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PremierInvestor.net Newsletter                   Monday 06-28-2004
                                                    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:  Iraq Officially Free Yet Stocks Sink
Watch List:   Squaring Up


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
     06-28-2004            High     Low     Volume Advance/Decline
DJIA    10357.09 - 14.75 10464.38 10337.70 1.65 bln   1245/1564
NASDAQ   2019.82 -  5.65  2039.93  2013.73 1.59 bln   1324/1725
S&P 100   550.48 +  0.73   555.01   549.27   Totals   2569/3289
S&P 500  1133.35 -  1.08  1142.60  1131.62
RUS 2000  584.10 -  3.60   588.82   583.38
DJ TRANS 3177.97 + 13.79  3205.56  3164.45
VIX        16.07 +  0.88    16.13    15.19
VXO        15.60 +  0.71    15.86    14.65
VXN        20.59 +  1.63    20.72    19.45
Total Volume 3,567M
Total UpVol  1,261M
Total DnVol  2,242M
52wk Highs     303
52wk Lows       81
TRIN          1.63
PUT/CALL      0.62
===============================================================

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

Iraq Officially Free Yet Stocks Sink
by James Brown

Stocks were off to a strong start this morning on the surprising
news that the formal handover of power in Iraq had occurred two
days earlier than expected.  Unfortunately, U.S. equities began
to weaken in late afternoon trading and the major indices turned
negative by the closing bell.  Disappointing comments from Dow-
components General Motors (GM) and Wal-Mart (WMT) weighed on the
index while concerns over rising rates resurfaced to tug at the
broader S&P 500 and NASDAQ Composite.

After fourteen months of a U.S.-led occupation the coalition
formally handed over the political power in Iraq to its new
interim government.  The move has long been expected to occur on
the June 30th deadline but in what some are calling a brilliant
move the Iraqi Prime Minister Iyad Allawi urged an earlier
turnover to catch insurgents off guard.

The new provisional government's main focus is to prepare the
country for general elections by January 2005.  Security remains
the real challenge today and the new government will continue to
work with the U.S.-led coalition forces numbering more than
100,000 men.  Global markets were also happy to hear that NATO
has stepped up to offer training to security forces for Iraq's
new government.  President Bush, who was in Turkey for a UN
meeting, praised the move calling it a "proud day" for the Iraqi
people.  European stocks, which had opened lower on the session,
were strongly positive by the closing bell.  The English FTSE
jumped 24 points to close at 4518.  The French CAC rose 29 points
to 3771.  The German DAX soared 56 points to 4069.

Unfortunately, U.S. averages weren't so bullish.  The Dow Jones
Industrials rallied to 10,464 (+93 points) early in the session
before drifting sideways.  Around 1:30 PM ET the index began to
sink into what would become a sharp afternoon sell-off.  The
Industrials closed down nearly 15 points to 10,357 just points
above its simple 100-dma.  The NASDAQ Composite managed to hit
new two-month highs earlier in the session at 2,039 but slipped
sharply toward recent support in the 2013-2015 range in the
afternoon decline.  The NASDAQ bounced back to 2019 (-5.6 points)
at the close.  Meanwhile the S&P 500 index mimicked the action in
the Dow but only lost a point to 1133.

Chart of the Dow Jones Industrials:



Chart of the NASDAQ Composite:



Market internals were bearish by the close.  Declining stocks
outnumbered advancers 5 to 4 on the NYSE and 17 to 13 on the
NASDAQ.  Down volume overshadowed up volume on both exchanges
while total volume came in somewhat light.  Technology, energy
and interest-rate sensitive sectors took the heaviest beating.
The GHA.X hardware index lost 1.5%.  The SOX semiconductor index
slipped 1.76%.  The NWX networking index fell 1.37%.  The OSX oil
services index dropped more than 2%.  Homebuilders sank to a 3%
decline on rising interest rate worries.  The successful transfer
in Iraq undermined demand for gold, which is seen as a safe haven
when geo-political worries rise.  Gold futures melted for a $1.90
loss to $401.30 and ounce while the XAU gold & silver index
tarnished with a 2.74% decline.

Crude oil was a big story today.  August crude oil futures fell
$1.31 (about 4%) to $36.24 a barrel nearing the psychological $36
level and its simple 100-dma.  The drop was fueled by the Iraq
handover of power and news that another Iraq pipeline in Basra
had become operational.  Traders are expecting there to be less
sabotage now that the new Iraq government is in power since any
new damage would be seen as an attack against the Iraqi people
and not the coalition and the West.  The drop in oil fueled a big
move in the Dow Jones Transportation index, which hit new four-
year highs above the 3200 level intraday before slipping back to
3177.  Several stocks in the sector like JBHT, UPS, and FDX all
hit new all-time highs during the session.

The XAL airline index also managed to early morning gains on the
Iraq news and drop in oil prices despite negative headlines from
giant United Air Lines (symbol: UALAQ or UALAQ.OB).  United Air
Lines, which is struggling to emerge from Chapter 11 bankruptcy,
was turned down for the third and final time for a $1.1 billion
government loan guarantee.  The three-member panel of the Air
Transportation Stabilization Board voted against giving UAL the
loan and said they would not accept any future requests from the
company.  UAL will have to look for financing from private
investors, which will force it to pay higher yields on its loans
and raising its expenses.  A number of UAL's rivals traded higher
on the news, since UAL may be forced to sell some of its assets
or more lucrative routes to raise cash.

Dow components General Motors (GM) and Wal-Mart (WMT) also issued
some bad news today.  Shares of GM sunk 2.4% to close right at
its simple 200-dma after its head of sales analysis said June
numbers would be disappointing.  Last month GM, the country's
largest automaker, posted huge numbers in May, which helped the
industry, hit an annual pace of 17.8 million units, the strongest
rate in nine months.  Now the industry expects June's totals to
be in the 16.3 million-unit range (that's for the whole sector
not just GM).  While this may not be a surprise for industry
watchers who knew last month's results would be hard to follow
it's not the kind of news Wall Street likes to hear.   On a
similar note Wal-Mart reported that June same-store sales would
likely fall in the 2%-4% range, below its previously forecasted
4%-6% range.  The world's largest retailer is blaming weak
Father's day sales and uncommonly cool weather in several parts
of the country hampering normal seasonal summer item sales.
Shares of WMT ended the session down 5 cents to $52.46.

The Altria Group (a.k.a. Phillip Morris, symbol: MO) happened to
be one of the Dow's best performing components.  Shares of MO
soared more than 5% intraday and closed at $49.60, up 3.76% as
investors responded to news in the government's lawsuit against
the tobacco industry.  Late Friday a U.S. district court judge
gave permission for the tobacco sector to appeal an earlier
decision regarding government prosecutor's plans to seek
disgorgement in billions of dollar in profits.  Currently U.S.
prosecutors are seeking a $280 billion reward in their fraud and
racketeering case against the industry.  The new decision will
allow tobacco companies to go to an appellate court and hopefully
dismiss the decision that "disgorgement" is an appropriate
remedy.  If the appellate court chooses to review the matter it
could delay the current lawsuit expected to begin in September.

Monday was not without its economic data.  The Commerce
Department reported that U.S. consumer spending rose 1% in May,
which was the best increase since October 2001.  Unfortunately,
real disposable incomes came in flat after being adjusted for
inflation.  Likewise the PCE price index or personal consumption
expenditure price index jumped 0.5%, the biggest move in more
than a year, indicating a rise in inflation.  The core PCE rate
only rose 0.2%.  Today's round of economic data helped fan the
rising interest rate fears.  While no one expects the FOMC to
raise rates by more than 1/4 point on Wednesday Wall Street is
now looking to the August meeting and wondering if a 50-point
hike is in the works.  Monday's data sent bonds lower and the 10-
year note hit a new seven-week low as its yield shot up to 4.7%.
CNBC mentioned that the month of May saw a record outflow of $17
billion from bond funds as investors worried about rising rates.

Tomorrow could be another tough session for interest rate
sensitive issues and mortgage lenders.  After the closing bell
tonight Washington Mutual (WM) lowered its 2004 earnings forecast
due to rising rates impacting its home-loan business.  Wall
Street analysts were expecting 2004 earnings to come in at $4.24
a share but WM now expects profits to fall in the $3.00-3.60
range.  WM's CEO Kerry Killinger sums it up in the company's
press release: "It now appears to us that the shift in the
interest rate environment in recent months, with a sharp increase
in long-term rates and a related reduction in mortgage volumes,
will continue through the rest of the year. The effects of these
changes are likely to outpace the timing of ongoing cost
reduction plans in our Mortgage Banking business."

Tuesday also brings the latest consumer confidence numbers (for
June) and begins the two-day FOMC meeting.  It is the FOMC
meeting that is likely to keep stocks trading sideways for the
next couple of sessions even though no one expects any surprises.
After the interest rate decision Wall Street will focus on the
Friday non-farm payrolls report, which should be positive for
stocks and the market if the current up trend remains in place.
I also want to remind readers that traders need to stay wary of
negative news out of Iraq.  Yes, the formal handover of power has
passed and without incident but odds are good that insurgents
will follow through on whatever evil plans they had set for the
June 30th deadline.


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

Squaring Up

Check Point Software - CHKP - close: 25.81 change: -0.06

WHAT TO WATCH: A lack of upside strength in the broad market kept
CHKP from making a strong breakout today, but it did manage to
probe new recent highs before the afternoon pullback.  Use a
trigger over today's high and target a rally towards $30.




---

Tenet Healthcare Corp. - THC - close: 12.70 change: -0.14

WHAT TO WATCH: With its slight pullback today, THC is giving us
another show at buying a dip to the bottom of the 3-month rising
channel.  A more conservative approach would be to wait for a
breakout over the early June highs and the 200-dma before
playing.  Target strong resistance near $15.




---

Centex Corp. - CTX - close: 46.20 change: -1.14

WHAT TO WATCH: As the FOMC decision on interest rates draws near,
Housing stocks have been quite volatile.  CTX failed in its
breakout attempt late last week and now looks headed for a
possible breakdown.  While aggressive traders might target
entries on a break below the June lows at $45, the more
conservative approach would be to wait for a break under $43,
which would be a strong PnF Sell signal.




---

Microsoft Corp. - MSFT - close: 28.28 change: -0.29

WHAT TO WATCH: The catalyst for the recent rise in shares of MSFT
centers around what the company will do with its cash hoard, with
that announcement likely in the month of July.  This is a longer-
term play, but the stock looks like it is preparing to break out
(to the upside) from its long-term consolidation wedge.  Use a
near-term pullback near the $27.00-27.50 area to establish
positions ahead of that breakout, targeting a rally as high as
the $40 area.





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

VLCCF $29.10 - Despite the lackluster action in the rest of the
market, shares of VLCCF have been soaring higher in recent
sessions, reaching their best level since 1998 today.  Aggressive
traders might look for a slight pullback near the $27 area in
order to gain a favorable entry, targeting a move to test the
all-time highs in the $31-32 area.

OTEX $31.12 - Taking off above recent resistance near $29 last
week, OTEX looks headed for a test of major resistance just under
$33.  Use a trigger over those March/April highs, seeking a
breakout to new all-time highs in the weeks ahead.


=================================================================
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 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter                   Monday 06-28-2004
                                                    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 Loss Updates:   ELX


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 Updates
==================================================================

ELX - tech short -
  lower stop from 16.01 to 15.76


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

FTE     France Telecom (ADS)       25.73    +0.65
BAC     Bank of America Corp       84.72    +0.72
MO      Altria Group Inc           49.60    +1.80
FNM     Fannie Mae                 71.75    +1.60
SI      Siemens Aktien             71.08    +0.83


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

ATI     Allegheny Technologies     17.44    +1.82


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

EBAY    eBay Inc                   92.81    +2.09
PPL     Ppl Corporation            44.79    +1.19
CME     Chicago Mercantile Exchnge140.94    +2.54
TCB     TCF Financial Corp         57.02    +1.02
JBHT    JB Hunt Transport Svcs     38.63    +1.47


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

JCI     Johnson Controls Inc       53.50    -1.20
DGX     Quest Diagnostics Inc      84.07    -3.23
ELAB    EON Labs Inc               42.40    -1.23
BRL     Barr Laboratories Inc      33.40    -2.30


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

VMC     Vulcan Materials Co        46.59    -0.35
SUN     Sunoco Inc                 61.51    -1.34
IQW     Quebecor World Inc         21.14    -0.32
RGS     Regis Corp                 44.85    -0.43


=================================================================
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 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.


DISCLAIMER

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.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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