, MER, MWD, and GS are all reeling 
from a potent combination of economic concerns and corporate 
malfeasance issues.  Goldman Sachs came under fire this week 
after a congressional finance committee alleged that the firm 
gave out shares in hot IPO's to higher-ups at 21 investment 
banking clients.  GS may be a good short in its own right but on 
the weekly chart we see solid historical support at $60.  LEH, 
on the other hand, has more immediate downside.  Bulls will 
argue that the 2001 low at $43.50 may offer some measure of 
support.  This may be the case, but the double-bottom p-n-f 
breakdown and falling daily stochastics do not bode well for a 
bounce in the near future.  Watch for a move under $44.50 to 
pave the way for a test of psychological support at $40.00.




---

Mellon Financial - MEL - close: 22.30 change: -1.20

WHAT TO WATCH: Banking stocks have been especially weak in 
recent sessions, and MEL is no exception.  The stock sold off 
sharply from its 50-dma ($26.34) on Wednesday.  Thursday's 
action saw MEL break through the $24.00 support level on the 
strongest volume since June.  The bulls finally got a reprieve 
today, but not until shares bounced near the July lows at 
$22.00.  If this level gives way, there's little in the way of 
underlying support to prevent a test of the $20.00 region.  The 
bearish MACD crossover, falling daily stochastics (5,3,3), and 
descending triple-bottom sell signal indicate that MEL will keep 
moving lower next week.  Bearish entries can be gauged on a 
break under today's low at $21.85.




---  

PACCAR Inc. - PCAR - close: 34.24 change: -0.79

WHAT TO WATCH: Shares of this truck manufacturer have been 
driving lower in a descending regression channel since March.  
PCAR has just rolled over from the top of this channel, which is 
backed by the 50-dma at $35.96.  Technically, the falling daily 
stochastics and leveling MACD are hinting at a continued 
decline.  Shareholders certainly won't be helped by the bearish 
cloud currently hanging over the transportation sector.  The 
port workers strike on the West Coast has literally brought some 
trucking companies to a standstill.  PCAR doesn't stand to be 
immediately effected by this work stoppage, but the negative 
sentiment won't help matters.  Watch for a break below today's 
low ($33.77), which would open the door for a test of the $30.00 
level.




---

Telephone & Data Systems - TDS - close: 49.02 change: -1.38

WHAT TO WATCH: Compared to many of its beaten-down telecom 
brethren, TDS trades at a lofty price.  Still, the stock is in a 
prolonged downtrend and shares have fallen to new multi-year 
lows.  Today's breakdown below critical support could bring 
about a more severe decline.  A glance at the weekly chart shows 
that in addition to providing support over the past two months, 
$50.00 also acted as resistance in 1998.  With this obstacle out 
of the way, the bears might really begin to pile on.  Short 
entries with relatively low risk could be targeted on a move 
below $49.00, with a stop slightly above $50.00.  Short-term 
traders could look for a decline to the $40.00 region.  Those 
with a longer timeframe could shoot for an eventual test of the 
1998 lows near $30.00.




--- 

United Online - UNTD - close: 10.68 change: +0.28

WHAT TO WATCH: Wow...An internet stock as a bullish candidate?  
United Online operates the Juno and Netzero internet service 
providers.  UNTD has been trending higher since it began trading 
last year.  The company may be benefiting from America Online's 
woes, as subscribers bail out of AOL for the cheaper ISP-only 
services.  Shares have shown amazing relative strength over the 
past week, and today's close above the 50-dma ($10.57) could 
bring even more bulls off the sidelines.  The bullish MACD 
crossover is another positive technical sign.  Aggressive 
traders can target entries at current levels, with an initial 
profit target in the $12.50-$13.00 range. 





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

CAT - Fresh 52-week lows for this Dow component.  On Friday CAT 
bounced near whole-number support at $35.00.  A move below this 
level would clear the way for a decline to historical support at 
$30.00 

JNJ - JNJ got a nice pop earlier this week but shares were 
unable to remain above the 200-dma at $57.78.  The daily 
stochastics are pointing lower from the overbought band, and the 
overall drug sector looks weak.  Short-term traders could look 
for a move down to the 50-dma at $54.15.

TTWO - Shares of this videogame maker have been uptrending since 
July.  The stock looks due for a pullback, but keep an eye out 
for a rebound from the $25.00 level, which coincides with the 
50-dma.  Shares may get a seasonal bounce ahead of the holiday 
season.

SIAL - Backed by strong volume, SIAL spiked below the 200-dma 
($46.62) on Friday.  A break below $45.84 could lead to a retest 
of the July lows near $39.00.  The p-n-f chart is displaying a 
double-bottom sell signal.  Note that bullish support is located 
at $44.00.

SRDX - SRDX has rolled over from its 200-dma, but this may be a 
function of weakness in the chemical manufacturing group.  
Previously the stock had shown relative strength versus the 
broader market.  Watch for a bounce from $30.00 level to offer a 
potential action point to open long positions.

MMS - The $20.00 level is extremely important for MMS.  Shares 
have breached this support only once since they began trading in 
1997.  A breakdown could quickly take MMS down to the 2000 lows 
at $18.00.



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

Does a Flat Basketball Bounce?

by Steven Price

We got an up close and personal look at support levels in the 
Dow, Nasdaq, S&P 500 and S&P 100.  There may be a difference of 
opinion as to whether or not the Dow held at support (I think it 
did), but the S&P 500 and S&P 100 clearly did hold those levels.  
The Nasdaq, however, failed its test miserably.

This morning's jobs data was a little confusing, as August 
numbers were revised, skewing the September results.  The 
unemployment rate actually fell to 5.6%, which was quite a bit 
under the 5.9% expectations.  However, non-farm payrolls fell by 
43,000 jobs.  After market participants sifted through the 
conflicting data, more weight was given to the payroll number and 
the sell-off commenced. 

After an earnings warning last night from EMC, which said that 
the IT spending environment was "brutal" and that the spending 
environment had worsened at the end of September, a test of 
support at 1160 in the Nasdaq seemed almost a foregone 
conclusion.  That level failed in the first half hour of trading, 
and acted as resistance shortly thereafter.  By the end of the 
day, the index finished down 25.66, to close at 1139.90.  The 
Nasdaq found intraday support at 1135, so that appears to be the 
next level for the time being.  

One of the groups to lead the Nasdaq down was the chip sector.  
The Semiconductor Sector Index (SOX.X) set yet another 4 year 
low, blowing through support at 231 to close at 227.00.  If IT 
spending is worsening, then the chip stocks will be one of the 
main sectors to feel the pinch. 

The Dow actually started up on the day, jumping 67.62 to start 
the day, after hearing the initial unemployment rate data.  It 
didn't take long, however, for the giddiness to wear off, and the 
banks led the broader markets down once again.  There is a great 
deal of concern that if Brazilian leftist presidential candidate 
Luiz Inacio Lula Da Silva wins the presidency (he is the current 
front-runner), he will attempt to default on the country's $260 
billion in debt.  While it is not certain just how much exposure 
U.S. banks have to Brazil, estimates are high for large 
institutions, such as J.P. Morgan, Citibank, Goldman Sachs and 
several others. After more warnings this week regarding non-
performing assets from Comerica and bank of New York, this was 
just the push the group needed to keep rolling downhill.

The Dow once again re-tested its lows in the 7500 range.  It 
actually closed at new recent lows, which I'm sure has the bears 
roaring louder than ever.  As a most-of-the-time member of this 
club, I'd like to roar along with them.  However, the index 
actually bounced right around the same point it did on September 
30.  On September 30, it bounced at 7460; today it bounced at 
7472.  The July 24 bounce was 7532, so we are without a doubt 
below the July lows.  However, we continue to bounce in this 
range, and until we get a real breakthrough, I find myself 
getting out of the way of an intermediate rally and closing short 
positions at this level.   A look at the S&P 500 confirms this 
possibility, as it closed at 800.58, which is a significant 
support level.  Ditto the OEX at 400 (closed at 403.22). In 
addition, as you can see from our Arms Index data, the readings 
are indicating an oversold condition, which also points to the 
possibility of a bounce. While I have been leaning short 
throughout the recent move, we are once again at a pivotal point.  
All of the recent news looks negative, and if the Brazilian 
elections turn out for the worst, these levels may fall quickly 
on Monday. However, I will trade what I see, and right now I see 
the potential for a short-term bounce.


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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7528
Current     :  7528

Moving Averages:
(Simple)

 10-dma: 7762
 50-dma: 8392
200-dma: 9484

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  775
Current     :  800

Moving Averages:
(Simple)

 10-dma:  828
 50-dma:  885
200-dma: 1031

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  815
Current     :  815

Moving Averages:
(Simple)

 10-dma:  850
 50-dma:  923
200-dma: 1231


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


The Semiconductor Index (SOX.X): The SOX has left no doubt today 
that previous support has been breached.  Although Thursday set a 
new 4 year closing low, the intraday low of 231 still hung below 
it, giving the impression of support.  Today the group crashed 
through 231, after last night's warning from EMC emphasized that 
the horrible IT spending environment was still getting worse.  
The SOX finished the day at 227.00, after finding a new intraday 
low of 223.57.  Every time it looks like we have found a bottom 
in this sector, it shows us that there is still more room to 
fall.  Today's big loser in the sector was OI put play QLogic 
(QLGC), which lost $3.71 to close at $20.89.  I am targeting 200 
as the next logical level of support.  Even I had to wonder if it 
ever traded at that level since it was created.  The answer is 
yes, and it did serve as support back in the fall of 1998. 

52-week High: 657
52-week Low : 227
Current     : 227

Moving Averages:
(Simple)

 10-dma: 242
 50-dma: 294
200-dma: 456




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

Market Volatility

The VIX actually increased less than I would have expected as the 
major market indices either broke or tested recent support 
levels.  While it did tack on 1.32 to close at 46.28, its highest 
level since August 5, there were plenty of weekend premium 
sellers keeping it in check, as the Dow held support at 7500.  If 
that level had been  broken on a closing basis, we probably would 
have seen the VIX closer to 50.  The VXN also added some points, 
but also was less than expected with the Nasdaq breaking through 
and closing below recent support.  There will always be a few 
more sellers on a Friday, trying to capture weekend time decay, 
and I suspect both of these numbers would have been higher if the 
same market activity had occurred in the middle of the week.

CBOE Market Volatility Index (VIX) = 46.28 +1.32
Nasdaq-100 Volatility Index  (VXN) = 60.28 +2.07

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.97        580,683       562,623
Equity Only    1.75        152,346       266,033
OEX            1.41         36,501        51,510
QQQ            0.46         49,978        23,149

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

Bullish Percent Data

           Current   Change   Status
NYSE          30      - 2     Bull Correction
NASDAQ-100    17      - 3     Bear Confirmed
Dow Indust.    7      - 3     Bull Correction
S&P 500       24      - 3     Bear Confirmed
S&P 100       20      - 2     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   1.54
10-Day Arms Index  1.54
21-Day Arms Index  1.47
55-Day Arms Index  1.37

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        633          2109
NASDAQ      932          2265

        New Highs      New Lows
NYSE         27             299
NASDAQ       12             356

        Volume (in millions)
NYSE     2,082
NASDAQ   1,575


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

Commitments Of Traders Report: 10/01/02

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

There has not been much change in the positions of Commercials, 
who reduced both longs and shorts by about 2,000 contracts each. 
Small traders are also relatively unchanged, with reductions of 
about 1,000 contracts to both the long and short sides.


Commercials   Long      Short      Net     % Of OI 
09/10/02      426,230   470,537   (44,307)   (5.0%)
09/17/02      476,224   503,268   (27,044)   (2.7%)
09/24/02      425,276   442,661   (17,385)   (2.0%)
10/01/02      423,661   440,133   (16,472)   (1.9%)

Most bearish reading of the year: (111,956) -   3/6/02
Most bullish reading of the year: ( 16,472) - 10/01/02

Small Traders Long      Short      Net     % of OI
09/10/02      166,696    85,259    81,437     32.3%
09/17/02      182,243   116,377    64,866     21.7%
09/24/02      124,232    73,506    50,726     25.7%
10/01/02      123,371    74,704    48,667     24.5%

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 reduced both longs and shorts, but by a relatively 
small percentage, giving up 600 long contracts and 1,700 shorts.  
Small Traders also made few changes to their overall positions, 
getting slightly longer overall, by about 600 contracts.


Commercials   Long      Short      Net     % of OI 
09/10/02       53,309     58,745    (5,436) ( 4.9%)
09/17/02       72,522     75,815    (3,293) ( 2.2%)
09/24/02       46,637     54,613    (7,976) ( 7.9%)
10/01/02       46,000     52,976    (6,976) ( 7.0%)

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
09/10/02       14,024    10,494     3,530    14.4%
09/17/02       15,288    14,142     1,146     3.9%
09/24/02       11,163     9,421     1,742     8.5%
10/01/02       11,896     9,575     2,321    10.8%

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 left long positions unchanged, while reducing shorts 
by 10%.  Small traders reduced longs by 1,000 contracts, while 
adding the same amount to the short side. 


Commercials   Long      Short      Net     % of OI
09/10/02       22,946    14,936    8,010      21.1%
09/17/02       26,863    21,187    5,676      11.8%
09/24/02       18,951    10,074    8,877      30.6%
10/01/02       18,969     8,903   10,066      36.1%

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
09/10/02        7,568    10,129    (2,561)   (14.5%)
09/17/02       13,393    11,637     1,756      7.0%
09/24/02        7,939     9,453    (1,514)   ( 8.7%)
10/01/02        6,809    10,503    (3,694)   (21.3%)

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  2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter          Weekend Edition 10-04-2002
                                                    section 2 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 two:

Net Bulls
  Bearish Play Updates: ACS, MERQ
  Closed Bullish Plays: INVN

Stock Bottom / Active Trader
  New Bearish Plays:     NEU, RYL
  Bearish Play Updates:  EXPE, FLIR, GM, KMB, LNC, MWRK
  Closed Bullish Plays:  CCU

High Risk/Reward
  Bearish Play Updates:  BGEN
  Closed Bearish Plays:  TSS


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

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

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

Affiliated Comp. - ACS - cls: 38.15 chg: -1.07 stop: 42.37 *new*

The NASDAQ plummeted to fresh multi-year lows on Friday, as 
investors dumped tech stocks following a chip sector downgrade 
and an earnings warning from EMC.  ACS followed suit with a loss 
of 2.7%, as shares rolled over from the $40.00 level and broke 
below the September lows.  The bearish MACD and daily 
stochastics indicate that ACS will continue lower next week.  
This outlook is supported by the rising volume and descending 
triple-bottom p-n-f sell signal.  Basically, things are looking 
pretty ugly for ACS.  Further weakness in the NASDAQ should 
bring the stock closer to our profit-target at $35.50.  Note 
that we've inched our stop down to $42.37, one cent above 
Thursday's high.  Those who are more risk-averse could use a 
stop just above whole-number resistance at $40.00.  Another 
failed rally at this level would provide a possible entry point 
for traders looking to open new short positions.
 
Picked on October 2nd at $41.06
Change since picked:      +2.91
Earnings Date          07/30/02 (confirmed)




---

Mercury Interactive - MERQ - cls: 16.81 chg: -0.25 stop: 18.31
 
Slowly but surely, MERQ is gravitating towards the $15.00 level.  
Shares drifted lower today in tandem with the GSO.X software 
index.  The stock attracted little in the way of buying interest 
after Thursday's bearish comments from Banc of America.  With 
the NASDAQ tanking to new multi-year lows, odds seem high that 
MERQ's recent downtrend (most readily visible on a 60-minute 
chart) will remain intact.  The daily stochastics (5,3,3) appear 
to be reversing from the middle range, offering further 
technical encouragement for the bears.  However, given the 
stock's proximity to our profit-target ($15.51), we would not 
advise taking new entries at this time.  Traders with a very 
short-term timeframe could watch for entries on a move below 
today's low at $16.55.  Premier Investor is currently up 6.5% in 
this play.

Picked on September 30th at $17.98 
Gain since picked:           +1.17
Earnings Date             10/17/02 (confirmed)
 




===============
NB Closed Plays
===============

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

InVision Technologies - INVN - cls: 30.51 chg: +0.11 stop: 29.98

Bearish caution flags were raised yesterday after INVN failed to 
rally on news that the U.S. government had placed a multi-
million dollar order for its bomb detection systems.  The bulls 
had previously been able to defend support at $30.00, but that 
level was abandoned on Friday morning when the broader market 
experienced a sell-off.  This play was closed for a loss of 5.4% 
after INVN violated our stop-loss at $29.98.  Traders who chose 
to hang on through the morning decline can be pleased with the 
subsequent rebound back above the $30.00 mark.  INVN showed some 
good relative strength in finishing with a small gain, easily 
outperforming the weak NASDAQ.  In another positive technical 
development, the daily stochastics (5,3,3) appear to be leveling 
out at the lower band.  This indicates that near-term downtrend 
may have run its course.  A close above the 200-dma ($30.72) and 
50-dma ($30.80) would help to confirm that the bulls have 
regained control.

Picked on September 23rd at $31.70
Results since picked:        -1.72
Earnings Date             10/23/02 (unconfirmed)
 




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

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

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

Neuberger Berman - NEU - close: 24.01 chg: -1.64 stop: 26.51

Company Description:
Neuberger Berman Inc. through its subsidiaries is an investment 
advisory company with $58.7 billion in assets under management, 
as of June 30, 2002. For 63 years, the firm has provided clients 
with a broad range of investment products, services and 
strategies. Neuberger Berman Inc. engages in private asset 
management, wealth management services, tax planning and 
personal and institutional trust services, mutual funds and 
institutional management, and professional securities services 
for individuals, institutions, corporations, pension funds, 
foundations and endowments. The firm is headquartered in New 
York with offices in major cities throughout the United States. 
(source: company press release)

Why We Like It:
The brokerage sector has seen a non-stop barrage of bad news for 
weeks and given the state of investor confidence we doubt it 
will recover any time soon.  The constant revelation of 
potential wrong-doing by brokerage big-wigs and the subsequent 
government investigation coupled with a crashing stock market 
has put mutual fund redemptions near all-time highs.  Trading 
activity is extremely low, IPO activity is extremely low, there 
appears to be nothing to redeem the securities broker from a 
drought in their industry.  It should be no surprise then the 
chart on most "investment services" stocks look dismal.  Shares 
of NEU have broken to new lows with Friday's session breaking 
potential support at both $25.50 and at $25.00.  Volume has been 
rising on the decline and we feel that the stock could get a 
real blow off to the downside before it recovers.  Our target is 
long-time support near the $20.00 level.  Officially we'll exit 
the play should shares of NEU trade at or below $20.51.  We're 
going to initiate the play at current levels and use a stop at 
$26.51 until we see where shares bounce and fail again.

Annotated Chart - NEU



Picked on October 5th at $24.01
Results since picked:     +0.00
Earnings Date          10/22/02 (confirmed)





---

Ryland Group Inc - RYL - close: 34.65 change: -1.68 stop: 37.26

Company Description:
With headquarters in Southern California, Ryland is one of the 
nation's largest homebuilders and a leading mortgage-finance 
company. The Company currently operates in 21 markets across 
the country and has built more than 190,000 homes and financed 
over 165,000 mortgages since its founding in 1967. (source: 
company press release)

Why We Like It:
Has the home construction market formed a bubble?  That 
question has been hotly debated in recent months.  Some may 
argue that investing in new homes offers an attractive 
alternative for a shell-shocked public that's been scared away 
from equities.  Others would counter that the gloomy economic 
climate has made it impossible for the housing market to 
sustain its robust growth.  In any case, the latest economic 
data shows that the bloom may be wearing off.  Construction 
spending numbers released this weak showed a 0.4% reduction, 
representing the fourth straight month of declines.  New 
residential construction (single family) fell by 0.7%.  That's 
the third consecutive month that the indicator has dropped.  
This concrete evidence of slowing demand has not fallen on deaf 
ears.  Wall Street is becoming less impressed with blowout 
numbers that indicate current strength but reveal little in the 
way of future growth.  For example, on Thursday morning HOV 
reported an impressive 94% increase in new home orders for 
September.  Previously this sort of announcement would've lent 
the stock a bullish bias.  However, investors seemed to be 
oblivious to the news, and shares ended the day with a loss.  
On a similar note, on Wednesday RYL announced a 68% increase in 
new home orders for the same month. Shares briefly spiked above 
40.00 but were quickly smacked down after failing to move above 
the 50-dma at $41.16.

The past two days of declines have created what we think is an 
attractive shorting opportunity in RYL.  Shares have broken 
below both the $35.00 support level and the July lows.  With 
the daily stochastics descending and p-n-f chart looking weak, 
a near-term decline to the $30.00 level appears likely.  Also, 
the current downtrend could accelerate if the DJUSHB home 
construction index breaks below critical support at 280.  For 
the purposes of this play, we'll enter a hypothetical short 
trade at current levels.  Our stop is set at $37.26, safely 
above today's high.  We'll set an official exit price as RYL 
approaches the $30.00 region.  On one more fundamental note, 
you might've noticed from the company description that Ryland 
is also in the mortgage-financing business.  That fact is not 
going to help the bulls.  Recent data indicates that 
foreclosures are occurring at record rates.  This equates to 
lost revenue for mortgage companies.

Click here for an annotated chart of RYL:


 
Picked on October 4th at 34.65
Results since picked:    +0.00
Earnings Date         10/22/02 (confirmed)





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

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

Expedia Inc - EXPE - close: 43.75 change: -1.07 stop: 48.06*new*

Another day, another dollar or so it appears to be for shares of 
EXPE.  The technicals continue to deteriorate and shares are 
getting closer to potential support in the $41 region.  The 
stock is becoming oversold and we would be very careful about 
entering new positions at this time.  EXPE is due for a bounce 
and a failed rally at $46 or $47 would be a better entry point 
for new bearish positions.  Short-term traders should begin to 
evaluate when and where they plan to exit the position for a 
profit (if you have not already).  A quick glance at other 
stocks in the group show TSG at new lows while shares of ROOM, 
which had been somewhat stronger, are beginning to show new 
weakness as well.  We are going to lower our stop on EXPE by 50 
cents to 48.06.

Picked on October 2nd at $46.06
Results since picked:     +2.31
Earnings Date           10/23/02 (confirmed)
 



---

FLIR Systems - FLIR - close: 32.73 chg: -0.67 stop: 37.01

Shares of FLIR are singing the same tune all week long - a slow 
and steady descent.  Shares are oversold but we still feel that 
FLIR is a tax loss selling candidate for fund managers to takes 
gains off the table in FLIR to make up for losses in other 
stocks.  The near-term danger for bears is the President's 
speech on Monday night concerning Iraq.  If he comes out with 
any new hawkish comments then there could be a knee jerk bounce 
in the defense sector of which FLIR is associated.  Thus, the 
best scenario for new plays would be to wait until Tuesday and 
see if FLIR can bounce back to the $35 or even the $36 level 
before rolling over at resistance.  This would offer a decent 
risk/reward entry point.  Our short-term target would be $30 but 
our intermediate-term target is profit-taking to the $25 level.  
If you missed the original write up on FLIR, check out a weekly 
chart.

Picked on October 2nd at $33.52
Results since picked:     +0.79
Earnings Date          07/24/02 (confirmed)
 



---

General Motors - GM - close: 36.42 change: -1.35 stop: 40.51*new*

The breakdown is picking up steam in GM.  On top of the 
company's healthcare crisis this West Coast lockout is not 
helping.  Auto plants are suffering from lack of parts and fewer 
cars produced normally means fewer sales for the manufacturer.  
Shares are getting pretty oversold but if there aren't any 
buyers this stock will probably stay that way.  We would expect 
some shorts to cover on any market bounce and with the 
Industrials right at their July lows this could occur at any 
time.  Keep that in mind as you consider new positions.  We did 
notice that GM has not been in the $36 region since January 
1995.  Should the stock break the $35 level it could have some 
support at $30, which was last seen about November of 1992.  If 
GM is left to its own devices (that means no market bounce) then 
we would expect the stock to continue to fall to the $35 level 
before we see any short covering.  A failed rally at $38 would 
look like a great place to evaluate new bearish positions.  We 
are going to drop our stop on this play to $40.51.

Picked on October 3rd at $37.77
Results since picked:     +1.35
Earnings Date          10/15/02 (unconfirmed)




---

Kimberly Clark - KMB - close: 55.88 change: -1.12 stop: 58.63

Finally we get a move out of KMB.  The stock traded to a new 
relative low on Friday before bouncing back a bit from its lows.  
We're willing to keep the stock on the play list for now but 
would encourage caution on any new positions.  Here's why: the 
$FPP.X forest and paper products index fell hard again on Friday 
and appears to be near the bottom of its descending channel.  A 
few stocks in the group are at recent lows and look like they 
could bounce as well.  Should a bounce occur then bears looking 
for shorts might get a better entry point on KMB (or at least 
we'll get an up tick to enter those new positions).  Of course 
the Industrials and the SPX like they could bounce as well and 
we'd rather not initiate new short positions in front of a 
potential short-term rally.  Continue to monitor KMB and if the 
sector and stock show weakness despite any broader market 
strength then adjust your strategy accordingly.  

Picked on September 20th at 56.85
Results since picked:       +0.97
Earnings Date            10/22/02 (unconfirmed)




---

Lincoln National - LNC - close: 27.30 change: -1.59 stop: 31.06

The selling pressure is picking up speed in shares of LNC.  The 
lack of faith in the insurance group appears to be sector wide.  
The IUX.X S&P insurance index is headed for its July lows near 
220 but take care to watch for any profit taking by the bears 
(that's short covering).  The IUX is near the bottom of its 
short-term channel after Friday's decline and it could bounce.  
Of course it could also breakdown through the bottom of its 
channel like our play candidate LNC.  The declines in LNC these 
last two days have been on strong volume.  The stock is overdue 
for a bounce but it may not happen until shares trade near 
potential psychological and round-number support at $25.00.  
Fortunately, our short-term and official exit price is $25.06 so 
should this occur we'll be able to close the play as a winner.  
If the broader markets do get a bounce early next week keep an 
eye on any potential failed rallies near the $29 to $30 levels.  
These might offer new entry points for bears.

Picked on October 3rd at 28.89
Results since picked:    +1.59
Earnings Date         10/30/02 (confirmed)




---

Mothers Work, Inc. - MWRK - cls: 32.41 chg: -1.49 stop: 36.11 

We've seen two days of volatile moves in MWRK but it wasn't 
until Friday's selloff that shares of MWRK moved through our 
trigger to go short at $33.49.  The pain investors are feeling 
in the retail sector isn't likely to let up soon given two 
factors.  Number one and most pressing is the West Coast port 
lockout.  Should this continue it could severely damage the 
upcoming holiday shopping season.  While MWRK may not be 
directly affected by the lockout it will be affected by any 
negative sentiment Wall Street has for the retail sector.  
Reason number two is also related to the upcoming holiday 
shopping season.  The uncomfortable fear that the U.S. consumer 
may not have as much discretionary income as previous years or 
the premise that they may not be quite so eager to spend it 
because they are concerned about job security is growing and 
this is putting a damper on any expectant fourth quarter bounce.  
Lest we forget, there is also a third reason that MWRK could 
succumb to further weakness.  October is year-end for thousands 
of mutual funds and many of those funds will be selling some of 
their winners to cover and hide some of their losers.  MWRK has 
been a big winner for 2002 and is a prime candidate for profit 
taking.  We did note that the 200-dma has moved up to $25.60 but 
we're going to keep our official exit point at $26.60 for the 
time being.  Our stop at $36.11 will work for now.

Picked on October 4th at $33.49
Results since picked:     +1.08
Earnings Date          07/15/02 (confirmed)
 




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

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

Clear Channel Comm. - CCU - cls: 33.73 chg: -1.12 stop: 33.99 

We added CCU as a long play last week after the stock broke to 
relative highs.  The quadruple breakout on the p-n-f chart and 
rising volume seemed to suggest that shares would continue to 
advance towards the $40.00.  Despite the positive technical 
picture, CCU was unable to trade higher in the face of a steady 
decline across the major indices.  Our play was closed for a 
hypothetical loss of 7.2% on Friday when shares fell through the 
$34.00 level.  CCU has not yet broken out of its multi-week 
uptrend, and shares could quickly move back to the $36.00 range 
if the Dow Jones bounces from the 7500 region.  However, given 
the strong volume behind today's decline, we would not recommend 
holding any long positions at this time.  Don't fight the 
market!

Picked on October 2nd at $36.65 
Results since picked:     -2.66
Earnings Date          11/06/02 (unconfirmed)





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

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

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

Biogen Inc. - BGEN - close: 28.96 change: -0.35 stop: 32.01

The biotech index (BTK.X) finally succumbed to the ever-
weakening NASDAQ on Friday.  Led by a hefty decline in AMGN, the 
BTK posted a loss of 4.3%.  This created an ideal climate for a 
breakdown in BGEN.  However, shares dropped by only 1.1%.  This 
relative strength can be attributed to Merrill Lynch, who raised 
BGEN's rating from "sell" to "neutral."  The upgrade was 
strictly a valuation call, and not a result of any perceived 
improvement in the company's fundamentals.  Technically, it was 
encouraging to see that shares faltered once again at the $30.00 
level.  The rising volume and bearish daily stochastics (5,3,3) 
are indications that BGEN will play catch-up with the rest of 
the sector.  The stock will have a difficult time maintaining 
current levels if the BTK falls below support at 300.  Traders 
still looking to go short can continue to watch for a move under 
$28.43.  

Picked on September 30th at $28.69 
Results since picked:        -0.27
Earnings Date             10/18/02 (confirmed)





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

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

Total System Services - TSS - cls: 12.08 chg: -0.52 stop: 13.06

Profit target achieved!  TSS dropped to new 52-week lows on 
Friday as investors continued to bail out of tech stocks.  This 
paper trade was closed for a gain of 16.5% when our exit price 
of $12.09 was reached in morning trading.  Shares actually fell 
to an intraday low of $11.65 before rebounding slightly to close 
above $12.00.  So how much downside is left in TSS?  Given the 
rolling daily stochastics (5,3,3) and continued strong volume, 
we would not be surprised to see shares test the bottom of its 
descending channel near $11.00.  Traders still short can be 
looking for a move to this level, while more aggressive types 
could target a decline to $10.00.  Be sure to keep those stops 
tight in order to protect profits.

Picked on September 23rd at $14.49 
Results since picked:        +2.40
Earnings Date             07/15/02 (confirmed)
 





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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.

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Copyright  2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter          Weekend Edition 10-04-2002
                                                    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 October 7th
   - 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 October 7th
========================================

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

Symbol  Company               Date           Comment      EPS Est

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

AMB    AMB Property          Mon, Oct 07  After the Bell      0.58


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

APOL   Apollo Group          Tue, Oct 08  Before the Bell     0.22
PEP    Pepsico               Tue, Oct 08  Before the Bell     0.55
RPM    RPM                   Tue, Oct 08  After the Bell      0.37
RI     Ruby Tuesday          Tue, Oct 08  -----N/A-----       0.31
SDX    Sodexho Alliance S.A. Tue, Oct 08  -----N/A-----        N/A
UOPX   Un of Phoenix Online  Tue, Oct 08  Before the Bell     0.14


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

ABT    Abbott Laboratories   Wed, Oct 09  -----N/A-----       0.48
BRO    Brown & Brown         Wed, Oct 09  After the Bell      0.28
CBH    Commerce Bancorp      Wed, Oct 09  -----N/A-----       0.52
DNA    Genentech             Wed, Oct 09  After the Bell      0.23
INFY   Infosys Tech Limited  Wed, Oct 09  After the Bell      0.34
MTB    M&T Bank              Wed, Oct 09  -----N/A-----       1.27
STI    SunTrust              Wed, Oct 09  Before the Bell     1.21
WIN    Winn-Dixie Stores     Wed, Oct 09  After the Bell      0.24
YHOO   Yahoo!                Wed, Oct 09  After the Bell      0.04
YUM    Yum! Brands, Inc.     Wed, Oct 09  After the Bell      0.47


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

CMH    Clayton Homes         Thu, Oct 10  Before the Bell     0.22
COST   Costco Wholesale Corp Thu, Oct 10  Before the Bell     0.49
DORL   Doral Financial       Thu, Oct 10  4:00 pm ET          0.67
DJ     Dow Jones             Thu, Oct 10  Before the Bell     0.08
SSP    E.W. Scripps          Thu, Oct 10  -----N/A-----       0.60
FDC    First Data            Thu, Oct 10  Before the Bell     0.45
ISCA   International Spdwy   Thu, Oct 10  Before the Bell     0.56
IFIN   Investors Finl Srvc   Thu, Oct 10  Before the Bell     0.26
JNPR   Juniper Networks      Thu, Oct 10  After the Bell     -0.02
MTG    MGIC Investment Corp. Thu, Oct 10  Before the Bell     1.42
NET    Network Associates    Thu, Oct 10  Before the Bell     0.12
BPOP   Popular, Inc.         Thu, Oct 10  After the Bell      0.65


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

BBT    BB&T                  Fri, Oct 11  Before the Bell     0.70
BLK    BlackRock             Fri, Oct 11  Before the Bell     0.51
FAST   Fastenal              Fri, Oct 11  -----N/A-----       0.28
GE     General Electric      Fri, Oct 11  Before the Bell     0.40
MI     Marshall & Ilsley     Fri, Oct 11  09:00 am ET         0.55
SPOT   PanAmSat              Fri, Oct 11  Before the Bell     0.11


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

Symbol  Company Name              Ratio    Payable     Executable

RMCI    Right Management          3:2      10/14       10/15
RLI     RLI Corp.                 2:1      10/15       10/16


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

The earnings parade begins this week and GE really kicks it off on 
Friday before the bell.  Friday the 11th is also full of economic 
reports.  The ones to watch are Retail sales, the PPI and the 
Sentiment numbers.

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

Monday, 10/07/02
----------------
Consumer Credit (DM)    Aug  Forecast: $10.5B  Previous:   $10.8B


Tuesday, 10/08/02
-----------------
None


Wednesday, 10/09/02
-------------------
None


Thursday, 10/10/02
------------------
Initial Claims (BB)   10/05  Forecast:    N/A  Previous:     417K
Export Prices ex-ag.(BB)Sep  Forecast:    N/A  Previous:     0.0%
Import Prices ex-oil(BB)Sep  Forecast:    N/A  Previous:     0.1%
Wholesale Invntories(DM)Aug  Forecast:   0.2%  Previous:     0.6%


Friday, 10/11/02
----------------
Retail Sales (BB)       Sep  Forecast:  -0.9%  Previous:     0.8%
Retail Sales ex-auto(BB)Sep  Forecast:   0.2%  Previous:     0.4%
PPI (BB)                Sep  Forecast:   0.2%  Previous:     0.0%
Core PPI (BB)           Sep  Forecast:   0.1%  Previous:    -0.1%
Mich Sentiment-Prel.(DM)Oct  Forecast:   85.3  Previous:     86.1


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 

.. none ..

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

ADTN    ADTRAN Inc                 19.63     +1.62
PACR    Pacer Intl Inc             12.30     +1.20
MENT    Mentor Graphics Corp        6.17     +2.07

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

LPNT    LifePoint Hospitals        33.04     +2.04

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

BAC     Bank Of America            58.00     -1.80
MO      Philip Morris Co           36.59     -2.91
IBM     Intl Business Machines     56.60     -3.40
AXP     American Express Co        28.53     -1.43
MMC     Marsh & Mclennan Cos       35.53     -3.13
MER     Merrill Lynch Co           30.17     -1.07
GM      General Motors             36.42     -1.35
DB      Deutsche Bank Ag           41.00     -3.51
BA      Boeing Co                  32.01     -2.30
KSS     Kohl's Corp                55.05     -1.05
MET     Metlife Inc                20.89     -1.63
GCI     Gannett Co Inc             69.15     -2.96
BF      BASF Ag Ads                33.48     -1.58
BK      Bank of New York           22.58     -1.37
TXU     TXU Corp                   27.04     -5.86
MEL     Mellon Financial Corp      22.30     -1.20
CI      Cigna Corp                 62.18     -7.12
NTRS    Northern Trust             31.81     -1.93
MCK     McKesson Corp              25.80     -1.60
AEP     American Electric Power    25.27     -2.70
LTR     Loews Corp                 39.65     -2.34
CF      Charter One Financial      25.43     -2.25
AET     Aetna Inc                  33.73     -2.07
DGX     Quest Diagnostic Inc       55.48     -6.94
VNO     Vornado Realty Trust       37.00     -1.02
LH      Laboratory Corp            21.68     -11.50
TMK     Torchmark Corp             32.86     -1.28
RJR     RJ Reynolds Tobacco        35.10     -3.36
DST     DST Systems Inc            24.78     -2.09
TROW    T. Rowe Price              23.00     -1.26
TCB     TCF Financial Corp         36.82     -2.46
MHK     Mohawk Industries          46.48     -1.58
FII     Federated Investors        23.80     -1.49
NFS     Nationwide Fincl Srvc      24.42     -1.71
VLO     Valero Energy Corp         23.87     -1.53
PHM     Pulte Homes                39.14     -1.96
CPS     Choicepoint Inc            30.39     -1.81
CXR     Cox Radio Inc              23.70     -1.20
QLGC    QLogic Corp                20.95     -3.65
PNW     Pinnacle West Capital      24.11     -2.14
ASBC    Associated Banc-corp       28.70     -1.23
TIN     Temple Inland Inc          36.82     -1.14
NVR     NVR Inc                   287.00    -14.25
IRM     Iron Mountain Inc          21.98     -1.71
HCR     Manor Care                 20.40     -1.66
RCII    Rent-A-Center              45.07     -4.12
NEU     Neuberger Berman           24.01     -1.64
BTH     Blyth Inc                  25.22     -1.51
BKH     Black Hills Corp           22.32     -3.04
SCSC    ScanSource Inc             48.85     -3.31

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

SRCL    Stericycle Inc             32.95     -0.99
ZNT     Zenith Natl Insurance      27.05     -0.30
SRDX    Surmodics Inc              31.26     -1.70
GOSHA   Oshkosh  B'gosh Inc        33.76     -0.29



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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  2002  PremierInvestor.net. and
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Do not duplicate or redistribute in any form.

DISCLAIMER

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