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Daily Newsletter, Thursday, 01/30/2003

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PremierInvestor.net Newsletter                 Thursday 01-30-2003
                                                    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:      Old Problems Produce New Lows
Play-of-the-Day:  Breakdown In Progress
Market Sentiment: What A Relief it Was


************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      01-30-2003           High     Low     Volume   Adv/Dcl
DJIA     7945.13 -165.60  8141.09  7938.62 1.78 bln 1064/2162
NASDAQ   1322.36 - 35.70  1360.55  1322.36 1.40 bln 1060/2257
S&P 100   426.71 - 10.83   426.71   426.26   Totals 2124/4419
S&P 500   844.62 - 19.74   865.48   843.74
W5000    8021.22 -173.00  8204.16  8014.72
RUS 2000  367.62 -  7.22   375.80   367.59
DJ TRANS 2128.64 - 34.70  2175.19  2126.40
VIX        36.37 +  1.15    36.55    34.75
VXN        46.22 +  2.58    46.26    43.96
Total Volume 3,401B
Total UpVol    647B
Total DnVol  2,723M
52wk Highs  133
52wk Lows   171
TRIN       1.72
PUT/CALL    .87
*************************************************************

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

Old Problems Produce New Lows

The numbers came in slightly better than expected by most but
the negative sentiment remained. The fourth quarter GDP did not
dip into negative territory but it was still anemic. The Fed
expressed worry about the economy and unemployment continues
to rise. These factors and war worries pushed the Dow to a new
low for the year.

Dow Chart - Daily


Nasdaq Chart - Daily


Economically investors should have been relieved. The GDP came
in at +0.7% for the fourth quarter when many analysts had been
quoting whisper numbers in negative territory. We are far from
out of the woods but that is one more quarter temporarily behind
us with a plus sign in front of it. That is of course it is not
revised downward when the real component numbers become available.
The internals showed slower inventory buildup and weaker exports.
Computer purchases continue to rise slowly along with business
investment. There are two more revisions to this number over
the next two months and there is still danger it could slip
into negative territory.

Jobless Claims rose again to 397,000 and very near the 400K
threshold. This was an increase of +14,000 and +10,000 over
the consensus estimates. Claims over 350,000 a week indicate
a shrinking labor market. Increasing the evidence for a
shrinking workforce was the drop in the Help Wanted Index to
a new cyclical low of 39. It was 47 during the recession just
a year ago. According to Economy.com the index peaked at 93
in the late 90s boom. There has been a -58% drop in job
advertising volume in this down cycle. This compares to a
drop of only -44% and -54% in the prior two economic cycles.
Employers are not hiring and are continuing to trim their
workforce.

The weakness in the job markets pushed the Employment Cost
Index to the slowest growth in five years at +0.7% for the
fourth quarter. With a surplus of unemployed there is no
need to offer premium wages with lots of costly benefits.
The drop would have been much deeper had it not been for
the +6% growth in benefit expenses for existing employees.
The construction industry showed the biggest increases as
they scramble for workers to complete houses before rates
begin rising again. With falling real wages and continued
competition for available jobs the consumer is going to be
hard pressed to hold up the economy with future spending.

For the fifth consecutive month the Chicago Fed National
Activity Index came in below zero. The -0.5 number and the
-0.6 3-month average shows the economy has stalled and there
is no recovery in process. July was the only month in 2002
not negative but the drop in activity has been sharp and
serious since. The normally robust December period was only
fractionally better than November's -0.55. This report
raises the very clear specter of a double dip recession
already in progress.

The minutes for the December FOMC meeting were released and
showed that the Fed heads were encouraged by the lack of a
further drop in the economy and the then current rebound in
the stock market. They felt the market was confirmation that
a recovery was underway despite the lack of economic
confirmation. They were worried about the rising unemployment
and lack of business investment. Their forecast for the near
future showed minimal expectations for growth. They felt the
rising geopolitical tensions as well as persisting concerns
about consumer spending would continue to hold the economy
back. Despite the -50 point cut in November the committee
remained open to the potential need for future cuts. The
number of negative factors "when measured against the stock
market rebound" appeared to be balanced. They kept that public
view at the January meeting despite the loss of the markets
gains. Makes you wonder what was offsetting the risks this
time? With Consumer Confidence at its lowest level since
1993 the Feds may be the only ones seeing balanced risks.

AOL, you've got mail! Hate mail and lots of it. Don't look
now but the monster may also have escaped from the lock box.
With AOL posting a -$99 billion loss for 2002 there are many
stockholders on the warpath. About to lead the attack is
Ted Turner who is stepping down from his post as Vice Chairman
in May. With over 100 million shares of AOL stock Turner is not
going to be a friend to the company. At $12 that 100M shares
is worth a whole lot less than it was at $95 in Dec-2000.
As an unrelated party to AOL, Turner would be free to sell his
shares OR more importantly lead a shareholder revolt to break
up the company with Turner ending up with the prized pieces.
Granted this is a broad leap of faith but Turner is reportedly
extremely hostile about his -$8 billion drop in net worth. I
can see where that could produce a vengeance motive. AOL
stock dropped on the news from $14 to $12. The -$99 billion
loss and negative guidance may have influenced investors as
well. (grin)

The oil strike in Venezuela may be almost over. Reports from
the area claim strikers are going back to work and banks and
retail stores are opening again. Employees need the wages to
live and the riots were losing intensity. Oil production is
back to about 1/3 of prior levels and growing. Fear of the
war is still holding up the prices at $33.85 today but once
the war begins it should fall.

Oil is not the only commodity soaring with Platinum hitting
a 17 year high at $647.80. The comments about hydrogen cars
in the Fate of the Union speech has prompted a run on the
metal and on fuel cell makers. Test vehicles have been the
rage on news shows since Tuesday night.

Too bad computer chips were not mentioned. AMAT announced
tonight that they were laying off an additional 165 workers
in response to the weakest industry conditions on record.
The company is also planning on shutting down temporarily
for a week or two to cut costs during this rough stretch.
This is bound to add to weakness in semiconductors tomorrow
after they had a rough Thursday finishing at 273.62 and a
three month low.

Disney announced earnings that beat the street but said they
were not going to give guidance for the 2Q. They did say they
expected to see +25% growth for all of 2003. ADBE also affirmed
company estimates for the current quarter. There was some
disagreement among analysts that the companies guidance was
less than the consensus but they affirmed a broad range that
did encompass the consensus estimate.

Tomorrow is packed full of economic reports including Chicago
PMI, NAPM-NY, Personal Income/Spending and the University of
Michigan Consumer Sentiment. This is the second reading of
the sentiment and it could have been impacted by the falling
market over the last two weeks. The first take was Jan-17th
and the current market drop began on the 15th. The war of
words over Iraq has heated up since the 17th and tens of
thousands of more troops have been called up. 83.9 is the
consensus forecast for tomorrow. The NAPM-NY dropped from
56.2 to 41.4 in December due mainly to layoffs in the
financial sector. With cuts continuing and waves of lowered
guidance it could be worse tomorrow. This is a regional
report but because it reflects the market conditions I
listed it.

The market is in trouble. After two days of gains it gave them
all back and closed at a new low for the year. With one day
left in January it is not likely we will finish with a gain
for the year. This January barometer will predict another
down year. Whether the year will be down or not the technicals
for the market are terrible. The S&P failed to hold or reach
yesterday's bear trap high of 868 and closed at a new low for
the year. The bullish sentiment on the Nasdaq that helped hold
up the other indexes earlier in the week has also disappeared.
The Nasdaq also closed at a new low for the year. The Dow at
7944 is not far from my initial target of 7700 that I predicted
two months ago.

The date is set, February-14th. That is the new drop-dead date
for Iraq to come clean with inspectors. It is the date that
the inspectors will again report to the UN and it is the date
that is making the rounds as the day before the start of the
war. Over the last two months I have suggested Feb-15th as the
earliest the war could start due to the Muslim holy days. It
is amazing now that the US has suddenly picked that date as
critical. Do they think we are all sheep? I think it will take
another week for them to get all the troops in place but the
window of opportunity is closing and they could go anytime
after the 14th to prevent a continued increase in antiwar
sentiment that could hinder their coalition.

That window of opportunity means we could be looking at three
more weeks like this week. There is going to be another UN
meeting on Wednesday where Powell will spill the beans about
some secret intelligence which is supposed to swing dissenters
back to the US side. That should mean continued weakness in the
short term but that weakness could be simply high volatility.
I have been a bear for the last two months in predicting 7700
but I would be surprised if we went much lower than that. That
is just an opinion and 7700 was my minimum target. The October
lows of 7197 could still be retested if economic news does not
improve quickly. Either way the next three weeks should be
rocky and then we could see a nice bounce once the war begins.
Anticipation of that historical bounce when the shooting starts
should slow any serious declines as traders start bottom fishing
in advance. Still three weeks is a lifetime in the markets
and nothing should be considered certain.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Cabot Microelectronics - CCMP - cls: 44.83 chg: -2.67 stop: *text

Company Description:
Cabot Microelectronics, headquartered in Aurora, Illinois, USA,
is the world leader in the development and supply of high-
performance polishing slurries used for chemical mechanical
planarization (CMP), a process that enables the manufacture of
the most advanced integrated circuit (IC) devices and hard disk
drive components. (source: company press release)

Why We Like It:
The entire chip equipment group was dealt a severe blow earlier
this month when Intel announced that capex spending in 2003 would
be much lower than analysts had expected.  The implicit reduction
in demand for companies engaged in the semiconductor
manufacturing process did not sit well with investors.  A sell-
off within the sub-sector immediately took hold, leading to large
losses in stock such as AMAT, KLAC, and NVLS.  CCMP doesn't have
the same high profile on Wall Street, but was nonetheless
subjected to heavy selling pressure.  Shares moved sharply lower
from the $55.00 area before finally bottoming out near $44.75
less than a week later.  Subsequent rally attempts were turned
back at $48.00, which has emerged as reliable short-term
resistance.  While that's enough to frustrate the bulls, today's
action was downright foreboding.

CCMP trended lower for the entire session and plummeted to levels
not seen since October.  These losses stemmed from a steep sell-
off in the semiconductor index, which posted a 5.8% decline.  The
SOX.X has fallen to multi-month lows and does not have any clear
support until the 220-230 region.  Minor support at 245 and 260
might be rendered obsolete if the overall market continues to
decline at a rapid pace.  Point-and-figure enthusiasts will also
be interested to note that the index will give a double-bottom
sell signal if it reaches 272.  This sector weakness does not
bode well for shareholders of CCMP.  Much like the SOX.X, Cabot
is sitting well above its next of solid support.  How far could
the stock fall?  The daily chart shows a fast-move region all the
way down to the October lows at $32.50.  We're going to be a bit
more conservative in targeting a decline to the $35.00 area.
However, we won't hesitate to close the play if shares rebound
from psychological support at $40.00.  Our action point to enter
this hypothetical trade is set at $44.69, two cents under today's
low.  If the play is activated our stop will be set at $48.01,
above the aforementioned short-term resistance.  Traders looking
for less upside risk could use a stop slightly above the 200-dma at $45.84.

Annotated daily chart - CCMP:



Picked on January xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           01/23/03 (confirmed)





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

What A Relief it Was
by Steve Price

That relief rally we got Wednesday didn't last long.  We got what
seems to be a decisive sell-off, confirming that what we saw on
Wednesday was an oversold bounce.  That shouldn't be a surprise
to anyone, since the recent trend has been decidedly down.  We
also began to see some signs that confirm the theory that we've
got additional downside in the near future.

The bond market saw some buying today, indicating a shift from
equities back into bonds.  The recent rebound in the equity
markets has shown the opposite, with bonds falling for the last
few days, however we saw decent bounces in the five, ten and
thirty year treasuries.  Those bounces weren't big, but if we are
going to see another rollover in stocks, this indication is one
of the supporting factors for that scenario.

Gold futures also got a bounce today, as traders moved back into
the defensive product after Wednesday's drop.  The futures still
haven't approached Monday's intraday rally up to 373.7, but they
matched the recent closing high on Tuesday of 370.0 and also beat
close of 369.4.

One of the other factors figuring into today's equity pullback
was the GDP report that showed the economy grew at a meager 0.7%
in the fourth quarter.  While that may not be a big surprise, it
was slightly lower than expectations for growth of 0.9%.  For the
2002 year, the economy grew a total of 2.4%, however, much of
that growth was due to big gains in homebuilding and auto sales.
Both of those factors are due to drop off in 2003, after setting
an unsustainable pace due to record low mortgage rates and 0%
financing deals offered by automakers. Other contributing factors
were an increase in defense spending and government spending,
which contributed 1.3% to the total, as well.  Without those
gains, we would have been in the red and those factors are hardly
representative of underlying economic health.  Business spending
was the biggest drag, falling 5.8% for the biggest decline in 27
years.   Investment in equipment and software dropped 1.8%, while
investment in structures fell a whopping 16.4%.  That 16.4% drop
was the largest since the data stream began in 1929.  The fourth
quarter increase was also a big drop from the third quarter's
rate of 4.0%, indicating a sharp downtrend.

The weak GDP number also underscored the initial claims data that
the government released this morning. For last week, unemployment
claims rose by 14,000 to 397,000.  However, the four-week moving
average declined slightly to 384,000, which would indicate an
improvement in the labor market.  The threshold for the moving
average between a worsening job market and one that is not
worsening is 400,000, although many economists think a number
below 350,000 is needed to suggest improvement.  In any case,
some of the data is skewed by the fact that employment offices
were closed for one day last week for the Martin Luther King, Jr.
holiday.

One of the bigger factors we've been hearing from companies
regarding costs of business in the fourth quarter, and also a
reflection of geo-political concerns, is the cost of fuel.  While
some companies are much more sensitive on these fluctuations
(i.e. airlines, trucking), those fuel costs apply to everything
from transport to fueling manufacturing plants, to heating
factories and offices. They are also passed along to less fuel
dependent customers of the companies that do see the direct
effects.  These costs were also highlighted in yesterday's FOMC
statement, which read, "Oil price premiums and other aspects of
geopolitical risks have reportedly fostered continued restraint
on spending and hiring by businesses."  Crude oil futures once
again rose today to new relative highs, suggesting there will be
little relief until the Iraq situation is resolved on way or
another.

The head and shoulders pattern remains essentially in tact, with
a failed rally below the neckline at Dow 8200, SPX 865 and OEX
438.  The only fly in the ointment is the strong support in the
Nasdaq Composite at 1319. That 1319 support in the COMP held on
the pullback from what would be a left shoulder in November and
has so far held, with a COMP close of 1322 today.  If that level
falls, there is little left to slow the decline.

If we do breakdown below those levels, traders can continue to
lean short, as there are few factors in the market that could
lead to a big rebound.  That doesn't mean we have moved into
lower risk territory, however, as a resolution to the Iraq matter
could still lead to a very big snap back rally. In essence,
traders willing to take on that risk should lean to the short
side, but traders with lower risk portfolios should still be on
the sidelines until we get a war decision behind us.
-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  7945

Moving Averages:
(Simple)

 10-dma: 8268
 50-dma: 8551
200-dma: 8813

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  844

Moving Averages:
(Simple)

 10-dma:  874
 50-dma:  902
200-dma:  935

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     :  985

Moving Averages:
(Simple)

 10-dma: 1011
 50-dma: 1045
200-dma: 1039
------------------------------------------------------------------

The Semiconductor Index (SOX.X):  The SOX gave up its previous
support in a big way today.  After flirting with support at 280,
closing just below before it bounced the last couple of days, it
rolled over, leaving that support level in the rear view mirror.
The SOX appears as though it has formed a classic head and
shoulders pattern and has now decisively broken the neckline.
What's more is that it fell below its November pullback low,
unlike the Nasdaq Composite, which has held that level.  There
was some support at 274.50, as well, but it was minor and the
index has broken below that level as well, although just barely.
There is a definite void in support levels between where we
currently stand and September/October lows in the low 200s (230
and then 211). There is some minor support at 260, but not nearly
as strong as that at 230. The measuring objective of the H&S is
much lower, down around 175, however that would be a very
aggressive target for bears.

52-week High: 657
52-week Low : 214
Current     : 273

Moving Averages:
(Simple)

 21-dma: 308
 50-dma: 320
200-dma: 354
-----------------------------------------------------------------

The VIX actually failed to react in the same dramatic way it did
on Monday's sell-off.  While we actually traded lower than we did
that day, the VIX barely jumped.  It did add 1.15 on the day,
after bouncing off previous resistance at 35, but the lack of
panic should throw up a red flag to bears.  If the institutions
are either not buying premium - or even selling it on the
bounces, they don't see as much downside in the current move as
would seem to be evident.

CBOE Market Volatility Index (VIX) = 36.23 +1.01
Nasdaq-100 Volatility Index  (VXN) = 46.22 +2.58
-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.87        476,129       414,207
Equity Only    0.70        353,102       246,414
OEX            0.84         22,248        18,814
QQQ            1.21         51,440        62,192
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          45.8    - 1     Bull Correction
NASDAQ-100    48.0    - 2     Bear Confirmed
Dow Indust.   36.7    - 0     Bear Confirmed
S&P 500       47.8    - 2     Bull Correction
S&P 100       45.0    - 1     Bear 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  1.52
10-Day Arms Index  1.54
21-Day Arms Index  1.24
55-Day Arms Index  1.29


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        847          2006
NASDAQ      986          2175

        New Highs      New Lows
NYSE        65               89
NASDAQ      71               84

        Volume (in millions)
NYSE       1,771
NASDAQ     1,412
-----------------------------------------------------------------

Commitments Of Traders Report: 01/21/02

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 similar amounts to both sides, ending the
period slightly less short, but not by a significant percentage.
Small traders also added similar amounts to both sides, finishing
the period with an additional 1,000 long contracts overall.

Commercials   Long      Short      Net     % Of OI
12/31/02      410,968   462,782   (51,814)   (5.9%)
01/07/03      411,542   455,538   (43,996)   (5.1%)
01/14/03      411,052   453,164   (42,112)   (4.9%)
01/21/03      415,028   456,885   (41,857)   (4.8%)

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
12/31/02      139,383    75,640    63,743     30.0%
01/07/03      143,169    83,895    59,274     26.1%
01/14/03      144,182    92,358    51,824     21.9%
01/23/03      148,227    95,356    52,871     21.7%

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 decreased long positions by 1,000 contracts, while
adding almost 5,000 contracts to the short side.  Small traders
added 5,000 contracts to the long side, while reducing shorts by
1,500.

Commercials   Long      Short      Net     % of OI
12/31/02       31,399     44,387   (12,988) (17.1%)
01/07/03       37,966     48,156   (10,190) (11.8%)
01/14/03       38,057     45,060   ( 7,003) ( 8.4%)
01/23/03       37,174     49,789   (12,615) (14.5%)

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
12/31/02       19,841     5,009    14,832    60.1%
01/07/03       19,708     8,453    11,255    40.1%
01/14/03       20,757     8,320    12,437    42.8%
01/23/03       25,852     6,764    19,088    58.5%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

Commercials added 1,000 contracts to the long side, while
reducing shorts by 1,400.  Small traders added approximately 600
contracts to both sides, leaving the net virtually unchanged.

Commercials   Long      Short      Net     % of OI
12/31/02       15,940    11,253    4,687      17.2%
01/07/03       16,210    11,333    4,877      17.7%
01/14/03       17,804    12,427    5,377      17.8%
01/23/03       16,901    11,031    5,870      21.0%

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
12/31/02        4,997     6,553    (1,556)   (13.5%)
01/07/03        4,963     8,334    (3,371)   (25.4%)
01/14/03        4,552     7,697    (3,145)   (25.7%)
01/23/03        5,120     8,282    (3,162)   (23.6%)

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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Do not duplicate or redistribute in any form
PremierInvestor.net Newsletter                 Thursday 01-30-2003
                                                    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:     CCMP
  Bearish Play Updates:  EXPE

Stock Bottom / Active Trader
  Bullish Play Updates:  FRX
  Bearish Play Updates:  APD, JWN

High Risk/Reward
  Bullish Play Updates:  XLNX



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

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

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

Cabot Microelectronics - CCMP - cls: 44.83 chg: -2.67 stop: *text

Company Description:
Cabot Microelectronics, headquartered in Aurora, Illinois, USA,
is the world leader in the development and supply of high-
performance polishing slurries used for chemical mechanical
planarization (CMP), a process that enables the manufacture of
the most advanced integrated circuit (IC) devices and hard disk
drive components. (source: company press release)

Why We Like It:
The entire chip equipment group was dealt a severe blow earlier
this month when Intel announced that capex spending in 2003 would
be much lower than analysts had expected.  The implicit reduction
in demand for companies engaged in the semiconductor
manufacturing process did not sit well with investors.  A sell-
off within the sub-sector immediately took hold, leading to large
losses in stock such as AMAT, KLAC, and NVLS.  CCMP doesn't have
the same high profile on Wall Street, but was nonetheless
subjected to heavy selling pressure.  Shares moved sharply lower
from the $55.00 area before finally bottoming out near $44.75
less than a week later.  Subsequent rally attempts were turned
back at $48.00, which has emerged as reliable short-term
resistance.  While that's enough to frustrate the bulls, today's
action was downright foreboding.

CCMP trended lower for the entire session and plummeted to levels
not seen since October.  These losses stemmed from a steep sell-
off in the semiconductor index, which posted a 5.8% decline.  The
SOX.X has fallen to multi-month lows and does not have any clear
support until the 220-230 region.  Minor support at 245 and 260
might be rendered obsolete if the overall market continues to
decline at a rapid pace.  Point-and-figure enthusiasts will also
be interested to note that the index will give a double-bottom
sell signal if it reaches 272.  This sector weakness does not
bode well for shareholders of CCMP.  Much like the SOX.X, Cabot
is sitting well above its next of solid support.  How far could
the stock fall?  The daily chart shows a fast-move region all the
way down to the October lows at $32.50.  We're going to be a bit
more conservative in targeting a decline to the $35.00 area.
However, we won't hesitate to close the play if shares rebound
from psychological support at $40.00.  Our action point to enter
this hypothetical trade is set at $44.69, two cents under today's
low.  If the play is activated our stop will be set at $48.01,
above the aforementioned short-term resistance.  Traders looking
for less upside risk could use a stop slightly above the 200-dma at $45.84.

Annotated daily chart - CCMP:



Picked on January xxth at $xx.xx <- see text
Results since picked:      +0.00
Earnings Date           01/23/03 (confirmed)





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

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

Expedia Inc. - EXPE - cls: 59.83 chg: -3.11 stop: 63.37 *new*

There have were plenty of warning signs that EXPE might be ready
to break lower.  The stock has consistently found resistance at a
descending trend of lower highs that's been keeping a lid on
intraday rallies over the past two weeks.  Shares were looking
even weaker yesterday when they underperformed the broader market
and closed below the 200-dma at $63.16.  We said in last night's
play-of-the-day update that a pronounced sell-off from this
moving average (which has recently acted as a price magnet) would
be a clearly bearish development.  That's exactly what happened
this morning when EXPE gapped lower by more than a point.  The
catalyst for this decline was a report from the Wall Street
Journal that said several of the largest hotel chains are
planning to collaborate on a website that will offer discounted
lodging rates.  The new hotel website will be in direct
competition with Expedia.  You might recall that the major
airlines made a similar move when they joined forces to offer
their own discount fares on orbitz.com.  Investors reacted to
today's news by hitting EXPE for a loss of nearly 5%.  NASDAQ
weakness helped to push shares below the January lows and
psychological support at $60.00.  EXPE is now in the process of
filling in its October 24th gap.  The bottom of this gap is near
$58.00.  Our downside objective is the $55.00 level.  In light of
the lack of underlying support, short-term traders looking for
new entries might want to watch for a failed rally near $60.50.
Just bear in mind that we'll probably close this play before
Expedia announces earnings next Wednesday evening.  Our stop has
been lowered to break-even at $63.37, which is also above the
200-dma.  Those who would like to protect a small gain could use
a stop slightly above today's high of $61.75.  Full disclosure:
Premier Investor analyst Jeff Bailey currently holds a bearish
position in EXPE.

Picked on January 22nd at $63.37
Results since picked:      +3.59
Earnings Date           02/05/03 (confirmed)






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

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

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

Forest Labs - FRX - close: 50.94 change: -0.47 stop: 49.74

On Thursday FRX put a halt to its recent trend of relative
weakness versus the DRG.X pharmaceutical index.  Shares finished
with a loss of less than one percent, easily outpacing both the
Dow Jones and DRG.X.  The stock traded in positive territory
early in the session and moved well above its 50-dma ($51.46),
which had acted as resistance during the previous two session.
These gains, however, were erased as the broader market moved
lower throughout the day.  Despite the intraday weakness, the
daily chart shows that FRX was able to trace higher highs and
higher lows for the second consecutive session.  The recent
reversal in the daily stochastics (5,3,3) suggests that the stock
may have put in a short-term bottom.  Unfortunately this
technical strength might be rendered moot if the broader market
extends today's decline.  If the stock sees further selling on
Friday we'll be watching for the $50.00 to once again act as
support.  We would not recommend taking new entries at this time.

Picked on January 24th at $53.01
Results since picked:      -2.07
Earnings Date           01/16/02 (confirmed)





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

Air Products - APD - close: 40.51 change: +0.08 stop: 42.51 *new*

The necessary condition for entering this short play - a trade at
$39.84 - was satisfied yesterday when APD fell through the $40.00
support region.  Shares mirrored the Dow Jones throughout the
session and posted some solid gains during the latter half of the
day.  Given this correlation with the broader market, one would
expect that APD would've followed the major indices into negative
territory today.  This was indeed the case on Thursday morning as
investors reacted to a disappointing earnings report from
chemical behemoth Dow Chemical (DOW).  But although the $40.00
level was briefly violated, bargain-hunters quickly moved in and
pushed the stock back into the green.  Shares traded relatively
strong throughout the session and finished with a fractional
gain, despite a 2.0% loss in the Industrials.  So did we get
suckered into a bear trap?  At this point it's too early to say.
The market is trading with a clear negative bias and with the Dow
trading below support at 8000 it's not looking good for the
bulls.  If the index continues to sell off we'd expect APD to
play catch-up and move towards yesterday's low of $39.32.  A
violation of this level would offer a potential action point to
open new short positions.  On the other hand, continued relative
strength would be an indication that APD might have already
bottomed out.  With this in mind we're going to lower our stop to
$42.51, slightly above the 21-dma.  Longer-term traders can
maintain a stop above the 50-dma at $42.93.

Picked on January 29th at $39.84
Results since picked:      -0.67
Earnings Date           01/22/03 (confirmed)




---

Nordstrom Inc - JWN - close: 17.99 change: -0.22 stop: 19.06

On Thursday morning Goldman Sachs weighed in with its opinion of
the retail group.  The firm raised their sector bias from
"cautious" to "neutral," saying that while "retail fundamentals
remain anemic," valuations have come down to more attractive
levels.  Interestingly, GS went out of their way to say that they
have a "tepid" stance on most mall-based stores.  The overall
tone of these comments was rather lukewarm.  There just aren't
many fundamental reasons to be buying retail stocks.  Sure, those
valuations might more favorable, but how will the sector be able
to show any growth while the economy remains weak?  Investors
seemed to be thinking the same thing this morning.  The RLX.X
retail index moved higher after the opening bell but quickly
reversed course and joined the Dow Jones in a steady downtrend.
JWN mirrored this action and finished with a loss of 1.2%.
Technical bears can be pleased with the fact that the stock also
closed below $18.00 for the first time in several months.  With
the overall market looking quite weak, our expectation is that
JWN will soon be trading at new relative lows.  Traders looking
for new short entries could watch for a move under $17.87.  P-n-f
chartists will note that a trade at $17.50 would trigger a
double-bottom sell signal.

Picked on January 27th at $17.98
Results since picked:      -0.01
Earnings Date           02/20/02 (confirmed)






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

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

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

Xilinx Inc - XLNX - close: 20.17 change: -1.51 stop: 19.89 *new*

It's been quite a roller coaster ride for XLNX.  Our long play
was proceeding nicely on Wednesday afternoon as shares rode a
chip sector rebound to a multi-day high of $21.79.  This followed
Tuesday's successful test of support at $20.00.  The SOX.X closed
above 290 and looked poised to make a move towards the 300 area.
Unfortunately the bears had other ideas.  Orderly profit-taking
in the chip group gave way to heavier selling this morning as the
NASDAQ bled steadily lower throughout the session.  The SOX.X
finished with a 5.8% loss.  XLNX fared even worse, giving back
nearly 7%.  The premise of this play was to capture a bounce from
the $20.00 area.  With the NASDAQ looking awfully weak (check out
that bearish engulfing candlestick) and the SOX.X trading at
multi-month lows, it appears as though XLNX could soon be trading
under support.  A move below this level would be a clear
technical victory for the bears.  With this in mind, we're going
to bump our stop up to $19.89.  We'd prefer to simply close the
play shortly after support is broken rather than maintain our
original stop at $19.49.  It's hard to justify waiting around for
the bulls to come to the rescue with the SOX.X looking so weak.

Picked on January 28th at $20.91
Results since picked:      -0.74
Earnings Date           01/21/03 (confirmed)







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