PremierInvestor.net Newsletter Weekend Edition 06-27-2004 section 1 of 3 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: Tick, Tick, Tick Market Sentiment: Deadline June 30th Watch List: Metals, Chips and More! ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= WE 6-25 WE 6-18 WE 6-11 WE 6-04 DOW 10371.84 - 44.57 10416.4 + 6.31 10410.1 +167.18 + 54.37 Nasdaq 2025.47 + 38.74 1986.73 - 13.14 1999.87 + 21.25 - 8.12 S&P-100 549.75 - 5.06 554.81 - 0.09 554.90 + 7.82 + 1.95 S&P-500 1134.43 - 0.57 1135.00 - 1.47 1136.47 + 13.97 + 1.86 W5000 11073.60 + 39.48 11034.1 - 11.83 11045.9 +109.64 + 9.95 SOX 478.91 + 25.83 453.08 - 23.20 476.28 + 5.37 - 17.95 RUT 587.70 + 17.16 570.54 + 1.42 569.12 + 1.37 - .53 TRAN 3164.18 + 95.61 3068.67 + 43.96 3024.71 + 32.43 + 44.27 WE = week ending ================================================================= =========================== Market Wrap =========================== Tick, Tick, Tick by Jim Brown While most Americans are oblivious to the coming events the clock continues to count down to June 30th. Whether it will pass as a major calendar event or pass quietly like a mini Y2K is yet unknown. The volume of press the events are now getting should go a long way toward making them anticlimactic. Investors, if you believe the talking heads, are sitting on pins and needles worrying about Wednesday's events. Personally I think Friday's Jobs Report will be more critical but you never know. Dow Chart - Daily Nasdaq Chart- Daily Russell-2000 Chart - Daily In the economic arena investors received another blow when the final GDP for Q1 came in lower than expected at +3.9%. This was less than the 4.4% estimate and the last revision. This shocker contained offsetting components. Corporate profits were revised up to +1.7% from the +1.2% reported in the last revision. That is good news but there was an offsetting entry. The PCE deflator, a key inflation gauge used by the Fed, jumped to +2.0% from the prior +1.7%. The GDP price index was also revised up to +2.8% from +2.6%. It seems the inflation threat is increasing and the economy is slowing. This is bad news for the Fed and could put them in a bind when they make their rate decision on Wednesday. Business inventories were revised down to $25.5B from $28.2B. The bulk of the downward GDP revision came from a larger than expected trade deficit at -$535.6B. This was a $10B increase from the prior revision. The Michigan Consumer Sentiment did rise as we expected but only slightly to 95.6 from the preliminary 95.2. This was more than a +5 point jump from May's 90.2. If you recall May saw a -5 point decline from April and the June bounce has now completely erased that drop. We speculated at the time that the Iraq prisoner scandal had depressed the May responses. Rocketing gas prices also impacted consumer wallets. It appears those problems have passed. As I suspected on Thursday the Existing Home Sales roared higher than consensus estimates and set a new record of 6.8 million units. This was substantially over estimates and the 6.63 million units in April. For the same reasons I wrote about on Thursday the turnover in existing homes is ripping along at the same hot pace as new homes. Each move to a new home vacates an existing home and the ripples behind the scenes begins. Each time a high-end buyer upgrades it produces a series of vacancies/sales at lower levels. Firming consumer confidence/sentiment is helping promote the current wave of upgrades. Including new home sales the annualized pace of total home sales surged past the eight million mark for the first time ever in May. The big news of the day was not the economics although a low GDP and negative Durable Goods did nothing to help stocks. The big news was the Russell shuffle at the close and it was nothing like anyone expected. Normally the Russell tanks into the close as fund managers sell the stocks leaving the indexes and buy the new stocks that will be in the indexes as of Monday. Surprise, surprise! The Russell failed to see any serious selling during the day despite constant conversations on stock TV about the possibilities. Just before the close, around 3:30, the Russell begin to climb, not just climb but accelerate into a vertical spike. The Russell posted a gain of +8.65 for the day and the Dow went out at -71 due to extreme volatility related to the rebalancing. This is crazy. The Dow closed at 10443 on Thursday and is showing a 4:PM close of 10412 for Friday. However, due to extreme after hours volatility right at 4:PM the after hours settlement is printing 10371 for a -71 loss. Needless to say there will be some serious volatility at the open on Monday. Major drops in GE, -1.00 at the close, and several other Dow stocks tanked the Dow instead of the Russell. Dell moved +1.00 after the close. Somebody needs to reevaluate their computer models if stocks not really involved in the rebalance got thrown this severely out of whack. The normal pattern was supposedly disrupted by the lack of hedge fun participation according to one analyst. The current lack of interest in the market and the pending news events prompted many hedge funds to simply pass on trying to arbitrage the trade. Many funds were reported to have legged out of the deletions and into the additions over the last two weeks instead of doing the normal Friday dump and buy. Whatever the reason it appears there was a substantial short contingent in anticipation of the normal routine and that routine was broken. Shorts found themselves in a squeeze with nobody dumping stock and once the short covering began it skewed the delicate market balance into a serious imbalance. On the charts the Dow is showing a solid stop at 10400 and a close at 10412. With the after hours imbalance we have no idea where this will resolve on Monday. I feel the 10400 level is the current support level and it held up very well on Friday. However, for the third consecutive day the Dow rebounded to 10487 and failed. It just can't seem to get to the strong resistance at 10500. With support at 10400 and resistance at 10500 we are looking at a very tight range next week while we wait for the Wednesday events. If the after hours volatility stands then I would expect that range to expand to 10360 to 10500. We could easily trade there through Wednesday except for several external factors. The Fed meeting has become a non-event. More than 25 points have already been priced into the market and with the two weak reports, GDP and Durable Goods, and the high Jobless Claims the Fed is back in the hot box. They have gone out of their way to prepare the market for a rate increase and yet the economy is not holding its prior pace. On the other side of the coin it appears inflation is rising on all fronts. The Fed is trapped and has to raise rates and a 25 point hike should be market positive. The uncertainty will be gone and a calming statement with the hike could put the bond junkies at peace until after the election. Bottom line, the Fed meeting should not have any negative impact on the market. The Iraq turnover has been cussed and discussed so much that everyone expects the worst and anything short of a Saddam escape should be ignored. The new Iraq officials are talking a good game and everybody knows there will be numerous attacks. I believe this is already priced into the market. I do not believe we will see any event that will cause us to tank except an event on U.S. soil. We saw 75 deaths and nearly 400 injured in the big attack this week and the market barely blinked. As one reporter put it on Friday, Iraq will revert to prime time next week and while we are not sure they are ready for the spotlight even the bad side will not be anything we have not seen before. The more they exaggerate the event the less impact it may have on the markets. Traders tend to glaze over after days and days of the same news. On the positive side this is the end of the quarter and retirement funds will be flowing. Some analysts think most funds are heavy in cash because they were waiting for the June implosion from the convergence of events. With no implosion and the events upon us and priced in those funds will want to put the money into stocks before the quarter end statements. With more cash about to hit those retirement accounts this should accelerate this need to invest. This should provide a positive bias into Wednesday's close. Conventional wisdom suggests we are going sideways until after the June 30th events. I have been buying this argument myself up until last week. When I started seeing the bullish factors lining up a week ago I began to reevaluate this outlook. Friday's action convinced me we still have more potential to move higher than lower next week. Of course any material event not currently contemplated could change that in an instant but that is my view today. To expand on this thought process I think the longer term view is the key. By longer term I am thinking three weeks. I have to clarify that because "longer term" means different things to different people. My longer term view is a post Fed rally into the holiday weekend and then a continuation of that rally for the week after the holiday. This will set us up for the Q2 earnings and the Q3 guidance. Once we get to July expiration all bets are off for the rest of the summer. One of the potholes in this yellow brick road is the Nonfarm Payrolls next Friday. The current consensus for the June jobs gain is +275,000. This is very strong for a summer jobs report. John Challenger was interviewed on Friday and he said employment was slowing. According to his surveys 69% of corporations did some hiring in the first six months of 2004. For the next six months the number of firms considering hiring drops to only 44%. Also the pace of hiring is slowing. Corporations have staffed up and now they are only looking at filling the vacancies rather than a new wave of additions. This view along with some of the slowing employment components from the various manufacturing surveys suggests the next Jobs Report could be a disappointment. That report is next Friday. But, depending on what the Fed says on Wednesday it could be completely ignored. For Q2 earnings we have had very few warnings and also very few guidance upgrades. Racing into the earnings cycle with no material earnings news could have a dual impact. No news could be good news for stocks as all the optimists line up at the buyer window. This allows us to speculate about how good things might be without really having any evidence to back it up. That sets us up for an earnings challenge for the last two weeks of July if there is no positive news from the early reporters. Most analysts expect a deceleration of earnings and an increasing failure to hit the high bar as we near 2005. In fact 2005 estimates are positively anemic compared to the last two quarters. This will put added emphasis on the Q3 guidance, especially in front of a tossup election. Traders will be looking for a reason to stay in the market not necessarily a reason to exit. To net all this out into a trading plan for next week I would again suggest buying the dips in anticipation for a retest of the 10500 resistance level. We may not hit it until after the Fed decision but I suggest you plan your trades for the eventuality. With the high volatility at Friday's close there is no telling where we will open on Monday. The Dow is showing a close at 10371 based on the after hours settlement. Using the 10360 support I mentioned earlier I would look for a long entry on a rebound from that level. Should the market gap up in a correction from the Friday volatility skew I would probably look for another dip to enter. Try to get in as close to the 10360-10400 range as possible. The risk on a long entry is the extended Nasdaq at 2030. This is the beginning of a strong resistance range for the Nasdaq and a level that could produce some profit taking. 2050-2070 is the next major resistance. The Nasdaq could see an additional bounce on Monday as funds complete their Russell purchases. Quite a few funds will normally wait until after the volatility event to enter the new stocks. This could provide support for the Nasdaq if not an outright upward bias. I hope I have given you a general idea of what may happen but please realize this will be an event motivated week. These events may be already priced in but there is always the potential for the unexpected. For instance Bush is out of the country and could try to sneak into Iraq for the changeover. A truck full of explosives was reportedly found in a Turkey airport on Friday. An airport Bush will use this weekend. On Friday an air strike in Fallujah knocked al-Zaqawi to the ground with a near miss but he was helped into a car and escaped. A direct hit could produce a significant market bounce. The Fahrenheit 9/11 film opening this weekend could start something and change the entire election balance. I hope you get the picture that this is a critical week and the picture could change in a heartbeat. Plan your trades including your exits and trade your plan. Don't get married to your market bias, divorce is painful. Enter Very Passively, Exit Very Aggressively! Jim Brown ================================================ Market Sentiment ================================================ Deadline June 30th - J. Brown This is it. We've finally made it to the final week of June. Wednesday June 30th marks the end of a two-day FOMC meeting and the formal handover of sovereignty from the coalition to the Iraqi people. Alan Greenspan & Co is expected to announce a 25 bps hike in interest rates and Iraq is expected to be an exceptionally dangerous place to be this week. Of course there's no guarantee the Fed won't surprise us with a 50-point hike and there's no guarantee that terrorist in Iraq and/or Saudi Arabia won't shock the world with some sort of unexpected attack. That's why stocks are likely to remain range bound through Wednesday. Actually stocks are prone to trade sideways all week long because Wall Street will also be waiting and watching for the Friday morning non-farm payrolls report. (Although I will note that the NASDAQ looks more bullish than the other indices.) June 30th also marks the end of the quarter. While I don't expect much window-dressing to push stocks higher by month's end we could see some pension-fund buying pressure in early July. As Jim pointed out in the market wrap if we can make it through this week and then the long fourth of July holiday weekend without any terrorist event on home soil we're set up for a rally into the Q2 earnings season. It could be a strong rally too because right now a lot of the sentiment indicators look bearish. A big move higher would catch a lot of shorts off guard. The volatility indices remain near their lows. The ARMS or TRIN index is approaching some bearish signals on some of its moving averages. The latest COT data (below) also offers some interesting insights. Commercial traders have brought their large S&P futures contracts close to parity while slashing their long positions on the e-minis leaving them drastically net short/bearish. Commercial traders tend to be correct on the big moves while small, retail traders march the opposite direction. Sure enough small traders dramatically reduced their short positions on the e-minis leaving them overwhelmingly bullish. Hmm.. maybe things aren't looking so hot and money managers plan on "selling the news" come Wednesday? On the positive side oil prices have continued to slip in spite of rising violence in Iraq and elsewhere. A steady decline in oil will be good news for several cyclical sectors as well as give consumers some relief at the gas pumps. Let's not forget the stellar home sales this week. Surging home sales, both new and used, is a huge boom for the economy because they produce so many ancillary purchases by consumers. They can also be interpreted as a direct vote of confidence by Americans about the economy and the future. Or if you're a cynic the big home sales numbers are just consumers trying to get in before the next up cycle in interest rates hits the market. I continue to suggest trading what you see but make sure you're aware of your risk. We may trade sideways this week but it could be a choppy sideways! ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 8871 Current : 10371 Moving Averages: (Simple) 10-dma: 10388 50-dma: 10252 200-dma: 10143 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 962 Current : 1134 Moving Averages: (Simple) 10-dma: 1134 50-dma: 1119 200-dma: 1096 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1180 Current : 1498 Moving Averages: (Simple) 10-dma: 1475 50-dma: 1447 200-dma: 1439 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 15.19 +0.38 CBOE Mkt Volatility old VIX (VXO) = 14.89 +0.50 Nasdaq Volatility Index (VXN) = 18.96 -0.40 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.68 567,925 385,072 Equity Only 0.57 477,164 272,300 OEX 1.03 12,950 13,353 QQQ 1.16 26,644 30,910 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 67.1 + 0 Bear Confirmed NASDAQ-100 45.0 + 2 BULL ALERT Dow Indust. 66.7 + 0 Bear Confirmed S&P 500 64.8 + 0 Bear CORRECTION 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: 0.95 10-dma: 0.99 21-dma: 0.95 55-dma: 1.04 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 1522 1749 Decliners 1273 1244 New Highs 198 133 New Lows 42 44 Up Volume 1078M 1690M Down Vol. 1228M 893M Total Vol. 2354M 2623M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 06/22/04 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 It looks like commercial traders are hedging all their bets by bringing them close to parity. If the "smart money" doesn't know what direction the S&P is going to go after June 30th how are the "little folk" supposed to know? *grin* Evidently, the retail trader isn't listening. They reduced their shorts to leave them strongly bullish on stocks. Commercials Long Short Net % Of OI 06/01/04 406,665 421,681 (15,016) (1.8%) 06/08/04 397,294 452,904 (55,610) (6.5%) 06/15/04 428,905 444,197 (15,292) (1.8%) 06/22/04 407,842 415,462 ( 7,620) (0.9%) 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 06/01/04 137,100 79,583 57,517 26.5% 06/08/04 158,373 92,794 65,579 26.1% 06/15/04 169,595 115,336 54,259 19.0% 06/22/04 124,985 89,934 35,051 16.3% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Wow! Maybe commercial traders are just ignoring the large S&P contracts and focusing on the e-minis. They reduced their positions in both longs and shorts but they almost cut their longs in half. That's VERY bearish for the market. Likewise small traders are lockstep in unison going the opposite direction. Commercials Long Short Net % Of OI 06/01/04 325,865 325,274 591 0.0% 06/08/04 367,191 409,246 (42,055) (5.4%) 06/15/04 440,867 522,546 (81,679) (8.5%) 06/22/04 229,290 446,974 (217,684) (32.2%) 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 06/01/04 111,484 90,625 20,859 10.3% 06/08/04 140,191 84,649 55,542 24.7% 06/15/04 216,759 147,247 69,512 19.1% 06/22/04 243,444 58,389 185,055 61.3% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders are reducing their positions in both longs and shorts for the NDX and bringing them closer to break even. Small traders are following suit bring their shorts and longs close to even. Looks like no one knows what direction the NASDAQ is going. Commercials Long Short Net % of OI 06/01/04 59,944 34,784 25,160 26.6% 06/08/04 64,747 41,178 23,569 22.3% 06/15/04 78,542 54,341 24,201 18.2% 06/22/04 40,397 37,413 2,984 3.8% 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 06/01/04 9,755 30,025 (20,270) (51.0%) 06/08/04 9,716 29,594 (19,878) (50.6%) 06/15/04 15,794 35,880 (20,086) (38.9%) 06/22/04 9,311 9,950 (639) ( 3.3%) Most bearish reading of the year: (20,270) - 06/01/04 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Hmm... oddly enough commercial traders are turning more bullish on the Dow Industrials. Looks like they like the upside breakout. Small traders are more pessimistic here. Commercials Long Short Net % of OI 06/01/04 23,397 24,393 ( 996) (2.0%) 06/08/04 24,636 25,821 (1,185) (2.3%) 06/15/04 30,438 24,766 5,672 10.3% 06/22/04 26,808 19,752 7,056 15.2% 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 06/01/04 9,000 6,021 2,979 19.8% 06/08/04 8,325 6,431 1,894 12.8% 06/15/04 13,942 20,953 (7,011) (20.1%) 06/22/04 5,626 7,798 (2,172) (16.2%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03 ----------------------------------------------------------------- ================================================================== 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 --------------------------------- Metals, Chips and More! Alcoa Inc - AA - close: 33.49 change: +0.64 WHAT TO WATCH: Metal stocks have been pretty strong this week and Dow-component AA has rallied through tough technical resistance at its 100 and 200-dma's. It also happened to breakout above its four-month trendline of lower highs. Volume on Friday was also strongly above average adding some momentum to the move. With the economy doing so well deep cyclical stocks like AA should be doing big business. Earnings are on July 7th so AA could see an earnings run. We would target a move to $36-37. --- Anglogold Ashanti - AU - close: 32.49 change: -0.33 WHAT TO WATCH: Many of the gold stocks have rebound significantly this week as the U.S. due to rising violence in Iraq and weakness in the U.S. dollar. Everyone expects the violence to become even more intense next week as we race towards the formal Iraqi handover of power on June 30th. Plus, the dollar still looks vulnerable to more weakness. AU is in a P&F sell signal but if it breaks out over $33.00 and its simple 50-dma it might be a decent short-term bullish play. We would target the $36-37 region. Bears can still play it just look for a failure back under $32.00 or a drop back under $30.00. --- Sun Microsystems - SUNW - close: 4.41 change: +0.13 WHAT TO WATCH: SUNW is starting to look like a bullish candidate. The 3% rally on Friday did fail at the $4.50 resistance level (and its simple 100-dma) but it still managed to close over its simple 200-dma. We would consider SUNW an aggressive long play if it broke through $4.50. Our target would be $5.00-5.10. We reiterate the aggressive nature of this play. SUNW is still very much in a bearish P&F chart pattern with heavy resistance overhead. --- PMC-Sierra - PMCS - close: 14.26 change: +0.66 WHAT TO WATCH: Wow! PMCS has been a big winner for the chip stocks this week. The stock has been stuck in a trading range for two months between $12.00 and $14.50. In the last four sessions it has rebounded back to the top of the range on rising volume, no less. The P&F chart shows the exact same range-bound trading so it's not much help. We like the bullish move through its simple 50-dma and feel a trade above $14.75-to-$15.00 might be an entry point for bulls. Be sure to watch out for overhead resistance at its 100-dma. --- Ask Jeeves - ASKJ - close: 37.97 change: +1.48 WHAT TO WATCH: Keep an eye on ASKJ. The better-known Internet stocks have been strong performers this week. ASKJ rebounded from a bearish breakdown and is now poised to breakout over technical resistance at its 40 & 50-dma's near $38.00. Such a move could be an entry point to catch any run toward the $43-44 levels. ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- STZ: 37.10 -0.69 - STZ has been consolidation its May-June gains for the last three weeks. Nimble traders can try and trade the range. We're going to look for a breakout over $38.00. XMSR: 25.50 +0.99 - XMSR has been a big winner this week up almost 10%. Shares have broken through technical resistance but still need to trade above $25.50. Such a move could be a trigger to go long and target a run toward $30.00 (if your patient). USM: 39.10 +1.14 - US Cellular has been soaring this week hitting new 2 1/2 month highs and breaking above its 100-dma. We would look for a dip back to $37-38 as a potential entry point. ================================================================= 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. 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PremierInvestor.net Newsletter Weekend Edition 06-27-2004 section 2 of 3 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 two: Tech Stocks New Bearish Plays: ELX Bullish Play Updates: BRCM, CSCO Bearish Play Updates: QLGC Active Trader (Non-tech) Bullish Play Updates: JCP, SHW Closed Bullish Plays: SBUX Closed Bearish Plays: LEN, HOTT High Risk/Reward New Bullish Plays: EVOL Bullish Play Updates: MACE Bearish Play Updates: NPSP, SOHU Closed Bearish Plays: RMBS Stock Splits Announcements: CFC ================================================================= Net Bulls (NB) Tech Stock section ================================================================= ========= NEW PLAYS ========= ----------------- New Bearish Plays ----------------- Emulex - ELX - close: 14.90 change: -0.81 stop: 16.01 Company Description: Emulex Corporation, which was named one of Forbes Magazine's 25 Fastest Growing Technology Companies in 2002, is the world's largest supplier and developer of storage networking host bus adapters. The Emulex product families are based on internally developed ASIC, firmware and software technologies spanning both Fibre Channel and IP networking protocols, and offer customers high performance, scalability, flexibility and reduced total cost of ownership. Emulex markets to OEMs and end users through its own worldwide selling organization, as well as its two-tier distribution partners, including ACAL, Avnet, Bell Microproducts, Info-X, Netmarks, Tech Data, TidalWire and Tokyo Electron. Corporate headquarters are located in Costa Mesa, California. (source: company press release) Why We Like It: Investors have been rotating out of ELX for months. The stock peaked above the $30.00 mark in January this year and it's been downhill ever since. In late April the company reported earnings that only met estimates and then management guided lower for the next quarter. Shares gapped lower the next day and dropped toward $16.00 before the selling stalled. Over the next six weeks ELX slowly climbed back to fill the gap and then it was back to steady selling again. Recently the selling has been picking up steam. The last couple of weeks has produced a new bear-flag pattern and breakdown. The flagpole on this pattern suggest a $13.00 target but we suspect that ELX can trade even lower. Its P&F chart is very bearish with a $1.00 price target (that's pretty bearish!). Traders can initiate positions at current levels or look for failed rallies under $15.50. The 5% decline on Friday was fueled by volume more than three times the average, which is very negative. We're going to start the play with a wide stop at $16.01 and target a drop toward the $10-12 range. Annotated Chart: Picked on June 27 at $14.90 Gain since picked: - 0.00 Earnings Date 04/22/04 (confirmed) Average Daily Volume: 2.0 million ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- Broadcom Corp. - BRCM - close: 45.41 change: +0.41 stop: 42.75 After getting off to a great start with Tuesday's strong breakout move through the $44 resistance level, shares of BRCM have been consolidating near their recent highs and just under the 200-week moving average ($46.23), in anticipation of the next bullish catalyst. Given the fact that the Semiconductor sector (SOX.X) has been unable to break from its dominant downtrend of the past several months, BRCM's strength is that much more impressive. There should now be very strong support in the $43.50-44.00 area and a pullback and rebound in that area would make for a great continuation entry. Of course, a breakout through the $46 resistance level would be a solid momentum entry point as well. Once through that level, we can look for BRCM to make a run at strong resistance at $50. We'll keep our stop set at $42.75 for now, as that is solidly below the 20-dma ($43.12). Picked on June 16th at $43.79 Change since picked +1.62 Earnings Date 4/22/04 (confirmed) Average Daily Volume = 8.06 mln --- Cisco Systems - CSCO - close: 23.43 change: -0.25 stop: 22.50 After pressing right to the edge of resistance on Wednesday, CSCO looked ready to blast off and make a run at higher levels of resistance. The technical picture looked good enough to get us to add bullish coverage of the stock, but fortunately we had the foresight to use a high enough trigger ($24.25) to signify a real breakout. The stock surged to within a nickel of that point on Thursday before turning south and heading back towards support on Friday. While CSCO is still poised for a breakout, we'll remain on the sideline (in other words we don't want to buy the dip) until that move through our trigger occurs. Maintain stops at $22.50. Picked on June 16th at $23.97 Change since picked -0.54 Earnings Date 8/10/04 (unconfirmed) Average Daily Volume = 51.8 mln -------------------- Bearish Play Updates -------------------- QLogic Corp. - QLGC - close: 26.76 change: -0.62 stop: 28.15 A week after beginning bearish coverage of QLGC, we've certainly seen the stock go through the whole cycle! First it refused to break under the $25 level, which avoided hitting our trigger for the play. Then shares soared right to resistance near $28 on Thursday before doing an about face on Friday, rolling over from precisely where we expected resistance to come into play. It is interesting to note that the intraday highs were capped by the 20-dma ($27.99), while the stock was unable to close above the 50-dma (now at $27.64). With daily Stochastics now tipping over in bearish fashion, it certainly looks like the downtrend is very much intact. We'll continue to wait for our trigger at $25 to be hit before entering the play. Momentum entries below the trigger or rollover entries on a failed bounce below the 50-dma after the initial breakdown are still our preferred entry points. Maintain stops at $28.15. Picked on June 20th at $25.57 Change since picked +1.19 Earnings Date 4/28/04 (confirmed) Average Daily Volume = 4.60 mln ================================================================= Stock Bottom / Active Trader (AT) section ================================================================= ========= NEW PLAYS ========= ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- J. C. Penney - JCP - close: 38.70 change: +0.31 stop: 36.75*new* While the bullish trend is still very much intact in JCP, the stock didn't manage to make much headway last week. The Tues/Wed rally up to the $39 level was followed by a slight retracement on Thursday and then a rebound towards the highs on Friday. Since the rebound from the 10-dma (now at $37.84) a couple weeks ago, that average hasn't really been challenged, and we're expecting to see support found at that point when it is challenged. With that in mind, a pullback near the 10-dma looks like a solid continuation entry for those that missed the breakout entry point. On the other hand, should price shoot higher next week, momentum traders can consider entries on a push over the $39.15 level. We'll inch our stop up to $36.75 this weekend and will trail it just below the 20-dma ($36.95). Picked on June 20th at $37.85 Change since picked +0.85 Earnings Date 8/17/04 (unconfirmed) Average Daily Volume = 3.16 mln --- Sherwin Williams - SHW - close: 41.20 change: -0.16 stop: 39.25 SHW is off to a strong start. Shares have powered their way through round-number resistance at $40.00 with volume rising on the rally. The next hurdle is the $42.00 mark but SHW may be due for a dip after three back-to-back weeks of gains. Bulls might consider looking for the dip back to $40.00 and buying the bounce. SHW hasn't produced any headlines of late but an upgrade for Rohm & Haas (ROH), a chemical manufacturer, could boost SHW too. ROH makes chemicals for paints. An analyst at Smith Barney upgraded ROH because sales of paint have been on the rise with the strong housing market (wholesale paint sales) and a strong retail market for consumers upgrading to higher-quality (and more expensive) paints. Remember that we have a 4-to-6 week time horizon to reach our $44-45 target or until SHW announces earnings, whichever comes first. We do not plan to hold over SHW's earnings in late July. Annotated Chart: Picked on June 20 at $39.96 Gain since picked: + 1.24 Earnings Date 04/29/04 (confirmed) Average Daily Volume: 777 thousand ============ CLOSED PLAYS ============ -------------------- Closed Bullish Plays -------------------- Starbucks Corp. - SBUX - cls: 43.20 chng: -0.43 stop: 42.90 After giving us a strong run from the initial breakout above the $40 level, SBUX has run into a strong wall of resistance near the $44 level. We gave the play plenty of time to push through that level and hit our $45 target, but the bulls just couldn't get the job done. With the peel off from resistance over the past couple days, it looks like it is more likely that our stop will be hit before that profit target is reached. Rather than wait for that event, we're going to pull the plug this weekend, while we're still sitting on a solid gain. Aggressive traders that are willing to hold out for another bounce from above $43 can roll the dice, but should keep that stop in place. The more prudent approach at this point is to lock in the gain and look to put the funds to work in a more promising play. Picked on May 26th at $39.67 Change since picked +3.53 Earnings Date 7/21/04 (unconfirmed) Average Daily Volume = 2.81 mln -------------------- Closed Bearish Plays -------------------- Lennar Corp. - LEN - close: 45.66 change: +0.17 stop: 46.50 Rather than the expected breakdown below support, LEN caught a strong boost of buying on Thursday and surged to within a few cents of hitting our stop. Testing that $46.50 resistance level again on Friday, LEN looks like it wants to break out, despite the intraday pullbacks we've seen over the past two days. Since our entry trigger was never hit, the stock never issued its PnF Sell signal and we never got an opportunity to enter the play. We'll chalk this one up as a great setup that never materialized, but we'll keep our eye out for another setup for that breakdown following the FOMC meeting next week. Picked on June 16th at $42.90 Change since picked +2.76 Earnings Date 6/15/04 (confirmed) Average Daily Volume = 2.00 mln --- Hot Topic - HOTT - close: 21.22 change: +0.45 stop: 20.51 Bad news for bears in HOTT. The stock is surging higher and trying to breakout over its descending technical resistance on no news. It's the no-news part that is perplexing. HOTT shot higher on Thursday with stronger than average volume for no apparent reason. The RLX didn't move on Thursday so it wasn't sector related. We were stopped out at $20.51. Currently HOTT is trying to break through the $22.00 level and managed to close over its simple 50-dma. Picked on June 20 at $19.31 Gain since picked: + 1.91 Earnings Date 05/19/04 (confirmed) Average Daily Volume: 1.3 million ================================================================= HIGH RISK/HIGH REWARD (HR) section ================================================================= ========= NEW PLAYS ========= ----------------- New Bullish Plays ----------------- Evolving Systems - EVOL - close: 5.15 change: +0.40 stop: 4.60 Company Description: Evolving Systems, Inc. is a provider of mission critical and cost-effective software solutions to tier one telecommunications companies. The company maintains long-standing relationships with wireline and wireless telecommunications providers in the United States. Customers rely on Evolving Systems to develop, deploy, enhance, maintain and integrate complex, reliable software solutions for a range of operations support systems (OSS) and enhanced services platforms. The company offers software products and solutions that enable its customers to comply with government-mandate requirements regarding local number portability for wireline and wireless number portability. Evolving Systems also offers inventory and assignment software that supports carriers' compliance with the government phone number conservation mandates. In addition, the EVOL offers network assurance and fulfillment solutions that were added to its portfolio when it acquired CMS Communications Inc. in 2003. Why we like it: It has been a very rough several months for investors in EVOL, as the stock has plunged from the $18 area to a May low just above $3. That's over an 80% haircut in a matter of months, and that's bound to generate at least a bit of an oversold bounce. That appears to be precisely what we experienced through the first two weeks of this month, as EVOL broke through resistance near the $4.50 level and surged to almost $7 before falling back towards support. With the dominant downtrend of the past several months still very much intact and the PnF chart still bearish, this is obviously a very aggressive play. But it looks like the potential is there for a very lucrative short-term bullish move. Since topping near the $6.75 level earlier in the month, EVOL has been tracing out a bull flag pattern and Friday's sharp rally gave us the bullish break from the pattern we've been waiting for. After the first surge higher on Friday morning, the stock settled into a sideways consolidation pattern, which is particularly encouraging in light of the afternoon weakness throughout much of the broad market. Looking at both the daily chart and Friday's intraday chart, it looks like a break above Friday's high should get the bulls running again and we're expecting a rally to at least the $6.00 level and potentially a retest of the mid-June highs. Aggressive traders can target entries on a pullback near the $4.70-4.80 area, while the more conservative approach will be to wait for a break to the upside, entering on a move over $5.30. We'll initially target $6.00, but keep our eye out for a sharp move up to challenge the mid-June highs. Set stops initially at $4.60, which is just under last week's lows and the 20-dma ($4.69). Annotated Chart of EVOL: Picked on June 27th at $5.15 Change since picked +0.00 Earnings Date 3/08/04 (confirmed) Average Daily Volume = 633 K ============ PLAY UPDATES ============ -------------------- Bullish Play Updates -------------------- Mace Security - MACE - close: 5.76 change: -0.05 stop: 5.35 Price action in shares of MACE hasn't been particularly encouraging since the sharp drop on June 17th, the we can't quite bring ourselves to pull the plug on the play. After bottoming at $5.40, the stock crept up as high as $6.00 before heading back south over the past couple sessions and is really trying to put in a higher low in the $5.60 area. A breakout over $6.00 will have the stock heading for a retest of the recent highs in the $6.60 area, while a breakdown under $5.40 will tell us quite clearly that it is time to move on. While aggressive traders could consider new positions on a bounce in the $5.60-5.70 area, our preference at this stage would be to enter on proven strength over the $6.05 level. Picked on June 13th at $6.05 Change since picked -0.29 Earnings Date N/A Average Daily Volume = 4.92 mln -------------------- Bearish Play Updates -------------------- NPS Pharm. - NPSP - close: 21.07 change: +0.15 stop: 22.00 After the reflexive rebound following the one-day dip below $20, shares of NPSP have been trading in a very narrow range, but have been exerting steady pressure on resistance just over the $21 level. The stock closed near the top of its week-long range on Friday, but with the 20-dma ($21.30) and 30-dma ($21.56) looming just overhead, the bulls are going to have their work cut out for them. Additionally, we have the daily Stochastics oscillator topping out in overbought territory and threatening to tip over. A rollover looks like the best opportunity for initiating new positions and our preference would be on a rejection from the 20- dma early next week. Momentum traders can consider new entries on a break below the bottom of the past week's range at $20.50. For a real breakdown, we're going to need to see NPSP break and close below the $20 level, but for now we're stuck in this holding pattern. Maintain stops at $22. Picked on June 13th at $20.68 Change since picked +0.39 Earnings Date 5/06/04 (confirmed) Average Daily Volume = 1.08 mln --- Sohu.com - SOHU - close: 20.18 change: -0.32 stop: 21.51 We would have liked to see more follow through on the breakdown under $20.00 but we're not going to complain about a 4% drop in SOHU shares this week. SOHU and its Chinese Internet brethren have been hovering around their Monday lows as they consolidate recent declines. We're encouraged that they are not in rally mode like the larger Internet stocks YHOO, AMZN and EBAY. Therein lies our future risk, though. As YHOO begins what could be a pre-earnings ramp up (for its July 7th earnings) it might rub off on stocks like SOHU. We'd be extra careful initiating new plays here. Fortunately, the bounce on Thursday in SOHU (and SINA and NTES) failed and technicals remain mostly bearish. Please note this is an aggressive play. SOHU tends to be volatile. Watch your stops carefully. We're going to lower our stop loss to $21.51. New plays might be considered on a move lower through $19.50. Annotated Chart: Picked on June 20 at $21.14 Gain since picked: - 0.96 Earnings Date 04/29/04 (confirmed) Average Daily Volume: 3.0 million ============ CLOSED PLAYS ============ -------------------- Closed Bearish Plays -------------------- Rambus Inc - RMBS - close: 17.50 chg: +0.68 stop: 17.51 It's possible that our stop at $17.51 was a little too tight. Of course it's tough to be bearish in chips stocks when the SOX semiconductor index rallies more than 5% in a week. RMBS decided to rally with it and hit $17.50, one penny below our stop on Wednesday. Thursday it hit $17.51 stopping us out. Friday it hit $17.51 again but couldn't crack it (or its simple 21-dma). RMBS's point-and-figure chart is still bearish so traders might want to keep an eye on it for a move lower back through $16.50. We're closing the play at our stop 17.51. Picked on June 6 at $17.68 Gain since picked: - 0.18 Earnings Date 04/14/04 (confirmed) Average Daily Volume: 1.7 million ================================================================= Stock Splits ================================================================= Announcements ------------- CFC announces another 2-for-1 split This morning before Friday's opening bell Countrywide Financial Corp (NYSE:CFC) announced that its Board of Directors has approved a 2-for-1 stock split in the form of a stock dividend. The split will be payable on August 30th, 2004 to shareholders on record as of August 25th. The split is subject to shareholder approval. On August 17th, 2004 CFC will hold a special meeting of shareholders to approve an increase in the number of authorized shares from 500 million to 1 billion, to enable the stock split. About the company: Founded in 1969, Countrywide Financial Corporation is a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide provides mortgage banking and diversified financial services in domestic and international markets. (source: company press release) ================================================================= 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 (c) 2001-2004 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Weekend Edition 06-27-2004 section 3 of 3 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 three: Market Watch for Week of June 28th, 2004 - Major Earnings - Stock Splits - Economic Reports 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) ================================================================= ========================================== Market Watch for the week of June 28th ========================================== ----------------- Earnings Calendar ----------------- Symbol Co Date Comment EPS Est ------------------------- MONDAY ------------------------------- RIMM Research In Motion LtdMon, Jun 28 After the Bell 0.32 SONC Sonic Corp. Mon, Jun 28 -----N/A----- 0.31 ------------------------- TUESDAY ------------------------------ MKC McCormick & Company Tue, Jun 29 Before the Bell 0.29 NPSN NASPERS LTD Tue, Jun 29 -----N/A----- N/A ------------------------ WEDNESDAY ----------------------------- STZ Constellation Brands Wed, Jun 30 After the Bell 0.50 EMMS Emmis Communications Wed, Jun 30 -----N/A----- 0.07 GIS General Mills, Inc. Wed, Jun 30 Before the Bell 0.72 MON Monsanto Company Wed, Jun 30 Before the Bell 0.82 ------------------------- THUSDAY ----------------------------- BMET Biomet, Inc. Thu, Jul 01 Before the Bell 0.36 CAG ConAgra Foods, Inc. Thu, Jul 01 Before the Bell 0.42 ------------------------- FRIDAY ------------------------------- None ---------------------------------------------- Upcoming Stock Splits In The Next Two Weeks... ---------------------------------------------- Symbol Co Name Ratio Payable Executable FBMT First National Bancshares 3:2 Jun 30th Jul 1st KWK Quicksilver Resources, Inc2:1 Jun 30th Jul 1st AXYS Axsys Technologies, Inc 3:2 Jun 30th Jul 1st TEVA Teva Pharm Industries Ltd 2:1 Jun 30th Jul 1st PTEN Patterson-UTI Energy Inc 2:1 Jun 30th Jul 1st CNT CenterPoint Prop Trust 2:1 Jun 30th Jul 1st LPMA Lipman Elect Engineering 2:1 Jul 1st Jul 2nd BPOP Popular Inc. 2:1 Jul 8th Ju1 9th URBN Urban Outfitters Inc 2:1 Jul 9th Ju1 12th -------------------------- Economic Reports This Week -------------------------- This is it! This is the week the markets have been focused on for the past month. Tuesday brings the consumer confidence numbers. Wednesday is the PMI, the FOMC decision on rates and the Iraq handover. Thursday is the ISM index announcement and Friday is the June non-farm payrolls report. ============================================================== -For- ---------------- Monday, 06/28/04 ---------------- Personal Income (BB) May Forecast: 0.5% Previous: 0.6% Personal Spending (BB) May Forecast: 0.8% Previous: 0.3% ----------------- Tuesday, 06/29/04 ----------------- Consumer Confidence (DM) Jun Forecast: 95.0 Previous: 93.2 ------------------- Wednesday, 06/30/04 ------------------- Chicago PMI (DM) Jun Forecast: 64.5 Previous: 68.0 FOMC Meeting - ANNOUNCEMENT on INTEREST RATES IRAQ DEADLINE for formal handover of power. ------------------ Thursday, 07/01/04 ------------------ Initial Claims (BB) 06/26 Forecast: N/A Previous: 349K Construction Spending (DM) May Forecast: 0.5% Previous: 1.3% ISM Index (DM) Jun Forecast: 61.2 Previous: 62.8 Auto Sales (NA) Jun Forecast: 5.6M Previous: 5.7M Truck Sales (NA) Jun Forecast: 8.0M Previous: 8.5M ---------------- Friday, 07/02/04 ---------------- Nonfarm Payrolls (BB) Jun Forecast: 240K Previous: 248K Unemployment Rate (BB) Jun Forecast: 5.6% Previous: 5.6% Hourly Earnings (BB) Jun Forecast: 0.3% Previous: 0.3% Average Workweek (BB) Jun Forecast: 33.9 Previous: 33.8 Factory Orders (DM) May Forecast: 1.5% Previous: -1.7% Definitions: DM= During the Market BB= Before the Bell AB= After the Bell NA= Not Available ====================================================== Trading Ideas ====================================================== This section contains stocks that meet criteria which may make them of interest to long and short side traders. These are not recommendations, nor have they been reviewed by PremierInvestor editors for investment potential. However, each of them has technical and fundamental characteristics that make them worthy of further review by traders and investors looking for fresh ideas. New stocks will appear daily following the market close. Value Plays With Bullish Signals --------------------------------- Ticker Company Name Close Change PTR Petrochina Co Ltd 45.90 +0.63 GS Goldman Sachs Group Inc 94.55 +1.36 CSR Credit Suisse Group 35.76 +0.95 NXTL Nextel Communications 26.83 +0.69 WLP Wellpoint Health Network 111.35 +1.40 HIG Hartford Fncl Srvcs Grp 67.92 +0.70 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- LUV Southwest Airlines Co 17.00 +1.23 AKAM Akamai Technologies Inc 17.45 +1.43 WHI W Holding Company 17.69 +1.68 SIMG Silicon Image Inc 12.23 +1.99 USG USG Corp 18.00 +1.02 CKP Checkpoint Systems Inc 18.50 +1.13 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- EBAY Ebay Inc 90.72 +1.98 DELL Dell Inc 36.02 +1.10 NKE Nike Inc CI B 75.31 +2.91 BIIB Biogen Idec Inc 62.37 +1.79 ERTS Electronic Arts Inc 53.25 +1.94 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- XOM Exxon Mobil Corporation 44.25 -1.02 PEP Pepsico Inc 54.00 -1.13 GE General Electric Co 32.18 -1.09 ABT Abbott Laboratories 40.56 -1.35 ADP Automatic Data Processng 42.44 -1.30 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- NCC National City Corp 34.60 -0.63 RTN Raytheon Co 34.67 -0.30 GDW Golden West Financial 107.65 -1.15 APC Anadarko Petroleum Corp 57.83 -0.72 ITT ITT INdustries Inc In 83.63 -1.12 ================================================================= 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 (c) 2001-2004 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
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