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Daily Newsletter, Thursday, 09/25/2003

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PremierInvestor.net Newsletter                Thursday 09-25-2003
                                                   section 1 of 2
Copyright  2003, All rights reserved.
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In section one:

Market Wrap:      Rationalize This
Watch List:       NFLX, EASI, URBN, BVF and more!
Market Sentiment: Bear Sightings on Wall Street.

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      09-25-2003           High     Low     Volume Advance/Decline
DJIA     9343.96 - 81.60  9458.49  9342.98 1.86 bln   1016/2170
NASDAQ   1817.20 - 26.50  1856.22  1817.20 1.98 bln    814/2393
S&P 100   502.62 -  2.84   508.96   502.61   Totals   1830/4563
S&P 500  1003.26 -  6.12  1015.97  1003.26
W5000    9726.36 - 81.30  9848.08  9726.22
RUS 2000  495.05 - 12.81   509.34   495.05
DJ TRANS 2697.12 - 48.80  2749.87  2697.12
VIX        22.26 +  1.04    22.27    21.04
VXN        30.65 +  1.29    30.72    29.16
Total Volume 4,202M
Total UpVol    910M
Total DnVol  3,202M
52wk Highs  298
52wk Lows    28
TRIN       1.20
NAZTRIN    1.71
PUT/CALL   0.84
=================================================================

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

Rationalize This

I wrote after the rebound on Tuesday that I was having trouble
rationalizing the market rally based on the historical calendar
trends but was prepared to tough it out if necessary. Finally,
a historical trend returned and we are staring at a serious
rationalization problem for the bulls. The shoe is now on
the other foot.

Dow Chart


Nasdaq Chart


There was not a flurry but a flood of economic reports today
and the general outlook was not exciting. The mixed picture
began with a throwaway Jobless Claims report. I say throwaway
because the analysts were quick to claim the hurricane wild
card as throwing the numbers into doubt. I agree with that
analysis. With ten states boarding up windows in advance and
cleaning up debris in the aftermath there was no way the new
Jobless Claims were going to be relative. This brings into
question the high number at 381,000 with more than ten states
closing up shop. What would it have been without the storm?
The aftermath cleanup and lack of power could keep the numbers
down for the next two weeks. If we do see a rebound over 400K
next week then we are in trouble because the non-storm numbers
would have been even higher. The bulls should have looked at
this number as a gift.

The Chicago Fed National Activity Index fell below zero once
again at -0.28 after peeking only slightly into positive
territory last month at +0.05. This was the lowest reading
since May at -0.34. The indicator is composed of 85 components
and 53 showed below average growth. 49 dropped between July
and August and of those that improved 14 still did not show
growth. If it were not for the housing market the nation
would be sinking in economic quicksand. Employment data
continues to pressure the recovery and there is no jobs
recovery in sight. This continues to pressure the
manufacturing sector and until this broad based sector
recovers we will continue to wander.

Also pointing to this continuing employment problem was the
Help Wanted Index, which fell to 37 and only 2 points away
from the current cycle low. If the HWI is a leading indicator
for hiring then the jobs picture is not looking up. Companies
are continuing to be pressed to cut costs and wages and very
high insurance and benefit rates are an easy target for
those cuts. Until demand begins to ramp up to the point
where the existing staff cannot handle it I do not expect
any gains in these numbers. In contrast to the HWI the Mass
Layoff numbers for August were significantly improved at
133,839 compared to 226,435 in July. This is a significant
improvement but still a large number of layoffs. This is the
lowest number since March at 113,026. It could have been
impacted by the blackout and by cyclical end of summer
vacations as well. The government layoffs were the highest
since the program began in 1995. I checked August of 2002
and that was also a multi month low which began to escalate
rapidly into the 225,000 peak in Jan-2003. The August-2003
number was also higher than the Aug-2002 level. Based on the
historical trend I do not put too much faith in the drop.

Proving the weak demand picture was the drop in Durable Goods
Orders by -0.9% in August. Shipments fell substantially more
at -2.9%. This was the first decrease since April. Were it
not for the jump of +2.9% in primary metals the drop would
have been even more substantial. Six of the seven components
fell with aircraft and motor vehicles falling by -6.6%.
Communications fell by -4.8% and computers -2.3%. Does this
look like we are rushing into the 4Q recovery?

The most positive events of the day were the jump in New Home
and Existing Home sales. New Home sales rose to 1.15 million
annualized and the second highest number on record. Existing
Home sales rose to 6.47 million, which was a new record. The
gain in these numbers is purely based on the bounce in rates.
As I have said before a bounce in rates after a period of
sustained lows always prompts a race to buy houses and lock
in the rates before they go higher. Everybody in America
understands that rates are going up very soon and they are
not going to wait around for 7% or higher to buy. Once the
rates really begin to rise the housing market may not die
but the rate of sales will slow significantly. The housing
market is the main supporter of the economy currently and
with consumer spending slowing we will continue to depend
on housing to keep it moving. It is up to the Fed to
understand this keep rates as low as possible for as long
as possible.

Friday we will get the final Q2 GDP revision and the consensus
is for it to be unchanged at +3.1%. The last revision surprised
to the upside from +2.9% to +3.1%. If the final revision goes
the other way and breaks back under 3.0% then the estimates
of +3.9% for the 3Q will be called into question. Remember,
after tax corporate profits fell by -3.4% in the 2Q GDP.
Spending rose +3.8% while profits fell. The 3Q GDP is going
to be a very important milestone for the markets.

The markets are expecting +19% earnings for the S&P in the
3Q according to First Call. For the last few days there has
been an increase in the rate of warnings and the market is
paying attention. 181 S&P companies have added or raised
their dividend since January. The markets have bought the
earnings expectations and the dividend increases since March.
Just like playing poker, once the last bet is placed it is
time to show the cards. It is time to see if the recovery
began to gain speed in the 3Q or was it just more cutting
costs and laying off workers that produced the earnings.

Federal Signal, FSS, cut estimates due to falling spending
by governments and private business. AO Smith, AOS, cut its
estimates by more than half. Darden Restaurants cut estimates
saying recent promotions had failed to attract additional
customers. Viacom, VIAb, cut estimates saying growth had
slowed and was not likely to reach prior forecasts. Other
companies warning today included AZZ, BSG, NEWP, PCIS, PHHM,
PSTA and TUP. Not all the news was bad with raised guidance
from BBY, CYBE, MKC, MUR and RAD. It was just the ratio of
warnings to upgrades that bothered investors.

BBY better get all the glory it can with its raised guidance
today because Dell went public with the new products
announcement. They are planning to offer flat screen TVs,
hand held computers and an online music service. They plan
on hitting the consumer market before the holidays and with
the Dell momentum it is due to be a big push. Dell said it
was conceivable that Dell could rise to the number one
position in home electronics very quickly. Whoa! Big claims
from Michael Dell and I am sure Gateway was paying rapt
attention. Still there are some big targets out there that
are ripe for the Dell marketing machine. Sony, Mitsubishi
and Panasonic are the top three and Michael Dell is walking
onto a field full of goliaths. This just happens to be where
he is most at home. Dell has slugged it out to Compaq,
Hewlett Packard and IBM and came out on top. The market was
controlled by these giants when he started just like Sony
and the others control the home electronics market today.
Dell also took aim at Apple with the entry into the music
business with the Dell Digital Jukebox and the Dell Music
Store. Going head to head with the Ipod, RNWK and ROXI. Go
get them Michael! Electronics retailers BBY and CC closed
down for the day but then who didn't?

Speaking of category killers Sony announced an entry into
the digital recorder business with a competitive product
to TIVO. The entry was expected eventually and the impact
to Tivo's business could be huge. The market has been
restricted to only a couple players in the field and the
margins have been high. Fortunately more competition will
knock those prices down to a reasonable level.

Not just a category killer but a category eliminator the
digital camera has knocked Eastman Kodak down for the
count. EK announced this morning that they were cutting
their dividend to 50 cents from $1.80 and said they were
no longer going to try and grow the film business. They
conceded that Fuji was winning the film battle and said
they were going to focus their energy on the digital
revolution after decades of being the leading film producer.

Another revolution is taking place at the NYSE. The lead
director and head of the compensation committee, Carl McCall,
announced his resignation and rumors are flying that there
are more resignations in the wings.

Unlike the earthquake on the NYSE there was a real 7.8-8.0
magnitude earthquake in northern Japan at 2:50 PM our time
today. This is a major quake and Tsunami warnings were in
effect for Japan, Russia, Guam, Mariana Islands and Wake
Island. Tsunami watches were in effect for Hawaii, Taiwan
and the Philippines. The earthquake occurred at 4:50 Japan
time and only a few hours before the Nikkei was scheduled
to begin trading. After trading down -192 points last night
and expected to trade down again on our loss the earthquake
could accelerate this drop.

The markets today were ugly. They did not start out that
way but ended up in a world of pain. The initial dip was
a continuation of yesterday's drop but the indexes fought
off a strong wave of program selling to rebound back into
positive territory at midday. The Dow and Nasdaq both
stalled just below a 38% retracement of the big drop and
lingered in positive territory just long enough to sucker
in any bulls that thought the dip was over. The high of
the day was about 12:15 and the bleed began once again.
The big drop came at 3:30 when the Dow broke 9400 for the
last time. It closed at 9344, Nasdaq 1819 and S&P just
barely over the psychological 1000 level at 1003. Some
blamed it on the earthquake, others on end of quarter
portfolio rebalancing. Wasn't that what they used as a
reason for the bounce on Tuesday? Either way it was nasty
and the Emini futures closed well under 1000 at 997.75.
This does not bode well for Friday.

The biggest losers were the tech stocks and the small caps.
The very indexes that saw the biggest gains in recent months.
The Russell dropped nearly -13 points today and is down -4.8%
for the week. The Nasdaq fell -26 but is down -5% for the
week. These are not good numbers for the bulls. It represents
a definite selling of the winners. The markets have not had
two consecutive quarters of gains in several years and some
analysts think that funds are willing to forego the 4Q and
lock in substantial profits now to protect their year. Most
believe the markets will finish higher for the year but not
much higher. The general consensus is around 10,000. This
creates risk for the funds. With many stocks up +50% to even
+100% since the October and March lows the funds are faced
with a risk reward scenario of a potential +7% gain for the
rest of the year or the potential for a much larger drop if
the selling becomes widespread. Techs and small caps have
already dropped -5% this week. What does the future hold?

OPEC is cutting production on oil to drive prices back up.
The economic recovery is starting to show signs of weakness
and job growth is nonexistent. The Fed is not likely to
cut rates again even though they feel the risks of deflation
outweigh the risks of inflation. Japan is tanking and after
today its economy could suffer even more depending on the
earthquake damage. The dollar/yen battle is continuing and
bonds are slowly climbing which indicates doubt about the
future. 3Q earnings will begin to appear in seven days and
only First Call is really optimistic. Investors are becoming
more cautious. The bottom line is more risk than reward for
funds which have to perform to please their investors. The
competition for dollars is going to be fierce in January as
investors unhappy with their returns for 2003 start looking
for another place to park money. Those that lock in +30%, 50%
or even 60% gains over the next couple weeks could win the
bragging rights contest in January if the 4Q fails to move
up substantially.

That brings us right back to the historical trends scenario
once again. Funny, I did not get a single piece of bullish
hate mail today. With the Dow down -342 points from Friday's
highs there is little to be bullish about. That is only -3.5%
for the Dow but it is a chink in the bullish armor. I have
no claims to a crystal ball for forecasting the potential
lows for October if the decline continues but I can guarantee
it will not be straight down. The most likely serious support
is 9000-9100 and that is where I expect the eventual battle
for control to be fought. It you take traditional market
metrics for gains and eventual pullbacks the numbers are
scary but even the bears do not expect traditional numbers
to repeat. A simple 38% retracement would see a Dow drop to
near 8800 where a 25% retracement of the gains from March
would stop around 9100. You draw your own conclusions but
with -342 points in a week and we are not even in October
yet anything is possible.

For Friday the GDP and the earthquake will rule. However
with the -342 point drop there could be come profit taking
from shorts eager to put an X in the win column for a change.
Monday marks a new round of economic reports for the week
with a new ISM, Factory Orders and Nonfarm Payrolls being
closely watched for signs of weakness. That should be a
great start for October. Stay tuned.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor



==================================================================
WATCH LIST
==================================================================

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.

STOCKS WORTH WATCHING
---------------------------------

Netflix, Inc. - NFLX - close: 34.81 change: -3.19

WHAT TO WATCH: NFLX has had quite the run in recent months and it
looks like it is time to pay the piper.  Profit taking has been
hitting all sectors of the market and NFLXD finally got hit over
the past two days, losing more than 8% on Thursday on above
average volume.  The $36 level should now be resistance and new
bearish entries at that point look favorable to hit $30, the site
of the 50-dma.




---

Engineered Support Systems - EASI - close: 59.75 change: -3.16

WHAT TO WATCH: It wasn't that long ago that we had EASI on our
bearish play list, but we were a bit early to the profit-taking
game and that play didn't work out.  But the stock is back in the
sights of the bears, and got hit for a 5% loss today.  Use a
trigger below $58 for new entries and look for a sharp decline to
ensue.  Below that level, there's very little in the way of
support until reaching the 50-dma just over $51 and then the
bottom of the gap near $47.50.




---

Urban Outfitters, Inc. - URBN - close: 26.25 change: +1.16

WHAT TO WATCH: Just to show we haven't completely given up on the
bulls, we found this bullish retailer that is breaking out to new
highs today. what is particularly impressive is the stock just
split its shares 2-for-1 and still the buyers haven't had enough.
Look for a pullback near the $25 level as a viable entry point
into this apparently unstoppable stock.




---

Biovail Corp. - BVF - close: 37.10 change: -1.50

WHAT TO WATCH: BVF has made a couple of decent rebound attempts
from the 200-dma over the past couple months, but this time the
bulls seem to have run out of luck.  The stock has been selling
off sharply over the past several sessions on rising volume and
on Thursday broke below the 200-dma and never looked back.  There
may be some support found in the $34.50-36.50 area, but the die
appears to have been cast.  Use failed rallies to initiate new
bearish positions, looking for an eventual decline to the $30
level.





===================
On the RADAR Screen
===================

FAST $39.31 - That's what this stock is doing, breaking down
fast!  Profit taking has finally arrived on Wall Street and
stocks with the most gains have the most to lose.  FAST gained
more than 50% from the March lows and with the break under $40
today it looks like the stock is headed for solid support near
$36.  Look for a rebound off the 50-dma to provide a decent entry
when that rebound fails below the 30-dma.

LLY $58.72 - It isn't a fast mover, but LLY has been in an
established downtrend for the past few weeks and is showing no
signs of strength.  Look to enter on a failed rebound below $60
and target a move to the $54-55 area.

HEPH $26.77 - Showing all the signs of a blowoff top, shares of
HEPH are coming down hard.  With today's break of the $27.50
support level, the stock appears destined for next support at
$22.  A failed rebound below $29 can be used for new entries, as
can a break below $26.50.  Due to the volatile action, this one
should be reserved for aggressive traders.



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

Bear Sightings on Wall Street.
-J Brown

Skittish investors ran for cover after a somewhat turbulent
session in the markets.  Early morning news from Dow component
Eastman Kodak (EK) put traders on the defensive.  The company
said they were slashing their cash dividend from a semiannual
payment of 90 cents a share to 25 cents in an effort to use the
$1.3 billion in savings for digital technology investments.  This
was the first cut in its dividend in over 100 years and the stock
lost 18% by the close making it the biggest loser in the
$Industrials.

Bulls tried to battle back midday to push the markets into the
green but their bravery faded again.  This week has been haunted
by concerns that stocks are now too richly valued after such an
incredible rally from this year's lows.  We warned readers a few
weeks ago that valuation downgrades would be the next cycle of
headlines to pull stocks backwards and that's what we're
witnessing.  Not necessarily a valuation call, but on Tuesday
Smith Barney cut their outlook on the defense sector and reduced
several stocks to neutral or sell.  Today we saw a similar
performance from Bank of America who cut their forecast on the
defense sector and downgrading several related stocks.  Morgan
Stanley even chimed in with a downgrade of the industry to
"neutral".

Looking overseas for strength was no help.  The dollar may have
stalled its flight against the yen but Asian exchanges were lower
again today with the NIKKEI leading the way.  European stocks
were mixed with a small bounce in the German DAX after
yesterday's big drop.

Looking closer to home we see the Dow Jones Industrials and the
NASDAQ composite making new short-term relative lows.  The INDU
has actually pulled back to its simple 50-dma.  The weakness was
certainly wide spread and there were several averages breaking
support like the RUT, which closed below its 500 level.  Market
internals were strongly negative with declining stocks out
numbering advancers 19 to 8 on the NYSE and 23 to 8 on the
NASDAQ.  Down volume was more than twice up volume on the NYSE
and swamped up volume 4-to-1 on the NASDAQ.

This sudden weakness actually smells like the real thing (not
just a dip) as the volatility indices have finally spiked higher
indicating growing investor fear.  Speaking of fear, the news
that inspectors found weapons grade uranium in Iran could come
back to haunt us.  Iran has until October 31st to prove to the
Intl Atomic Energy Agency that it does not have a secret nuclear
weapons program.  Should they fail to do so, the volatile world
stage could get even more so.



-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High:  9686
52-week Low :  7197
Current     :  9343

Moving Averages:
(Simple)

 10-dma: 9521
 50-dma: 9338
200-dma: 8683

S&P 500 ($SPX)

52-week High: 1040
52-week Low :  768
Current     : 1003

Moving Averages:
(Simple)

 10-dma: 1022
 50-dma: 1001
200-dma:  930

Nasdaq-100 ($NDX)

52-week High: 1406
52-week Low :  795
Current     : 1325

Moving Averages:
(Simple)

 10-dma: 1367
 50-dma: 1304
200-dma: 1142


-----------------------------------------------------------------

Ah.. finally we're starting to see some movement here.  With the
markets actually feeling some selling pressure the new VIX is up
strongly in the last two sessions.  The VXN has also responded but
both "indices" are under bearish resistance.  If the market indices
drop through their next level of support then the VIX and VXN could
break out higher.

CBOE Market Volatility Index (VIX) = 22.26 +1.04
Nasdaq Volatility Index (VXN)      = 30.65 +1.29

-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.84        670,213       565,114
Equity Only    0.69        533,492       372,277
OEX            0.69         32,507        22,478
QQQ            1.35         43,165        58,691


-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          72.8    + 0     Bull Confirmed
NASDAQ-100    79.0    - 2     Bear Correction
Dow Indust.   80.0    - 3     Bull Correction
S&P 500       81.0    - 1     Bull Confirmed
S&P 100       84.0    - 2     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  1.47
10-Day Arms Index  1.21
21-Day Arms Index  1.13
55-Day Arms Index  1.05


Extreme readings above 1.5 are bullish, and readings below .85
are bearish.  These signals don't occur often and tend be early,
but when they do, they can signal significant market turning
points.

-----------------------------------------------------------------

Market Internals

            -NYSE-   -NASDAQ-
Advancers     870       795
Decliners    1945      2307

New Highs      48        86
New Lows       12         3

Up Volume    506M      378M
Down Vol.   1318M     1641M

Total Vol.  1857M     2031M
M = millions


-----------------------------------------------------------------

! The COT Website has NOT updated their data since 09/09/03.

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


NASDAQ-100

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

DOW JONES INDUSTRIAL

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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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.

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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 09-25-2003
                                                   section 2 of 2
Copyright ) 2003, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

Play of the Day:  Wasting No Time

Stop Loss Update: UTSI


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  ( bearish )
===============

UTStarcom, Inc. - UTSI - cls: 32.99 chng: -2.09 stop: 37.00*new*

Company Description:
UTStarcom, Inc. is a global provider of wireless and wireline
access and Internet protocol (IP) switching solutions.  The
company designs, manufactures, sells and installs an integrated
suite of future-ready access network and next-generation switching
solutions.  It enables wireless and wireline operators in fast-
growth markets worldwide to offer voice, data and Internet access
services rapidly and cost effectively by utilizing their existing
infrastructure.  UTSI's products provide a seamless migration from
wireline to wireless, from narrowband to broadband and from
circuit- to packet-based networks by employing next-generation
network technology.

Why we like it:
Technology stocks have been on fire lately, as though we're right
back in 1999.  But the party had to come to an end sometime, and
this week seems as good a time as any.  Actually, UTSI began to
weaken in early September, with the first downdraft culminating
with a weak rebound from the $34 level.  That rebound ran its
course and the stock rolled over just below $38.50 and based on
the past two days closing at the low of the day and selling volume
on the rise, it looks like another downward move is in the offing.
The PnF chart has already cast its vote with a big Sell signal in
early September that now gives us a bearish price target of $24.
That may be a bit aggressive with the bullish support line at $25,
but a drop to next support at $30 and possibly to the 200-dma near
$28 certainly seems likely.  Note that a trade at $34 would
reinforce the bearish picture with another PnF Sell signal.

We'll use a trigger at $34.99 and advocate a couple of possible
entry strategies.  A breakdown below the trigger can be used for
aggressive entries, while those with a more patient approach can
wait for a successive rebound and rollover below the $36-37
resistance area.  The recent consolidation/rebound found a local
high at $38.45, so our stop will initially be placed at $38.50.  A
rally through that level would be a clear sign that we are
premature in looking for a substantial breakdown.  More
conservative momentum traders may want to wait for a drop through
the $34 level and that new PnF Sell signal before playing.  Our
initial target will be for a move down to the $30 support level,
with an outside chance of continuation down to the 200-dma,
currently $27.88.

Why This is our Play of the Day
UTSI came to rest right above critical support yesterday and the
setup for new bearish plays looked too good to pass up.  Sure
enough, it looks like we may have caught a runner here, as the
stock broke below $35 (satisfying our trigger) shortly after the
open and didn't stop for breath until reaching the $32 level a few
minutes later.  You had to be quick on the trigger to catch that
initial entry, but following that initial rebound, there were a
couple of opportunities to enter on a rollover from the vicinity
of $34.  An afternoon rebound attempt following the company's
reaffirmed Q3 guidance was only good for another bounce to $34 and
subsequent rollover into the close.  Rollovers in the $34-35 area
look good for new entries from here, with the $30 level being the
logical first target.  Based on the heavy selling volume (four
times the ADV) on Thursday, it looks like UTSI could go for the
gusto and achieve our aggressive target of $28, right at the 200-
dma.

Annotated Chart of UTSI:



Picked on September 24th at  $35.08
Change since picked           -2.09
Earnings Date              10/23/03 (confirmed)
Average Daily Volume =     3.55 mln



=================================================================
Stop Loss Updates
=================================================================

UTSI - short play
       Adjust from $38.50 down to $37.00



==================
  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

GDW     Golden West Financial      90.26     +1.01
FTN     First Tennessee Ntl        42.65     +1.01
MDC     M.D.C. Holdings            53.15     +0.67

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

ABMD    Abiomed Inc                  8.70     +1.86
HBIO    Harvard Bioscience           8.13     +1.18

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

URBN    Urban Outfitters            26.25     +1.16
CREE    CREE Inc                    21.04     +1.68
TRB     Tribune Co                  47.01     +1.14
NCR     NCR Corp                    32.50     +2.81
WDFC    WD-40 Co                    32.29     +3.54

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

UTSI    UTStarcom Inc               32.99     -2.09
NUE     Nucor Corp                  45.69     -1.41
SYNT    Syntel Inc                  25.05     -3.82
NOC     Northrop Grumman            84.92     -1.08
BMY     Bristol-Myers Squibb        25.80     -1.20
EK      Eastman Kodak               22.15     -4.84
BVF     Biovail Corp                37.10     -1.50
LLL     L-3 Communications          42.35     -2.15

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

HEPH    Hollis-Eden Pharmaceutical   26.77     -2.18
FAST    Fastenal Co                  39.40     -1.86
NFLX    Netflix Inc                  34.81     -3.19
GPRO    Gen Probe Inc                57.01     -6.52
EASI    Engineered Support           59.75     -3.16
TECUA   Tecumseh Products            38.85     -1.65
NCOG    NCO Group Inc                23.75     -1.55



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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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