Option Investor

Daily Newsletter, Thursday, 06/17/2004

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PremierInvestor.net Newsletter                 Thursday 06-17-2004
                                                    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:      One to Go
Market Sentiment: The Waiting Game
Watch List:       Waiting For Expiration

MARKET WRAP  (view in courier font for table alignment)
     06-17-2004            High     Low     Volume Advance/Decline
DJIA    10377.52 -  2.06 10390.01 10338.13 1.57 bln   1670/1108
NASDAQ   1983.67 - 14.56  1993.93  1976.25 1.46 bln   1199/1811
S&P 100   552.60 -  0.83   553.63   550.62   Totals   2869/2919
S&P 500  1132.60 -  1.51  1133.56  1126.88
RUS 2000  569.57 -  0.50   571.16   565.21
DJ TRANS 3059.99 +  0.75  3062.53  6032.32
VIX        15.15 +  0.36    15.58    15.00
VXO        15.06 +  0.40    15.97    14.87
VXN        21.33 +  0.94    21.75    20.77
Total Volume 3,321M
Total UpVol  1,345M
Total DnVol  1,908M
52wk Highs     214
52wk Lows      131
TRIN          1.38
PUT/CALL      0.79

Market Wrap

One to Go
Linda Piazza

One day remains in this option-expiration week.  Only one more
day of boredom remains before markets break out of their recently
established consolidation patterns.  At least, that's the hope
many market watchers express.

Muted reactions to economic numbers characterized Thursday's
trading, with markets drifting down or up according to the
latest release in a day punctuated by scattered releases.  Only
on the Nasdaq and some other tech-heavy indices did the drifts
take the indices far from the flat-line levels. The Dow closed
lower by 2.06 points or 0.02 percent, the Nasdaq by 14.56 points
or 0.73 percent, the Russell 2000 by 0.50 points or 0.09 percent,
and the S&P 500 by 1.53 points or 0.13 percent.

Some hints of another boring day on the markets occurred pre-
market.  Futures showed little reaction to overnight news that
might have been market moving only a week or two earlier.  The
day dawned with news of a car bombing in Iraq, with that bomb
killing dozens and wounding more than 100.  As the June 30 hand-
off date approaches, violence escalates as had been anticipated,
but the level of Thursday's carnage proved particularly
disturbing.  In addition, recent explosions have stopped oil
exports from Iraq, requiring repairs of blasted pipelines in both
the north and south of Iraq.  Crude oil prices rose pre-market,
with European and U.K. oil majors rising and crude-sensitive
sectors such as airlines sinking.

June 30 looms important for another reason, too, of course, with
a two-day FOMC meeting concluding that day.  Exacerbating the
worries of market watchers during the pre-opening hours was a
Swiss central bank decision to hike rates and further warnings by
central bank members in England and other countries.  In the
U.K., May's retail sales rose a higher-than-expected 0.8 percent,
increasing expectations for yet-another rate hike by the Bank of
England.  Economic numbers released in the U.S. before the market
open fanned worries about the pace of rate hikes in the U.S.

Our economic calendar included the release of initial claims and
PPI at 8:30, May's leading indicators at 10:00, natural gas
inventories at 10:30, and June's Philadelphia Fed number at noon,
but it was PPI that garnered the most attention early in the day.
PPI came in at a hotter-than-expected 0.8 percent higher due to
soaring food and energy costs.  Core PPI, excluding those costs,
rose more than expected, too, to 0.3 percent against an
expectation of a 0.2 percent rise.  Crude goods rose 2.8 percent,
with core crude goods falling 3.8 percent.  May's wholesale
prices climbed 5 percent, indicating that producers have been
able to increase prices to offset costs.  Intermediate goods
prices climbed 1.1 percent and 0.9 percent, excluding food and
energy.  Gasoline prices contributed to the higher PPI. While one
article trumpeted the news that "Wholesale Inflation Leaps on
Higher Producer Prices," raising the specter of Greenspan and
company ratcheting up rates at a faster-than-wanted pace, other
commentators calmly noted that PPI tends to be more volatile than

Markets also had to deal with the pre-market release of the
jobless claims number, balancing that stronger-than-expected PPI
against good news in the employment sector.  With last week's
claims number rising to a seven-week high and the prior week's
revised upward, attention focused on that claims number.  The
expectation for the four-week average ranged from 330K-346K,
depending on the source.  The actual number fell somewhere near
the middle of that range, at 336,000. Articles mentioned that
increased demand encouraged U.S. companies to hold on to workers.
First-time claims fell 15,000 from a revised-lower 351,000
(revised from 352,000).  The four-week average dropped to
343,250, easing away from that 350,000 level that many consider
the benchmark.  Some point to the federal holiday last week for
President Reagan's funeral as a major reason for the decrease in
claims, the second week in a row that has contained a federal
holiday.  Next week, much attention should focus on the claims

Before the release of the 8:30 numbers, S&P futures had been
holding steady and slightly higher than at Wednesday's close,
from about 1132.75 to 1134, but they dipped lower to support near
1132 after the release.  The dip wasn't extreme, and it was
predictive of the market open, also a dip that wasn't extreme,
although the Nasdaq did open almost five points lower.  Indices
opening near Wednesday's close didn't maintain those near flat-
line levels long, however, with markets slipping lower into the
10:00 release of May's leading indicators.  Market pundits
characterize the leading indicators index as a closely watched
number, and it appeared to cheer market watchers, with the SPX,
Dow, Russell, and Nasdaq all steadying immediately after the
release of that number and then climbing off their lows.  After
our markets opened, European markets had followed our markets
lower after PPI and had steadied immediately after the release of
the leading indicators and then drifted up into the European
close, following the same pattern the U.S. markets this morning.
The FTSE 100 and CAC 40 closed near flat-line levels, up 0.05
percent and 0.10 percent, respectively, but the DAX fell harder
after PPI than did the other two, and it closed lower by 0.44

Expectations for May's leading indicators ranged from a rise of
0.3-0.4 percent, with the prior month's release seeing a rise of
0.1 percent.  Leading indicators actually rose a higher-than-
predicted 0.5 percent, with one headline noting that eight of the
ten U.S. leading indicators rose.  Consumer confidence and stock
prices were the two leading indicators that dropped.  An increase
in factory hours and a rise in money supply prompted some of the

Then began the next set of economic releases.  Natural gas
inventories rose 94 BCF, according to the Department of Energy,
but that number appeared to produce no reaction at all.
Expectations for June's Philadelphia Fed Index had ranged from
25.3-28.00, with the market consensus being 26.4, according to
one article.  The number was actually a higher-than-expected
28.9, rising above May's 23.8.  The prices-paid component dropped
to 51.9 against May's 59.6.  As Jonathan Levinson noted at the
time on the Monitor, markets showed little reaction at first to
the Philadelphia Fed Index, perhaps still ruminating over the
previous releases and their implications.  Most markets then
drifted slightly lower, wafted along on a gentle, languorous

They tried to climb again, too, but late-day trading was
characterized by a dampening of any moves higher or lower, with
most indices finding a preferred level and sticking to that level
into the close. Breadth proved mixed, with adv/dec ratios at
19:14 for the NYSE and 12:19 for the Nasdaq.  Up volume
outnumbered down volume by a healthy margin on the NYSE, too,
with down volume more than double up volume on the Nasdaq.

Weakness in semi stocks and a Jabil-induced weakness in
electronic manufacturers pressured the tech-laden Nasdaq all day.
Flextronics (FLEX) and Celestica (CLS) fell along with JBL,
although Solectron (SLR) managed a nearly flat close ahead of its
after-hours earnings report.  Across the markets, other weak
sectors included biotechs, networkers, securities broker/dealers,
and computer storage companies, but a surprising number of
sectors closed in the green.  Many stocks closing higher were in
the oil-service, utility, and natural-gas sectors, but gainers
also included the homebuilders and healthcare stocks.  Studying a
list of sector decliners and gainers, some might consider the
trading to have been mostly defensive.

Stocks in the news included Jabil (JBL), of course, closing lower
by 3.56 points or 12.69 percent after the warning about Q4.  CSCO
traded lower by 0.52 points or 2.18 percent after announcing that
it would buy the intellectual property, most of the engineering
teams and certain assets from Procket Networks, a privately owned
company.  JDA Software (JDAS) announced its own acquisition, of
QRS Corp. (QRSI), a retail-industry software maker.  Although
JDAS opened lower and traded lower after the opening, it
rebounded and closed higher by 0.32 points or 2.61 percent.

Other scheduled economic releases included the money supply
figure.  Recently, some economists and other market watchers have
been scrutinizing the money supply figures, expressing the
opinion that money supply has been expanding at an abnormally
fast pace.  Many concluded that the Fed had taken an unusually
accommodative stance.  However, you'll notice that you don't find
the figures for money supply in this article.  That's because
I've recently come across articles by Mark Hulbert, with those
articles expounding on some of the reasons why we might not be
able to trust the money supply numbers.  Those reasons include
the Fed's tendency to seasonally adjust those numbers even many
years after their first release.  Recently, the Fed revised the
seasonally adjusted data for 1998, for example.  Hulbert also
mentioned a couple of ways that the errors could affect the money
supply number, including the as-yet-unproved possibility,
proposed by Madeline Schnapp of TrimTabs, that banks could be
erroneously entering figures for risky items into one measure of
money supply that has displayed that abnormally high pace of
expansion.  I don't know about you, but I don't have the
experience to sort through data sets that may be in error when
first released and then adjusted for the next six years and come
to any sound conclusion, so you won't find an erudite discussion
on money supply in an article I've written.

Another economic release scheduled for after hours was the semi
book-to-bill number.  Late last week and early this week saw
several analysts recommend that clients lighten up on their semi
related stocks, with Deutsche Bank and UBS being two of those
analysts.  Clients have apparently taken that advice to heart,
along with a number of their investing friends, because the SOX
headed south all week, rolling back down into the descending
regression channel that has contained its prices this year.
Stochastics rolled down into a full bear roll, and the SOX
confirmed a double-top formation, setting up a downside target
near 437.  Not benefiting Thursday's trading was memory-chip
maker SimpleTech's (STEC) lowering of revenue estimates on
Wednesday.  Semi.org had not yet released the semi book-to-bill
number as this article was submitted, so I was not able to
include that number in this article, but semi-related stocks
throughout the globe could certainly use some help tonight, with
our SOX perching on important support.

Annotated Daily Chart of the SOX:

As James Brown pointed out on the Market Monitor today, MACD
created a new sell signal.  The histogram is now negative, but
that sell signal was created from above the signal line, and the
MACD has not completely rolled down through that line.  I find
this an iffy time when watching MACD, because as it's on the
verge of rolling down through that signal line, it sometimes
turns right back up again.  This might be a particularly
important point since the SOX ended the day on possible mid-
channel support, just above the March low.  A positive or even a
buy-the-(negative)-news reaction to the book-to-bill number could
see beaten-down semiconductor stocks attempt to rise.  If so, the
30-dma has proven particularly important to watch over the last
month, with that average now marking the approximate confirmation
level of the double-top formation.  With that confirmed double
top formation, complete with bearish divergence as the second top
was formed, the expectation would be that the SOX will again find
resistance, perhaps near either the 30- or the 50-dma's.
Expectations or not, in-place trend or not, price action should
always be the guide.  A move above the 200-dma would signal that
the SOX might be ready to break out of that descending regression

A negative reaction to the book-to-bill number could be followed
by a further drop, confirmed by a move below 452.75-453.00.  The
expectation then would be that the SOX would fall down through
its regression channel toward that 437-438 downside target
predicted by the double-top formation.  Traders should note
intervening support before that target could be reached, however.

A SOX decline would create more pressure on the Nasdaq, of
course.  With tomorrow being opex Friday, I would caution against
placing large bets on any position, however, as the day could
produce false moves that are not particularly amenable to
technical analysis.

The Nasdaq's chart displays some troubling signs, too.

Annotated Daily Chart of the Nasdaq:

That potential head-and-shoulders formation just under resistance
pinpoints possible weakness, especially when coupled with the
rolling-down RSI.  Bullish traders prefer to see a measured
pullback in the form of a flag formed from a tight pattern of
lower highs and lower lows, a bull flag.  However, neither
stochastics nor MACD has fully committed to the downside, and the
Nasdaq has stubbornly maintained levels above the 200-dma, so we
can't assume that H&S formation will ever be confirmed.  Watch
that 200-dma for signs that the Nasdaq might be confirming that
H&S, rolling down toward the 1930 support again. A move up
through 2000 and then above last week's high would be a sign that
the Nasdaq is unexpectedly breaking to the upside out of its
bearish right triangle.  These formations typically break to the
downside, but "typically" is not synonymous with "always."

The Russell 2000 chart displays its own possible H&S, with the
Russell 2000 not yet ready to roll over into that right shoulder
and perhaps never ready to do so.  That possible right shoulder
forms at the 50 percent retracement of the decline from the April
5 high to the May 17 low, and has a descending neckline that
roughly conforms to the 30-dma.

Annotated Daily Chart of the Russell 2000:

Oscillators do not yet commit to a direction.  It's possible to
micro-analyze every nuance of each of the oscillators and
discover bearish price/RSI divergence as the possible head was
formed, but all we can say with certainty is that the Russell
2000 remains trapped between its 200-dma and 100-dma.  It's
positioned about midway between support and resistance and
displays a potentially bearish formation that has yet to be
confirmed.  A break much above 572 negates the potential H&S,
while a break below the 200-dma confirms it.  Until either of
those events occurs, we can't determine much else.

The Dow's chart displays indecision, too, with the daily candle a
doji at resistance for the second day in a row.

Annotated Daily Chart of the Dow:

Although I haven't included the channel on this chart, it's also
possible to characterize the Dow as trading lower since February
within a descending regression channel, with the top of that
channel described by the top red trendline on the chart above.
As other writers have noted, the Dow clings to that upper
trendline, not able to move above it and not willing to fall
below it.  Oscillators show inconclusive evidence.  Stochastics
and RSI poise on the verge of tipping over into bearish rolls or
else trending while the Dow begins a directional move higher.
Nothing on this chart signals that the Dow will head one
direction more strongly than the other, with the obvious
exception of an expectation that an index trading in a well-
formed descending regression channel might continue to trade
lower within that channel.  Since the weekly view shows
oscillators still trending up but showing the slightest tendency
to hook over, the possibility remains that this big regression
channel has been nothing more serious than a bull flag on the
weekly chart.

The SPX can also be characterized as trading lower within a
descending regression channel, although its channel formed
beginning in early March.

Annotated Daily Chart of the SPX:

As is also true of the OEX, the SPX's pullback on the daily chart
since early June could be variously characterized as a bull flag
(if you're a bull) or a broadening formation (if you're not so
bullish).  This week, that formerly broadening formation has
narrowed into a tighter range, however, with a top at about
1136.50 and a bottom at about the board-flat 100-dma, with
further support below at the 50-dma.  RSI begins to look more
bearish here, but stochastics kicked back up again, giving a
mixed outlook that goes perfectly with the flattening MACD.
Weekly oscillators look similar to the Dow's:  RSI and
stochastics headed higher, but showing a slight tendency to hook

After-hours earnings did little to clarify the situation.  They
included reports by Adobe (ADBE), Red Hat (RHAT) and Solectron
(SLR), with ADBE and RHAT both trading lower, and SLR headed
higher.  RHAT's revenue missed expectations, and the stock had
headed lower by 9 percent as this report was prepared.  ADBE had
dropped more than 2 percent.

Economic reports due Friday include only the 8:30 release of the
Q1 current account figure, with the previous number at -$127.5
billion, and with expectations firming up for a deficit of
-$140.0 billion, but ranging from $139.5-141.3 billion.  If
markets are going to move, they'll probably be prodded by
something other than economic numbers.

The often-seen tendency for an option expiration Friday is for
markets to clamp down late in the morning and attempt to maintain
equilibrium until the market close, a tendency that may be
exacerbated by the upcoming FOMC meeting and transfer of power in
Iraq, with both events now two weeks away.  While I would not be
surprised to see that trend continued tomorrow, be watchful of
the crude prices.  While lowered gasoline prices this week and
building inventories over the last couple of weeks might have
reassured markets, crude futures flamed up toward the
$39.00/barrel level Thursday.  That, coupled with the higher-
than-expected PPI, could start a fire that eats through some
support levels.  The Dow Jones Transportation Index, often a
leading indicator for the Dow, created a doji at the top of a
rise in Thursday's trading, and Dow bulls don't want to see it
turn down Friday, pressured by rising crude prices.

However, some possibilities for at least a modest rise exist.
Tech traders should watch the SOX's reaction to the semi book-to-
bill number.  Although several chart attributes suggest that the
SOX has room to fall, it's deeply oversold on a 30-minute basis,
and it may just see an oversold bounce unless the number
disappoints in a big way.  If a directional move gets underway,
market watchers want to see the various indices make a concerted
effort to move the same direction, rather than have the tech-
related indices moving in opposition to the others, for example.
If markets could all head the right direction, perhaps market
watchers won't even have one more day of boring trade but will
find something to excite them tomorrow.

I'm not counting on that to happen, but just open to the
possibility.  Be careful, keeping the trend of many opex weeks in
mind as you make decisions about entering positions.  After the
opening volatility, moves that appear to be promising may get
damped down almost as soon as they get started, especially if
there's no volume behind the move.

Market Sentiment

The Waiting Game
- J. Brown

Welcome to the waiting game.  The Producer Price Index (PPI)
showed that inflation at the wholesale level ticked higher than
expected but stocks really didn't react to the news.  That's
because the markets feel relatively confident that the FOMC will
only raise rates by 1/4 point on June 30th.  The only thing left
to do now is wait for the June 30th meeting to pass.  In the mean
time investors will be reacting to what will surely be a string
of bad news as we approach the Iraq handover of power.

There was news out this morning that terrorists drove a car bomb
into a crowd of Iraqis looking for work in the new government
military.  The explosion killed 35 people and injured more than
100.   The real unfortunate thing here is that we're likely to
here more of these reports as we approach the deadline.  The
combination of waiting for the interest rate decision and rising
violence in Iraq will likely to keep a lid on the stock market.

Not helping matters today was an earnings warning from Jabil
Circuit (JBL) last night.  JBL slipped more than 12% but it drug
the SOX semiconductor index down with it.  The SOX fell more than
3.3% breaking minor support at 460.  The next test for the SOX is
the 450 level.  The NASDAQ will have a hard time trying to mount
a rally without support from the semiconductor sector.

Earnings season is quickly approaching but there is still a
threat that we may see more earnings warnings.  Plus, the markets
may be back to its old tricks of looking for the whisper number.
Software maker Adobe Systems (ADBE) reported earnings of 44 cents
per share.  This was 2 cents above estimates and significantly
better than last year's 27 cents yet the stock fell lower in
after hours trading in spite of guiding higher for the next

Traders need to keep an eye on crude oil again.  Oil futures
rallied $1.16 to $38.81 a barrel.  Bulls can shop the energy
stocks for potential plays.  Overall the market internals were
mixed.  Advancers beat decliners almost 17 to 11 on the NYSE but
lost 12 to 18 on the NASDAQ.  Volume continues to be light.

I continue to watch the volatility indices.  The VIX/VXO/VXN all
bounced today but they remain near their lows, which could also
be a roadblock to any new rally of significance.


Market Averages


52-week High: 10753
52-week Low :  8871
Current     : 10377

Moving Averages:

 10-dma: 10351
 50-dma: 10261
200-dma: 10121

S&P 500 ($SPX)

52-week High: 1163
52-week Low :  962
Current     : 1132

Moving Averages:

 10-dma: 1131
 50-dma: 1119
200-dma: 1093

Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1180
Current     : 1464

Moving Averages:

 10-dma: 1472
 50-dma: 1448
200-dma: 1436


CBOE Market Volatility Index (VIX) = 15.15 +0.36
CBOE Mkt Volatility old VIX  (VXO) = 15.06 +0.40
Nasdaq Volatility Index (VXN)      = 21.33 +0.94


          Put/Call Ratio  Call Volume   Put Volume

Total          0.79        818,546       647,093
Equity Only    0.63        604,920       383,811
OEX            1.01         37,221        37,547
QQQ            5.43         14,854        80,593


Bullish Percent Data

           Current   Change   Status
NYSE          65.4    + 0     Bear Confirmed
NASDAQ-100    42.0    + 3     BULL ALERT
Dow Indust.   70.0    + 0     Bear Confirmed
S&P 500       63.2    + 0     Bear Confirmed
S&P 100       63.0    + 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: 1.02
10-dma: 0.98
21-dma: 0.92
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


Market Internals

            -NYSE-   -NASDAQ-
Advancers    1670      1199
Decliners    1108      1811

New Highs     135        72
New Lows       57        55

Up Volume    854M      413M
Down Vol.    671M     1024M

Total Vol.  1572M     1458M
M = millions


Commitments Of Traders Report: 06/08/04

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 trades are turning more bearish with an increase
in short positions while pulling a little bit of money out
of their longs.  Small traders have increased their positions
in both longs and shorts but continue to remain net bullish.

Commercials   Long      Short      Net     % Of OI
05/18/04      394,352   423,258   (28,906)   (3.5%)
05/25/04      400,713   420,764   (20,051)   (2.4%)
06/01/04      406,665   421,681   (15,016)   (1.8%)
06/08/04      397,294   452,904   (55,610)   (6.5%)

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
05/18/04      139,647    74,597    65,050    30.4%
05/25/04      136,086    79,060    57,026    26.5%
06/01/04      137,100    79,583    57,517    26.5%
06/08/04      158,373    92,794    65,579    26.1%

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

Hmm... could the commercial traders be trying to tell us something?
Both their large S&P futures positions and their S&P e-minis
positions have turned net short or bearish.  As would be
expected the small traders is walking the other way and has
significantly beefed up their longs.

Commercials   Long      Short      Net     % Of OI
05/18/04      390,484   357,157     33,327     4.5%
05/25/04      353,722   336,406     17,316     2.5%
06/01/04      325,865   325,274        591     0.0%
06/08/04      367,191   409,246    (42,055)   (5.4%)

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
05/18/04       62,216     87,269    25,053    16.8%
05/25/04       91,515    100,759   ( 9,244)  ( 4.8%)
06/01/04      111,484     90,625    20,859    10.3%
06/08/04      140,191     84,649    55,542    24.7%

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


Commercial traders remain net long on the NASDAQ 100.
Small traders remain strongly net short.

Commercials   Long      Short      Net     % of OI
05/18/04       58,376     37,528    20,848   21.8%
05/25/04       59,891     37,630    22,261   22.8%
06/01/04       59,944     34,784    25,160   26.6%
06/08/04       64,747     41,178    23,569   22.3%

Most bearish reading of the year: (21,858)  - 08/26/03
Most bullish reading of the year:  25,160   - 06/01/04

Small Traders  Long     Short      Net     % of OI
05/18/04        9,843    18,935   ( 9,092)  (31.6%)
05/25/04       10,184    20,653   (10,469)  (33.9%)
06/01/04        9,755    30,025   (20,270)  (51.0%)
06/08/04        9,716    29,594   (19,878)  (50.6%)

Most bearish reading of the year: (20,270) - 06/01/04
Most bullish reading of the year:  19,088  - 01/21/02


There has been very little action from the commercial traders
in the Dow Jones futures but they remain net short.  Small
traders remain net long but their resolve may be weakening
a bit.

Commercials   Long      Short      Net     % of OI
05/18/04       22,257    22,444   (  187)     (0.4%)
05/25/04       23,578    24,632   (1,045)     (2.2%)
06/01/04       23,397    24,393   (  996)     (2.0%)
06/08/04       24,636    25,821   (1,185)     (2.3%)

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
05/18/04        9,098     6,591    2,507     16.0%
05/25/04        9,623     6,614    3,009     18.5%
06/01/04        9,000     6,021    2,979     19.8%
06/08/04        8,325     6,431    1,894     12.8%

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



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.


Waiting For Expiration

Teradyne Inc. - TER - close: 20.16 change: -0.84

WHAT TO WATCH: With the Semiconductor sector getting hit hard on
Thursday, it's no surprise to see shares of TER back to testing
key support near $20.  Aggressive entries look good on a break
below $20, while the more conservative approach would be to wait
for a break under the early May low of $19.64.  Target a drop to
strong support near $18.


Burlington Resources Inc. - BR - close: 36.07 change: +0.43

WHAT TO WATCH: After coiling just under resistance at $35 and
using the 50-dma for support for these past several weeks, BR
finally broke out earlier this week and the stock is continuing
to run.  We're not brave enough to chase the stock higher at this
point, but a mild pullback to test the $35 level would make for
an ideal entry point ahead of a continued rally towards the $40


Intermune, Inc. - ITMN - close: 16.20 change: +1.22

WHAT TO WATCH: After getting hit hard in late April, shares of
ITMN have been trying to build a new base near the $14 level.
Based on today's strong upward move into April's gap, the bulls
are ready to take a shot at filling that gap.  Trigger entries
over today's high and target a rally to $18 resistance.


Accenture Ltd. - ACN - close: 26.79 change: +1.48

WHAT TO WATCH: Throw in strong earnings, and an upgrade and
shares of ACN were looking strong today.  The stock gapped up and
continued advancing right to strong resistance at $27.  Based on
the strong volume, this looks like the beginning of a larger
move.  Use an entry trigger above today's high and target strong
resistance at $30.

On the RADAR Screen

CTV $19.09 - After the strong move up earlier this week, CTV is
back in position to challenge its January highs and a breakout
over $20 looks like it has room to run towards strong resistance
near $23.

JCP $37.00 - After the briefest of pullbacks, JCP is once again
threatening to push to new multi-year highs.  Use a trigger over
$37.25 and target a rally first to $40 and then to strong
resistance near $44-45.

SWY $24.51 - After breaking out over the $24 level, SWY is taking
aim at next resistance at $26.  but judging by the strong price
action, the stock looks poised to scale that obstacle as well and
make a run at the $28 resistance level.

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

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:


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.

PremierInvestor.net Newsletter                 Thursday 06-17-2004
                                                    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:  SNDK, RMBS
Stock Splits:      CCFH

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

SNDK - tech short play -
 lower stop from $22.26 to $22.00


RMBS - high risk short play -
 lower stop from $19.01  to $18.01

Stock Splits


CCFH announces a 3-for-2 stock split

This morning shortly after 10:00 am ET the CCF Holding Company
(NASDAQ:CCFH) announced that its Board of Directors had approved a
3-for-2 stock split and a 5 cent cash dividend.

The cash dividend will be paid on a post-split basis.  The stock
split and the cash dividend will be paid on July 15th, 2004 to
shareholders on record as of July 1st.  Fractional shares will be
paid in cash.

About the company:
CCF Holding Company is the parent company of Heritage Bank; a
state chartered commercial bank serving in the southern market of
greater Atlanta, Georgia. The Company had total assets of $335
million at March 31, 2004. The bank has six full service offices
specializing in commercial, real estate and consumer lending.
(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

UBS     UBS Ag                     73.50     +0.75
TOT     Total Sa (ADS)             97.68     +1.10
SC      Shell Transport            45.56     +0.60
MFC     Manulife Financial         39.01     +0.60
OXY     Occidental Petroleum       47.47     +0.53
HIG     Hartford Fncl Services     67.06     +0.88

Breakout to Upside (Stocks $5 to $20)

LZB     Laz-Z-Boy Inc              19.14     +1.05
FLE     Fleetwood Enterprises      14.51     +1.15
ITMN    Intermune Inc              16.20     +1.22
PARL    Parlux Fragrances           9.88     +1.85

Breakout to Upside (Stocks over $20)

ACN     Accenture Ltd              26.79     +1.48
CCL     Carnival Cruises           45.21     +1.65
MBT     Mobile Telesys            125.50     +9.50
POT     Potash Saskatchewan        92.05     +7.11
LEG     Leggett & Platt            26.66     +2.95
THO     Thor Industries            32.18     +3.06
WGO     Winnebago Industries       36.85     +4.85

Breakout to Downside (Stocks over $20)

OMC     Omnicom Group              77.84     -1.06
XLNX    Xilinx Inc                 32.48     -2.36
NTRS    Northern Trust             41.22     -1.15
JBL     Jabil Circuit              24.49     -3.56
NVLS    Novellus Systems           29.37     -1.47
HSIC    Henry Schein               63.66     -1.33
FRO     Frontline Ltd (ADR)        32.51     -7.51
NTY     NBTY Inc                   26.99     -9.51

Recently Overbought With Bearish Signals (Stocks over $20)

UTR     Unitrin Inc                42.00     -0.56

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

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:


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.


Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

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