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Daily Newsletter, Tuesday, 11/05/2002

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PremierInvestor.net Newsletter                 Tuesday 11-05-2002
                                                   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:      Bullish Sentiment Elected
Market Sentiment: Voting Stock
Play-of-the-Day:  Any Which Way But Lose

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      11-05-2002           High     Low     Volume Advance/Decline
DJIA     8678.27 +106.70  8691.38  8544.42 1.59 bln   1664/1486
NASDAQ   1401.17 +  4.60  1401.37  1379.33 2.06 bln   1634/1692
S&P 100   467.93 +  5.67   468.39   460.84   Totals   3298/3178
S&P 500   915.39 +  7.04   915.83   904.91
RUS 2000  386.07 -  0.90   386.97   382.93
DJ TRANS 2344.46 + 10.60  2346.88  2316.32
VIX        34.28 -  0.19    34.98    33.50
VXN        51.20 +  1.98    52.37    50.39
Total Vol   3,835M
Total UpVol 1,949M
Total DnVol 1,789M
52wk Highs   108
52wk Lows     96
TRIN        0.83
PUT/CALL    0.77
-----------------------------------------------------------------

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

Bullish Sentiment Elected

It is far too soon to know how the political elections turned
out but traders elected to be bullish again today. It is unknown
what is powering the sentiment other than the overwhelming
assumption that the Fed will cut rates on Wednesday. Early
comments from the election reporters seemed to indicate that
gridlock would remain and that means no immediate danger to
the status quo. It appears bulls are celebrating in advance on
both counts.

Dow Daily Chart


Nasdaq Daily Chart


There was good economic news this morning if you call a smaller
than expected drop in the ISM service numbers good news. Analysts
were expecting a drop to 51.8 for October and the real number
came in at 53.1. This was still a drop in the rate or growth
but just not as bad as expected. This is just another indicator
that the mid-year recovery is continuing to slow but not at the
same rapid pace.

The recent rally in the market has brought out a flood of analyst
downgrades based on valuation. The common theme appears to be
that the unexpected bounce in most stocks has propelled them
well over what the lowered earnings expectations would support.
They were eager to recommend them four weeks ago but are now
aggressively cutting them while they are profitable. Some of
the stocks downgraded on valuation today were ADP, IBM, AXP,
LXK, ADNE, YHOO, NXTL and TLAB. Many stocks have come too far
too fast and we are starting to see an undercurrent to the
bullishness that wonders how much farther the market can go
without some positive economic news.

Circuit City added to the negative sentiment on the retail
sector for the holidays with a strong warning. The Chain Store
Sales Snapshot released today also showed a continued slide in
sales and projected a weak number when Retail Sales are announced
on Thursday.

AMAT was instrumental in knocking the chip sector for a rare
loss today with their news of a -1750 job cut and dismal
outlook last night. KLIC added to the gloom today by saying
they were looking into selling non-core assets to reduce costs
and conserve energy until a recovery appears. However, traders
bought the dip at 1:45 PM at the low of 307 on the SOX. It
appears no amount of bad news can weaken the chip sector before
the Fed meeting.

After the close today CSC announced earnings after the bell
but warned that it was lowering their earnings outlook due to
a continuing slowdown in technology spending. It blamed slack
demand in the U.S. and Europe for consulting and systems
integration for the shortfall. They lowered full year estimates
to $2.60 from $2.73 to $2.88 a share. Since IBM and EDS are
their primary competitors it would be safe to assume that those
companies are having trouble as well.

Despite the election today the markets rallied to near Monday's
highs with the Dow closing at 8675. Regardless of the election
outcome the major hurdle in front of us is the Fed meeting on
Wednesday and Cisco earnings after the close. The closer we get
to the Fed meeting the more cautious the commentators calling
for a 50 point cut are becoming. I have heard a greater number
of analysts saying a cut will not matter which is a politically
correct way of hedging their previous comments projecting a
cut. I have beaten this topic to death but the bottom line is that
the Fed has not said a word about the chances of a cut. This is
very uncharacteristic of them but it could be due to not wanting
to become an election target.

The bottom line is what can the Fed do "FOR" the market tomorrow?
A 25 point cut is already priced in and would cause a sell the
news event as traders captured profits. Since there is already
a 65% chance that we will see a 50 point cut by December a 50
point cut tomorrow would mean there was nothing else coming until
next year. After an initial pop on the news the markets would
likely sell off as traders took profits and moved to the sidelines
to see what will happen next. Of course no cut would be the worst
option. The bottom line is that the maximum expectation has already
been priced in and there is nothing the Fed can do to really juice
the market. Of course with investors buying bad news recently it
is entirely possible they buy the sell off on any news with an
eye that things will get better by the end of 2003.

As a postscript to the Fed meeting the Cisco earnings after the
close could actually be a bigger factor than the Fed. They have
widely been expected to miss the revenue numbers with one analyst
suggesting by -$200 million just this morning. Others think that
because they did not warn they will hit estimates and raise
guidance. Now that would be a surprise. However, a rumor from a
company that buys a lot of Cisco products is that they could not
get expedited shipments on products for the last month. This
implies that they were out of inventory due to better than
expected sales. There are other possible scenarios. They could
have let their inventory shrink to avoid massive write downs like
they have had to take in the past. Make only what you sell and
limit exposure to obsolescence. Since most boxes take only a
very small amount of time to manufacture it keeps you flexible.
Another possibility could have been parts held up by the dock
strike. Maybe the company was ordering the newer top of the line
products where there is demand while the rest of the line was
slipping. You can see it is very dangerous to speculate on market
rumors.

The only speculation I can see making tonight would be that the
market is very overbought and the chances for a rate cut have
actually diminished over the last two days. In normal markets
this would be the prime setup for a drop regardless of what the
Fed did. That would be my outlook for tonight. Expect a possible
bounce at the open if the CSC news does not tank IBM and then bleed
points until the 2:15 Fed decision. Any bounce will run into strong
resistance at 8725. I expect any good news from the Fed to be muted
due to the Cisco news after the close. Nobody is going to want
to go long with big bets with a Cisco time bomb only two hours
later. Thursday all bets are off as it will be tech driven and
depend on the Cisco guidance. Even if the stars align and the Fed
and Cisco don't disappoint the resistance at 9050 is likely to
hold until the economy shows signs of a recovery.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Voting Stock

by Steven Price

Whether today's rally was election related, or simply an attempt
to jump on the bandwagon ahead of Wednesday's FOMC meeting, it
still kept us range bound.  Of course, we are now in a higher
range than we were for the last two weeks, so it can be viewed as
bullish by those looking for a little reassurance that the 1400-
point Dow rally has been for real.  The Dow struggled to break
through 8550 from October 21 until Monday.  That level now
appears as support, with the next upside test at 8750.  Likewise,
the SPX has now broken above 900 for the first time since
September 11 and has found support there, as well. Don't pinch
yourself just yet, however, as the next 24 hours will be long
ones.

Tomorrow morning will bring the market's reaction to a new
political landscape.  Of course the market will have only a few
hours to digest the election results before Team Greenspan let's
us know just how low they'll go.  Some financial institutions are
calling for a fed funds rate cut of 50 basis points tomorrow
afternoon, however that seems very unlikely.  With the fed funds
futures predicting a cut of 25 basis points, and an already low
rate of 1.75%, the FOMC is likely to give us what we are
expecting.  They may even throw us bone by keeping an easing bias
for the near future.  There is another FOMC meeting a little more
than a month from now, so there will be a chance for another 25
points before the end of the year if needed. With the threat of
terrorism still very much existent and the economy growing,
albeit at a very slow pace, the Fed is likely be stingy with the
few rate cuts it has left.

SEC Chairman Harvey Pitt resigned tonight, after pressure mounted
surrounding his choice of William Webster to head the SEC's
accounting oversight board. Pitt failed to inform the commission
or the White House that Webster had been involved in an
accounting investigation a few years ago, although Webster had
told Pitt of the potential problem.

The Semiconductor Index finally gave something back today, after
gaining 52% since October 9.  At one point it looked like it may
test support at 300, but rallied at the end of the day to finish
down only 8.47, at 317.55.  Last night AMAT said it was cutting
11% of its workforce in an attempt to combat a 2-year slump in
chip demand, which got the group rolling downhill this morning.
In keeping with the recent trend however, the SOX shook off the
bad news to keep its up trend in tact. The index has been
following its ascending channel for the last month, and has
bounced from the lower trend line on each test, including today.

One market that is predicting a big win for the democrats is oil.
Crude Oil futures have been dropping like a stone, from a high of
almost $31 per barrel, to a close today of $26.01.  The threat of
an Iraqi invasion is being discounted in the oil market, which
would indicate a predicted shift of sentiment in Congress. While
most pundits will virtually guarantee an Iraqi regime change, the
oil futures are telling us that it may be a while.  Donald
Rumsfeld indicated yesterday that he "would expect that there
would be guard and reserve call-ups in the immediate period
ahead," however that does not necessarily mean we will invade
before the December oil futures expire.

The market internals gave mixed signals today, in spite of the
big gain in the Dow.  Advancing volume on the NYSE was only
favored 1.4:1 over declining volume. In the Nasdaq, which posted
a gain of 4.63, declining volume actually outpaced advancing
volume by about the same margin. We basically saw a market on
hold ahead of election results and the Fed announcement.

One important development was that the Nasdaq 100 and S&P 100
bullish percentages both shifted into bull confirmed status
today.  We now have the NDX, OEX, Dow and NYSE all giving strong
bullish point and figure signals.

While today may have been a snoozer, tomorrow should be just the
opposite. If the republicans gain control of the Senate, we could
see a rally in the morning.  However, if we get no more than a 25
basis point rate cut, the rally may be short lived.   If we get
no cut at all, watch out below.  If the democrats retain the
Senate, we may see a sell-off, or a very quiet open ahead of the
FOMC announcement.

The Put/Call ratio at the CBOE increased today to .77, however,
that level is somewhat neutral, relative to recent ratios. This
would indicate that the big players are not betting in either
direction. Keep an eye on 8750 Dow to the upside and 8550 to the
downside, in order to gauge direction after tomorrow's FOMC
announcement. In either case, give it a few minutes to settle in
before piling on, as there is usually tremendous volatility
immediately following the release. Once we get a directional
feel, we'll go for the quick hits, as history has told us that
volatility usually lasts a few days.

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

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7286
Current     :  8678

Moving Averages:
(Simple)

 10-dma: 8636
 50-dma: 8448
200-dma: 9282

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  775
Current     :  915

Moving Averages:
(Simple)

 10-dma:  912
 50-dma:  894
200-dma: 1000

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1050

Moving Averages:
(Simple)

 10-dma: 1047
 50-dma:  999
200-dma: 1158

-----------------------------------------------------------------
The Semiconductor Index (SOX.X): The SOX finally began giving
back its gain of more than 50% in the last month, after AMAT said
last night that it would lay off 11% of its workforce in order to
cope with declining demand in the chip industry.  While this was
a mantra heard often throughout earnings season, it has had
little effect on the soaring SOX.  Until the index breaks below
300, that level should be viewed as support.  Today's low of 306
reinforced that notion. While we are hesitant to play a sector
long that is seeing continued weakness, we won't jump in short
until there is a decisive support break.  Data from the
Semiconductor Industry Association indicated that the last
quarter saw a 20% increase from the year ago period, but

52-week High: 657
52-week Low : 214
Current     : 317

Moving Averages:
(Simple)

 10-dma: 298
 50-dma: 269
200-dma: 426

Market Volatility

The VIX is not acting as though the Dow was up over 100 points
and has reached a higher support level after breaking through
8550.  Most likely that is because there is so much uncertainty
swirling around today's elections and tomorrow's FOMC meeting.
Normally we would see a big drop in premium levels as the market
heads higher, and buy writing commences.  However, we will not
likely get that drop until the market chooses a direction later
in the week, following the FOMC announcement Wednesday afternoon.
If that direction is down, we may re-test 40.  If it is up, we
may crack 30 for the first time since early July

CBOE Market Volatility Index (VIX) = 34.28 -0.19
Nasdaq-100 Volatility Index  (VXN) = 51.20 +1.98

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.77        581,986       448,606
Equity Only    0.62        485,543       302,506
OEX            0.84         19,423        16,251
QQQ            0.71        113,414        79,985

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

Bullish Percent Data

           Current   Change   Status
NYSE          40      + 2     Bull Confirmed
NASDAQ-100    68      + 9     Bull Confirmed
Dow Indust.   63      + 6     Bull Confirmed
S&P 500       56      + 6     Bull Alert
S&P 100       60      + 6     Bull 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   0.97
10-Day Arms Index  1.04
21-Day Arms Index  0.90
55-Day Arms Index  1.27


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       1429          1284
NASDAQ     1536          1616

        New Highs      New Lows
NYSE         22              28
NASDAQ       56              39

        Volume (in millions)
NYSE     1,579
NASDAQ   1,691

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

Commitments Of Traders Report: 10/29/02

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 loaded up slightly on both sides of their position, adding
5,000 long and short contracts.  Small traders treated their positions
similarly, adding 3,000 contracts to both sides.


Commercials   Long      Short      Net     % Of OI
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%)
10/29/02      437,565   468,557   (30,992)   (3.4%)

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
10/08/02      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%
10/29/02      137,740    75,587    62,153     29.1%

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 left positions virtually the same, with a slight reduction
to the long side and a slight increase to the short side.  Small
traders added less than 1,000 contracts to both sides.


Commercials   Long      Short      Net     % of OI
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%)
10/29/02       47,837     55,261    (7,324) ( 7.1%)

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
10/08/02       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     6.6%
10/29/02       10,584     9,419     1,165     5.8%

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 kept the status quo here, as well, reducing the net long
position by 300 contracts, of 0.4% of open interest.  Small traders
increased longs by 1,200 and shorts by 2,000.


Commercials   Long      Short      Net     % of OI
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%
10/29/02       21,800    13,337    8,463      24.1%

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
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%)
10/29/02        5,602    11,090    (5,488)   (32.9%)

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

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


===============
PLAY-of-the-Day  ((new BEARISH non-tech play))
===============

Diamonds - DIA - close: 82.80 chg: +3.86 stop: 85.01

Company Description:
The Diamonds Trust is a Dow Jones tracking stock that is traded
on the AMEX.  Options are available for interested traders.

Why We Like It:
It's a simple plan.  When we have a market moving event like the
FOMC meeting tomorrow sometimes it's easiest to just play the
market instead of individual issues.  Using the AMEX:Diamonds
(DIA) we can do that.

There's been so much hype regarding a possible rate cut by the
FOMC tomorrow that we really don't see any scenario that won't
result in a market sell-off.  If they don't cut after the market
has already priced in a 25 point cut, then we should see
immediate profit taking in the markets (potentially severe).  If
they do announce a 25 point, well that's rather anti-climatic and
we should see profit taking since the Fed did what the market has
already moved on.  Should we get the unexpected and receive a 50-
point rate cut then the markets are likely to rally but
potentially only short-term.  There is already huge speculation
that the Fed will cut another 25 points in December before the
end of the year (this is in addition to the 25 points expected
tomorrow).  Thus, some suspect that a 50-point cut tomorrow will
mean no cut in December.  Whatever the case, it would appear that
we're set up for a fall.  Either right after the announcement
should the result be no cut or 25 points or a bit later in the
afternoon or tomorrow if they cut 50 points.

Here is the challenge for the trader.  The markets are already
inching higher in after hours action with the over-eager
optimists thinking the Republicans might hold the Senate to a
stalemate or even win it by one seat.  Whatever the case, we
could see the markets move higher ahead of the Fed results
expected around 2:15 PM ET.  Our plan will be the following.
Number one - no moves until after the Fed announcement.  We will
sit back and wait.  Once the interest rate news is know we will
use a trigger to go short when the DIA trades under 85.00.  We
know we're missing (currently) a 178 point move in the
Industrials, but we want to see some conviction and not have the
market bounce near 86 to 85.50 (8600-8550).  Once triggered our
short-term goal will be support at 82.00 (8200).  If 82 breaks
we'll look to take profits near 80.  Traders can consider
covering 1/2 at 82 and another near 80.  If we are triggered
(when the DIA trades at or under 85) then we'll use a stop at
86.50 to limit risk.

The worst case scenario is the markets dip intraday - trigger us
at 85.00 and then rally back to stop us out at 86.50 on the DIA.
Another potential trap for the bears on this play is the
following.  We get triggered at 85.00 and after hours on
Wednesday, CSCO smashes earnings or has some other good news that
ignites a market rally on Thursday and we get stopped out.  Think
about this: while we have seen a number of better than expected
Q3 earnings season, almost every tech-related customer or non-
wireless-related business has met numbers only through cost
cutting.  Sales have been down and many have forecasted dismal
results going forward.  What are the odds of CSCO being able to
avoid an industry wide malaise (headline numbers aside)?

So we know our risk and our targets.  Now what happens if the
Diamonds are already under 85 before the 2:15 PM announcement?
We will decide now to wait.  No play.  More aggressive traders
can make their own decision to follow this suggestion or to
adjust their entry point.

Annotated chart on the DIA



Picked on November 5th at $xx.xx <-- see text above
Results since picked:      +0.00
Earnings Date           xx/xx/xx







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Copyright ) 2002  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Tuesday 11-05-2002
                                                    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:     DIA
  Bearish Play Updates:  BAX, MO, SUP

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

Split Trader Stock Splits
  Split Announcement:
                         GSOF: 2-for-1 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
  -----------------

Diamonds - DIA - close: 82.80 chg: +3.86 stop: 85.01

Company Description:
The Diamonds Trust is a Dow Jones tracking stock that is traded
on the AMEX.  Options are available for interested traders.

Why We Like It:
It's a simple plan.  When we have a market moving event like the
FOMC meeting tomorrow sometimes it's easiest to just play the
market instead of individual issues.  Using the AMEX:Diamonds
(DIA) we can do that.

There's been so much hype regarding a possible rate cut by the
FOMC tomorrow that we really don't see any scenario that won't
result in a market sell-off.  If they don't cut after the market
has already priced in a 25 point cut, then we should see
immediate profit taking in the markets (potentially severe).  If
they do announce a 25 point, well that's rather anti-climatic and
we should see profit taking since the Fed did what the market has
already moved on.  Should we get the unexpected and receive a 50-
point rate cut then the markets are likely to rally but
potentially only short-term.  There is already huge speculation
that the Fed will cut another 25 points in December before the
end of the year (this is in addition to the 25 points expected
tomorrow).  Thus, some suspect that a 50-point cut tomorrow will
mean no cut in December.  Whatever the case, it would appear that
we're set up for a fall.  Either right after the announcement
should the result be no cut or 25 points or a bit later in the
afternoon or tomorrow if they cut 50 points.

Here is the challenge for the trader.  The markets are already
inching higher in after hours action with the over-eager
optimists thinking the Republicans might hold the Senate to a
stalemate or even win it by one seat.  Whatever the case, we
could see the markets move higher ahead of the Fed results
expected around 2:15 PM ET.  Our plan will be the following.
Number one - no moves until after the Fed announcement.  We will
sit back and wait.  Once the interest rate news is know we will
use a trigger to go short when the DIA trades under 85.00.  We
know we're missing (currently) a 178 point move in the
Industrials, but we want to see some conviction and not have the
market bounce near 86 to 85.50 (8600-8550).  Once triggered our
short-term goal will be support at 82.00 (8200).  If 82 breaks
we'll look to take profits near 80.  Traders can consider
covering 1/2 at 82 and another near 80.  If we are triggered
(when the DIA trades at or under 85) then we'll use a stop at
86.50 to limit risk.

The worst case scenario is the markets dip intraday - trigger us
at 85.00 and then rally back to stop us out at 86.50 on the DIA.
Another potential trap for the bears on this play is the
following.  We get triggered at 85.00 and after hours on
Wednesday, CSCO smashes earnings or has some other good news that
ignites a market rally on Thursday and we get stopped out.  Think
about this: while we have seen a number of better than expected
Q3 earnings season, almost every tech-related customer or non-
wireless-related business has met numbers only through cost
cutting.  Sales have been down and many have forecasted dismal
results going forward.  What are the odds of CSCO being able to
avoid an industry wide malaise (headline numbers aside)?

So we know our risk and our targets.  Now what happens if the
Diamonds are already under 85 before the 2:15 PM announcement?
We will decide now to wait.  No play.  More aggressive traders
can make their own decision to follow this suggestion or to
adjust their entry point.

Annotated chart on the DIA



Picked on November 5th at $xx.xx <-- see text above
Results since picked:      +0.00
Earnings Date           xx/xx/xx





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

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

Baxter Intl. Inc. - BAX - cls: 25.15 chg: unch stop: *text*

BAX looks like a very good short play below $24.00, but so far we
haven't gotten the necessary breakdown to activate this paper
trade.  BAX remained above our entry trigger ($23.99) on Monday
and managed to close slightly above $25.00.  Today's trading was
downright flat, as shares moved in a narrow 50-cent range before
finishing unchanged.  Given this lack of movement it was a bit
surprising to see that volume was a brisk 9.1M shares.  The 5-
minute chart shows a flurry of sell-on-close orders during the
final 15 minutes of trading.  This was probably a result of
traders covering positions ahead of Wednesday's FOMC meeting.
Speaking of the Fed, we think odds are in favor of a market sell-
off following the interest rate announcement.  A 25-point cut has
already been priced in, while some of the more vociferous bulls
are even calling for a 50-point cut.  In our opinion the latter
scenario is highly unlikely.  On the same token, the Fed has not
telegraphed any decision whatsoever.  This suggests that Uncle Al
might leave rates unchanged on Wednesday.  We believe either a
no-cut or quarter-point cut will lead to a market sell-off.  With
this in mind, we're going to keep this short play with a trigger
at $23.99.  If we're activated our stop will be set at $26.51.

Picked on November 1st at $xx.xx
Results since picked:      +0.00
Earnings Date           10/17/02 (confirmed)




---

Phillip Morris - MO - close: 42.68 change: +0.94 stop: 44.11

Tuesday's session afforded nervous bears another chance to cover
positions ahead of the FOMC meeting.  The Dow Jones traded in
positive territory for most of the day and traded particularly
strong during the final two hours.  MO moved stair-stepped higher
with the Industrials and finished with a 2.2% gain.  Not a bad
performance, but it's interesting to note that the bulls were
once again stymied by the 50-dma ($42.89).  We continue to be
suspicious of any rally that does not take MO above this moving
average.  With today's action producing an Inside Day, it's
possible that shares could see a big move out of this
consolidation pattern tomorrow.  We'd expect that move to be to
the downside if the market sells off in reaction to the Fed's
interest rate decision.  Traders looking to open new positions
can continue to watch for a breakdown below $40.00.

Picked on October 29th at $41.49
Results since picked:      -1.19
Earnings Date           10/17/02 (confirmed)




---

Superior Industries - SUP - cls: 41.91 chg: +0.31 stop: 45.27

Slowly but surely, SUP is moving in a southward direction.  The
recent pattern of lower lows was maintained on Tuesday when
shares gapped down in morning trading.  Shares quickly bounced
back but were unable to clear Monday afternoon's shelf of
resistance at $42.50.  SUP faded the broader market during the
final two hours of trading and finished with a gain of only 31
cents.  Not too impressive, considering the Dow was up by more
than 100 points.  The rolling oscillators suggest that the
current downtrend will continue.  Although we wouldn't advise
taking entries ahead of tomorrow's interest rate decision
(expected around 2:15 EST), a market sell-off could really sink
SUP.  New short positions can be targeted on a move below $41.16.

Picked on October 28th at $42.97
Results since picked:      +1.06
Earnings Date           10/17/02 (confirmed)






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

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

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

AT&T Corp. - T - close: 14.30 change: +0.41 stop: 12.83 *new*

There's the breakout we've been looking for!  After hovering
above the 200-dma ($12.89) for more than a week, T has ascended
to levels not seen since April/May.  Shares tacked on 2.9% today
after Kaufman Brothers initiated coverage on T with a "Buy"
rating.  The stock closed near the highs of the day and briefly
moved above the May high of $14.30.  The rising daily stochastics
and newly-minted double-top buy signal on the point and figure
chart indicate that the current rally will have staying power.
Premier Investor is currently up 6.7% on this play, and
conservative investors may want to consider taking profits at
current levels.  We're going to continue to target a move to the
$15-$16 area.  Of course, our bullish aspirations could go up in
smoke if the market reacts negatively to Wednesday's FOMC
announcement.  We've given T plenty of breathing room with our
stop at $12.83, slightly below the 200-dma.  Those who are
unwilling to take any losses could use a break-even stop at
$13.40.  Note that we wouldn't recommend taking any new positions
ahead of the interest rate decision.

Picked on October 23rd at $13.40
Results since picked:      +0.90
Earnings Date           10/22/02 (unconfirmed)




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

Human Genome Sciences - HGSI - cls: 10.34 chg: +0.58 stop: 10.81

This play started off well enough as HGSI fell to new lows on
Friday.  Yesterday's rebound was not all that concerning, given
the stock's recent sell-off.  What does have us worried is the
way shares have moved back above psychological resistance at
$10.00.  HGSI tacked on nearly 6% today following the company's
announcement that Phase I clinical trials for its experimental
Hepatitis C drug had shown promising results.  With the
oscillators beginning to turn up from oversold levels, we
strongly considered dropping this play at current levels rather
than wait for shares to take out our stop at $10.81.  What
convinced us otherwise is our outlook for a market sell-off
following tomorrow's FOMC announcement.  We believe disappointed
bulls will throw in the towel if the Fed leaves rates unchanged
or cuts rates by only 25 basis points.  This could trump the
technical bullishness in HGSI and drag the stock back under
$10.00.  Of course, this might all be a moot point if the NASDAQ
rallies before the announcement.  Conservative traders may want
to consider closing positions on Wednesday morning.

Picked on November 1st at $9.49
Results since picked:     -0.85
Earnings Date          10/29/02 (confirmed)





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

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

Watson Pharma. - WPI - cls: 29.04 chg: +1.19 stop: 27.51

Not a bad finish!  With WPI reporting earnings tomorrow, we
collared this play with a very tight stop-loss and exit target.
Shares rebounded nicely from yesterday's orderly pullback and
reached our exit target at $28.49, at which point this paper
trade was closed for a gain of 8.7%.  Shares appeared to benefit
from a strong performance by the DRG.X pharmaceutical index,
which outperformed the Dow Jones.  WPI is looking technically
bullish and appears to be headed for a test of the $30.00 level,
but we have absolutely no desire to stick our heads out and risk
a downside earnings surprise tomorrow.  Traders who elected to
hold over the announcement may want to strongly consider taking
profits if shares reach the bottom of the March 28th gap at
$30.67.

Picked on October 28th at $26.20
Results since picked:      +2.29
Earnings Date           11/06/02 (confirmed)






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

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

Group 1 Software Offers Investors 2-for-1 Stock Split

Just after the closing bell today, Group 1 Software (NASDAQ: GSOF)
announced a 2-for-1 stock split.

The split will be payable on December 2, 2002 to shareholders of
record on November 15, 2002.

GSOF last split in early 2000.  Today's announcement follows an
impressive three-week uptrend that has seen shares gain roughly
50%.  The stock moved sharply higher on October 30th after Wall
Street reacted enthusiastically to the company's second-quarter
earnings report.

Shares closed at $21.89 on Tuesday.  For a current quote, click
here:

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

About the company
Group 1 Software is a leading provider of software solutions for
data quality, marketing automation, customer communications
management and direct marketing applications. Group 1's software
systems and services enable over 2,000 customers worldwide to
market smarter by helping them find, reach and keep customers.
(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

PQE     Proquest Co                20.55     1.23
TTIL    TTI Team Telecom            7.73     +1.15
TECD    Tech Data Corp             37.11     +1.89
RCL     Royal Caribbean            19.93     +0.68
ESST    ESS Technology              6.95     +0.68
UIL     UIL Holdings               32.94     +0.54

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

POSS    Possis Medical             13.70     +2.04
PDLI    Protein Design Labs         9.83     +1.02
CVC     Cablevision Systems        12.99     +1.19
V       Vivendi Universal          13.15     +1.10

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

SNPS    Synopsys Inc               48.25     +6.64
ENZN    Enzon Inc                  20.69     +1.12
TSCO    Tractor Supply Co          43.40     +1.70
SHPGY   Shire Pharma.              24.40     +1.04
SHRP    Sharper Image              23.20     +1.15
DB      Deutsche Bank              49.77     +3.18

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

HSIC    Henry Schein               46.43     -3.02
CVH     Coventry Healthcare        29.78     -2.06
RCII    Rent-A-Center              39.01     -1.81
MME     Mid-Atlantic Medical       34.65     -2.27
NX      Quanex Corp                34.40     -2.75
TRI     Triad Hospitals            34.49     -1.84
ABC     Amerisourcebergen          68.81     -3.14
PHCC    Priority Healthcare        22.40     -1.57
RJF     Raymond James              30.60     -1.39
FO      Fortune Brands             47.49     -1.13

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

NKE     Nike Inc                   46.12     -1.23
VAR     Varian Medical Systems     48.33     -1.10
ITG     Investment Technology     29.39     -3.50




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