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Daily Newsletter, Monday, 09/22/2003

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PremierInvestor.net Newsletter                 Monday 09-22-2003
                                                  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:      Drop in Dollar Dominos

Play of the Day:  Relative Strength

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     09-22-2003            High     Low     Volume Advance/Decline
DJIA     9535.41 -109.41  9641.87  9501.72 1.52 bln    787/2026
NASDAQ   1847.62 - 31.08  1881.42  1866.88 1.69 bln   1050/2050
S&P 100   513.31 -  7.31   520.62   510.95   Totals   1837/4076
S&P 500  1022.82 - 13.48  1036.30  1018.30
RUS 2000  513.65 -  6.55   520.20   511.65
DJ TRANS 2779.18 - 15.53  2792.96  2757.67
VIX        19.65 +  0.58    23.90    19.03
VXN        27.94 -  1.80    28.39    27.52
Total Volume 3,636M
Total UpVol    771M
Total DnVol  2,788M
52wk Highs     468
52wk Lows       17
TRIN          1.59
PUT/CALL      0.75
===============================================================

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


Drop in Dollar Dominos
by James Brown

A drop in the U.S. dollar cascaded across the global market place
after the G7 finance ministers released a statement supporting
flexible exchange rates.  The U.S. dollar fell to three-year low
against the Japanese yen and a fresh two-month low against the
Euro.  World indices responded negatively to the news as anyone
who exported to the U.S. suddenly found their products more
expensive.  American indices, which had been near new one-year
highs, suffered losses as investors used the G7 news as an excuse
to take profits.

The G7 summit included finance ministers from the U.S., Japan,
Germany, Italy, Britain, France and Canada.  The meeting was held
in Dubai, United Arab Emirates and together the seven expressed
their unhappiness with countries or markets that tried to
manipulate their currency to the favor of exporters.  Okay, it
was probably just six expressing their concerns and Japan told
them what they wanted to hear.  While no one country was named
specifically, the message was clearly focused on Japan and China
who have been devaluing their currencies to keep them weak
against the US dollar and thus keep their exports competitive in
the U.S. market place.

The Bank of Japan is famous for selling yen and/or buying dollars
to keep their currency weak.  This year economists estimate the
BoJ has already sold somewhere near $100 billion (more than $11
trillion yen) through the month of September to keep their
exports competitive and the yen weak.  Unfortunately for Japanese
businesses the reaction to the G7 statements was rapid.  The yen
rose to a high of 111.39 against the dollar from Friday's 114.
Japan, the second biggest economy on the planet, has been trying
to pull out of a 12-year slump and the rising yen is not going to
help.  The NIKKEI 225 average, which hit a fresh 15-month high
last week, dropped more than 460 points or 4.2% to 10,475 as
investors sold Japanese stocks on fears the stronger yen would
slash corporate profits.  It was the largest one-day loss for the
NIKKEI in two years.  To put it in perspective, it's been
estimated that Toyota Motor Corp (NYSE:TM) losses 20 billion yen
in operating profits for every 1 yen in decline against the
dollar.

Concerns over Japan's traditional currency plays were also felt
here at home in the bond markets.  Japan is the largest foreign
holder of U.S. Treasuries and demand for U.S. notes should
slacken if Japan is going to let the yen float.  The weakness in
the dollar also compounded the threat to U.S. equities.  As the
dollar weakens the value of U.S. investments held by foreigners
also slips.  We've had an incredible run up this year and further
weakness on the horizon for the dollar could spark international
fund managers to lock in some profits in their U.S. investments.
This could be a new headwind for stocks as speculation is already
suggesting the dollar might fall to 103 against the yen while the
euro could climb to $1.30 by the end of 2004.

Following the drop in the Japanese markets, the Hang Seng lost 95
points to 10,873.  The British FTSE 100 dropped 28.8 to 4,228 and
the German DAX 30 plummeted 3.4% to 3,456.  The Dow Jones
Industrials fell 109 to 9535.  The NASDAQ Composite lost 31
(1.6%) to 1874 and the S&P 500 index fell 1.3% to 1022.  The
broadest market index, the Wilshire 5000 lost 126 points, falling
back below the 10K mark to 9927.  The selling was very wide
spread with only two major sector indices in the green.  Closing
positive was the XNG natural gas index, up 1/3 of a point to 195
and the XAU gold and silver index, up 1.3% to 96.93.  The
strength in the XAU was powered by a $5 jump in December gold
futures to $388 as some investors sought safety in the shiny
metal against the slipping U.S. greenback.

As would be expected market internals were horrible.  Declining
stocks beat advancing issues 20 to 7 on the NYSE and 2 to 1 on
the NASDAQ.  Down volume swamped up volume by 4 to 1 on the NYSE
and 3.6 to 1 on the NASDAQ.  Normally when the markets decline
the VIX or volatility index advances.  That's exactly what
happened today with a 3 percent jump in the VIX to 19.65.
However, what makes today's move significant is that today is the
first day of trading for the "new" VIX based on option prices in
the S&P 500 index instead of the S&P 100 index.  Those traders
who would like to continue to follow volatility moves using the
old calculations can do so using the new symbol VXO.

Chart of the Industrials:



Chart of the NASDAQ:



One of the biggest stories today, behind the G7 announcement, was
news from Motorola (NYSE:MOT).  After six years as the CEO of
Motorola, Christopher Galvin, grandson of the company's founder,
resigned after a conflict with the board of directors.  The stock
market welcomed the news with an 8.74% gain in the stock price
and a wave of analyst upgrades.  Critics had been harsh on Galvin
after MOT's stock price lost nearly half its market value during
his reign and Motorola, once the king of mobile phone handset
production, fell behind Nokia.

Other than the G7 news and the Motorola shake up most of Monday's
session felt pretty quiet.  Of course it's tough to have a Monday
without new M&A activity and today was no exception.
InterActiveCorp (IACI), previously known as USA Interactive, has
added yet another dotcom to its stable.  The house that Barry
Diller is building now includes HotWire.com, the discount
travel/lodging website.  The acquisition is said to cost upwards
of $665 million in cash and the assumption of $20 million in
options and warrants.  HotWire.com now shares the IACI umbrella
with Expedia.com, Hotels.com, TicketMaster(.com), Match.com,
CitySearch(.com), LendingTree.com and the HomeShoppingNetwork.

Jim's wrap over the weekend seemed rather appropriate.  Was
Friday's session just the calm before the storm?  Is the reaction
to the G7 statement merely the first flash of lightening before
it starts to rain or will buyers step in to by the dip yet again?
There were plenty of comments over the dollar today.  Most
believe that a weaker dollar should actually be beneficial to the
U.S. economy in the long run as it makes U.S. products more
competitive overseas.  However, part of the concern is how fast
will the reaction be.  If the dollar spirals out of control it
could throw the markets into a panic with global repercussions.
The general attitude is that the dollar should see more weakness
near term.  Plus, the new consensus for flexible exchanges rates
is going to put a lot more pressure on Asia and Europe to
generate stronger domestic growth.

Jim and I both mentioned over the weekend that we've just stepped
into the most dangerous time of the year.  It's traditionally the
weakest period for the equity markets as bears try and gorge
themselves in a fall feeding frenzy before hibernating during the
Q4 holiday shopping season.  The markets have been less than kind
to the bears so they should be starving and willing to bite at
anything that starts to stumble.  At least one analyst told the
financial media today that some investors may want to move to the
sidelines.

Tomorrow will be day without major economic news and traders will
be reacting to earnings news and upgrades/downgrades.  Headlining
the earnings reports tomorrow are three of Wall Street's biggest
brokers.  Goldman Sachs (GS) is estimated to turn in $1.22 a
share, up from $1.00 last year.  Lehman Brothers (LEH) is
expected to earn $1.35, up from $0.70 last year.  Morgan Stanley
(MWD) is estimated to earn $0.69, up from $0.55 last year.
Expectations could be high after last week's major blow out by
Bear Stearns (BSC).  The XBD broker-dealer index has been hitting
new two-year highs and investors are expecting results to back up
these gains.

While not market-moving news, the media will also be reporting on
the OPEC meeting tomorrow as well as President Bush's address to
the U.N. concerning Iraq.

Keep an eye on those stop losses.



===============
Play-of-the-Day  ( BULLISH )
===============


Zimmer Holdings - ZMH - close: 54.18 change: +0.49  - stop: 51.49

Company Description:
Zimmer, based in Warsaw, Indiana, is a worldwide leader in the
design, development, manufacture and marketing of reconstructive
orthopaedic implants and trauma products. Orthopaedic
reconstruction implants restore joint function lost due to disease
or trauma in joints such as knees, hips, shoulders and elbows.
Trauma products are devices used primarily to reattach or
stabilize damaged bone and tissue to support the body's natural
healing process. Zimmer manufactures and markets other products
related to orthopaedic surgery. For the year 2002, the Company
recorded worldwide revenues of $1.37 billion. Zimmer was founded
in 1927 and has more than 3,600 employees worldwide. (Source:
Company Press Release.)

Why we like it:
ZMH hit our $54.00 trigger on Thursday, but without the expansion
of volume we suggested was needed for confirmation.  We'll follow
the play as if it's been triggered, however.

ZMH turned down Friday.  That was the day ZMH confirmed its 99
percent ownership of Centerpulse shares.  ZMH made a $3.4-billion
offer for the Swiss orthopaedics company in its bid to become the
world's largest orthopaedics group.  We think Friday's downturn
was probably a sell-the-event reaction, although we also note that
Stryker, SYK, and some other medical-device manufacturers
declined.

Although MACD flattened and RSI rolled down, stochastics remained
bullish.  Often mixed indicator signals hint that a period of
consolidation will ensue and that may happen with ZMH, too. The
10-dma rises beneath the current price, snaking above the midline
support of the rising regression channel.  Friday's candle sprang
up satisfactorily from its test of the $53.00 level that was
support during its last consolidation period.  Further entries
could be sought on a push above Friday's high, but first confirm
an expansion in volume.

Why This is our Play of the Day
While a 0.9% gain on our ZMH play may not seem particularly
exciting, it sure got our attention in light of the broadly
negative action in the broad market.  Very little outside of the
precious metals sector ended the day in the green, but ZMH pushed
up nicely from its early dip this morning to end very near its
intraday high.  It wasn't enough to set another high, but ZMH
looks like it could break out as early as tomorrow.  In reality,
the breakout came last week with the move through the $54 level
and the action over the past couple days only confirms that
breakout as ZMH now appears to be finding support near $53.50, at
old resistance.  Successive rebounds from above the $53 level look
good for new entries, while momentum traders will want to wait for
a move above last Thursday's intraday high ($54.59) before
playing.  Maintain stops at $51.49 for now.

Annotated Chart of ZMH:



Picked on September 17th at  $53.87
Change since picked:          +0.31
Earnings Date:             10/22/03 (unconfirmed)
Average Daily Volume:      1.71 mln







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

PremierInvestor.net Newsletter                  Monday 09-22-2003
                                                   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
=================================================================

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)



==================================================================
  Trading Ideas
==================

APC     Anadarko Petroleum Corp    44.65     +1.05
BVN     Campania De Minas Buena    41.50     +1.92
ABFS    Arkansas Best Corp         29.90     +1.11
TBCC    TBC Corp                   25.32     +2.57
DUSA    DUSA Pharmaceuticals Inc    5.68     +0.53


---------------------------------------
Breakout to Upside (Stocks $5 to $20)
---------------------------------------

MCDTA   Mcdata CI A                12.06     +1.07
TTEC    Teletech Holdings Inc       7.03     +1.16
MCDT    Mcdata CI B                11.98     +1.11
NEOL    Beopharm Inc               17.79     +1.54


---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------

KZL     Kersner Intl Ltd           35.90     +2.65
YELL    Yellow Corp                32.67     +1.16
NFLX    Netflix                    38.79     +1.79
MICC    Millicom Intl Cellular SA  47.90     +3.70
HEPH    Hollis-eden Pharmaceutical 33.25     +3.05


-------------------------------------------
Breakout to Downside (Stocks over $20)
-------------------------------------------

SNE     Sony Corp                  35.95     -1.44
HMC     Honda Motor Co Ltd (ADR)   21.21     -1.20
KSS     Kohl's Corp                55.03     -2.45
PKX     Posco                      28.49     -1.56
KYO     Kyocera Corp               61.05     -2.71
GILD    Gilead Sciences Inc        57.71     -2.25


-----------------------------------------
Recently Overbought With Bearish Signals (Stocks over $20)
-------------------------------------------

AAA     Altana Ag                  57.27     -1.75
JEF     Jeffreries Group Inc       30.45     -1.01
ARDX    Andrx Corp Andrx Cm Stk    20.10     -1.83
PGL     Peoples Energy Corp        41.67     -0.56
SONC    Sonic Corp                 25.50     -0.58
WCN     Waste Connections Inc      35.78     -0.67



=================================================================
To stop receiving this PremierInvestor.net Newsletter,
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

*****************************************************************
ADVERTISING INFORMATION

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.

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.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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