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Daily Newsletter, Thursday, 01/29/2004

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PremierInvestor.net Newsletter                 Thursday 01-29-2004
                                                    section 1 of 2
Copyright (c) 2004, 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:      Buy The Dip?
Watch List:       VC, CEC, ROP, EASI
Market Sentiment: Finicky Investors

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MARKET WRAP  (view in courier font for table alignment)
=================================================================
      01-29-2004           High     Low     Volume Advance/Decline
DJIA    10510.29 + 41.90 10522.59 10417.85 2.43 bln   1171/2078
NASDAQ   2068.23 -  9.10  2087.33  2041.07 2.64 bln   1059/2131
S&P 100   563.10 +  3.61   563.33   557.36   Totals   2230/4209
S&P 500  1134.11 +  5.63  1134.39  1122.38
W5000   11045.72 + 28.80 11058.26 10932.72
RUS 2000  579.86 -  4.05   586.81   573.34
DJ TRANS 2971.99 +  4.30  2986.68  2948.35
VIX        17.14 +  0.36    17.66    16.79
VXO (VIX-O)17.11 +  0.01    18.01    16.93
VXN        25.20 +  0.04    26.24    25.05
Total Volume 5,521M
Total UpVol  2,022M
Total DnVol  3,415M
Total Adv  2523
Total Dcl  4784
52wk Highs  271
52wk Lows    16
TRIN       0.85
NAZTRIN    0.90
PUT/CALL   0.80
=================================================================

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

Buy The Dip?

Some traders bought the dip as the indexes neared critical
support but there was no V bottom blast off as many had
hoped. The low of the day came around 2:PM with alternating
buy/sell programs fighting for control. Is this the bottom
or better yet, is this the correction we needed?

Dow Chart - Daily


Nasdaq Chart - Daily



The morning started off with another drop of -1,000 in the
Jobless Claims but with the prior weeks number revised up
+2,000 the net result was a rise. Regardless of how you add
it up it was just one more week without any jump in the
numbers. This was the third week in the 343,000 range and
the four week moving average came in at 346,000. The total
insured unemployment rate is down to 2.5% from the peak at
3.0% in late May. We are going in the right direction but
we are not going very fast. Forty-seven states saw a drop
in claims for last week. Florida had the largest gain in
claims due to numerous layoffs.

The Employment Cost Index jumped +0.7% for the 4Q but it was
less than analysts had expected at +0.9%. Wages dropped but
health care benefit costs rose. The drop in wages and the
outsourcing of jobs is helping companies tack on additional
earnings but slowly depressing real income. It is a good
thing inflation is very low or the middle to lower income
workers would really be suffering. Wages grew by only +2.9%
for the year while employment costs rose +3.8%. Benefit
costs rose +1.2% in the 4Q and +6.3% for the year.

The Chicago Fed National Activity Index came in at only
+0.13 for December and well below the +0.68 for November.
That November number was revised upward from +0.55 and
indicated a stronger bounce in the middle of the quarter
and a fall off in December. Output components only added
+0.05 to the index and well off the +0.54 contribution in
November. Employment fell for the 11th straight month. Only
44 of the 85 components were positive for the period. One
analyst said the headline number of +0.13 clearly showed
that the economic recovery was gaining strength thanks to
strong productivity growth. Sorry, I see a significant
drop from November and a barely breakeven ratio on the
components. It was the fourth consecutive positive month
although it was only barely positive. Let's count our
blessings and not worry over what could be in the future.

The Help Wanted Index dropped one point to 38 but should
not be considered a negative event. It has been holding
the 37-38 range since June. The negative connotation would
be due to the lack of a gain. If advertising for employees
is not picking up then the Jobs report next Friday could
also be flat. Analysts would love to have seen even a small
jump over 40 to suggest a pickup in employment activity but
they will have to wait for at least another month. If the
economy is improving you would think employment advertising
should be showing at least a minor increase. This always
causes analysts to suspect the economic growth is not as
robust as they hoped. Next Friday we get the answer. There
is always the chance that consulting firms, internet job
firms, search networks and the flood of unsolicited
resumes are taking away the need for those advertisements.

To confirm that thought process the Labor Turnover Survey
also out today showed that layoffs are down -14% from year
ago levels. Job openings have increased by +1.8% and new
hires are up +3.1%. This was only the second month since
the survey began in 2000 that there was a year over year
increase in job openings. According to the JOLTS numbers
the bottom in the labor market was in Aug/Sep 2003 and
hiring has been increasing, although slowly, since then.
The catch with this report is the reporting period. This
is a November period and light years behind the market
in terms of revelance. Traders want to know what happened
last week not three months ago. This does suggest that
data from other more current sources like the ISM surveys
will continue to show improvement in hiring and that
improvement will eventually end up in the JOLTS data.

There is also the problem with the type of new jobs being
created. New Wal-Mart's, Starbucks, Home Depots and new
fast food restaurants are creating new jobs faster than
the jobs report is showing. This suggests that we are
seeing the cheapening of the work force. (no offense
to those readers in those professions) I am merely drawing
a conclusion that although jobs are being created they
are not the jobs most people would be excited about.

The FOMC minutes for December came out at 2:PM and they
are credited with the afternoon drop in the market. Not
the actual minutes but the fear of the minutes as the
drop came between 1:15-1:45. The minutes clearly described
why the Fed removed the considerable period statement this
month. They viewed it as restricting their flexibility to
respond to changing conditions. The minutes were also more
bearish in tone with greater worries that inflation could
ramp up at any time and they wanted to be prepared to take
a preemptive strike if need be. The members also expressed
concern for the rising budget deficit and the eventual
impact on the economy.

Several members argued to remove the statement in the
December meeting suggesting they were getting ready to
raise rates and needed to clear the table for the next
series of rate hikes. Ugly thought! Instead of an immediate
drop they added the phrase associating it with economic
conditions to warn the markets there was a change coming.
As we know from the past six weeks the markets ignored the
warning. That market stance of burying its head in the sand
brought the Fed no choice but to change the statement to
plain language at this weeks meeting. So much for the soft
landing. We didn't listen and they had to hit us harder.
The members also expected the unemployment rate to drop
over the coming quarters as a result of the rising economy.
Now we can see why they were shocked when the December Jobs
report was barely positive. In general they are not really
worried about inflation and could still see a potential
deflationary period ahead. They view the risk to each
direction as now equal. They just wanted to be ready to
react if the inflation monster won the battle and sprang
from the bushes. With capacity utilization still at 75%
the odds of impending inflation are very slim.

Bonds finished flat for the day and after the ramp job
yesterday it is amazing we did not see a sell off. It is
even more amazing when you consider there is $80 billion
in new supply coming to market through next week. The
government has to fund that deficit and somebody will
get the interest.

The market reaction to the Fed news both in bonds and
equities was over done in the opinion of most analysts.
However, while nobody thinks they will raise rates soon
it is the discounting process that we are seeing now.
When the Fed was seen to be on hold until 2005 the markets
had factored in that lack of change for the next 6-9 months.
That is exactly what the markets are supposed to do. They
factor earnings, rates and economic prosperity for 6-9
months in advance. A change in one prompts a change in
the others. We need to also remember that rate hikes
do not come one at a time. The Fed is not going to raise
1/4 point and then go dormant for a couple years. They
raise for a reason and every rate adjustment takes 6-9
months to work its way through the markets. Normal cycles
involve 3-5 rate changes over an 18-month period. So, the
markets are not just factoring in a potential rate hike
in May, which is the new target, but they are factoring
in the entire rate hike cycle which could begin in May.
See, it really is a trend change in progress.

The good news is the reason for the hikes. If the Fed
does hike rates in May it will be because the economy
has exploded fast enough to generate inflation. Think
about that. We are currently crawling along in terms
of economic growth that we can see as in job creation.
However earnings are exploding. We are seeing raised
guidance by the majority of companies and the body
language of the confessors is positive. They are not
hunkered down behind their figurative podium in flak
jackets when they announce. They are generally proud
of the results and optimistic about the future. This
is a complete change from just six months ago. The
bottom line is that the growth has to expand significantly
from even the current level to invoke a rate hike and
at the present rate that may not happen anytime soon.
The message to the markets should be don't get yourself
in a tizzy because nothing fundamental really changed.

However, there was a major change in the tone of the
stock market. We have had three major distribution days
so far this week. Strong volume with declining volume
substantially higher than advancing volume. New 52-week
highs on Thursday were 274 and a level not seen since
October 24th. The semiconductor sector crashed to a
support level not seen since early December. The SOX
broke its 50 dma at 515 and came within two points of
next support at 500. Considering chip stocks were up the
strongest of any sector over the last few months it is
no surprise they were the hardest hit. In fact the SOX
lows on Thursday were more than -10% off the January
highs. A REAL correction!

SOX Chart - Daily



The Russell also took it on the chin with a -5% drop
back to 573.00 from its 601 high from Tuesday. A -5%
drop in three days is a significant hit. Putting it in
perspective the Dow barely blinked. We saw a drop back
to 10417 intraday on Thursday and close enough to 10400
to call it a successful test of support for me. That
was only a -2.7% drop from its 10705 high from Monday.
The real damage came from the Nasdaq, which dropped
-112 points from its 2152 high on Monday. I say real
damage because that was a -5% drop on a highly visible
index. Remember this is on mostly better than expected
earnings. The afternoon rebound on Thursday was simply
an oversold reaction in front of the GDP report and not
necessarily a sign that the worst is over.

Ok, now what? The key is the GDP report on Friday morning.
It also helps that we have the NY-NAPM, Chicago-PMI and
Consumer Sentiment at the same time. If I had to take an
unbiased look at just the indexes and predict a direction
without factoring in the bullish sentiment I would expect
at least one more down day in our future and maybe several.
None of the major indexes have even come close to their
real support at the 50 dma except the SOX. The levels
for the respective indexes are:

Current - 50-dma

579   - 558   Russell
1094  - 1134  Spx
2068  - 2005  Nasdaq
10510 - 10208 Dow
11045 - 10661 Wilshire 5000

The SOX is the only major index of note to break its 50
dma during this sales event. Based on simple technical
analysis and recent historical trends the major markets
should all test that level. But, we still have to factor
in the bullish sentiment and economic conditions.

Basically the conditions are good and the sentiment is
still off the wall bullish. The economic conditions will
be tested over the next six trading days with a barrage
of reports ending in the Nonfarm Payrolls next Friday.
These reports will either push the rest of the undecided
sellers off the fence or convince the dip buyers to go
shopping for bargains.

The GDP on Friday is the first big motivator. The real
consensus estimate is about +5.2% with the whisper numbers
still running around +6.5%. We have to assume the Fed
knew the GDP numbers in advance and factored them into
their statement. If the GDP was weaker than expected
would they have wanted to roil the markets only to have
them tank again two days later when the GDP was released.
Stranger things have happened but I am not expecting it.
If we do get a decent GDP I would expect the markets to
react favorably. Friday is also month end and I would
expect some window dressing from funds with excess cash
on hand. I would expect that window dressing to trigger
some short covering from those who profited from the drop.
A bad GDP will just add fuel to the profit taking fire.

Obviously this is all speculation and anything is possible.
We are well off the highs but also well above normal support.
That gives us plenty of room to wander without breaking any
real support or resistance levels. We can remain range bound
within a broad range until after the Jobs report next Friday.
I would then expect the markets to go directional once again.
While I could rationalize a touch of the 50 dma on all the
averages I would be very surprised to see it. When you
consider I have been looking for a -500 point Dow pullback
since Jan-1st that should give you some idea of my current
mindset. I can see us moving lower, I would just be surprised
if it was that much lower given the current sentiment. I
have said all along there was a buying opportunity in our
future and this is it. About the only thing that could ruin
it for me would be a massive negative surprise in the economic
reports. I am betting against that possibility and went long
on the dip today.

Enter Passively, Exit 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
---------------------------------

Visteon Corporation - VC - close: 11.25 change: -0.36

WHAT TO WATCH: VC has had quite a run over the past couple
months, and investors were only too happy to start taking profits
following last week's earnings report.  But things look like they
may be turning more bearish with the stock threatening to break
below the $10.75 level.  Use that price as an entry trigger and
target a drop to the 50-dma.




---

CEC Entertainment Inc. - CEC - close: 47.32 change: +0.18

WHAT TO WATCH: After more than a month of testing the $46.75
support level, it looks like CEC is finally due for a breakdown.
The last rebound attempt was firmly rejected from 50-dma
resistance earlier this week and a break under today's low
($46.75) can be used to enter bearish positions, looking for a
drop to fill in that series of gaps from mid-October.  Initial
support may be found in the $43.50 area, but if it breaks, the
200-dma just under $41 will be a viable target.




---

Roper Industries Inc. - ROP - close: 48.95 change: -0.81

WHAT TO WATCH: After being firmly rejected at major resistance
near $53, ROP has picked up some downside momentum this week,
breaking the 50dma yesterday and getting a feeble bounce off the
100-dma today.  If that average gives way, the real test will be
$48 support.  We want to play the downside on a break below $48,
targeting next solid support near $44 or even a drop to the 200-
dma.




---

Engineered Support Systems - EASI - close: 48.91 change: -2.81

WHAT TO WATCH: After two failed attempts to get back over the 50-
dma this week, shares of EASI are back on the defensive, falling
sharply on Thursday on rising volume.  That brings the stock
right back to critical support just above $48.  Use an entry
trigger at $48 and target a drop to strong support at $40.





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

NVDA $24.00 - The recent weakness in the Semiconductor sector has
pressured NVDA right back to strong support near $22, which it
slipped below on Thursday.  But this could be a good aggressive
bullish entry, especially in light of the strong rebound this
afternoon.  Wait for a rally back over the 50-dma before playing
and target a rally back to the $24-25 area.

DIS $24.45 - It may not be exciting, but DIS continues to trade
steadily higher in its rising channel that began last spring.
The sharp dip this morning was eagerly bought on strong volume,
as investors seem to have liked the "divorce" between the firm
and Pixar.  Another pullback and rebound from above the 50-dma
looks good for new entries, as does a breakout over today's high,
as it will have the stock back in the upper half of its rising
channel.

AMD $14.68 - If the Semiconductor sector continues to weaken,
then AMD is about to have a nasty fall.  Today's selling pushed
the stock very close to critical support at $14 and only the
late-day rebound saved it.  Trigger entries on a break of that
support and look for a fall back to the $12 level.


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

Finicky Investors
- J. Brown

Yesterday the markets crater because the Fed removes its
"considerable period" language.  Today the markets rally after
the Fed releases its minutes from last month's meeting that
suggest they were considering a removal of this language back in
December.  No one ever said the stock markets moved on logic but
this time it might make sense.  The news yesterday was a great
"excuse" to take some profits off the table.  However, investor
sentiment turned bullish again as they realized that the Fed's
comments confirm that the economy really is improving and that
means strong corporate profits.

Tech stocks lagged the afternoon rally today but almost every
sector moved up off its lows.  Several sectors (transports, disk
drives, natural gas, and airlines) pulled back to their simple
50-dma and either held support there or bounced.

The hardware sector (GHA) did lose ground today but continues to
build what looks like a bullish flag consolidation pattern.  The
software sector (GSO) produced a nice "hammer" candlestick that
might suggest a one-day bullish reversal.  Probably the most
watched tech sector index is the SOX, which closed under its
simple 50-dma but remains above round-number support at 500.  If
I had to bet, I'd bet on a bounce here tomorrow unless some chip
company issues an earnings warning before the open.

Financials were strong today with the banking index (BKX) pulling
back to previous resistance before bouncing from the 980 level.
The strongest sector was the biotechs (BTK).  The BTK index added
2.35%.  I also note that the DRG drug index looks bullish with a
nice bounce from its short-term moving averages.  Normally when
the markets turn volatile drug stocks are commonly seen as "safe
havens" to park your money.

Utilities were also higher as investors seem reluctant to sell
these higher-yielding dividend stocks.  Two more sectors
performing well are insurance (IUX) and healthcare (HMO).  Both
have managed to maintain the majority of the gains with only a
slight pull back.

It is notable that the gold & silver index (XAU) was the worst
performer with a 2.32% drop and a close under recent support at
96. It was no coincidence that gold futures fell more than $16 to
close under the $400 level for the first time in weeks.


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

Market Averages

DJIA ($INDU)

52-week High: 10701
52-week Low :  7416
Current     : 10510

Moving Averages:
(Simple)

 10-dma: 10578
 50-dma: 10208
200-dma:  9458

S&P 500 ($SPX)

52-week High: 1155
52-week Low :  788
Current     : 1134

Moving Averages:
(Simple)

 10-dma: 1140
 50-dma: 1094
200-dma: 1017

Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low :  795
Current     : 1496

Moving Averages:
(Simple)

 10-dma: 1530
 50-dma: 1457
200-dma: 1319


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

Try as they might the volatility indices could not maintain any
of their morning gains.  The midday reversal suggests the rally
might not be over yet for the markets.

CBOE Market Volatility Index (VIX) = 17.14 +0.36
CBOE Mkt Volatility old VIX  (VXO) = 17.11 +0.01
Nasdaq Volatility Index (VXN)      = 25.20 +0.04

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.80        960,543       764,294
Equity Only    0.64        836,300       538,960
OEX            1.22         24,106        29,386
QQQ            1.74         56,817        98,948


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

Bullish Percent Data

           Current   Change   Status
NYSE          77.1    - 1     Bull Confirmed
NASDAQ-100    75.0    - 3     Bull Confirmed
Dow Indust.   90.0    - 3     Bull Confirmed
S&P 500       87.0    - 1     Bull Confirmed
S&P 100       87.0    - 1     Bull Confirmed


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: 1.01
10-dma: 0.92
21-dma: 0.95
55-dma: 1.03


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    1108      1085
Decliners    1752      2024

New Highs     166       113
New Lows       14         6

Up Volume    939M      793M
Down Vol.   1378M     1811M

Total Vol.  2369M     2611M
M = millions


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

Commitments Of Traders Report: 01/23/04

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the
Chicago Mercantile Exchange and Chicago Board of Trade. COT data
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being
financial institutions. Commercials are historically on the
correct side of future trend changes while small specs tend
to be wrong.

S&P 500

Wow!  We've seen a mild reversal in the commercial traders'
positions.  They've moved from mildly net short to mildly net
long.  That's an encouraging sign for more strength in the
markets.  Small traders have grown a bit more cynical with
a slight increase in short positions but they remain net
long.


Commercials   Long      Short      Net     % Of OI
12/22/03      400,066   405,240    (5,174)   (0.6%)
01/06/04      403,721   408,729    (5,008)   (0.6%)
01/13/04      405,558   411,361    (5,803)   (0.7%)
01/23/04      422,135   407,626    14,509     1.7%

Most bearish reading of the year: (111,956) -  3/06/02
Most bullish reading of the year:   23,977  - 12/09/03

Small Traders Long      Short      Net     % of OI
12/22/03      147,537    81,596    65,941    28.8%
01/06/04      142,844    83,518    59,326    26.2
01/13/04      149,057    90,571    58,486    24.4%
01/23/04      141,107   100,090    41,017    17.0%

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

Commercials are starting to up their bets on the e-minis with
almost 40K new longs and 44K new shorts.  Small traders in
turn reduced their bets but remain net long.


Commercials   Long      Short      Net     % Of OI
12/22/03      128,801   213,021    (84,220)  (24.6%)
01/06/04      175,489   240,865    (65,376)  (15.7%)
01/13/04      196,858   263,845    (66,987)  (14.5%)
01/23/04      233,867   307,122    (73,255)  (13.5%)

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
12/22/03     125,248     43,482    81,766    48.5%
01/06/04     139,433     51,909    87,524    45.7%
01/13/04     191,241     62,711   128,530    50.6%
01/23/04     187,270     57,196   130,074    53.2%

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


NASDAQ-100

There is very little change in commercial traders' positions
here and the same holds true for the small traders.


Commercials   Long      Short      Net     % of OI
12/22/03       40,277     36,452     3,825    5.0%
01/06/04       42,892     37,801     5,091    6.3%
01/13/04       41,829     38,547     3,282    4.1%
01/23/04       42,823     39,442     3,381    4.1%

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
12/22/03       22,656    14,544     8,112    21.8%
01/06/04        8,035    17,911   ( 9,876)  (38.1%)
01/13/04        9,705    12,539   ( 2,834)  (12.7%)
01/23/04        9,180    11,371   ( 2,191)  (10.7%)

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

Commercials are also hesitant to make any big changes to their
net bullish stance on the Dow.  Meanwhile small traders grow
a little more bearish.


Commercials   Long      Short      Net     % of OI
12/22/03       14,088     9,998    4,090      17.0%
01/06/04       15,697     9,497    6,200      24.6%
01/13/04       16,501     8,724    7,777      30.8%
01/23/04       16,403     9,252    7,151      27.9%

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
12/22/03        6,915     8,983  ( 2,068)   (13.0%)
01/06/04        5,713     8,105  ( 2,392)   (17.3%)
01/13/04        6,496     9,970  ( 3,474)   (21.1%)
01/23/04        6,068    10,183  ( 4,115)   (25.3%)

Most bearish reading of the year: (10,136) - 12/16/03
Most bullish reading of the year:   8,523  -  8/26/03

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


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is possible at this or some subsequent date, the editors and
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presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

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http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter                 Thursday 01-29-2004
                                                    section 2 of 2
Copyright (c) 2004, All rights reserved.
Redistribution in any form is strictly prohibited.

The entire newsletter is best viewed in COURIER 10 for alignment
=================================================================

Stop Adjustments: None

Closed Plays:     BLI, ORB

Stock Splits:     BMS, FWFC, SAFM, SJW

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


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

None


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

===================================
Active Trader (AT) CLOSED LONG play
===================================

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

Big Lots Inc - BLI - close: 14.22 chg: -0.37 stop: 14.30

Ouch!  BLI has posted four down days in a row.  This sell-off has
broken support at its 200-dma as well as the $14.50 and $14.25
levels. The stock did dip toward its simple 50-dma this morning
but there wasn't much enthusiasm in its bounce off the lows.
We're stopped out at $14.30.  While the stock looks short-term
oversold and due for a bounce watch out for its daily
oscillators, which have turned bearish.

Picked on January 25 at $15.23
Gain since picked:      - 1.01
Earnings Date         02/25/04 (unconfirmed)
Average Daily Volume:      652 thousand




======================================
High Risk/Reward (HR) CLOSED LONG play
======================================

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

Orbital Sciences - ORB - cls: 12.62 chng: -0.63 stop: 12.50

There didn't seem to be any company-specific news to justify the
selloff in ORB today, but that didn't change the fact that the
stock lost nearly 5% on the day, tripping our $12.50 stop on the
early plunge before the afternoon rebound arrived.  That break of
both the $12.75 support and the 20-dma looks bearish, and ORB
will probably lose more ground before building a base for another
launch.  We'll keep our eye on the stock for another opportunity
to play, but for now, we must drop it and move to the sidelines.

Picked on January 11th at   $12.90
Change since picked          -0.28
Earnings Date                  N/A
Average Daily Volume =       380 K





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

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

BMS ships a 2-for-1 stock split

A couple of hours after lunch Bemis Company (NYSE:BMS) announced
that its Board of Directors had approved a 2-for-1 stock split and
a 14% increase in its cash dividend.

The quarterly cash dividend is being raised to 32 cents per share
and is payable on March 1st, 2004 to shareholders on record as of
February 17th.  The cash dividend will be paid on a pre-split
basis.

The 2-for-1 stock split will take effect as a 100% stock dividend
and is payable on March 1st, 2004 to shareholder on record as of
February 17th.  The split will increase the number of outstanding
shares to 108 million and marks BMS' fifth stock split.

About the company:
Bemis Company is a major supplier of flexible packaging and
pressure sensitive materials used by leading food, consumer
products, manufacturing, and other companies worldwide. Founded in
1858, the Company reported 2003 sales of $2.6 billion, of which
$2.1 billion was from the flexible packaging business segment and
$0.5 million was from the pressure sensitive materials business
segment. More than 75 percent of the Company's sales are packaging
related. The primary market for Bemis' products is the food
industry, which accounts for over 65 percent of sales. Other
markets include consumer goods, medical, pharmaceutical, chemical,
agribusiness, printing and graphic arts, and a variety of other
industrial end uses. Bemis holds a strong position in many of the
markets it serves and actively seeks new market segments where its
technical skill and other capabilities provide a competitive
advantage. Bemis' leadership position in the flexible packaging
industry rests on a strong technical foundation in polymer
chemistry, film extrusion, coating and laminating, printing and
converting. Bemis' pressure sensitive materials business
specializes in adhesive technologies. Based in Minneapolis,
Minnesota, Bemis employs about 12,000 individuals in 53
manufacturing facilities in 10 countries around the world.
 (Source: Company Press Release)

---

FWFC announces a 5-for-4 stock split

A couple of hours after the market's close tonight First
Washington FinancialCorp (NASDAQ:FWFC) announced that its Board of
Directors had approved a 5-for-4 stock split.

The split will be payable on March 1st, 2004 to shareholders on
record as of February 16th.  FWFC's Chairman said this was the
12th year in a row the company has declared a stock split (or
stock dividend).

About the company:
First Washington FinancialCorp is the holding company for First
Washington State Bank. The Bank maintains its headquarters in
Windsor, New Jersey and has 15 banking offices located in Mercer,
Monmouth and Ocean counties, New Jersey. In addition, the Company
is a joint venture partner in Windsor Title Agency, LLP, a general
title agency located in Lakewood, NJ. (Source: Company Press
Release)

---

SAFM scratches up a 3-for-2 split

An hour before the closing bell Sanderson Farms, Inc.
(NASDAQ:SAFM) announced that its Board of Directors had approved a
3-for-2 stock split of its common stock in the form of a 50% stock
dividend.

The distribution date will be February 26th, 2004 to shareholders
on record as of February 10th.  Fractional shares will be paid in
cash.

SAFM also announced a quarterly cash dividend of 12 cents per
share payable on February 24th to shareholders on record as of
February 10th.  This will be paid on a pre-split basis.

About the company:
Sanderson Farms, Inc. is engaged in the production, processing,
marketing and distribution of fresh and frozen chicken and other
prepared food items.   (Source: Company Press Release)

---

SJW Corp gushes with a 3-for-1 stock split


Late this evening SJW Corp (AMEX:SJW) announced that its Board of
Directors had approved a cash dividend increase and a 3-for-1
stock split of its common shares.

The quarterly cash dividend will be 76.5 cents per share and
payable on March 1st, 2004 to shareholders on record as of
February 9th.  The cash dividend will be paid on a pre-split
basis.

The 3-for-1 stock split will be payable on March 1st, 2004 for
shareholders on record as of February 10th.  After the split SJW
will have approximately 9.1 million shares outstanding.

About the company:
SJW Corp. is a publicly traded holding company headquartered in
San Jose, Calif. SJW Corp., through its subsidiary San Jose Water
Company, provides water service to a population of approximately
one million people in the City of San Jose and nearby communities.
(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

WFC     Wells Fargo                57.84     +0.78
MWD     Morgan Stanley             57.84     +0.78
MER     Merrill Lynch              58.68     +0.57
KMB     Kimberly Clark             59.00     +1.00
CAH     Cardinal Health            64.00     +0.75
GDW     Golden West Financial     102.94     +1.44

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

DCLK    Doubleclick Inc            11.90     +1.56
IPXL    Impax Labs                 19.19     +1.68
BBX     BankAtlantic Bancorp       16.53     +1.09
TEN     Tenneco Automotive         11.21     +1.02
CNQR    Concur Technologies        10.73     +1.51

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

PG      Procter & Gamble Co       101.00     +2.38
WLP     Wellpoint Health Network  104.36     +3.06
SBUX    Starbucks Corp             36.48     +1.02
MHP     McGraw-Hill Companies      75.64     +1.73
HDI     Harley-Davidson Inc        50.35     +1.61
STJ     Saint Jude Medical         71.75     +3.20
EL      Estee Lauder               41.90     +1.99

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

STM     STMicroelectronics         27.13     -1.16
ITW     Illinois Tool Works        77.55     -2.11
GM      General Motors             50.71     -1.75
CHA     China Telecom              36.98     -1.72
CAT     Caterpillar Inc            77.26     -2.36
VRTS    Veritas Software           32.24     -4.23
IMO     Imperial Oil Ltd           43.80     -1.80
TLM     Talisman Energy            54.50     -2.54
CTL     CenturyTel Inc             28.00     -3.30

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

GDT     Guidant Corp               63.30     -1.95
AMX     America Movil              31.04     -1.10
CFC     Countrywide Financial      82.05     -1.70
HAR     Harman Intl Industries     74.26     -3.64
DCX     DaimlerChrysler            47.40     -0.96
FRO     Frontline Ltd (ADR)        27.77     -1.70
SMMX    Symyx Technologies         25.80     -0.97


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

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

*****************************************************************
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The Premier Investor Network.
Do not duplicate or redistribute in any form.

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