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Daily Newsletter, Tuesday, 11/26/2002

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PremierInvestor.net Newsletter                 Tuesday 11-26-2002
                                                   section 1 of 2
Copyright ) 2002, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

In section one:

Market Wrap:      Hope Fades
Market Sentiment: The Sky Is Falling, The Sky Is Falling!
Play-of-the-Day:  Look Out Below

-----------------------------------------------------------------
U.S. Market Numbers
-----------------------------------------------------------------
MARKET WRAP  (view in courier font for table alignment)
-----------------------------------------------------------------
      11-26-2002           High     Low     Volume   Adv/Dcl
DJIA     8676.42 -173.00  8844.40  8670.18 1.89 bln 1117/2090
NASDAQ   1444.43 - 37.50  1478.73  1441.12 1.90 bln 1318/2086
S&P 100   467.08 -  9.87   476.95   466.34   Totals 2435/4176
S&P 500   913.31 - 19.56   932.87   912.10
RUS 2000  398.32 -  6.53   404.85   397.15
DJ TRANS 2268.35 - 58.60  2327.18  2263.51
VIX        28.74 +  1.79    29.31    27.18
VXN        47.99 +  2.31    48.57    46.49
TRIN        1.84
PUT/CALL    0.83
-----------------------------------------------------------------

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

Hope Fades

The markets tripped over reality again this morning as the
seven week old Dow rally faltered on good news. Yes, good
news. Investors apparently were hoping for significantly
better economic data and news that growth was still struggling
was not what they wanted to hear. With huge paper gains and
a what amounts to a week long holiday ahead they decided to
cash out and take their chips off the table.

Dow Chart - Daily

Nasdaq Chart - Daily


The markets were already looking for a softer open on news
of terrorist plots and arrests around the world and news that
there could be terrorist links to the Saudi royal family. For
investors who are holding their breath as we approach the
holidays any terrorist news is unwelcome. The economic news
showed the economy growing but at a slower pace and there
were some unsettling trends beginning to be seen.

The GDP was revised upward for the 3Q from 3.1% to 4.0%. While
this was positive it was based on the stronger than expected
inventory accumulation. This accumulation could be seen two
ways. It could be a buildup due to an expected increase in
orders in the 4Q or because sales are slowing. Obviously the
latter would be bad news. In the internal GDP numbers corporate
profits after adjustments fell and corporate cashflow was down.
With this release it appears the odds of a double dip recession
have dropped but the chances of a robust recovery have dropped
as well.

The Consumer Confidence number came in 84.1, which was a huge
bounce from last months 79.6 but less than analysts expected.
This was the first bounce in the headline number in six months.
Almost all of the bounce came from a jump in expectations from
81.1 to 88.4. These expectations were boosted by a rising stock
market, the Fed rate cut, the capture of the snipers and the
impending holiday season. The internal CC numbers painted a
different picture. The number of people expecting to buy a
home or auto fell to six year lows. The index of people who
thought jobs were plentiful dropped to 14.1 and a major low.
The long term out look remained flat. The biggest hurdle as
evidenced by the confidence report was the lack of pent up
demand. Almost everyone who wanted a new car or home has
already bought it and there are no buyers left to consume
the currently expanding supply.

Adding to the confusion today was a jump in layoffs to 171,088
in October. This was 47,000 over the September number and with
the pace of layoffs expanding again it appears November could
be worse. With the health of the manufacturing sector still
weak there appears to be no employment rebound in sight.

These conditions prompted a decline in home sales of -4.5% from
September and inventory levels rose to a 4.1 month supply. The
low interest rates should continue to support sales but the
number of buyers as indicated by the confidence report has
fallen to a six year low. With buyers shrinking and inventory
rising it does not take a rocket scientist to see the eventual
housing wreck. One thing between home builders and a vast
oversupply is the stock market. The negative wealth effect has
taken an entire segment of potential buyers out of the market.
Until the market returns to bull status those investors will
be in conserve mode. Add in the longer-term impact of the baby
boomers selling their family homes over the next few years to
move into smaller retirement homes and condos and the eventual
rise in rates and trouble is brewing. Mortgage applications have
already been trending down for several weeks.

Due to the shortened week there are a flood of economic reports
due out on Wednesday. The Fed Beige Book, Chicago PMI, Durable
Goods, Jobless Claims, Mortgage Applications, Personal Income
and Spending, Help Wanted Index and another Consumer Sentiment
report will be announced. This flurry of reports after today's
mixed numbers would have been enough to trigger profit taking
by many traders.

Tech traders were also worried about the SUNW mid quarter
update due out at 4:30 this afternoon. SUNW said it was expecting
a seasonal uptick in sales and affirmed it's revenue estimates
for the current quarter. However, they said pricing was very
competitive and margins would be below last quarter's levels
of 41.2%. SUNW refused to give any profit estimates saying the
conditions were still tough. Analysts expect them to post a
penny loss in the current quarter. This was actually an upbeat
report since they refused to give any visibility in last months
conference call.

NVLS affirmed guidance for an +11 cent profit and said orders
for new equipment could exceed previous projections. The
company said conservative scenarios were still being executed
by customers but the outlook was hopeful. CHRT gained ground
on news that it had a new deal with IBM for an advanced semi
manufacturing processes.

The market the rest of the week is a toss up. Historically the
day before and after Thanksgiving is bullish. I outlined a
scenario in the Market Monitor this afternoon that suggested
a bullish bounce was possible tomorrow. The reasoning behind
this is the "forced bottom" tactic by big money. Sometimes
when big money sees potential bullish conditions ahead but
are looking for a potential entry point they try to force a
bottom. They sell short stocks they want to buy to try and
find a support level where buyers appear. Essentially they try
and run the stops and take out all the weak holders and find
out where the real buyers are lurking. When conditions are ripe
for profit taking they can accelerate this process and when
the market stops falling they cover the shorts and go long.
With historical trends favoring bullish conditions later this
week this was a good day to try and force an entry point.

Nobody knows if this is what happened today and it could have
been just normal pre-holiday profit taking. However, if the
week has been bullish for the last nine years then why take
profits today and miss the buyers? You can easily see why
trying to analyze daily market trends can drive you crazy.
Fox Mulder would never have run out of X-Files plots if he
had been investigating the markets instead of aliens.

Any rally later in the week will run into the beginning of
earnings warning season next week. This is where reality
will meet expectations once again and any flurry of negative
news could sink the current bullish sentiment. There will
be the endless news stories about the success or failure of
retail sales over the holiday weekend. That will color
the market outlook going forward as it will be the first
real clue about the current strength and mindset of the
consumer. It is time for consumers to stand up and vote
for a recovery with their holiday dollars.

Enter Very Passively, Exit Aggressively!

Jim Brown
Editor


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

The Sky Is Falling, The Sky Is Falling!

by Steven Price

Was this the end of the rally?  It certainly felt like it as the
markets were bleeding red around us.  However, after a 1500-point
gain in the Dow since October 9, didn't it deserve a bit of a
breather?  Markets rarely go straight up, without some type of
pullback (excluding the late 1990s, but anyone seen CMGI lately).
The day surrounding Thanksgiving are traditionally bullish, so
don't go pulling on those shorts just yet.

Today's pullback was certainly more than a blip, but so was the
recent rally.  On a percentage basis, we just gave back about 11%
of the rally. While that is significant, if we gave back only 11%
of most rallies, we wouldn't have been in a bear market the last
couple of years. We may have more to give back, as well, so bulls
and bears are both free to feel confused about where we're headed
next.  One indication that it may be time for a pause is that the
bullish percentages are all fairly extended, which can be
expected after a 21% move in the Dow.  The Dow bullish percent,
which bottomed at an extremely oversold (anything below 30 is
oversold) 8% in October, has now rebounded into overbought
territory at the threshold for that status of 70%. The NDX has
bounced from 14% to 78%.  The SPX is right up against its bearish
resistance line at 66% and the COMP, which registers a narrower
range, is also against bearish resistance at 48%.  This tells us
a couple of things.  First, it tells us that there are an awful
lot of point and figure buy signals being given by stocks in the
various indices.  Second, it tells us that it may be time for a
pullback from overbought territory.   That doesn't mean the
pullback has to be of enormous magnitude, but that we should be
conscious of the downside risk after such a big run.   The key
may be where that pullback stops.  In fact, the Dow could pull
all the way back to 8500 and still constitute a higher high in
the current rally pattern of higher highs and higher lows. The
Nasdaq could make it back to 1400 and still not be a bearish
indication.   Of course, if we actually saw some increase in
spending by businesses, that would help the bullish theory.

This morning's economic data showed a GDP revised upward in the
third quarter, from 3.1% to 4%.  Good news, huh?  Well, it would
have been better if economists hadn't also lowered expectations
for the fourth quarter from 2.7% to 1.4% and for the first
quarter of 2003 from 3.3% to 2.5%. Bah, humbug!    On the plus
side (sort of), the Consumer Confidence number showed a gain from
last month's reading of 79.6, to a November reading of 84.1.  The
problem was that expectations were for a reading of 84.8.  We
also saw new home sales drop 4.5% in October, but still came in
above expectations and September's number was revised higher, as
well.

Apparently the big institutions aren't too worried about an
extended drop, as the Market Volatility Index (VIX) remained
under 30.  It gained a couple of points, as it does on most
triple digit drops, but at 28.74 is still quite a bit lower than
we've seen in recent months.

We saw an across the board sell-off, with scant few sectors in
the green.  The biggest winner was the HMO index, which bounced
from an incredible sell-off the last week on concerns about
pricing limitations and government investigations into industry
practices.

We also saw action in bonds as some of the cash flowing from
equities found a new home.  Interestingly, one could argue that
the recent bond sell-off just registered a double bottom (bearish
for stocks). However, after its own bearish head and shoulders
formation over the last month, equity bears will need a continued
cash shift from equities to bonds to support the argument.  The
other argument (hush, hush) is that the H&S formation failure in
the Dow wasn't really a failure:  The "head" at 8800 was actually
the left shoulder, and the recent rally to 8868 was the head.
But you didn't hear that from me.

Get your trading out of the way in the morning, because the
trading floors will empty out as the day wears on ahead of the
holiday.  Friday's half-day should be a non-event, as well.  Eat
well, and remember that turkeys with a few extra puts rarely get
stuffed.

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

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8676

Moving Averages:
(Simple)

 10-dma: 8627
 50-dma: 8211
200-dma: 9194

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  913

Moving Averages:
(Simple)

 10-dma:  911
 50-dma:  870
200-dma:  984

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1087

Moving Averages:
(Simple)

 10-dma: 1072
 50-dma:  953
200-dma: 1124

-----------------------------------------------------------------
The Semiconductor Index (SOX.X):  Is the party over?  I
wouldn't panic just yet.  However, traders need to be
aware that after a 75% gain since the beginning of October,
a pullback is expected.  How much of a pullback?  Likely
levels are 350 and 329.  if we get a bounce from the current
reading of 357, then I expect to test 400 again, which served
as resistance in June and July.

52-week High: 657
52-week Low : 214
Current     : 357

Moving Averages:
(Simple)

 10-dma: 336
 50-dma: 280
200-dma: 409

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

We saw the expected bounce in volatility on a market sell-off.
However, we didn't see the "pop" that comes with real fear in
the marketplace.  It is unlikely we'll see a VIX over 30 by
the weekend, as traders avoid purchasing premium before an
extended weekend.  It is tough to absorb 5 days worth of premium
decay, in exchange for 1 1/2 days of trading opportunity.


CBOE Market Volatility Index (VIX) = 28.74 +1.79
Nasdaq-100 Volatility Index  (VXN) = 47.99 +2.31

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.83        442,445       367,544
Equity Only    0.72        351,825       253,119
OEX            0.94         17,217        16,145
QQQ            2.36         23,595        55,801

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

Bullish Percent Data

           Current   Change   Status
NYSE          47      + 1     Bull Confirmed
NASDAQ-100    78      + 1     Bull Confirmed
Dow Indust.   70      + 0     Bull Confirmed
S&P 500       65      + 0     Bull Confirmed
S&P 100       71      + 1     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   1.08
10-Day Arms Index  0.96
21-Day Arms Index  1.17
55-Day Arms Index  1.22


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        854          1889
NASDAQ     1233          1996

        New Highs      New Lows
NYSE         23              23
NASDAQ       66              28

        Volume (in millions)
NYSE     1,856
NASDAQ   1,888

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

Commitments Of Traders Report: 11/19/02

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 9,000 long contracts, while adding
only 3,700 shorts.  Small traders added 2,000 longs
to their positions, while adding 7,000 short contracts.

Commercials   Long      Short      Net     % Of OI
10/29/02      437,565   468,557   (30,992)   (3.4%)
11/05/02      438,546   472,384   (33,838)   (3.7%)
11/12/02      437,683   476,540   (38,857)   (4.3%)
11/19/02      446,668   480,270   (33,602)   (3.6%)

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
10/29/02      137,740    75,587    62,153     29.1%
11/05/02      138,604    76,032    65,572     30.5%
11/12/02      141,389    70,624    70,765     33.4%
11/19/02      143,070    77,332    65,738     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 reduced both long and short positions by
approximately 3,000 contracts.  Small traders added
4,000 to the long side and 2,000 to the short side.


Commercials   Long      Short      Net     % of OI
10/29/02       47,837     55,261    (7,324) ( 7.1%)
11/05/02       49,128     56,121    (6,993) ( 6.6%)
11/12/02       45,647     55,892   (10,245) (10.1%)
11/19/02       42,074     52,302   (10,228) (10.7%)

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
10/29/02       10,584     9,419     1,165     5.8%
11/05/02       13,355    12,903       452     1.7%
11/12/02       12,698     8,801     3,897    18.1%
11/19/02       16,292    10,540     5,752    21.4%

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 added 1,000 contracts to both the long
and short side, while small traders reduced the long side
by 1,300 contracts and shorts by only 300.

Commercials   Long      Short      Net     % of OI
10/29/02       21,800    13,337    8,463      24.1%
11/05/02       22,533    15,687    6,846      17.9%
11/12/02       22,283    14,953    7,330      19.6%
11/19/02       23,535    15,741    7,794      19.8%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
10/29/02        5,602    11,090    (5,488)   (32.9%)
11/05/02        5,089     8,735    (3,646)   (26.4%)
11/12/02        5,736     8,513    (2,777)   (19.5%)
11/19/02        4,428     8,203    (3,775)   (29.9%)

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 Active Trader/non-tech play))
===============

Procter & Gamble - PG - close: 84.42 change: -1.22 stop: *text*

Company Description:
P&G markets nearly 300 brands - including Pampers, Tide, Ariel,
Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin,
Downy, Lenor, Iams, Crest, Actonel, Olay and Clairol Nice 'n Easy
-- in more than 160 countries around the world. (source: company
press release)

Why We Like It:
We've had our eye on PG for several weeks.  This Dow component
consistently showed up as a bearish candidate while the major
market indices launched off of their multi-year lows.  The stock
always seemed to be on the verge of a breakdown and traded with
little regard to the overall market uptrend.  Perhaps a simple
comparison of recent performance between PG and the Dow Jones
best illustrates this relative weakness: The Industrials bottomed
out on October 10th and have since gained 20.5%.  Meanwhile, PG
has actually lost 5.1% over the same time period!  Examining the
nature of the October/November broader market rally helps to
explain why shares are underperforming.  The largest gains have
been concentrated in beaten-down tech and telecom stocks, as well
as the beleaguered financial sector.  PG, however, was actually
trading within 5-6 dollars of 52-week highs when the market
bottomed out.  That's why the stock didn't see the same sort of
steep short-covering rebound that buoyed so many other stocks.
But shares have been drifting lower ever since the 200-dma was
violated in late-October, and now the downtrend is beginning to
accelerate.

Today's 1.4% decline did a lot of technical damage.  Not only did
PG close under short-term support at $85.00, but shares also fell
below bullish support on the p-n-f chart.  A trade at $84.00 will
create a double-bottom sell signal.  The MACD and daily
stochastic oscillators are both trending lower, suggesting that
today's breakdown could be the beginning of a steeper decline.
Turning our attention to the daily chart, we see no clear levels
of support until the July lows near $74.00.  Our expectation is
that PG will begin to retrace the late-July rebound and make its
way towards the $80.00 level.  If we get some cooperation from
the Dow (which is struggling with resistance at 8875), a decline
to the $77-$78 area would not be out of the question.  We're
starting this play with an entry trigger at $84.24.  Our stop (if
the play is activated) will be set at $86.06, just above
resistance on the 15-minute chart.  PG has had trouble with
whole-number levels over the past week, and that was the case
again today when shares rolled over from the $85.00 level.
Traders who are willing to take a little more heat could use a
stop just above $87.00.

Annotated chart - PG:



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







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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 11-26-2002
                                                    section 2 of 2
Copyright ) 2002, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

In section two:

Stock Bottom / Active Trader
  New Bearish Plays:     PG
  Bullish Play Updates:  SPC, TSCO

High Risk/Reward
  Bullish Play Updates:  AHC, ICOS
  Bearish Play Updates:  CW, NTES
  Closed Bullish Plays:  ALA

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

Procter & Gamble - PG - close: 84.42 change: -1.22 stop: *text*

Company Description:
P&G markets nearly 300 brands - including Pampers, Tide, Ariel,
Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin,
Downy, Lenor, Iams, Crest, Actonel, Olay and Clairol Nice 'n Easy
-- in more than 160 countries around the world. (source: company
press release)

Why We Like It:
We've had our eye on PG for several weeks.  This Dow component
consistently showed up as a bearish candidate while the major
market indices launched off of their multi-year lows.  The stock
always seemed to be on the verge of a breakdown and traded with
little regard to the overall market uptrend.  Perhaps a simple
comparison of recent performance between PG and the Dow Jones
best illustrates this relative weakness: The Industrials bottomed
out on October 10th and have since gained 20.5%.  Meanwhile, PG
has actually lost 5.1% over the same time period!  Examining the
nature of the October/November broader market rally helps to
explain why shares are underperforming.  The largest gains have
been concentrated in beaten-down tech and telecom stocks, as well
as the beleaguered financial sector.  PG, however, was actually
trading within 5-6 dollars of 52-week highs when the market
bottomed out.  That's why the stock didn't see the same sort of
steep short-covering rebound that buoyed so many other stocks.
But shares have been drifting lower ever since the 200-dma was
violated in late-October, and now the downtrend is beginning to
accelerate.

Today's 1.4% decline did a lot of technical damage.  Not only did
PG close under short-term support at $85.00, but shares also fell
below bullish support on the p-n-f chart.  A trade at $84.00 will
create a double-bottom sell signal.  The MACD and daily
stochastic oscillators are both trending lower, suggesting that
today's breakdown could be the beginning of a steeper decline.
Turning our attention to the daily chart, we see no clear levels
of support until the July lows near $74.00.  Our expectation is
that PG will begin to retrace the late-July rebound and make its
way towards the $80.00 level.  If we get some cooperation from
the Dow (which is struggling with resistance at 8875), a decline
to the $77-$78 area would not be out of the question.  We're
starting this play with an entry trigger at $84.24.  Our stop (if
the play is activated) will be set at $86.06, just above
resistance on the 15-minute chart.  PG has had trouble with
whole-number levels over the past week, and that was the case
again today when shares rolled over from the $85.00 level.
Traders who are willing to take a little more heat could use a
stop just above $87.00.

Annotated chart - PG:



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





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

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

St. Paul Co. - SPC - close: 35.62 change: -0.24 stop: 33.93

A wave of selling hit the insurance sector on Tuesday as the
broad market pulled back on what will probably be the last
"meaningful" trading session of the week.  Likely thin volume
during Wednesday and Friday's sessions will make it tough to
gauge market direction.  Historically, these two days do have a
bullish bias.  This could help SPC to move back towards its
relative high of $36.71.  President Bush signed the Terrorism
Insurance bill this morning, which gives $100 billion in
government backing to insurance companies who offer terrorism
liability plans.  The lack of a strong market reaction suggests
that the market had already discounted this news.  We had
speculated that anticipation of a Terrorism Insurance bill had
helped property & casualty stocks find a bid, but that catalyst
has been rendered moot.  SPC is showing good relative strength
compared to the IUX.X insurance index (which gave back 2.7% on
Tuesday) and has thus far held above previous resistance at
$35.00.  But the falling daily stochastics (5,3,3) urge caution
for the bulls, so for the time being we wouldn't advise taking
any new long positions.  Our stop remains at $33.93.

Picked on November 18th at $35.11
Results since picked:       +0.51
Earnings Date            10/23/02 (confirmed)




---

Tractor Supply Co. - TSCO - cls: 44.17 chg: -1.17 stop: *text*

We said last night that this play would only be activated if TSCO
extended Monday's breakout and moved above $45.50.  The bulls
were hard-pressed to accomplish that feat during today's session,
with the Dow Jones posting its largest loss since November 11th.
TSCO traded an Inside Day and finished in the red by 2.5%.  In
keeping with the two-week trend, the volume reading was less than
most of the recent days when TSCO posted a gain.  The lack of
high-volume profit-taking at current levels is a positive sign
for the bulls.  For the time being we will keep our entry point
at $45.51.  Shares are still holding near all-time highs and we
see no reason why the stock won't be able to continue its uptrend
if the overall market shakes off today's weakness.  Our stop will
be set at $42.49 if this play is triggered.

Picked on November xxth at $xx.xx <-- see text
Results since picked:       +0.00
Earnings Date            10/14/02 (confirmed)






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

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

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

Amerada Hess - AHC - close: 55.25 change: -0.74 stop: 52.39

Shares of AHC are handing in there.  Tuesday's session only saw a
74 cent loss while the Dow Industrials tumbled more than 170
points.  We're encouraged by AHC's relative strength, especially
against the Oil Index (OIX.X).  The OIX is continuing to fall
after its railed rally a couple of sessions ago against the 260
level and its 50-dma.  Currently the OIX is at 250 and could find
support at 245 where it bounced it mid-November.  Keep in mind
that this entire group will be sensitive to all the press
regarding Iraqi, the weapons inspections and now the media focus
on Saudi Arabia.  Checking the price of crude, we see the January
03 contracts are still in a short-term rally and look like they
could head higher.  The pull back in AHC to the $55 level
intraday could have been seen as an entry point.  However, if the
broader markets continue to slip due to profit taking from their
multi-week rally then patient traders may get an even better
entry point in AHC as it might dip to the $54.00 level.  We'd
prefer to wait if we were looking to initiate a position.  In the
news AHC has made a "new significant discovery" near Equatorial
Guinea.

Picked on November 12th at $52.41
Results since picked:       +2.84
Earnings Date            10/24/02 (confirmed)




---

ICOS Corp. - ICOS - close: 30.21 change: -1.91 stop: 28.72

A common saying around the office here is nothing moves in a
straight line, specifically stocks.  That's why it's usually
never a good idea to chase one when you think it's getting away
from you.  The pull back today in shares of ICOS may be just what
new bulls need for a more profitable entry point but before you
pull the trigger let's take a look around.  The BTK biotech index
has fallen more than 5% today.  The BTK.X tried to breakout above
its descending 200-dma two days in a row (Fri/Mon) and failed.
The broad market profit taking was very evident in the biotech
group and the BTK is now resting near 359.  If the profit taking
continues for another day we might see the BTK bounce near 350
but there is stronger support at 340-342.  Contributing to the
slide in the biotech sector were shares of Biogen (BGEN).  Wall
Street powerhouse Merrill Lynch downgraded BGEN from a "neutral"
to a "sell".  Their analyst based this on their perceived risk
for BGEN's Avonex and Amevive sales.  Meanwhile the same broker
upped their earnings estimates on Amgen (AMGN) but it was little
help to the group or the stock.  Shares of ICOS had been so
strong and are up so much that when the profit taking hit today
the stock lost almost six percent.  Is it over?  Is this a new
entry point for bulls?  Maybe but odds are stronger that we could
see some follow through on Wednesday morning.  We'd keep an eye
out for a dip to the $29.00 level.  If shares bounce there, then
we'd evaluate a potential new long position.  As of Monday's
close, the stock was up above the $32 level and we raised our
stop to $28.72.  This may have been a bit premature.  We hate to
reverse the direction of any stop we set but more patient traders
should probably use the 200-dma at $28.35 or the support we see
closer to $28.00 as their own guide for placing their stops.  It
would not surprise us to see ICOS dip to $28.00 or $28.25 and
then bounce higher again.  Yes, this will stop us out but you can
adjust your own risk levels based on what you see.

Picked on November 22nd at $30.05
Results since picked:       +0.16
Earnings Date            11/05/02 (confirmed)




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

Curtiss Wright - CW - cls: 64.30 chg: -0.20 stop: 67.06 *new*

CW quietly sank to a new relative low today after the company
announced it would pay $10.5 million in cash to acquire TAPCO
International, a designer of industrial flow control systems.
Shares traded sporadically throughout the session (as is often
the case among lower-volume stocks) after opening slightly below
$64.00.  Overall it looks like the bulls were all tuckered out
after Monday morning's upward gap.  The rapid sell-off that
followed this gap is a good sign for the bulls.  It's also
encouraging to see that the DFX.X defense index has started to
roll over from its 50-dma at 161.  With U.N. weapons inspectors
landing in Iraq today, the prospects of war seem a little more
muted.  As far as this play is concerned, CW looks like it could
quickly fall to the $62.00 area if support at $64.00 gives way.
Traders looking for new entries can watch for a move below
$63.95.  Our stop-loss has been lowered to $67.06, just above
last week's high.

Picked on November 19th at $64.94
Results since picked:       +0.64
Earnings Date            10/29/02 (confirmed)




---

Netease.com - NTES - close: 8.11 change: -0.33 stop: 8.81

The bears will bend...but they won't break.  This afternoon it
looked like NTES might take out our stop-loss at $8.81.  Shares
were showing good relative strength after bouncing from the $8.00
level early in the morning.  Fortunately the sinking tech sector
began to erode these gains, and NTES followed the NASDAQ lower
for the remainder of the session.  Volume has been drying up over
the past two days.  This might just be a result of the typical
pre-holiday malaise, but it could also be indicative of waning
investor interest.  NTES will have a difficult time maintaining
its recent explosive gains if volume returns to pre-November
levels.  This paper trade is currently showing a profit of 7.7%,
and short-term traders might want to think about taking their
money off the table if shares get another bounce from $8.00.
We're maintaining an optimistic downside target of $6.32.
Traders looking for new entries can continue to target failed
intraday rallies near $8.60.

Picked on November 20th at $8.79
Results since picked:      +0.68
Earnings Date           11/05/02 (confirmed)





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

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

Alcatel - ALA - close: 5.47 change: -0.41 stop: *text*

ALA traded to a new relative high on Monday, but alas, shares
just couldn't crack resistance at $6.00.  The IXTCX combined
telecom index was likewise unable to plow through its 200-dma at
123.  The bears keyed in on these failed breakouts as a shorting
opportunity, leading to heavy losses in both the index and the
stock on Tuesday.  ALA gave back nearly 7% and erased most of
last Friday's gains.  Although bulls can be encouraged that this
pullback came on light volume, our entry trigger ($6.06) is now
more than 10% from today's closing price.  We'd hate to give up a
double-digit move before entering this long play.  On the other
hand, the rolling IXTCX is enough to scare us away from adding
ALA on a bounce from current levels.  Normally we prefer to give
a stock more than two days to reach our action point.  But given
the technical uncertainty, we're simply going to walk away from
this play without having been triggered.  Nonetheless, ALA is
worth keeping an eye on.  We just might give this stock another
shot if it bounces from psychological support at $5.00.

Picked on November xxth at $xx.xx
Results since picked:       +0.00
Earnings Date            10/30/02 (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

BRL     Barr Laboratories          64.92     +2.19
SRZ     Sunrise Assisted Living    26.22     +0.67
WSFS    WSFS Financial             31.86     +1.91
SCSS    Select Comfort              9.20     +0.89

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

BRPX    Bradley Pharmaceuticals    14.18     +1.01
OMG     OM Group                    5.75     +1.35
MSM     MSC Industrial             17.17     +1.07
VRNT    Verint Systems             15.40     +1.30

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
Ticker  Company Name               Close     Change
PNR     Pentair Inc                34.75     +1.65
KWD     Kellwood Co                27.66     +1.31
ANT     Anteon Intl                22.34     +1.34

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

ROL     Rollins Inc                22.55     -1.85
EMR     Emerson Electric           49.17     -2.43
AZO     Autozone Inc               80.10     -2.98
GOSHA   Oshkosh B'gosh             28.18     -1.18
IDPH    IDEC Pharmaceuticals       32.84     -3.40
JBHT    JB Hunt                    26.23     -1.41
AVE     Aventis                    54.30     -2.74
TECD    Tech Data                  30.00     -3.27
EAT     Brinker Intl.              29.65     -1.31
CNI     Canadian Natl. Railway     40.25     -1.65

-----------------------------------------
Recently Overbought With Bearish Signals (Stocks over $20)
-------------------------------------------
Ticker  Company Name               Close     Change
STT     State Street               44.05     -1.35
TMK     Torchmark Corp             36.52     -0.84
SKE     Spinnaker Exploration      21.25     -0.88
POS     Catalina Marketing         20.49     -1.05




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