Option Investor
Newsletter

Daily Newsletter, Thursday, 10/09/2003

HAVING TROUBLE PRINTING?
Printer friendly version
PremierInvestor.net Newsletter                Thursday 10-09-2003
                                                   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:      Happy Birthday
Watch List:       WGO, MYG, CLE, CHS and more!
Market Sentiment: Happy Anniversary

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      10-09-2003           High     Low     Volume Advance/Decline
DJIA     9680.01 + 49.10  9768.69  9633.20 1.96 bln   1985/1225
NASDAQ   1911.90 + 18.10  1936.93  1899.21 2.10 bln   1917/1280
S&P 100   518.48 +  1.94   523.41   516.51   Totals   3902/2505
S&P 500  1038.73 +  4.95  1048.28  1033.78
W5000   10092.92 + 54.30 10183.38 10038.58
RUS 2000  521.34 +  5.66   526.40   515.68
DJ TRANS 2850.73 + 59.10  2876.46  2792.97
VIX        18.82 -  0.36    19.28    18.26
VXN        28.84 -  0.32    28.99    27.79
Total Volume 4,377M
Total UpVol  2,947M
Total DnVol  1,343M
52wk Highs 1060
52wk Lows    14
TRIN       0.74
NAZTRIN    0.75
PUT/CALL   0.76
=================================================================

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


Happy Birthday

My how you have grown in one year. October 10th 2002 was the
bottom of the two year bear market and the birth of the new
bull that we are experiencing now. The Dow bottomed at 7197
and has rebounded +2483 points (+34.5%) in the last 12 months.
The Nasdaq bottomed at 1108 and has gained +804 points (+72.5%)
to threaten 2000 once again. The S&P hit 769 before rebounding
to 1038 today. (+34.9%) The million-dollar question is this,
"what is the average rebound from a bear market bottom?"

Dow Chart


Nasdaq Chart


S&P Chart


Before I answer that question we need to wade through the
market data for today and there was not a lot. In fact it
was pretty limited. Jobless Claims fell to 382,000 and
-13,000 below estimates. This was the lowest level in eight
months. You would have thought they had said 382,000 people
found new jobs last week from the market reaction. Futures
exploded despite the upward revision to 405,000 for the
prior week. Analysts were quick to point out that a slight
drop in layoffs was a big leap from a pickup in hiring.
Continuing claims fell only -7,000 to 3.63 million. Jobs
are still tough to find and until that changes we should
not expect the Jobless Claims to continue dropping
significantly. The market rose on a stabilization of
employment not a jobs celebration.

A reader sent me an analysis of the jobs situation from a
viewpoint I had not considered. The nonfarm payrolls rose
+57,000 last week for the month of September. He was from
a hurricane state where according to him there was more
than 57k workers hired to rebuild just the damage in
his state. He speculated that across all the states with
damage there would have been many more than that hired and
that the employment would not be long term. If this is true
then the Jobless Claims would have also been impacted and
the October Jobs report could show a reversal of those
gains. Just a different point of view from the trenches.

Another positive for Thursday was a very strong Chain Store
Sales number for September. The headline number rose +5.9%
and well over the +3.5% number that had been reported as
the official estimate. Even better was the breadth of the
gains. All components saw bigger gains from August except
discount stores which, while still strong at +5.8%, slowed
slightly from the +6.4% rate in August. Apparel, department
stores and wholesale clubs had their best month in over
two years. Total store sales growth rose +10.8% and the
fastest growth since Jan-2001. While analysts were rushing
to upgrade earnings estimates again the Bank of Tokyo was
warning that growth in October could slow to 4.5%-5.0%.
They also had said they expected September to be 3.5%-4.0%
in their last weeks estimate. Sales in September were up
on the remaining tax rebate checks and colder weather in
the north east which prompted early fall clothing purchases.
October will see a boost from 307,000 autoworkers getting
bonus checks of $3,000 from signing a new contract. That
is nearly $1B being paid out but a small fraction of the
previous tax rebate.

Also helping cheer the bulls was the jump in the MAPI
Survey to 68% for Q3 and the highest level in two years.
This was the seventh consecutive quarter of expansion in
the manufacturing outlook. All components except for
inventory and profits increased. Shipments rose to 80
from 70, New Orders to 69 from 53 and Order Backlog to
69 from 56. This is very bullish but it is over a long
period of time. This is a quarterly number but it shows
the continued improvement in the sector. The low inventory
number continues to predict a faster ramp up in production
soon. However, the profits component will continue to
suffer as reports out today outlined increasing capacity
in China. Their exports to the U.S. now exceed $150 billion
per year and are impacting nearly every sector of U.S.
manufacturing.

Import Prices fell slightly by -0.5% compared to estimates
of +0.2%. The majority of the change was due to falling
energy prices early in the month. The falling dollar also
helped. Meat prices continue to rise due to an import ban
on Canadian cattle and lumber prices rose due to the
hurricane and increased buying by the government. Seems
we have to supply all the plywood and sheetrock for Iraq
due to the lack of a lumber industry in the desert. Oil
prices are beginning to rise again so any dip in these
numbers could only be temporary.

Yahoo powered the markets higher today with its better
than expected earnings and improved guidance. Short covering
was rampant in YHOO, AMZN and EBAY with AMZN roaring to
a high of $59 and EBAY sprinting to within $3 of its all
time high of $63. You would think bubble mania had returned
to Internet stocks except it was broad based across all
sectors. There was over 1000 new 52-week highs and only
15 new lows. Earnings estimates were being ratcheted up
yet again and as one trader said, "expectations are higher
than when Adam met Eve."

Those expectations took a slight hit when the CEO Conference
did not produce any evidence of future confidence. The IP
CEO was on CNBC several times bragging about cost cutting
but saying he saw no sustainable increase in orders. The
various surveys taken by attendees showed they expected
the economy to remain flat to only slightly up over the
next year. Participants were equally divided between those
that were seeing a slight increase ahead and those seeing
a slight decline. The biggest hindrance to future gains
was seen as a growing excess in global manufacturing
capacity and increased price competition.

Despite the calming influence of the CEO Conference the
markets roared into the stratosphere and new 52-week
highs all around with the Dow up +140 at noon. Dow 10,000
comments were flying and traders were back slapping each
other on their good fortune. Then Uncle Ben took to the
podium. Ben Bernanke took the stage in London and the
headline on the wire services was "Bernanke says, Too soon
to say if the recovery was sustainable." Like an under age
drinking party with cops at the door the party goers raced
for the exits. While the -100 point drop from the highs
was dramatic it was not material.

The damage to the bears psyche was already done and bulls
rushed to buy the dip. New highs and better than expected
earnings were just signs of the future according to the
bulls. The dollar rallied overseas overnight, gold fell
and bonds were selling off. All positives for the equity
market. There simply seems to be nothing on the horizon
to put out this fire regardless of how high it blazes.
The bears continued to claim over valuation in excess
of bubble market levels in some cases and no surge in IT
spending. The bear battle cry is "good news priced in".
With better than expected earnings apparently the order
of the day it is hard to convince traders that better
times may not be ahead. The problem will remain until the
pony appears. If your daughter spends the month before
her birthday buying riding clothes, boots, whips, helmets,
etc in anticipation of getting a pony for her birthday
there will be hell to pay if the pony does not appear.
Today it looks like the earnings will appear on schedule
and until there is reason to worry the bulls will continue
to party.

Just how long can they party? For the answer to the initial
million dollar question consider the following facts. The
average bear market lasts 6-12 months. The bear market that
ended on Oct-10, 2002 was the longest bear market on record
since the great depression. According to Ned Davis Research
the average bear market is 418 days while the average bull
market lasts 673 days. The average bear market knocks -31%
off the Dow while the average bull market adds, are you
ready, +81% to the Dow. If the last bear market was the
worst ever knocking -4553 points off the Dow high of 11,750
(-38.7%) then might we expect at least the average bounce
of +81%? If your answer was yes then take a deep breath
before calculating the answer. If the averages hold the
Dow could hit 13,026 in the next 307 days. While I doubt
it and I am sure even then most blatant bulls doubt it
that is what the averages predict.

Obviously, we cannot rely on averages except over very
long periods as in decades or dozens of bull/bear markets.
Averages are the tools of statisticians and historians.
Historically October is known for dramatic dips but the
biggest dip we have seen so far is the -23 point drop
on Wednesday. So far in October the Dow is up exactly
+400 points with bullish sentiment in the extreme. I
confess I thought we were going negative for the day when
the afternoon drop began. I see no reason for it but we
don't always know the reason in advance. When profit taking
begins in earnest it can take on a life of its own and there
does not have to be a reason. We are roaring into the last
three weeks of October with option expiration week just
ahead. If there was ever a period of time to be cautious
this is it.

We will get GE earnings on Friday but no fireworks are
expected there. That sets up a potential for a negative
surprise if they caution about economic conditions. GE
is normally seen as a proxy for the economy and as such
the earnings are critical. Not for the earnings because
everybody expects an inline report but for the guidance.
GE reported two weeks ago that orders for its plastics
division were down -5% and plastics supplies 10% of GE
earnings. The plastics division is also seen as a proxy
for the market because nearly every manufactured product
contains plastic.

Once the GE earnings are public tomorrow morning the
potential for a bout of profit taking increases for Friday.
Even if GE earnings are positive there may be just too much
profit for traders to resist the urge to take some off the
table. Dow 9600 would be the best estimate of a target and
it would probably be bought heavily. The flood of earnings
does not really begin until next week and traders are
looking forward to some big names like INTC on Tuesday and
IBM on Wednesday along with over 250 other companies.

Market Breadth


Volume for Thursday was strong with nearly 4.4 billion shares
traded. Advancing volume was 2:1 over down volume. I posted
the market breadth spreadsheet above last week to show how
the market had been changing sides daily. From Aug-22 through
Oct-2nd there was 109 billion shares traded. In the last five
days we added nearly 20 billion shares. Note the update for
this week that the top eight days have been very strong
volume wise and most of that volume has been on the upside.
This market breadth is very bullish but with the big jump
at the open traders would like to have seen a much stronger
imbalance to the upside. It was strong but market technicians
want to see 4:1 or 5:1 up volume on breakouts to confirm the
move. This increases the potential for some cautious profit
taking on Friday. Whether this potential comes true or not
it has definitely been an exciting October week already and
we still have three weeks to go! As I said last time, keep
those seatbelts fastened as our thrill ride gains speed.

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

Winnebago Industries Inc. - WGO - close: 50.33 change: +1.33

WHAT TO WATCH: Apparently consumers can still afford those luxury
items and even having the summer travel season winding down
hasn't put a damper on investors' appetite for shares of WGO.
Not only is the stock challenging its August highs just above
$50, but this is the site of major weekly resistance going back
to early 2002.  Use a break above today's intraday high ($50.75)
to initiate new positions and look for a near-term move to $55.




---

Maytag Corp. - MYG - close: 28.32 change: +0.73

WHAT TO WATCH: With Housing stocks and the Home Improvement
Retailers like LOW and HD soaring to new highs, shares of MYG are
starting to catch the bullish fever and have rallied smartly over
the past 7 sessions, coming right up to near-term resistance near
$28.50.  Look for a breakout over that level to have upside into
the $31-32 area heading into earnings.  This is a more aggressive
play though, as the company is set to report its results next
Thursday, meaning that the move will have to occur quickly.




---

Claire's Stores, Inc. - CLE - close: 38.76 change: +3.03

WHAT TO WATCH: There was lots of positive news in the Retail
arena on Thursday and CLE added to the positive tone with an
upside guidance revision for the October quarter, leading to a
more than 8% rally.  This isn't the sort of move we want to
chase, especially after such a large gap.  But a pullback to fill
the gap and confirm broken resistance at $36 as new support would
provide an ideal entry point ahead of a continued rally into
earnings in early November.




---

Chico's FAS Inc. - CHS - close: 35.31 change: +2.75

WHAT TO WATCH: Delivering a powerful breakout from a bullish
wedge pattern was enough to put smiles on the bulls' collective
faces, as the stock gained nearly 8.5% to close at new all-time
highs.  As is the case with CLE, we can't justify new entries
after such a strong upward move, but a pullback and rebound from
$33.50-34.00 would be a great continuation entry.  Target a move
to the $40 area ahead of earnings on November 26th.





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

TARO $62.05 - Where are the shorts?  That's what the bears want
to know, as TARO has blasted through major resistance near $59
and is surging to new all-time highs.  It feels like a bit of a
chase right here, but a pullback into the $59-60 area could make
for a very nice entry ahead of a final run into earnings on
October 23rd.

ISLE $20.52 - It seems everyone is up for a little fun and games
lately, and ISLE is trying to make a break into the big time.
After consolidating between $19-20 for more than a month, buying
volume is on the rise and a breakout appears imminent.  Look for
a move above $20.65 before playing and target a move to $22-23.

AA $29.68 - One of the first to report earnings, AA certainly
didn't disappoint, beating estimates by 3 cents.  After a bit of
indecision, investors are bidding the stock higher and drove it
to fresh 52-week highs on Thursday.  Enter on either a pullback
near $29 or breakout over $30, looking for a move to the $33
level in the weeks ahead.



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


Happy Anniversary
- J. Brown

It was one year ago today that both the DJIA and the NASDAQ
Composite marked their closing lows for the bear market.  The
following session, October 10th, 2002, saw additional weakness in
the morning and then a surge higher.  That rally was the
beginning to a bull market that has lifted the DJIA almost 2400
points or nearly 33%.  The NASDAQ has gained almost 800 points or
more than 71%.   How appropriate that both indices tagged new
one-year highs today.

As one can imagine the current bull market both excites and
scares some investors.  Is it too late to get in?  Did I miss it?
Are some of the concerns that patient investors have been feeling
as they watch the markets climb.  Others dove in and are
relishing the heady gains in tech stocks.  Yahoo's earnings news
after the bell last night brought back fond memories of the
bubble days (if you're bull) and concerns that it could all pop
(if you're a bear).  Considering that AMZN is trading near levels
not seen since May of 2000 and EBAY came within a couple of
points of its all-time bubble highs near March of 2000 it's not a
surprise why some might fear for valuations.

Fortunately, we have some enthusiastic economic news to support
much of the positive attitude.  This morning opened with a
positive surprise in the initial jobless claims.  First-timers
dropped to 382,000, which is the lowest level since February 8th.
Enthusiasm that corporations might begin hiring again could
really keep the rally going.  The super strong September same-
store sales numbers is another encouraging factor for investors.
Many analysts are now very positive on the upcoming Q4 holiday
sales season.  Plenty of stores do the vast majority of their
yearly revenues in just the last two months of the year.  It's no
secret that more than 2/3rds of this country's GDP is based on
the consumer so it's good news that we're actually seeing an
increase in sales.  However, not everyone was cheering.  Skeptics
were quick to point out that September's same-store sales numbers
only look this good because last September was so bad.

Market internals today were bullish with advancers out numbering
decliners almost 18 to 10 on the NYSE and 18 to 12 on the NASDAQ.
Up volume was very strong today.  Readers hear us talk about the
strong breadth of the markets but may not realize what this means
or looks like.  The bullish percent is a measure of how many
stocks are currently on a point-and-figure chart buy signal.
Currently, the bullish percent reading for the S&P 500 has been
and is still at 5-year extremes near 80 (out of 100) and actually
looks poised to climb higher.  This technically a bearish
reading, but it's been pegged there for quite some time.

Tomorrow will bring the September PPI numbers but Wall Street
will also be watching for General Electric's earnings report.  GE
used to be considered a proxy for the market as a whole because
it is so big and has so many different business divisions across
different sectors.  The last couple of years there has been a
disconnect but once again commentators are looking to GE as a
market indicator.

It certainly brings back (bullish) memories but be careful.  The
markets are definitely short-term overbought and are in need of a
rest.  The new low on the VIX is concerning and the candlestick on
on the DJIA looks like a potential one-day reversal pattern.  There
is no reason to chase new highs.  Be patient and wait for your entry
point.  As one financial commentator said today, this bull market
could easily have another 12 to 24 months to go.  If you missed your
entry point there will be another one.



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

Market Averages

DJIA ($INDU)

52-week High:  9768
52-week Low :  7197
Current     :  9680

Moving Averages:
(Simple)

 10-dma: 9507
 50-dma: 9406
200-dma: 8733

S&P 500 ($SPX)

52-week High: 1048
52-week Low :  768
Current     : 1038

Moving Averages:
(Simple)

 10-dma: 1021
 50-dma: 1007
200-dma:  936

Nasdaq-100 ($NDX)

52-week High: 1418
52-week Low :  795
Current     : 1396

Moving Averages:
(Simple)

 10-dma: 1356
 50-dma: 1322
200-dma: 1159


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

The DJIA and the NASDAQ Composite both tagged new highs today
and in a mirrored reflection of the two, the VIX hit a new low.
Bullish traders should be careful.  The candlesticks on the
indices above look like potential one-day reversal patterns and
the new low in the VIX doesn't help matters.

CBOE Market Volatility Index (VIX) = 18.82 -0.36
Nasdaq Volatility Index (VXN)      = 28.84 -0.32

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.76        789,341       601,330
Equity Only    0.61        633,635       387,421
OEX            1.16         36,187        41,950
QQQ            3.89         18,087        70,429


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

Bullish Percent Data

           Current   Change   Status
NYSE          73.2    + 0     Bull Confirmed
NASDAQ-100    77.0    + 3     Bear Confirmed
Dow Indust.   83.3    + 0     Bull Correction
S&P 500       80.0    + 2     Bull Confirmed
S&P 100       79.0    + 0     Bull Correction


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  0.89
10-Day Arms Index  1.05
21-Day Arms Index  1.18
55-Day Arms Index  1.07


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    1787      1859
Decliners    1041      1227

New Highs     274       216
New Lows       13         5

Up Volume   1289M     1352M
Down Vol.    596M      658M

Total Vol.  1913M     2061M
M = millions


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

Commitments Of Traders Report: 09/30/03

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

Wow!  It looks like the commercials traders went to sleep.  There
was almost no change in either the number of longs or number of
short positions.  Everyone must have been waiting on the September
Jobs report.  Small Traders were upping their bets with small
increases in both longs and shorts but still heavily long.


Commercials   Long      Short      Net     % Of OI
09/02/03      417,973   482,392   (64,419)   (7.2%)
09/09/03      418,958   486,209   (67,251)   (7.4%)
09/23/03      395,123   397,858   ( 2,735)   (0.0%)
09/30/03      395,713   397,577   ( 1,864)   (0.0%)

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
09/02/03      169,030    75,748    93,282    38.1%
09/09/03      176,401    81,444    94,957    36.8%
09/23/03      139,482    87,981    51,501    22.6%
09/30/03      144,681    96,801    47,880    19.8%

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

We did see some movement in the e-minis.  Commercials added about
50K new longs while only adding 14K new shorts.  Small Traders took
some money off the table with a redemption in their longs by more
than 40K.  However, small traders are still heavily bullish.


Commercials   Long      Short      Net     % Of OI
09/02/03      347,724   224,011    123,713    21.6%
09/09/03      370,909   237,610    133,299    21.9%
09/23/03      109,417   204,026   ( 94,609)  (30.2%)
09/30/03      163,828   218,991   ( 55,163)  (14.4%)

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
09/02/03       56,709   134,094   (77,385)  (40.6%)
09/09/03       59,692   130,270   (70,578)  (37.1%)
09/23/03      175,750    62,558   113,192    47.5%
09/30/03      131,698    65,259    66,439    33.8%

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


NASDAQ-100

Much like the large S&P futures contracts, the commercial
traders appear to be asleep with very little change this
last report.  Small traders were also comatose with just a
couple of thousand new long contracts.


Commercials   Long      Short      Net     % of OI
09/02/03       37,002     55,379   (18,377) (19.9%)
09/09/03       44,677     62,369   (17,692) (16.5%)
09/23/03       32,648     42,565   ( 9,917) (13.2%)
09/30/03       33,571     42,993   ( 9,422) (12.3%)

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
09/02/03       23,168    10,561    12,607    37.4%
09/09/03       28,788    13,370    15,418    36.6%
09/23/03       17,862     9,880     7,982    28.8%
09/30/03       19,803     9,917     9,886    33.3%

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

There seems to be a theme here for commericals... no movement.
This time the small traders joined them in their sit back and
wait mode.


Commercials   Long      Short      Net     % of OI
09/02/03       25,462    10,447   15,015      41.8%
09/09/03       25,807    10,756   15,051      41.2%
09/23/03       15,911     9,123    6,788      27.1%
09/30/03       16,561     8,932    7,629      31.5%

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
09/02/03        6,629    13,402   (6,773)   (33.8%)
09/09/03        7,429    13,796   (6,367)   (30.0%)
09/23/03        7,505     7,779   (  274)   ( 1.8%)
09/30/03        7,578     8,125   (  547)   ( 3.5%)

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

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




=================================================================
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.
PremierInvestor.net Newsletter                Thursday 10-09-2003
                                                   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:     Testing Resistance

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 )
===============

TYCO Intl. - TYC - close: 21.73 change: +0.38 stop: 19.99

Company Description:
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in medical device products, and plastics and
adhesives. Tyco operates in more than 100 countries and had
fiscal 2002 revenues from continuing operations of approximately
$36 billion.  (Source:  Company Press Release.)

Why we like it:
Tuesday, as opening statements began in the trial of TYC ex-CEO
Dennis Kozlowski, we counted six articles focusing on the trial.
TYC nevertheless managed another bounce from its rising trendline
that day.  Wednesday ended with TYC again above that trendline,
but the doji's short lower shadow would probably not count as a
bounce.  On a day when the Dow lost 0.25 percent, we're satisfied
with TYC's minimal 0.05 percent loss.

TYC's climb this week has been so gradual that it could more
nearly be described as consolidation.  In keeping with that
consolidation, the indicators flattened, with stochastics and RSI
flattening along trendlines they had previously violated.

Still, we can't ignore that doji sitting at the top of TYC's most
recent climb.  Such doji indicate indecision, but they can also
signal a trend change.  This one's opening and closing prices are
positioned in the middle of the small gap from mid-September.
TYC perhaps had trouble battling its way above that gap,
especially as the weak performance of the broader markets offered
it little momentum.  If that doji does signal a potential
reversal, however, the first line of defense will lie at the
moving averages grouped between $20.21 and $21.00.  Conservative
traders might position their stops beneath the 30-dma, while more
aggressive traders might feel comfortable with our current $19.99
stop, just below the rising 50-dma.  Because of those small-
bodied candles and Wednesday's doji, traders might wait for a
break above $22.00 for new entries.

Why This is our Play of the Day
Certainly, a breakout to new 52-weeks would have been preferable,
but in light of the sharp retracement in the overall market at
the end of the day, we're willing to cut TYC some slack.  The
early strength was enough to propel price up to exactly match the
intraday high from 9/24 before falling back to end very near the
opening price.  This $22 level is a key resistance level and a
breakout above there should be good for upside continuation,
first towards $25, which is both the site of the May 2002 highs,
as well as the top of the April 2002 gap.  TYC continues to work
higher in an ascending channel that has been building since the
March lows, so dips near the bottom of that channel (currently
$20.50) can be used for new entries.  Additionally, momentum
entries on a breakout over $22 look attractive here.  For now,
we're maintaining our stop at $19.99 and looking for a run at the
$25 level.

Annotated Chart of TYC:


Picked on Sep 21st at    $21.90
Change since picked:      -0.17
Earnings Date:         11/04/03 (confirmed)
Average Daily Volume:  9.54 mln



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

PTR     PetroChina Co Ltd (ADS)    36.90     +0.99
CHL     China Moble Ltd            15.08     +0.57
KTC     KT Corp                    21.00     +0.54
IR      Ingersoll-Rand Ltd         58.51     +1.06
LEN     Lennar Corp                85.43     +1.06
MYG     Maytag Corp                28.32     +0.73

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

AMR     A M R Corp                 14.85     +1.50
DDS     Dillard's Inc              16.07     +1.37
NWAC    Northwest Airlines         11.93     +1.39
ALGN    Align Tech Inc             15.38     +1.89
MTSN    Mattson Technology         10.78     +1.05
DJO     DJ Orthopedics             15.45     +1.45

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

YHOO    Yahoo! Inc                 42.75     +3.96
IACI    InterActive Corp           37.71     +1.30
AMZN    Amazon.com                 57.86     +2.16
AA      Alcoa Inc                  29.68     +1.01
TJX     TJX Companies              21.20     +1.11
FD      Federated Dept Stores      45.60     +1.20
FDO     Family Dollar Stores       42.40     +1.02

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

KSS     Kohl's Corp                53.00     -1.89
CA      Computer Associates        25.95     -3.01
IMDC    Inamed Corp                68.38     -2.49
ODSY    Odyssey Healthcare         28.45     -1.62

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

MAR     Marriott Intl Inc          43.10     -1.64
KIND    Kindred Healthcare         38.66     -1.48
IRM     Iron Mountain Inc          35.92     -0.30





=================================================================
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.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives