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Daily Newsletter, Thursday, 07/01/2004

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PremierInvestor.net Newsletter                 Thursday 07-01-2004
                                                    section 1 of 2
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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


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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

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          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


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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


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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.


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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:
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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
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charts and graphs, click here:
http://www.PremierInvestor.net/htmlemail/pi_c03h_2.asp
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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


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

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Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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





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