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Daily Newsletter, Tuesday, 05/25/2004

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PremierInvestor.net Newsletter                  Tuesday 05-25-2004
                                                    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:      Russell Leads the Way
Watch List:
Market Sentiment: Blast Off!

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
     05-25-2004            High     Low     Volume Advance/Decline
DJIA    10117.62 +159.19 10121.67  9915.86 1.84 bln   2410/ 478
NASDAQ   1964.65 + 41.67  1966.68  1913.73 1.73 bln   2216/ 850
S&P 100   542.39 +  8.35   542.72   531.57   Totals   4626/1328
S&P 500  1113.05 + 17.64  1113.80  1090.74
RUS 2000  565.39 + 13.67   565.43   550.16
DJ TRANS 2931.95 + 66.59  2934.22  2856.11
VIX        15.96 -  2.12    18.42    15.73
VXO        15.91 -  2.40    19.21    15.63
VXN        22.04 -  2.29    24.82    21.62
Total Volume 4,012M
Total UpVol  3,476M
Total DnVol    454M
52wk Highs     117
52wk Lows      125
TRIN          0.40
PUT/CALL      0.90
=================================================================

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

Russell Leads the Way
Linda Piazza

While market participants focused on the Iraq situation, crude
oil prices, the Consumer Sentiment and Existing Home Sales, the
Russell 2000 was making a sneak assault on the top boundary of
its nearly month-long rectangular congestion zone.  That sneak
assault led the way for other indices to challenge recent
consolidation patterns, too.  By the end of the day, the move had
led to gains of 2.48 percent on the Russell 2000, 1.16 percent on
the SPX, 2.17 percent on the Nasdaq, and 1.60 percent on the Dow,
with those gains produced on moderate volume.  Other volume
patterns proved impressive, however, with the ratio of advancing
to declining issues 28:6 on the NYSE and 23:9 on the Nasdaq.  Up
volume amounted to more than eight times down volume on the NYSE
and seven times down volume on the Nasdaq.

With crude oil futures closing at a record high on Monday, the
stage had been set for a decline in overseas markets.  Following
network television's decision not to televise Bush's speech live,
articles discussing overseas market performance made little
mention of Bush's five-point plan for achieving a stable,
peaceful Iraq as a factor in trading decisions.  Instead, those
articles focused on the likely impact of increasing oil prices.

The Nikkei followed through on the promised declines, falling
138.71 points or 1.25 percent to close below the psychologically
important 11,000 at 10,962.93.  With concerns that oil prices
would restrict economic growth and Germany's much-watched IFO
Index easing in May, European markets gapped lower, too, but then
treaded water near their opening levels.  Stagnating consumer
demand continues to impact expectations in Germany, with higher
oil prices being mentioned along with escalating health-care
costs as negative factors. Some took heart from the increase in
the expectations component of that index, however.

Our futures reacted by falling throughout the night, beginning a
labored climb about 6:30 am EST, perhaps about the time that it
was clear that European markets would steady rather than tumble
precipitously.  The dollar weakened and fixed income markets
throughout the globe stabilized.  Yields for the benchmark Ten-
Year Treasury Note opened lower, followed by early weakness in
equity markets.

Most indices fell toward their morning lows just ahead of and as
May's Consumer Confidence and April's Existing Home Sales numbers
were released at 10:00 am EST.  Expectations for May's Consumer
Confidence had ranged from 93-94 with a prior number at 92.9.
The expectations component of the consumer confidence number, 60
percent of the total index, rose from 94.8 to 95.2, with the
present-situation component falling from 90.4 to 90.3.

The 93.2 Consumer Confidence number was variously hailed as
meeting expectations and being lower than expectations, depending
on the news source.  Survey results listed rising gasoline
prices, a mixed employment outlook, and the growing Iraq scandal
as pressures on confidence levels.  UBS issued a report last
Friday that speculated that the rising oil costs could trim $35
billion from after-tax income this year if those higher costs
continue.  Goldman Sachs believes consumer confidence and
presidential approval ratings to be strongly linked, and Bush's
approval rating has dipped as the Iraq situation intensifies.

All agreed on whether the existing home sales number met or beat
expectations, with that number surprising to the upside.  The
6.64 million sales figure was the second highest on record
according to the National Association of Realtors.  Consensus
expectations had been for a decrease to 6.41 million from March's
6.48 million sales, although I'd read forecasts that ranged from
6.40-6.48 million.  Some theorize that potential homebuyers
rushed to get into homes as interest rates rose, fearing higher
interest rates to come, making that bump higher a temporary one.
Perhaps predictably, the homebuilders saw some of the strongest
gains, with the $DJUSHB, the Dow Jones US Home Construction
Index, gaining 4.90 percent in Tuesday's trading.

The SPX, Dow and Nasdaq reacted variously to those numbers and a
concurrent dip in crude oil futures by steadying a few minutes or
dipping to a slightly lower low.  The Russell 2000, however, just
steepened the climb that it had begun at Tuesday's open when it
broke above the consolidation zone in which it had been confined
since May 7.

Annotated 60-Minute Chart of the Russell 2000:



After closing above its 200-dma on Monday, the Russell charged
above that consolidation zone and important 60-minute averages at
the open, pausing only to absorb the impact of the economic
numbers before steepening that climb.

Annotated Daily Chart of the Russell 2000:



As can be observed on the Russell 2000's daily chart, recent
gains produced a bullish cross in the MACD, but from below
signal, and broke the stochastics above the signal line.
Shorter-term 5(3)3 stochastics (not shown), however, have already
cycled far toward levels indicating short-term overbought
conditions, with that stochastics level being approached as the
Russell 2000 approaches horizontal resistance, the upside target
of its 60-minute rectangular consolidation band, the 50-dma, and
one version of a descending trendline off recent highs.  While
today's impressive gains can not be minimized, especially as they
created a new P&F double-top breakout signal with an upside
target of 630, neither should that impressive resistance be
minimized.

This move can not be called bullish with certainty until it
retraces more than 50 percent of the recent decline.  If the
Russell 2000 can break above the 572 level, it should next test
the 100-dma and then the 595-600 range if it can climb above the
100-dma.

If the Russell 2000 led the way, did the other indices follow?
Most major indices produced breakouts, with the SPX being one of
those indices.

Annotated Daily Chart of the SPX:



The SPX has been particularly important to watch as its tests of
the 200-sma have prompted recent bounce attempts.  While some
other indices, most notably the OEX, appeared more bearish
because of continual closes below their 200-dma's, the SPX's
closes above that important moving average coupled with the
bullish divergence on its daily chart signaled a warning to those
thinking bearishly. Today's action saw the MACD produce a bullish
cross, but from below signal.

Annotated Daily Chart of the Nasdaq:



If the Russell 2000's close above its 200-sma Monday predicted
that it was breaking out of its recent congestion zone, the
Nasdaq's close above its 200-ema Monday may have been doing the
same.  Especially with tech-related indices, I like to watch the
-ema as well as the -sma, and this viewpoint shows the OEX
scrambling above that moving average Monday, finding support at
it on Tuesday's morning dip, and then climbing strongly from that
average.  As with many other indices, MACD produced a bullish
cross but from below signal.  The 21(3)3 stochastics have moved
up through the signal line.  The shorter-term 5(3)3's (not shown)
have already cycled far toward levels indicating overbought
conditions as the Nasdaq heads up to test its 50-dma, the
psychologically important 2000, and then perhaps its 100-dma and
the descending trendline off the year's high, depending on
whether it can surmount each succeeding level or gets turned
back.  It's possible to draw several versions of a triangle on
the Nasdaq's chart, and the possible formation I've drawn on this
one proves less neutral than a symmetrical triangle.  The chart
reveals that the Nasdaq is perhaps just rising within that
formation that consists of a flat bottom and a series of lower
highs.  That presumes the formation of another lower high, but it
was also possible to draw a triangle with an ascending lower
trendline, the neutral version of a triangle.  The coordination
of the MACD bottoms with the price bottoms within the flat-
bottomed structure hint that it may be the correct one.

I've included a neutral triangle (ascending bottom support) and a
bearish one (flat bottom) on the Dow's chart, although here an
interpretation of the formation as a bearish right triangle seems
a stretch.

Annotated Daily Chart of the Dow:



The Dow's chart (using the DJX as a proxy) has produced bullish
price/MACD divergence, too.  As with the other indices, the MACD
bullish cross was produced from below signal, and prices head
straight up into moving-average, horizontal and trendline
resistance.  Dow 10,200-10,300 registers as important known
historical resistance as well as the location of the 30- and 50-
dma's and the former supporting trendline from the Dow's neutral
triangle.

Weekly charts show these indices trying to steady at first
important weekly support, while weekly 21(3)3 stochastics attempt
bullish crosses, completed only on the COMPX and without a move
up through the signal line on that index.  On all, RSI hooks up
within a roughly descending formation.  Weekly MACD has not
turned up on any of the above indices.

What does it all mean?  Earlier in the week, I had speculated
that indices might make a run higher this week into the June 3
official OPEC meeting in a kind of buy-the-rumor move.
Yesterday's climb by crude oil futures spoiled that effect, with
Jane Fox of the OIN Market Monitor perhaps pinpointing one reason
behind that climb.  It was perhaps produced at least in part by a
safety shutdown at a Royal Dutch/Shell Oil platform in the Gulf
of Mexico, with that shutdown cutting the oil supply by 150,000
barrels a day.

With some statements about an optimum price being $30/barrel
producing Tuesday's pullback in crude prices, we then saw the
expected run higher, a run into resistance.  That continued
inverse relationship between oil prices and equity behavior gives
me pause about predicting whether the indices will be able to
push above their next approaching resistance levels.  Crude oil
prices have been consolidating above the benchmark $40.00, with
these moves higher and lower occurring within a consolidation
zone roughly between $40.00 and $42.00.  Moves within a
consolidation zone prove difficult to predict.  Daily oscillators
for crude oil head lower . . . or did, until stochastics turned
higher again on Tuesday, refusing to fall below the signal line.

The other factor giving me pause relates to economic releases
Wednesday, with one of those releases being the Crude
Oil/Gasoline/Distillate Inventories at 10:30.  In this climate,
that number might be watched more closely than in the past, with
further declines producing a move higher in the crude futures.
We're beginning to see earnings reports and business and consumer
confidence numbers being impacted by crude oil costs, such as
Germany's IFO Index and our Consumer Confidence Index.  Headlines
for articles discussing airline stocks mention fuel surcharges,
but the airliners aren't the only entities affected by those high
crude prices.  Articles today about eurozone movers and shakers
included notations that chemical firms such as BASF and Bayer had
been notable decliners in early trading today, attributing those
declines to crude oil costs.

The best I can say is that I think indices will attempt continued
bounces into resistance as long as crude prices consolidate or
show an inclination to decline into the June 3 OPEX meeting.
However, if Wednesday's inventory numbers concern market watchers
or some global geopolitical event heightens worries and send
crude oil higher again, markets appear vulnerable to a downturn
below resistance.  Whether indices can break above upper
descending trendlines remains in question at this time and may
depend in part on OPEC's decision.  If we do get a buy-the-rumor
continued run higher, then even a beneficial decision by OPEC
might result in a sell-the-rumor effect, especially as some doubt
how much production can be increased.

When we're considering what's likely to happen, however, we
shouldn't ignore the collapse in volatility today.  The collapse
was huge, almost mirroring the March 10 one-day gain in
volatility.  The collapse turned the VIX back into the 15.75-
16.75 range that has been a recent axis of gyrations for the VIX
and elicited intrigue about who knows what.  Is China going to
announce a decrease in demand that will uncouple the inverse
relationship of oil and equities?  Will Russia reveal that it
will complete its pipelines sooner than expected and be able to
supply the world's needs?  Who knows something and what is it
that's known?

It's not the actual number that proved so startling, since that's
within that recent axis, but the precipitous drop.  As far as I
can ascertain, Tuesday produced the biggest one-day drop in the
VXO since the reformulation of the VIX. A continued drop in the
VIX produces an enigma for market watchers who remember the old
"when VIX is low, it's time to go" axiom, coupled with the usual
advice about selling stocks in May.  We've watched the VIX go
lower and lower, reaching new multi-year low after new multi-year
low with only to-be-expected pullbacks resulting, so how low is
low?

Other economic reports due Wednesday include the 8:30 release of
April's Durable Goods Orders, with expectations anything from a
flat number to a 0.8 percent decrease.  March's number stood at 5
percent and March's Durable Goods Orders minus transportation at
5.4 percent.  This release by the Census Bureau often proves
market-moving even though it can be volatile.  Non-defense
capital goods can be a much-watched component of this number
since it gives insight into business investment component of the
GDP. Market watchers will want to see gains, if any result, be
broad based rather than isolated in a particular sector.  Other
economic releases include April's New Homes Sales at 10:00 EST
and the already mentioned Crude Oil/Gasoline/Distillate
Inventories at 10:30.  Homebuilder Toll Brothers (TOL) also
reports before the bell.  Like other indices, the $DJUSHB's gain
today sent it up into resistance, and market watchers want to see
TOL announce results that reassure the dip buyers that the made
the right decision.

Keep an eye on the Russell 2000 and crude oil prices tomorrow as
guides to likely action, and be careful around the time of these
economic releases.


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

Blast Off!

Brown Shoe Company, Inc. - BWS - close: 41.32 change: +0.83

WHAT TO WATCH: Remember a couple weeks ago when we looked at BWS
as a potential breakout candidate?  Well, the stock made good on
that promise yesterday with its first-ever close over the $40
level and added to those gains on increasing volume today.  While
aggressive traders could consider chasing the stock higher from
here in anticipation of a run towards the $45 level, our
preference would be to be a bit more patient, looking for
pullback entries on a dip near the $39.50-40.00 area.




---

Airtran Holdings Inc. - AAI - close: 14.08 change: +0.61

WHAT TO WATCH: Shares of AAI spent the tail end of last week
putting the finishing touches on its lop-sided H&S bottom
formation, with just a hint of a breakout coming as Friday's
close was just over the down-sloping neckline.  Yesterday's
strength confirmed that breakout, but was held back by the 200-
dma.  Helped by the broad market strength though, AAI blasted
through that resistance today and is on the verge of another
breakout.  Look to play the upside on a breakout over the $14.25
January high, targeting a rise to strong resistance near $16.




---

Southwest Airlines Inc. - LUV - close: 15.76 change: +0.49

WHAT TO WATCH: If at first you don't succeed, try again.  LUV's
first attempt at a breakout over the $15.30 resistance level
failed, sending the stock back down towards the $13.50 support
zone.  Despite the record high fuel prices, the stock has been
rallying strongly over the past couple weeks and today broke out
on strong volume, posting its best close since early January.
This looks like a serious rally underway, although there is the
risk of resistance near the 200-dma.  Rather than entering on
strength, the better strategy appears to be on a slight pullback
to confirm the $15.25 level as new-found support.




---

CVS Corp. - CVS - close: 41.15 change: +1.17

WHAT TO WATCH: After spending the past couple weeks consolidating
its early May drop, shares of CVS came roaring back today,
climbing back over the $41 level and posting its best close since
the middle of 2001.  This looks like a great setup for a breakout
play.  Trigger entries on a move over $41.40 and target an upside
move to next resistance at $45.




---


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

AUO $23.35 - Is the profit taking finally over?  It certainly
looks that way for shares of AUO, as the stock has now broken
above the 50-dma and all the shorter moving averages, moving
beyond the short-term downtrend.  This sets the stage for a run
back at the April highs near $28.  Entries look favorable on a
breakout over today's high, but even better on a dip and
successful test of the 50-dma as new support.  Target an initial
move to $26 resistance before setting sights on the April highs.

AOC $26.95 - After spending the first couple weeks of May
building support just over the $25 level, AOC began to show signs
of life late last week, moving back over the 100-dma.  Today's
broad market strength lent further lift to the stock, pushing
through the early May highs and coming to rest just under the 50-
dma.  Use a trigger at $27.25 and look for a rally back towards
the March/April highs near $29.

WMB $11.94 - Natural Gas stocks had quite a day, participating in
the broad market rally.  Shares of WMB broke out in a big way,
smashing former resistance at $11.50 and closing at a nearly 2-
year high.  Following the broad consolidation of the past several
months, this looks like a great point to look for a longer-term
bullish position.  Look to initiate positions on a successful
test of support in the $11.25-11.50 area, looking for a rally
first to the $15 level and then towards major resistance at $20.
Note that the PnF bullish price target is currently $18.


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

Oil Slides, Stocks Geyser
- J. Brown

It is interesting how the market seems to focus on one main
concern.  A few weeks ago it was interest rates.  Before that it
was jobs.  Right now it's oil.  Monday saw oil shoot to an all-
time high at $41.72 a barrel despite news that Saudi Arabia would
up production to soothe demand and rising prices.  Today oil
slips 58 cents and the markets rejoice with a very broad-based
rally that left no one behind.  Every major sector index closed
in the green with very heavy buying in tech stocks and previously
interest rate sensitive items like homebuilders.

Boosting investors confidence today was a better than expected
existing home sales numbers, which is a strong sign for the
economy since home sales tend to boost demand for household
products.  Also on the economic front today was consumer
confidence, which edged up 0.2 percent to 93.2.  The markets
could also be reacting to President Bush's speech last night that
clearly outlined America's plan to exit the conflict in Iraq.
The fact that we now have a plan and a timetable should have
eased fears that we'll be trapped there forever.

Of course the President did say we have tough days ahead of us as
insurgents and terrorists step up their activities ahead of the
June 30th handover.  Here at home we have mounting concerns with
elevated terrorist "chatter" about a potential attack during the
Olympics in Greece, the Democratic and Republican conventions
this summer and the U.S. elections in November.  For the time
being "geo-political risk" will remain an underlying worry but
today investors managed to forget them.

Market internals were very bullish with advancing stocks
outnumbering decliners almost 6-to-1 on the NYSE and 11-to-4 on
the NASDAQ.  Up volume was more than eight times down volume on
the NYSE and more than seven times down volume on the NASDAQ.
Volatility indices took major tumbles back toward their April
lows.  We've been expecting a potential rally this week (see this
weekend's market wrap) and we've finally got one.  The Dow's
breakout over 10,100 and its 200-dma is very encouraging as is
the NASDAQ's close over its own 200-dma.

Tomorrow brings us the April durable goods order and the new home
sales numbers.



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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  8540
Current     : 10117

Moving Averages:
(Simple)

 10-dma:  9986
 50-dma: 10252
200-dma: 10050



S&P 500 ($SPX)

52-week High: 1163
52-week Low :  927
Current     : 1113

Moving Averages:
(Simple)

 10-dma: 1094
 50-dma: 1116
200-dma: 1083



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1123
Current     : 1447

Moving Averages:
(Simple)

 10-dma: 1407
 50-dma: 1435
200-dma: 1422


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

CBOE Market Volatility Index (VIX) = 15.96 -2.12
CBOE Mkt Volatility old VIX  (VXO) = 15.91 -2.40
Nasdaq Volatility Index (VXN)      = 22.04 -2.29


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.90        829,079       748,788
Equity Only    0.69        648,742       448,555
OEX            1.00         25,434        25,328
QQQ            0.50         56,017        28,098


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

Bullish Percent Data

           Current   Change   Status
NYSE          62.4    + 1     Bear Confirmed
NASDAQ-100    33.0    + 3     Bear Confirmed
Dow Indust.   66.7    + 0     Bear Confirmed
S&P 500       58.4    + 0     Bear Confirmed
S&P 100       61.0    + 0     Bear 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: 0.91
10-dma: 1.14
21-dma: 1.06
55-dma: 1.08


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    2410      2216
Decliners     478       850

New Highs      67        78
New Lows       27        37

Up Volume   1597M     1511M
Down Vol.    192M      209M

Total Vol.  1841M     1734M
M = millions


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

Commitments Of Traders Report: 05/04/04

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

Commercial traders remain net short and seem to be increasing
their bearish sentiment.  Small traders are net bullish and in
mirror-like fashion are growing more bullish compared to the
big traders.


Commercials   Long      Short      Net     % Of OI
04/27/04      406,927   416,244   ( 9,317)   (1.1%)
05/04/04      397,964   417,175   (19,211)   (2.4%)
05/11/04      401,365   421,672   (20,307)   (2.5%)
05/18/04      394,352   423,258   (28,906)   (3.5%)

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
04/27/04      133,775    90,535    43,240    19.3%
05/04/04      137,112    80,201    56,911    21.6%
05/11/04      135,534    76,987    58,547    27.5%
05/18/04      139,647    74,597    65,050    30.4%

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 four-week trend for the commercial traders has been a bullish
one as they increase their long positions.  Meanwhile the small
traders have been busy shuffling money around and reducing their
long and short positions.


Commercials   Long      Short      Net     % Of OI
04/27/04      291,365   370,549    (79,184)  (12.0%)
05/04/04      316,840   370,781    (53,941)  ( 7.8%)
05/11/04      378,696   362,887     15,809     2.1%
05/18/04      390,484   357,157     33,327     4.5%

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
04/27/04      175,788     69,613   106,175    43.3%
05/04/04      119,308     74,407    44,901    23.2%
05/11/04      101,199     94,408     6,791     3.5%
05/18/04       62,216     87,269    25,053    16.8%

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


NASDAQ-100

There continues to be very little movement in the commercial
traders' positions.  Small traders have reduced their short
positions somewhat.


Commercials   Long      Short      Net     % of OI
04/20/04       54,852     35,964    18,888   20.8%
04/27/04       54,196     33,948    20,248   23.0%
05/04/04       56,931     35,209    21,722   23.6%
05/18/04       58,376     37,528    20,848   21.8%

Most bearish reading of the year: (21,858)  - 08/26/03
Most bullish reading of the year:  21,722   - 05/04/04

Small Traders  Long     Short      Net     % of OI
04/27/04        9,008    20,347   (11,339)  (38.6%)
05/04/04       10,247    24,764   (14,517)  (41.5%)
05/11/04        9,716    21,072   (11,356)  (36.9%)
05/18/04        9,843    18,935   ( 9,092)  (31.6%)

Most bearish reading of the year: (14,517) - 05/04/04
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

The dead heat between longs and shorts for the commercial
traders has grown even thinner.  Small traders have moved
from net bearish to net bullish on the Industrials.


Commercials   Long      Short      Net     % of OI
04/27/04       23,676    22,009    1,667       3.6%
05/04/04       24,296    22,181    2,115       4.6%
05/11/04       22,614    21,507    1,107       2.5%
05/18/04       22,257    22,444   (  187)     (0.4%)

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
04/27/04        5,998     8,868   (2,870)   (19.3%)
05/04/04        6,262     8,155   (1,893)   ( 9.2%)
05/11/04        7,009     7,640   (  631)   ( 4.3%)
05/18/04        9,098     6,591    2,507     16.0%

Most bearish reading of the year: (12,106) -  3/09/04
Most bullish reading of the year:   8,523  -  8/26/03

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


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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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Copyright ) 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter                  Tuesday 05-25-2004
                                                    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

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


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

SI      Siemens Aktien             70.52     +1.07
UBS     UBS Ag.                    72.54     +0.78
PTR     Petrochina Co Ltd          46.69     +0.61
HBC     HSBC Holdings              72.43     +1.35
WB      Wachovia                   47.47     +0.82
AIG     American Intl Group        72.00     +2.20

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

HUM     Humana Inc                 17.14     +1.49
SWFT    Swift Transport            18.71     +3.08
NNI     Nelnet Inc                 19.49     +1.19
VCLK    ValueClick Inc             11.23     +1.15
FFBC    First Financial Bancorp    17.43     +1.26
LFB     Longview Fibre Co          12.38     +1.45

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

ITW     Illinois Tool Works        90.25     +1.85
CNA     CNA Financial              29.36     +1.33
PHM     Pulte Homes                52.46     +2.71
MRBK    Mercantile Bankshares      46.15     +1.02
TOL     Toll Brothers Inc          41.31     +2.23
TTC     Toro Co                    62.39     +4.36
TSO     Tesoro Petroleum           24.12     +1.83

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

WYE     Wyeth                      34.67     -2.64
BOBE    Bob Evans Farms            25.67     -2.73

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

.none..


=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to Contact Support
=================================================================
DISCLAIMER
=================================================================

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

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

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

*****************************************************************

Copyright 2003  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





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