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Daily Newsletter, Monday, 10/06/2003

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PremierInvestor.net Newsletter                 Monday 10-06-2003
                                                  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:      Earnings Eve
Play of the Day:  Still Going...

===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     10-06-2003            High     Low     Volume Advance/Decline
DJIA     9594.98 + 22.67  9624.91  9562.53 1.21 bln   1811/ 984
NASDAQ   1893.46 + 12.89  1894.22  1876.00 1.36 bln   1949/1089
S&P 100   517.04 +  1.87   518.24   514.62   Totals   3760/2073
S&P 500  1034.35 +  4.50  1036.48  1029.15
RUS 2000  516.72 +  4.44   516.74   510.97
DJ TRANS 2796.67 + 11.82  2806.50  2781.45
VIX        19.51 +  0.01    20.69    19.45
VXN        29.42 +  0.22    30.21    29.32
Total Volume 2,818M
Total UpVol  1,983M
Total DnVol    776M
52wk Highs     707
52wk Lows       19
TRIN          0.89
PUT/CALL      0.66
===============================================================

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


Earnings Eve
by James Brown

It would have been a rather uneventful Monday but positive
earnings news from the likes of PeopleSoft (PSFT) and Knight
Trading Group (NITE) renewed investor enthusiasm for the Q3
earnings season finally upon us.  Motorola and Rambus chipped in
with some positive headlines of their own and Wall Street managed
to stretch its winning streak to four in a row.  The Yom Kippur
holiday was reflected in the very low volume, about 25 percent
less than the market's three-month average, with just 1.3 billion
shares trading on the big board and slightly more trading on the
NASDAQ.

Shallow gains were widespread with only the semiconductors,
biotechs and healthcare stocks slipping into the red.  Most of
the buying was concentrated in technology, brokers and airlines.
Strong traffic numbers from JetBlue (JBLU) helped lift the XAL
airline index to a new yearly high.  The DJIA added 22 points to
close at 9594.  The NASDAQ added almost 13 points to close at
1893 and the S&P 500 inched up 4.5 points to close 1034.  All
three are very close to their 52-week highs.  Asian exchanges
contributed to the positive mood with a strong gain in the Hang
Seng index but European bourses were down slightly as the dollar
continued to slip against the euro.

Domestically the advance-decline numbers were positive.  The NYSE
recorded 18 winners for every 9 losers.  The NASDAQ turned out 19
advancers for every 10 losers.  Up volume significantly out paced
down volume on both the NYSE and the NASDAQ.  There was another
surge in new yearly highs with 612 between the two exchanges.
There were only 12 new yearly lows.

Chart of the DJIA:


Chart of the NASDAQ:


Raising the Bar

Shares of PeopleSoft (PSFT) surged another 3.1 percent to
breakout above the $20 level after raising their Q3 earnings
guidance for the second time in two months.  Last month PSFT had
raised their guidance to 10-to-11 cents a share and most analysts
readjusted their estimates to match the 11-cent figure on
estimated revenues of $589 million for the quarter.  Today the
company said they will top their latest projections.  PSFT's CEO
said the combination of PeopleSoft and recently acquired
J.D.Edwards was "already exceeding our expectations".  The stock
is now trading above the $19.50-a-share hostile takeover by
software rival Oracle (ORCL).  PSFT is expected to announce its
Q3 results in the next two-to-three weeks.

Another stock breaking out to new highs on raised earnings
guidance is Knight Trading Group (NITE).  The company is a market
maker for a wide range of securities and the rebound in trading
volumes has really boosted its business.  The company's press
release also remarked on the progress they feel they're making
with institutional clients.  Consensus estimates had been for 11
to 12 cents a share.  NITE now sees Q3 earnings in the 16 to 21
cent range.  The good news boosted shares of NITE by more than
15% and the XBD broker dealer index gained 1.85%.

Chipping In

Now that he's on the way out Motorola (MOT) CEO Chris Galvin
seems to be a lot more agreeable to making improvements at his
company.  Analysts and investors have been suggesting that MOT
spin off its semiconductor business for a long time.  This
morning, the company finally announced that it would.  The
Semiconductor Products Sector (SPS) division of MOT currently
represents about 18% of their overall sales but it also accounts
for a large portion of their operating losses.  Details were not
readily available but investors will probably have more to digest
at MOT's October 14th earnings announcement.  The stock jumped
almost 10 percent to a new 52-week high on today's news.

Rambus (RMBS) is another chip stock hitting new 52-week highs
today.  Actually, the stock hit a 2 1/2 year high after rising
almost 38 percent in today's session to close at $25.80.  Fueling
the move was news that the U.S. Supreme court refused to hear an
appeal by rival chip-maker Infineon Technologies (IFX) after the
company lost its fraud case against RMBS.  The courts also
reopened RMBS' counter-suit that IFX was involved in patent
infringement.

Bouncing Back

It was a bullish Monday around the board with oil, gold and bonds
all bouncing back to join stocks in the green.  Crude oil futures
were green again in what has been a sharp two-week climb from the
$26.50 level to back above the $30 mark.  Concerns that Saudi
Arabia might cut production to prepare for the eventual coming to
market for Iraqi oil has combined with investor fears over
trouble in Venezuela and new threats of strikes in Nigeria.  Add
growing turmoil with Israel sending planes to bomb terrorists in
Syria and gunfire on the Israel-Lebanon border and we have what
could be a recipe for new highs in crude oil.  Meanwhile both
gold and bonds bounced back after painful sessions last Friday.
Gold close up $3.30 to $373.30 and the yield on the 10-year note
dropped to 4.151%.

Tomorrow will be the starting gun for Q3 earnings announcement.
The major company to watch will be Dow component Alcoa (AA) who
reports after the close on Tuesday.  Consensus estimates are for
30 cents a share, which is 15 percent better than last year.
We'll also hear from PepsiCo (PEP) who reports before the opening
bell.  Estimates for PEP are 62 cents.  After the market will be
fast-food giant Yum! Brands (YUM), who is better known for their
Taco Bell, Pizza Hut, KFC and Long John Silver's fast food
outlets.  Estimates for YUM are 52 cents a share.

Despite the onset of Q3 earnings tomorrow's headlines will likely
be dominated by one event.  You guessed it, the state of
California's governor recall election.  Will the recall pass?
Will Arnold get the vote?  Who will be the first to file a
lawsuit contesting the results?  Oh the myriad of questions we'll
be forced to listen to late into the evening tomorrow.  Sounds
like a good reason to just turn off the T.V.




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


Zimmer Holdings - ZMH - cls: 57.84 chng: +1.15 stop: 54.75*new*

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:
Thursday, TYC completed its acquisition of Centerpulse.
Investors liked the idea.  The stock had been consolidating in a
symmetrical triangle, and broke out of that triangle to the
upside.  It rose to test the top of its ascending regression
channel.  RSI rose along its own rising trendline, confirming the
move.  That rising trendline may not be relevant much longer,
however.  It's risen so high that RSI would likely violate the
trendline with the smallest downside oscillation.

MACD remains bullish, and stochastics turned back up into
territory indicating overbought conditions.  When a stock trends
strongly, as ZMH has been doing, stochastics can trend at
overbought levels for some time as is obvious from ZMH's chart.
Downturns in the stochastics might signal nothing more than
consolidation.

We suspect that ZMH might again consolidate as it tends to do
once hitting the top of its regression channel.  We also notice
that the RXP, the Morgan Stanley Health Care Products Index, does
not perform as well as ZMH and closed down Friday.  While ZMH is
not a component of this index, several other medical device
companies are.  The RXP's decline might be attributed to the
steep decline in MDT, falling 4.91 percent Friday.  Prudential
cut Medtronic's rating to underweight.  While ZMH continues to
perform strongly and we've noticed that stocks in this sector
tend to trade independently of one another, we wish the sector
performed strongly, too.  We're raising the stop to $54.24 in
case sentiment carries over to other medical-device companies.
If ZMH does consolidate, new entries might be found on pullbacks
and bounces from above $55.50.

Why This is our Play of the Day
In seemingly unstoppable fashion, ZMH kicked the week off with a
2% advance on strong volume of 2.1 million shares.  That's pretty
impressive in light of the anemic gains across the rest of the
market, especially as it launches the stock into new high
territory once again.  The stock is up strongly over the past
four days and with today's close above the upper Bollinger band
($57.76), a profit-taking pullback would not be a surprise.
Conservative traders that entered on the last dip might even
consider harvesting some gains here and look for re-entry on the
next pullback.  There should now be strong support in the $55-56
area, with the 10-dma ($55.89) showing itself to be solid support
over the past few weeks.  Look for a dip and bounce from this
area to provide the next entry point into the play.  we're
raising our stop to $54.75 tonight, which is well below the 10-
dma and just below last Wednesday's intraday low.

Annotated Chart of ZMH:


Picked on September 17th at   $53.87
Change since picked:           +2.31
Earnings Date:              10/22/03 (confirmed)
Average Daily Volume:       1.82 mln





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

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

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

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
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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 10-06-2003
                                                   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
=================================================================

Stop Loss Updates:   ZMH

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)


=================================================================
Stop Loss Adjustments
=================================================================


ZMH - Raise from $54.24 up to $54.75


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

STI     Suntrust Banks Inc         63.75    +1.30
AT      Alltel Corp                49.93    +1.63
CMA     Comerica Inc               48.16    +0.72
IFF     Internat Flavors & Frag    34.70    +0.89


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

MOT     Motorola Inc               13.50    +1.22
NITE    Knight Trading Group Inc   19.95    +1.85
TWTC    Time Warner Telecom Inc    11.43    +1.14
IBN     Icici Bank Ltd (ADS)       12.23    +1.02


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

PBI     Pitney Bowes Inc           41.14    +1.18
NTRS    Northern Trust Corp        45.12    +1.52
TKC     Turkcell Iletisim Hzmt     20.70    +2.40


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

MDT     Medtronic Inc              44.78    -1.10
BVF     Biovail Corp               28.70    -2.40
WTW     Weight Watchers Intl Inc   39.40    -1.10


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

None



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