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Daily Newsletter, Thursday, 10/31/2002

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PremierInvestor.net Newsletter                 Thursday 10-31-2002
                                                    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:      Longest October on Record
Play-of-the-Day:  Biotech Wreck
Market Sentiment: A Scary Story


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      10-31-2002           High     Low     Volume Advance/Decline
DJIA     8397.03 - 30.40  8493.92  8336.34 1.85 bln   1776/1417
NASDAQ   1329.71 +  3.00  1347.58  1323.09 1.68 bln   1746/1589
S&P 100   451.23 -  1.37   457.21   447.52   Totals   3522/3006
S&P 500   885.80 -  4.91   898.83   879.75
RUS 2000  373.49 -  0.68   376.71   373.05
DJ TRANS 2260.07 - 17.20  2301.41  2249.54
VIX        35.91 -  0.17    36.70    35.14
VXN        52.00 +  1.70    53.67    51.52
Total Vol   3,767M
Total UpVol 1,922M
Total DnVol 1,751M
52wk Highs   118
52wk Lows    146
TRIN        1.75
PUT/CALL    0.87
*************************************************************

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

Longest October on Record

I know that is not a real fact but it sure seemed that way. I
felt like I have been waiting for today to come for months. The
year end for many large funds has passed and all the dressing
up for statements is over. Unfortunately the waiting is not
over. Normal, whatever that means to you, probably will not
return to the markets until Thursday of next week.

Dow Chart


Nasdaq Chart


What a day to be a fund manager. The economic reports are the
worst in months and you have to buy stocks to appear fully
invested and ready for the new bull market. It is like getting
caught doing something wrong in front of your friends in high
school and being told to report to the principal's office before
going to class tomorrow. You have to keep up pretenses for the rest
of the day to avoid losing face with your crowd but knowing that
you are going to get serious licks by the principal the next
morning. I am obviously dating myself and speaking from personal
experience. They probably don't give "licks" any more in high
school but I racked up 17 consecutive days once in the mid 60's.

Back to the point. Funds that were forced to go long today to
save face are likely to get whacked at the open tomorrow. The
terrible economic news is eventually going to strike home and
Friday could be the start of that process.

The day began with a GDP for Q3 that at 3.1% was far below
consensus of 3.7%. Inventories rose only $1.9 billion which
indicates that businesses are not expecting any recovery anytime
soon. This was down from $4.9 billion in Q2. This paints a
lower profit picture for Q4 since lack of inventory prevents
sales growth. What GDP growth there was came from auto sales
which were 22.7% of the growth. Economists have been saying
that the quarter began with a bang and ended with a sigh. The
majority of the gains came in July when growth spurted to +4%
for several weeks on the back of summer auto sales but slowed
to the current estimates of only 1.7% by quarter end.

This paints a very negative picture of the current economy.
Auto sales have dried up. Mortgage applications fell -20% last
week and it was the third weekly drop in a row. The housing
bubble is bursting and the refinancing wave is over. Estimates
of GDP for the 4Q are less than 2.0%. Several analysts
pointed to a 6% jump in business equipment and software as
evidence of a recovery but they forgot about the one time sale
that Microsoft held when it changed its licensing method.
Remember the record bounce in MSFT earnings reported this month
from that one time event. Ditto for the internal GDP numbers.
Take that away and the overall number would even be worse.

The Chicago PMI also fell significantly below estimates of 49.5
to 45.9 and indicating a signification contraction in the Midwest
economy. This is the lowest level since January and as the second
month in negative territory signals the end of a seven month
recovery. The PMI also showed continued weakness in payrolls.

The combined GDP, PMI and higher than expected Jobless Claims
numbers today paint a dreary picture for Friday's critical reports.
The PMI is a leading indicator for the more important ISM numbers
and the ISM was already showing negative growth last month at
49.5. The nonfarm payrolls, estimated at -15,000 for tomorrow,
could also be at risk despite a slight rise in help wanted ads.
We will also see the Personal Income and Spending and Construction
Spending on Friday. October vehicle sales could be the last nail
in the coffin. It will be a very full morning.

The Dow finished the month about 30 points from posting the best
October on record, ever. Coming in second best was no small feat
with a +10.6% gain. This was the best monthly gain for the Dow
since Jan-1987. Unfortunately, every time the Dow has posted a
double digit gain since 1926 the following month showed a high
single digit drop. Every time! That does not mean November is
a guaranteed drop but I would not bet against it based on the
fundamentals. The outlook for the 4Q is so bad that even food
stores are issuing warnings. Albertsons said it expected profits
to drop based on a steeper than expected drop in sales. It also
cut expectations for the entire year. Wal-Mart was blamed in
part for stealing business from food chains but even Wal-Mart
has warned that sales are falling.

The wild card here is the Fed meeting on Wednesday. If there was
no impending Fed meeting the market numbers would already be more
scary than anything that will come knocking on your door tonight.
There are so many conflicting guesses about the Fed's move that
the outcome is far from clear. The market has priced in more than
a 25 point cut but almost zero chance of a 50 point cut. There
are many analysts that think the Fed will not cut at all and
will stick with the "current stimulus is adequate" mantra and
not risk scaring investors with an "oh my gosh, it is really bad"
type of reaction. Since there has been no Fedspeak leaning toward
a rate cut there is a feeling they will hold pat and put pressure
on the ECB to cut rates first. The Fed does not want to weaken
the dollar any more unless the ECB follows suit. Not cutting
next week would put the pressure on them.

Many feel they will cut 25 points to show they feel our pain
even though it would have zero impact on the economy for at least
six months. At 1.75% we already have the lowest funds rate in
decades and according to all published Fed comments they feel
it is sufficient to fuel the recovery.

This is the way it is shaping up for me. A .25% cut is priced into
the market already. A .25% cut would leave the markets depressed
and we could see a negative reaction. A .50% cut would bring out
concerns of deeper problems than we can see and while there might
be an immediate bounce in the markets it should not last more than
a couple days before current fundamentals take hold again. With
no rate cut we could get the instant drop as the current expectations
are taken out of the market but then a rebound as the Fed will go
on the campaign trail to promote the "current stimulus is adequate"
story.

Whatever will happen is of course still four trading days away.
This means the verbal battle will continue in the press with
everyone getting their 15 min of face time on TV. They will
rationalize the drop in consumer spending and try to spin the
kinder gentler slow growth economy as "recovering" instead of
dipping. The confusion is going to keep investors on the sidelines
and without positive Fedspeak there will be plenty who will close
positions and move to the sidelines to avoid the possible unknowns.
Add into this the gains in the last two weeks as mutual finds
stacked their portfolio decks and you have a very good chance of
that house of cards collapsing.

Friday could be explosive or implosive. If the economic reports
come in better than expected then the initial reaction will be to
celebrate but they will then start discounting the chances of a
rate cut. Mass confusion. If the reports are worse than expected
the hopes for a rate cut will rise but the economic fundamentals
will have worsened. We have not seen any strong impact from the
last 12 cuts and one more is not likely to do any better. What
we are going to have is four more days of trading confusion with
a probable downward trend. Remember, a 25 point cut is already
priced in and everything else is just smoke. You have to ask
yourself why anyone would risk the precious capital they have
left by going long in front of the Fed meeting. Also, remember
the Fed needs to save its ammo for a response to a future
terrorist attack and in case the war in Iraq goes badly. They
do not want to be in the same shape as Japan with a zero interest
rate, no more bullets and the economy still falling.

Now that I have totally confused you I think that you should also
remember that the election is on Tuesday. Incumbents typically
do badly when the markets are crashing on election day. That
sets up another possibility of artificial manipulation that only
conspiracy theorists will admit to. Can we please just fast
forward to next Thursday and end the pain of uncertainty? No
such luck I am afraid.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Human Genome Sciences - HGSI - cls: 9.77 chg: -0.49 stop: *text*

Company Description:
Human Genome Sciences is a company with the mission to treat and cure
disease by bringing new gene-based drugs to patients. (source: company
press release)

Why We Like It:
Human Genome did not impress Wall Street with its earnings report
on Tuesday.  The company said that ongoing efforts to move their
experimental drugs through clinical trials had resulted in a net
loss of 58 cents/share for the third-quarter, tripling last
year's Q3 loss.  Consensus estimates were for a loss of only 38
cents.  Such a severe earnings miss would typically result in the
stock getting slaughtered, but investors seem to be a little more
forgiving in the speculative realm of biotechnology.  Still, the
bad news has not gone unnoticed.  HGSI gapped lower on Tuesday
morning and broke through support at $10.50.

Today's trading saw the stock fall under the $10.00 level for the
first time since 1999.  Selling volume has been high, which
suggests that shares may continue to fall in the short-term.  (On
a related note, check out that huge volume spike on October 17th.
The stock was hammered after a brokerage report indicated that
Human Genome might have only a year before it has to start
raising cash to operate and pay off debts.  This is easier said
than done for a biotech company with plenty of drugs in the
pipeline but no products on the market.)  This week's breakdown
is enough to have the bears licking their chops, and additional
technical negativity is provided the quadruple-bottom sell signal
on the point-and-figure chart.  Given the lack of underlying
support, we think HGSI could easily test the 1999 lows near
$7.00.  We'd like to see more evidence of weakness before
entering this paper trade, so we've placed an entry trigger at
$9.49.  If we're triggered we'll use a stop slightly above
Tuesday's high, at $10.81.  Those who are a bit more aggressive
could use a stop above $11.00.

Point-and-figure chart - HGSI:



Picked on November xxth at $xx.xx <-- see text
Results since picked:       +0.00
Earnings Date            10/29/02 (confirmed)





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

A Scary Story

by Steven Price

The bears and the bulls both got a little taste of what they were
looking for today. Economic numbers were horrible, and hopes of a
rate cut were fueled. The jobs data, which was expected to show
400,000 first time jobless claims last week, instead came in at
410,000.  GDP, predicted to show the economy growing at a 3.6%
clip, came in at only 3.1%.  Auto sales, which increased 42.2% as
a result of zero-percent financing, accounted for more than half
of the increase in GDP over last quarter. However, on the
positive side, there were some increases in business spending on
equipment and software for the bulls to hang their horns on.
Chicago PMI, a measure of Midwest manufacturing activity, showed
contraction, registering a reading of 45.9% - short of
expectations of 49.1%.  Bad economy?  Guess we really, really
need a reduction in the fed funds rate. Are you listening Alan?
The bulls are betting that he is.

While the initial reaction to the numbers was a boost in the
market, the Dow had given up -30.38 by the end of the day.  What
we are seeing is short-term bulls betting on a rate cut next
Wednesday of possibly 50 basis points, while the bears are seeing
economic numbers that should have a long-term negative effect on
the market. Talk of a rate cut is focusing on how much, not if,
we will get one. Tomorrow will bring more economic news, with the
ISM index, nonfarm payrolls, October unemployment, auto and truck
sales, and personal income and spending.  The reaction could be
more of the same.  Bad news = rising market.  However, anything
short of a 50 basis point cut already seems priced in, so a rally
should be short lived.

The retail sector appears to finally be rolling over, after the
combination of low Consumer Sentiment and a Wal-Mart downgrade.
The Retail Index (RLX.X) has finally broken the 50-dma to the
downside, and confirmed a similar move in the Retail Holders
(RTH), which made tonight's put play list.  Wal-Mart (WMT)
commented that Halloween sales were lower than expected and given
today's economic data, it doesn't appear holiday sales will be
setting any records this year. Consumer spending makes up 2/3 of
GDP, so a miss of 14% of the expected GDP number translates into
a significant miss for retailers' targets as well.

SEC Chairman Harvey Pitt is under the gun once again for his
accounting board chairman pick. Pitt selected William Webster to
head the oversight committee.  Webster headed the audit committee
of U.S. Technologies, which is facing shareholder lawsuits for
alleged fraud over accounting problems.  Pitt apparently knew
this before he made the selection, but did not share the
information with SEC commissioners, or the White House.  Pitt has
asked the SEC's inspector general to look into the Webster
selection.

According to the National Association for Business Economics,
members have scaled back capital spending for the sixth straight
quarter.  This would seem in contrast with the business spending
numbers on the GDP release. The NABE called this, "an ominous
sign for the outlook for economy-wide investment."  The news is
nothing new, after we have been hearing the mantra of capex
reductions over the last quarter.  However, we now have concrete
evidence of the industry-wide trend.

October registered the biggest monthly gain in the Dow since
1987; however, all of that gain was simply a rebound from
September's losses, falling 266 points shy of a full bounce. I
don't want to sound like a party pooper, but signs continue to
point negative.  The Fed speculation should keep a floor under
the market for the next few days, but unless we get a surprise of
more than 25 basis points from the FOMC, I wouldn't be putting on
full long positions in more than a few select issues.

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

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7286
Current     :  8397

Moving Averages:
(Simple)

 10-dma: 8412
 50-dma: 8200
200-dma: 9300

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  775
Current     :  885

Moving Averages:
(Simple)

 10-dma:  889
 50-dma:  871
200-dma: 1003

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     :  989

Moving Averages:
(Simple)

 10-dma:  976
 50-dma:  915
200-dma: 1166

The Retail Index (RLX.X): The Retail Index rebounded impressively
from Tuesday's poor Consumer Sentiment numbers.  However, a
Wednesday downgrade to Wal-Mart (WMT), and slower than expected
GDP were too much for the group.  The RLX finally broke below its
50-dma on Wednesday and continued lower today. Heading into the
holiday shopping season, things do not look bleak, as consumer
spending is likely to continue is slowdown.  Many stores have
already lowered monthly sales projections (WMT has cut its usual
same store sales projections in half), so that they can claim the
numbers are on track, but the trend remains obvious. We are
looking at shorts in the sector and after not even a rate cut
will be able to make its way into consumers' pockets by
Christmas.

52-week High: n/a
52-week Low : 252
Current     : 282

Moving Averages:
(Simple)

 10-dma: 290
 50-dma: 286
200-dma: 321

Market Volatility

The VIX has clung to the mid 30s, as the market has hovered close
to unchanged.  With a slew of economic data today and tomorrow,
followed by the FOMC rate announcement next week, we are likely
to see it stay in this range, or possibly creep higher if the
data continues to miss estimates. Tomorrow should be a telltale
sign, seeing what premium positions traders are willing to take
home after we finish two days of economic stats.  If the news is
positive, they may not want to get caught with time decay over
the weekend.  If the news is negative, don't plan on much of a
weekend decline.

CBOE Market Volatility Index (VIX) = 35.91 -0.17
Nasdaq-100 Volatility Index  (VXN) = 52.99 +1.70

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.87        448,430       389,096
Equity Only    0.79        359,127       282,879
OEX            0.84         18,065        15,105
QQQ            1.96         29,448        57,860

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

Bullish Percent Data

           Current   Change   Status
NYSE          37      + 1     Bull Confirmed
NASDAQ-100    55      + 1     Bull Alert
Dow Indust.   57      + 0     Bull Confirmed
S&P 500       49      + 1     Bull Alert
S&P 100       55      + 0     Bull Alert

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

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

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

5-Day Arms Index   1.20
10-Day Arms Index  1.02
21-Day Arms Index  1.02
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       1484          1267
NASDAQ     1646          1512

        New Highs      New Lows
NYSE         23              53
NASDAQ       45              70

        Volume (in millions)
NYSE     1,828
NASDAQ   1,748

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

Commitments Of Traders Report: 10/22/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the
Chicago Mercantile Exchange and Chicago Board of Trade. COT data
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being
financial institutions. Commercials are historically on the
correct side of future trend changes while small specs tend
to be wrong.

S&P 500

Commercials added to both long and short positions, however
increased shorts by an additional 11,000 contracts.  Small
traders left long positions virtually unchanged, but reduced the
short side by 11,000, taking the opposite approach.

Commercials   Long      Short      Net     % Of OI
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%)
10/22/02      432,775   463,827   (31,052)   (3.5%)

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
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     23.3%
10/22/02      134,641    72,681    61,960     29.8%

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

NASDAQ-100

Commercials increased their long contract positions by 3,400
contracts, while increasing shorts by 2,100.  Small traders left
longs unchanged, while reducing shorts by 3,600.

Commercials   Long      Short      Net     % of OI
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%)
10/22/02       48,954     54,088    (5,134) ( 4.9%)

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
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%
10/22/02       10,202     8,892     1,310    11.8%

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

In a continuing trend with other markets, commercials increased
short positions by 2,000 more contracts than they increased
longs.  Small traders reduced longs positions by 1,600 and shorts
by 1,000.

Commercials   Long      Short      Net     % of OI
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%
10/22/02       22,189    13,448    8,741      24.5%

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
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%)
10/22/02        4,445     9,270    (4,825)   (35.1%)

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                 Thursday 10-31-2002
                                                    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
  Bearish Play Updates:  HIG, MO, SUP

High Risk/Reward
  New Bearish Plays:     HGSI
  Bullish Play Updates:  T, WPI

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 Play Updates
===============

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

Hartford Fincl. - HIG - cls: 39.50 chg: -0.67 stop: 42.26

For those who might have missed the last update, we'll briefly
recap Wednesday's action: HIG gapped sharply lower after being
targeted by three separate brokerage downgrades.  Our play was
activated at the opening trade of $42.00, and shares finished
just above $40.00.  Today's trading saw HIG fall under this level
and continue lower with a 1.6% loss.  This is a good sign for the
bears, and at this point it looks like shares may retest the
October lows near $37.00.  We've set a profit-target slightly
above this area at $37.51.  This would represent a gain of
roughly 10% from our entry point.  Yesterday's steep decline
makes gauging new entries a tricky proposition, but aggressive
traders with a very short-term approach could target a breakdown
below Wednesday's low of $38.94.

Picked on October 30th at $42.00
Results since picked:      +2.50
Earnings Date           10/28/02 (confirmed)




---

Phillip Morris - MO - close: 40.75 change: -0.59 stop: 44.11

Flat, directionless trading characterized the Dow Jones on the
final day of October.  Save for a brief pop higher during the
first hour, the index moved in a narrow range with neither the
bulls nor bears showing much conviction.  Given the lack of
movement, it was encouraging to see MO reach another short-term
low.  The stock underperformed the broader market and faded
fellow tobacco stocks LTR, RJR, and UST, all of which posted
small gains.  MO gave back 1.4% on Thursday and closed near the
worst levels of the day.  A similar downside move would have the
stock testing the $40.00 region on Friday.  We're anticipating
some support at this level, but the recent downtrend indicates
that MO will eventually move lower.  A breakdown below $40.00
would present an opportunity to initiate new short positions.

Picked on October 29th at $41.49
Results since picked:      +0.74
Earnings Date           10/17/02 (confirmed)




---

Superior Industries - SUP - cls: 42.47 chg: -0.48 stop: 46.01

Much like the major market indices, SUP spent the last two
sessions trading in a sideways fashion.  The company announced
earlier this week that it had declared a quarterly dividend of
$0.125/share (payable on January 24th to stockholders of record
on January 10th), but this news did not appear to have any impact
on the stock.  SUP still looks like it could fall to the $36-$38
region, but the bears will probably need some assistance from the
broader market.  The rising daily stochastics (5,3,3) indicate
that shares may continue to find support near $42.00.  Although
we're keeping our stop set at $46.01, more conservative traders
may want to use a stop slightly above the 50-dma at $45.20.  With
SUP not moving in any clear direction, we would not advise taking
new entries at this time.

Picked on October 28th at $42.97
Results since picked:      +0.50
Earnings Date           10/17/02 (confirmed)






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

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

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

Human Genome Sciences - HGSI - cls: 9.77 chg: -0.49 stop: *text*

Company Description:
Human Genome Sciences is a company with the mission to treat and cure
disease by bringing new gene-based drugs to patients. (source: company
press release)

Why We Like It:
Human Genome did not impress Wall Street with its earnings report
on Tuesday.  The company said that ongoing efforts to move their
experimental drugs through clinical trials had resulted in a net
loss of 58 cents/share for the third-quarter, tripling last
year's Q3 loss.  Consensus estimates were for a loss of only 38
cents.  Such a severe earnings miss would typically result in the
stock getting slaughtered, but investors seem to be a little more
forgiving in the speculative realm of biotechnology.  Still, the
bad news has not gone unnoticed.  HGSI gapped lower on Tuesday
morning and broke through support at $10.50.

Today's trading saw the stock fall under the $10.00 level for the
first time since 1999.  Selling volume has been high, which
suggests that shares may continue to fall in the short-term.  (On
a related note, check out that huge volume spike on October 17th.
The stock was hammered after a brokerage report indicated that
Human Genome might have only a year before it has to start
raising cash to operate and pay off debts.  This is easier said
than done for a biotech company with plenty of drugs in the
pipeline but no products on the market.)  This week's breakdown
is enough to have the bears licking their chops, and additional
technical negativity is provided the quadruple-bottom sell signal
on the point-and-figure chart.  Given the lack of underlying
support, we think HGSI could easily test the 1999 lows near
$7.00.  We'd like to see more evidence of weakness before
entering this paper trade, so we've placed an entry trigger at
$9.49.  If we're triggered we'll use a stop slightly above
Tuesday's high, at $10.81.  Those who are a bit more aggressive
could use a stop above $11.00.

Point-and-figure chart - HGSI:



Picked on November xxth at $xx.xx <-- see text
Results since picked:       +0.00
Earnings Date            10/29/02 (confirmed)





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

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

AT&T Corp. - T - close: 13.04 change: -0.16 stop: 11.98

Common market wisdom says that the direction of the overall
market usually dictates the majority of an individual stock's
movement.  AT&T provides a perfect case in point.  With the Dow
Jones showing no clear direction, T has continued to meander
above the 200-dma ($12.95).  The ability of shares to remain
above this moving average is a bullish sign, but the bulls will
have a tough time pushing T to new relative highs without some
help from the broader market.  We're expecting the action to pick
up next week, with Tuesday's elections and Wednesday's FOMC
meeting providing added volatility.  Although our stop is
unchanged, traders looking to minimize downside risk could use a
stop just under the rising 50-dma at $12.29.  In the news today,
AT&T said that it could complete the spin-off of its Broadband
cable until as early as next week.  This will be concurrent with
a one-for-five reverse stock split.  We'll keep you apprised of
further details as they become available.

Picked on October 23rd at $13.40
Results since picked:      -0.36
Earnings Date           10/22/02 (unconfirmed)




---

Watson Pharma. - WPI - cls: 27.49 chg: -0.31 stop: 24.34

In the most recent update for WPI we said we were looking for
shares to move into the unfilled gap from late-March.  Shares
moved higher this morning and came within just two cents of
accomplishing this feat.  But try as they might, the bulls
weren't able to push WPI above the top of the gap at $28.20.  The
stock pulled back with the broader market and traded in a small
50-cent range for the duration of the trading day, ultimately
finishing with a 1.1% loss.  Technically, we're seeing some
possible signs of weakness.  WPI produced a bearish engulfing
candlestick on the daily chart and the same interval is
displaying overbought stochastics.  Going forward, we'll be
looking for shares to break above today's high and rapidly move
towards the $30.00 area.  Watson announces earnings before the
bell on Wednesday, November 6th.  We'll probably be closing this
play ahead of the announcement to eliminate the risk of any nasty
surprises.

Picked on October 28th at $26.20
Results since picked:      +1.29
Earnings Date           11/06/02 (confirmed)





==================
  Trading Ideas
==================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

CSC     Computer Sciences Corp     32.29     +0.97
NVDA    Nvidia Corp                11.90     +0.66
UCO     Universal Compression      19.40     +0.65
SEE     Sealed Air Corp            15.32     +0.51
SMD     Singing Machine            12.80     +0.64
RSC     Rex Stores Corp            11.95     +0.93
CED     Canadian Natural Res.      27.70     +0.88

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

SMSC    Standard Microsystems      19.17     +1.27
ADRX    Andrx Corp                 15.45     +1.89
EDS     Electronic Data Sys.       15.06     +1.31
INSP    Infospace Inc               8.11     +1.06
ATRS    Altiris Inc                12.93     +1.07
LQMT    Liquidmetal Tech.           7.99     +1.64
SMMX    Symyx Tech.                11.51     +1.07

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

OSI     Outback Steakhouse         34.05     +1.06
HAR     Harman Intl.               56.00     +1.50
RMD     Resmed Inc                 33.77     +1.77
PDX     Pediatrix Medical          40.00     +2.95
CDWC    CDW Computer Ctrs.         53.02     +1.22
COLM    Columbia Sportswear        40.22     +1.43
TTC     Toro Co.                   63.86     +1.56

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

CVX     ChevronTexaco Corp         67.63     -3.77
AMGN    Amgen Inc                  46.56     -1.48
UHS     Universal Health Svcs.     48.48     -2.62
ETM     Entercom Comm.             49.22     -1.39
HCP     Health Care Prop.          43.20     -1.18
BBY     Best Buy Co.               20.61     -1.15

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

CTSH    Cognizant Tech.            66.17     -0.46
MER     Merrill Lynch              37.95     -1.02
SKY     Skyline Corp               29.04     -0.82
CMCSK   Comcast                    23.01     -0.40
USTR    United Stationers          29.73     -0.57




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