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Daily Newsletter, Thursday, 12/19/2002

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PremierInvestor.net Newsletter                 Thursday 12-19-2002
                                                    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:      Bah Humbug
Play-of-the-Day:  Heartening News
Market Sentiment: And the Wheels Came Off


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      12-19-2002           High     Low     Volume Advance/Decline
DJIA     8364.80 - 82.60  8505.23  8327.78 1.58 bln   1448/1770
NASDAQ   1354.16 -  7.40  1384.58  1346.18 1.58 bln   1479/1886
S&P 100   449.12 -  3.66   456.97   446.81   Totals   2927/3656
S&P 500   884.26 -  6.86   899.19   880.32
RUS 2000  383.42 -  0.51   387.69   381.29
DJ TRANS 2306.01 +  0.30  2336.37  2296.86
VIX        30.81 -  0.59    31.86    30.38
VXN        51.05 -  0.57    52.41    50.51
Total Vol   3,395M
Total UpVol 1,015M
Total DnVol 2,325M
52wk Highs   107
52wk Lows    186
TRIN        1.78
PUT/CALL    0.96
*************************************************************

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

Bah Humbug

It may be starting to look a lot like Christmas in homes but
not in the markets. It appears to be turning into a jobless
holiday for more and more workers. Even more workers are
expected to be paying the holiday bills with unemployment
checks after the first of the year.

Dow Chart - Daily

Nasdaq Chart - Daily


The headline news that jobless claims for this week fell by
-11,000 to "only" 433,000 was not met with cheers. Actually
the numbers were worse. The 441,000 from last week was revised
up to 444,000 meaning this weeks 433,000 was only a drop of
-8,000 from the previously reported numbers. Using their logic
any upward revision does not count and they might as well just
report 250,000 each week and then upwardly revise it to 400+
the next week. That would always provide them with a strong
drop in jobless claims from the "revised" number. Yes, I am
griping about the number games. It is all scripted for the
uneducated investor that happens to hear a sound bite on a
news channel. OIN readers are hopefully more literate and can
see through this smoke screen. A better gauge for the real
numbers is the continuing claims which rose to 3,497,000 from
3,268,000 the week before. That +229,000 gain in the jobless
rolls is a clear sign of trouble. Those who dropped off the
list last week because their claim period expired are not
reported which makes the +229,000 jump even more drastic.
There is also a number of rumors of mass layoffs, which will
be announced after the holidays. Stay tuned.

Another indicator of the lack of recovery was the Chicago
Fed National Activity Index, which came in at -0.51. This is
the fourth consecutive month the index has been below zero
and indicating a pull back in economic activity. Specifically
weak were the employment and production categories. Hiring at
temporary agencies, which is a leading indicator of a rebounding
economy, fell for the third month in a row. The extended weakness
in the CFNAI for the last four months shows an increasing risk
of the economy slipping back into recession. The year-end boost
in production has passed and future production will require
new and currently unseen demand.

Contrary to the two items above the Philadelphia Fed Business
Outlook Survey for their region showed an increase from 6.1
to 7.2. This slight increase in their diffusion index indicated
a very slight pickup in manufacturing in their area. However,
shipments fell to a negative -3.4 and new orders fell from 11.0
to 9.3. Inventories rose to 13.9 from -6.1 but the gains came
mainly from a drop in orders and shipments. Only 30% of the
respondents said they were considering adding employees in the
1Q of 2003. The 1Q spending expectations component fell from
25.8 in November to only 9.1 in December indicating a significant
drop in plans to spend money for any reason. The Conference
Board's index of leading indicators also picked up very slightly
in November from 111.5 to 112.3. This index has been very flat
for the last eight months but may be showing early signs of
improvement.

More of a serious challenge to Americans is the current rise
in oil prices. With oil trading at $21 a barrel and not expected
to drop over the next 30 days consumers are faced with an
undeclared tax on almost everything they buy. For every $1
over $25 a barrel the US consumer will fork out about $7
billion more a month in energy related expenses. At $31 a
bbl this represents a extra $42 billion monthly drain on the
economy. Nobody is exempt since energy is required not only
to heat our homes but in some form for almost every product
we consume. This drain on the economy will drag on corporate
earnings and eventually the stock market. With the war not
likely to happen until February, after the Jan-27th report to
the UN Security Council, this means oil could go higher. The
situation in Venezuela is getting worse not better and there
is no resolution in sight.

Tech stocks tried to rally at the open on the Oracle earnings
news and the semi book-to-bill numbers. Oracle managed to gain
+.37 cents on their news. The semi B-T-B number rose only
slightly from 0.78 to 0.79 but orders were flat and shipments
fell -0.9%. The flat headline number for November was likely
related to last minute orders for rush holiday shipments for
computers and cell phones. There are no indications that there
are any new orders on the horizon and falling capital spending
will continue to drag on the sector. The latest CIO Magazine
Tech Poll in November showed more CIOs expected to cut spending
than increase spending in the current quarter. This was the
second consecutive month the trend was down. The long awaited
upgrade cycle for Y2K computers may be coming but it is still
too far in the distance to be seen.

Microsoft just keeps getting hit with security problems with
yet another warning today. Security holes in Windows XP make
playing media files off the Internet very risky. The same flaw
was found in WinAmp from Nullsoft, which is a unit of AOL. Both
programs would allow for an attacker to disguise his program
as a MP3 or WMA file with the same name as a popular music
download. Once the user clicks on the file the computer belongs
to the attacker and he could modify/delete anything on the PC
without the user being aware. Windows XP does not even require
a user to click on the icon. Just moving your mouse over it is
enough to trigger the program. This makes music file sharing over
the Internet even more risky. Both companies have posted fixes
on their websites. MSFT is hugging support at $53 and AOL is
still glued to $13.25. With multiple Internet companies running
very high profile attack ads against AOL on national TV the
odds are AOL will be looking up at $13 soon.

The market sell off on Thursday was primarily related to the
"material breach" claim against Iraq. The news brought to
reality what everyone knew was coming. We will be going to
war against Iraq in February. I had thought this news was
already priced into the market but obviously there were still
some traders with their head in the sand. The next deadline is
the Jan-27th report to the UN Security Council where the specific
material claims will be spelled out for all to see. There is
no doubt this will be played out in the media well in advance.
The US has already stationed 60,000 troops in the gulf and
authorized another 50,000 today. There are already enough men
and equipment in the gulf to start a war since the first 30
days are expected to be a series of surgical strike air attacks.
Those attacks will be carried out from air bases hundreds if
not thousands of miles from Iraq and with assets already in
place.

The markets on Thursday suffered from a series of attacks in
the form of sell programs. They were repulsed only when the
Dow neared last-ditch resistance near 8300. It was not a wave
of carpet bombing that drove the index down but several
lightning attacks by small sell programs that exploited the
thin ranks of buyers. Each penetration to a lower level
brought a rush of buyers to fill the gap but due to their
limited numbers they were not able to repulse the attacks
for more than a few minutes. The defensive lines at the 50
DMA of 8498 and the 100 DMA at 8408 failed. Only a valiant
stand at the 38% retracement level of 8344 prevented the
defenders from being overrun. The defenders were able to
mount a weak counter attack in the last 30 minutes and
managed to regain some of the ground lost earlier. The buyers
continually ran out of volume and were frantically trying to
induce others to join their cause to no avail. (I obviously
should not write war novels.)

The bulls are counting on historical trends to save them.
Since 1945 the Santa Claus rally has averaged a +10.6% gain
in the Dow from the Nov/Dec lows to the highs in late December
and early January. Since 1945 this string is unbroken. The
smallest gain recent times was 0.86% in 1968-69 and the
largest of +22.22% in 1974-75. The Nov/Dec low for this year
was 8298 on Nov-13th. Using the average gain of +10.6% that
would equate to a potential of 9177 on the Dow. Personally
I think this is not possible in the current state of pre-war.
Still only half of the average gain would put us back near
8750. While nobody can guarantee Santa will appear there is
ample historical evidence to suggest traders will see some
sort of bounce over the next couple of weeks. Since 1968
only five of the eventual highs occurred in December while
28 occurred in January. In our current bear market for the
last three years the highs occurred on Jan 8th, 14th and 3rd.

In 1990 when the US was preparing for the gulf war the Dow
sold off from its high of the year at 3010 to the October
low of 2344. A it became evident that the US and the growing
coalition was going to kick Iraq troops back to Baghdad the Dow
rebounded over the December holidays to 2662 but fell sharply
back to 2448 when the attack started. Within a week the Dow
began to rebound and hit 3017 again by March. That +20% rebound
began a new bull market that climaxed at 11,750 in Jan-2000.
We know that economic conditions were almost the same this
year as they were in 1990 and that our odds are significantly
better in Iraq now than they appeared to be then. A casual
observer would expect no further drops in the market due to
war sentiment since the massing of troops tends to build
patriotic spirit. Couple that with extreme oversold conditions
and the Dow at strong support and I would say the potential for
a Santa Claus rally is strong. That opinion and $4 will get
you a coffee at Starbucks but that is the way I see it. I
am still a buyer of the market below Dow 8450 with a stop
at 8250. My sell target is 8750. That is where I think the
economic issues will again take center stage.

Of note were the TRIN, which closed at 1.78 and the put/call
ratio which closed at .96. Both are indicating a level of
fear and oversold conditions which could produce a bounce
at Friday's open. It is a quadruple witching Friday but most
squaring of positions should already be complete. I expect
some strong volume on the Nasdaq as the rebalancing becomes
effective as of the close of business. Heavy selling in those
15 NDX stocks being removed should not significantly impact
any chance of a Nasdaq bounce at the close because they are
already nearing penny stock status.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Boston Scientific - BSX - close: 43.70 change: +0.45 stop: *text*

Company Description:
Boston Scientific is a worldwide developer, manufacturer and
marketer of medical devices whose products are used in a broad
range of interventional medical specialties. (source: company
press release)

Why We Like It:
A glance at the daily chart for BSX reveals that investors have
had an insatiable appetitive for shares of this medical device
company.  What's driving the stock higher?  The current uptrend
can be traced back to early-October, when a federal judge ruled
against Guidant (GDT) in a case involving drug-coated heart
stents.  Guidant is competing with Boston Scientific to bring the
lucrative gizmos to market.  The judge's ruling significantly
delayed GDT's research, effectively leaving BSX and JNJ as the
only major players.  Meanwhile, BSX has moved ever-closer to FDA
approval of its own stents.  On November 18th the company
reported that its TAXUS IV product had shown positive results in
a safety study.  More positive news arrived nine days later, when
Guidant's appeal of the previous decision fell flat.  This second
ruling helped to propel the stock to new 52-week highs.
Technically, we like how BSX has bounced back after pulling back
to the bottom of its ascending regression channel.  The stock
showed good relative strength today and closed at levels not seen
since 1999.  The rising volume and MACD (which is poised to give
a bullish crossover) bode well for a continuation of the existing
uptrend.  In terms of upside potential, we'll be aiming for a
rally to the $50.00 level.  Shorter-term traders may want to
target a move to the all-time highs near $47.00.  Our entry
trigger for this play will be set at $44.01.  If shares reach
this level our stop will be located at $40.99, just below the
December lows.  This creates a risk/reward ratio of roughly 1:2.
Those with slightly more conservative strategy could use a stop
just below $41.50.

Picked on December xxth at $xx.xx <-- see text
Results since picked:       +0.00
Earnings Date            10/22/02 (confirmed)





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

And the Wheels Came Off
by Steven Price

What started as a nice bounce in the markets into the green,
quickly turned south as world events took a turn for the worse.
We saw a move higher following good news from Oracle after the
bell on Wednesday, as the company beat earnings estimates and
guided slightly higher.  That was followed by mixed, but mostly
positive economic data, as the Philly Fed report came in at a
reading of 7.2, above expectations of 5.0.  The index of leading
economic indicators also jumped 0.7%, versus a consensus of 0.6%
and saw the October reading revised upward from a flat reading to
a gain of 0.1%.  The one piece of negative data was an important
one, as the initial claims number showed jobless claims jumped to
433,000 and the four-week average increased by 12,750 to 400,750.
That average is the highest since the first week of November.
The jobs report certainly looks bearish, but numbers out at this
time of the year are somewhat unreliable due to seasonal
fluctuations and the recent drop in the average as low as 377,250
may have been overly bullish, as well.   In any case, the market
shook off those numbers and rallied to a high of 8505 in the Dow
and 1384 in the Nasdaq Composite.

Then, the bleeding started.  News came out that Chief U.N.
inspector Hans Blix would tell the U.N. that the Iraqi weapons
declaration was lacking the answers he was looking for.  That
sent the ball rolling downhill and as more reports surfaced that
the U.S. would declare Iraq in "material breach" of the U.N.
agreement, that sell-off picked up steam.  The Dow gave up 140
points from its high, and fell through recent support at 8400.
The "material breach" term was the key phrase that puts us one
step closer to war. While not many traders predicted that Iraq
would fully comply with the UN resolution, the statement that it
had not sent us reeling.  It was not, however, a massive sell-off
and so far the heavy support at Dow 8300 has held up. If there is
going to be an end of year rally, it will have to come in spite
of the geo-political picture, which seems to be getting worse,
rather than better.

One political factor that has been weighing on the economy, but
may be seeing a glimmer of hope, is the general strike in
Venezuela.  Today Venezuela's Supreme Court issued an injunction
against the oil worker strike, sending oil prices lower after the
recent surge in oil futures up to $31.25.  The U.S. imports about
15% of its oil from Venezuela and the recent surge in prices has
mirrored the recent drop in equities. While that relationship
also mirrors Iraqi tensions, a drop in oil prices can only help
lower costs for industries across the board.

Much of the cash that came out of stocks today flowed into bonds,
as the five, ten and thirty-year treasuries were all green. The
five and ten-year notes have broken downward sloping trend lines
and are approaching horizontal resistance, while the thirty-year
has yet to break the trend.

While today certainly had a bearish tone, it is hard to make a
case that the stock market looks terrible.  The sell-off was in
concert with the Iraq news after a rally following the economic
data releases and Oracle news.  If not for the war talk, we may
very well have finished the day in the green.  Of course, coulda-
woulda-shoulda doesn't get us very far swimming against the tide.
Colin Powell's statements carried a lot of strong rhetoric about
what Iraq failed to include in its declaration.  However, he also
said that the ball is in their court to rectify the situation and
cooperate with inspections.  Sounds like yet another chance (17
now by the President's count in a previous speech) for Saddam to
avoid an immediate invasion. A law professor once told me that
when analyzing a Supreme Court decision I should look at what
they did, not what they said.  So far, we just gave Iraq more
time. That doesn't mean we aren't laying the foundation for an
invasion, but I was expecting a little more direct threat than
what we heard this afternoon, given the opportunity to side with
Blix and declare that Hussein had run out of chances.

If the Dow continues its slide below 8200, then all bets are off,
as this area of support may end up as resistance on a rebound
attempt.  However, the so-called traditional Santa Claus rally,
taken from a low made in November or December, to a high in
December or January, has averaged over 10% in the Dow since 1968.
That rally just might form a nice right shoulder if we rollover
following the rally.  With that data behind us, I would still
expect some type of bounce over the next few days.  If not, look
out below.
-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8364

Moving Averages:
(Simple)

 10-dma: 8522
 50-dma: 8493
200-dma: 9072

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  884

Moving Averages:
(Simple)

 10-dma:  899
 50-dma:  897
200-dma:  968

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1006

Moving Averages:
(Simple)

 10-dma: 1029
 50-dma: 1019
200-dma: 1094
-----------------------------------------------------------------

The Semiconductor Index (SOX.X): The Semiconductor Index was
quite a surprise today.  After leading the broader markets lower
for the last couple of weeks, for once it wasn't the culprit on a
big drop.  Following Oracle's earnings release, the chip stocks
followed the software companies higher this morning for a brief
period of time.  When the Iraq news hit the wires, the bottom
fell out of the market.  By the end of the day, however, the SOX
gave up only -0.79, barely a blip on the radar screen.  As this
average has been very closely correlated with the S&P 500, having
matched drops of 2.5% or more on 53 of 55 days in the last year.
Is this telling us that the broad market drop was simply news
related and we can expect a bounce in the morning?  We can't be
sure, but the fact that the SOX failed to confirm the drop is
likely a bullish sign.

52-week High: 657
52-week Low : 214
Current     : 297

Moving Averages:
(Simple)

 10-dma: 315
 50-dma: 309
200-dma: 392
-----------------------------------------------------------------

Market Volatility

The VIX popped to 34.55 today, as the Dow/OEX/SPX dropped on war-
related fears.  However, the VXN actually dropped slightly,
indicating the tech sell-off may be coming to an end, at least
temporarily.  The techs did not react violently to the Iraq news,
along with the blue chips, indicating the drop had less to do
with fundamentals than geo-political fears. In the past the techs
have led the broader markets, and although we saw a drop in the
NDX, the 1000 support level held up and the VXN reflects that
support.


CBOE Market Volatility Index (VIX) = 34.55 +2.80
Nasdaq-100 Volatility Index  (VXN) = 49.47 -0.17
-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.95        599,998       572,089
Equity Only    0.81        395,592       320,754
OEX            1.10         43,956        48,303
QQQ            1.68         59,944       100,762
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          49      - 1     Bull Confirmed
NASDAQ-100    62      - 2     Bear Alert
Dow Indust.   57      - 3     Bear Alert
S&P 500       60      - 3     Bull Confirmed
S&P 100       58      - 6     Bear 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   1.45
10-Day Arms Index  1.36
21-Day Arms Index  1.30
55-Day Arms Index  1.16

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       1290          1575
NASDAQ     1435          1749

        New Highs      New Lows
NYSE         42              47
NASDAQ       56              65

        Volume (in millions)
NYSE       1617
NASDAQ     1627
-----------------------------------------------------------------

Commitments Of Traders Report: 12/10/02

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 2,000 long contracts and 16,000 shorts, leading
to a 30% increase in the net short position. Small traders took
the opposite approach, leaving the net long position unchanged,
while reducing shorts by 9,000 contracts.

Commercials   Long      Short      Net     % Of OI
11/19/02      446,668   480,270   (33,602)   (3.6%)
11/26/02      447,024   488,250   (41,226)   (4.4%)
12/03/02      444,345   487,411   (43,066)   (4.6%)
12/10/02      446,831   503,583   (56,752)   (5.9%)

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

Small Traders Long      Short      Net     % of OI
11/19/02      143,070    77,332    65,738     29.8%
11/26/02      155,975    81,962    74,013     31.1%
12/03/02      162,192    82,584    79,608     32.5%
12/10/02      162,115    71,505    90,610     38.8%

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 saw a small gain to the long side, but left shorts
virtually unchanged.  Small traders increased long positions by
1,300 contracts, while slightly reducing the short side.

Commercials   Long      Short      Net     % of OI
11/19/02       42,074     52,302   (10,228) (10.7%)
11/26/02       43,231     52,425   ( 9,194) ( 9.6%)
12/03/02       43,709     51,977   ( 8,268) ( 8.6%)
12/10/02       44,651     51,716   ( 7,065) ( 7.3%)

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
11/19/02       16,292    10,540     5,752    21.4%
11/26/02       17,574    12,329     5,245    17.5%
12/03/02       13,749     9,869     3,880    16.4%
12/10/02       15,026     9,242     5,784    23.8%

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 maintained the status quo, with no significant
changes to positions.  Small traders followed suit, making only
slight reductions to both the long and short side.

Commercials   Long      Short      Net     % of OI
11/19/02       23,535    15,741    7,794      19.8%
11/26/02       20,499    15,015    5,484      15.4%
12/03/02       20,176    15,427    4,749      13.3%
12/10/02       19,953    15,759    4,194      11.7%

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
11/19/02        4,428     8,203    (3,775)   (29.9%)
11/26/02        6,544    10,350    (3,806)   (22.5%)
12/03/02        5,885     9,781    (3,896)   (24.9%)
12/10/02        5,394     9,499    (4,105)   (27.6%)

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 12-19-2002
                                                    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:

Net Bulls
  Bearish Play Updates:  LXK, TECD
  Closed Bullish Plays:  MERQ, NVDA

Stock Bottom / Active Trader
  New Bullish Plays:     BSX
  Bearish Play Updates:  AIG, COST, DLX

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)


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

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

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

Lexmark Intl - LXK - close: 61.68 change: +1.58 stop: 62.56

As we discussed in last night's comments, LXK was pressured by
yesterday's European Union ruling that Lexmark (and other
computer printer companies) could not force customers to buy
their own brand-name ink cartridges.  This news sent the stock
lower by more than 5%.  Our short play was triggered when shares
dipped below $60.00.  The violation of this critical support
level had us looking for a continued decline on Thursday.
However, the stock proved to be quite resilient.  Shares traded
contrary to the broader market trend and actually stair-stepped
higher in afternoon trading.  Although this rebound is a bit
disconcerting, the technical picture remains decidedly negative:
Yesterday's selloff produced a quadruple-bottom sell signal on
the point-and-figure chart, and the daily stochastics (5,3,3) are
beginning to falter near the mid-range.  New entries can be
evaluated if LXK breaks out of today's Inside Day formation and
falls below $59.70.  Our stop at $62.56 is somewhat conservative.
Those who can handle more risk may want to consider a stop
slightly above $63.50.

Picked on December 18th at $59.97
Results since picked:       -1.71
Earnings Date            10/21/02 (confirmed)




---

Tech Data Corp. - TECD - cls: 28.31 chg: +0.03 stop: 30.51

We're having a tough time figuring this one out.  TECD seems to
want to trade sideways, regardless of what the NASDAQ is doing.
Shares traded in positive territory for most of Thursday's
session, despite a sell-off in the overall tech sector.  The
stock may have been buoyed by news that Tech Data had signed a
distribution agreement with Sun Microsystems (SUNW).  Today's
relative strength could be seen as a bullish development, but
it's important to note that shares were not able to clear
substantial short-term resistance in the $28.50-$29.00 area.  We
expect the bears to continue to defend this level unless the
NASDAQ experiences a powerful rally.  Of course all this
rangebound trading has to end eventually.  Conservative traders
may want to place their stops slightly above $29.00.  This would
protect a small gain from our entry point.  We'll continue to
watch for a breakdown under the $26.72 to clear the way for a
move to our exit target at $25.11.

Picked on December 5th at $29.49
Results since picked:      +1.18
Earnings Date           11/25/02 (confirmed)





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

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

Mercury Interactive - MERQ - cls: 31.51 chg: -0.22 stop: 28.48

Pacific Growth Securities initiated coverage on MERQ yesterday
with a non-committal "Equal Weight" rating.  Although this news
didn't help shares to shrug off the overall tech weakness, it was
encouraging to see that the $30.00 level provided support.
Unfortunately today's NASDAQ sell-off proved to be more than the
bulls could handle.  MERQ was hit with heavy selling shortly
after the opening bell.  Shares fell below $30.00 and the 200-dma
($28.78) before finally bottoming out slightly above the 50-dma
at $28.17.  This hypothetical trade was closed for a loss of 5.9%
when the stock violated our stop-loss at $28.48.  In hindsight,
it looks like the weakening NASDAQ was this play's undoing.  A
large sell-off in the chip sector also helped to scare off
potential investors.  MERQ seemed to have enough strength to
retest its November highs, but the stock just couldn't fight the
broader market's downtrend.  Sector bulls will be watching for
the GSO.X to remain above 100.  With MSFT sitting just above its
200-dma, it may be do-or-die time for the software group.

Picked on December 11th at $30.27
Results since picked:       -1.79
Earnings Date            10/17/02 (confirmed)




---

NVIDIA Corp. - NVDA - close: 12.65 change: -0.28 stop: 12.87

The current landscape for NVDA shareholders does not look good if
they have not yet been stopped out.  Wednesday was the telling
day for both the markets and NVDA.  Looking at the broader
markets first, NVDA has been feeling the weight of the Dow
Industrials three-day losing streak and its break under the 8400
level.  We witnessed a similar decline in the NASDAQ Composite
and the NAZ closed below its 50-dma while trading lower to its
1350 level on Thursday.  Mirroring the declines was the SOX chip
index, which fell hard on Wednesday and closed below its 50-dma
and under the 300 level.  Shares of NVDA held up somewhat better
and were able to maintain support at the 50-dma on Wednesday at
$12.90 despite bad news from rival ATI.  It was this earnings
news from ATI Technologies that probably hit NVDA the hardest.
Higher sales not withstanding, ATI's Q1 profit numbers suffered
due to product writedowns and higher costs.  The stock, which
trades on the Toronto exchange, was given a 22% hair cut
(Reuters).  The Premier Investor Newsletter would have been
stopped out at $12.70 at the opening bid for today's session.
This is below our stop of $12.87 and results in a $1.83 loss.
The environment and technical breakdowns do not look good for
NVDA and shares could see a retest of their lows near $10 if the
market continues to slide.

Picked on December 12th at $14.53
Results since picked:       -1.83
Earnings Date            11/07/02 (confirmed)






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

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

  -----------------
  New Bullish Plays
  -----------------

Boston Scientific - BSX - close: 43.70 change: +0.45 stop: *text*

Company Description:
Boston Scientific is a worldwide developer, manufacturer and
marketer of medical devices whose products are used in a broad
range of interventional medical specialties. (source: company
press release)

Why We Like It:
A glance at the daily chart for BSX reveals that investors have
had an insatiable appetitive for shares of this medical device
company.  What's driving the stock higher?  The current uptrend
can be traced back to early-October, when a federal judge ruled
against Guidant (GDT) in a case involving drug-coated heart
stents.  Guidant is competing with Boston Scientific to bring the
lucrative gizmos to market.  The judge's ruling significantly
delayed GDT's research, effectively leaving BSX and JNJ as the
only major players.  Meanwhile, BSX has moved ever-closer to FDA
approval of its own stents.  On November 18th the company
reported that its TAXUS IV product had shown positive results in
a safety study.  More positive news arrived nine days later, when
Guidant's appeal of the previous decision fell flat.  This second
ruling helped to propel the stock to new 52-week highs.
Technically, we like how BSX has bounced back after pulling back
to the bottom of its ascending regression channel.  The stock
showed good relative strength today and closed at levels not seen
since 1999.  The rising volume and MACD (which is poised to give
a bullish crossover) bode well for a continuation of the existing
uptrend.  In terms of upside potential, we'll be aiming for a
rally to the $50.00 level.  Shorter-term traders may want to
target a move to the all-time highs near $47.00.  Our entry
trigger for this play will be set at $44.01.  If shares reach
this level our stop will be located at $40.99, just below the
December lows.  This creates a risk/reward ratio of roughly 1:2.
Those with slightly more conservative strategy could use a stop
just below $41.50.

Picked on December xxth at $xx.xx <-- see text
Results since picked:       +0.00
Earnings Date            10/22/02 (confirmed)





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

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

American Intl. - AIG - cls: 58.09 chg: -0.95 stop: 62.76

It's taken almost two weeks but AIG is finally picking up some
bearish momentum.  The recent trend of lower highs gave the bulls
a heads-up that the technical picture was worsening, even though
shares had continued to gravitate towards $60.00.  Savvy bears
may have been able to take advantage of this morning's rollover
from that level.  Today's broader market weakness provided the
perfect catalyst to take AIG down to new lows.  Shares headed
lower after topping out at $59.97, moved below the relative low
of $58.64, and finished with a loss of 1.6%.  By way of
comparison, the insurance index posted a loss of 1.2%.  With the
IUX.X also trading below support, we think AIG will continue to
move lower in the near-term.  New entries can be gauged on
another rollover from $60.00.  In the news this afternoon, a New
York judge denied a motion by several insurance companies
(including AIG) in a case related to the World Trade Center
attacks.  The issue at hand is whether the terrorist acts count
as one or two events.  If the judge rules that the attacks were
two separate events (two buildings targeted by two different
planes), the liable insurance companies would be forced to pay a
larger amount.

Picked on December 6th at $60.80
Results since picked:      +2.71
Earnings Date           10/24/02 (confirmed)




---

Costco Wholesale - COST - cls: 27.60 chg: +0.08 stop: 30.51

Our short play in COST was triggered on Wednesday morning after
shares dipped to new multi-year lows.  The stock spent the
remainder of the session trading near $27.50.  Today's action was
very similar, with the exception of a brief move higher during
the first hour of trading.  These gains evaporated once the
broader market started to drift lower.  Shares tagged a new
relative low but managed to hold up pretty well while the retail
index drifted into negative territory.  Sector bears can be
pleased with the fact that the RLX.X has fallen below support
near 270.  On Friday we'll be looking for COST to abandon the
$27.50 area and move under today's low of $27.20.  New entries
can be targeted if a breakdown does occur, but be sure to first
confirm weakness in the RLX.X.

Picked on December 18th at $27.56
Results since picked:       -0.04
Earnings Date:           12/12/02 (confirmed)





---

Deluxe Corp. - DLX - close: 40.09 change: -0.31 stop: 43.76 *new*

A 15-minute chart for DLX brings to mind images of sap on a tree,
slooowly dripping lower.  This gradual downtrend has been intact
ever since the stock rolled over from its 200-dma earlier this
month.  Shares haven't been able to attract many buyers, and the
recent broader market weakness sure isn't helping matters.  The
main challenge the bears face is psychological support at $40.00,
which was tested at the tail-end of today's session.  If a bounce
ensues from this level we'll be looking for shares to find
resistance at $41.00 and $41.50.  $42.00, which previously
provided support, also coincides with the top of DLX's descending
regression channel.  A move below $40.00 would provide an
opportunity to consider new short positions.  Our stop has been
lowered to $43.76, just above the 200-dma.  More conservative
traders may want to use a stop slightly above $42.00.

Picked on December 4th at $41.28
Results since picked:      +1.19
Earnings Date           10/17/02 (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

TMB     Telemig Celular            17.30     +0.65
INDB    Independent Bank Corp      23.76     +0.59
KB      Kookmin Bank               39.53     +0.57

---------------------------------------
Breakout to Upside (Stocks $5 to $20)
---------------------------------------
Ticker  Company Name               Close     Change
SEPR    Sepracor Inc                9.14     +1.24
RBN     Robbins & Meyers Inc       17.42     +1.32

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

PHM     Pulte Homes                49.44     +1.34
TRMS    Trimeris Inc               42.45     +2.49
BBBY    Bed Bath & Beyond          33.73     +1.40
GPN     Global Pmts. Inc           31.40     +1.50
ATK     Alliant Techsystems        60.97     +2.17

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

KKD     Krispy Kreme Doughnuts     32.95     -2.63
EK      Eastman Kodak              35.95     -1.22
GS      Goldman Sachs              70.30     -3.40
ICOS    Icos Corp                  25.20     -4.48
AGN     Allergan Inc               53.75     -3.10
UB      Unionbancal Corp           39.86     -1.14
CLX     Clorox Co                  41.95     -1.95
PSS     Payless Shoesource         51.75     -1.79
LOGI    Logitech Intl.             30.10     -1.46
LF      Leapfrog Enterprises       25.25     -1.13

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

PG      Procter & Gamble           85.70     -1.67




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