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Daily Newsletter, Wednesday, 09/08/2004

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PremierInvestor.net Newsletter               Wednesday 09-08-2004
                                                   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: Meeting Expectations
Watch List:  Give Me an "I"

Trading Ideas
  Value Plays With Bullish Signals
  Breakout to Upside (Stocks $5 to $20)
  Breakout to Upside (Stocks over $20)
  Breakout to Downside (Stocks over $20)
  Recently Overbought With Bearish Signals (Stocks over $20)


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      09-08-2004           High     Low     Volume   Adv/Dcl
DJIA    10313.36 - 29.43 10361.22 10305.18 1.54 bln 1083/1708
NASDAQ   1850.64 -  7.92  1870.04  1850.05 1.44 bln 1121/1893
S&P 100   543.12 -  1.88   546.27   543.12   Totals 2204/3601
S&P 500  1116.27 -  5.03  1123.05  1116.27
SOX       352.06 -  1.70   358.36   350.91
RUS 2000  557.79 -  5.14   565.79   557.64
DJ TRANS 3188.79 +  7.79  3203.20  3176.82
VIX        14.06 -  0.01    14.31    13.41
VXO (VIX-O)13.70 +  0.12    14.11    13.58
VXN        21.28 -  0.16    21.83    21.24
Total Volume 2,980M
Total UpVol  1,093M
Total DnVol  1,832M
Total Adv  2204
Total Dcl  3601
52wk Highs  120 
52wk Lows    54
TRIN       1.19
PUT/CALL   1.05
===============================================================

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

Meeting Expectations
Linda Piazza

Global bourses waffled around in overnight trading.  U.S. futures
drifted higher and then lower, setting up the expectation that
our markets might show the same lack of direction.  

That's how it felt as the day progressed, but a study of intraday
charts showed a relentless sinking lower throughout the day. 
That was particularly true of the retail index, the RLX, and the
Dow Jones US Home Construction Index, the DJUSHB.  By the end of
the day, the DJUSHB had lost 1.69 percent; the RLX, 0.82; the
SOX, 0.48; the Dow, 0.28; the OEX, 0.34; the SPX, 0.45; and the
Nasdaq, 0.43.  The TRAN however, bucked the trend, climbing along
an ascending trendline all day and closing higher by 0.24
percent.  

The oil services and pharmaceutical sectors joined the TRAN among
the few gaining sectors, while the biotechs, banks and utilities
joined the losing sectors.  Although more closely matched earlier
in the day on the Nasdaq, decliners led advancers all day on the
NYSE and did on the Nasdaq, too, by the afternoon.

Most times, the term "meeting expectations" refers to earnings
expectations.  Wednesday, that term applied to expectations for
Alan Greenspan's testimony before the House Budget Committee at
10:30 EST in Washington.  Most economists expected that Greenspan
would testify that the economic recovery proceeds about as
anticipated and that the FOMC would continue its measured set of
rate increases.  Still, many awaited confirmation that Greenspan
still believed the soft patch in the economy to be transitory. 
They waited to hear what he would say about the impact of higher
crude costs and the new record budget deficit. Market watchers
expected Greenspan to address that deficit, saying that the
deficit outlook was worsening.

Although our markets appeared to waffle prior to Greenspan's
testimony, a couple of notable developments occurred just prior
to the release of his prepared comments.  The Russell 2000
climbed five cents above its 200-sma and the OEX stopped five
cents short of its 200-sma.  That was to be the high of the day
for those indices.

As expected, Greenspan confirmed his belief that the soft patch
had been transitory, blaming higher crude prices for that soft
patch and saying that the expansion had regained traction.
Although some financial ministers across the globe have lately
quantified the effect of rising crude costs on their economies,
Greenspan declined to do so, noting disagreement among economists
about the impact.  He stated that non-oil import prices had
decreased, lowering concerns about core consumer price inflation,
but said that the outlook for crude prices remained uncertain. 
Rising demand in China and India as well as other factors could
buoy crude prices.  

Perhaps not conforming to expectations, some credited his
comments with a temporary spike in oil prices.  Crude futures for
October delivery moved up to their $43.70 high of the day before
beginning the decline into the $42.25 low of the day.  That low
occurred on continued assurances from OPEC that the market is
saturated.  

Also meeting expectations, Greenspan mentioned the deficit
outlook, calling the federal budget outlook "troubling."  A CNBC
commentator likened Greenspan's outlook to two separate forecasts
and summed up by saying that Greenspan's outlook was "short-term
good: long-term bad."

While Greenspan's testimony met expectations, JetBlue (JBLU)
warned that Q3 earnings would miss expectations.  The airliner
pegged those missed expectations on higher jet fuel costs and the
impact of two hurricanes hitting their key market in Florida.

Rising fuel costs also impacted Delta Airlines (DAL).  That
company announced a transformation plan to avoid bankruptcy, but
the CEO warned that bankruptcy could still be an option unless
pilots accepted the company's proposed pay cut.  That
transformation plan included a closing of the hub at the
Dallas/Fort Worth airport, news that hit all Dallas television
stations early Wednesday morning due to the impact on the DFW
airport and the metroplex.  A redesign of the Atlanta hub will
allow the carrier to add flights and reduce congestion at that
airport.  DAL will cut 6,000-7,000 jobs and will also reduce the
number of different types of aircraft it flies to trim
maintenance costs.  The company will add to the fleet of its low-
cost carrier, Song.  

JetBlue closed 0.34 percent higher, but Delta lost a whopping
9.82 percent, making the TRAN's gain all that more surprising.

Annotated Daily Chart of the TRAN:

 

As the TRAN approached the June 30 closing high and the July 1
intraday high, daily oscillators failed to reach the highs of
that late-June/early-July period.  That sets up potential but not
confirmed bearish divergence.  The TRAN's daily candle was a
shooting star, a potential reversal signal, but the TRAN produced
nearly the same candle at nearly the same level on June 28 before
climbing a few days into that subsequent closing and then
intraday high.  While the comparison with that late-June and
early-July period might not be particularly comforting to bulls,
it also shows the danger in assuming that the TRAN will see
immediately follow-through on the TRAN's intraday decline from
its high of the day.

Recently, dipping crude prices have helped the TRAN, but this
index also benefits from actual or anticipated improvement in the
economy.  As Greenspan's speech was released, suggesting that the
economic recovery had regained some traction, the TRAN tested
3200 the first time, fell back before reaching it, and then rose
above it again in the afternoon before retreating into the close. 
Traders might watch this indicator index for signs that bullish
trades have been given the green light.  They should look for a
move above the July 1 intraday high of 3212.45 for a potential
upside breakout.  

Those traders should be prepared for potential whipsaws out of
the trade, however, as the TRAN can reverse as quickly as it can
drive forward.  Some charts suggest a drop below 3180 might see a
quick drop to 3170-3172, with the result of that drop then
determining what happens next.  Just as there's the potential for
an upside break, there's also the potential for a double-top
formation on the TRAN's chart, with such a formation having
bearish implications for the market.

JetBlue's warning wasn't the only one seen Wednesday.  Some
market watchers and commentators, including Jim Brown, have
expected earnings warnings to accelerate this week, and Wednesday
saw several.  Coca-Cola Enterprises (CCE) warned, as did McKesson
(MCK), Dean Foods (DF) and Avon Products (AVP).  CCE lowered its
earnings forecast for the year, and drug wholesaler MCK said that
earnings would miss estimates.  DF cut its earnings guidance for
the third quarter and full year, with Q3 earnings expectations
lowered to 44-46 cents against expectations of 54-57 cents a
share.  Volatile milk prices and more-intense-than-expected
competitive pressures hurt the company, as did higher fuel costs
and resin prices.  AVP warned analysts to trim expectations for
Q3 profit from U.S. businesses by as much as 10 percent.  CCE
closed lower by 5.39 percent; KO, 4.82; MCK, 15.24; DF, 18.13;
and AVP, 6.13.  This suggests some danger to the markets, as
warning companies likely will be punished severely.

At 2:00 EST, the Fed's Beige Book was released.  While some
characterized the report as contrasting with Greenspan's
testimony, others noted that it, too, met expectations by saying
that the economy was seeing a gradual recovery.  With the report
expected to help the FOMC make decisions about monetary policy on
September 21, market watchers gleaned the report for information. 
The result of anecdotal information collected from the twelve
Federal Reserve districts, the Beige Book showed mixed conditions
across districts and sectors.  The word "mixed" appeared
frequently in the report.  Household spending, retail sales and
home sales might have cooled, but manufacturing improved. 
Consumer loans may have decreased, but demand for commercial
loans increased.  Back-to-school sales might have been slow in
New York, but Kansas City saw stronger sales when compared to
those of the previous year.  Dallas and Kansas City might have
seen slower sales of SUVs and light trucks, but Atlanta and
Chicago saw those sales increase.  

Although the Dow Jones US Homebuilders, the DJUSHB, had been
headed lower all day, the BIX and BKX both steepened their
descents after the Beige Book was released, perhaps at least in
part due to the notation that demand for consumer loans had
softened.  Earlier that morning, the MBA Refinancing Index
information was released.  Last week's figures showed refinancing
decreasing 0.6 percent, but that activity increased week-over-
week in this week's report.  Investors appeared to focus instead
on the Fed's headline statement characterizing sales of new and
existing homes as cooling.  

At 3:00, July's Consumer Credit figures were available for
examination.  Forecasts had ranged widely from $5.0-7.5 billion,
with the prior number at $6.6 billion, but this number zoomed
past expectations, with the figure at $10.9 billion.

Another focus sector was the SOX, ahead of TXN's after-the-close
mid-quarter update.  The SOX moved lower, closing at 352.06 ahead
of that announcement.  The day's candle produced a potential
reversal signal, however.

Annotated Daily Chart of the SOX:

 

MACD produced a bearish cross from below signal, not an
encouraging development to SOX bulls, but one that can be erased
if TXN prompts a strong enough bounce during Thursday's trading. 
Lowering the low end of its earnings-per-share estimate and the
top end of its revenue estimate, the company blamed inflated
inventories among its customers.  Some commentators characterized
these adjustments as a paring back of expectations while others
focused on the reduction in TXN's effective tax rate that would
allow it to meet or perhaps raise profit expectations.  

As this report was prepared, TXN traded at $19.11, up from the
$18.83 close.  While it's dangerous to assume that after-hours
trading is indicative of during-market-hours trading, some feel
that the bad news is priced into the SOX. A move below
Wednesday's SOX low will undo the potential for a confirmation of
the potential reversal signal.  A move above 353-354 will be
needed to break through Wednesday's resistance, but the 20-dma
and the 50 percent retracement of the rally off the October 2002
low might be powerful resistance.  A trend change can't be
verified until the SOX clears those levels, so any bounce might
be treated with caution until then.

Another average and retracement level have shown importance with
the Nasdaq's trading pattern.

Annotated Daily Chart of the Nasdaq:

 

The Nasdaq has been finding resistance at both the 38.2 percent
retracement of the June-August decline and the 50-dma.  A move
above both might represent an upside breakout, but the Nasdaq
would then soon find resistance at the 1900-1905 level, where the
200-ema now converges.  If the Nasdaq pushes above the 50-dma and
keeps going, bullish traders in Nasdaq stocks should have profit-
protecting plans in mind as that 1900-1905 level is tested.

Before Wednesday's close, however, the Nasdaq had fallen beneath
an ascending trendline off the August 31 low.  Before the Nasdaq
can advance far, it needs to reclaim that trendline, currently
crossing at about 1856.  A decline would need to be confirmed
first by a fall beneath the September 7 low of 1847.48, with
support expected again near 1842 and then perhaps at the 30-dma. 
Bulls do not want to see a daily close beneath the 30-dma, but
then the Nasdaq approaches possible gap support from early
August, support already proven to hold in late August. The Nasdaq
trades within a congestion zone, and conclusions and trading
conditions always remain hazardous within such a zone.

The Russell 2000 has also moved into a congestion zone, both from
the last week's trading and from a period in mid-July.  

Annotated Daily Chart of the Russell 2000:

 

A break above the 200-sma and Wednesday's intraday high,
particularly on a closing basis, would represent a breakout for
the Russell 2000, with resistance soon expected on the test of
the upper trendline of its descending regression channel.  Bulls
eventually want to see a breakout above that channel.  

A breakdown is more difficult to pinpoint since the Russell 2000
has now spent some time building support, but the confluence of
the 200-ema, important in the Russell's trading pattern, and the
50-dma just below the important 350 level might mark one support
level that bulls want to see hold.  A break of that support would
likely find at least temporary support near the 30-dma and
historical support at 541.50-542, with a break of that level then
setting up a possible test of 533-534.

While we don't always think of the Dow as an indicator index, it
sometimes functions as one.  While its sister index, the TRAN,
was testing a major swing high, the Dow has been approaching the
top of its descending regression channel.  The top of that
channel lies at about 10,400, but bulls should feel nervous until
they get confirmation by a move above the late June highs,
several of them in a row, at 10,487.  

Since the trend since the first of the year has been for the Dow
to turn lower at each test of the top of the channel, the
assumption might be that the Dow will do so now, too.  Dow bears
betting on that action should not feel safe until a move below
the 200-sma, an average that has been prompting bounces since the
OEX moved back above it.  A decline beneath that MA might soon
find support near 10,200.

Annotated Daily Chart of the Dow:

 

The SPX did not approach the top of its channel as closely as did
the DOW, but its chart looks similar otherwise.  

Annotated Daily Chart of the SPX:

 

The SPX moved lower, toward a test of its 200-sma, with other
averages just below to support the SPX.  Those averages, as
important as they might be, will not have the same effect on
sentiment as will a Dow and/or SPX decline beneath their 200-
sma's.  Bulls hope to see a bounce and a test of the top of the
descending regression channel, with a move up through that
channel's top resistance trendline.  Tuesday's 1,124.08 high
could be expected to serve as resistance, with the top-of-the-
channel resistance soon following at about 1,133.  Those with
bullish positions should have profit-protecting plans in place
for a test of the top of the channel if the SPX should bounce.

If the SPX instead falls through its 200-sma, the 100-sma lies
just beneath, at 1,110.09, near historical support/resistance,
and the 30- and 50-sma's and 200-ema all look to be converging
between 1,095-1,100 to provide support that should be stronger.

The OEX may be one of the best indices to watch Thursday,
however, as it perhaps came the closest to testing the top of its
descending regression channel.  Like the Russell 2000, the OEX
has not managed to move above its 200-sma.  A break above that
average and then above the top of the channel, currently at about
548, might signal an upside break, although the OEX would soon
move into congestion beginning at about 549.50 and extending all
the way up to 556.  Some charts show potential upside likely to
be capped at just over 553 on a first test of that level.  

Annotated Daily Chart for the OEX:

 

The OEX had also broken below its ascending trendline off the
August 31 low by Wednesday's close, so would need to climb back
above that trendline before the intraday bearish sentiment
improved.  A confirmed H&S Wednesday set a downside target
between 541.50-542, at historical support/resistance and near the
location of the 100-dma at 541.74.  OEX 540.80 is also historical
S/R and the location of a longer-term ascending trendline off the
August 13 low, with a violation of that trendline setting up the
potential for a retest of the converging 50-dma and 200-sma.  

This is an exciting time for options traders, because it appears
that a directional move could get started, despite all the
various resistance and support levels grouped around the current
levels of the equity indices.  The Russell 2000 and OEX show a
potential for a break above their 200-sma's or for a rollover
beneath them.  The OEX and Dow show a potential for a break out
of the long-term descending regression channels on their daily
charts or for a rollover down through those channels again, with
the SPX also near a test of the top of its descending regression
channel. 

The TRAN is close to a breakout above a major swing high or for a
double-top formation with all the bearish ramifications of that
formation.  The BIX did break out above a major swing high, but
Wednesday produced an inside-day candle that so nearly retraced
Tuesday's gains that it's also a possible tweezer-top formation. 
That threatens to create a weekly double-top formation if the BIX
closes the week below the weekly closing high of 361.23 from late
this winter.

Continuing the potential for a directional move has been the
action on the VIX.  Lately, VIX moves into sub-14 levels have
indicated a market top nearing, although the VIX is not a
reliable market-timing tool.  That truism of late should make
bulls nervous enough to make plans to protect their positions,
but doesn't prove that bears should pile in with bearish
positions.  Those who believe it does should hark back to spring,
2003 when the VIX was then approaching and descending below 20,
the level that for several years had indicated market tops in the
making.  The VIX offers a warning, but if price behaves in
opposition to that warning, we shouldn't keep trying to play the
opposite direction.

If the spring of 2003 taught us anything, it should have taught
us to trade the trend.  Which trend, though?  The SOX's trend,
both short-term and intermediate-term, has been down.  Short-
term, many indices have been rising through those descending
regression channels, with short-term trends that are moving up.  
Since the first of the year, however, many of those indices have
been trading in descending regression channels, so that
intermediate trend is down.  This is true of the two S&P's and
the Dow, for example.

I've long learned to heed the wisdom of the past, so those
intermediate-term trends and the months-long implications of sub-
14 levels on the VIX make me nervous about long positions just
now.  They don't make me nervous enough to discount the
possibility of upside breakouts, however, but certainly nervous
enough to wait for the breakouts to occur to believe that they
will.  The TRAN is one of the indices I'll be watching for that
upside breakout, as it's the nearest to a breakout and the
fastest moving.  It's also temperamental, and a quick reversal
will have me reversing my judgment just as quickly, too.

Be careful about drawing too many conclusions about the TRAN's
action ahead of mid-morning, however.  Although the Department of
Energy and American Petroleum Institute normally releases crude,
distillate and gasoline inventories on Wednesday, that release
was delayed until Thursday due to the holiday-shortened week. 
Crude prices and the TRAN both typically react to those
inventories numbers.

Thursday's economic releases begin with the usual 8:30 release of
jobless claims.  Last week's initial claims amounted to 362
thousand, with Hurricane Charley blamed for the increase.  If
that thinking and timing remained intact with regard to Hurricane
Frances' impact, the expected increase would not occur in this
week's number, but I wouldn't be surprised if any increase
weren't pegged to the hurricane's impact anyway.  

Other economic numbers released at 8:30 will include August's
export and import prices, with export prices ex-ag. rising 0.6
percent in the prior month and import prices ex-oil rising 0.1
percent in the prior month.  At 10:00, July's wholesale
inventories will be released, with expectations of a 0.6-0.8
percent rise measured against the previous month's 1.1 percent
increase.  


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

Intl Game Technology - IGT - close: 32.89 change: +1.00

WHAT TO WATCH: IGT continues to soar adding another 3.13 percent 
on Wednesday.  The stock is climbing with strong volume after a 
Barron's article over the weekend suggested new casinos will 
drive profits from higher slot machine sales over the next couple 
of years.  IGT has now passed its late July-early August highs 
and broke above its simple 50-dma.  The stock looks short-term 
overbought so we'd watch for a dip and then consider a bounce.




---

Intersil Corp - ISIL - close: 15.37 change: -0.69

WHAT TO WATCH: ISIL is another semiconductor stock suffering 
under the steady declines in the sector.  Not only is ISIL 
withering under a long-term trend of lower highs but today's 4.2 
percent decline appears to be a new low under the August dip.  
Technicals are bearish and its MACD is in a new sell signal 
that's just four days old.  The P&F chart remains bearish even 
though the vertical count target has been achieved.  Watch for 
any follow through on today's decline.  We expect some volatility 
tomorrow as the markets react to TXN's mid-quarter update 
tonight.




---

Ivax Corp - IVX - close: 19.82 change: -0.13

WHAT TO WATCH: Reversal alert!  IVX has been trying to breakout 
over resistance at the $20.00 mark for six months.  Every time 
IVX managed to trade above this level it was quickly reversed.  
Today shares gapped higher at $20.71 and then promptly collapsed 
back under the $20 mark.  The candlestick now looks like a 
bearish engulfing pattern.  Watch for some follow through on the 
reversal and a drop under support at the $19.00 mark.




---

VISX Inc - EYE - close: 21.28 change: -0.57

WHAT TO WATCH: EYE also appears to have produced a bearish 
reversal.  Yesterday shares struggled to breakout over resistance 
at $22.00 bolstered by its simple 50 and 200-dma's.  Shares tried 
again this morning and failed.  Aggressive traders might consider 
shorts under the $21.00 mark.  We're going to keep an eye on 
round-number, psychological support at the $20.00 level. 





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

AAI $11.29 -0.85 - After spending more than a week trying to 
breakout over resistance at its 200-dma and the $12.50 level 
shares of AAI have collapsed on big volume.  AAI are likely to 
hit the $10.00 region. 

ORCL $9.86 -0.22 - ORCL continues to slowly bleed lower and 
today's drop under the $10.00 mark doesn't look good.  Watch for 
a break under support at $9.80.

WON $21.88 -0.25 - The breakdown under the $22.00 level looks 
like an entry point to ride WON toward the $20 mark.
 



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DISCLAIMER
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Do not duplicate or redistribute in any form.







PremierInvestor.net Newsletter               Wednesday 09-08-2004
                                                   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, MVK, SPN, CTMI, PCLN

Active Trader (Non-tech Stocks)
  New Bearish Plays:    ETM
  Closed Bullish Plays: ELY
  
High Risk/Reward
  New Bearish Plays:    ICOS
  
Stock Splits
  Announcements:       VIDE

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 continues to buck the market's trend with its
  own bullish climb higher.  AAPL's trend of higher lows
  is encouraging as is the breakout over resistance at
  $36.00. We're raising our stop loss to $33.95.
  Short-term traders may want to consider taking profits  
  now or as AAPL moves into the 36.50-37.00 range.
  AAPL is currently up 10 percent from our entry point.
 
 
MVK - non-tech long -
  Heads up!  MVK is seeing a little bit of profit taking
  today and we could see it dip towards the $30.00 level
  in the next couple of sessions.  
 
SPN - non-tech long -
  Uh-oh!  SPN is not looking good here.  Wednesday's 
  failed rally at the $11.80 level sent shares right back
  toward support at $11.50.  We'd be extremely cautious
  under $11.50 and conservative traders may want to exit
  on a breakdown.
 
 
CTMI - high risk/reward short -
  CTMI continues to sink.  We're lowering our stop from
  $9.81 to $9.51.  
 
PCLN - high risk/reward short -
  Entry point!  PCLN broke down under the $20.00 level
  yesterday.  Today's bounce back over $20 has failed
  and shares look poised for more weakness.  The MACD
  is very close to a new "sell" signal.



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

---------
New Plays
---------


  New Bearish Plays
  -----------------

Entercom Comm. - ETM - close: 37.00 change: -0.67 stop: 40.01

Company Description:
Entercom is the nation's fourth largest radio broadcaster, 
operating in Boston, Seattle, Denver, Portland, Sacramento, 
Kansas City, Indianapolis, Milwaukee, New Orleans, Norfolk, 
Buffalo, Memphis, Providence, Greensboro, Greenville/Spartanburg, 
Rochester, Madison, Wichita, Wilkes-Barre/Scranton, 
Gainesville/Ocala, and Longview/Kelso, WA.
(source: company press release)

Why We Like It:
We're adding ETM to the play list as a short based on its bearish 
technical outlook.  Short-term the stock is suffering under a 
trend of lower highs and a mild double-top near the $40.00 mark.  
The recent consolidation near $38 and its 40 and 50-dma's has 
failed and its RSI and stochastic indicators are bearish.  The 
MACD is in a "sell" signal and its P&F chart points to a $21.00 
target.  Longer-term the stock appears to be painting a big bear-
flag pattern.  If that's the case then the flagpole on the 
pattern points to a $32-$30 target.  We do expect short-term 
support in the $35-$36 area but the longer-term trend is very 
much down.  

We'll initiate the play with a wide stop at $40.01.  More 
conservative traders can probably get away with something 
tighter.  Our initial target will be $32. 

Annotated Chart:

 

Picked on September 08 at $37.00 
Gain since picked:        - 0.00
Earnings Date           08/03/04 (confirmed)
Average Daily Volume:        463 thousand




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

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

Callaway Golf - ELY - close: 12.10 change: -0.40 stop: 11.75     

Hmm... something happened to shares of ELY today.  The stock 
gapped higher and hit $12.65 before promptly falling.  ELY tried 
to bounce from the $12.05 region but failed again in afternoon 
trading.  Volume was well under the average but the bearish 
engulfing candlestick pattern has spooked us.  Traditionally a 
bearish engulfing candlestick at the top of a bullish trend is a 
reversal pattern.  We're already cautious on bullish plays given 
September's history as the worst month of the year so we'd rather 
exit now.  In the news the only thing we could find was a press 
release from ELY yesterday evening.  The company has signed " 
reigning Masters champion Phil Mickelson to play its golf clubs 
and golf ball and endorse Callaway Golf on the PGA Tour. 
Mickelson, the No. 4-ranked golfer in the world and one of the 
game's most popular and exciting players, will wear the company's 
logo on his shirt sleeve, the side of his visor and his golf bag 
and will wear Callaway Golf® footwear and golf glove."  Now that 
doesn't seem like the kind of news to spark a reversal but we're 
not taking any chances with the technical pattern developing.  
More aggressive traders can keep the play open but watch support 
at the $12.00 level closely.

Picked on September 01 at $12.25
Gain since picked:        - 0.15
Earnings Date           07/22/04 (confirmed)
Average Daily Volume:        1.0 million 




==================================================================
High Risk/Reward (HR) Stock section
==================================================================

---------
New Plays
---------


  New Bearish Plays
  -----------------

ICOS Corp - ICOS - close: 23.80 change: -0.65 stop: 26.01

Company Description:
ICOS Corporation, a biotechnology company, is dedicated to 
bringing innovative therapeutics to patients. Headquartered in 
Bothell, Washington, ICOS is marketing its first product, Cialis® 
(tadalafil), for the treatment of erectile dysfunction. ICOS is 
working to develop treatments for serious unmet medical 
conditions such as chronic obstructive pulmonary disease, benign 
prostatic hyperplasia, cancer and inflammatory diseases.
(source: company press release)

Why We Like It:
Any time we list a biotech stock as a bearish short play we 
always put it in the high risk-reward section.  Stocks in the 
group tend to be volatile and there is always a risk that they 
announce some new wonder-cure.  Having said that we do like ICOS 
as a short-term bearish play.  The stock's August rally is fading 
and shares have broken support at the $25.00 level and its 10, 
21, 40 and 50-dma's.  Simply put this is a technical play.  The 
BTK biotech index appears to be rolling over and is now back 
under its own simple 200-dma.  We also like the bearish technical 
oscillators in ICOS and its MACD indicator has produced a new 
"sell" signal.  Volume has been above average on the recent 
declines and that usually suggest more weakness ahead.  The only 
indicator that doesn't match up is the P&F chart, which is still 
in a buy signal so it is something to consider.  

We also consider ICOS an aggressive play because there is a 
short-term trendline of possible support (see chart) near the 
$23.00 area.  There is also a long-term trendline of potential 
support but that is down near the $20 mark and coincidentally our 
initial target.  

Annotated Chart:

 

Picked on September 08 at $23.80 
Gain since picked:        - 0.00
Earnings Date           08/04/04 (confirmed)
Average Daily Volume:        1.1 million 




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

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

VIDE offers a 2-for-1 split 

About thirty minutes after the opening bell Video Display Corp 
(NASDAQ:VIDE) announced that its Board of Directors had approved a 
2-for-1 stock split.

The split will be payable as a stock dividend on October 31st, 
2004 to shareholders on record as of September 23rd.  Post-split 
there should be 9.8 million shares of common stock outstanding.


About the company:
Video Display Corporation designs, develops and manufactures 
unique solutions for display requirements for military, medical 
and industrial use with emphasis on high end training and 
simulation applications. Its product offerings include ruggedized 
CRT and AMLCD displays as well as complete projection systems 
utilizing VDC's Marquee(TM) line of projectors. Video Display 
Corporation operates 11 display design and manufacturing plants 
plus eight sales facilities throughout the United States and 
Europe. (source: company press release)


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

IBM     Intl Business Machines     85.79     +0.82
CNI     Canadian Natl Railway      47.62     +1.33
UNP     Union Pacific              58.70     +1.43
AET     Aetna Inc                  94.87     +0.71
IGT     Intl Game Technology       32.83     +0.94
WES     Westcorp                   42.15     +0.70

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

VCLK    ValueClick                  8.36     +1.02
RVI     Retail Ventures             7.45     +1.06
DAB     Dave & Buster's Inc        18.07     +2.07
ASFI    Asta Funding               16.88     +1.40
HITK    Hi-Tech Pharma             15.13     +1.13

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
DRL     Doral Financial            42.84     +1.24
BLL     Ball Corp                  38.23     +0.63
POT     Potash                     58.17     +1.06
FMD     First Marblehead           44.92     +1.62
TASR    Taser Intl                 35.55     +2.99
SCSC    Scansource Inc             63.35     +2.40
PWN     Cash America               24.70     +1.15

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

PEP     Pepsico                    49.72     -1.33
KO      Coca-Cola Co               43.45     -2.20
AVP     Avon Products              42.96     -2.70
MCK     McKesson                   26.97     -4.86
PBG     Pepsi Bottling Group       25.85     -1.29
DF      Dean Foods Co              30.44     -6.69
DJ      Dow Jones & Co             40.32     -1.48
SPW     SPX Corp                   33.39     -3.10

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

HSY     Hershey Foods              48.26     -1.13
PENN    Penn National Gaming       36.74     -2.53
LZ      Lubrizol Corp              35.48     -1.88
HDWR    Headwaters Inc             28.49     -2.99
GIS     General Mills              46.54     -0.78


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