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Daily Newsletter, Tuesday, 12/09/2003

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PremierInvestor.net Newsletter                 Tuesday 12-09-2003
                                                   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:      Considerable Period
Watch List:       INTC, QLGC, UNP, HD and more!
Market Sentiment: Fed Stays, Investors Don't

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      12-09-2003           High     Low     Volume Advance/Decline
DJIA     9923.42 - 41.90 10003.12  9916.90 1.79 bln   1257/1954
NASDAQ   1908.32 - 40.50  1956.97  1906.84 1.80 bln    990/2249
S&P 100   524.15 -  3.52   529.14   523.63   Totals   2247/4203
S&P 500  1060.18 -  9.12  1071.94  1059.16 
W5000   10326.70 - 98.50 10449.94 10318.40
RUS 2000  534.54 -  8.50   544.85   534.26 
DJ TRANS 2920.92 -  8.60  2948.66  2919.74   
VIX        17.63 +  1.09    17.80    16.56
VXO (VIX-O)17.08 +  0.77    18.00    16.40
VXN        28.32 +  0.77    28.47    27.35 
Total Volume 3,946M
Total UpVol    955M
Total DnVol  2,949M
52wk Highs  617
52wk Lows    33
TRIN       1.38
NAZTRIN    1.61
PUT/CALL   0.73
=================================================================

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


Considerable Period

That was not how long the Dow lingered over 10,000 on Tuesday.
The hang time was far less than two minutes and the result was
exactly what I had expected. The Dow slipped back to 9960 and
held there until after the Fed announcement. There was a 
valiant effort to hit D10K once more after the announcement
but that effort fell short by .46 of a point. Close enough 
for me and it was close enough for the sell programs as well.

Wilshire-5000 Chart - Daily


Dow Chart - Daily


Nasdaq Chart - Daily


The morning opened with a mission and that mission was to hit
D10K and put that target behind them. Many of the traders on
the floor at the NYSE brought their Dow 10000 hats with them
to work today. Does that give you a clue that the fix was in?
Once that mission was accomplished in the first ten minutes
of trading investors were left to focus on economic reports
and wait for the Fed. The economics were not pretty. 

The Weekly Chain Store Sales dropped -2.5% compared to -0.1%
the prior week. This was the biggest drop in sales in three 
years. The excuse was the snow in the Northeast despite the 
early reports that stores were packed over the weekend even
with the snow. Somebody is wrong. If stores were packed in 
the Northeast then they must have been vacant elsewhere. 
There are definitely some conflicting signals in the retail
sector and there are some signs of rising prices making 
discounting difficult. 

The second report was the Richmond Fed Manufacturing Survey
and it also disappointed with a +11 compared to last months
+20. If you will remember it was just yesterday that the
Kansas City Fed Survey fell from +28 to +6 with some nasty
drops in the internals. The Richmond Fed Survey showed that
Shipments fell from 20 to 11 but New Orders rose from 6 to
14. This was more neutral than the Kansas City Fed number
but still a drop. Production on the Kansas survey fell
to 6 from 28, Shipments to -1 from +21, New orders to 14 
from 29. The Kansas survey was not positive in any respect
from my view. With the Richmond Fed Survey confirming the 
Kansas numbers it should not take a rocket scientist to 
conclude the recovery is slowing. 

This weighed on the markets but with the Fed meeting underway
the focus was on the 2:15 announcement and not the economics.
The Fed announcement had the potential to be the economic
trump card and nobody was making any bets until that card
was shown. 

The Wholesale Trade report which showed a sharp increase in
sales also failed to lift the markets. Sales were up +2.0%
and inventories were up +0.5%. This was an October number so
the revelation was old news and not earth shaking. There was
a sharp drop in the inventory to sales ratio to 1.18 and an
all time record low. I have conflicting thoughts about that.
First, it suggests that there is a huge inventory build 
somewhere in our future. Second, it makes me wonder where 
the inventory is going to come from for 4Q sales. You can't
sell it if you do not have it and the two Fed surveys show
that nobody was making any in November. If demand were 
suddenly to surge there would be a strong inventory short
squeeze and you know who would get squeezed. The consumer
would end up paying more if retailers are fighting for the
product. Remember Chicken Dance Elmo last year? They were
selling for 2-3 times retail on EBAY because the stores
had no inventory. 

The Dow had plenty of support this morning or the pull back
would have been much worse. GM soared +1.50, bringing to
almost $5 the last week's gain after they said their pension
returns were +14% for the last year. They only need +8% to
keep them fully funded and +14% is almost twice that amount.
Two years ago their $44 billion pension liability was the
topic of conversation constantly and how would they ever
recover. Evidently a little Fed liquidity injection and a
nine-month bull market was all it took. It also did not
hurt having an upgrade from Goldman Sachs to provide some
short covering urgency. 

UTX, GE and MMM also helped boost the market as each made
new highs for the month and new 52-week highs in the case
of MMM and UTX. Unfortunately they all closed well off 
their highs. Dow component HPQ tried hard to help out with
an upbeat forecast but HPQ ended up in the red. Fiorina
said HPQ expects to grow its earnings +20% per year in
2004 and beyond. I listened to an in-depth interview with
her on Kudlow-Cramer tonight and I was impressed. She took
the hardball questions and the comparisons with IBM and
DELL and really surprised me with the answers. I have to 
admit I never thought I would buy HPQ due to years of 
lackluster performance by CPQ tainting my memory but I was
impressed. She has taken the enormous heat from the merger
and even before that and has not wilted. I am thinking 
about adding HPQ to our TOP 50 Stocks for 2004 Special 
Investor Guide as a wildcard play. I have to do some more
research but if what she said was true there is plenty of
upside potential there.

One thing Fiorina did say negative was there is no bounce
in IT spending in the 4Q. She said there was no end of 
year flush the excess budget buying as in years past. She
also said IT spending in 2004 was likely to be flat at
maybe twice the GDP. Assuming the GDP is 4.5% that keeps
the IT spending under 10% growth and does not suggest a
strong IT recovery. This could have helped accelerate the
Nasdaq slide and at -40 points it was definitely downhill.

The biggest news of the day was of course the Fed meeting.
The answer to the $64 trillion question was, yes. They kept
the "considerable period" statement in the forecast and
gave the markets a holiday gift. At least that is what 
they thought they were doing. In order to leave it in they
played with the context and the preface to that statement
to give them some wiggle room. The initial reaction was
positive and the Dow soared back to 9999.56 again but once
the impact filtered through it was lights out for the bulls.
It is not that there was anything bad in the statement and
in reality it was just one factor in the D10K sell off. 
One analyst suggested maybe they are telling us the 
economy is not as strong as we thought. I seriously doubt
it but that view was making the rounds. Of course they
do have inside data we do not have so it could take a 
couple more months to know for sure. 

Here is the text of the statement:

The Committee continues to believe that an accommodative 
stance of monetary policy, coupled with robust underlying
growth in productivity, is providing important ongoing 
support to economic activity. The evidence accumulated 
over the intermeeting period confirms that output is 
expanding briskly, and the labor market appears to be 
improving modestly. Increases in core consumer prices 
are muted and expected to remain low. 

The Committee perceives that the upside and downside risks
to the attainment of sustainable growth for the next few 
quarters are roughly equal. The probability of an unwelcome
fall in inflation has diminished in recent months and now 
appears almost equal to that of a rise in inflation. 
However, with inflation quite low and resource use slack, 
the Committee believes that policy accommodation can be 
maintained for a considerable period.
   
The key points are "output expanding briskly, labor market
improving modestly, prices low". All three of those items
are past tense if we are to believe the recent economics
but that is not the problem. 

The problem was "unwelcome fall in inflation has diminished"
and "with inflation quite low and resource use slack". With
these words they sank the bond market and suggested that
contrary to the explicit English there could be a rate hike
in our March future. If deflation fears have diminished then
inflation, which is already beginning to appear, could rise
quickly. As long as the larger risk was deflation the bond
market felt safe with their long term investments. The 
inflation statement put a qualifier on the "considerable 
period" sentence. Reading between the lines it says if 
we see inflation rising and/or an uptick in capacity 
utilization then all bets are off. This was always implied
in past Fed stances but by adding the inflation tag line to
the considerable period context they set the stage for a 
faster exit from accommodation if needed. Bonds crashed on 
fears that the inflation trigger could be pulled at will 
and they no longer had the "considerable period" of safety 
despite those words in the announcement. Ten-year yields 
jumped from 42.09 at the announcement to 43.52 at the close.
This almost completely retraced the drop from Friday which
was the biggest one day drop since Jan-2002. Easy come, 
easy go. 

The capacity portion of the announcement does not really
produce any worry. The Fed seldom raises rates in these
situations until the capacity utilization is over 80%. It
is currently only 75% and should take many months to rise
to the 80% level. Durable goods utilization is only 70.5%.
With this much excess capacity it is tough to make the 
"risk of deflation has been minimized" argument. But then
the Fed said it so it must be true or at least that is the
way the bond market reacted. 

The stock market reaction after the announcement probably
had more to do with the touch of Dow 10,000 than it did
with the Fed but there always has to be an excuse. Nobody
expected the Fed to raise rates and very few people 
expected the Fed to leave the phrase alone. The Fed 
performed as expected and investors simply sold the news.
There were seven sell programs and only two buy programs
in the 30 minutes after the announcement. Obviously 
institutions were ready and waiting and hoping for a post
announcement spike to provide the volume to exit safely. 

The Dow effectively made a double top today at 10,000 
intraday and failed both times. While it looks spectacular
on the charts it is not material until we see what follow
through appears. The real key is the next support level. 

Dow Intraday Chart

 
Dow 30 min Chart

 
The Dow held 9850 since Dec-1st and that is strong support.
The -41 drop today was nothing and only brought it back to
the top of last weeks range. It only appears more important
because of the touch at 10,000 and the dramatic post meeting
drop. The Dow has three critical levels of support at 9850,
9725 and 9600. The odds of 9850 being tested are good. 9725
is possible and 9600 would be only a remote possibility 
before the Santa rebound. While I expect a serious bout of
profit taking in January I also expect us to remain range
bound between 9700-10000 until year end. There is too much
support below and too much overhead supply between 10000
and 10200 to break out of either side of the range. At 
least that is the model I am going with today. The way 
this market has been acting anything is possible. 

The more important breakdown today was the Nasdaq. The 
Nasdaq broke a level of serious support at 1925 (50 DMA) 
and appears headed to 1880. It was barely able to remain 
above 1900 at the close. While the 50 DMA was never the
strong support for the Nasdaq as it has been for the Dow
it was still a market milestone. The 100 DMA at 1850 would
be the next crucial test but baring a disaster before the
holidays I would be surprised to see it tested. 

Nasdaq Chart 60 min
 

For the balance of the week the markets need to find a sector
to lead the way back to neutral. Chips led the Nasdaq down
with Intel dropping -10% since last Thursday. The SOX broke
its 50 DMA which HAS been support since March. This is a 
critical test for the techs. The bank index dropped to a
new low for the month on warnings from Washington Mutual
and National City that mortgage loan demand was down and
corporate borrowings were declining. Home builders dropped
like a rock on the mortgage news despite record earnings 
by HOV and raised guidance. There were comments making the
rounds that the outlook for the first quarter was softer 
than originally thought. Even the Biotech index was sliding
on problems with the drug pipeline.

The only economic report for Wednesday is the weekly 
Mortgage Application Survey which could help or hurt the
homebuilder sector depending on the results. That leaves
the markets free to focus on any new earnings warnings.
The Nikkei opened down -200 points on our performance 
and our futures are down slightly at 8:PM. Thursday and
Friday the pace of the economics releases picks up and
you can bet there will be some more rehashing of the Fed
statement until every word has been dissected hundreds of
times. I am still expecting a slight pullback this week
and then a rebound into the holidays. Use the support 
levels I outlined above to plan for that rebound. The
wildcard is the profit taking by institutions. Eventually
somebody is going to pull the trigger that fires the
starters gun and the race will be on. I am just betting
that it does not get serious until January. I am hoping
that the majority of funds will hold out hoping for one
last bounce into the end of year retirement contributions
and a chance to push tax consequences into 2004. This is
obviously just speculation based on historical trends but
so far the script has played out as we expected. For the
rest of the week I would be patient about entries and let
prices come to you. 

Enter Very Passively, Exit Very Aggressively!

Jim Brown


==================================================================
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
---------------------------------

Intel Corporation - INTC - close: 30.25 change: -1.39

WHAT TO WATCH: After channeling steadily higher for months, INTC 
broke down out of that channel on strong volume on Tuesday and 
the break indicates more downside is in store.  While momentum 
entries below the $30 level should work just fine, a failed 
bounce and rollover below the bottom of the broken channel near 
$31.50 would be even better.  Target a drop towards the 200-dma 
near $24.50.




---

Qlogic Corporation - QLGC - close: 51.45 change: -1.00

WHAT TO WATCH: Traders looking for a dip to buy in the 
Semiconductor arena would be hard-pressed to find a better 
candidate than QLGC.  While the stock fell in sympathy with the 
SOX, and it has given a PnF Sell signal, the stock is sitting 
right on its bullish support line, which is just above the rising 
trendline from October 2002, as well as the 100-dma.  But the dip 
near $50-51 and look for a rebound back to the $56 area, using a 
stop just below the 200-dma.



---

Union Pacific - UNP - close: 66.09 change: +0.75

WHAT TO WATCH: Not everything was mired in the red on Tuesday, as 
UNP surged to a new multi-year closing high, defying even the DOW 
Transports' negative close.  While it is possible that we'll see 
a near-term pullback to confirm support in the $64-65 area (which 
would make a solid entry point on the rebound), it looks like UNP 
is in the early stage of a breakout move that should take the 
stock up to strong resistance in the $72-73 area.  Momentum 
entries can be considered on bullish continuation above $66.50




---

Home Depot - HD - close: 34.04 change: -0.66

WHAT TO WATCH: Housing stocks got slammed on Tuesday in response 
to the selloff in bonds, so it is no surprise that shares of HD 
were weak as well.  The stock recently rolled over from the top 
of a multi-year descending channel and appear headed back towards 
the $31-32 support area.  While entries near current levels don't 
really make sense, a failed rebound back near the 50-dma (just 
under $36) would likely set up a favorable entry for the ride 
down.





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

EMN $38.75 - Despite the carnage in the rest of the market, 
shares of EMN soared on Tuesday and on volume that nearly doubled 
the ADV.  While a near-term pullback can be expected to test 
support now at $37, this looks like the early stage of a breakout 
move, especially with the new PnF Buy signal.  Once over $40 
resistance, look for EMN to make progress towards strong 
resistance in the $44-46 area.

BBY $52.82 - What happened to the holiday cheer?  It wasn't that 
long ago that BBY was threatening to break out of the top of its 
rising year-long channel.  After the heavy selling of the past 
week, capped off by today's 2.6% slide, shares of the electronics 
retailer are threatening to break down out of that channel.  Use 
a trigger at $52.50 and look for that breakdown to fall quickly 
to the $49-50 area, with potential downside to $45-46.

MER $55.25 - Financial stocks are giving up their recent strength 
and are starting to make strides towards lower levels.  MER is 
right on the verge of a breakdown and if it breaks below $54, 
then it appears to have easy downside to $51.50 and possibly $50.  
Wait for the breakdown and use a stop just over the 50-dma at 
$57.09.



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


Fed Stays, Investors Don't
- J. Brown

The FOMC announcement tonight was upstaged by the DJIA touching 
10,000 again for the first time since May 2002.  There was a 
brief dip as traders did some profit taking but the INDU managed 
to hold its gains until the Fed announcement.  The NASDAQ wasn't 
so lucky. 

Overall the feeling among professional traders is to hold on to 
their gains through the end of the year.  That doesn't mean they 
won't by the dip again but the DJIA has plenty of room before it 
finds new support. 

The NASDAQ looks a lot worse for wear.  The tech heavy index 
dropped more than two percent and broke its simple 50-dma.  
Furthermore, with the SOX also breaking down and the chips like 
to lead the tech sector. I would expect the NASDAQ to test 
support at 1880 again.  Looking at the daily chart we see a 
strong bearish divergence in its MACD stretching back to 
September.

This could be the dip we need to prep the markets for a Santa 
Claus rally but that could just be wishful thinking.



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

Market Averages

DJIA ($INDU)

52-week High: 10003
52-week Low :  7197
Current     :  9923

Moving Averages:
(Simple)

 10-dma: 9863
 50-dma: 9735
200-dma: 9057

S&P 500 ($SPX)

52-week High: 1074
52-week Low :  768
Current     : 1060

Moving Averages:
(Simple)

 10-dma: 1063
 50-dma: 1045
200-dma:  973

Nasdaq-100 ($NDX)

52-week High: 1453
52-week Low :  795
Current     : 1383

Moving Averages:
(Simple)

 10-dma: 1419
 50-dma: 1403
200-dma: 1243


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

Given the drop in the major indices we're surprised that the 
volatility indices didn't jump higher. 

CBOE Market Volatility Index (VIX) = 17.63 +1.09
CBOE Mkt Volatility old VIX  (VXO) = 17.08 +0.77
Nasdaq Volatility Index (VXN)      = 28.32 +0.77


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.73        770,383       559,394
Equity Only    0.56        611,586       340,208
OEX            1.10         27,228        30,007
QQQ            1.45         34,499        50,011


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

Bullish Percent Data

           Current   Change   Status
NYSE          74.5    + 1     Bull Confirmed
NASDAQ-100    68.0    - 6     Bear Correction
Dow Indust.   80.0    + 0     Bull Correction
S&P 500       81.2    - 1     Bull Confirmed
S&P 100       80.0    + 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: 1.33
10-dma: 1.13
21-dma: 1.17
55-dma: 1.15


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    1083       927
Decliners    1753      2174

New Highs     352       101
New Lows       13        12

Up Volume    509M      376M
Down Vol.   1217M     1385M

Total Vol.  1740M     1778M
M = millions


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

Commitments Of Traders Report: 12/02/03

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

Long and short interest continues to flat line from the
commercial traders.  Everyone seems to be waiting for the year
to end before changing their bets.  Small traders have grown
slightly more optimistic.


Commercials   Long      Short      Net     % Of OI
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%)
12/02/03      394,531   414,223   (19,692)   (2.4%)

Most bearish reading of the year: (111,956) -  3/06/02
Most bullish reading of the year:   18,486  -  6/17/03
 
Small Traders Long      Short      Net     % of OI
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%
12/02/03      154,788    85,776    69,012    28.7%

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

Wow!  We're actually seeing some action here in the e-minis.
Commercial traders have reversed from being net short to
net long.  This is bullish news.  Small traders have added
strongly to both their long and short positions and remain
bullish as well.


Commercials   Long      Short      Net     % Of OI 
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%)
12/02/03      283,199   268,833     14,366     2.6%

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
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%
12/02/03     119,555     77,609    41,946    21.3%

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


NASDAQ-100

Much like the large S&P contracts above, commercial traders
have fallen asleep.  There is very little change in positions.
Meanwhile, small traders have reduced positions on both
sides of the equation.  


Commercials   Long      Short      Net     % of OI 
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%)
12/02/03       35,569     48,552   (12,983) (15.4%)

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
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%
12/02/03       21,594     9,429    12,165    39.2%

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

The same story appears to hold true for DJ futures.  The
overall trend is flat with commercials slightly bullish
and small traders generally bearish.


Commercials   Long      Short      Net     % of OI
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%
12/02/03       21,128    12,379    8,749      26.1%

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
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%)
12/02/03        6,667     9,302   (2,635)   (16.5%)

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 12-09-2003
                                                   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:   Solid Breakdown

Stop Adjustments:  SIRI, FCEL, SLAB, UTEK

Closed Plays:      JNPR, ZBRA

Stock Split:       PCAR


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

Ultratech Stepper - UTEK - cls: 26.79 chng: -1.38 stop: 30.00*new*

Company Description:
UTEK develops, manufactures and markets photolithography equipment 
designed to reduce the cost of ownership for manufacturers of 
integrated circuits, including advanced packaging processes, 
photomasks, thin film magnetic recording devices and micro-
machined components,  The company supplies step-and-repeat systems 
based on one-to-one (1X) and reduction optical technology to 
customers involved in the semiconductor fabrication process 
throughout North America, Europe and Asia.

Why we like it:
After several months of steadily moving higher, the price action 
in shares of UTEK is growing more volatile, which is often a sign 
of a topping formation.  Conveniently, the stock has also traced 
out a Head and Shoulders top, with price coming to rest on Friday 
right at the $28.25 neckline.  This slightly upward-sloping 
neckline is the result of connecting the slightly higher lows of 
the past 2 months, a trend that was broken on Friday.  But we 
don't want to get caught selling a breakdown before it happens, as 
many a bear has been caught in that trap in recent months.  So 
we're going to wait for a solid break of support, using a trigger 
at $27.50 before considering UTEK a live play.  We can afford to 
give up a little bit of room on the downside, because the 
measuring objective from the H&S pattern is $21.75 (28.25-6.50).  
Isn't it nice how the 200-dma is waiting near that level at 
$21.87?  A quick glance at the PnF chart reveals a fresh Sell 
signal on Friday, with a bearish price target of $22.

With so many factors pointing to $22 as a downside target, we 
won't argue and will set $22 as our exit target on the play.  When 
the initial trigger is satisfied, aggressive traders can enter on 
the initial break, but need to be mindful of the possibility of a 
near-term bounce from the $26.50-27.00, where UTEK bounced in late 
August on the way up.  The more conservative approach to entering 
the play will be to wait for that rebound and then enter on a 
rollover from the $28.00-28.50 area, as broken support at the 
neckline provides new resistance.  Once below that $26.50-27.00 
support, look for a potential bounce point near $24 before 
reaching our $22 target.  Initial stops are set at $31, which is 
above Thursday's intraday high, as well as the cluster of the 20-
dma ($30.45), 30-dma ($30.89) and 50-dma ($30.71).

Why This is our Play of the Day
A failed bounce right at the open this morning provided an 
aggressive entry point for traders looking to enter new bearish 
plays in UTEK before the confirmed breakdown.  The initial drop 
took the stock down to the $27.25 area, where it consolidated in 
anticipation of the FOMC meeting being over.  Once the news was 
out, traders hit the sell button again, driving UTEK down to close 
at its low of the day, solidly breaking the $27 support and 
closing at its lowest level since mid-August.  With a confirmed 
breakdown from the H&S pattern we mentioned over the weekend and a 
break below horizontal support, UTEK looks vulnerable to more 
downside in the near term.  Traders still looking for an entry can 
use either a break below the 8/26 intraday low ($26.32) for 
momentum entries or a failed bounce below $28.50.  Once below $26, 
there isn't much in the way of support until the $24 level, which 
is the next likely spot for a short-term bounce before continuing 
down to our $22 target.  Lower stops to $30 tonight, which is 
right at the site of the falling 20-dma.

Annotated Chart of UTEK:


Picked on December 7th at   $28.20
Change since picked          -1.41
Earnings Date              1/15/04 (unconfirmed)
Average Daily Volume =       385 K



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


SIRI - long
Adjust from $1.95 up to $2.05

FCEL - short
Adjust from $14.05 down to $13.25

SLAB - short
Adjust from $48.00 down to $46.75

UTEK - short
Adjust from $31.00 down to $30.00


=================================================================
Tech Stock section
=================================================================

============
Closed Plays
============

  --------------------
  Closed Bullish Plays
  --------------------


Zebra Tech - ZBRA - close: 62.22 change: -1.88  stop: 61.00

Zebra Technologies hit our target Wednesday, and we're sure glad 
it hit that target early in the day as markets charged higher in 
early trading.  ZBRA ended the day three points lower than its 
day's high.  Volume was lower than average daily volume, but sell 
programs must have been triggered as the high was hit.  RSI 
turned down toward its ascending trendline again.  The 21(3)3 
stochastics rolled down out of territory indicating overbought 
conditions, but they've done that before as ZBRA has ascended 
toward today's high, only to turn up again after a brief 
retracement.

Although ZBRA's drop proved steady and relentless Wednesday, and 
although it retraced nearly all yesterday's gains, ZBRA 
maintained support above its 21- and 30-dma's and also maintained 
support above the $60.50 level that was the top of a previous 
consolidation zone.  It's difficult to decipher today's action 
and determine whether it was just an expected retracement as a 
new high was achieved or whether it's something more serious.  
The relentlessness of the decline felt troublesome, however.  
Fortunately we don't have to make that determination since ZBRA 
hit our $65.00 target this morning before the decline.  We're 
closing the play and taking our profits.

Picked on Nov 19 at  60.20
Change since picked: +2.02
Earnings Date:    10/23/04 (confirmed)
Average Daily Volume:  618 thousand




=================================================================
High Risk/High Reward (HR) section
=================================================================

============
Closed Plays
============

  --------------------
  Closed Bullish Plays
  --------------------

Juniper Networks - JNPR - close: 17.50 change: -0.68 stop: 17.50

The bulls really tried to defend support on Tuesday, but the 
selling frenzy in Chip-related stocks was just too much.  JNPR 
sliced through the 50-dma  and then the bottom of its rising 
channel enroute to a close of $17.50, exactly at our stop.  
Hindsight shows the problems brewing under the surface, as JNPR's 
last rally failed right at the channel midline, leaving behind a 
potential H&S top to contend with, a pattern that is looking more 
likely now that the neckline (right at the bottom of the broken 
channel) has been violated.  Any positions should have been 
closed near the lows of the day, as all the potential support 
used to justify our bullish bias was broken.

Picked on November 19th at  $17.69
Change since picked          -0.19
Earnings Date              1/08/03 (unconfirmed)
Average Daily Volume =    9.07 mln





=================================================================
Stock Splits 
=================================================================

Announcements
-------------

PCAR announces an extra cash dividend and a 3:2 stock split

During today's session, Paccar Inc. (NASDAQ:PCAR) announced that 
its Board of Directors has approved a 3-for-2 stock split of its 
common shares and a cash dividend.   

The payable date for the stock split is set for February 5th, 2004 
to shareholders on record as of January 19th.  The company also 
increased their quarterly dividend to $0.15, which is payable on 
March 5th, 2004 to shareholders on record February 18th.  PCAR has 
paid a dividend every year since 1941, and has increased their 
dividend by 125% in the last six months.


About the company:
PACCAR is a global technology leader in the design, manufacture 
and customer support of high-quality light-, medium- and heavy-duty 
trucks under the Kenworth, Peterbilt, DAF and Foden nameplates. It 
also provides financial services and distributes truck parts related 
to its principal business. In addition, the Bellevue, Washington-based 
company manufactures winches under the Braden, Gearmatic and Carco 
nameplates. (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

PTR     Petrochina Co              45.02     +1.77
TOT     Total Sa (ADS)             85.57     +1.35
BP      BP Plc                     45.07     +0.67
SC      Shell Transport            40.92     +0.87
GM      General Motors             48.41     +1.27
UNP     Union Pacific Corp         66.09     +0.75

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

NL      NI Industries Inc          10.67     +1.56
MLT     Metals USA Inc             10.00     +1.10

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
PBR     Petroleo Brasileiro        26.42     +1.07
PPG     PPG industries             62.48     +1.21
CCL     Carnival Corp              37.06     +1.76
PD      Phelps Dodge               68.98     +2.05
WON     Westwood One               32.46     +1.08
SWK     The Stanley Works          35.58     +1.32
PII     Polaris Industries         88.85     +2.20

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

INTC    Intel Corp                 30.25     -1.39
GDW     Golden West Financial      99.13     -2.42
ADBE    Adobe Systems              37.73     -1.70
NWL     Newell Rubbermaid          21.00     -1.97
SNDK    Sandisk Corp               60.80     -5.54
ACV     Alberto-Culver             60.50     -1.20
AVID    Avid Technology            46.60     -3.23
ATMI    ATMI Inc                   20.42     -1.44

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

CFC     Countrywide Financial     103.20     -5.10
CTX     Centex Corp               107.51     -5.29
DRL     Doral Financial            49.17     -2.84
TOL     Toll Brothers              39.45     -2.15
HOV     Hovnanian Enterprises      89.00     -7.61




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