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Daily Newsletter, Thursday, 10/23/2003

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PremierInvestor.net Newsletter                Thursday 10-23-2003
                                                   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:      Back From The Brink
Watch List:       T, ELBO, MDC, MTH and more!
Market Sentiment: Bewildered.

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      10-23-2003           High     Low     Volume Advance/Decline
DJIA     9613.13 + 14.90  9622.16  9551.73 2.05 bln   1527/1651
NASDAQ   1885.51 - 12.60  1893.20  1874.11 1.93 bln   1316/1839
S&P 100   514.88 +  1.48   515.59   511.21   Totals   2843/3490
S&P 500  1033.77 +  3.41  1035.44  1025.87
W5000   10029.20 + 21.90 10047.48  9955.10
RUS 2000  510.49 -  2.66   513.55   506.81
DJ TRANS 2828.52 + 10.50  2828.78  2799.99
VIX        17.68 +  0.01    18.51    17.48
VXO VIX-O  19.10 +  0.04    19.99    19.02
VXN        26.09 +  0.41    26.57    25.58
Total Volume 4,269M
Total UpVol  1,729M
Total DnVol  2,485M
52wk Highs  271
52wk Lows    30
TRIN       1.12
NAZTRIN    2.26
PUT/CALL   0.85
=================================================================

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


Back From The Brink

If you had told me at 2:AM with the Nikkei off -550 points
and our futures falling through the floor that the Dow would
only drop -50 points at its worst and close up +15 I would
have thought I was dreaming. Sometimes reality is stranger
than fiction and today was definitely one of those days.

Dow Chart


Nasdaq Chart


Nikkei Chart


We had yet another math miracle before the open with Jobless
Claims. The number came in at 386,000 and a four-week low.
You should be confused. Last weeks number was a multimonth
low at 384,000 and the week before that was even lower at
382,000. Each was trumpeted as new cycle lows. Unfortunately
the 382K from three weeks ago was revised up to 388K the
next week. The 384K from two weeks ago was revised up to
390K. These revisions make today's 386K the new four week
low at least until it is revised up next week. Using the
+6k revision average that should put today's number near
392K. Either way there is a slight upward trend in the
claims but nothing serious.

A better number to gauge the strength of the job market was
the Monthly Mass Layoffs for September which came in at 868
and considerably better than the prior two months. 82,647
workers were laid off in September compared to 133,839 in
August and 226,435 in July. This is a definite improvement
in the trend. Whether it means the pace of cost cutting
has slowed as we approach a seasonal increase in business
or that companies just don't have as many workers they can
cut is unclear. Either way the slow down in the pace of
layoffs should help ease the pressure in the job market.

The lack of real economic reports today left the markets
to fixate on earnings and Wednesday earnings were less than
exciting on several front. Companies warning or missing
estimates included some high profile names like JPM, MRK,
THC, WHR, SGP, KLAC, STX and ERTS to name a few. We had the
obligatory comments about "no signs of an economic recovery
yet" from Dow component Dow Chemical. SNE said they had 50%
excess capacity for the current demand. Bucking the trend
UPS saw a strengthening in shipments. While these high
profile bad apples drew the headlines the overall earnings
were still strong. With over 300 of the S&P companies
reported the number meeting or beating estimates is around
64%. If you have been reading my commentary you know that
is down from 92% two weeks ago and 66% last week. Still
strong but slipping as the smaller companies report. I
have not seen Chuck Hill on CNBC this week but should he
appear with a lowered estimate for 3Q earnings the sentiment
could get a lot worse.

Guidance for the 4Q from those 300+ companies has 36% guiding
higher, 22% guiding inline and 42% warning. This means just
under half of all companies are warning and very close to
the historical trend. In other words the ratios are not as
good as some analysts hoped. You have also seen me quote the
earnings estimates for the 4Q as +20% to +25% growth based
on First Calls published summaries. The 4Q estimate as of
the close today had dropped to +18%. Still strong but maybe
a hint of further trimming to come.

After the bell today Microsoft announced earnings that beat
the street by a penny and initially caused their stock to
rise. The company raised guidance slightly and bragged about
strong enterprise sales. They said that "while IT spending
was only improving slowly over the quarter they did see
increasing strength across the consumer sector". The raised
guidance left little for traders to be excited about. MSFT
raised full year estimates to a range of $1.10-$1.12. The
analyst community was already expecting $1.11 so the fanfare
fell on deaf ears. The stock began to fall almost immediately
once the guidance was disseminated without waiting for the
conference call. One factor suggested as accelerating the
drop was a more than double than expected drop in unearned
or deferred income. This line item is normally used as a
slush fund for earnings that can be "adjusted" as needed
to make earnings targets. Deferred income is money received
before the product is shipped. If a corporation ordered
a large amount of various software products late in the
quarter, possibly some in short supply or not yet released
then Microsoft does not claim the income until the software
is shipped. There is always a backlog as companies preorder
new products or products for conversions from legacy systems.
This "order backlog" is seen as an indicator of strength
for Microsoft. High backlog equals lots of orders, low
backlog means excess product on hand. (simple explanation)
Microsoft had guided analysts to expect a drop of $300
million in this number. The actual drop was over $600 mil
and twice Microsoft estimates. Considering MSFT had net
profits of $2.6 billion for the quarter I would not think
this is a critical problem. Just something for the analysts
to question to earn their 15 min of fame. Most informative
was their raised guidance. They are only expecting PC growth
in upper single digits for 2004. This is not going to be
exciting for the tech outlook. They also projected a drop
in subscribers to their MSN Internet service. A couple
more less than positive comments included, "we missed some
forecasts and you (analysts) should be concerned" and "we
are not expecting any significant revenue growth for the
rest of the year."  MSFT closed the after hours session
at $27.54 and down nearly -1.50 from the regular session
close.

Wednesday's earnings and market action led to massive drops
overseas. The Nikkei suffered the biggest one-day drop of
(-554) since 9/12/01 and the day after the WTC attack. This
was a huge event and all the Asian and European markets
suffered. To some extent it was triggered by our drop on
Wednesday. Still the outlook looked VERY negative at the
open and a triple digit Dow drop looked like a certainty.
When the Dow opened down -50 it was immediately met with
a very large buy program that consumed immense amounts of
selling volume as it powered the markets higher. Within
20 min the Dow was back in positive territory and the
buying stopped. Almost immediately another drop began and
again only 10 min later another large buy program blasted
the average to a new high. Bears were dumbfounded and
shorts thinking they had a free ride after the drop in Asia
were starting to think about covering. Over the next hour
the indexes bled points but very slowly as nobody knew
what was happening. About 11:20 the Dow touched a new low
and immediately was met with more buy programs. By noon
traders were glazed over and the Dow was stuck just below
9600 where it hovered for two hours. Traders simply did
not know what was happening. Shorts and longs alike were
afraid to trade and volume slowed to a crawl.

About 2:PM there appeared to be a surge in short covering
in front of MSFT earnings but the bears gained confidence
when the Dow could not break to a new high. They were
able to knock it down once again but each dip was met
with new buy programs. Market on close orders were
weighted to the buy side and bears gave up. S&P Futures
were 1032 at the cash close and they managed to close
the Dow back over 9600. Amazing. Unfortunately once the
earnings began to hit the wire the selling began again
in earnest and once MSFT spoiled the party the futures hit
a new low for the day at 1018.75 and significantly down
from the close. As I type this at 6:30 they have recovered
to 1021.50, -7.50 with Nasdaq futures down -17.00.

What a day. Volume was very strong with over 2 bil shares
on the NYSE and 1.93B on the Nasdaq. Because of the huge
buy programs the down volume was only 4:3 over up volume.
It appeared at the close that somebody with big money had
rescued the markets just when they needed it worst. The
reaction to the after hours earnings brings that rescue
back into question.

There are multiple reasons for the after hours negativity.
First, MSFT did not uphold the standard set by Intel and
Yahoo. Great earnings expectations had been priced into
the market and we are seeing those great expectations
slowly deteriorate into just good news sprinkled with
some weaker than expected guidance. Is this going to
cause a further dip? Odds are good but after today I
would not bet on it. Deep pockets bought the open this
morning to hold up the markets. Not to buy stock at
bargain prices but to hold up the market. Think about it.
If you were going to buy billions of dollars in stock
today and the market was showing a triple digit drop
before the open, possibly a -200 day or more, then why
would you buy immediately at the open at -25? Would you
not rather wait for an hour or so to get a better price?
Wouldn't you be afraid that the negativity at the open
could cause that drop AFTER you spent those billions
and put you in a significant loss before the day was
over? Any reasonable trader with far less money at stake
would have waited for the drop to slow before buying the
dip. This smacks of market manipulation by somebody.
Somebody with very deep pockets. The conspiracy theorists,
including me, were speculating that the Fed could be
propping up the markets to keep the recovery hopes alive.
Another possibility is Japan. With the Nikkei tanking
-5% overnight from multiyear highs on fears about a weak
U.S. recovery then what better way to spend some of those
billions in dollars they have been hoarding than to buy
the U.S. market. They have been spending billions each
week trying to control the currency rates and boosting
our markets would certainly help their markets.

Another possibility was mutual fund related. Funds have
been beaten so badly for the last two years that they are
scared. They are riding a huge rally wave that could have
been about to crumble. Investors had poured in more than
$4.3 billion into funds each of the last two weeks and
funds had a vested interest in keeping the markets up.
A sharp correction could stem the flow of money and
blunt investor sentiment for a couple more months. The
only question is did the funds have enough money to
orchestrate the massive buying and head off the opening
crash? If so which one? Was it a team effort and if so
then how did they coordinate it? Far too many questions
and no answers.

The real question is what about tomorrow? What a tossup!
We have yet to see how the Asian markets are going to
respond to tonight's earnings. Futures have stabilized
at about 1021 for the time being and while negative they
have at least quit falling. Traders are confused. Each
time the markets reached resistance today the retail
buyers disappeared. The buy programs provided the reversal
momentum but nobody jumped on the train at the highs.
Shorts were never forced to cover because resistance
levels were never broken. If Asia shakes off the earnings
from MSFT and others and their oversold conditions from
Thursday then we may have a chance. If the deep pockets
from this morning are still around at the open on Friday
then they might be able to build on any Asian gains. If
the reverse happens and Asia tanks again then it may take
more than deep pockets to slow us down at Friday's open.

T.G.I.F, at least most big drops do not occur on Fridays.
Fridays are not immune but they tend to be less severe.
Traders leaving early for the weekend and trying to
capture profits for the week tend to equalize the
opposing pressures. Odds favor a range bound day without
a big move in either direction but then odds favored a
huge drop at the open today and it did not happen. Amazing
how that VXO at 17.50 worked on Wednesday. But then most
assume it was just a coincidence. (grin)

Now that MSFT has announced the earnings week is winding
down and there will be little to capture investor attention.
Less than 50 companies report on Friday and there are no
major names. With six days left in October I would not
count this month out just yet. Keep your fingers crossed
and seatbelts fastened.

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

AT&T Corporation - T - close: 19.16 change: -0.35

WHAT TO WATCH: The pre-emptive rally in shares of T has been
smashed into non-existence, as investors have run for the exits
in the past 3 days.  First breaking below $20, the stock suffered
further technical damage on Thursday by falling through the 200-
dma and it appears headed significantly lower, perhaps into the
$15-16 area.  The best entries will likely come from a failed
rebound below $20.




---

Electronics Boutique - ELBO - close: 29.25 change: -1.61

WHAT TO WATCH: With all the weakness being seen in the shares of
the video game stocks, it's no surprise to see shares of ELBO
getting hit hard in the past couple days.  Today's break of the
20-dma/50-dma is a significant blow to the bulls and it appears
headed for $25-26.  Optimum entries would come on a failed
rebound below those moving averages.




---

MDC Holdings - MDC - close: 65.99 change: +1.32

WHAT TO WATCH: Shares of MDC have been consolidating right at
all-time highs following a sharp runup in early October.  After
two weeks of chipping away at $65 resistance, the stock broke out
today and on strong volume.  Look for upside continuation to $70
and possibly even to the $75 area.




---

Meritage Corp. - MTH - close: 57.82 change: +1.82

WHAT TO WATCH: Another breakout!  MTH has been whipping around
near its all-time highs in volatile fashion over the past couple
weeks, but the bulls certainly asserted control today.  The stock
shot higher on strong volume, resulting in a new closing high.
Entries near current levels look good, with the next upside
target in the $61-62 area.






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

JBLU $61.80 - Sell the news!  Strong earnings and revenue growth
wasn't enough for investors in JBLU today, as they rushed to lock
in profits because the results weren't "good enough".  That broke
the stock's rising trendline and it looks like there could be
more downside in store.  There's solid support in the $59-60
area, but if that gives way, it could be a steep slide lower.
Target a drop to $57 near-term.

SMTC $21.19 - The earnings warning from KLAC last night sent
shock waves through the entire Chip sector and SMTC wasn't
immune, suffering a 4.4% loss on Thursday.  This could be just
the tip of the iceberg and continuation below the 20-dma looks
like a sure bet to test major support near $18.50.  The best
entries will come from a failed bounce near $22.

ICOS $42.40 - Biotechs have not been faring well recently, but
shares of ICOS are bucking the trend of weakness and continuing
to consolidate near strong resistance at $43.50.  A breakout over
that level looks like a solid entry setup.  While there's some
additional resistance in the $45-46 area, the stock looks capable
of making a run to the $50 level.



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


Bewildered.
- J. Brown

Investor sentiment today can probably best be summed up in one
word: confused.  The massive declines in the Japanese NIKKEI last
night (down more than 500 points) should have sent our own
markets into free fall.  This is especially true considering the
earnings miss and lowered guidance from KLAC last night.  Yet
despite all the negativity the $INDU managed to close in the
green and the NASDAQ cut its losses in half.  Market veterans
immediately began to wonder what magic was afoot.

Jim does an excellent job in the wrap tonight discussing some of
the theories on why our markets didn't melt down today so I won't
belabor the point.  Potentially contributing to the mixed markets
were the positive jobless claims number today and expectation
over MSFT's earnings.  However, now that MSFT has announced, the
news is not sitting well with investors.  Friday is liable to be
weak with most of the selling focused on tech issues.

Next week is the last full week of October.  While we will
continue to hear from corporate earnings there are numerous
economic events that are likely to take center stage, not the
least of which is the FOMC meeting on the 28th.  Trade carefully!


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

Market Averages

DJIA ($INDU)

52-week High:  9850
52-week Low :  7197
Current     :  9613

Moving Averages:
(Simple)

 10-dma: 9730
 50-dma: 9523
200-dma: 8799

S&P 500 ($SPX)

52-week High: 1053
52-week Low :  768
Current     : 1033

Moving Averages:
(Simple)

 10-dma: 1042
 50-dma: 1020
200-dma:  943

Nasdaq-100 ($NDX)

52-week High: 1439
52-week Low :  795
Current     : 1378

Moving Averages:
(Simple)

 10-dma: 1407
 50-dma: 1356
200-dma: 1178


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


The VXO has rebounded from its recent lows as have the VIX and
VXN.  Together they all remain very "oversold" for lack of a
better term indicating the markets are still primed for more
weakness.

CBOE Market Volatility Index (VIX) = 17.68 +0.01
CBOE Mkt Volatility (old vix)(VXO) = 19.13 +0.07
Nasdaq Volatility Index (VXN)      = 26.09 +0.41


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.85        579,837       493,493
Equity Only    0.72        493,194       354,797
OEX            1.45         15,490        22,420
QQQ            2.28         21,291        48,493


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

Bullish Percent Data

           Current   Change   Status
NYSE          73.2    + 0     Bull Confirmed
NASDAQ-100    75.0    - 3     Bear Correction
Dow Indust.   83.3    + 0     Bull Correction
S&P 500       79.2    - 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-dma: 1.21
10-dma: 1.09
21-dma: 1.09
55-dma: 1.06


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    1321      1281
Decliners    1482      1771

New Highs     102       140
New Lows       10        13

Up Volume   1049M      613M
Down Vol.    943M     1286M

Total Vol.  2003M     1927M
M = millions


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

Commitments Of Traders Report: 10/14/03

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

Unfortunately we're still not seeing much change in sentiment
for the Commercials in the big S&P futures.  They remain slightly
net short.  Small traders aren't making many moves either and
they remain net long.


Commercials   Long      Short      Net     % Of OI
09/23/03      395,123   397,858   ( 2,735)   (0.0%)
09/30/03      395,713   397,577   ( 1,864)   (0.0%)
10/07/03      390,232   402,964   (12,732)   (1.6%)
10/14/03      391,972   410,299   (18,327)   (2.3%)

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
09/23/03      139,482    87,981    51,501     22.6%
09/30/03      144,681    96,801    47,880    19.8%
10/07/03      138,644    88,018    50,626    22.3%
10/14/03      133,940    86,418    47,522    21.6%

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

It's the same story here.  Commercials increased their positions
in both longs and shorts but remains slightly net short.  Small
traders trimmed some short positions and opened 30K more long
contracts just in time for the late week weakness.


Commercials   Long      Short      Net     % Of OI
09/23/03      109,417   204,026   ( 94,609)  (30.2%)
09/30/03      163,828   218,991   ( 55,163)  (14.4%)
10/07/03      212,273   225,377   ( 13,104)  ( 3.0%)
10/14/03      221,897   233,066   ( 11,169)  ( 2.5%)

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
09/23/03      175,750    62,558   113,192    47.5%
09/30/03      131,698    65,259    66,439    33.8%
10/07/03      134,990    63,560    71,430    36.0%
10/14/03      161,208    59,213   101,995    46.3%

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


NASDAQ-100

Sorry...no big changes for the Commercial traders here either.
They remain net short while the Small Trader remains net long.


Commercials   Long      Short      Net     % of OI
09/23/03       32,648     42,565   ( 9,917) (13.2%)
09/30/03       33,571     42,993   ( 9,422) (12.3%)
10/07/03       33,253     40,861   ( 7,608) (10.3%)
10/14/03       34,639     41,880   ( 7,241) ( 9.5%)

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
09/23/03       17,862     9,880     7,982    28.8%
09/30/03       19,803     9,917     9,886    33.3%
10/07/03       18,182     9,688     8,494    30.5%
10/14/03       16,822     9,046     7,776    30.1%

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 one seems willing to make any big bets.  Commercials have
been stuck in the same range for weeks now and remain net long
the DJ futures.  Small traders took some money out of their long
and dumped some of it into shorts but not much.


Commercials   Long      Short      Net     % of OI
09/23/03       15,911     9,123    6,788      27.1%
09/30/03       16,561     8,932    7,629      31.5%
10/07/03       16,277     9,528    6,749      26.2%
10/14/03       16,595     9,433    7,162      27.5%

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
09/23/03        7,505     7,779   (  274)   ( 1.8%)
09/30/03        7,578     8,125   (  547)   ( 3.5%)
10/07/03        7,392     7,910   (  518)   ( 3.4%)
10/14/03        6,427     8,495   (2,068)   (13.9%)

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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The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                Thursday 10-23-2003
                                                   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:     Inside Inside Day

Stop Loss Adjustments:  TTWO

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


Take-Two Interactive - TTWO - cls: 37.20 chg: -1.23 stop: 39.50*new*

Company Description:
Headquartered in New York City, Take-Two Interactive Software,
Inc. is an integrated global developer, marketer, distributor,
and publisher of interactive entertainment software games and
accessories for the PC, PlayStation. game console, PlayStation.2
computer entertainment system, the Xbox. video game system from
Microsoft, Nintendo GameCube(TM) and Nintendo Game Boy Advance.
The Company publishes and develops products through its wholly
owned subsidiary labels: Rockstar Games, Gotham Games, Gathering,
Joytech and Global Star. The Company maintains sales and
marketing offices in Cincinnati, New York, Toronto, London,
Paris, Munich, Vienna, Milan, Sydney, Amsterdam and Auckland.
(source: company press release)

Why we like it:
It looks like we may have caught a top in shares of TTWO, as this
aggressive bearish play is definitely moving in our favor.  After
last Friday's downdraft, the stock found support just below $39
and rebounded on Tuesday to close just under $40.  That bounce
turned out to be a great entry, as TTWO gapped down today and
proceeded lower into the close, shedding nearly 4% by the end of
the day.  So far, it is just normal profit taking after running
to new all-time highs recently.  But we could be looking at a
sell-the news event in the wake of competitor ERTS' earnings
report after the close.  ERTS is trading down nearly $5 after
beating estimates, guiding higher and announcing a stock split.
That definitely looks like selling the news.  TTWO is trading
down in sympathy, currently at $37.00 in the afterhours session
vs. its $38.43 regular session close.  There's some pretty decent
support in the $36-37 area and a near-term rebound would not be
surprising.  Conservative traders may look to harvest some near-
term gains on a rebound from that area.  Our next viable shot at
a solid entry point is likely to come from a failed rebound in
the $38.50-39.00 area.  Lower stops to $40.90, which is just
above yesterday's intraday high.

Why This is our Play of the Day
Just as we noted in last night's update, TTWO began the day under
some pretty stiff selling pressure this morning, which drove the
stock as low as $35.10 before the buy-the-dip crowd showed up.
Hopefully some of you took advantage of that dip to lock in some
gains before the rebound.  Today's big drop left behind a sizable
gap ($36.72-38.43) and today's close back inside that gap hints
at a pending fill of that gap.  We're looking for any rise to the
top of the gap to meet with stiff resistance from the combination
of the top of the gap and the 20-dma ($38.25) and that's where
we'd recommend looking for new entries.  We're still looking for
an eventual decline into the $33-34 area near-term with a very
real possibility of a droop down to fill the early September gap
between $30-32.

Annotated Chart of TTWO:


Picked on October 19th at  $39.34
Change since picked         -2.14
Earnings Date            12/03/03 (unconfirmed)
Average Daily Volume =       1.08 mln





==================================================================
STOP LOSS ADJUSTMENTS
==================================================================


TTWO - Adjust from $40.90 down to $39.50


==================================================================
Stock Splits/Announcements
==================================================================


Countrywide Declares 4-for-3 Split

Before today's opening bell, Countrywide Financial Corporation's
(NYSE:CFC) Board of Directors declared a 4-for-3 stock split of
its common shares, and announced a new cash dividend.

The payable date on the stock split is December 17th, 2003 to
shareholders on record December 2nd.  CFC also announced that
they would increase their cash dividend to $0.20.  The payable
date on the cash dividend is December 1st, 2003 to shareholders
on record November 12th.

About the company:
Founded in 1969, Countrywide Financial Corporation is a member of
the S&P 500, Forbes 500 and Fortune 500. Through its family of
companies, Countrywide provides mortgage banking and diversified
financial services in domestic and international markets.
Mortgage banking businesses include loan production and servicing
principally through Countrywide Home Loans, Inc., which
originates, purchases, securitizes, sells, and services primarily
prime- quality loans. Also included in Countrywide's mortgage
banking segment is the LandSafe group of companies that provide
loan closing services. Diversified financial services encompass
capital markets, banking, insurance, and global, largely through
the activities of Countrywide Capital Markets, a mortgage-
related investment banker; Countrywide Bank, a division of
Treasury Bank, NA, a banking entity offering customers CDs, money
market accounts, and home loan products; Balboa Life and Casualty
Group, whose companies are national providers of property,
liability, and life insurance; Balboa Reinsurance, a captive
mortgage reinsurance company; Countrywide Insurance Services,
Inc., a national insurance agency offering home-related insurance
products; and Global Home Loans, a European mortgage banking
joint venture in which Countrywide holds a majority interest. For
more information about the Company, visit Countrywide's website
at www.countrywide.com.
(Source: Company Web Site)

---

KSWS seeks shareholder approval for a 2-for-1 stock split

Before today's opening bell, K-Swiss Inc. 's (NASDAQ:KSWS)
announced its Q3 earnings report and in that announcement
included plans for a 2-for-1 stock split.

KSWS Board of Directors is calling for a special meeting of
stockholders to be held in early to mid-December 2003.  The
purpose of the meeting is to approve an increase in authorized
shares.  Once approved the Board will declare a 2-for-1 stock
split to be enacted as a 100% stock dividend.

KSWS last split 2-for-1 in June 2002.

About the company:
K-Swiss Inc. designs, develops and markets an array of athletic
footwear for high performance sports use, fitness activities and
casual wear under the K-Swiss brand. The Company also designs and
manufactures footwear under the Royal Elastics and National
Geographic brands. Royal Elastics, a wholly owned subsidiary, is
the leading innovator of slip-on, laceless footwear. National
Geographic Footwear, under an exclusive license from the National
Geographic Society, offers outdoor-oriented and casual footwear.
(Source: Company Press Release)



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

VZ      Verizon Communications     33.24     +0.77
KMB     Kimberly Clark Corp        51.94     +0.66
WSH     Willis Group Holdings      32.75     +0.75
HET     Harrah's Entertainment     44.51     +2.11
IRGI    Inveresk Research Group    24.00     +2.33
AZR     Aztar Corp                 22.25     +2.94

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

QSFT    Quest Software              14.71     +1.25
NUS     Nu Skin Enterprises         15.10     +1.35
THER    Therasense Inc              16.82     +4.30
LNCE    Lance Inc                   11.80     +1.14
CACS    Carrier Access Group        10.07     +1.93
MTXX    Matrixx Initiatives         13.87     +2.16

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

AZN     Astrazeneca Plc             48.90     +2.53
LLY     Eli Lilly & Co              65.10     +4.32
DOW     Dow Chemical Co             36.22     +1.37
GDW     Golden West Financial       98.68     +3.00
ZMH     Zimmer Holdings             62.00     +3.28
COF     Capital One Financial       62.48     +2.38
CFC     Countrywide Financial      104.43     +8.77

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

SNE     Sony Corp                   34.49     -2.66
CL      Colgate-Palmolive Co        53.19     -4.57
ACL     Alcon Inc                   53.16     -3.57
KLAC    KLA-Tencor                  53.49     -4.56
PLD     Prologis                    29.43     -1.86
MERQ    Mercury Interactive         43.84     -5.22
HSC     Harsco Corp                 37.50     -1.36
POWI    Power Integrations Inc      34.30     -3.95
AMMD    American Medical Systems    20.61     -2.62

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

PD      Phelps Dodge Corp           54.88     -1.12
JBLU    JetBlue Airways             61.80     -6.16
ZBRA    Zebra Technologies          56.28     -2.12
SMTC    Semtech Corp                21.19     -0.98





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