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Daily Newsletter, Thursday, 10/24/2002

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PremierInvestor.net Newsletter                 Thursday 10-24-2002
                                                    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:      Dazed Bulls Consider Options
Play-of-the-Day:  Ready for a Bank Roll?
Market Sentiment: Which Way is Up?


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
10-24-2002           High     Low     Volume Advance/Decline
DJIA     8317.34 -176.90  8558.63  8277.87 2.44 bln   1408/1760
NASDAQ   1298.69 - 21.50  1330.99  1296.54 1.89 bln   1547/1764
S&P 100   447.88 -  6.85   458.24   445.89   Totals   2955/3524 
S&P 500   882.50 - 13.64   902.94   879.00 
RUS 2000  366.02 -  2.93   371.27   365.61 
DJ TRANS 2304.62 - 36.90  2375.08  2300.20   
VIX        39.90 +  0.52    40.24    37.90   
VXN        54.58 +  2.21    55.17    51.65
Total Vol   4,159M
Total UpVol 1,692M
Total DnVol 2,413M
52wk Highs    90
52wk Lows    216
TRIN        1.05
PUT/CALL    0.81
*************************************************************

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

Dazed Bulls Consider Options

So near but yet so far. The markets touched almost a two-month 
high at the open but failed to hold the high ground and ended 
significantly down for the day. Dow 8558 was the double top high
for the week and a number not seen since Sept-12th. The Nasdaq 
also hit a post September high of 1331 only to close under the
1300 level at the close. 

Dow Chart

Nasdaq Chart


Everything started out on a positive note with a smaller than
expected Jobless Claims number of 389,000, which was below the 
consensus of 403,000. This may have been encouraging on the 
surface but it will take a string of lower numbers for several
weeks to make a difference. Continuing claims fell -115,000 from
decade high levels but this is just a blip in the data flow. 
Several big name companies announced more layoffs today, which
indicates the bad conditions still exist. However, the number
of mass layoffs for September fell to only 1,060 involving 
122,277 workers. This is down from the 128,080 in August. 

The good jobs news offset a downgrade of Dow component IP by 
Prudential before the open. PRU downgraded it to a SELL from 
HOLD. They quoted the drop in GAAP net worth to $2.05 billion
and the increase in debt-equivalent liabilities to $16.2
billion. They think IP will need to issue about $2 billion in
more stock to raise capital. 

Microsoft was down after the LA Times reported that the Justice
Dept is investigating allegations that MSFT is still hiding 
Windows code from rivals in violation of its court settlement. 
If true it could cause serious problems for MSFT but the company
said it was old news and they had nothing to hide. They were
also blasting the airwaves with a half-billion dollar attack 
on AOL with MSN-8. Bill Gates was on CNBC pounding AOL and the
benefits of MSN-8. If MSFT is successful in seducing millions
of subscribers to switch it would be a real windfall for them. 
The conversion would help cement future MSFT product loyalty
from those subscribers for things like Windows, Windows Media,
and any number of add on products. Look out AOL, the gorilla is
on the prowl. 

After the bell today AMZN said it lost money again, -$35 million,
but broke even on a pro forma profit of $400,000. Yes, $400K on 
$851 million in sales. This was a +33% increase in sales due in
part to their free shipping program. Buy for $8, sell for $10, 
eat $4 in free shipping! I got it! You make it up in volume!
Just kidding, I buy something at AMZN a couple times a month
but they need to start making a real profit like Ebay soon or
the stock will end up in the penny stock arena. AMZN is trading
down -$1 in after hours. They did raise estimates for the 4Q. 

FLEX also announced earnings after the bell of 8 cents and 
inline with analysts estimates. They affirmed estimates going
forward and said that although market conditions remained
tough they were gaining market share. They also traded down 
about -$1 in after hours. JDSU missed analyst's estimates 
slightly after the close and said projected revenue could drop
-20% for the next quarter. 

TQNT also announced inline earnings but guided lower for the
current quarter. MSTR also missed estimates by 2 cents and warned
about the coming quarter. Cigna lowered guidance to $1.47 for
the coming quarter vs estimates of $1.99. 

Good news came from ERTS after the close, which posted earnings
of 34 cents compared to analyst's estimates of 17 cents. This
was the second quarter in a row that it blew away estimates. 
The stock was trading up +2 in after hours. The company affirmed
estimates for the next quarter due to strong game sales. Analysts
commented after the announcement that maybe ERTS had come too
far too fast and the sales were due to slow with saturation. 
Another win came from BMC, which beat estimates of 4 cents with
an 8 cent gain. They affirmed estimates for the next quarter at 
the high end of the current range. 

The worst big name earnings for today was SBC which missed 
earnings by 3 cents but admitted they had lost -751,000 retail
lines to AT&T and WorldCom. SBC also said it was cutting capital
spending to $7.5 billion from earlier targets of $9.2 billion. 
This is down from $11.2 billion last year. This is bad news
for the feeder group like Lucent and NT. 

Despite all the bad earnings news this was not really what tanked
the markets. The lackluster earnings did nothing to give the bulls
confidence that they could muster another charge and after moving 
sideways most of the day the bulls got nervous. Helping them was
rumors that IRAQ was going to kick all the reporters out of the
country and that stepped up war fears. Many analysts have said
that they expect him to go preemptive and try to strike us first
if he feels the walls closing in on him. This was strike one. 

The FBI said they had specific and credible evidence that an
attack on rail lines, bridges, nuclear power plants, oil refineries
and assorted infrastructure targets could come at any time. Great!
They said they had discovered pictures of railroad bridges, power
plants and other targets in Al Qaeda documents and terrorists in
captivity had knowledge of planned attacks. The key here was that
the attacks could come at any time based on new intelligence. Strike
two for the markets. 

The semiconductor sector had been soaring for over a week and was
leaping from bad new to bad news with new gains. Investors watched
in disbelief as stocks like KLAC gained strongly after warnings. 
Today everything changed. The SOX had risen from 210 to almost 300
since Oct 10th for a +42% gain in 14 days. Overbought anyone? Well
the SOX hit 299.18 at exactly 11:30 today and the selling began. 
That 300 level was the same level where the SOX had failed on 
September 12th. Strong resistance and you can see that sellers
were waiting for it to be hit. Strike three, batter out. 

SOX Chart


Adding to the overhead weight was the economic reports for tomorrow.
The Consumer Sentiment report is due out at 9:45 and it has not been
kind as of late. Also Durable Goods at 8:30 and Home Sales at 10:00.
The fear factor may have come into play as the momentum players
became frustrated with the double top failure at 8550. After two
attempts to rally through that level in the same week, the positive
earnings news dwindling, war fears growing and new terrorist threats
the best course of action was to take profits. This profit taking
could continue tomorrow on negative economic news.  

The real question is what happens next Monday. The mutual fund year
comes to an end on Thursday. Tax selling should be over and end of
year replacement buying may have dried up. There may be some lingering
hang over but we only have five days left. We also have the big 
gains to digest. Even at today's close we are up +1100 points in 
fourteen days. During that 14 days funds saw out flows, $4.1
billion in the last week alone. If traders were rushing to buy
the new bull market then why have the last two weeks both shown
outflows? There are many unanswered questions. 

One article I read this week was extolling the fears of lost
performance. With mutual funds closing weekly the rest are racing
to grab performance at any price. When this year is over and those
final fund statements are received there is going to be a massive
shift of cash from fund families. Fears of lost fees and jobs is
outweighing the fears of more market losses. This grabbing for
momentum stocks is increasing the volatility. Some funds are not
holding and are trying to trade themselves back into profitability,
is a scary thought. What this means is that stocks in fund
portfolios may not be in strong hands as many have thought. Strong
hands imply no need to sell, plenty of cash on hand and a long
term outlook. When considering many funds in the current market
they are being forced to raise cash on a daily basis and selling
is the only way they can get it. Their outlook is as long as the 
next dip. 

That means Monday is still a tossup. We know where resistance is
waiting. Dow 8350, 8400, 8500, 8555. Support is 8300, 8250, 8200 
8138 and then 8000. A drop to 8036 would only be a -38% retracement
of the gains from the Oct 10th low. First we have to get through
Friday and that should depend on the economic reports and the urge 
by investors to protect profits. Futures are down in after hours 
despite the earnings being somewhat positive. Plenty of dark before
morning but I would be surprised to see another attempt at 8550 on
Friday.  

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

First Tenn. Natl. - FTN - cls: 35.78 chg: -0.71 stop: 37.01

Company Description:
First Tennessee National Corp. is a nationwide, diversified 
financial services institution and one of the 50 largest bank 
holding companies in the United States in asset size and market 
capitalization. Banking and other financial services are provided 
through the FTN banking group and three national lines of 
business: First Horizon (First Horizon Home Loans and First 
Horizon Equity Lending), FTN Financial (capital markets, equity 
research, investment banking, strategic alliances and 
correspondent services), and transaction processing (First 
Horizon Merchant Services, credit card merchant processing; and 
Express Processing, nationwide payment processing operation).
(source: company press release)

Why We Like It:
In reality there isn't anything in particular about FTN that 
we're bearish about - at least fundamentally.  The company 
actually reported record third quarter earnings on Oct. 16th.  
First Call had been expected 69 cents a share and FTN turned in 
73 cents due to low interest rates boosting mortgage volumes and 
origination fees (Reuters).  We do believe the Banking sector is 
looking a little top heavy and among the other banking stocks FTN 
appear to be one of the easiest to short.  It's less expensive 
than BAC (dollar wise, so we can short more shares if we want to 
for the same cash) and FTN is failing near its significant moving 
averages while BAC, who really looks like it has room to fall, 
still has some significant support below it.  One can easily 
argue that FTN has support at $34 and we won't deny it.  It is 
possible any future decline could stall there but if the markets 
decide to retrace a hefty portion of its two week rally we don't 
believe the $34 level for FTN will hold.  Astute chart readers 
will also notice that a chart of FTN looks almost identical to 
the $BIX banking index (okay, it's pretty darn close).  
Technically, FTN still has a bullish MACD but it looks like it's 
starting to roll and the histogram is indicating weakness.  Plus 
the stochastics on both a 14,1,3 and a 5,3,3 setting are both 
overbought and rolling over.  The PnF chart isn't too clear.  The 
stock is on a column of X's after bouncing at bullish support 
near $30.

We don't believe the pull back will move retrace all of the 
recent gains but a decent bout of profit taking could allow for a 
10% move in FTN.  We're going to start the play at current levels 
with a stop above the recent high (three days ago).  Conservative 
traders who prefer to catch something while it is moving may want 
to wait for FTN to trade below the near term support (from 
Wednesday and Thursday) at $35.50 or they can wait for FTN to 
trade below $35 before initiating a short position.

Annotated Chart - FTN



Picked on October 24th at $30.74
Results since picked:      +0.00
Earnings Date           10/16/02 (confirmed)





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

Which Way is Up?

by Steven Price

The market schizophrenia continued today, with the broader 
averages eventually settling for significant losses by the end of 
the day.  While a look at the end of day numbers may seem very 
bearish, there were some positives imbedded in the results, as 
well.  The Dow once again tested 8300 and found buyers, closing 
at 8317.  It did trade as low as 8277, but never cracked the 50-
dma of 8248.  The Nasdaq tested 1300 and couldn't hold, closing 
at 1298, but I wouldn't call it a major breakdown.  Still we saw 
the third straight day of a lower low in the Dow, and the 
semiconductor stocks may have finally run out of steam.  After 
gaining 35% in the last two weeks, the Semiconductor Index 
(SOX.X) topped out at 299.18, before falling negative on the day.  
The 300 level has provided previous resistance and would seem the 
logical point for exhaustion to set in.  of, course, the recent 
rally has been anything but logical, as numerous chipmakers and 
chip equipment makers have been guiding revenue lower during the 
recent earnings season, with very little good news to offset the 
warnings.  

The markets began to sink after news hit the wires that Iraq was 
tossing out all foreign journalists.  If the country really 
intends to open itself up for inspection, there would be no need 
to take such action.  In recent days, it has seemed the U.S. was 
backing away from an invasion, instead giving Saddam Hussein a 
chance to make nice by complying with U.N. inspection 
requirements.  However, it now appears the U.S. plan was designed 
simply to give Saddam enough rope to hang himself with. 

The retail stocks have been surging, following positive comments 
from Wal-Mart, which reaffirmed its 2002 earnings guidance.  
However, tomorrow's university of Michigan Consumer Sentiment 
report should give us a look at consumers' attitudes as we get 
closer to the holiday shopping season.  Many retailers have 
blamed slow mall traffic for falling sales.  However, it is more 
likely that the problem is that consumers simply don't want to 
spend as much with an uncertain economy and almost daily 
announcements of layoffs coming from a wide range of industries.  
The Retail Index (RLX.X) also found resistance at the 300 level  
after a rally of almost 20% since October 9. The area between 300 
and 310 has been impenetrable for the group on the last two 
rallies and tomorrow's Sentiment numbers should give us an 
indication as to whether we were simply given a better entry 
point for short plays in the sector.  The alternative is to get 
out of the way and let the index run to the 200-dma of 322, but 
I'm leaning to the short side on this group. 

Another group which rallied right to resistance is the software 
stocks.  The Software Index has tacked on 28% from its low of 
77.63 on October 7, to yesterday's close over 99.  It was unable 
to crack triple digits after reports surfaced that Microsoft was 
not entirely compliant with its antitrust settlement and was 
still hiding technical information about Windows from its 
competitors. Bill Gates' comments about gaining market share from 
AOL for its MSN internet service were unable to rescue the stock 
from a loss of $1.97, which managed to erase most of the activity 
of the last three days. 

The Market Volatility Index (VIX) remains close to 40, closing 
today at 39.90.  This is generally an indication of fear in the 
marketplace, as traders don't want to sell anything too cheap for 
fear a big move to the downside will erase gains from premium 
decay. The put/call ratio is also on the rise (.81), reflecting 
similar fears, as the number of puts traded is increasing on the 
re-test of support levels to the downside. 

We are not yet out of the woods, and while the recent rally has 
put bears back into hibernation, they have not hit R.E.M. sleep 
just yet.  If we see intraday resistance on a Dow break under 
8300, it may be enough to bring out the shorts in force. The SPX 
also has not yet been able to hold over 900, reaching 902 briefly 
today, only to be turned back.  Until that happens, look for the 
Dow and Nasdaq to struggle to hold onto gains. If we continue to 
bounce from 8300, then step aside until we see support over SPX 
900, before stepping in long.  If we breakdown below 8300 again, 
then I'll be looking for short opportunities, as key sectors seem 
to have run out of steam. 

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

Market Averages

DJIA ($INDU)

52-week High: 10679
52-week Low :  7286
Current     :  8317

Moving Averages:
(Simple)

 10-dma: 8241
 50-dma: 8248
200-dma: 9338

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  775
Current     :  882

Moving Averages:
(Simple)

 10-dma:  875
 50-dma:  876
200-dma: 1009

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     :  964

Moving Averages:
(Simple)

 10-dma:  945
 50-dma:  918
200-dma: 1182

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

The Semiconductor Index (SOX.X): There have been numerous times 
over the last couple of weeks that this sector looked like a 
shorting opportunity.  4Q warnings were given with almost every 
earnings release.  Stocks that announced after hours were 
hammered in after market trading.  Revenue forecasts were lowered 
into 2003.  Yet still the SOX kept going up.  Stocks that had 
traded down after hours miraculously rebounded the next morning, 
and kept going.  Now that we have hit the 300 level, or more 
precisely, failed the 300 level, with an intraday high of 299.18, 
we may finally get that shorting opportunity. The SOX finally 
closed down for the day after the rally failed, settling in at 
278.50, just above the 50-dma of 276.92.  We'll be looking for a 
break below the 50-dma and then searching for some of the 
weaklings that rode the coattails of the broader market. 

52-week High: 657
52-week Low : 263
Current     : 278

Moving Averages:
(Simple)

 10-dma: 265
 50-dma: 276
200-dma: 435

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

Market Volatility

The VIX remains close to 40, reflecting a level of downside fear. 
If the Dow breaks support of 8300 on a closing basis, we expect 
the VIX to head back into the 40s, and a break under 8000 should 
put us around 45.  For the moment, however, we are at 39.90 and 
could see some premium sellers capturing weekend time decay 
tomorrow if we remain above 8300. Watch for the VIX to fall into 
Friday's close if we don't get a sell-off. The VXN continues to 
bounce from its 200-dma of 50.93 and it will be interesting to 
see if a market rally can finally crack that level.  It hasn't 
been below the 200-dma since the end of August. 

CBOE Market Volatility Index (VIX) = 39.90 +0.52
Nasdaq-100 Volatility Index  (VXN) = 54.58 +2.21

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.81        575,268       468,575
Equity Only    0.70        473,446       332,315
OEX            1.05         14,403        15,142
QQQ            1.60         43,575        69,627

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

Bullish Percent Data

           Current   Change   Status
NYSE          36      + 2     Bull Confirmed
NASDAQ-100    55      + 6     Bull Alert
Dow Indust.   53      + 0     Bull Confirmed
S&P 500       48      + 3     Bull Alert
S&P 100       54      + 5     Bull Alert

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

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

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

5-Day Arms Index   0.85
10-Day Arms Index  0.85
21-Day Arms Index  1.11
55-Day Arms Index  1.26

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       1148          1565
NASDAQ     1454          1679

        New Highs      New Lows
NYSE         24              32
NASDAQ       59              79

        Volume (in millions)
NYSE     2,035
NASDAQ   1,931

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

Commitments Of Traders Report: 10/15/02

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

Not much change for the commercials, who added 2,000 long 
contracts and 4,000 shorts, for a net increase of 1600 short 
contracts, but not much % change. Small traders increased both 
positions for a net overall increase of only 300 long contracts.


Commercials   Long      Short      Net     % Of OI 
09/24/02      425,276   442,661   (17,385)   (2.0%)
10/01/02      423,661   440,133   (16,472)   (1.9%)
10/08/02      427,070   445,135   (18,065)   (2.1%)
10/15/02      429,448   449,138   (19,690)   (2.2%)

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
09/24/02      124,232    73,506    50,726     25.7%
10/01/02      123,371    74,704    48,667     24.5%
10/08/02      131,486    81,010    50,476     23.7%
10/15/02      134,507    83,714    50,793     23.37%

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 made little change to the long side, but reduced 
shorts by almost 4,000 contracts.  Small traders, on the other 
hand, left long positions virtually unchanged, while more than 
doubling their short contract positions; adding a total of almost 
7,000 short contracts.


Commercials   Long      Short      Net     % of OI 
09/24/02       46,637     54,613    (7,976) ( 7.9%)
10/01/02       46,000     52,976    (6,976) ( 7.0%)
10/08/02       45,384     55,504   (10,120) (10.0%)
10/15/02       45,578     51,969    (6,391) ( 6.6%)

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
09/24/02       11,163     9,421     1,742     8.5%
10/01/02       11,896     9,575     2,321    10.8%
10/08/02       10,735     5,721     5,014    30.4%
10/15/02       10,185    12,478     2,293    10.1%

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 long positions by 1,400 contracts, reducing 
shorts by 2,000.  Small traders reduced the long side by 1,800 
contracts, while slightly increasing shorts.  


Commercials   Long      Short      Net     % of OI
09/24/02       18,951    10,074    8,877      30.6%
10/01/02       18,969     8,903   10,066      36.1%
10/08/02       19,550    11,823    7,727      24.6%
10/15/02       20,914     9,630   11,284      36.9%

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
09/24/02        7,939     9,453    (1,514)   ( 8.7%)
10/01/02        6,809    10,503    (3,694)   (21.3%)
10/08/02        7,890     9,645    (1,755)   (10.0%)
10/15/02        6,040    10,329    (4.289)   (26.2%)

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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PremierInvestor.net Newsletter                 Thursday 10-24-2002
                                                    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:

Stock Bottom / Active Trader
  New Bearish Plays:     FTN, MLM, SUP
  Bearish Play Updates:  RTH

High Risk/Reward
  Bullish Play Updates:  T
  Closed Bearish Plays:  YHOO

Split Trader Stock Splits
  Split Announcement:
                         JBLU: 3-for-2 split announcement

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

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

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

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

First Tenn. Natl. - FTN - cls: 35.78 chg: -0.71 stop: 37.01

Company Description:
First Tennessee National Corp. is a nationwide, diversified 
financial services institution and one of the 50 largest bank 
holding companies in the United States in asset size and market 
capitalization. Banking and other financial services are provided 
through the FTN banking group and three national lines of 
business: First Horizon (First Horizon Home Loans and First 
Horizon Equity Lending), FTN Financial (capital markets, equity 
research, investment banking, strategic alliances and 
correspondent services), and transaction processing (First 
Horizon Merchant Services, credit card merchant processing; and 
Express Processing, nationwide payment processing operation).
(source: company press release)

Why We Like It:
In reality there isn't anything in particular about FTN that 
we're bearish about - at least fundamentally.  The company 
actually reported record third quarter earnings on Oct. 16th.  
First Call had been expected 69 cents a share and FTN turned in 
73 cents due to low interest rates boosting mortgage volumes and 
origination fees (Reuters).  We do believe the Banking sector is 
looking a little top heavy and among the other banking stocks FTN 
appear to be one of the easiest to short.  It's less expensive 
than BAC (dollar wise, so we can short more shares if we want to 
for the same cash) and FTN is failing near its significant moving 
averages while BAC, who really looks like it has room to fall, 
still has some significant support below it.  One can easily 
argue that FTN has support at $34 and we won't deny it.  It is 
possible any future decline could stall there but if the markets 
decide to retrace a hefty portion of its two week rally we don't 
believe the $34 level for FTN will hold.  Astute chart readers 
will also notice that a chart of FTN looks almost identical to 
the $BIX banking index (okay, it's pretty darn close).  
Technically, FTN still has a bullish MACD but it looks like it's 
starting to roll and the histogram is indicating weakness.  Plus 
the stochastics on both a 14,1,3 and a 5,3,3 setting are both 
overbought and rolling over.  The PnF chart isn't too clear.  The 
stock is on a column of X's after bouncing at bullish support 
near $30.

We don't believe the pull back will move retrace all of the 
recent gains but a decent bout of profit taking could allow for a 
10% move in FTN.  We're going to start the play at current levels 
with a stop above the recent high (three days ago).  Conservative 
traders who prefer to catch something while it is moving may want 
to wait for FTN to trade below the near term support (from 
Wednesday and Thursday) at $35.50 or they can wait for FTN to 
trade below $35 before initiating a short position.

Annotated Chart - FTN



Picked on October 24th at $30.74
Results since picked:      +0.00
Earnings Date           10/16/02 (confirmed)




--- 

Martin Marietta Mat. - MLM - cls: 28.26 chg: -0.51 stop: *text*

Company Description:
Martin Marietta Materials, Inc. is the nation's second largest 
producer of construction aggregates and a leading producer of 
magnesia-based chemicals used in a wide variety of industries. 
(source: American Stock Exchange)

Why We Like It:
The name "Martin Marietta" conjures up images of jet fighters and 
missiles, even though the defense contractor merged with Lockheed 
several years ago.  Some may be surprised to learn of the low-
tech business that drives the company's spin-off.  Martin 
Marietta Materials works in the construction industry, providing 
builders with crushed stone, sand, and chemicals.  Not exactly 
rocket science.  Certain segments of the construction sector 
(namely the homebuilders) have done a good job of weathering the 
latest economic downturn, but this is not the case with MLM.  
Last Friday's earnings warning highlighted the difficulties that 
the company must deal with.  MLM said it expects Q3 earnings of 
80 cents/shares, compared to previous guidance of 95 cents/share.  
In addition to the loss of revenues stemming from a steep decline 
in commercial construction, extensive state budget deficits have 
led to delays in road construction.  The latest Beige Books 
numbers confirm that commercial construction spending is 
declining.  As long as the economy remains weak, it's hard to 
imagine that business will pick up for MLM anytime soon.

As could be expected, shares of MLM were pressured by last week's 
warning.  The stock gapped lower and has since trended lower on 
stronger-than-average volume.  Today's breakdown below $28.40 
took the stock to new multi-year lows.  Given the lack of any 
immediate support levels, we think MLM will continue to decline.  
Pulling back to a weekly chart, we see that the stock has 
historical support at $25.00.  We'll initially target a move to 
this area, but a larger sell-off wouldn't be out of the question 
if investors begin to bail out ahead of the company's October 
31st earnings report.  In order to ensure that MLM is breaking to 
fresh lows, this play will not be activated until shares trade 
below $28.00.  The p-n-f chart shows that a move under this level 
would also create a double-bottom sell signal on the p-n-f chart.  
If we're triggered our stop will be located at $29.61, slightly 
above Tuesday's high.  Those willing to take a bit more heat 
could use a stop just above psychological resistance at $30.00.

Picked on October xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           10/31/02 (confirmed)
 



--- 

Superior Industries - SUP - cls: 43.40 chg: -1.28 stop: *text*

Company Description:
Superior supplies aluminum wheels and other aluminum automotive 
components to Ford, General Motors, DaimlerChrysler, BMW, 
Volkswagen, Audi, Land Rover, MG Rover, Toyota, Mazda, 
Mitsubishi, Nissan, Subaru and Isuzu. (source: American Stock 
Exchange)

Why We Like It:
As you can see from the above description, SUP earns its money by 
selling wheels and other components to the major auto 
manufactures.  That fact could weigh heavily on the stock in the 
weeks to come.  Although zero-interest financing had cars zooming 
off the lots over the past year, this brisk pace seems to be 
subsiding.  The Beige Book data released on Wednesday indicated 
"motor vehicle sales generally slowed from very high levels."  
This does not bode well for Superior Industries.  The company 
recently announced some new contracts, but future revenue still 
largely depends on strong auto sales.  On a technical basis, we 
like SUP as a short play because of the way shares have rolled 
over from resistance at the converging 50-day ($45.41) and 200-
day ($45.07) moving averages.  This level is also the location of 
descending resistance on both the bar chart and the point-and-
figure chart.  The falling daily stochastics (5,3,3 setting) 
provide more ammunition for the bears.  The last four times the 
stochastics fell out of the overbought region, shares were met 
with heavy selling.  We're optimistically targeting a retest of 
the recent lows near $36.00.  Shares bounced from just under 
whole-number support at $43.00 today, so we're going to place an 
entry trigger at $42.97.  If this play is activated we'll use a 
stop at $46.01, above the relative high and the aforementioned 
moving averages.  Shorter-term traders could use a tighter stop 
and target a decline to the $40.00 area.

Annotated chart - SUP



Picked on October xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           10/17/02 (confirmed)
 




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

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

Retail HOLDRS - RTH - close: 77.17 change: -0.83 stop: *text*

With RTH trading well above $75.60 over the past two sessions, 
this play remains inactive.  Thursday morning's rally above the 
50-dma ($77.56) seemed to indicate that the bulls were firmly in 
control.  However, these gains were eroded by the afternoon sell-
off on the Dow Jones.  RTH finished under the 50-dma and posted a 
1.0% loss.  This reversal is a bearish sign, and tomorrow's 
economic data could really get shares moving to the downside.  
Michigan consumer sentiment will be released on Friday morning 15 
minutes after the opening bell.  A downside surprise (estimated 
reading is 81.0) would pressure the retail sector.  With RTH 
still technically overbought (check out those falling daily 
stochastics), we're going to keep our entry trigger ($75.60) in 
place.  If this play is activated we'll use a stop at $79.01.  
More aggressive traders could use a stop just above today's high 
of $79.55.

Picked on October xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date                N/A



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

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

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

AT&T Corp. - T - close: 13.40 change: +0.35 stop: 11.98

The IXTCX combined telecom index pulled back today after several 
consecutive positive sessions.  The winning streak looked like it 
would be extended another day, but this afternoon's widespread 
equity weakness sapped the sector's strength.  T traded in a 
similar fashion, as shares moved to a new relative high before 
following the Dow Jones lower.  Although the stock closed one 
cent above its 200-dma, further weakness in the Industrials could 
lead to more selling.  We've given T plenty of breathing room 
with a stop at $11.98.  If shares fall below $13.00, we'll be 
looking for previous resistance in the $12.75 area to act as 
support.  We would not advise taking new positions until T trades 
above $13.50.

Picked on October 23rd at $13.40 
Results since picked:      -0.29
Earnings Date           10/22/02 (unconfirmed)
 




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

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

Yahoo! Inc. - YHOO - cls: 15.06 chg: -0.01 stop: 15.26

YHOO opened strong on Thursday and gapped above our stop-loss, 
closing our play for a loss of 6.7%.  The reason for this early-
morning bullishness isn't exactly clear.  YHOO was targeted by a 
brokerage downgrade, and there wasn't any positive company-
related news to explain to rise.  We did notice EXPE trading 
sharply higher following its earnings report.  This may have 
helped to put a bid under the internet sector during the first 
half of the session.  The sinking broader market took its toll on 
YHOO during the final two hours of trading, dragging shares back 
below the $15.00 level.  Today's breakout to new relative highs 
is a positive technical development for YHOO, but investors will 
be paying more attention to tonight's earnings announcement from 
AMZN.  The company announced a 33% increase in revenue and beat 
estimates by 4 cents.  Shares were trading slightly lower in 
after-hours, indicating that the good news may have already been 
factored in by the recent rally.  YHOO might head lower if the 
internet sector sells off tomorrow, but the bears will have to 
contend with near-term support at $14.25.

Picked on October 15th at $14.42 
Results since picked:      -0.98
Earnings Date           10/09/02 (confirmed)
 





=================================================================
Split Trader Stock Splits (ST) section
=================================================================

Split Announcements
-------------------

JetBlue Offers Investors 3-for-2 Stock Split

Just as the market opened today, JetBlue Airways (NASDAQ:JBLU) 
announced that its Board of Directors had declared a 3-for-2 stock 
split.

The split will be distributed on December 12, 2002 to shareholders 
of record on December 2, 2002.

JBLU came to market as a much-hyped IPO in April.  The stock has 
been trending lower since for several months, but has held up 
relatively well compared to most of the larger airlines.  Shares 
have dropped 31% from its all-time high on May 6th, while the 
XAL.X airline index is down 56% over the same time period.  The 
company's streamlined business approach seems to have been 
effective in keeping operating expenses at a manageable level.

JBLU closed at $36.44 on Wednesday.  For a current quote, click here:

http://user.financialcontent.com/pin1/quote.cgi?account=pin1&ticker=JBLU

About the company
JetBlue is a low-fare, low-cost passenger airline, which provides 
high-quality customer service. Since launching operations in 
February 2000, the airline has carried more than eight million 
passengers. JetBlue operates a fleet of 31 new Airbus A320 
aircraft and is scheduled to place into service another five new 
A320s by the end of 2002 (source: company press release)


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

UNP     Union Pacific              61.20     +1.57
PBR     Petroleo Brasileiro Sa     12.58     +0.72
CTL     CenturyTel Inc             28.10     +1.30
IVX     Ivax Corp                  13.10     +0.75
ARA     Aracruz Celulose Sa        16.85     +0.60
UDI     United Defense Industries  22.00     +1.35

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

TYC     Tyco Intl Ltd              15.49     +1.55
CMX     Caremark Rx Inc            18.90     +1.08
RHI     Robert Half Intl           17.63     +1.30
CBD     Companhia Brasiliera       14.20     +1.15
FDRY    Foundry Networks Inc        7.60     +1.35
SLVN    Sylvan Learning Sys.       14.89     +1.03

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

ROOM    Hotel Rsrvtns Network      60.36     +1.55
EXPE    Expedia Inc                64.20     +6.59
AJG     Arthur J. Gallagher        26.55     +1.28
CVD     Covance Inc                21.65     +2.55
LF      LeapFrog Enterprises       24.50     +1.01
PECS    Pec Solutions              32.53     +1.42

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

LLY     Eli Lilly & Co             55.71     -2.38
DOW     Dow Chemical Co            24.97     -2.57
HI      Household Intl             22.83     -3.62
MGG     MGM Mirage Inc             30.03     -1.12
AHC     Amerada Hess Corp          57.77     -8.08
SPW     SPX Corp                   85.00     -2.50

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

CCU     Clear Channel Commun       37.25     -2.83
WLP     Wellpoint Health Network   80.46     -4.10
MEDI    Medimmune Inc              24.30     -3.05
CHIR    Chiron Corp                38.32     -3.04
AGN     Allergan Inc               57.40     -4.25
BLL     Ball Corp                  49.52     -3.47
SUN     Sunoco Inc                 30.48     -1.24
AG      AGCO Corp                  23.38     -2.00
BMET    Biomet Inc                 29.56     -1.19




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