PremierInvestor.net Newsletter Thursday 07-01-2004 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 ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/pi_c01h_1.asp ================================================================= In section one: Market Wrap: Nonetheless Market Sentiment: Fear of the Weekend Watch List: Delayed Response ================================================================= MARKET WRAP (view in courier font for table alignment) ================================================================= 07-01-2004 High Low Volume Adv/Dcl DJIA 10334.16 -101.30 10448.09 10274.51 1.78 bln 1380/1850 NASDAQ 2015.55 - 32.20 2045.53 2006.67 1.77 bln 938/2124 S&P 100 549.01 - 4.86 554.43 545.85 Totals 2318/3974 S&P 500 1128.94 - 11.90 1140.84 1123.06 W5000 11024.15 -114.80 11140.79 10975.26 SOX 467.03 - 18.10 485.09 462.59 RUS 2000 582.43 - 9.09 591.52 582.43 DJ TRANS 3172.01 - 32.39 3212.45 3160.17 VIX 15.20 + 0.86 15.57 14.41 VXO (VIX-O)15.08 + 1.09 15.99 14.40 VXN 20.06 + 0.69 20.68 19.59 Total Volume 3,883M Total UpVol 726M Total DnVol 3,112M Total Adv 2686 Total Dcl 4466 52wk Highs 261 52wk Lows 86 TRIN 2.75 NAZTRIN 1.91 PUT/CALL 0.93 ================================================================= =========== Market Wrap =========== Nonetheless by Jim Brown The key word in the Fed announcement was "nonetheless" and not "measured pace" and that difference was felt in the market action on Thursday. Post Fed trading was less than inspiring as a new flurry of earnings warnings produced a cloud over the markets. Adding to that cloud was a weaker than expected ISM and stronger than expected Jobless Claims. Cracks were forming in the bullish sentiment on multiple fronts. Dow Chart - Daily Nasdaq Chart - Daily SPX Chart - Daily SOX Chart - Daily The morning began badly with stronger than expected Jobless Claims which came in at 351,000 with last weeks numbers revised up to 350,000. This makes three of the last four weeks at 350,000 or higher and suggests the employment picture is not as strong as economists would like. The four week moving average rose to 347,000 and the highest level since April 17th. With the June employment data due out tomorrow the markets were not excited about the 350K level being breached so frequently. Offsetting the Jobless Claims was a stronger report from the Monster.com Employment Index which rose to 136 in June from 128 in May. This was a +6.3% increase and the jobs were spread across most geographic sectors. Management and Administration positions were the strongest with the Sales and Production components barely budging. This data is not adjusted for seasonality as are all the other employment surveys and it is difficult to determine if it was a seasonal bounce or a real change in hiring. This index represents the change in jobs advertised and not jobs filled. The key report for the day was the ISM for June and at 61.1 it still represents an expanding economy but it was the lowest level seen since last October's 57.0. The high of 63.6 was posted in January and the number has been moving lower since. There was a small bounce to 62.8 in May but June's -1.7 drop erased all the gains. The problem for June was in the New Orders and Backlog components. New Orders dropped from 62.8 to 60, down from the 73.1 high in December. Order Backlog fell to 58.5 from 63.0 in June and the 66.5 high in April. New Export Orders fell nearly -4 points from 60.6 to 56.7. Employment fell from 61.9 to 59.7. Good news came from a drop in Prices Paid from 86.0 to 81.0 but bad news came from a nearly +2 point jump in inventory levels to 51.1. The conclusions drawn from the ISM are not very exciting. Orders are down, inventory is up with employment dropping again. This appears to be confirmation of the many smaller reports from earlier in the month suggesting the economy is cooling. What this means in English is we are no longer expanding at a red hot pace but more of a lukewarm crawl. The lack of any inflation in the prices could be due to the continued slack in the economy and the inventory buildup. This is good news for the Fed but troubling news for traders. With the market priced to perfection a slowing of growth at the same time the Fed is raising rates is a recipe for disaster. It might sound like the ISM was all negative and that is far from the truth. The ISM has now been over 60 for eight months and that is the first time in over 20 years. The economy is still expanding only that pace of expansion has slowed over the last four months. The odds are good that string will be broken next month. The problem for the markets today came from multiple fronts. The Fed statement was one area of concern. While everyone expected the Fed to raise rates again before year end they would prefer that it occur in an orderly measured pace. The Fed added the clause "Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability." While the "measured pace" term was still used in the preceding sentence the "nonetheless" qualification removed it from consideration. The Fed tried to ride the fence and ended up with splinters. They tried to appease the markets but just had to have the last word. That last word worried the markets that there is still a danger of a repeat of the 1994 runaway rate hikes. If the economy was still expanding at a faster rate this statement may not have been a real problem. The ISM confirmation of weakness in prior reports that the expansion is slowing only served to highlight the phrase. Another challenge for the markets was some window undressing before the holiday weekend. Those who bought stocks last week in anticipation of a Fed celebration rally were quick to bail out when that rally did not occur. Remember all the talking heads that predicted a market relief rally if the Fed would just go ahead and raise rates and remove the uncertainty? They were conspicuously absent today as the market imploded. Also impacting the averages was another flurry of earnings warnings and lowered guidance. Many tech companies confessed to lower earnings prospects and the Nasdaq took it on the chin with a -32 point drop. Leading the big cap indexes down was very disappointing auto sales and further evidence of the slowing economy in general. GM reported sales fell -15% and much more than anticipated from their warning last month. Ford said sales fell -8%. Both companies said they were working to increase sales. Translated that means the incentives offered in the showroom was going up once again. The average incentive today is just over $4000 with some vehicles well over $5000. The problem with autos is the lack of demand. They have been giving them away for three years now with zero percent and buy one, get one gimmicks and there is no pent up demand. Used car prices have fallen off the planet and junkyards are crushing newer cars than ever before and on a regular basis. We have discussed the lack of future car buyers for the last two years as each round of incentive increases was implemented. Short of putting car keys in Wheaties boxes the car companies are going to have a tough time moving inventory for the next several months. The new model year will be their best hope. Cardinal Health was the biggest loser of the day and lost -$7 billion in market cap and -$17 off their stock price when they issued a high profile earnings warning. Three funds collectively lost over $1 billion on the news. The Fidelity Dividend Growth Fund and Fidelity Advisor Dividend Growth along with the Vangard Health Care Fund lost big bucks. CAH was a top holding in each. CAH was also 1.3% of the Fidelity Magellan Fund with assets of $67 billion. Tough to wake up to that kind of haircut as a fund manager. All your work for the last six months wiped out in one day by one stock. Other earnings warnings for the day included COLT, WMAR, PSTA, ELX, ESPD, CCUR, AMKR, MERX and SIPX to name a few. The index with the biggest loss was the SOX after Smith Barney downgraded the sector and AMKR warned of sector problems. AMKR cut its estimates to +6 cents from 17-22 cents analysts had expected. They cited weakness in cell phones and shortages of semi components. Morgan Stanley also tanked the sector saying Intel guidance, due out with earnings on the 13th, could be below analysts expectations. Add in the ELX warning of slow sales and the SOX dropped -18 (-3.72%) for the day. Needless to say the Nasdaq did not have a chance. The Nasdaq gave back -32 points of its gains for the week but managed to close right on the bottom of its current range at 2015. The Nasdaq rallied out of its prior range (1965-2000) on the 23rd and has refused to go back. The drop today was over by 11:30 but no rebound appeared. The Nasdaq closed off its lows but only barely. The key here is still the SOX and with nearly a -4% drop there is no way the Nasdaq could have produced a gain. The SOX fell back below the 470 support level, which had held all week and clung to 465, the last stop before testing 450 again. If the Intel rumor picks up speed we could easily test 450 again next week. I kept thinking all day we would see some chip buying at the close but it never appeared. The Dow took a serious header off the high board and landed face first several points below the bottom of its recent range. The Dow traded down to 10274 and under the 10300 level which has held for nearly four weeks. We did see a recovery at the close back to the prior 10330 resistance level but the rebound ran out of steam. As with every long holiday in recent memory the rumors of terror threats/events were flying. It was so bad at one point that the Homeland Security Dept had to make a statement that they were not raising the threat level and there were no credible threats for the coming weekend. That is almost more scary than a credible threat because it means there is no concentration of force to prevent the event. It is almost as though the cops are going on holiday as well because there is no visible enemy. There were also several commentators suggesting the Democratic Convention was the most likely target for a regime change attack because the attacked party tends to get the most sympathy. With the goal to sink Bush the commentators thought the Boston convention was not only the easiest target in population density but the preferred target as well. You can bet the security will be extreme and it will not be an easy target by the time the convention begins. In the end it was not the rumors that tanked the market but the perception that the Fed was ready to aggressively raise rates just as the economy appeared to slowing even further. It fell on worries that earnings were going to disappoint and on several key downgrades. Yahoo for instance was knocked for a -2 loss on a change in search strategy by Microsoft. Valuation downgrades are beginning to become common place and earnings warnings only accelerate the worry. Still the most likely fear factor impacting the markets today was the Employment Report tomorrow. The current consensus estimate is still +275,000 jobs and traders were beginning to fear a disappointment. We have seen employment drop in almost every report except for the Monster Index. We have seen Jobless Claims rise back to the 350,000 level for three of the last four weeks with the four week average at 347K. These are not positive signs for the Nonfarm Payrolls. I have heard several whisper numbers this afternoon in the 100-110K range. While this would still be a positive gain it would be a sentiment loss. The perception that employment is accelerating would be dashed and cast more suspicion on the strength of the recovery. A major drop in new jobs would weaken the republican stance and give Kerry more ammunition. The race is already a tossup and that could give investors more election indigestion. Should we see a minus sign in front of the number it could be lights out for any July rally. July is typically the best month of the third quarter and we certainly did not get started off on the right foot. The Dow lost -101 points and broke crucial support intraday. The S&P also traded below 1125 support and managed almost no rebound. Oil spiked back over $39 on comments from Saudi Arabia that they thought it was fairly valued in the upper $30s. What happened to the $25-$30 target price we have been using? Inflation in its purest form brought on by supply and demand. The jump in oil and rates and the drop in orders and jobs knocked the hope out of the market and the result was an ugly day. Normally the trend into the July-4th holiday is up with an earnings led rally for the following week. Not looking too good for that rebound tonight. For the market to have any hope of repeating that trend the Nonfarm Payrolls had better be strongly positive and at least 100K or more. With the implied weekend terrorist threat a wimpy number is not going to instill confidence and create an urge to buy. There is good news in the market but it was hidden by the various factors above. Real rates fell to nearly a two month low despite the Fed rate hike. The yield on the ten-year closed at 4.564. The market had priced in the potential for a 50 point hike as well as strong economics. We got neither and bonds continued to climb. This will help home sales and take some of the fear of the Fed out of the market. This fact will surface next week and you can count on it. We will also need some positive earnings news in order to capitalize on the rate drop and that could be a challenge. For Friday I would look for a good Jobs number to start some bargain hunting ahead of the earnings parade that begins next week. However, don't just jump in assuming we will go higher. We did break support intraday on Thursday and that could be a signal of things to come. The market will confound the most people possible and summer trading is very tough. Wait for a real trend to appear. We are also playing in some fast traffic. The NYSE reported that program trading was responsible for 70.5% of all trades on the NYSE for the week ended June 25th. 70.5%!!! This is an all time record and something that should indicate to us all how little retail trading is actually being done. According to the NYSE an average of 1.119B shares were traded each day. Since there was only an average of 1.588B shares traded each day this means less than 470 MILLION shares of retail trading per day. This is a picture of the summer doldrums at its best. Here is the link to the NYSE report: link In the for-what-its-worth category Abby Joseph Cohen gave her carefully scripted market outlook on Wednesday. She said the markets were 12-15% undervalued and we could see a significant rally by year end. Using the S&P as of Wednesday that +12-15% gain would put the S&P at 1275-1311. Definitely a far cry from our 1025 support today. She also said the rally might not occur until late November or December due to the election. I hope she is right but I would not mortgage the kids to bet on it. Interesting that she chose to make her appearance during the post Fed bounce where all the pundits were predicting a celebration rally. Enter Passively, Exit Aggressively. Jim Brown Editor =============================== Market Sentiment =============================== Fear of the Weekend - J. Brown If yesterday's post-fed afternoon rally was due to window dressing then funds didn't take long to do a little undressing. The day started with some disappointing economic data in the form of higher than expected initial jobless claims and an ISM index that came in just a tad lower than forecast. There were a number of factors pressuring stocks and investors used them all as an excuse to sell. The last 24 hours has not been positive when it comes to earnings outlooks. Cardinal Health, the nation's largest drug wholesale, dropped a bomb last night with an earnings warning for the June quarter, the year and next year. On top of the earnings news CAH added to its woes by revealing a new government probe into its accounting practices. Shares of CAH dropped like a rock with a $17.00 haircut or 25% decline in market cap. Emulex (ELX) was chasing after CAH with its own earnings warning that left shares of ELX down 20% on the session. You would expect the brokers to downgrade these stocks and they did but analysts were also downgrading some recent winners like Boeing (BA) and Yahoo (YHOO). All in all the effect was damaging to investor confidence regarding the upcoming Q2 earnings season. It was a very bearish day as the SOX semiconductor index led stocks lower with a 3.7% decline. Only the DFI defense index and the XNG natural gas index managed to close in the green. Pressing down on stocks was day two in a huge surge higher for crude oil. Oil has risen more than 8% in the last two sessions and completely erased its losses over the last two weeks. Market internals were obviously negative. Declining stocks outnumbered advancers 17 to 10 on the NYSE and 21 to 9 on the NASDAQ. Down volume was more than four times higher than up volume on both exchanges. Wall Street will be focused on the non-farm payrolls report tomorrow but the real fear may be the Fourth of July weekend. Investors tend to get spooked ahead of any long holiday and the potential for terrorist attacks. I suspect that many traders have already left for the holiday, which will leave us with low volume to exaggerate any moves in the markets today and tomorrow. If we can escape any sort of major terrorist event over the weekend then maybe fund managers can put their new wad of retirement cash from the quarter's end to work and do a little buying next week. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 8871 Current : 10334 Moving Averages: (Simple) 10-dma: 10392 50-dma: 10253 200-dma: 10152 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 962 Current : 1128 Moving Averages: (Simple) 10-dma: 1135 50-dma: 1119 200-dma: 1099 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1180 Current : 1489 Moving Averages: (Simple) 10-dma: 1487 50-dma: 1451 200-dma: 1442 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 15.20 +0.86 CBOE Mkt Volatility old VIX (VXO) = 15.08 +1.09 Nasdaq Volatility Index (VXN) = 20.06 +0.69 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.93 736,874 686,859 Equity Only 0.74 576,755 429,000 OEX 0.62 38,203 23,733 QQQ 0.78 66,351 51,684 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 67.1 + 0 Bear Confirmed NASDAQ-100 50.0 + 1 BULL ALERT Dow Indust. 70.0 + 3 Bear Confirmed S&P 500 65.4 + 0 Bear CORRECTION S&P 100 66.0 + 2 Bear CORRECTION 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: 1.26 10-dma: 1.08 21-dma: 1.04 55-dma: 1.07 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 1059 915 Decliners 1741 2103 New Highs 105 73 New Lows 28 37 Up Volume 358M 325M Down Vol. 1415M 1386M Total Vol. 1796M 1725M 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 --------------------------------- Delayed Response A G Edwards - AGE - close: 33.75 change: -0.28 WHAT TO WATCH: After a year of building a broad topping formation, shares of AGE look like they are finally ready for a major breakdown. Use a trigger under yesterday's low and target a drop to next major support near $30. --- DoubleClick Inc. - DCLK - close: 7.63 change: -0.14 WHAT TO WATCH: Things started to look bad for DCLK investors when the stock gapped sharply lower in mid-April and since then the stock has been trying to build a new base. That attempt appears to have failed with price breaking below the bottom of the 10-week range today. Use an entry trigger below $7.50 and target a drop to major support near $6.00. --- Chinadotcom Corp. - CHINA - close: 6.99 change: -0.39 WHAT TO WATCH: Investors have clearly lost their appetite for Chinese Internet stocks, as the entire group continues to see heavy selling pressure. CHINA is on the cusp of a serious breakdown and we can play this move with a trigger under today's $6.90 low. While there is some support just above $6.00, aggressive traders can target a move substantial drop to major support near $5.00. --- Sanmina-SCI Corp. - SANM - close: 8.30 change: -0.80 WHAT TO WATCH: After more than 2 weeks of consolidation near its multi- month lows, SANM broke down hard today, continuing the pattern of lower highs and lower lows that has been in place since the decline started in January. This looks like a great entry point on the way to strong support near the $6.50-7.00 area. A failed rebound below the $9.00 level would be an even better entry point. =================== On the RADAR Screen =================== PFE $33.93 - Even the normally defensive Drug stocks weren't immune from today's decline and PFE dropped to test major support near $33.50 before the end of day rebound. Use a trigger under today's low and target a slide down to the $30-31 area. TXN $23.54 - So much for a possible rebound in the Chip sector, with the SOX getting slammed lower today. That furthered the rollover in shares of TXN and the stock looks poised for another breakdown sooner, rather than later. Use a trigger at $22.90 and target major support at $20. AVT $21.15 - Technical breakdown setups don't get much better than this. Today's sharp decline pushed AVT right to the edge of major support at $21, ending right on the 50-week moving average. Use a trigger under $20.80 and target initial support near $17 enroute to the key $15 level. ================================================================= To stop receiving this PremierInvestor.net Newsletter, send email to Contact Support ================================================================= DISCLAIMER ================================================================= This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of PremierInvestor.net may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. PremierInvestor.net staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control. Please read our disclaimer at: http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html ***************************************************************** ADVERTISING INFORMATION For more information on advertising in PremierInvestor.net Newsletter, or any Premier Investor Network newsletter please contact Contact Support. ***************************************************************** Copyright ) 2003 PremierInvestor.net. and The Premier Investor Network. Do not duplicate or redistribute in any form.
PremierInvestor.net Newsletter Thursday 07-01-2004 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 ================================================================= To view this email newsletter in HTML format with imbedded charts and graphs, click here: http://www.PremierInvestor.net/htmlemail/pi_c03h_2.asp ================================================================= Stop Adjustments: SOHU Closed Plays: 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 Adjustments ================================================================= SOHU - high risk/reward short - Lower stop from $22.01 to $20.15 Prepare to exit as SOHU nears $16.00 just $2.00 away ================================================================= Closed Plays ================================================================= Emulex - ELX - close: 11.46 change: -2.85 stop: 15.55 Wow! That didn't take long. ELX has already hit our target range to exit. Last night the company issued an earnings warning for its fourth quarter. ELX now sees earnings of 18 cents on revenues of $85-86 million versus previous estimates of 25 cents on $100-103 million. Wall Street was obviously unhappy with the news and a handful of brokers downgraded the stock. Investor reaction was worse. Shares of ELX gapped down to $12.53 and proceeded to slip through out the session to close at $11.46. This is a 23% drop from our picked price over the weekend. The lack of intraday bounce is encouraging and more aggressive traders might want to keep the play open to see how far ELX might fall. The $10.00 mark is probably a good target. We'd suggest a trigger over today's high. However, we're officially closing the play now. Sometimes it doesn't pay to be greedy. Picked on June 27 at $14.90 Gain since picked: - 3.44 Earnings Date 04/22/04 (confirmed) Average Daily Volume: 2.0 million ================== 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 TXU TXU Corp 41.14 +0.63 SU Suncor Energy 26.19 +0.58 HOT Starwood Hotel & Resort 45.50 +0.65 VLO Valero Energy 74.80 +1.04 HET Harrah's Entertainment 54.63 +0.53 SWN Southwestern Energy 30.42 +1.75 --------------------------------------- Breakout to Upside (Stocks $5 to $20) --------------------------------------- CACS Carrier Access Corp 13.25 +1.33 TINY Harris & Harris 13.67 +1.43 LWAY Lifeway Foods 16.43 +1.27 --------------------------------------- Breakout to Upside (Stocks over $20) --------------------------------------- SBUX Starbucks 44.62 +1.13 BMET Biomet Inc 45.56 +1.12 RIMM Research In Motion 71.47 +3.02 KMRT Kmart Holding 74.73 +2.93 CME Chicago Mercantile 147.06 +2.69 ZBRA Zebra Technologies 88.78 +1.78 ISCA Intl Speedway Corp 49.88 +1.24 ------------------------------------------- Breakout to Downside (Stocks over $20) ------------------------------------------- WMT Wal-Mart Stores 51.74 -1.02 GM General Motors 45.34 -1.25 CAH Cardinal Health Inc 52.80 -17.25 XLNX Xilinx Inc 31.80 -1.51 BDX Becton Dickinson 49.24 -2.56 MCK Mckesson Corp 31.00 -3.33 RF Regions Financial 30.23 -6.32 ABC AmerisourceBergen 55.67 -4.11 CDWC CDW Corp 61.01 -2.75 ----------------------------------------- Recently Overbought With Bearish Signals (Stocks over $20) ------------------------------------------- MGA Magna Intl 83.87 -1.30 PPG PPG Industries 61.32 -1.17 RRD R.R.Donnelly 32.56 -0.46 CATY Cathay General 64.69 -2.01 SAFM Sanderson Farms 52.38 -1.24 ================================================================= 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. 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