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Daily Newsletter, Tuesday, 12/02/2003

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PremierInvestor.net Newsletter                 Tuesday 12-02-2003
                                                   section 1 of 2
Copyright  2003, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment

In section one:

Market Wrap:      Like Moths to a Flame
Watch List:       WMT, ELBO, TEVA, LH and more!
Market Sentiment: Treading Water

MARKET WRAP  (view in courier font for table alignment)
      12-02-2003           High     Low     Volume Advance/Decline
DJIA     9853.64 - 45.40  9900.45  9837.27 1.77 bln   1582/1608
NASDAQ   1980.07 -  9.80  1996.08  1978.23 1.78 bln   1580/1696
S&P 100   524.71 -  1.89   527.02   523.85   Totals   3162/3304
S&P 500  1066.62 -  3.50  1071.22  1065.22 
W5000   10441.68 - 29.40 10492.66 10432.96
RUS 2000  553.60 -  0.99   557.42   553.28 
DJ TRANS 2936.36 - 25.20  2964.24  2935.45   
VIX        16.27 -  0.50    16.89    16.17
VXO (VIX-O)16.42 +  0.45    16.90    15.99
VXN        26.72 +  0.43    26.94    25.81 
Total Volume 3,824M
Total UpVol  1,496M
Total DnVol  2,270M
52wk Highs 1106
52wk Lows    23
TRIN       1.31
NAZTRIN    1.33
PUT/CALL   0.71

Market Wrap

Like Moths to a Flame

The bulls gravitated to overhead resistance at 9900/2000 again
and like moths dodging a flame they were careful to stay just
out of touch. The Dow just nicked the 9000 level by .45 of a 
point right at the open and then wandered lower but within
reach the rest of the day. The Nasdaq traded less than four
points from 2000 before getting its wings singed by a sell 
program that could have been triggered by a proximity fuse.

Dow Chart

Nasdaq Chart

The day started out on a bad note after the weekly Retail 
Sales dropped -0.1% despite two of the strongest sales days
of the year. Not a good sign in my opinion. There were all
kinds of excuses about weather, inventory shelving and 
competition but the bottom line was weaker than expected
sales. All the smoke about the improved employment picture
suddenly cleared and analysts saw that the change of 200,000
jobs over the last couple months did little to give consumers
cash to buy gifts. Yes, the trend has changed but not strong
enough to produced a new wave of broad based employment. 
Consumers are still hoarding cash. While the news reports
were full of early bird specials on Friday the rest of the
weekend was tame in comparison. 31% of consumers surveyed 
said they were going to spend less this year. Only 22% said
they were going to spend more. 35% said they were going to 
wait until the last two weeks of the holiday season. Wal-Mart
fell to a new five-month low of 53.02 on the disappointing

That employment picture continued to improve with the November
Challenger Layoff report showing a drop of 40% in the numbers
from October. In November there were 99,452 job cuts announced
compared to 171,870 in October. This was encouraging but the
number was still well above the 60-70,000 levels from last
summer. The elevated levels still show that companies are 
trying to cut costs rather than staff up for the recovery. 
We will get another look at employment on Friday with the 
November Jobs report. The estimate is for a gain of +140,000
jobs compared to +126,000 in October. This will be a critical
report. If the number falls but remains positive it may not 
be disastrous but a negative number would be a disaster. 
Also, we need to watch for a revision of the number from 
last month. The November whisper number is nearing +200,000
and is way out of line in my opinion. This is setting us up 
for a serious disappointment. 

If we get a blowout number then the FOMC meeting on Tuesday
will be a major market event. A strong jump in jobs would
insure a removal of the "considerable period" statement and
possibly a change in the bias to tightening. A drop in the
number of jobs to +50K or so would keep the recovery on a
tentative basis and the Fed may feel more comfortable in 
leaving things alone. This is a critical report and the 
outcome will directly impact the Tuesday Fed meeting. This
puts the markets on notice that things could change quickly
and could stimulate some cautionary selling. 

The Auto Sales data was mostly positive today with only
Ford posting negative numbers for the month. GM posted a
+22% gain in overall sales and +30% gain in trucks. DCX
showed a minor +3% gain with Nissan up +15%. Ford fell -2%
for the period. Cadillac was a strong GM performer with a
whopping 40% gain. GM raised production targets by 10,000
units for the quarter. Incentives are also creeping up
with the average expected to be +$4000 in December. The
automakers were mostly optimistic about coming quarters
and are looking forward to strong sales in the 1Q boosted
by the next $150 billion in tax stimulus to consumers. 

Another fund was hit with charges today but unlike the
others vowed to fight the charges. Invesco Funds said they
had done nothing wrong despite the charges levied on them
for late trading and market timing. The war of words flew
both directions all day and Invesco posted a strongly
worded rebuttal on their website. They said they had done
nothing wrong and the charges will be "vigorously contested".
They claim they never participated in late trading and that
their market timing trades were permissible and not contrary
to the best interests of the shareholders. 

The Dollar plunged again on the currency markets and with
the drop in the dollar came the rise in gold to a high of
$407 and a close at 404.80. All commodities continue to 
rise on the recovery hopes and in some cases terror threats.
Oil rose over $30 a barrel once again after a three day dip
under that technical level. Cold weather also helped jack
up oil prices but new terror threats continue to put strain
on potential availability of future supplies.  

The markets today were very cautious. The initial Dow tick
to 9900 triggered some light selling that pushed the index
back to support at 9850 and it spent the rest of the day 
between 9850-9890. Well within striking distance of 9000
but maintaining a cautious distance away. The Nasdaq 
struggled to within 4 points of 2000 around 2:PM and after
lingering in the area for about 15 min a very strong sell
program triggered that knocked it back to just above 1980. 

What I believe we are seeing is fear of round numbers. That
is fear of round number targets. Nasdaq 2000 is obviously
a target that has been in trader sights since Jan-2002 when
we dipped below that level. After nearly two years the
Nasdaq is drawing back to that now strong resistance and
there are a lot of investors that will be very happy to 
just get out alive when that number is reached again. They
have been holding for this event to get even for two years.
The last rebound over 2000 came on Dec-5th 2001 from the
post 9/11 Nasdaq low of 1387. Euphoria was high and techs
were soaring. They traded in the 2000 range for a little
over a month before slipping back below 2K on Jan-15th. 
Traders were sure it was just a profit taking dip from the
+600 point bounce and many held their positions until it
was too late or too expensive to exit. Now two years later
and after a dip to 1100 they are almost back to where they
started. With memories of a +50% bounce failing at 2000
in 2002 they are probably plenty of fears of the current 
+81% bounce to 2000 in 2003 failing as well. 

Many funds have accumulated huge profits with this bounce 
and they are probably very worried that somebody will 
blink before Dec-31st and start a cascade of profit taking.
I have speculated that a touch of 2000 would trigger some
sell programs from profit takers. When the Nasdaq stalled 
only 4 points away from 2000 for about 15 min this afternoon
I suspect the pressure was too much to bear for whomever
pulled the trigger on the big program. If you have been
waiting for months for that target to be hit and your bonus
is riding on your funds performance then cheating by four
points makes sense to me. 

Did that relieve the performance anxiety for the next touch
of that level? I doubt it. The same thing has been happening
at Dow 9900 but not in the same volume. The big programs
are probably waiting for D10K and as long as we linger in
in the 9850-9900 range they may not decide to adjust the
triggers. The danger here is a perceived lack of progress.
We have been stopped dead at 9900 on every attempt since
November 3rd. 9900 is the down trend resistance since Jan
2000 and very strong resistance. However this is December
and typically the second strongest month of the year. The
economy is exploding according to most economic reports 
and investors are throwing money at mutual funds despite
the scandals. 

This scenario is setting the markets up for massive end
of year confusion. Retail investors are buying and 
institutional investors, hedge funds and mutual funds are
trapped in high flying stocks with no easy way out. With 
cash flowing into funds in near record amounts it is tough
to justify selling winners. It is tougher to find a place
to put the new money. Hedge funds may have large profits 
but are paid on year end results. They do not want to sell
now unless they have to. What we have is a confluence of
major buying pressure and major selling pressure with the
calendar counting down to the year end deadline. 

This has caused stagnation at the 52-week highs. There 
is not enough buying pressure to push us over 9900/2000 
top. They are happy to buy the dip but they do not want
to buy the top. The market is perceived as fully priced
despite the exploding numbers. It is fully priced because
the market expected the economy to recover. It expected
double digit earnings growth in the 3Q and 4Q because 
all the analysts had been predicting it since January. 
It was the 3rd year they predicted it but that is another
story. You could make a case for a stronger than expected
gain due to the GDP but very few traders believe that 
number anyway.

This leaves us in serious confusion. Over the last 50
years the S&P has gained an average of +1% in December.
Last year the S&P lost -6%, -80 points in December. The 
high for the month was set on 12/2. In Dec-2001 the high
was set on 12/5 and then the S&P dropped -60 points into
the middle of the month. In 2001 the high was set on the 
11th and the S&P dropped -136 points by the holidays. 

The bottom line here is that we have a recent historical
trend that suggests the high for the month could be set
early and then portfolio rebalancing, year end profit
taking, etc puts pressure on the market. We definitely
have profits to take. To be fair the prior three years
for comparison were all bear market years. Somehow when
traders look back to see prior seasonal patterns they
tend to overlook the bigger trend. 

While that bigger trend would work in favor of the analysts
when just looking a the prior three Decembers there is a
bigger trend that works against us. That is the downtrend
from Jan-2000. It intersects at Dow 9900 and is serious
Dow Weekly Chart

I would also note that three of the last four Januarys have
seen significant losses. 2003, nearly -900 points off its 
highs, 2002, nearly -800, 2001, -550. 2000 had two separate
drops in January of -600 and -1050 points. A very volatile

I have gone to great lengths to paint the picture for the
next six weeks. We have rebounded +80% on the Nasdaq and 
+34% on the Dow. The rebound has stalled exactly at strong
downtrend resistance. There is very strong overhead supply
at D10K and N2K. Portfolio managers are looking at the
recent January trends and thinking "how much longer should
I hold" or "how much farther can we go?" In each case they
are risking a lot with very little upside left. I say very
little upside because any move over 9900 will draw the D10K
sellers that are getting out early. 

In my previous commentaries I wrote that I expected a bounce
to 9900 this week and then a slight sell off for a week or 
so, then a bounce into the holidays. That holiday bounce 
rarely reaches the prior highs for the month. I suggested 
that any breakout to 10,000 would be sold heavily. At 
present I am not seeing any catalyst to produce that 
breakout. We have ISM Services tomorrow but that is not a 
big report. After ISM Manufacturing the services number is
assumed to be ok and traders look elsewhere. Friday is the
big one with the Jobs Report. With the whisper number 
around +200K we could be disappointed. Add in the rate 
anxiety for next Tuesday and traders have more to worry 
about than they do to be excited about. 

The prediction for the rest of the week is high risk. We
could move up but I think the bulls are starting to weaken.
They have over indulged on good news for weeks and the Jobs
Report is the desert. The harsh reality of the FOMC meeting
could be the heart attack that shocks them awake and begins
the slim down diet. I would love to see them get their second
wind and race off into the holidays and bust through 10,000
like a marathon runner through the tape but that only sets
up another "what now" scenario. I would suggest we don't
get our hopes too high and not be surprised if December is
disappointing. Keep the faith until the red candles begin 
to appear but keep one eye on the exit.

Enter Very Passively, Exit Very Aggressively!

Jim Brown


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.


Wal-Mart Stores - WMT - close: 53.02 change: -1.48

WHAT TO WATCH: As the bellwether for the Retail sector, WMT's 
weakness may be telling us something important.  After a sharp 
drop from the $58 area in mid-November, the stock consolidated 
and then broke down again over the past two days and looks 
destined for major support in the $48-50 area.  With solid 
support in the $51.50-53.00 area, chasing the stock lower isn't 
what would be termed a high-odds strategy.  But another failed 
rebound below the 200-dma ($55.35) can be used for establishing 
bearish positions ahead of that decline down to major support.


Electronics Boutique Holdings - ELBO - close: 22.83 change: -1.33

WHAT TO WATCH: The holiday shopping season may be underway, but 
shares of ELBO do not seem in a festive spirit.  The stock is 
still under pressure from the reduced guidance issued a month ago 
and it appears ready to break under the consolidation zone that 
has been holding for the past few weeks.  Trigger entries on a 
break below $22.40 and look for a decline down towards solid 
support in the $17-18 area.  That is the reasonable measuring 
objective based on the premise that the early November drop 
(roughly $6) should be repeated once this consolidation breaks.


Teva Pharmaceutical - TEVA - close: 61.33 change: +0.16

WHAT TO WATCH: After roughly 3 months of consolidation, shares of 
TEVA are on the move again.  The initial bullish move came last 
week as the stock surged above the 3-month descending trendline 
and the buying pressure has continued this week, with the past 
two days seeing a concerted effort to push through resistance in 
the $61.50-62.00 area.  So far, the bears have kept things in 
check, but a close over $62 should have the momentum players 
coming back.  Technically, the stock has already broken out, as 
today's close represents a new all-time closing high.  Based on 
the bullish PnF chart ($77 price target), TEVA still has room to 


Laboratory Corp. - LH - close: 36.80 change: +0.43

WHAT TO WATCH: After falling out of its rising channel back in 
August, LH build a solid base just above $28 leading up to the 
mid-October upside explosion.  That bullish move took the stock 
back inside its rising channel and price action has been looking 
strong.  Rising again on Tuesday, LH is poised just below its 
mid-November highs and looks ready to break out.  If successful, 
the stock should make a run up towards solid resistance near $40, 
which is also the top of the channel.  Use a trigger of $37 for 
entry and a stop of $35.50 (just below the bottom of the 
channel), targeting a move to $40.

On the RADAR Screen

BBY $58.52 - Instead of celebrating the positive economic news 
and a strong start to the holiday shopping season, investors have 
been selling shares of BBY and on strong volume.  Monday's rally 
attempt was turned back right at the top of the rising channel 
and it looks like the beginning of a move back towards the bottom 
of the channel.  This is clearly an aggressive bearish play, but 
if BBY breaks below the midline of its channel and strong support 
at $57.50, it would certainly make sense to play it to the 
downside for a retracement to the lower channel line at $52.  
Watch for potential support at the 50-dma, just over $55.

APA $73.56 - After a second pullback to confirm support at the 
50-dma, shares of APA have been charging sharply higher for the 
past several days, capping the move off on Tuesday with a 
breakout above $73 to new all-time highs.  The stock has been 
trading in a broad ascending channel for over a year now and 
given the recent price strength, a run to the top of that channel 
(currently just over $76) seems reasonable.  Consider momentum 
entries above $74 and pullback entries on a rebound from above 
$72 for a quick move towards that target.

CTSH $48.40 - Even a die-hard bull would get a touch of vertigo 
looking at the weekly chart of CTSH, as the stock has nearly 
tripled since March.  But the bulls keep pressing it higher in 
that persistent rising channel and once again managed a breakout 
to new all-time highs on Tuesday.  Optimum entries will come on a 
pullback near $47 support, while momentum entries can be 
considered on a break into the upper half of the rising channel 
above $49.  Target a quick gain to the upper channel line at $52.

Market Sentiment

Treading Water
- J. Brown

It was a relatively quiet day on Wall Street.  There were no 
major economic reports.  No corporate earnings and very little on 
the scandal front today.  Stocks and major averages merely 
churned sideways as if digesting a portion of Monday's big gains.  
This is in essence another victory for the bulls.  With such a 
clear lack of sellers it could instill even more confidence for 

Technical fans will note that the ARMS index's 5-dma has dropped 
to a bearish reading of 0.81.  Traditionally readings under 0.85 
are bearish and indicate a market top is close by.  Of course the 
real question now is will anyone take notice?  Traders have been 
ignoring the VIX, another technical indicator, for months.

Tomorrow brings the revised Q3 productivity numbers and the ISM 
services index.  Both pale under the importance of Monday's ISM 
factory number and investors are probably looking ahead to 
Friday's employment report and next Tuesday's FOMC meeting.  

Trade carefully and watch those stops.  


Market Averages


52-week High:  9903
52-week Low :  7197
Current     :  9853

Moving Averages:

 10-dma: 9665
 50-dma: 8882
200-dma: 9740

S&P 500 ($SPX)

52-week High: 1071
52-week Low :  768
Current     : 1066

Moving Averages:

 10-dma: 1050
 50-dma: 1040
200-dma:  968

Nasdaq-100 ($NDX)

52-week High: 1453
52-week Low :  795
Current     : 1431

Moving Averages:

 10-dma: 1403
 50-dma: 1396
200-dma: 1232


As the markets churned sideways so followed the volatility 
indices.  There is little change and they all continue to 
urge caution for bullish investors.

CBOE Market Volatility Index (VIX) = 16.27 -0.50
CBOE Mkt Volatility old VIX  (VXO) = 16.42 +0.45
Nasdaq Volatility Index (VXN)      = 26.72 +0.43


          Put/Call Ratio  Call Volume   Put Volume

Total          0.71        735,096       524,620
Equity Only    0.52        601,278       314,983
OEX            1.13         20,089        22,789
QQQ            1.11         21,419        46,036


Bullish Percent Data

           Current   Change   Status
NYSE          73.8    + 1     Bull Confirmed
NASDAQ-100    75.0    + 2     Bear Correction
Dow Indust.   80.0    + 0     Bull Correction
S&P 500       81.6    + 2     Bull Confirmed
S&P 100       79.0    + 1     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: 0.81
10-dma: 1.11
21-dma: 1.11
55-dma: 1.14

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


Market Internals

            -NYSE-   -NASDAQ-
Advancers    1378      1467
Decliners    1436      1652

New Highs     536       408
New Lows       13        10

Up Volume    709M      408M
Down Vol.    956M       10M

Total Vol.  1689M      1771M
M = millions


Commitments Of Traders Report: 11/18/03

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

Will it never end?  The commercial traders refuse to move any
positions or make any more big bets in the full S&P futures
contracts.  They've been oscillating in the current range for
weeks.  Small traders have bumped up both their short and long
positions but they remain relatively equidistance from each other.

Commercials   Long      Short      Net     % Of OI
10/28/03      391,596   412,498   (20,902)   (2.6%)
11/04/03      391,079   415,136   (24,057)   (3.0%)
11/11/03      389,965   415,259   (25,294)   (3.1%)
11/18/03      393,893   414,442   (20,549)   (2.5%)

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
10/28/03      137,791    76,791    61,000    28.4%
11/04/03      137,829    78,206    59,623    27.6%
11/11/03      136,072    74,249    61,823    29.4%
11/18/03      147,842    80,047    67,795    29.7%

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

The e-minis are seeing some action.  Commercials upped their
short positions but not by too much.  Small traders also 
raised their short positions by 10K contracts (almost 20% of
outstanding shorts).

Commercials   Long      Short      Net     % Of OI 
10/28/03      220,171   260,644    (40,473)  ( 8.4%)
11/04/03      242,409   270,785    (28,376)  ( 5.5%)
11/11/03      249,864   258,503    ( 8,639)  ( 1.7%)
11/18/03      249,286   264,083    (14,797)  ( 2.9%)

Most bearish reading of the year: (354,835)  - 06/17/03
Most bullish reading of the year:  133,299   - 09/02/03

Small Traders Long      Short      Net     % of OI
10/28/03      123,569    59,742    63,827    34.8%
11/04/03      135,525    63,006    72,519    36.5%
11/11/03       94,649    51,815    42,834    29.2%
11/18/03       95,119    61,975    33,144    21.1%

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


Commercial traders are still stuck in limbo with outstanding
longs and shorts in NDX futures barely budging the last few
weeks.  Meanwhile small traders have turned more bullish with
a nice jump in outstanding long positions.

Commercials   Long      Short      Net     % of OI 
10/28/03       36,168     46,272   (10,104) (12.3%)
11/04/03       34,159     48,293   (14,134) (17.1%)
11/11/03       35,889     49,201   (13,312) (15.6%)
11/18/03       35,608     49,689   (14,081) (16.5%)

Most bearish reading of the year: (21,858)  - 08/26/03
Most bullish reading of the year:   9,068   - 06/11/02

Small Traders  Long     Short      Net     % of OI
10/28/03       21,640     8,830    12,810    42.0%
11/04/03       24,132     9,703    14,429    42.6%
11/11/03       26,212    10,730    15,482    41.9%
11/18/03       32,034    10,356    21,678    51.3%

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  19,088  - 01/21/02


Ditto here as well...commercials are not making any new big
bets and keeping the number of long and short contracts 
relatively unchanged.  Small traders appeared to have scaled
back on longs and inched up their shorts.

Commercials   Long      Short      Net     % of OI
10/28/03       20,504    11,366    9,138      28.7%
11/04/03       21,756    11,903    9,853      29.3%
11/11/03       20,209    11,660    8,549      26.8%
11/18/03       20,746    11,080    9,666      30.4%

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
10/28/03        5,295     8,864   (3,569)   (25.2%)
11/04/03        5,099     9,160   (4,061)   (28.5%)
11/11/03        6,105     8,201   (2,096)   (14.7%)
11/18/03        5,655     8,607   (2,952)   (20.7%)

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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PremierInvestor.net Newsletter                 Tuesday 12-02-2003
                                                   section 2 of 2
Copyright ) 2003, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment

Play of the Day:  No Weakness Here

Closed Play:      MCK, STLD

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  )

FLIR Systems - FLIR - close: 35.32 change: +0.35 stop: 32.65

Company Description:
FLIR is engaged in the design, manufacture and marketing of 
thermal imaging and stabilized camera systems for a wide variety 
of commercial, industrial and government applications.  The 
company's products are divided into two categories, which include 
the thermography products and imaging products.  In the 
Thermography division, FLIR manufactures products that are sold to 
commercial, industrial, research and machine vision customers. For 
industrial customers, FLIR has developed thermography systems that 
feature accurate temperature measurement, storage and analysis.  
The Imaging division caters to military, law enforcement, 
surveillance and security customers.

Why we like it:
Traders looking for some excitement on Friday had to be 
disappointed with FLIR's 63-cent range on volume that failed to 
even reach 100K.  It was a throwaway consolidation session, 
leaving FLIR in much the same condition where we left it on 
Wednesday -- just below it's all-time high, but with daily 
Stochastics having been buried in overbought now for the past 7 
sessions.  It certainly feels like a bit of consolidation or even 
a mild pullback is due.  The strongest near support appears to be 
near $33, although there is the potential for a dip and rebound at 
$33.50 or $34.00, both areas where the stock has consolidated on 
the way up.  The 20-dma has now reached $32.50 and even on a sharp 
pullback, we're looking for that average to continue in its 
supportive role.  So it appears safe to raise our stop to $32.40.

Why This is our Play of the Day
The broad market may have been rejected from resistance on 
Tuesday, but the same can't be said for FLIR, which finally broke 
out over the $35 resistance level, setting yet another 52-week 
high.  We can't exactly call the volume convincing as it continues 
to run well below the ADV.  But still price continues marching 
higher.  Higher highs and higher lows have been the pattern and it 
doesn't show any sign of ending either.  Intraday dips back near 
the 10-dma ($34.03) should serve as solid entry points into this 
bullish trend as FLIR continues to march up towards our $38 
target.  It won't set any speed records getting there, but 
sometimes slow and steady is a preferable mode of travel.  
Maintain stops at $32.65, just under last Tuesday's intraday low 
($32.81) and the 20-dma ($32.89).

Annotated Chart of FLIR:

Picked on November 23rd at  $33.90
Change since picked          +1.42
Earnings Date              1/21/03 (unconfirmed)
Average Daily Volume =       422 K

Non-tech Active Trader section

Closed Plays

  Closed Bearish Plays

McKesson Corp. - MCK - close: 30.60 change: +0.77 stop: 30.30

Catching our attention just over a week ago, as it came down to 
test major support near $28, MCK looked like the ideal breakdown 
candidate, good for a nice $3-4 drop once that support gave way.  
The only problem is that the support never gave way, MCK's entry 
trigger was never satisfied and we watched with detached 
amazement as the stock steadily recovered through one apparent 
level of resistance after another.  Tuesday's rally took the 
stock through strong resistance just over $30 and violated our 
stop.  That removes the stock from consideration as a bearish 
trade candidate for now.  We'll count ourselves lucky that the 
play never triggered and look for better candidates.

Picked on November 23rd at  $28.26
Change since picked          +2.34
Earnings Date              1/22/03 (unconfirmed)
Average Daily Volume =    1.71 mln

High Risk/High Reward (HR) section

Closed Plays

  Closed Bullish Plays

Steel Dynamics - STLD - close: 19.75 change: -1.50 stop: $19.40

Although one writer opined that the ending of the steel tariffs 
was unlikely to hurt U.S. steelmakers, a McDonald Investments 
analyst had other concerns about the steelmakers.  Mentioning low 
steel prices and higher scrap metal costs, he downgraded STLD and 
fellow steelmaker Nucor (NUE).  Although STLD's downgrade was to 
a buy rating from the previous aggressive buy rating, perhaps 
some investors didn't linger to read that part.  STLD dropped to 
a low of $19.23, triggering our stop before it bounced again.  

Despite that bounce, the day's action tugged RSI out of territory 
indicating overbought conditions and completed a bearish cross on 
both the stochastics and the MACD.  Volume was above average, 
too, with the volume spikes occurring intraday as STLD dropped. 

STLD did bounce from above the 30-dma, not even dipping down to 
that important average, but today's action showed this high-risk 
play's vulnerability to the downside. We're closing the play. 

Picked on Nov 12 at  19.78
Change since picked: -0.03
Earnings Date:    10/22/03 (confirmed)
Average Daily Volume:  359 thousand

  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

WYE     Wyeth                      39.96     +0.51
FNM     Fannie Mae                 70.16     +0.57
COP     ConocoPhillips             58.70     +0.73
FRE     Freddie Mac                55.31     +0.65
GCI     Gannett Co                 88.93     +0.66
APA     Apache Corp                73.56     +0.77

Breakout to Upside (Stocks $5 to $20)

QLTI    QLT Inc                     18.93     +2.10
TIWI    Telesystem Intl Wireless     9.22     +1.07
ECLP    Eclipsys Corp               13.03     +2.80
CENX    Century Aluminum            18.71     +1.86
VTAL    Vital Images Inc            19.51     +1.36
MALL    PC Mall                     15.27     +1.31

Breakout to Upside (Stocks over $20)
OMC     Omnicom                     84.02     +3.95
ACE     Ace Ltd                     38.32     +1.25
EL      Estee Lauder Cos            39.71     +1.33
IMCL    Imclone Systems             42.58     +2.89
EASI    Engineered Support Sys      56.38     +1.84
USNA    Usana Health Sciences       36.76     +2.86

Breakout to Downside (Stocks over $20)

WMT     Wal-Mart                    53.02     -1.48
FDO     Family Dollar Stores        37.16     -1.44
DLTR    Dollar Tree Stores          31.50     -1.25
FS      Four Seasons Hotels         51.70     -1.90

Recently Overbought With Bearish Signals (Stocks over $20)

BBY     Best Buy Co                 58.52     -2.35
MBT     Mobile Telesys              77.81     -5.69
BREL    Boireliance Corp            42.38     -2.23

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