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Daily Newsletter, Tuesday, 03/18/2003

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PremierInvestor.net Newsletter                 Tuesday 03-18-2003
                                                   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:      Confused?
Market Sentiment: Tick, Tick, Tick
Play-of-the-Day:  Higher Revenues, Retail and the Oracle

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U.S. Market Numbers
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MARKET WRAP  (view in courier font for table alignment)
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      03-18-2003           High     Low     Volume Advance/Decline
DJIA     8194.23 + 52.30  8209.36  8096.12 1.85 bln   1731/1494
NASDAQ   1400.35 +  8.30  1400.55  1378.83 1.57 bln   1788/1455
S&P 100   440.38 +  1.74   440.66   435.37   Totals   3519/2949
S&P 500   866.45 +  3.66   866.94   857.36
W5000    8200.32 + 37.20  8200.72  8114.52
RUS 2000  368.02 +  2.62   368.02   363.30
DJ TRANS 2129.02 + 35.00  2129.02  2086.54
VIX        35.78 -  0.68    37.47    35.19
VXN        48.02 +  1.35    50.36    48.02
Total Volume 3,721M
Total UpVol  2,643M
Total DnVol  1,024M
52wk Highs  151
52wk Lows   151
TRIN       0.59
PUT/CALL   0.61
-----------------------------------------------------------------


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

Confused?

If so you are in good company. Even the Federal Reserve heads
cannot decide what is happening in the economy. The mixed
economic reports and the fog of war has everyone confused.
The recent rally in the markets has confused analysts as
well. The only people not confused appears to be retail
traders who are buying everything in sight.

Wilshire 5000 - Daily


Nasdaq Chart - Daily


The biggest economic news at the open was the -11% drop in
New Housing Starts. This was significantly below expectations
and significantly below last months -1% drop. This was the
third consecutive monthly drop in starts and they are
accelerating. The decline was broad based and not specific
to any particular region which negated the weather factors.
This was the largest drop since December 2000. A new factor
is the growing number of existing homes for sale which is
climbing rapidly. Rental vacancy rates are at an all time
high which shows weakness in the multifamily market.

Chain Store Sales were actually positive at +0.4% for a
change but most stores reported sales were flat or below
plan for the period. Unemployment, war worries, high gasoline
prices are still being given for the drop in consumer
spending.

The Semiconductor Book-to-Bill ratio came in at .99 and
an improvement over last months .94 level but they are
still booking less than they are shipping. The $781 million
in shipments in February is still less than the $826 million
they shipped in December. The trend is improving but it is
a long way from well. Part of the problem is the low profit
margins from vast overcapacity but SEMI said there were
over 20 new fabrication plants scheduled to begin production
in the next two years. These new enterprises are coming as
older companies are closing plants and laying off workers.
AMAT was the latest confirmation that this trend is
continuing. Still looks like tough times ahead to me.
MCHP warned after the bell that equipment manufacturers
were frozen in place and were continuing to cancel or
delay orders. They said they were going to delay opening
a new plant until demand returned. They said fears over
North Korea had caused a drop of -8% in Asian sales to
complicate the US picture.

The Fed met today to determine monetary policy and decide
if they needed to cut rates to stimulate the economy. Despite
the constant flow of negative information the Fed ended the
meeting without making any decision other than to wait another
30 days to see if the fog of war had lifted. The Fed heads in
all their wisdom could not decide if the economy was in the
tank due to economic reasons or war reasons or both. They
issued a strange post meeting press release saying they had
retained the bias at neutral with no changes in the interest
rate. They said "incoming economic data was mixed and the
labor market was disappointing. However, the hesitancy of the
economic expansion appears to owe importantly to oil prices
and geopolitical uncertainties. In light of the unusually
large uncertainties clouding the geopolitical situation and
their apparent effects on economic decision making the
committee does not believe it can usefully characterize the
current balance of risks to the economy." They will continue
to maintain "heightened surveillance". As opposed to the
partial surveillance that got us here? (grin) Basically they
dodged the bullet and use the "Iraq ate my economy" excuse
and left the markets hanging. Now investors are faced with
forming their own decisions about the value and prospect of
stocks.

Fidelity surveyed 300 fund managers and found that nearly
70% of fund managers thought the market was either fairly
valued or over valued at these levels. Only 12% thought stocks
would beat bonds for the rest of 2003. Now that is a scary
statistic. With earnings warnings rising and profits
falling it is not surprising that professional money
managers are skeptical about the rest of 2003.

There is starting to be more rumors that the last two days
of gains were due to some asset allocation shifts by a couple
large fund groups. Surprise! I wrote about this possibility
last Tuesday but it still caught me off guard. Now the
funds that missed the rocket launch are trying to decide if
it was real or just another bear market rally. With volume
shrinking again and new highs/lows only breaking even today
and not negative for the first time since March 3rd there is
no real confirmation. We had a nice 90% down day last week
and a 90% up day this week. Unfortunately it takes an average
of six 90% days to for a normal bottom. Two down, four to
go.

We are heading full speed into warning season and should
the war get launched this week it should not take long
before attention returns to those earnings only three
weeks away. One positive is the -3.26 drop in oil prices
to $31.67 today. The drop was on the fear that the US
would open the strategic petroleum reserves when the
war started to offset any drop in Iraqi production. The
lower oil prices will eventually result in a reduction in
costs for manufactured products but that could take a
couple quarters. Until we are in control of the Iraqi
oil fields there is no assurance that oil flow will
return to normal.

Another Dow problem today was the filing of a $289 billion
suit by the Justice dept to recover profits from tobacco
companies that was earned through deceptive advertising
according to their claims. The Justice Dept said new
evidence showed that the companies were manipulating
nicotine levels, lying to their customers about the
dangers of smoking and directing billions of dollars of
advertising at children. The government's case will take
years to prove and many claim it will be next to impossible
but the risk is there and tobacco stocks fell sharply.
Dow component MO dropped -2.08 on the news.

Oracle announced earnings after the close and beat the
street by a penny but warned that the current quarter
could fall below current estimates due to falling new
license revenues and the war climate. The new license
revenues are seen as an indicator for future revenues
due to follow on renewals and support. With new business
slowing future revenues may suffer.

Is it the economy or is it the war? Not even Greenspan
knows for sure so is it any doubt that average traders
are confused. The Dow has made an astounding bounce from
last weeks lows of nearly +800 points in five days. It
came to a stop today well out of the current range, over
8150 and right at light resistance of 8200. This +11%
bounce in five days has everyone expecting for a pullback.
The Nasdaq stopped right at a very strong resistance range
of 1400-1425. With the ORCL and MCHP warnings tonight I
would be surprised to see it break that level tomorrow.
Nasdaq futures are down -10.50 at 8:15PM and with a large
amount of rebound profit on the books it looks shaky for
Wednesday.

The general consensus of opinion is that nobody missed
the train. There is a growing feeling that the pattern
of the last Iraq war has already been broken and we will
not see a post war rally. I know this is heresy but that
is the feeling making the rounds. With the Fed giving
traders no assurances and warnings continuing to fly
the bulls will have to call in the reserves to push the
markets higher.

One positive event remains the growing number of Iraqi
soldiers trying to surrender. One instance today had
some Iraqi tanks flying white flags try to crash through
the lines to surrender. They had heard some gunshots from
troops taking last minute target practice and wanted to
surrender before the fighting got to them. The strangest
thing is the friendly forces told them the war had not
started and made them turn around and take the tanks
back with them. The next couple days are probably going
to get even stranger in the market.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


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

Tick, Tick, Tick
by Steven Price

48 hours.  Is that how long it will take before we see another
leg higher?  Or a reversal? It will likely depend on how
successful the U.S. is in its war plans and whether we get
retaliatory terror attacks in the U.S.  Of course a wait and see
approach doesn't do traders much good, since the recent moves
have been swift and large and by the time they've been obvious
they've seemed overdone.  So let's take a look at some important
levels to watch, which should at least give traders a roadmap to
when support and resistance come into play.

I drew a head and shoulders pattern back in January with a
downside Dow target of 7500, OEX of around 400 and SPX of 787.
Those objectives were hit almost exactly following the neckline
break that I had drawn at Dow 8200.  We have now seen a rebound
of 778 Dow points; but that rebound found resistance in the same
area it did in January when it was attempting a bounce from the
neckline break.  At that time it consolidated between a downside
floor of 7950 and an upside ceiling of 8160.   The rally added
some points to the upside this morning, getting above that 8160
high in the Dow, but falling below 8200 by the close.  More
importantly, the SPX also found resistance in the 865-868 area,
which corresponded with the Dow rally attempts at 8150-8160 in
January. The OEX finished right at the 440 level, which has been
pivotal as both support and resistance going back almost a year
now.  Picking an exact number in the Dow for support resistance
can be trickier than the SPX because the futures on the SPX are
so heavily traded and give institutions more control over picking
levels at which to buy and sell.  That resistance at 868 happens
to coincide with bearish resistance on the point and figure
charts, which appears to be the lone roadblock to the triple-top
buy signal given in the SPX on Monday's rally.  That buy signal
at 855 was confirmed with a trade of 860, which got the SPX
beyond the classic bear trap on the PnF.

The triple top in the SPX was accompanied by buy signals in the
Dow and OEX and maybe even more importantly the first upturn in
bullish percents since December.  The bullish percent charts show
a bounce in the Dow from a much oversold 10% up to 20%.  The NDX
shows a rebound from 30% to 44%.  The bullish percent shows the
number of stocks in an index giving PnF buy signals and 30% is
considered to be oversold territory (70% is overbought).
Certainly a bounce from bearish H&S objectives, accompanied by
point and figure buy signals and an upturn from oversold bullish
percents, would seem to indicate a very bullish reversal -
especially considering the 10% gain off the bottom form last
Wednesday.  But we also need to remember that we had fallen 1400
Dow points and so far the bounce of 778 points has taken us to
just below the neckline break. We have essentially retraced 50%
of the recent drop. Is that bullish?  Certainly a move back over
that neckline would register more than a 50% reversal, but then
we have yet another crucial level to look at.

Dow 8300 served as a closing support level for many months.  In
fact, it served as horizontal support on both the July-September
head and shoulders that eventually broke down and achieved its
objective of 7200 and again as horizontal support for the
November-January head and shoulders pattern.  The neckline sits
at 8200 because of the downward slope, but technicians can argue
that the first close below 8300 was the domino that started us
falling to last Wednesday's low.   8300 also happens to be the
location of the bearish resistance line on the Dow's PnF chart.

The OEX can be viewed with the traditional PnF chart or with the
2.5-box size, which has more closely mirrored action in the other
indices.  The OEX also topped out at 440 on the January rebound
attempts and today's high of 440.66 demonstrates that the level
remains as resistance.  The bearish resistance line here is
442.50 on the 2.5 point box and at 448 on the traditional chart.

Now that we are less than 48 hours from a possible invasion into
Iraq, we are entering a time in which the markets will be ultra-
sensitive to almost any world event that either hints at a
prolonged war, such as early setbacks for the U.S. in the
invasion, or any event that suggests terrorist retaliation.  I
think back to the refinery fire on Staten Island and remember the
sudden market drop and rebound. During war time, it seems likely
that the reaction to such events would be even more extreme and
traders looking to set stops need to decide whether they are
willing to give their positions room for larger moves, or if they
want to tighten things up to avoid any sudden reversals.  It
seems that anything in the middle is subject to whipsaws.

The economy got some more bad news last night and today.  The
tech sector continues to suffer, with Applied Materials (AMT)
announcing it will cut 14% of its workforce and close some of its
facilities.  It was the second round of job cuts for the chip
equipment maker in five months and signals that the company does
not see a recovery in the immediate future.  Gateway followed
with a similar announcement, saying it would cut 17% of its
workforce and close 76 of its retail stores.  The company is
aiming toward the fourth quarter of 2003 for a return to
profitability.  Tech Data also guided to the low end of first
quarter earnings expectations.  After the bell, Oracle released
its numbers as well.  The company beat expectations, but widened
its revenue and earnings estimates due to war uncertainty.
Investors punished the stock after hours, taking the NASDAQ
futures along with it. After closing at $12.25, it was last
trading $11.52 as of this writing.

Housing Starts were also released this morning and the picture
underscores January's drop and the input that many OI readers
gave us in an informal poll a couple of months ago. New
residential construction fell 11% in February to an annualized
rate of 1.622 million, which is the lowest rate since April 2002.
The percentage decline was the largest in nine years.  Although
Alan Greenspan said he thought there was no housing "bubble," he
did say that last years pace for new homes and mortgage
refinancing was unsustainable.  That appears to be the case after
a second straight monthly decline to start off 2003.  Some of
this can be blamed on seasonal patterns, but with interest rates
beginning to bounce, it seems that the trend has certainly pulled
back, if not reversed itself.

The relationship between oil and the equity market has remained
consistent.  Even when they don't behave as expected, they
continue to maintain an inverse relationship today.  I heard an
analyst equate a drop in oil from $31 to $24 per barrel to a 1%
increase in GDP as a result of savings to Americans.  That could
certainly be behind the relationship.  Since Monday's close,
crude oil futures have dropped 10%, due to the acceleration of
the war plan (which gets us closer to the end if it is short), as
the Dow gained more than 50 points.

Think traders are having a hard time figuring out the economy?
Apparently the Federal Reserve Open Market Committee doesn't have
a clue either.   They did not adjust interest rates, which was
expected, but also did not give an opinion on the economy, which
was unexpected.  Instead, the statement from the FOMC read "In
light of the unusually large uncertainties clouding the
geopolitical situation in the short run and their apparent
effects on economic decisionmaking, the Committee does not
believe it can usefully characterize the current balance of risks
with respect to the prospects for its long-run goals of price
stability and sustainable economic growth. Rather, the Committee
decided to refrain from making that determination until some of
those uncertainties abate. In the current circumstances,
heightened surveillance is particularly informative."    The
committee also said the labor market looked weak, but the
hesitancy of expansion was likely due to oil prices and geo-
political concerns.  In other words, until the Iraq situation
becomes clearer, they don't know what to expect either.

Tomorrow should get even more interesting, as we get closer to an
invasion.  Saddam has said he will stay and fight, but with
300,000 troops sitting on the border and the stated intention to
remove him from power, doesn't it make more sense for him to take
off with a couple billion dollars.  Of course the fact that he is
holding his ground may indicate that there are weapons of mass
destruction and that he is planning on using them.  If that is
the case, the war may not go as neatly as we are hoping and then
the recent bullishness may not last.  Certainly if the oil fields
begin to burn, the price of futures is likely to spike and if the
above relationship is consistent, then we should see an equity
drop.

The futures were slightly lower after the bell, following the
Oracle news. It could certainly lead to a pullback after a huge
up move that seems like it is due for some profit taking.
However, after hours activity is not always an indicator of the
following morning's sentiment.  While things feel awfully bullish
right now overall, anything can happen in the next few days and
traders should be managing their accounts in accordance with that
risk.
-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8194

Moving Averages:
(Simple)

 10-dma: 7785
 50-dma: 8091
200-dma: 8461

S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  866

Moving Averages:
(Simple)

 10-dma:  829
 50-dma:  857
200-dma:  895

Nasdaq-100 ($NDX)

52-week High: 1734
52-week Low :  795
Current     : 1082

Moving Averages:
(Simple)

 10-dma: 1007
 50-dma: 1009
200-dma:  995
-----------------------------------------------------------------

The Semiconductor Index (SOX): The SOX built on its 200-dma
breakthrough and is now approaching the 330-331 resistance level
from December that I've highlighted here recently.  It pulled
back this morning as the churning broader markets tried to pick a
direction. However, that pullback found support at the 200-dma -
a bullish sign that gave a reliable signal as the bounce took it
up 11 points.  Now that it is just points away from the next
resistance level, bulls can look for a break above 331 to next
test 350.  However, after the bell, Oracle dragged down the NDX
and the techs may get swept lower with a broad brush to start the
day, so watch that 200-dma to see if it continues to provide
support.

52-week High: 614
52-week Low : 214
Current     : 328

Moving Averages:
(Simple)

 21-dma: 75
 50-dma: 76
-----------------------------------------------------------------

Market Volatility

The VIX once again found support at the 35% level and at its 200-
dma of 35.53.  With the exception of a breakout on March 12, it
has also found resistance at a descending trend line connecting
the highs of last July, October and this February. The rally in
equities has been impressive but will be even more promising if
the VIX can manage a close below its recent extreme of 34%.

CBOE Market Volatility Index (VIX) = 35.78 -0.68
Nasdaq-100 Volatility Index  (VXN) = 48.02 +1.35
-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.61        785,908       479,523
Equity Only    0.46        545,384       249,910
OEX            1.04         39,275        40,909
QQQ            0.41         85,207        35,078
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          37.1    + 2     Bull Correction
NASDAQ-100    44.0    +10     Bull Alert
Dow Indust.   20.0    +10     Bull Alert
S&P 500       34.2    + 6     Bull Confirmed
S&P 100       27.0    + 4     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  0.63
10-Day Arms Index  1.34
21-Day Arms Index  1.38
55-Day Arms Index  1.34


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       1593           1248
NASDAQ     1706           1362

        New Highs      New Lows
NYSE        46               35
NASDAQ      51               36

        Volume (in millions)
NYSE       1,838
NASDAQ     1,585
-----------------------------------------------------------------

Commitments Of Traders Report: 03/11/02

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 to both sides of the equation, with an
additional 14,000 long contracts and 13,000 shorts.  Small
traders mirrored that activity, adding 5,000 longs and 4,000
shorts.

Commercials   Long      Short      Net     % Of OI
02/18/03      423,871   481,871   (58,000)   (6.4%)
02/25/03      424,276   482,476   (58,200)   (6.4%)
03/04/03      426,053   472,492   (46,439)   (5.2%)
03/11/03      440,688   485,938   (45,250)   (4.9%)

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
Small Traders Long      Short      Net     % of OI
02/18/03      155,475    91,102    64,373     26.1%
02/25/03      157,790    91,083    66,707     26.8%
03/04/03      164,759    98,636    66,123     25.1%
03/11/03      169,450   102,631    66,819     24.6%

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 added almost equally to both sides with 3,700 long
contracts and 3,000 shorts. The slightly higher addition to the
long side was similar to the activity in the S&P.  Small traders
got longer as well, with 3,000 additional long contracts and
1,600 additional shorts.

Commercials   Long      Short      Net     % of OI
02/18/03       38,486     50,501   (12,015) (13.5%)
02/25/03       38,787     51,745   (12,958) (14.3%)
03/04/03       39,934     52,978   (13,044) (14.0%)
03/11/03       43,641     56,020   (12,379) (12.4%)

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
02/18/03       25,482     9,425    16,057    46.0%
02/25/03       25,378     7,431    17,947    54.7%
03/04/03       24,240     8,038    16,202    50.2%
03/11/03       27,196     9,674    17,522    47.5%

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 broke ranks in the Dow, adding 1,600 short contracts
and only 400 longs.  Small traders added 300 long contracts and
reduced shorts by about the same amount.

Commercials   Long      Short      Net     % of OI
02/18/03       18,812    11,939    6,873      22.4%
02/25/03       19,985    11,866    8,119      25.5%
03/04/03       21,326    12,724    8,602      25.3%
03/11/03       21,726    14,370    7,356      20.4%

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
02/18/03        5,561     8,973    (3,412)   (23.5%)
02/25/03        4,872     8,723    (3,851)   (28.3%)
03/04/03        5,233     8,075    (2,842)   (21.4%)
03/11/03        5,549     7,727    (2,178)   (16.4%)

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


===============
PLAY-of-the-Day  ((new BULLISH Active Trader/non-tech play))
===============

Best Buy Co - BBY - close: 30.50 change: +0.63 stop: 26.99

Company Description:
Minneapolis-based Best Buy Co., Inc. is North America's leading
specialty retailer of consumer electronics, personal computers,
entertainment software and appliances. The Company operates
retail stores and/or web sites under the names: Best Buy
(BestBuy.com), Future Shop (FutureShop.ca), Magnolia Hi-Fi
(MagnoliaHiFi.com), Geek Squad (GeekSquad.com), Media Play
(MediaPlay.com), Sam Goody (SamGoody.com) and Suncoast
(Suncoast.com). The Company reaches consumers through nearly
1,900 retail stores in the United States, Canada, Puerto Rico and
the U.S. Virgin Islands. (source: company press release)

Why we like it:
Some of our readers are probably scratching their heads that
we're considering another retail stock for a bullish long play.
Believe us, we had the same reaction at least initially.  There
is no arguing that the economic stability of this country is on
shaky ground and the retailing sector has NOT been a leader
recently.  With so many signs pointing to a potential double-dip
recession how does one build a case for bullish retailers?  The
short answer would be "carefully".  Not all retailers are on
equal footing and both investors and traders need to be choosy.

Let's try and look at the story for Best Buy.  The company is
expected to announce full year earnings on April 1st, 2003.  BBY
management has affirmed that they will hit analyst estimates and
actually guided toward the upper half of the range.  BBY's Q4
revenue numbers were 9% higher than the year before and total
revenue for the year appears to be up 16% to $22.71 billion.  As
the number one retailer of consumer electronics, industry
watchers expect BBY to continue to take market share from its
closest rival Circuit City, who is still struggling to remodel
its stores.  Bears will be quick to point out that all is not
pretty at BBY.  The company's Musicland operations have been
bleeding money, which is no doubt due to the malaise affecting
the entire music industry.  However, BBY is restructuring its
Musicland operations and closing some stores.

So the domestic economy is stumbling along and BBY still manages
to raise its revenue numbers?  There are plenty of other
retailers who would like to say the same but can't.  We also
found it very interesting that the Oracle of Omaha, Warren
Buffett, appears to have taken a liking to BBY.  Recent research
into the top 35 stock holdings of Berkshire Hathwaway showed that
the company bought additional shares in seven of its top 35
stocks positions during the fourth quarter of 2002.  High on the
list was BBY.  Now Buffett won't tell the media why he likes BBY
but one reporter speculated that the Oracle certainly doesn't
mind BBY's low P/E.  Historically, shares of BBY tend to trade
between a P/E of 20 and 40 times earnings.  Currently they are
only trading at 14 times estimated 2003 earnings (source:
Forbes.com).  That definitely leaves room for upside price
appreciation, especially if you have a longer-term perspective
like Warren.

We also noticed some very bullish developments on BBY's point-
and-figure chart.  Not only did BBY breakout above descending
bearish resistance but the stock is also in breakout mode from a
bullish triangle.  Now here's the skinny on those bullish
triangle breakouts for PnF charts.  According to studies, a
bullish triangle PnF breakout is profitable 71.4% of the time.
Not only that, the stock in question has an average gain of 30.9%
over the next 5.4 months.  Here's the trick - these results only
apply in a bull market.  It would take a lot of faith and a whole
lot of guts to call today's markets a new bull market.  Also
positive for PnF chart readers is the stock's bullish vertical
count, which is currently pointing to a price target of $60
(again, this is probably a long-term target).

On a much shorter-term time frame bulls should be encouraged by
the breakout above the $30 level on rising volume.  However, we
feel that the best entry point is probably on a pull back to the
$29.00 area.  This is why we're going to initiate the play with
such a wide stop loss (of $26.99).  A pull back and bounce
anywhere between $28 and $29 would allow traders a much smaller
amount of exposure.  Our short-term target is $35.00 with a two-
to-four week time frame.

Annotated Chart of BBY:


Picked on March 18th at $30.50
Gain since picked:       +0.00
Earnings Date         04/01/03 (unconfirmed)







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only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

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The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                  Tuesday 03-18-2003
                                                    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
  Closed Bearish Plays:  INFY

Stock Bottom / Active Trader
  New Bullish Plays:     BBY
  Bullish Play Updates:  TBL, TOO
  Bearish Play Updates:  T
  Closed Bearish Plays:  S, UHS

High Risk/Reward
  New Bullish Plays:     BBOX
  Closed Bearish Plays:  CTAC

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 Closed Plays
===============

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

Infosys Technologies - INFY - cls: 58.52 chg: -0.15 stop: 60.01

Last week we discussed how the dissipation of bullish momentum in
the software index and sector leader MSFT had helped to keep INFY
under resistance at $60.00.  The bears put up a valiant defense
of that level on Monday as the GSO.X and overall tech sector
moved explosively higher.  INFY tagged an intraday high of
$60.00, leaving our short play hanging by a thread.  This morning
the stock gapped up to an opening price of $60.19, stopping our
play out for a loss of 70 cents, or 1.1%.  In light of the
powerful market rally from last weeks lows, it wasn't surprising
to see INFY move sharply higher.  Another factor that helped fuel
the stock's rise is the recent uptrend in the U.S. Dollar.  The
currency has been pushed higher by the equity rally and a growing
belief that the pending war with Iraq will be quickly resolved.
The corresponding weakness in the Indian rupee is a positive
development for Infosys.  On the daily chart, we see that INFY is
approaching its 200-dma at $62.27.  That moving average provided
resistance in late-February/early-March.  Longer-term traders may
want to maintain a stop just above those highs at $62.44.

Picked on March 5th at $59.49
Results since picked:   -0.70
Earnings Date        04/11/03 (unconfirmed)






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

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

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

Best Buy Co - BBY - close: 30.50 change: +0.63 stop: 26.99

Company Description:
Minneapolis-based Best Buy Co., Inc. is North America's leading
specialty retailer of consumer electronics, personal computers,
entertainment software and appliances. The Company operates
retail stores and/or web sites under the names: Best Buy
(BestBuy.com), Future Shop (FutureShop.ca), Magnolia Hi-Fi
(MagnoliaHiFi.com), Geek Squad (GeekSquad.com), Media Play
(MediaPlay.com), Sam Goody (SamGoody.com) and Suncoast
(Suncoast.com). The Company reaches consumers through nearly
1,900 retail stores in the United States, Canada, Puerto Rico and
the U.S. Virgin Islands. (source: company press release)

Why we like it:
Some of our readers are probably scratching their heads that
we're considering another retail stock for a bullish long play.
Believe us, we had the same reaction at least initially.  There
is no arguing that the economic stability of this country is on
shaky ground and the retailing sector has NOT been a leader
recently.  With so many signs pointing to a potential double-dip
recession how does one build a case for bullish retailers?  The
short answer would be "carefully".  Not all retailers are on
equal footing and both investors and traders need to be choosy.

Let's try and look at the story for Best Buy.  The company is
expected to announce full year earnings on April 1st, 2003.  BBY
management has affirmed that they will hit analyst estimates and
actually guided toward the upper half of the range.  BBY's Q4
revenue numbers were 9% higher than the year before and total
revenue for the year appears to be up 16% to $22.71 billion.  As
the number one retailer of consumer electronics, industry
watchers expect BBY to continue to take market share from its
closest rival Circuit City, who is still struggling to remodel
its stores.  Bears will be quick to point out that all is not
pretty at BBY.  The company's Musicland operations have been
bleeding money, which is no doubt due to the malaise affecting
the entire music industry.  However, BBY is restructuring its
Musicland operations and closing some stores.

So the domestic economy is stumbling along and BBY still manages
to raise its revenue numbers?  There are plenty of other
retailers who would like to say the same but can't.  We also
found it very interesting that the Oracle of Omaha, Warren
Buffett, appears to have taken a liking to BBY.  Recent research
into the top 35 stock holdings of Berkshire Hathwaway showed that
the company bought additional shares in seven of its top 35
stocks positions during the fourth quarter of 2002.  High on the
list was BBY.  Now Buffett won't tell the media why he likes BBY
but one reporter speculated that the Oracle certainly doesn't
mind BBY's low P/E.  Historically, shares of BBY tend to trade
between a P/E of 20 and 40 times earnings.  Currently they are
only trading at 14 times estimated 2003 earnings (source:
Forbes.com).  That definitely leaves room for upside price
appreciation, especially if you have a longer-term perspective
like Warren.

We also noticed some very bullish developments on BBY's point-
and-figure chart.  Not only did BBY breakout above descending
bearish resistance but the stock is also in breakout mode from a
bullish triangle.  Now here's the skinny on those bullish
triangle breakouts for PnF charts.  According to studies, a
bullish triangle PnF breakout is profitable 71.4% of the time.
Not only that, the stock in question has an average gain of 30.9%
over the next 5.4 months.  Here's the trick - these results only
apply in a bull market.  It would take a lot of faith and a whole
lot of guts to call today's markets a new bull market.  Also
positive for PnF chart readers is the stock's bullish vertical
count, which is currently pointing to a price target of $60
(again, this is probably a long-term target).

On a much shorter-term time frame bulls should be encouraged by
the breakout above the $30 level on rising volume.  However, we
feel that the best entry point is probably on a pull back to the
$29.00 area.  This is why we're going to initiate the play with
such a wide stop loss (of $26.99).  A pull back and bounce
anywhere between $28 and $29 would allow traders a much smaller
amount of exposure.  Our short-term target is $35.00 with a two-
to-four week time frame.

Annotated Chart of BBY:


Picked on March 18th at $30.50
Gain since picked:       +0.00
Earnings Date         04/01/03 (unconfirmed)





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

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

Timberland Co. - TBL - close: 41.35 change: -0.43 stop: 38.74

News continues to be scarce for TBL but that has not stopped the
stock from enjoying the bullish atmosphere in the markets.  When
the broader indices soared on Monday, shares of TBL joined in the
rally and headed higher.  That is until they slammed smack dab
into resistance at $42.00.  The stock spent most of the session
trading sideways between 41.80 and 42.00 before slipping back
from its highs into the close.  TBL saw some profit taking early
in Tuesday's session but buyers bought the dip and by the
afternoon the stock was ticking higher again.  Very conservative
traders could use today's low as a potential stop loss guide
while potentially less but still conservative traders could use
the $40 mark as a guide.  Currently, we're going to keep our stop
loss at 38.74.  Remember, this is a short-term trade with our
target near $45.  The longer-term weekly patterns are showing TBL
to be overbought and ready for a pull back.

Picked on March 14th at $40.81
Results since picked:    +0.54
Earnings Date         04/17/03 (unconfirmed)




---

TOO Inc - TOO - close: 17.21 change: +0.01 stop: 16.94

Our bottom fishing retail play in TOO has been a real trooper
lately.  The stock has taken every opportunity to rally with the
markets and today's show of strength by not pulling back was very
encouraging for shareholders.  After Monday's big day we
seriously considered closing the stock play for a profit.  Yet
after seeing the broader markets closing performances we decided
to give TOO more time but using a very tight stop loss.  That new
stop loss from Monday night is $16.94.  This protects a decent
gain (even more decent if you entered on the pull back near
$14.50) while still allowing TOO a chance to run.  The stock is
up significantly in the last four sessions and we would not
recommend new positions unless the stock offered a pull back an
bounced.  Of course this will stop out our current play.  Keep in
mind that the S&P Retail index is looking just as top heavy and
approaching its 200-dma.  What could keep this rally going is
shares of WMT, the leader in the retail group.  WMT managed to
close above both its $52 level and its 200-dma.  WMT looks just
as top heavy and due for a pull back but if the stock keeps
running it can power the retail group to new highs.  TOO is
likely to keep the pace.  Again, we do not recommend any new
positions at this time and traders should be considering when
they plan to exit if they are not already taking some profits off
the table.

Picked on February 27th at $15.66
Gain since picked:          +1.55
Earnings Date            02/19/03 (confirmed)




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

AT&T - T - close: 17.15 change: -0.08 stop: *text*

Shares of T bounced sharply on Monday.  Did the business outlook
for AT&T suddenly improve?  Not a chance!  But with the Dow
Industrials rallying more than 280 points, nearly every component
of the index posted solid gains.  Yesterday's short-covering
erased most of last week's losses.  The stock traded in a much
smaller range during today's session and finished with a
fractional decline.  News from Sprint this morning underscored
the intense telecom competition that has pressured T.  FON
announced that it plans to begin selling local phone service with
wireless and long-distance calling.  These sorts of developments
will make it increasingly difficult for AT&T to turn a profit.
As far as the technical outlook is concerned, we're not quite
convinced by the bounce off the relative lows.  Until the stock
shows additional confirmation, we'll maintain an entry trigger at
$15.74.  Remember that the play won't be activated if shares gap
below $15.50.  If these requirements are met our stop will be
placed at $17.16.  In other recent news, AT&T announced a
quarterly divided on Monday morning.  The dividend of $0.1875 per
share will be payable on May 1st to shareholders of record on
March 31st.

Picked on March xxth at $xx.xx
Results since picked:    +0.00
Earnings Date         04/24/03 (unconfirmed)





===============
AT Closed Plays
===============

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

Sears Roebuck - S - close: 20.52 change: +0.65 stop: 20.62

The current market rally began last Wednesday when all three
major indexes bottomed out at relative lows.  Sears, however,
didn't initially show much of a response to the equity gains.
The stock continued to languish near multi-decade lows without
showing any ability to catch a bid.  It wasn't until Monday
morning that shares finally shook off the weakness.  S saw steady
buying throughout the session and closed just below psychological
resistance at $20.00.  Driving this powerful upward move were
news announcements from the Federated and Wal-Mart camps.  FD,
the parent company of Bloomingdale's and Macy's, affirmed its
same-store sales forecast of a 3%-4% decline for March.  WMT said
it expects the same figures to show an increase in the low-single
digits.  The fact that Sears rallied sharply on its competitors
reiteration of a *decline* in sales shows just how panicky shorts
are in this environment.  It's hard to imagine that that news
would've triggered heavy buying a week ago, when the market was
still mired in bearishness.  But rally it did, and our play was
stopped out for a 6.4% loss this morning when shares extended
yesterday's uptrend.  Traders who used a more lenient stop will
be pleased to see that shares closed below the 21-dma after
failing to move above whole-number resistance at $21.00.  It's
also interesting to see that the long-term trend of lower highs
hasn't been broken.  Nonetheless, with both the MACD and daily
stochastics (5,3,3) hinting at further bullishness, traders still
holding long positions in S may want to consider heading for
exits during intraday pullbacks.

Picked on March 6th at 19.30
Results since picked   -1.32
Earnings Date       04/17/03 (unconfirmed)




---

Universal Health - UHS - cls: 38.45 chg: -0.14 stop: 39.06

As the saying goes, a rising tide lifts all boats.  Last week UHS
showed a rather tepid response to the ascending action of the
broader market.  The stock lifted off its short-term lows but
wasn't even able to break above its 21-dma.  That all changed on
Monday when the Dow Jones exploded for a 282-point gain.  UHS
followed the index higher throughout the session and continued to
rally on Tuesday.  Our short play was closed out for a loss of
2.8% when the stock spiked up to our stop-loss during the second
hour of trading.  Shares clawed their way to an intraday high of
$39.48 before profit-takers finally moved in late-afternoon
action.  Longer-term traders who elected to give UHS more
breathing room may want to use a stop slightly above either
today's high or psychological resistance at $40.00.

Picked on March 6th at 37.98
Results since picked   -1.08
Earnings Date       02/13/03 (confirmed)






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

============
HR New Plays
============

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

Black Box Corp. - BBOX - close: 30.82 change: +2.14 stop: *text*

Company Description:
Black Box is the world's largest technical services company
dedicated to designing, building and maintaining today's
complicated network infrastructure systems. Black Box services
clients through 117 offices in 132 countries throughout the
world. (source: company press release)

Why We Like It:
As Albert Einstein once pointed out, opportunity can often be
found in the midst of great difficulty.  That piece of wisdom
applies particularly well to the recent trading in BBOX.  Shares
of the networking company lost roughly a third of their value on
March 12th after Black Box reduced its fourth-quarter earnings
expectations to 53-54 cents/share.  Analysts, on average, had
been expecting an EPS result of 74 cents.  Explaining the
shortfall, BBOX said "overcapacity in just about all vertical
markets...continues to have an impact on our business."  They
also cited the continued war and terrorism concerns as reasons
for the weakness, but of course that could be said for the entire
economy in general.  Investors were not pleased with these
bearish comments regarding IT demand.  BBOX gapped from $39.14 to
$26.78 on extremely high volume of 7.5 million shares.  The stock
continued to decline and bottomed out at $25.58 during the
following session.  Things were looking awfully bleak as BBOX
fell to multi-year lows, but the bears finally decided to call it
quits when they were confronted with Thursday's broader market
rally.

Although there have been no fresh news developments for Black Box
since last week's earnings warning, bargain-hunting and short
covering have pushed BBOX sharply higher over the past two
sessions.  Obviously yesterday's market rally played a big factor
in those gains.  Shares continued to trade strong on Tuesday and
outperformed the NASDAQ with a gain of 7.4%.  That relative
strength is a positive sign for the bulls.  Point-and-figure
chartists will also note that BBOX has reversed into a column of
"X."  And while a case could be made for some consolidation of
the recent bounce from the $26.50 region, we feel the stock is
poised to continue higher as it fills in the March 12th gap.  An
entire retracement of those losses would take BBOX to the $39-$40
area.  This might be a realistic goal for longer-term traders.
Because we have a shorter-term timeframe, our objective will be
to capture a rally to our official exit target at $34.94, just
below psychological resistance.  The action trigger to enter this
play is set at $30.86.  Should we be triggered, we'll use a stop-
loss at $28.69, five cents under today's low.  Those looking for
less downside risk might want to use a stop slightly below
$29.50, which acted as a price magnet during the middle of
today's session.

Annotated daily chart - BBOX:



Picked on March xth at $xx.xx <- see text
Results since picked:   +0.00
Earnings Date        05/08/03 (unconfirmed)





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

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

1-800 Contacts - CTAC - cls: 20.09 chg: +0.60 stop: 20.01

CTAC didn't show much of a response to yesterday's bullish
onslaught in the equity market.  The stock posted a paltry 1.4%
gain while remaining well below the relative high of $19.70.
That relative weakness gave the bears some hope that shares would
roll over and begin to retrace the recent gains.  But with the
major indexes holding firm on Tuesday, a delayed bullish reaction
propelled CTAC to a 3.0% gain.  Our 6.4% stop-loss at $20.01 was
violated when shares broke through psychological resistance near
the end of the trading day.  Given the lack of additional
overhead resistance until the declining 50-dma at $21.64, we
would not advise maintaining short positions at this time.

Picked on February 20th at $18.80
Results since picked:       -1.21
Earnings Date            02/18/03 (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

DUK     Duke Energy                15.51     +0.87
FE      First Energy               30.97     +0.67
SHPGY   Shire Pharma.              18.20     +1.25
TECD    Tech Data                  24.25     +1.27
PRX     Pharamceutical Resources   40.00     +1.20

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

DGIN    Digital Insight Corp       15.55     +1.27
URS     URS Corp                   12.14     +1.11
CELL    Brightpoint Inc            14.47     +1.26

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

DD      DuPont                     40.08     +1.38
SLB     Schlumberger Ltd           39.50     +1.42
NAB     National Australia Bank    90.25     +1.63
ABK     Ambac Financial            49.57     +1.15
ESV     Ensco Intl.                26.21     +1.24
FMX     Fomento Economico          33.80     +1.01
GRMN    Garmin Ltd                 34.92     +1.32
BCR     C.R. Bard                  61.05     +1.31
AGE     A.G. Edwards               27.52     +1.13

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

NHY     Norsk Hydro                36.10     -1.24
RJR     RJ Reynolds                33.57     -3.12
WGO     Winnebago Industries       24.45     -5.31

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

                             




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send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************


Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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