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Daily Newsletter, Thursday, 08/26/2004

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PremierInvestor.net Newsletter                 Thursday 08-26-2004
                                                    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:       Bulls Applying Pressure
Watch List:        Software to Chickens
Market Sentiment:  Volume Evaporates

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      08-26-2004           High     Low     Volume   Adv/Dcl
DJIA    10173.41 -  8.30 10193.54 10155.86 1.24 bln 1781/1424
NASDAQ   1852.92 -  7.80  1860.39  1848.88 1.18 bln 1231/1762
S&P 100   539.46 -  0.11   540.45   538.18   Totals 3012/3186
S&P 500  1105.09 +  0.13  1106.78  1102.43
W5000   10721.63 + 83.26 10737.04 10699.87
SOX       380.40 -  3.90   384.28   378.16
RUS 2000  547.25 -  2.89   550.14   546.00
DJ TRANS 3108.84 -  5.20  3130.55  3098.79
VIX        14.91 -  0.07    15.22    14.76
VXO (VIX-O)14.87 +  0.24    15.23    14.56
VXN        21.60 +  0.19    21.77    21.36
Total Volume 2,625M
Total UpVol  1,100M
Total DnVol  1,466M
Total Adv  3467
Total Dcl  3580
52wk Highs  143
52wk Lows    79
TRIN       0.99
NAZTRIN    1.55
PUT/CALL   0.84
=================================================================

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

Bulls Applying Pressure
by Jim Brown

The major indexes may have finished in the red but it was
only by a narrow margin. Sellers were unable to capitalize
on a slow day and take back some of the gains from the
last week. Oil prices, weak earnings, weak economics and
potential terror events failed to remove the underlying
bid that kept the markets near their highs for the week.

Dow Chart – Daily


Nasdaq Chart – Daily


SPX Chart – Daily


Russell Chart – Daily



Jobless Claims jumped again to the 340,000 level and
well above estimates for another drop to 330,000. The
market tried to ignore the news because much of the
increase was related to Hurricane Charlie. Despite the
thousands of temporary hires in Florida the jump to
343K was the highest level in four weeks. Discounting
the impact of Florida to the headline number the trend
has been steadily downward. This tells us that layoffs
are continuing to slow despite the lack of strong jobs
growth. Rising oil prices and geopolitical concerns
may be keeping employers from adding to the workforce
but they are not cutting workers at the same rate they
were earlier in the year. This suggests we could see
some additional jobs growth in the Jobs Report next
Friday. The estimate for +125,000 new jobs is well
below last months optimistic level but still above
the +32,000 jobs actually reported.

Another employment report released today was the Help
Wanted Index and it fell to only 37. This is the lowest
level since December and only one point below the low
of 36 set in May of 2003. With the move to job ads on
the Internet instead of papers this index has been
demoted to a footnote but it is still an indication of
a lack of hiring. The recent high of 40 in March was
inline with the rising job creation at the time. A
continued drop is just another confirmation employers
are still cost conscious and concerned about the future.

For Friday we are scheduled to get the GDP update and
the consensus is for another drop to +2.8% from the
+3.0% last time around. With anecdotal evidence from
several weak sectors there is some concern the number
could drop even lower. A low number here could help
fuel speculation that the Fed will not raise rates
at the Sept-21st meeting. The current consensus is
for another hike because the Fed views is as removing
accommodation not raising rates. They view the current
1.50% as woefully low and in need of correction. The
Fed funds futures after the morning reports are showing
a 70% chance of another quarter point increase in Sept.

We will also see the final Consumer Sentiment for August
and it is not expected to change from the 94 in the
earlier release.

Greenspan is scheduled to talk at the Jackson Hole
conference and that speech will be dissected for further
insight on his comments earlier in the week. His Jackson
Hole remarks have moved the markets in the past as he
tends to be less formal and deviate from the party line
at these conferences. His rebuttal letter to the Senate
Banking Committee earlier this week suggested home
prices were too high in some areas as a result of
the recent housing bubble. He also said he thought
Japan could be hurt significantly if oil prices continued
to climb. Japan has no oil and is dependent on imports.
He also said the economic cycle in Asia is slowing and
oil prices could accelerate that weakness. He said
growth in China had "braked sharply" and there was a
risk of a hard landing. The letter was a constant set
of good news/bad news comments where he made positive
comments about an area of economic concern and then
hedged his bet by giving a caution about that same area
in the very next paragraph. This fence straddling will
hopefully be resolved with any update on those topics
tomorrow. Unfortunately I would not bet on it.

Today was a bad news bulls type of day. Earnings misses
and warnings from several high profile companies gave
the bulls a wall of worry to climb and while they did
not quite make it to the top they ended on the last
step. Starbucks produced some bitter coffee for investors
with sales growth that was the weakest since May 2003.
SBUX dropped -$2.58 or -5.6% on the news. The slowing
growth was undoubtedly due to consumers paying more
at the pump and less at the counter over the last
three months. $3 coffee may be a casualty of $2 gas.

Krispy Kreme donuts failed to satisfy the sweet tooth
of investors after turning in a dismal +0.1% growth in
revenue. The stock was knocked for a -10% loss after
reporting earnings and guidance that was far below
estimates. KKD only earned $5.7 million this quarter
compared to $13 million in the same quarter last year.
This was a -55% drop in earnings. They also posted
large increases in costs and big drops in margins
from 19.3% to only 10.4% in company owned stores.
They said they suffered losses in closing some non
performing locations. Wow, have times changed. They
also said stores purchased from franchisees had been
under performing. If I reworded that sentence it would
look something like this. Stores repossessed by KKD
and those abandoned by franchisees were doing poorly
as one would expect when taking over failed locations.
Since boarding up a failed KKD store could produce very
negative sentiment for other KKD stores in the area they
are sometimes forced to run a location rather than close
it. Shades of Boston Chicken all over again. At $13
today they are well off their $50 2003 highs and odds
are good they will go lower. KKD blamed their problems
on the Atkins diet and with that trend slowing they
will have a chance for a sweet rebound in the future.

Fred's missed estimates by a penny and blamed the
results on slower sales in home furnishings and apparel.
No real surprise here after WMT and TGT warned that
sales were slowing earlier in the week. The impact of
higher gas prices is likely to produce a flood of these
type of earnings reports when earnings begin again in
October. We are still a couple weeks ahead of the start
of earnings warning season in mid September but I think
everyone already knows how it is going to turn out. With
home heating oil running +30% over last year there will
be a lot of coal in the Christmas stockings and some
people will be glad to get it.

Kirkland's (KIRK) dropped -19% after warning that sales
in August were down sharply. You may not have heard of
them but they sell home furnishings. They said sales
have "slowed considerably" and "customer traffic remains
a concern, ESPECIALLY in mall stores" (my capitals) They
also said they were "not optimistic they could produce
comparable same store sales in the near term". They
expect same store sales to drop -10% to -15% in the 3Q.
Try telling them and other retailers that gas prices
are not a problem for the retail community. I have seen
several reports that mall traffic has slowed considerably
across the country.

Semi stocks took yet another hit today as various
analysts continued their cautionary stance for chips.
BofA cut their ratings on AMD, INTC, TXN, BRCM and MU.
They feel the chip sector has peaked early for this
cycle and expect capex spending to decline. They are
expecting 2005 to exhibit a cycle trough like those
that began in 1995 and 1997. I quickly tracked down
a chart for that period and there were some significant
declines after the 1995 and 1997 peaks. If they are
correct then there are some rough times ahead.

SOX Chart - Weekly 1995-1999


SOX Chart - Weekly 2001-2004



Do we have to wait for 2005 to determine what is going
to happen in chips? Not if we believe the mid quarter
updates currently in progress. NVLS gave their mid
quarter update after the bell with mixed results. The
stock dropped initially after the bad news but rebounded
in later trading. Novellus said customer order patterns
were becoming more cautious and the outlook was much
different than the upbeat guidance in July. NVLS said
they were seeing some push outs of orders, some as far
as 1Q of 2005. They were still positive about the outlook
but turning cautious as well. Bookings are now expected
to be at the low end of the range at $420 million but
shipments will be below previous guidance. 3Q revenue
was also expected to be lower than previously forecast
but only slightly. (they still have time to let
investors down slowly) Q3 earnings were lowered to 37
cents compared to the current analyst consensus of 40
cents.

On Wednesday CMOS also warned that conditions were
deteriorating with order push outs and lower visibility.
There is that "visibility" word again. It means we are
not getting the orders we want but we are still hoping
we can produce a miracle before time to report earnings
again.

The big dog, Intel, will have their mid quarter update
on Thursday Sept 2nd and all eyes will be on how they
are handling their inventory problem and how bookings
are progressing. The back to school build out season
is over and we are moving into the holiday build cycle.
Time to get down and dirty on pricing to blow out those
excess chips. Expect some killer computer deals this
fall.

AMR also warned after the bell that conditions were
getting worse. With oil still hovering in the mid $40s
AMR expects 3Q fuel costs to be $300 million over the
same quarter in 2003. AMR said its full year fuel costs
would be in the $3.8 billion range. They did say traffic
loads were up about +7% but revenue per available seat
mile (RASM) would be below last years levels. Obviously
a continued rise in oil prices would be very detrimental.

Unfortunately that is probably what is going to happen.
Crude oil fell again today despite sabotage in Iraq
cutting production again. Oil prices rose on the news
but fell back again before the close on news of the
ceasefire in Iraq. With oil demand continuing to rise
on a daily basis this price pullback may only be
temporary. I have discussed Hubbert's Peak several
times in this commentary over the last several weeks.
There is a scenario in the current peak forecast that
predicts a push out of that production peak for several
years if OPEC allows oil prices to run out of control.
I believe we are seeing that today. Because the oil
nations can see the future in terms of depletion they
are determined to get every last dollar they can before
the wells run dry. Does anybody really think this oil
"crisis" just happened overnight? Of course not.

Oil was $7 a barrel in 1997. What changed? Supply
temporarily exceeded demand because OPEC was not
managing production correctly. Now they have the price
going in the right direction (for them) and there is
no end in sight other than a dry hole. Sure prices may
fluctuate but the last chapter has already been written.
Below is a chart of Hubbert's Peak. The swing point
extension is a prediction that very high prices could
squelch demand and prolong the pain but the end result
is the same. Remember it is not when the last oil well
runs dry but when demand exceeds production that all
hell will begin to break loose. Currently that is
projected for 2007-2008. For a complete description
of the projection go here:
http://www.hubbertpeak.com/campbell/camfull.htm

Hubbert's Peak Chart




Not to spend all my space on negative events TIVO beat
estimates by 12 cents and Ace Cash Express (AACE) beat
by 8 cents. That tells me consumers are short on cash
to buy gas and that benefits ACE and they are staying
home more and that benefits TIVO. Need I say more? A
study I saw last week said a $10 rise in the price of
oil subtracted two cents from average corporate earnings
and 50% from cash available to spend by consumers. That
sounds a little strong to me on the consumer side but
we all know almost every blue collar worker is supposedly
only two paychecks away from bankruptcy. That may be an
over exaggeration but I have heard it many times. Most
consumers tend to spend what cash is available and max
out their credit cards for the rest. When unexpected
events happen there is very little cash available to
fill the gap. Using that analogy I guess it is possible
for the 50% study to be at least close. Using that same
analogy UBS downgraded Capital One today from a buy to
a neutral due to credit risks ahead. Capital One supplies
credit cards to weaker credits.

Considering all the bad news today I think the market
performance was nothing short of spectacular. We may not
have closed in positive territory but just holding the
high ground with nothing positive in the headlines was
a major achievement. The Dow closed at 10177 and continued
to hold near that strong resistance range of 10200-10250.
The Nasdaq was slightly weaker but managed to hold over
1850. Were it not for the SOX losing another -1% the
Nasdaq might have made it back to positive territory.
There was simply no profit taking from the gains of the
last week and not even any sign of real weakness.

These performances were even more amazing to me with
the Olympics winding down to the closing ceremonies on
Sunday and the Republican Convention starting on Monday.
Add in the GDP and Greenspan speech on Friday and traders
have a mine field of event risk ahead. Personally I am
expecting a rally next week once the convention gets
underway with no problems and I expect it to continue
the week after Labor Day. Maybe the strong underlying
bid this week is from institutional investors who are
anticipating that rally and trying to sneak into positions
ahead of the herd. It makes as much sense to me as any
other theory.

With only one trading day left before those two big
events I would expect some event risk selling on Friday.
However what I would expect and what we get may be two
different things. With the futures shaking off the NVLS
news after the bell and trading back in positive territory
only a couple points away from the high for the month
there is no evident event fear. One of our readers in
the Futures Monitor today probably said it best. If all
the bears are already short in anticipation of a drop
on Friday are we not in danger of sinking our own boat?
I paraphrased but you get the point.

With the rebound to SPX 1105 this week every bear in
the market was ready to jump on that very strong
resistance in anticipation of both profit taking from
the rebound and event risk selling into the weekend
close. Neither has occurred and there are probably
more than a few bears getting very nervous tonight.
Should we get a positive GDP surprise tomorrow morning
or Greenspan gets out of bed in a bullish mood then
there may be some bearish road kill for lunch. I for
one will be going long on any break over SPX 1110 if
I have to close my eyes and hold my nose to do it.
There is strong resistance at 10200-10250 but there
was also strong resistance at 10150 and we blew right
past it yesterday and never looked back. If bulls need
a wall of worry to climb then this is it. Cinch up
those climbing spikes and get ready for a run if the
markets open higher tomorrow. It will defy logic but
then most rallies normally do. If we do get a dip
instead it will just a better buying opportunity for
Monday.

Enter Passively, Exit Aggressively.

Jim Brown
Editor


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

Network Appliance - NTAP - close: 20.19 change: -0.37

WHAT TO WATCH: Two and a half weeks ago NTAP tested the $16.00
level and the bottom of its descending channel.  Now the stock is
up 25% and testing overhead resistance at its simple 200-dma and
the top of its descending channel.  This could be an entry point
and we're betting on the bears.  Readers can watch for a drop
under $20.00 (or 19.50) and target a move toward $18.00, which
would be the middle of the channel.  If we're wrong look for a
move past $21 and target a 4% move to resistance at $22.




---

Pilgrim's Pride - PPC - close: 26.83 change: +0.86

WHAT TO WATCH: PPC has seen a pretty sharp oversold rebound from
its drop on Tuesday.  It's rival SAFM reported earnings on
Tuesday and missed estimates and then guided lower.  PPC traded
down in sympathy with SAFM but now PPC is rebounding.  The
current six-week trend is still bearish for PPC but we can watch
for a new relative high over 28.25 and target a move back toward
$30.00.  Or more aggressive traders can try and catch the bounce
now, just watch your risk!




---

Citrix Systems - CTXS - close: 16.02 change: -0.26

WHAT TO WATCH: CTXS' recent failure at $17.00 and the simple 40-
dma produced a new lower high and reinforced the downtrend.  We
think the stock will test support at $15.00 again and it may not
hold this time.  The MACD indicator is fading and short-term
technicals are already bearish. The P&F chart has cracked support
and points to a $12.00 target.





-----------------------------------
RADAR SCREEN - more stocks to watch
-----------------------------------

IGT $29.06 - IGT tried to rally today but traders sold any
strength and shares failed at its simple 10-dma under the $30.00
mark.  This looks like an entry point to short it and target a
drop to $25.


===============================
Market Sentiment
===============================

Volume has been very low all week and it is still sinking.  A lot
of investors have already placed their bets and or moved to the
sidelines ahead of the Republican National Convention next week
so there isn't a lot to do but sit and wait.  "But look at oil!"
you say?  The sharp decline in oil is great news but with crude
down five days in a row I'm surprised that the markets aren't
higher.  So that brings the question, "Is this just a dip in the
bull market for oil?"  Or "Are terror concerns about next week's
convention really that high and keeping traders out of the
markets?"  Both questions are valid.  Unfortunately, I don't have
solid answers for either although I tend to believe a lot of
folks are willing to sit out and not do any trading until after
Labor Day.  Our market wrap column on OptionInvestor.com has been
saying that there aren't any strong catalysts to spur any buying
until after Labor day for a while now.

If you're an optimist then you can feel good that the NASDAQ is
back over the 1850 level and the S&P 500 is back above the 1100
mark but that's about it.  Yes, there are a number of stocks that
appear to have put in a new bottom in August or was that just a
new relative low?  Until we see some new relative highs the
prevailing downtrend is the one we need to be careful with.  I
might feel better if the Dow Industrials can breakout over 10,200
but the warm fuzzy feeling probably won't last long.

Today's market was certainly mixed.  Advancing stocks outnumbered
decliners 15 to 13 on the NYSE but lost 12 to 18 on the NASDAQ.
Likewise up volume outweighed down volume on the NYSE but it was
reversed on the tech-heavy NASDAQ.  Overall volume was pathetic
with less than 2.5 billion shares trading on both exchanges.

I will say that the strength in financials has been bullish but
the banking indices are now looking over extended and just under
resistance.   The recent breakout in the Dow Transports is also
bullish but the gains have been more muted than I would have
expected given the sharp pull back in crude prices.

There definitely seem to be a lot of cross-currents in the market
right now and none of them are very strong.  Everyone seems to be
waiting for something.  Now whether that's the RNC or the Labor
Day weekend is up for debate.

Look for tomorrow's trading to be influenced by the GDP revision
and the sentiment numbers.  Next week's volume is going to be
worse than this week with rumors floating around that Wall Street
is taking the week off to avoid the traffic delays caused by the
RNC security.


-----------------------------------------------------------------

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9233
Current     : 10173

Moving Averages:
(Simple)

 10-dma: 10051
 50-dma: 10149
200-dma: 10251



S&P 500 ($SPX)

52-week High: 1163
52-week Low :  983
Current     : 1105

Moving Averages:
(Simple)

 10-dma: 1091
 50-dma: 1104
200-dma: 1110



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1280
Current     : 1369

Moving Averages:
(Simple)

 10-dma: 1356
 50-dma: 1406
200-dma: 1441



-----------------------------------------------------------------

CBOE Market Volatility Index (VIX) = 14.91 –0.07
CBOE Mkt Volatility old VIX  (VXO) = 14.87 +0.24
Nasdaq Volatility Index (VXN)      = 21.60 +0.19


-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume

Total          0.84        563,139       472,778
Equity Only    0.70        441,929       309,162
OEX            0.99         21,186        20,831
QQQ            2.77         18,290        50,526


-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          54.9    + 0     Bear Confirmed
NASDAQ-100    32.0    + 3     Bear Confirmed
Dow Indust.   46.6    + 0     Bear Confirmed
S&P 500       50.6    + 1     Bear Confirmed
S&P 100       49.0    + 3     Bear Confirmed


Bullish percent measures the number of stocks in an index
currently trading on a buy signal on their point and figure
chart.  Readings above 70 are considered overbought, and readings
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend


-----------------------------------------------------------------

 5-dma: 0.94
10-dma: 0.82
21-dma: 1.20
55-dma: 1.25


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    1485      1212
Decliners    1308      1775

New Highs      91        36
New Lows       18        34

Up Volume    653M      349M
Down Vol.    544M      799M

Total Vol.  1224M     1173M
M = millions


-----------------------------------------------------------------

Commitments Of Traders Report: 08/17/04

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

There has been very little change in the commercial traders'
positions.  They remain slightly net short while small traders
are net long (bullish).

Commercials   Long      Short      Net     % Of OI
07/27/04      397,354   422,914   (25,560)   (3.1%)
08/03/04      401,619   419,429   (17,810)   (2.2%)
08/10/04      397,576   419,734   (22,158)   (2.7%)
08/17/04      398,472   416,109   (17,637)   (2.2%)

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
07/27/04      135,136    90,433    44,703    19.8%
08/03/04      128,510    88,833    39,677    18.3%
08/10/04      135,689    93,897    41,792    18.2%
08/17/04      138,550    97,792    40,758    17.2%

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

In the e-mini contracts we see commercial traders upping
both their long and short positions but they remain net
bearish.  Small traders have done the same by increasing
positions overall and they have increased their bullish
sentiment.

Commercials   Long      Short      Net     % Of OI
07/27/04      337,615   429,477   ( 91,862)  (12.0%)
08/03/04      340,053   428,736   ( 88,683)  (11.5%)
08/10/04      369,547   441,055   ( 71,508)  ( 8.8%)
08/17/04      404,065   457,372   ( 53,307)  ( 6.2%)

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
07/27/04      186,211     68,930   117,281    46.0%
08/03/04      195,105     68,717   126,388    47.9%
08/10/04      179,940     89,239    90,701    33.7%
08/17/04      192,939     92,361   100,578    35.3%

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 have increased both their longs and
shorts in the NDX but shorts made a stronger comeback.
Commercial traders remain net bullish but the strength of
their sentiment is decreasing at least as of Aug. 17th.
Small traders have turned sharply bullish with a big switch
in positions.

Commercials   Long      Short      Net     % of OI
07/27/04       43,042     35,935     7,107    9.0%
08/03/04       42,771     36,863     5,908    7.4%
08/10/04       43,968     38,351     5,617    6.8%
08/17/04       44,743     41,535     3,208    3.7%

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
07/27/04       14,543    14,518        25     0.0%
08/03/04        8,995    13,901    (4,906)  (21.4%)
08/10/04       10,081    10,858    (  777)  ( 3.7%)
08/17/04       12,256     8,352     3,904    18.9%

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

Commercial traders are at a virtual standstill during the
latest period and remain net bullish on the Industrials.
Naturally small traders are making the opposite bet and have
turned more bearish.

Commercials   Long      Short      Net     % of OI
07/27/04       27,577    21,427    6,150      12.5%
08/03/04       30,118    25,029    5,089       9.2%
08/10/04       30,634    22,994    7,640      14.2%
08/17/04       30,271    22,809    7,462      14.1%

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
07/27/04        5,310     6,099   (  789)   ( 6.9%)
08/03/04        4,325     5,212   (  887)   ( 9.3%)
08/10/04        6,450     8,488   (2,038)   (13.6%)
08/17/04        4,388     7,089   (2,701)   (23.5%)

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



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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

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Copyright ) 2004  PremierInvestor.net. and
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Do not duplicate or redistribute in any form.









PremierInvestor.net Newsletter                 Thursday 08-26-2004
                                                    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
=================================================================

In section two:

Stop Loss Adjustments:  AAPL, TKLC, GLW

Net Bulls (Tech Stocks)
  Closed Bullish Plays: SBUX


Active Trader (Non-tech Stocks)
  Closed Bearish Plays: -- OSI

Stock Splits
  Announcements:       None

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


AAPL - tech stock long -
  AAPL is soaring today up almost 5 percent and
  breaking out over resistance at $34.00.  We're
  going to raise our stop loss from $30.00 to $31.50.

TKLC - tech stock long -
  Danger Alert!  - TKLC dropped 3.88 percent failing at
  the $19.00 level and dropping to the $18.00 mark.
  We don't see any specific news but we're starting to
  wonder if TKLC is building a Head & Shoulders pattern
  with a sharply slanted neckline.  If TKLC breaks under
  the $18.00 mark we want to EXIT.
  We're raising our stop loss from $17.49 to $17.95.

GLW - tech stock short -
  GLW is dropping sharply right on cue.  The stock is
  already down more than 5 percent from our picked price.
  Short-term traders can be ready to take profits off the
  table.  However, with today's 3.7 percent drop under the
  psychological $10.00 mark we could see GLW hit our
  target range soon.  We're going to set an OFFICIAL exit
  at $9.40.  Lower stop from $11.01 to $10.51.



==================================================================
Net Bulls (NB) Tech Stock section
==================================================================

============
Closed Plays
============

  Closed Bullish Plays
  --------------------

Starbucks - SBUX - close: 43.07 change: -2.97 stop: 42.75

Well that does it for our SBUX play.  Last night we mentioned
that the company reported same-store sales growth of 8 percent
but that wasn't enough to make investors happy.  Analysts were
expecting 10 percent growth or more.  The stock gapped down to
$43.53 and then quickly traded through our stop loss at $42.75.
Volume was massive at almost five times the norm.  Longer-term
traders may want to keep an eye on SBUX.  The stock bounced from
its rising simple 100-dma, which was support back in May.  If
there is no follow through on today's decline this may end up
being a bullish entry point.

Picked on August 24 at $45.51
Gain since picked:     - 2.44
Earnings Date        07/21/04 (confirmed)
Average Daily Volume:     3.2 million




==================================================================
Active Trader (AT) Non-Tech Stock section
==================================================================


============
Closed Plays
============

  Closed Bearish Plays
  --------------------

Outback Steakhouse - OSI - close: 39.70 chg: +1.07 stop: 40.01

Thursday's rally looks like a fluke.  OSI, which had been
struggling under its simple 21-dma and building a trend of lower
highs suddenly surged higher on above average volume.  The
company announced same-store sales numbers that looked weak to us
but evidently someone was impressed.  OSI managed to trade to
$40.11 intraday and stopping us out at $40.01.

Picked on August 09th at $38.99
Gain since picked:       + 0.71
Earnings Date          07/22/04 (confirmed)
Average Daily Volume:       629 thousand




==================================================================
Stock Splits
==================================================================

Announcements
-------------

None

==================
  Trading Ideas
==================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

UBS     UBS Ag                     68.31     +0.66
GSK     GlaxoSmithKline            40.90     +0.62
CVX     ChevronTexaco              94.52     +0.72
FNM     Fannie Mae                 73.97     +0.60
MWD     Morgan Stanley             51.94     +0.96
SNY     Sanofi-Aventis             35.41     +0.62

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

CBK     Christopher & Banks        17.75     +1.01
GRA     W.R. Grace                  7.25     +1.10
PUMP    Animas                     17.11     +1.41

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

GILD    Gilead Sciences            69.24     +2.42
AAPL    Apple Computer             34.66     +1.61
MIK     Michaels Stores            56.86     +1.14
CAM     Cooper Cameron             50.43     +1.29
EYET    EyeTech Pharma.            39.20     +3.92
UOPX    Univ. of Phoenix           88.51     +6.69
PCH     Potlatch Corp              43.70     +3.45

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

SBUX    Starbucks                  43.07     -2.97
AOS     A O Smith                  23.91     -2.31
SAM     Boston Beer                23.46     -3.94
BMHC    Building Materials         22.65     -1.35

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

LMT     Lockheed Martin            53.30     -1.11
PDCO    Patterson Co               74.85     -1.55
MSA     Mine Safety Appliance      37.00     -2.70
ZEUS    Olympic Steel              21.96     -2.22

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

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

*****************************************************************

Copyright (c) 2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.









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