Option Investor

Daily Newsletter, Tuesday, 09/16/2003

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PremierInvestor.net Newsletter                Tuesday 09-16-2003
                                                   section 1 of 2
Copyright (c) 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:      Unchanged But Changed
Watch List:       VIP, AME, MCHP, FRED and more!
Market Sentiment: All Aboard!

MARKET WRAP  (view in courier font for table alignment)
      09-16-2003           High     Low     Volume Advance/Decline
DJIA     9567.34 +118.50  9571.13  9449.16 1.72 bln   2312/ 902
NASDAQ   1887.26 + 41.60  1887.87  1848.41 1.80 bln   2186/1067
S&P 100   517.36 +  7.40   517.59   509.96   Totals   4498/1969
S&P 500  1029.32 + 14.51  1029.66  1014.81
W5000    9979.05 +136.10  9980.60  9842.92
RUS 2000  515.66 +  9.02   515.91   507.64
DJ TRANS 2773.38 + 40.40  2775.43  2732.06
VIX        19.31 -  0.94    20.85    19.25
VXN        31.66 -  1.27    33.44    31.24
Total Volume 3,800M
Total UpVol  3,145M
Total DnVol    582M
52wk Highs  552
52wk Lows    21
TRIN       0.53
NAZTRIN    0.40
PUT/CALL   0.66

Market Wrap

Unchanged But Changed

The Fed left rates unchanged today but there was a change in
the statement. It was very subtle and just enough to tilt the
scales but traders completely ignored it. Tuesday was governed
by several large program trades that caught the market by
surprise and left many shorts running for cover at the close.

Dow Chart

Nasdaq Chart

The day started off negative with the Retail Sales report and
a decline of -0.3%. Wal-Mart and Target held up the sector or
it would have been much worse. Back to school sales continued
to provide the majority of their gains. The 9/11 anniversary
did not really impact sales and life continued as normal. The
numbers were also boosted by heavy sales of building supplies
on the east coast in preparation for the hurricane. This
was the first negative week after three consecutive weeks of
gains. The Bank of Tokyo is now projecting gains for September
of only +3.5% to +4% which is down from their +5% earlier
estimate. It is going to be harder for retail sales to grow
over the next month because the tax checks are over and the
refinancing boom has bust. Consumers should be in conservation
mode for the holiday purchases in December.

The NAHB Housing Index fell to 68 in September from 71 in
August. This is a minor decline and 68 is still the second
highest number since early 2002. The outlook by the builders
may be eroding but it is still high. The components showed
that buyer traffic dropped to 20 from 55 and single family
sales dropped to 73 from 77. The only component that did not
drop was the six-month outlook which remained at 78 and the
same as the prior month. With the drop in buyer traffic from
55 to 20 I am amazed the headline number did not drop any
more. Builders are still hoping the rising economy will
offset rising rates and keep the momentum moving. They are
shifting their marketing to adjustable rate mortgages in an
attempt to diffuse the impact of the rate increase.

The Consumer Price Index rose only +0.3% for August and the
majority of that increase was due to energy prices. The core
rate showed only a +0.1% gain and emphasizes the lack of
pricing power for corporations and the potential for an
"unwelcome fall in inflation". The lack of inflation will
do nothing to prevent the Fed from taking stronger action
if needed to fuel the economy. The core rate at only +0.1%
was so low that it pushed the 12 month inflation rate down
to only +1.3%. This is the lowest rate since 1966. At only
+0.1% there is very little room before we start seeing
negative numbers and true signs of deflation. The economy
needs to put in a floor here, draw line in the sand or make
goal line stand. Choose your metaphor.

The FOMC meeting ended with no change in interest rates as
expected. The statement was a carbon copy of last months
statement with one small but important exception. Today's
release specifically said labor conditions were weakening
instead of labor conditions are mixed. Other than that
they repeated the same comments from the last two meetings
of risks are basically balanced between inflation and an
"unwelcome fall in inflation" but all things considered
there is still a minor risk of the latter. They still do
not trust us with the "D" word. Still the mere mention,
regardless of how minor, of the D phrase kept the bond
market to only a minor loss. The key point here is that
the Feds are either cautiously optimistic that the economy
is still recovering or they are still behind the curve or
they just have their heads buried in the sand. They did
realize that after seven months of jobs losses and
increasing jobless claims that the labor market was
weakening instead of mixed.

The Fed also issued the coded sentence that there were no
rate changes coming any time soon to keep the market from
worrying that any economic bounce could jumpstart the
rate hike cycle. This is critical considering the real
funds rate is already negative and has been for most of
the last 2 years. Also, this is one of the longest periods
of low rates over the last 50 years. The M2 money supply
has expanded more quickly in the last three year period
than any other period in history. Many analysts think the
"labor market weakening" statement was a clue that the
Fed could actually cut rates again if the Oct jobs report
was negative. The markets had a mixed reaction to the
announcement at first but then rallied strongly into the
close on a monster buy program. Conspiracy theorists were
flocking to the theory that the Fed was pumping money into
the market to make it appear the market was excited about
the Feds decision.

The Fed announcement was actually preempted by another
news event on the west coast. Two of the top three pension
funds in California with assets of nearly $300 billion in
stocks, called for the resignation of Richard Grasso and
a reduction in his announced pay package. They were quickly
followed the North Carolina Treasurer, claiming he represented
700,000 pensioners, and the New York State Controller who
claimed he represented 960,000 fund holders. This brings
to about a dozen the number of major players calling for
his resignation and in some cases the resignation of the
board. Now that the top players in the country have gone
on the offensive and pledged an aggressive fight using all
the methods at their disposal, Richard's days are numbered.
The reluctance to release details of the pay package until
pressed by authorities and then the bits and pieces release
already make the board and management look guilty. The
pressure is rising and although they did not do anything
legally wrong the appearance of abuse and cover up will
probably lead to a big announcement soon. Grasso has
refused all interview requests since the resignation
demands began to increase. Expect this to take center
stage on Wednesday right behind the hurricane.

After the bell MCHP affirmed a lower range of estimates for
earnings. Prior estimates were for sales to increase from
+1% to +6% and they narrowed the range to +2% to +5%.
Earnings were still expected to be 17 cents. Dell's CFO,
Kevin Rollins, was interviewed on CNBC and he was not as
upbeat as Michael Dell. He tried to carefully express both
caution and confidence without stepping on his boss's toes.
He said demand was stable but there was no real growth. He
also said they were seeing growth in performance but not
in price. The interviewer asked him specifically again if
that meant that revenue would not increase and Kevin tried
to dodge the bullet by repeating that they were seeing
growth in performance and launched a sales pitch for Dell.
Interesting interview where they actually discussed the
fact that Michael Dell may be more bullish about expectations
than facts would allow but it was very carefully worded.
I think Michael must hold training classes on how to speak
to the media to turn every interview into a sales pitch and
how to divert pointed questions.

The recall election is not off. At least according to the
ninth circuit court. Instead of waiting to see if the parties
to the recall suit would appeal the three judge ruling the
9th circuit gave the parties a limited amount of time to
file a 15 page position paper from which the court would
decide to take the case or pass. The court stayed the order
from the lower court halting the election and told everyone
to consider the election as back on until they ruled on the
appeal. The court can pass and open the door for a supreme
court appeal.

Spitzer is on the prowl again and they woke up the mutual
fund community today by filing not only civil charges but
criminal charges against Theodore Sihpol a broker for BAC
until he was fired last week. They are claiming that traders
"stole" money from fund holders by allowing late trading.
He faces up to 25 years in prison. Spitzer and colleagues
claim there will be many more charges against dozens if not
hundreds of fund personnel. The wake up call has caused some
real grief from people expecting a hand slap and a fine.
Real jail time on multiple charges with minimum sentencing
provisions will cause some sleepless nights tonight.

There will be more sleeplessness tonight for those that
were caught off guard by the strong rally today. There was
a strong move up at the open accompanied by a buy program
at 9:50. This produced some short covering that pushed the
Dow to strong resistance at 9500 where it traded sideways
in a ten point range until the Fed announcement. After the
announcement the Dow dropped only to the bottom of that
range and another buy program triggered to push the Dow
to the 9525 range where it held on strong but declining
volume for 30 minutes only to blast off on yet another
apparent buy program to 9560. When the 9525 buying began
the shorts began covering in earnest and pushed the Dow
and the Nasdaq to six day highs. Almost the entire drop
for the last six days since the September 8th closing high
was recovered in one day on negative news. There are quite
a few bears still short and scratching their heads tonight.
The S&P Emini came to a dead stop at 1028 with very strong
resistance at the 1030 level and the contract high. The
Dow closed at 9563 and only a very short 37 points away
from very strong resistance at 9600. 9607 was the recent
52-week high. The Nasdaq rallied +41 points and came to
rest only one point below the recent 52-week high. This
very bullish day completely surprised almost everyone.
However, if you look at the candles on the charts above
I am sure you will agree it was not normal buying patterns.

Let's reconstruct. Retail Sales declined and the Bank
of Tokyo lower their estimates for September. The core rate
of the CPI rose only +0.1% and could not get any closer to
an unwelcome fall in inflation. The NAHB Housing Index
showed buyer traffic fell to 20 from 55. The Fed said the
labor market was weakening and deflation was still a greater
threat than inflation. We are in the most dangerous six
weeks of the year. If all of this is bullish then I am
missing the boat. So what prompted the markets to retest
the current highs? What prompted the strong program buys
that triggered the massive short covering? Maybe I should
start believing the conspiracy theorists. It was certainly
not excitement that Grasso may be on his way out or that
Spitzer could file charges against hundreds of traders.

Ok, let's assume the economy is in a stealth recovery. We
are getting cautious comments from quite a few companies
that are affirming estimates but not specifically raising
them. Earnings warnings are very low on a historical basis.
We have analysts quoting +7% GDP for the 3Q with no evidence
to support it. Great, I hope we get it. The problem I see
that this is already priced into the market. Literally every
major analyst agrees with this concept. Also, almost all
analysts agree that a rally over the traditional Sept/Oct
period would be strongly bullish. Unfortunately nobody can
explain why it would happen. Nobody can explain why we are
not seeing any real profit taking.

The only scenario that makes sense is the new bull market
scenario. Scrap the concept of waiting for valuation because
stocks are always over valued at this stage of a market
cycle. Forget the normal historical market cycles because
they are only serving to produce dips to buy. Stocks are
going up because people want to buy them. They want them to
go up. After three years of a bear market they are tired of
the bearishness. They have bought the recovery scenario lock
stock and barrel. 2004 will be a banner year according to
the rising six month sentiment expectations. That is the
bullish view, buy the dip. The bearish view sees all the
negatives I mentioned above and keeps trying to short the
resistance. Been there, done that, today. Many are scared
of shorting the tops now because of the numerous breakouts.
They are waiting for the dips to gain speed and after 2-3
days of a downtrend they finally get suckered back into a
short position. Just as they get comfortable with the trend
the trend changes but just slow enough to keep them short
until the last minute.

We had five days of weakness on the Dow totaling about -220
points. No big deal but enough to make traders think that
Dow 9000 was possible again. This was especially true when
we were trading in the high 9300s last week. Shorts are like
that frog in a pan of cold water. Just as they are getting
comfortable and adding to their positions the price begins
to rise little by little but always with a hint of a continued
down trend. These represent the bearish equivalent of buying
opportunities or shorting opportunities. After a couple days
of sideways movement to lull them to sleep we got the big
morning bounce on bad news. Their fear factor rises but
surely this is temporary. We always get a sell off just
before the Fed announcement. What, no sell off? That is ok
we will see a monster sell the news event because the Fed
cannot say anything positive for fear of spooking the bond
market. The news is out, the market drops slightly and maybe
they add to their positions thinking the crash is about to
occur. Suddenly a massive buy program kicks the Dow up +60
points and their pain threshold increases exponentially.
Short covering begins on heavy volume but the majority are
still locked into that final lie. Don't worry the Dow will
fail again at 9600, Nasdaq 1890, S&P 1030. That was the prior
highs and very strong resistance. Shucks, I am going to
average down and add to my positions if we hit that level.

Replay that scenario every week for the last six months and
just change the economic reports and the prices and you will
see why we are threatening to break out again. All the
indications for the bear point to a failure in the economy,
a failure on price and a failure based on the calendar. None
of which has yet to come true. Most retail bulls are oblivious
to the complicated forces in the market. They have a winning
plan and they are following it carefully. Buy the dip. It
worked for years and it is back. Martha, take the funds out
of the money market we are going to make it all back. Actually
the Fed is supporting this plan. If they can keep talking the
market up and not scare anybody with the D word then investors
will feel prosperous again and they will spend money and pay
taxes with those profits. The only problem with this scenario
is that it will only work until it quits and nobody knows
when that will be. Eventually institutions will decide they
have ridden the bull long enough and start taking profits.

Actually, the activity over the last several days had looked
an awfully lot like some institutions were taking profits.
It looked like we were in a distribution phase. Distribution
occurs when institutions want to exit a large position
without tanking the market. If they think the market is near
a top they will start feeding each bounce with a fraction of
their position. Say they wanted to sell 20 million shares of
MSFT or GE. Just placing an order for 20 million shares would
knock us back to July in a heartbeat and they would end up
getting far less than current value. Instead they start
dumping smaller blocks of 5, 10, 20, 50,000 shares into the
market at a slow enough rate to keep the market from tanking
but fast enough to get them out as high as possible. By
distributing these multimillion share positions to the retail
investors in thousands of smaller chunks they get out quietly.

The signs of distribution are heavy volume and no movement.
This is exactly what we have been seeing over the last several
days. Today especially. There were several periods of huge
volume for a prolonged time with no movement. The bulls were
buying hard but somebody was feeding them in volume. The
bounce in the late afternoon was on very heavy volume and
it appeared as though the 9525 and 9550 pause levels were
particularly heavy. Of course this is all speculation on my
part because nobody knows what it powering the market. We
could have just been seeing some asset allocation programs
coupled with short covering triggered by those programs. The
key to the puzzle is still tomorrow.

Regardless of the reasons we did close at or near the highs.
If the gains today were based on program trades of some sort
then tomorrow could see a reversal. If it was really a flood
of new money into the market then tomorrow could see a break
to a new high once again. Shorts will be sitting with their
finger on the trigger at the open. They are in a very dangerous
position this close to a breakout. Let one major buy program
hit at the open and it could be off to the races. The economic
news tomorrow is light with only Residential Construction and
Mortgage Applications and the Semi Book-to-Bill after the close.
We are on our own for direction and the futures are perfectly
flat at 9:PM. It could be an exciting day if you are on the
right side of the market. It could be painful if you are on
the wrong side. The Nikkei rose +179 points at the open tonight
to break 11,000 for the first time in 14 months. This could be
our first clue. Dow 9600 is the key at the open. Once broken
the next stop could be 10,000. The key word there is "broken".

Enter Very Passively, Exit Very Aggressively!

Jim Brown


The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have
time to fully read pertinent news stories, due background
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.


Vimpel Communications - VIP - close: 57.80 change: +1.07

WHAT TO WATCH: Another day, another new closing high for VIP.
Just one of the soaring Russian wireless telephone service
providers, VIP has more than doubled in the past year and looks
to be breaking out again.  Either a pullback near the 10-dma or a
breakout over $58.10 can be used for new entries.  The PnF chart
remains quite bullish with a price target completely out of reach
in the near term ($95).  Target a near term move to the $65 area.


Ametek Inc. - AME - close: 42.66 change: +1.09

WHAT TO WATCH: The third time's the charm.  Over the past few
weeks, shares of AME have been turned back from the $42.75-43.00
area, and price is once again returning to that zone of
resistance after Tuesday's sharp rise.  Things appear different
this time around though, as volume is really starting to build.
Target an entry on a breakout over $43 and look for an initial
move into the $45-46 area.


Microchip Technology, Inc. - MCHP - close: 28.10 change: +1.30

WHAT TO WATCH: Semiconductor stocks are surging again and the SOX
closed right at the pivotal $460 resistance level on Tuesday.
MCHP has been banging its head on resistance in the $28.00-28.70
area for nearly a month and it looks like a breakout is overdue.
Tuesday's strong buying volume and nearly 5% gain looks like the
beginning of a bigger move.  Wait for a breakout over $28.75
before playing and then look for a move to the $32 level.


Fred's Inc. - FRED - close: 34.98 change: +1.51

WHAT TO WATCH: This type of price pattern is becoming all-too-
familiar, as every dip is being aggressively bought.  FRED had
quite a tumble from its recent peak near $37, but the bulls
picked up the pieces, bought the stock back at the 30-dma and it
looks like Rally-Ho all over again.  Look for entries on a
pullback near the $33.75-34.00 area and then look for a test and
likely breakout over the $37 level.


On the RADAR Screen

URBN $49.50 - It seems there is no holding back the Retailers and
URBN is just one more that seems to be catching the bulls'
attention.  After being turned back near $50, the stock came back
to find support near $45 and it is once again nearing resistance.
Look for a breakout before going long.

CSCO $21.29 - Surprise, surprise, CSCO charged to a new 52-week
high on Tuesday and it won't take much more upside and it will be
setting multi-year highs.  Look for pullback into the $20.50-
20.75 area and then target a move to $24, near the site of the
May 2001 highs.

ETR $54.21 - If you're looking for a solid trend, it's hard to
argue with that provided by ETR.  Sure it gets a bit volatile at
times, but the stock has been consistently hitting higher highs
for the past year.  Speaking of higher highs, it looks like those
could arrive later this week with a breakout over $54.75.  Wait
for the breakout and then target a move to $60.

Market Sentiment

All Aboard!
- J. Brown

Investor sentiment is getting pretty simple these days.  If it
goes up, buy it!  If it pulls back, buy it!  If it goes sideways,
wait for it to go up or pull back.  I say this tongue in cheek
but any veteran trader knows this can't last for very long but
until it changes, enjoy the ride.

The FOMC's decision to hold interest rates at 1 percent was no
surprise and the markets cheered with a 118-point rally in the
DJIA and a 2.2 percent rally in the NASDAQ.  Analysts continue to
harp on their positive expectations for strong corporate profits
the next two quarters and beyond so money keeps flowing into

Market internals were very bullish with advancing stocks
punishing losers 20 to 7 on the NYSE and 21 to 9 on the NASDAQ.
Up volume was 6 times down volume on the NYSE and almost as
strong on the NASDAQ.

Volatility indices, which are supposed to measure investor fear
fell lower today as the markets rallied.  From the looks of it,
investors are pretty fearless and again this is a warning signal
that veteran traders will recognize as a clue to be careful.

Play the trend but don't get caught when the trend changes.
Fortunately for the bulls, it feels like the current trend still
has some legs underneath it.

A couple of items to be aware of tomorrow:  The homebuilders have
been strong with interest rates still near historical relative
low.  We're going to see the housing starts and building permit
numbers tomorrow before the opening bell.  Plus, nearly everyone
has jumped on the bullish bandwagon for semiconductors.  We're
going to see the latest book-to-bill ratio tomorrow night after
the bell.  Let's hope they're good.  Many believe the chips tend
to lead the markets either higher or lower.


Market Averages


52-week High:  9609
52-week Low :  7197
Current     :  9567

Moving Averages:

 10-dma: 9512
 50-dma: 9291
200-dma: 8660

S&P 500 ($SPX)

52-week High: 1032
52-week Low :  768
Current     : 1029

Moving Averages:

 10-dma: 1022
 50-dma:  997
200-dma:  926

Nasdaq-100 ($NDX)

52-week High: 1387
52-week Low :  795
Current     : 1382

Moving Averages:

 10-dma: 1362
 50-dma: 1292
200-dma: 1132


No surprises here.  The volatility indices both took a dive with
the markets in rally mode.  These are suppose to measure investor
fear and right now the markets are pretty much fearless.

CBOE Market Volatility Index (VIX) = 19.31 -0.94
Nasdaq Volatility Index (VXN)      = 31.66 -1.27


          Put/Call Ratio  Call Volume   Put Volume

Total          0.66        705,925       464,376
Equity Only    0.50        555,642       276,726
OEX            1.20         34,893        41,948
QQQ            0.98         71,870        70,308


Bullish Percent Data

           Current   Change   Status
NYSE          73.1    + 0     Bull Confirmed
NASDAQ-100    78.0    + 0     Bear Correction
Dow Indust.   83.3    + 0     Bull Confirmed
S&P 500       81.8    + 0     Bull Confirmed
S&P 100       88.0    + 0     Bull Confirmed

Bullish percent measures the number of stocks in an index
currently trading on a buy signal on their point and figure
chart.  Readings above 70 are considered overbought, and readings
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend


 5-Day Arms Index  1.19
10-Day Arms Index  1.17
21-Day Arms Index  1.02
55-Day Arms Index  1.02

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


Market Internals

            -NYSE-   -NASDAQ-
Advancers    2051      2134
Decliners     779       968

New Highs     180       309
New Lows       10         4

Up Volume   1441M     1476M
Down Vol.    240M      250M

Total Vol.  1693M     1779M
M = millions


Commitments Of Traders Report: 09/09/03

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

No change in sentiment for the commercial traders here.  Meanwhile
small traders forked out a little more cash to increase both
their long and short positions.

Commercials   Long      Short      Net     % Of OI
08/19/03      404,665   455,381   (50,716)   (5.9%)
08/26/03      410,378   472,987   (62,609)   (7.1%)
09/02/03      417,973   482,392   (64,419)   (7.2%)
09/09/03      418,958   486,209   (67,251)   (7.4%)

Most bearish reading of the year: (111,956) -  3/06/02
Most bullish reading of the year:   18,486  -  6/17/03

Small Traders Long      Short      Net     % of OI
08/19/03      162,034    87,064    74,970    30.1%
08/26/03      170,424    76,967    93,457    37.8%
09/02/03      169,030    75,748    93,282    38.1%
09/09/03      176,401    81,444    94,957    36.8%

Most bearish reading of the year:  (1,657)- 5/27/03
Most bullish reading of the year: 114,510 - 3/26/02

E-MINI S&P 500

Commercial traders in the e-minis continue to pump up their
long positions.  The last numbers show the most bullish
posture in quote sometime.  Meanwhile the small trader has
rotated a little bit of money from short back to long.

Commercials   Long      Short      Net     % Of OI
08/19/03      296,971   235,779     61,192    11.5%
08/26/03      338,766   234,841    103,925    18.1%
09/02/03      347,724   224,011    123,713    21.6%
09/09/03      370,909   237,610    133,299    21.9%

Most bearish reading of the year: (354,835)  - 06/17/03
Most bullish reading of the year:  133,299   - 09/02/03

Small Traders Long      Short      Net     % of OI
08/19/03       90,428   125,980   (35,552)  (16.4%)
08/26/03       52,131   120,853   (68,722)  (39.3%)
09/02/03       56,709   134,094   (77,385)  (40.6%)
09/09/03       59,692   130,270   (70,578)  (37.1%)

Most bearish reading of the year: (77,385)  - 09/02/03
Most bullish reading of the year: 449,310   - 06/10/03


Commercial traders are increasing their bets on the NDX
but they're still beating more heavily on a move lower.
Small Traders are also active with larger net positions
but they're still beating on the bulls.

Commercials   Long      Short      Net     % of OI
08/19/03       32,107     53,665   (21,558) (25.1%)
08/26/03       33,991     55,849   (21,858) (24.3%)
09/02/03       37,002     55,379   (18,377) (19.9%)
09/09/03       44,677     62,369   (17,692) (16.5%)

Most bearish reading of the year: (21,858)  - 08/26/03
Most bullish reading of the year:   9,068   - 06/11/02

Small Traders  Long     Short      Net     % of OI
08/19/03       25,607    10,134    15,473    43.3%
08/26/03       26,108     8,864    17,244    49.3%
09/02/03       23,168    10,561    12,607    37.4%
09/09/03       28,788    13,370    15,418    36.6%

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


No change in investor sentiment for the professional traders
here.  There is little change for the small trader but they
have bumped up their long positions a tad.

Commercials   Long      Short      Net     % of OI
08/19/03       21,088    18,984    2,104       5.3%
08/26/03       24,586    10,386   14,200      40.6%
09/02/03       25,462    10,447   15,015      41.8%
09/09/03       25,807    10,756   15,051      41.2%

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

Small Traders  Long      Short     Net     % of OI
08/19/03       15,717     9,143    6,574     26.4%
08/26/03       14,115     5,592    8,523     43.2%
09/02/03        6,629    13,402   (6,773)   (33.8%)
09/09/03        7,429    13,796   (6,367)   (30.0%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   8,523  -  8/26/03


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of stock traders. The newsletter is an information service
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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
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Please read our disclaimer at:


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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                Tuesday 09-16-2003
                                                   section 2 of 2
Copyright (c) 2003, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment

Play of the Day:     Bread Is Rising

Stop-Loss Adjustments: INSP, QCOM, RSAS, TER, PNRA, TARO, WPI

Stock Split Announcements:  MYL

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)

Play-of-the-Day  ( Bullish )

Panera Bread - PNRA - close: 47.68 change: +0.82 stop: 44.65*new*

Company Description:
Panera Bread Company owns and franchises bakery-cafes under the
Panera Bread and Saint Louis Bread Co. names.  The Company is a
leader in the emerging specialty bread/cafe category due to its
unique bread combined with a quick, casual dining experience.
(Source:  Company Press Release.)

Why we like it:
We know.  PNRA has a P/E ratio of 53.79.  However, PNRA's chart
shows some interesting characteristics, and the company has been
the recipient of many buy ratings since late July.

When reporting earnings August 7, PNRA raised FY03 guidance.  For
a few days afterward, mild profit-taking ensued, but that profit
taking took PNRA only down to next support.  After falling back
near the July high in a bull flag, PNRA rebounded Thursday and
Friday.   It gained 2.68 percent Friday, and looks ready to
challenge the recent $47.40 high.  RSI turned up, and stochastics
hooked back up again.  Volume was slightly higher than average.
Best of all, perhaps, is PNRA's P&F chart, showing a recent
bullish triangle breakout.

While we expect some mild hesitation near $50.00, PNRA's original
P&F buy signal predicted a far higher target.  PNRA looks ready
to achieve all-time highs, so we'll follow the stock up as it
climbs, letting our stop take us out.  For now that stop will be
set at $43.99, just below recent consolidation.

Traders can enter at the current level since it represents a
breakout of the bull flag.  Conservative traders might wait for a
move over that $47.40 recent high, watching to see that volume
confirms the breakout.

Why This is our Play of the Day
So far this week, PNRA's valuation has gotten just a bit richer,
as the stock continued last week's rebound from the $45 area and
after a failed breakout above $47.40 on Monday, the bulls got the
job done on Tuesday, closing the session at a new all-time high.
It certainly looks like the stock is destined for higher levels
and the half-century mark ($50) is looming closer by the day.
Intraday dips into the $46.00-46.50 area can be used for
continuation entries, supported by the 10-dma ($46.49).  With
strength prevailing though, a continuation above Tuesday's high
($47.79) can be used for momentum entries.  With the breakout to
new highs, we can safely raise our stop to $44.65, which is just
below both the 20-dma (44.95) and last Thursday's $44.72 intraday

Annotated Chart of PNRA:

Picked on September 14th at $46.80
Change since picked:         +0.00
Earnings Date:            11/05/03 (confirmed)
Average Daily Volume:        571 K

Stop-Loss Adjustments

INSP – Raise from $17.74 up to $18.50

QCOM – Raise from $40.50 up to $41.95

RSAS – Raise from $12.50 up to $13.50

TER -  Raise from $18.35 up to $19.25

PNRA – Raise from $43.99 up to $44.65

TARO – Raise from $52.75 up to $54.25

WPI -  Raise from $41.49 up to $42.90

Stock Split Announcements

MYL announces 3-for-2 stock split

Before today's opening bell, Mylan Laboratories Inc's (NYSE:MYL)
Board of Directors declared a 3-for-2 stock split of its common

The payable date on the stock split is October 8th, 2003 to
shareholders on record September 30th.  Fractional shares will be
paid in cash.

This is Mylan's 11th stock split, said the company's CEO, Robert

About the company:
Mylan Laboratories Inc. is a leading pharmaceutical company with
four subsidiaries, Mylan Pharmaceuticals Inc., Mylan Technologies
Inc., UDL Laboratories Inc. and Bertek Pharmaceuticals Inc., that
develop, manufacture and market an extensive line of generic and
proprietary products.
(Source: Company Press Release)

  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

FRE     Freddie Mac                 55.08     +0.78
MCK     McKesson Corp               35.03     +0.53
LEN     Lennar Corp                 74.62     +2.37
MHK     Mohawk Industries           73.20     +0.94
PHM     Pulte Homes Inc             68.64     +1.37
OHP     Oxford Health Plans         37.78     +1.07

Breakout to Upside (Stocks $5 to $20)

LEXR    Lexar Media                 19.50     +1.91
RSAS    RSA Security                15.11     +1.14
BID     Sotheby's Holding           11.61     +1.14
TSAI    Transaction Sys             17.52     +1.41
TTMI    TTM Technologies            12.73     +2.33
NLS     Nautilus Group              13.80     +1.80

Breakout to Upside (Stocks over $20)

TM      Toyota Motor                66.80     +3.80
MWD     Morgan Stanley              51.36     +2.28
SNE     Sony Corp                   38.00     +1.08
QCOM    QUALCOMM                    44.89     +1.44
ERTS    Electronic Arts             93.14     +4.34
FAST    Fastenal Co                 42.23     +1.80
BLC     Belo Corp                   25.64     +2.15

Breakout to Downside (Stocks over $20)

GILD    Gilead Sciences             61.86     -4.15
BG      Bunge Ltd                   27.37     -2.74
JOE     Saint Joe Co                31.95     -1.95

Recently Overbought With Bearish Signals (Stocks over $20)

ACL     Alcon Inc                    52.75     -1.12
COO     Cooper Companies             42.19     -0.69

To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support

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:


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Newsletter, or any Premier Investor Network newsletter please
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