Option Investor

Daily Newsletter, Thursday, 09/18/2003

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PremierInvestor.net Newsletter                Thursday 09-18-2003
                                                   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:      NYSE Hurricane
Watch List:       NSC, XICO, PIXR, TYC and more!
Market Sentiment: Another Round of New Highs, Please.

MARKET WRAP  (view in courier font for table alignment)
      09-18-2003           High     Low     Volume Advance/Decline
DJIA     9659.13 +113.50  9662.84  9538.28 1.84 bln   2104/1068
NASDAQ   1909.55 + 26.50  1910.51  1874.30 2.02 bln   1960/1250
S&P 100   522.60 +  7.17   522.84   515.25   Totals   4064/2318
S&P 500  1039.58 + 13.61  1040.16  1025.75
W5000   10076.16 +124.40 10076.16  9945.50
RUS 2000  519.46 +  4.36   519.48   513.21
DJ TRANS 2825.07 + 63.90  2825.07  2760.19
VIX        19.30 -  0.32    20.37    19.17
VXN        29.75 -  2.00    32.31    29.67
Total Volume 4,148M
Total UpVol  3,087M
Total DnVol    966M
52wk Highs  821
52wk Lows    23
TRIN       0.67
NAZTRIN    0.56
PUT/CALL   0.51

Market Wrap

NYSE Hurricane

Storm clouds blew over not only the east coast but also over
the NYSE and in both cases left behind far less devastation
than had been expected. Richard Grasso was asked to resign by
the same board that thought he was worth $139 million and the
exchange is going back to business as usual with hopes that
the furor has passed. Isabel blew ashore with winds of 65-100
mph but mainly produced only heavy rains and minor flooding
and some random damage. By this time next week Grasso and
Isabel will be regulated to the back pages and the small
print of the daily papers. The fallout from the Grasso event
will be another month of sound bites for television reporters.
Isabel is at least expected to add between $5 to $10 billion
to the 3Q GDP.

Dow Chart

Nasdaq chart

What a day! The markets celebrated a massive drop in Jobless
Claims to less than 400,000 for the first time in three weeks.
Well, maybe not a massive drop at 399,000 but the market did
react like it was 349,000. Nobody seemed to care that the
numbers from last week rose to 428,000 with a +6,000 upward
revision. The headline number began with a 3 and that was all
that mattered. The four-week average rose to 410,750 and a
two month high and the continuing claims rose to 3.68 million
and the highest level since June. The recent pattern of upward
revisions to past weeks would indicate that the 399K will
really be 400+ by this time next week. Two thirds of workers
without jobs have now exhausted all of their benefits and are
no longer counted in the 3.68 million base. This puts the
real unemployed number somewhere close to ten million.

The Conference Board's Leading Indicators rose +0.4% for Aug
and inline with estimates but less than the +0.6% from July.
This was the fourth consecutive monthly increase in the
indicators but it is well off the May highs at +1.1%. Three
of the four coincident components rose but the one that fell
was the employment component. Conditions are improving but
the rate of increase is very slow.

The Philadelphia Fed Survey was the most negative report of
the day and fell to 14.6 from 22.1 in August. This is a survey
of conditions in the Philadelphia Fed district and this was
a serious headline drop. However, there were some positives
hidden in the internals. The New Orders component rose to
19.3 from 14.6 and order backlogs rose to 6.5 from 1.1. The
New Orders component hit a new four-year high. While the
estimate miss on the headline number and the drop from last
month appeared negative the internals painted a different
picture of strength still slowly building in the
manufacturing sector.

The only other release for the day was the FOMC minutes for
the August meeting. The highlights were a clear desire to
keep rates low for a much longer time than was customary,
fear of potential deflation and concern over job losses.
The meeting itself was uneventful and the topic of most
concern was the sharp rise in rates since the June meeting.
There were minor reports of small increases in various
economic sectors and the committee still thought the recovery
was proceeding, just very slowly. The confidence level was
beginning to build without any apparent summer lag. The
committee met again on Sept-15th to review their methods
of communication of their policy to consumers. This was
after several board members had made statements about a
kindler gentler Fed with posted targets and actions when
those targets were hit. The committee met and decided to
make no changes to the current policy dissemination method.
The "keep us in the dark" and "talk up the markets" method
is going to continue.

On the stock side of the news GE said orders in its plastics
division fell -5% in August. The plastics division contributes
about 10% to GE earnings. This is seen as a short cycle
indicator of future economic activity. This comes on the
heels of warnings by DD, NYT, JBX, KROL, TKR, ENTG, JILL and
several others that would seem to indicate that things were
not going well. Appearances can be deceiving as there were
quite a few inline guidance updates and even some raised
guidance and earnings beats from companies like NKE, SLR,
COMS, RHAT, CAMD, JBL and CNF. BSC was the winner today with
a whopper of an earnings win with earnings of $2.30 compared
to analysts estimates of only $1.65. They said trading profits
in bonds and their fixed income business was the reason.
Several brokers have mentioned that trading volumes have
been rising over the last three weeks but volume on the
exchanges has not been showing any big gains until today.

Another indication that things may not be as rosy as investors
think was the Semiconductor Book-to-Bill report late Wednesday.
The BTB number fell to 0.91 for August a drop from the
previously reported 0.97 in July. Unfortunately the July
number was also revised down to 0.90. Bookings fell to only
$721 million and the lowest bookings since Jan-2002. While
the book-to-bill is not as low as it was in that period at
0.81 it is because the billings have fallen significantly
as well. When both numbers fall in tandem the BTB remains
stable. Just looking at the BTB gives a false indication of
the actual strength of the sector. The bookings number is
the critical number as it is a precursor to what companies
are going to bill 3-6 months from now. What does an 21-month
low say about the strength in the semiconductor sector? I
would think it meant the tech recovery was losing strength.
It appears conventional wisdom does not work in this sector
because the $SOX closed up for the day as investors bought
semi stocks. That takes a lot of faith at this point in the
face of the facts. Or, maybe most investors really do not
understand the BTB and heard the sound bites that the BTB
"ROSE" to 0.91 from last month's 0.90. I gave you the actual
numbers, you be the judge.

SUNW added to the coming jobless claims with news that they
were cutting another 1080 workers amid a protracted slowdown
in server sales. The move was an additional effort to return
to profitability. They also cut prices on their servers and
launched an aggressive advertising campaign promoting servers
at 50% less than a comparable Dell product. This push is in
addition to a software announcement that took aim at Windows
as a replacement product. The software is priced as low as
$50 a year and will be updated quarterly for life for no
additional charge. The software will run on any computer
capable of running Windows-2000 and is compatible with
programs like Microsoft Office. While it sounds good on the
surface SUNW will have to perform and on a wide scale before
Microsoft will begin to get worried. SUNW was up nearly +4%
today and MSFT finished down with the Nasdaq up +26. Does
that tell you anything? There may not be a rush into the
SUNW product but cautious investors are looking ahead.

The hurricane on Wall Street has passed and Richard Grasso
has gone home to count his money. It is still not clear but
evidently the board asked for his resignation and he complied.
That would guarantee his salary for the remainder of his term
as a termination payment. This would amount to about $9 mil
more. Speculation is rampant on whether he can rescind his
cancellation of the $48 million in additional compensation
that he said he would forgo a couple weeks ago. As an
ex-employee he might not be so favorable about that
concession. Either way they do not have Grasso to kick around
any more and the hunt is on to find a replacement. NYSE board
member Carl McCall said the co-chief operating officers would
continue to run the exchange on a day to day basis. McCall is
the acting lead director at the present time. He, as well as
many others, have already turned down Grasso's job. Evidently
nobody wants to take the hot seat for what is expected to be
significantly less money.

AOL Time Warner, excuse me, Time Warner voted to drop AOL from
its name and change its stock symbol back to TWX. Investors
wish it was that easy to erase the pain and frustration from
the failed AOL merger which cost investors billions. Just
changing the name will not help anyone but at least it will
prevent the name AOL from popping up in every news article
and stock report going forward. Out of sight, out of mind
is what the board is hoping for. Guess we will not have AOL
to kick around either. Now if we can just get them to quit
filtering our newsletters as spam we would be ok.

Tomorrow is a quadruple witching Friday and several analysts
were attributing today's gains to short covering in front
of those expirations. The max-pain point for the S&P was
985 and it closed at 1040. There was definitely some pain
for many with that big a miss. The same level for the DJX
was 91.00 and 32.00 for the QQQ. The max-pain point is the
level where the most options expire worthless and insure
the most profit for those that sold them. If the gains today
were really from short covering then there is little to
continue the bounce come Tuesday. Friday could see some
follow through and Monday is settlement day. After that we
will be left to our own to determine direction based on
things like earning and book-to-bill numbers. Until then
those traders that sold covered calls on their stocks
expecting a typical September decline are faced with buying
additional shares to cover the calls or buying the calls
back at much higher prices. Those that sold the calls
naked and are flat the stock are in serious trouble. Who
would have thought that the markets would be at 52-week
highs on an expiration Friday in September when they sold
those calls last month? If options expiration was behind
the move then Friday will have to do without help from the
S&P and DJX options which ceased trading on Thursday. With
the short interest on the QQQ near all time highs at 287
million shares short there is still plenty of ammo left.

Regardless of the reason for the strong gains on Thursday
all the indexes closed at new yearly highs. The Wilshire
5000 closed above 10,000 at 10,076 and the Dow is not far
behind. The morning started off with a short dip before
being pushed higher by no less than five strong buy programs.
Each program brought another round of short covering and
buying by bulls chasing the indexes higher. The Dow broke
over 9600 and closed right at decent resistance at 9660.
The Nasdaq closed well over 1900 resistance and is staring
resistance at 1915, 1935 and eventually 2000 right in the
face. Just imagine how strong it would have been if the semi
bookings had actually risen!

I am not going to try and justify the bounce today or predict
the outcome for tomorrow. As an expiration Friday it could
be wild or mild and volume could be strong or gone. The
volume today was over two billion on the Nasdaq and 1.9
billion on the NYSE. This is very strong volume for an up
move in September. The internals were equally strong with
813 new 52-week highs and only 20 new lows. Advancing
volume was 3:1 over declining volume. Once the smoke
cleared the reality of how strong it really was hit me.
The gradual rise during the day was deceiving. +60 points
of the Dow gain was due to the first buy program in the
first 45 min of trading. That propelled the Dow to
resistance at 9600 where is languished for an hour before
another buy program popped it to 9635. It trended down
from there for two hours and suckered the shorts back
into the market just as another buy program hit at 1:30.
The Dow traded in a narrow 20-point range for the rest of
the afternoon and right at 9650 resistance. It sounds like
it struggled higher and as I lived it I felt like it was
struggling. Looking back after the close produced one of
those moments felt by traders many times when they realize
the trend they were fighting all day never faltered and the
pauses and dips were only head fakes.

Friday is a tossup. When a market closes at new highs the
obvious thought is a follow through the next morning after
the European and Asian markets rise on our gains. Add in
the expiration pressures and we could see additional
volatility. We just do not know which way those remaining
pressures will push us. With the indexes so far above the
max-pain points you would think the pressure would be up.
The futures are flat in the overnight session and giving
us no clue. Whichever way you feel led to trade tomorrow
please be careful. I am marking next Tuesday on my calendar
as the make or break day. Settlement Mondays are generally
volatile but don't produce big moves. That makes Tuesday
the one to watch. Now if we can just get some follow through
on Friday we will be well positioned for a really big move
next week.

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.


Norfolk SO CP - NSC - close: 20.00 change: +0.70

WHAT TO WATCH: With the Dow Jones Transportation Index reaching a
level not seen since April, 2002, the index pulled many
transportation stocks higher with it.  NSC gained 3.63 percent,
closing above $20.00 for the first time since the middle of June.
The move also carried NSC above its 200-dma.  Volume proved
higher than the daily average.  The move also confirmed an
inverse H&S formation, with that confirmation setting an upside
target of $22.00.  The stock sports a new P&F buy signal, and
will create another new signal on a trade above $22.00.  A
descending trendline from a June 1999 high to current levels also
crosses near $22.00.  Because that $22.00 number recurs often, an
entry at $20.00 doesn't give us the optimal risk/reward we need
to elevate this stock to play status, but we do think the move to
$22.00 looks achievable.  Traders might want to set a trigger on
a move above Wednesday's high or a pullback and bounce from the
200-dma, currently at $19.66.


Xicor, Inc. - XICO - close: 10.55 change: +0.51

WHAT TO WATCH: After consolidating in a bull flag, XICO broke out
Thursday on slightly higher than average volume, climbing above
$10.00 and finding support at its grouped 10 and 21-dma's.  It
looks ready to move to next resistance near $12.75, a hefty
percentage gain, or perhaps all the way to next resistance near
$14.00.  It's on a double top breakout buy signal, created with
the move over $10.50.  The low average daily volume of 121,000
shares keeps this from making our "A" list, but stochastics and
RSI have already turned up with the prices.  MACD also curves up,
halting its previous decline, but has not yet reverted to full
bullish mode.  Set a trigger over the 9/03 high of $10.70, or
watch for a pullback and bounce from the 30-dma, currently at
$9.79.  Be alert to possible volatility due to the low average
daily volume.


PIXAR Inc. - PIXR - close: 72.13 change: +0.72

WHAT TO WATCH: This stock didn't make our play list because of
its expense, but we notice intriguing characteristics on its
chart.  It's been trading in an ascending channel since May, and
it's currently climbing the bottom of that channel.  It looks
ready now to ascend to the top of the channel again, with midline
resistance near $75.00 and the top of the channel currently near
$79.00. While currently in an "O" column as it consolidates, it's
also on a P&F buy signal and above the bullish support line, with
a P&F target above the top of the channel.  Ideal entries would
be on a move above Thursday's $72.51 high, confirmed by strong
volume, or another pullback and bounce from the 30-dma and the
bottom of the channel, near $70.40. The bullish cast of the
indicators suggests that the breakout entry might be the only one


Tyco Intl. - TYC - close: 21.00 change: +0.36

WHAT TO WATCH: Thursday TYCO declared a regular quarterly cash
dividend of 1.25 cents per common share, payable November 1 to
shareholders of record October 1.  Already sporting a P&F triple
top breakout buy signal, the stock sprang from its grouped 10 and
21-dma's and challenged the $21.00 level.  Daily stochastics and
RSI look bullish, too, with MACD on the verge of a bullish cross
above signal.  Volume proved higher than the daily average. Only
one chart characteristic kept this off our regular list.  There's
a small weekly gap from the spring of 2002, with the top of that
gap at $22.00.  While TYC has already retraced more than 50
percent of that small gap, traders seeking new entries might be
aware of possible gap resistance at $22.00.  Once above $22.00,
$27.50 looks achievable.


On the RADAR Screen

BOBJ $29.24 - Wednesday, Business Objects announced that Fifth
Third Bancorp had selected the company as its enterprise business
intelligence standard.  BOBJ has been finding support at its 21-
dma and it consolidated just above that average the early part of
the week.  Having already broken out of a bull flag Wednesday, on
Thursday the stock bounded above the 10-dma with indicators
turning up, too.  Volume was above average daily volume.  We
would recommend an entry at this level, except that BOBJ is just
below round-number resistance at $30.00.  Use a trigger over
$30.00 or watch for a pullback to the 21-dma at $27.16 and a
bounce from that level.

S $46.21 - Sears looks as if it's ready to break out of its
latest consolidation pattern.  MACD lines curve upward, with RSI
and stochastics already bullish.  ADX remains strong, indicating
that a strong trend remains in place.  The P&F chart sports a buy
signal.  We would elevate this to watch list or play status
except that the weekly chart depicts possible resistance near
$47.50, with the P&F chart also indicating likely resistance near
that level.  We're not sure that the risk/reward outlook remains
right for the play list right here, but look for a break over
that resistance, verifying first that volume confirms the
breakout and that MACD remains strong.

VSTA $36.16 - The low average daily volume lands this stock on
the RADAR Screen list, with ADV just over 120,000.  All other
characteristics look appealing, but low average daily volume can
produce volatile and unpredictable moves in some stocks.  VSTA
doesn't appear to be one of those stocks.  It's on a P&F buy
signal, although currently in an "O" column due to the recent
pullback.  As it's been doing, it pulled back in a bull flag
pattern, and now has begun rising.  Traders could enter here with
a stop just below the rising 30-dma, currently at $33.29.  VSTA
has been finding support at that moving average as it climbed.
Target $40.00.

Market Sentiment

Another Round of New Highs, Please.
- J. Brown

The bullish locomotive running rampant on Wall Street has yet to
slow down as the NASDAQ marked an 18-month high above the 1900
level and the INDU traced a 15-month high above the 9650 mark.
It's becoming a common cliche these days that the path of least
resistance is up.

Today's rally was boosted by a better than expected drop in
jobless claims.  Economists had been hoping for a move down to
the 410,000 level.  Instead we got a drop of 29,000 to 399,000.
Add another drop in mortgage rates and investors were flocking
into equities.

Advancing stocks beat decliners 18 to 9 on the NYSE and 19 to 11
on the NASDAQ.  Up volume was almost three times down volume on
the NASDAQ and more than four times down volume on the NYSE.

August and September are seasonally the worst two months of the
year for the equity markets.  This last August bucked that trend
and so far September is right on track to do the same.  The
recent move seems pretty convincing and bears may choose to
hibernate until Q3 earnings come out.  However, I have to caution
our readers.  Seasonal trends may not have held up very well
lately but we are still approaching one of the most perilous 2-
to-3 week periods the markets typically witness.  This danger
zone runs from September's option expiration into the first week
of Q3 earnings announcements.

Play the trend but keep a good eye on your risk.


Market Averages


52-week High:  9662
52-week Low :  7197
Current     :  9659

Moving Averages:

 10-dma: 9516
 50-dma: 9307
200-dma: 8667

S&P 500 ($SPX)

52-week High: 1040
52-week Low :  768
Current     : 1039

Moving Averages:

 10-dma: 1023
 50-dma:  998
200-dma:  927

Nasdaq-100 ($NDX)

52-week High: 1401
52-week Low :  795
Current     : 1400

Moving Averages:

 10-dma: 1366
 50-dma: 1296
200-dma: 1135


The NASDAQ VXN has rolled back under the 30 level while the older
VIX continues to sleep towards new one-year lows as the markets

CBOE Market Volatility Index (VIX) = 19.30 -0.32
Nasdaq Volatility Index (VXN)      = 29.75 -2.00


          Put/Call Ratio  Call Volume   Put Volume

Total          0.51      1,058,699       542,582
Equity Only    0.47        700,389       325,880
OEX            1.13         58,584        66,447
QQQ            1.69         42,616        72,061


Bullish Percent Data

           Current   Change   Status
NYSE          73.5    + 0     Bull Confirmed
NASDAQ-100    80.0    + 2     Bear Correction
Dow Indust.   83.3    + 0     Bull Confirmed
S&P 500       83.2    + 1     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  0.92
10-Day Arms Index  1.13
21-Day Arms Index  1.02
55-Day Arms Index  1.01

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    1876      1907
Decliners     935      1176

New Highs     264       376
New Lows        7         3

Up Volume   1394M     1424M
Down Vol.    413M      507M

Total Vol.  1826M     1995M
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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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
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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                Thursday 09-18-2003
                                                   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:     Smooth As Glass

Stop-Loss Adjustments: ADBE, QCOM, RSAS, TER, GOLD, GLW

Active Trader Closed Play:  PNRA

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 )

Corning, Inc. - GLW - close: 9.76 change: +0.41 stop: 8.61*new*

Company Description:
Corning Incorporated is a global, diverse technology company that
has been changing the world through research and technological
innovation for more than 150 years. By integrating scientific
discovery with market need, the company has developed leading
positions in the telecommunications, information display, and
advanced materials industries. The company is an industry leading
manufacturer and supplier of optical fiber, cable systems and
photonic components, for the telecommunications industry; and
high-performance flat glass for television, information display
and other communications industries. The company also develops
advanced materials for scientific, semiconductor, environmental
and ophthalmic markets. With more than 70 manufacturing
locations, Corning employs approximately 22,000 employees
worldwide. Its diverse portfolio of businesses is aligned under
two major business sectors: Corning Optical Communications and
Corning Technologies. Revenues for 2002 were $3.2 billion.
(Source:  Company Website.)

Why we like it:
We've been watching GLW for a while, noting the way it's been
trading up within an ascending regression channel.  Wednesday,
GLW found support at the midline of that regression channel and
moved up, achieving a new 52-week high as it did so.  We think
GLW might be headed up toward the top of that channel again, and
maybe up toward previous $11.60 resistance.  The higher volume
over the last two days supports that view.

The indicators have turned back up in a bullish fashion, too.  We
expect some hesitation as GLW approaches round-number resistance
near $10.00, but a study of the weekly chart revealed that GLW
has already bypassed the strongest resistance.  We're setting the
$8.49 stop just under the rising 21-dma and setting a target of

What's been happening to drive GLW higher?  The XTC, the North
American Telecoms Index, has also been performing well, although
it has not yet moved above its July high, but many developments
appear specific to GLW.  After its July earnings, several firms
upgraded GLW to a buy or initiated coverage with a buy rating.
More recently, GLW announced on Monday that it had sold a large
percentage of its venture capital arm to Scrimitar Capital
Partners, a Saudi Arabia-based company.

We suggest entries at the current level or on a pullback and
bounce anywhere above $8.60.  We're not sure GLW investors are in
the mood to give anyone those pullback entries, however.

Why This is our Play of the Day
One look at the chart explains a lot, as GLW has been channeling
higher for the past 11 months and with the strength in the broad
market (especially the NASDAQ) this week, the stock has really
started to move again, with today's 4.4% advance capping off a
nice 13.6% advance in the past four days.  This may not be the
best area to open new positions, as a bit of consolidation may be
necessary before the bulls can push through the venerable $10
level.  Thursday's rally pushed the stock back into the upper
half of its ascending channel, the top of which is near the
$10.50 level.  If the bulls can continue to charge higher, then
reaching the top of the channel would represent a good location
to harvest some gains.  With the strong volume supporting the
breakout over $9.00 this week, we would view any pullback to that
level as a gift of an entry point.  It just remains to be seen if
we will be so fortunate to see that pullback before the stock
powers above $10.00.  We're raising our stop to $8.61 tonight,
just under Tuesday's intraday low.

Annotated Chart of GLW:

Picked on Sep 17 at   $9.35
Change since picked:  +0.00
Earnings Date:    07/21/03 (confirmed)
Average Daily Volume:  6.8 million

Stop-Loss Adjustments

ADBE – Raise from $37.75 up to $38.75

QCOM – Raise from $41.95 up to $42.75

RSAS – Raise from $13.50 up to $14.50

TER -  Raise from $19.95 up to $20.50

GOLD – Raise from $22.99 up to $23.75

GLW  – Raise from $8.49 up to $8.61


  Closed Bearish Plays

Panera Bread - PNRA - close: 44.61 change: -1.60 - stop: 44.65

We're not sure whether Wednesday's Raymond James downgrade on
valuation concerns, a presentation at the Banc of America
Investment Conference, or Thursday's reported 5 percent rise in
same store sales led to the downtick in PNRA's price, but
something left a bad taste in investors' mouths.  We had noted a
potential RSI H&S pattern forming. RSI did punch through the
confirming neckline of that H&S formation.  When we also noted
possible bearish divergence on the MACD, we warned of a possible
retreat to next support.  We didn't expect the gap down on
Thursday, however.  At least the bad taste didn't linger, with
the stop hit early and decisively.

Picked on Sep 14 at  46.80
Change since picked: -2.19
Earnings Date:    08/07/03 (confirmed)
Average Daily Volume:  497 thousand

  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

C       Citigroup                  46.65     +1.71
AAUK    Anglo Amer. Plc ADR        19.68     +0.58
GDW     Golden West Financial      90.05     +2.06
FON     Sprint Fon Group           15.79     +0.83
COF     Capital One Financial      61.55     +0.70
FD      Federated Dept Stores      44.53     +0.75

Breakout to Upside (Stocks $5 to $20)

THOR    Thoratec Corp              19.23     +1.31
IDBE    ID Biomedical              18.01     +2.48
PGNX    Progenics Pharmaceuticals  19.17     +1.36
CENX    Century Aluminum Co        12.45     +1.25
MRGE    Merge Technologies         18.99     +2.38
ABAX    Abaxis Inc                 12.69     +1.10

Breakout to Upside (Stocks over $20)

JPM     J.P.Morgan                 35.74     +1.08
AXP     American Express           47.08     +1.73
MER     Merrill Lynch & Co         57.29     +2.13
GS      Goldman Sachs              93.25     +2.25
YHOO    Yahoo! Inc                 37.58     +1.58
STT     State Street Corp          48.10     +2.20
LEH     Lehman Brothers            70.85     +1.60

Breakout to Downside (Stocks over $20)

SNP     China Petro & Chemical     25.83     -1.70
CLC     Clacor Inc                 42.50     -3.30
ARRO    Arrow Intl Inc             23.30     -1.01

Recently Overbought With Bearish Signals (Stocks over $20)

GDT     Guidant Corp               48.50     -1.47
IRF     Intl Rectifier Corp        41.80     -1.19

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:


For more information on advertising in PremierInvestor.net
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.


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