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Daily Newsletter, Thursday, 01/09/2003

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PremierInvestor.net Newsletter                 Thursday 01-09-2003
                                                    section 1 of 2
Copyright ) 2003, 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:      Stampede!
Play-of-the-Day:  Lots Of Downside Potential
Market Sentiment: One More Step


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      01-02-2003           High     Low     Volume Advance/Decline
DJIA     8776.18 +180.90  8787.70  8596.61 1.89 bln   2318/ 963
NASDAQ   1438.48 + 37.40  1445.09  1414.47 1.66 bln   2350/1035
S&P 100   469.92 +  9.86   470.44   460.06   Totals   4668/1998
S&P 500   927.57 + 17.64   928.31   909.93
W5000    8755.00 +160.00  8760.47  8596.03
RUS 2000  395.94 + 41.10   396.87   389.07
DJ TRANS 2411.79 + 41.10  2411.79  2369.79
VIX        26.88 -  1.54    27.88    26.19
VXN        42.99 -  1.57    45.06    41.79
Total Volume 3,733M
Total UpVol  3,181M
Total DnVol    522M
52wk Highs  293
52wk Lows    66
TRIN       0.46
PUT/CALL    .74
*************************************************************

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

Stampede!

Bulls broke out of the corral and stampeded up the hillside
to supposedly greener pastures ahead. Unfortunately the heavy
diet of bearish leftovers and lack of any real exercise since
Dec-2nd has left them breathless after the three days of
sprints in 2003. Each run has resulted in a failure to crest
the top of the hill at 8800 and the need for another nap the
next day. Will Friday be different?

Dow Chart - Daily


Nasdaq Chart - Daily


The morning started with a bang when the jobless claims fell
slightly to +389,000 for last week. This was a surprise as
many had expected the number to rise now that the holiday
distractions are over. Chalk up one for the good guys. The
continuing claims decreased by -35,000 to 3.445 million but
that number is expected to rise sharply now that they have
approved another 13 weeks of benefits to 2.3 million additional
workers that are still unemployed. Over a million other workers
that have been unemployed for 39 weeks already are still out
of luck.

The Wholesale Trade numbers also surprised analysts with a
+1.2% gain and a gain in inventories of +0.2%. This pushed
the inventory-to-sales ratio to a record low of 1.21. The
jump in sales and inventories suggested on the surface that
there was a glimmer of hope at the end of the tunnel. The
majority of the gains were autos again and we know what the
future holds for them. These were the numbers for November
and may not be a good indication of the current situation.
We have heard several tech companies say they have not seen
any increase in capital spending with EMC and SAP being the
exceptions. The record low inventory to sales levels will
provide a very big boost to the recovery once it starts.
There will be strong buying to replenish those levels once
demand is seen again.

Retail Sales for December rose only +1.0% and was the worst
gain for the period since 1970. This report came only two
days after the same research firm raised estimates to 2.0%
for the period. Evidently they lost a few fractions between
estimates and final. Weakness was chalked up to serious
discounting, lower inventory levels, strikes, snipers,
weather, gasoline prices and unemployment. However, despite
the negative news investors celebrated. It appears the
outlook was for a much worse holiday season. (Worst in 32
years was not enough?) Several stores reported same store
sales and WMT gained +2.3% with TGT showing only a slight
decline and FD losing -2.6%. Still FD gained +1.71 on the
news. Will wonders never cease? Worst year in 32 years BUT
it could have been worse. Let's buy! (grin) The reality is
that investors felt this should be a bottom for retailers
with the 2H-2003 recovery in our future. (Yes, somebody is
counting eggs instead of chickens.)

There were several other positive news events today. SAP
said they were going to raise guidance due to stronger than
expected sales in the fourth quarter. This gave techs a boost
since their expectations had been for a decline in SAP sales.
The tech gain was surprising since the gain in SAP sale was
only "slight". On the whole there appeared to be many more
warnings/downgrades than raised guidance/upgrades but traders
already had their mind made up. These were some of the changes
today.

Warnings: WTSLA, PSS, OO, TOO, FD, EMN, CPWR, KSS, TGT, DG,
BJ, CTR, MHO, SKS, WYE, SHLM, ICPT, AOL, CAKE, LXK, ASH, SGP,
BGP, HUF, FINL, TOY.

Raised guidance: BBY, SAP, AZN, BWS, ROST, INVX, MRVC, ALO,
RPM, ROK.

What captured investors attention this morning were statements
out of the UN that they have not found any smoking gun. There
were several news conferences about the lack of progress and
the bottom line appeared to be that the potential war could
be setback as far as Nov/Dec. This easing war deadline made
traders more confident that it may not happen at all. The
"deadline" for the formal report on Jan-27th has turned into
a status check instead. Almost everyone now expects that the
inspectors will request much more time and the US will be
forced to cool its heels. There was another order issued to
the Marines today which prohibits any Marine from leaving the
service for the next 12 months. B2 bombers were ordered to
leave from Idaho to staging areas closer to the battlefield.
There are about 200,000 troops either in theater or moving
into position with another 50,000 expected to be called up.

Key dates in our future are the State of the Union speech on
Jan-28th (just a coincidence that it is a day after the prior
Jan-27th deadline, right?) and the Muslim holy weeks. Two
million Muslim pilgrims will be traveling to Saudi Arabia
performing the Hajj by the first week of February. The end
of this event is the Adha celebration which takes place
on Feb-14th. It is generally accepted that the US would not
start the war until after this period. This allows them to
give the UN inspectors another 30 days but any further delay
would put the effort off until the next winter due to the
very hot summer conditions.

Another positive event was promising words out of North Korea.
It appears the rush to make nuclear bombs has slowed as pressure
was brought to bear from their neighbors. The NK ambassador
is meeting in the US to discuss potential resolutions.

Suddenly the world appears closer to continued peace and
fewer unemployed. This could be a temporary situation but
it did cause shorts in the market to cover in panic for
the third time this short year. The markets are VERY skittish
and there is no confirmation in either direction as evidenced
by the alternating triple digit days. The markets want to
go up based on the expectations that the Bush stimulus,
added to the already flood of Fed stimulus, will simply
over power the economic sluggishness. Traders are tired
of fighting losses for the last three years and are ready
to invest regardless of the conditions.

This positive sentiment flattened the VIX to a six-month
low of 26.19 today. The TRIN also fell to a very overbought
level of .35 around noon. While the VIX at 26 is far from
historic levels is in an indication that there is no fear
in the markets. Almost everybody is bullish, which in itself
is a bad sign. The Dow closed just below strong resistance
at 8800 once again. This is the 3rd time since Jan-2nd that
the Dow has come within 20 points of that 8800 level. On a
normal day this would be a setup for failure.

Tomorrow the bears could be caught flat-footed again. The
Jobs report for December will be released on Friday at 8:30
AM. Last months number showed a loss of -40,000 jobs. The
forecast for December is for a gain of +32,000 jobs. If that
jobs number is exceeded the bullish sentiment could explode
and the bears could be looking at an opening well over 8800.
Conversely, if the number is negative we could see the same
result as the retail sales as traders look forward to a
future without war. I realize this is a stretch for some
readers, it is for me, but instead of trading what we think
we need to trade what we see. A break over 8800 would cause
another serious round of short covering and would put Dow
9000 clearly in our sights once again.

There was a material change in our technicals today. The
Nasdaq closed over its 200 DMA at 1435 by 3 points. Granted
that is not much but it did seem to gravitate and stick to
that average all afternoon. Any further move over it would
prompt serious short covering. It appears we could be set
up for a big move at the open in either direction depending
on the Jobs report and any news events. According to Yahoo
there are only seven companies who report earnings on Friday
so any flurry of stock news could be warnings. It should be
interesting!

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Telephone Data Systems - TDS - cls: 43.73 chg: -0.79 stop: *text*

Company Description:
TDS is a diversified telecommunications corporation founded in
1969. Through its strategic business units, U.S. Cellular and TDS
Telecom, TDS operates primarily by providing wireless and local
telephone service. TDS builds value for its shareholders by
providing excellent communications services in growing, closely
related segments of the telecommunications industry. (source:
company press release)

Why We Like It:
Something is amiss with TDS.  The past two sessions have seen
shares of the telecom provider sell off on nearly three times the
average daily volume.  What's driving the stock lower?  Frankly,
we can't say for sure.  A scan of recent news items on both Yahoo
and Briefing.com turned up no fresh developments to explain the
sell-off.  However, we did see a note that TDS was a participant
in Salomon Smith Barney's annual Media and Telecommunications
conference.  The company was expected to give a presentation
during the meeting, which began on Monday and ended today.  Based
on the sudden and high-volume nature of the recent decline, we
think TDS announced something at the conference that spooked
investors.  The strong volume behind the sell-off suggests that a
lot of larger institutional players are bailing out of long
positions.  But again, we can't say for certain what's pressuring
TDS.  We'll be looking for analyst comments on Friday or Monday
to help clear things up.

Something we can be more certain of is the stock's technical
weakness.  TDS has been mired in a long-term downtrend that began
in late-1999.  It's been a long and painful journey for
shareholders and it doesn't look like they'll be getting any
relief in the near future.  The stock gave back another 1.7%
today and seemed to be completely oblivious to the broader tech
rally.  This decline took TDS to levels not seen since the tail-
end of 1998.  Bulls will not be encouraged by the fact that the
selling was backed by the strongest volume reading since July.
Further technical negativity can be gleaned from the falling
daily stochastics (5,3,3).  Although TDS has come under a lot of
selling pressure, this oscillator is indicating that shares have
not yet reached oversold levels.  The MACD is also looking weak,
as it begins to roll over below the baseline.  The weekly chart
shows no clear support until the lows for that year near $30.00.
$30.00 also happens to be the current vertical bearish count on
the point-and-figure chart.  This would be a reasonable downside
target for longer-term traders.  Since we have a shorter
timeframe, we'll be aiming for a decline to the $33-$35 region.
Our trigger to enter this short play will be at $43.40, one cent
under today's low.  If we're triggered we'll give TDS ample room
to move with a stop at $47.11, just over Wednesday's high.
Traders willing to take a little more heat could use a stop
slightly above $47.57.  This would force TDS to fill in the small
gap that was created on Wednesday morning.

Picked on January xth at $xx.xx <- see text
Results since picked:     +0.00
Earnings Date          02/05/03 (unconfirmed)





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

One More Step
by Steven Price

That big sell-off to support in the Dow, SPX and COMP appears as
though it may have just been a pullback on the road to higher
ground.  That being said, we are still fighting heavy resistance
and market direction is getting harder to predict.   What many
traders thought were ticking time bombs ended up fizzling out as
news from the retail sector and General Motors was not as bad as
expected.  Good news from German software maker SAP also helped
the techs, as the company raised guidance on stronger than
anticipated software license revenues. It was enough to erase
of yesterday's drop, giving the impression that the January
effect remains strong.

The initial jobless claims report released this morning showed a
drop of 19,000 claims last week, pushing the four-week average
down to just above the 400,000 level that economists generally
regard as a sign of an improving or worsening employment picture.
The average still remains at 406,000, but it is headed in the
right direction. We are still quite a ways from the 350,00 level
that signals an expanding labor market, but now that we are past
the holidays, there may be hope that companies which had
previously put off hiring until after the New Year may once again
begin hiring.  Of course that knife cuts both ways with companies
that held back on layoffs until after Christmas.  In any case,
the first claims number of the year shows a shift toward the
former.

General Motors released its 2003 earnings estimates, which came
in higher than expected.  The market got the jitters yesterday,
as rumors about GM lowering the expected return on their pension
fund circulated and created worries that the write-down would
affect the company's bottom line. The company did reduce its
expected return from 10% to 9%. The pension plan was underfunded
by $19.2 billion at the end of 2002. While the company did say
its pension liabilities will increase from $1 billion in 2002 to
$3 billion in 2003, it also said it will earn $5 per share in
2003, ahead of consensus estimates of $4.82 per share.  The
underfunding was not as bad as expected and the guidance for 2003
was enough to bring investors back into the stock, which gained
$1.29 to close at $39.50.

The news from SAP sent the Nasdaq up 37.38 points, making up
of Wednesday's loss and closing above its 200-dma of 1435.89, at
1438.46.  This is the first close over the 200-dma since March.
That 200-dma put a lid on the November/December rally, as well as
Monday's big run.  Wednesday's sell-off, however, found support
at the 50-dma of 1394.  With the 50-dma ascending support and the
200-dma descending resistance, a breakout beyond these averages
could be significant and give us a directional clue for at least
the short term.  Fellow software makers also benefited from the
SAP news, as the sector index (GSO.X) rallied almost 5% to
115.15, breaking back over Monday's high of 113.92 and setting
its sights on the December 2 rally high of 121.58.

A look at the point and figure chart shows a reversal down
yesterday in the Dow, SPX and OEX from a column of "X" to a
column of "O."  We got the opposite action today, with a reversal
back into the column of "X."  This looks bullish as we pulled
back following a big run, then found support and reversed higher.
We also saw a reversal up in the Dow bullish percent and it
appears the tide may be turning.  However, we are also trading
right up against significant horizontal resistance on the daily
chart at Dow 8800.  We failed there on Monday and Tuesday and
today's rally ended just short once again. It appears it will be
a hard fought battle at that level. Right now the bears are
winning, but the bulls continue to hit that door with the
battering ram and I'm not sure how much longer it will hold.  Of
course, we saw similar action just a week ago as we tested the
downside at 8200-8300.

Why the big change?  The President's tax plan was the impetus
that got us rolling as investors rushed for dividend paying
stocks.  Today's announcement by the U.N. weapons inspectors that
they found no smoking gun in Iraq also appears to have delayed
the specter of war. For now it certainly appears as though we are
headed higher after bouncing on the pullback.  A decisive move
over Dow 8800 would indicate a re-test of December highs over
9000 in the near future.  Traders can keep an eye on that level
to either get long with a tight stop, or at least get out of the
way if shorting resistance.
-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8776

Moving Averages:
(Simple)

 10-dma: 8547
 50-dma: 8575
200-dma: 8941

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  927

Moving Averages:
(Simple)

 10-dma:  902
 50-dma:  904
200-dma:  951

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1076

Moving Averages:
(Simple)

 10-dma: 1029
 50-dma: 1041
200-dma: 1064
-----------------------------------------------------------------
The Software Index (GSO.X):  The Software Index raced to new

relative highs today following increased guidance from German
Software firm SAP.  SAP said it saw higher licensing revenue than
anticipated, giving the techs something to cheer about across the
board. After blowing through its 200-dma on Tuesday, the GSO
pulled back to support above that level on Wednesday's market
drop.  It is impressive that the group held that support level
after the breakthrough and today's new high suggests it may make
a run at the December high of 121.58.  Microsoft is encountering
resistance $56, but traders can look for a move through that
resistance as a signal to look for other longs in the sector as
well.  As the GSO approaches 120, however, be ready to tighten
stops in case of a pullback.

52-week High: 204
52-week Low : 77
Current     : 115

Moving Averages:
(Simple)

 10-dma: 108
 50-dma: 118
200-dma: 264
-----------------------------------------------------------------

Market Volatility

The VIX dropped back toward 26 once again on today's broad market
rally. It continues to flirt with support at that level on
rallies, and signal market pullbacks each time.  However, if we
continue higher above Dow 8800 on a closing basis, we may finally
see that support give way and the VIX drop to its lowest levels
since June. With the market still trading in wide daily ranges
and the VIX headed toward relative lows, traders who are adept at
scalping positions against long options may want to consider
straddle purchases.  These involve the purchase of both a call
and a put at the same strike and then buying dips in the
underlying and selling rallies.  This strategy favors choppy
market movement, with the option holder keeping his option as 1:1
or 1:0.5 protection against the purchases and sales in the
underlying instrument.  The Dow Diamonds or Spiders (SPY) are a
possible candidate for long straddles to scalp the current market
action.

CBOE Market Volatility Index (VIX) = 26.71 -1.71
Nasdaq-100 Volatility Index  (VXN) = 42.99 -1.57
-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.74        588,307       435,811
Equity Only    0.52        450,368       292,411
OEX            1.03         22,304        23,030
QQQ            4.22         50,016        25,902
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          52      + 0     Bull Confirmed
NASDAQ-100    64      + 2     Bear Alert
Dow Indust.   57      + 7     Bull Confirmed
S&P 500       62      + 1     Bull Correction
S&P 100       59      + 0     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  1.01
10-Day Arms Index  1.23
21-Day Arms Index  1.27
55-Day Arms Index  1.23


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       2127           766
NASDAQ     2253           952

        New Highs      New Lows
NYSE        148              28
NASDAQ      114              31

        Volume (in millions)
NYSE       1,865
NASDAQ     1,662
-----------------------------------------------------------------

Commitments Of Traders Report: 12/31/02

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 increased long positions, while reducing shorts, for
a net long change of approximately 7,000 contracts.  Small
traders increased shorts by 17,000 contracts, while leaving long
positions relatively unchanged.

Commercials   Long      Short      Net     % Of OI
12/10/02      446,831   503,583   (56,752)   (5.9%)
12/17/02      465,361   528,896   (63,535)   (6.4%)
12/23/02      408,592   467,259   (58,667)   (6.7%)
12/31/02      410,968   462,782   (51,814)   (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
12/10/02      162,115    71,505    90,610     38.8%
12/17/02      194,740    90,803   103,937     36.4%
12/23/02      138,756    58,236    80,520     40.9%
12/31/02      139,383    75,640    63,743     30.0%

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 close to unchanged. Small traders
increased longs significantly and reduced shorts slightly.

Commercials   Long      Short      Net     % of OI
12/10/02       44,651     51,716   ( 7,065) ( 7.3%)
12/17/02       51,999     54,383   ( 2,384) ( 2.2%)
12/23/02       32,067     44,451   (12,384) (16.2%)
12/31/02       31,399     44,387   (12,988) (17.1%)

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
12/10/02       15,026     9,242     5,784    23.8%
12/17/02       23,027    18,027     5,000    12.2%
12/23/02       17,009     5,865    11,144    49.0%
12/31/02       19,841     5,009    14,832    60.1%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  14,832  - 12/31/02

DOW JONES INDUSTRIAL

Commercials added 1,000 contracts to their long positions, while
leaving shorts relatively unchanged.  Small traders increased
both positions slightly, with a slight reduction in the net short
position.

Commercials   Long      Short      Net     % of OI
12/10/02       19,953    15,759    4,194      11.7%
12/17/02       23,782    20,605    3,177       7.2%
12/23/02       14,991    11,103    3,888      14.9%
12/31/02       15,940    11,253    4,687      17.2%

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
12/10/02        5,394     9,499    (4,105)   (27.6%)
12/17/02        5,498     9,045    (3,547)   (24.4%)
12/23/02        4,584     6,296    (1,712)   (15.7%)
12/31/02        4,997     6,553    (1,556)   (13.5%)

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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Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                 Thursday 01-09-2003
                                                    section 2 of 2
Copyright ) 2003, 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
  New Bearish Plays:     TDS
  Bearish Play Updates:  ERTS
  Closed Bearish Plays:  QCOM

Stock Bottom / Active Trader
  Bullish Play Updates:  BSX, SYK
  Bearish Play Updates:  DLX

High Risk/Reward
  Bearish Play Updates:  CEPH

* NOTE: Due to technical difficulties out of our control,
the Trading Ideas section will not be posted tonight. *



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

============
NB New Plays
============

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

Telephone Data Systems - TDS - cls: 43.73 chg: -0.79 stop: *text*

Company Description:
TDS is a diversified telecommunications corporation founded in
1969. Through its strategic business units, U.S. Cellular and TDS
Telecom, TDS operates primarily by providing wireless and local
telephone service. TDS builds value for its shareholders by
providing excellent communications services in growing, closely
related segments of the telecommunications industry. (source:
company press release)

Why We Like It:
Something is amiss with TDS.  The past two sessions have seen
shares of the telecom provider sell off on nearly three times the
average daily volume.  What's driving the stock lower?  Frankly,
we can't say for sure.  A scan of recent news items on both Yahoo
and Briefing.com turned up no fresh developments to explain the
sell-off.  However, we did see a note that TDS was a participant
in Salomon Smith Barney's annual Media and Telecommunications
conference.  The company was expected to give a presentation
during the meeting, which began on Monday and ended today.  Based
on the sudden and high-volume nature of the recent decline, we
think TDS announced something at the conference that spooked
investors.  The strong volume behind the sell-off suggests that a
lot of larger institutional players are bailing out of long
positions.  But again, we can't say for certain what's pressuring
TDS.  We'll be looking for analyst comments on Friday or Monday
to help clear things up.

Something we can be more certain of is the stock's technical
weakness.  TDS has been mired in a long-term downtrend that began
in late-1999.  It's been a long and painful journey for
shareholders and it doesn't look like they'll be getting any
relief in the near future.  The stock gave back another 1.7%
today and seemed to be completely oblivious to the broader tech
rally.  This decline took TDS to levels not seen since the tail-
end of 1998.  Bulls will not be encouraged by the fact that the
selling was backed by the strongest volume reading since July.
Further technical negativity can be gleaned from the falling
daily stochastics (5,3,3).  Although TDS has come under a lot of
selling pressure, this oscillator is indicating that shares have
not yet reached oversold levels.  The MACD is also looking weak,
as it begins to roll over below the baseline.  The weekly chart
shows no clear support until the lows for that year near $30.00.
$30.00 also happens to be the current vertical bearish count on
the point-and-figure chart.  This would be a reasonable downside
target for longer-term traders.  Since we have a shorter
timeframe, we'll be aiming for a decline to the $33-$35 region.
Our trigger to enter this short play will be at $43.40, one cent
under today's low.  If we're triggered we'll give TDS ample room
to move with a stop at $47.11, just over Wednesday's high.
Traders willing to take a little more heat could use a stop
slightly above $47.57.  This would force TDS to fill in the small
gap that was created on Wednesday morning.

Picked on January xth at $xx.xx <- see text
Results since picked:     +0.00
Earnings Date          02/05/03 (unconfirmed)





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

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

Electronic Arts - ERTS - close: 48.93 change: -3.07 stop: *text*

You'll recall from Tuesday's description of this play that
speculation of weak videogame sales had helped to push ERTS to
52-week lows.  Specifically, the stock had been pressured by
analyst expectations for weak sales of Electronic Arts' "Sims
Online" game.  As it turns out these forecasts were a little
premature.  Speaking at a Morgan Stanley conference, the
company's CEO said that the game had sold 90,000 units in its
first three weeks, greater than expectations.  The recent round
of negative analyst comments were based on initial figures from
the first week of sales.  This news helped ERTS to rebound on
Wednesday morning before shares were dragged lower by a sinking
NASDAQ.  Today's action saw a strong tech sector push the stock
to a 2.6% gain.  Taking a look at the daily chart, we see that
ERTS has traded an Inside Day within an Inside Day.  What this
means in English is that shares are moving in an increasingly
narrow range.  The bulls and bears are duking it out with no
clear winner.  There seems to be a good deal of uncertainty with
the fundamental picture looking a little better after the release
of the Sims sales data, but the technical outlook looking bleak
as shares bounce around near 52-week lows.  For the time being
we're going to keep this play open with the expectation that ERTS
will break out of its sideways range, violate its crucial 200-
week moving average, and reach our entry trigger at $47.89.  Our
stop will be set at $51.06 if the play is activated.

Picked on January xth at $xx.xx <- see text
Results since picked:     +0.00
Earnings Date          01/29/03 (unconfirmed)





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

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

QUALCOMM Inc - QCOM - close: 38.68 change: +2.06 stop: *text*

Anyone who was short tech stocks today will tell you it was a
tough day to be a bear.  The 2.6% NASDAQ gain was largely driven
by gains in both the YLS.X wireless index and SOX.X semiconductor
index, with the former tacking on more than 6.2%.  One of the
primary reasons for our negative bias on QCOM was its inability
to rally with these indices.  Today's trading action bucked that
trend.  The stock gained 5.6%, sliced through the 50-dma
($37.92), and moved to a new short-term high.  We'd been looking
for the 50-dma to provide resistance after QCOM rallied off its
relative lows earlier this week.  With shares finishing well
above this level on Thursday, it looks like the bears are clearly
on the defensive.  However, it's interesting to see that the
stock hasn't broken its trend of lower highs.  We've drawn a
trendline on our daily chart connecting the highs from December
11th, 17th, and 26th.  Today's rally came to a halt just below
this level.  That's potentially good news for shorts.  But for
the purposes of this play, we're unwilling to wait for the stock
to reverse course and move back towards our entry trigger at
$35.38.  Although we're dropping the play tonight, traders might
want to keep an eye out for an eventual breakdown below last
week's lows.  In the news today, Qualcomm confirmed that its
first-quarter earnings would be released on January 22nd.

Picked on January xth at $xx.xx <- see text
Results since picked:     +0.00
Earnings Date          01/22/03 (confirmed)






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

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

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

Boston Scientific - BSX - close: 44.82 change: +0.63 stop: 40.99

Still holding near multi-year highs.  The past two sessions
haven't seen any significant technical developments in BSX, as
shares roughly traded in tandem with the Dow Jones.  We did see
some encouraging relative strength (compared to the DRG.X
pharmaceutical index) this afternoon when shares moved sharply
higher during the final hour of trading.  The strong finish is a
promising sign for further upside action on Friday.  Of course
BSX also closed at the highs of the day on Tuesday and didn't see
any momentum carry over the following morning.  What could really
get the stock moving is a breakout above resistance at $45.00.
Traders thinking about adding long positions can continue to
watch for a move above this level, which would open the door for
a test of the 1999 highs at $47.00.  Those who are looking to
reduce their downside risk may want to use a stop just below the
rising 50-dma at $41.49.

Picked on December 20th at $44.01
Results since picked:       +0.81
Earnings Date            10/22/02 (confirmed)




---

Stryker Corp - SYK - close: 68.65 change: +1.23 stop: 65.43

With no fresh news for SYK, shares have been left at the whim of
the broader market.  The stock moved nicely higher today as the
bulls keyed in a triple-digit rally in the Dow Industrials.
Shares closed near the highs of the day and moved back towards
resistance at $69.00.  More upside action in the equity market
tomorrow could be just what the bulls need to clear this hurdle.
Ideally we'd like to see a rally to all-time highs be accompanied
by an uptick in volume, which has been drying up over the past
week.  Large volume behind a breakout would indicate a large
amount of conviction on the part of the bulls.  New entries can
be considered on a move above $69.00.  Very conservative traders
may want to place their stops slightly under yesterday's low of
$67.25.  Our stop remains set at $65.43.

Picked on January 3rd at $68.26
Results since picked:     +0.39
Earnings Date          10/16/02 (confirmed)




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

Deluxe Corp. - DLX - close: 41.89 change: +0.26 stop: 42.56

Surprise, surprise...DLX continued to drift sideways on Thursday.
A glance at the 30-minute chart shows that the stock has traded
in a measly $1.26 range for over two weeks!  Neither powerful
market rallies (such as the one we had today) or large sell-offs
(like the one we witnessed yesterday) have caused DLX to budge
from this consolidation pattern.  In the last update we said that
more sideways trading would probably prompt us to drop this play.
While that's still our plan, we feel that it's worth giving DLX
at least one more day to show some downside action.  The stock
WAS relatively weak today, and those falling daily stochastics
(5,3,3) don't look too good for the bulls.  We just might get
that retest of support if $40.00 if shares fall out of the recent
range.  Chances of a breakdown would increase if the market pulls
back on Friday.  We'll re-evaluate our position after the market
closes tomorrow.

Picked on December 4th at $41.28
Results since picked:      -0.61
Earnings Date           10/17/02 (confirmed)






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

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

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

Cephalon Inc - CEPH - cls: 49.99 chg: +1.09 stop: 52.06 *new*

Cephalon followed the broader markets higher today, rallying back
into resistance from the converging 200-dma and resistance at
$50.  It's been setting a series of lower highs, with the 50-dma
forming a ceiling.  It did tick above the 200-dma of $49.85 by
the close, but the closing print of $49.99 shows obvious bearish
strength at $50. The recent bounce on the PnF chart into a column
of "X's" after the long decline cemented the bearish vertical
count at $36, however, with bullish support at $43, it will take
a dramatic sell-off to reach that count on the current move. The
company announced an agreement with MDS Poteomics to use the MDS'
technologies to help develop and market Cephalon's pipeline of
small molecule compounds.  While that may help the company
somewhere down the road, it does not introduce any new products
for investors to seize in the short term.  Traders can continue
to watch for new entries on a break under the relative low of
$47.76.  We are lowering our stop-loss on the play to $52.06,
just above the most recent lower high.  A violation of that high
would alter the consistency of the downtrend and get in the way
of our play objective.

Picked on December 30th at $48.77
Results since picked:       -1.22
Earnings Date            11/06/02 (confirmed)







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