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Daily Newsletter, Monday, 10/11/2004

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PremierInvestor.net Newsletter                   Monday 10-11-2004
                                                    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: Setups 
Watch List:  Banks to Satellite TV and more


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      10-11-2004           High     Low     Volume   Adv/Dcl
DJIA    10081.97 + 26.77 10098.78 10056.09 1.16 bln 1403/1345
NASDAQ   1928.76 +  8.79  1930.66  1920.76 1.15 bln 1789/1185
S&P 100   539.92 +  1.45   540.91   538.47   Totals 3192/2530
S&P 500  1124.39 +  2.25  1126.20  1122.14
SOX       391.53 +  2.01   392.89   384.63
RUS 2000  577.56 +  1.91   577.56   574.61
DJ TRANS 3336.17 +  0.17  3342.63  3322.63
VIX        14.71 -  0.34    15.27    14.28
VXO (VIX-O)14.99 +  0.04    15.54    14.70
VXN        20.05 -  0.64    20.46    19.94
Total Volume 2,316M
Total UpVol  1,282M
Total DnVol  1,002M
Total Adv  3192
Total Dcl  2530
52wk Highs  103 
52wk Lows    41
TRIN       0.93
PUT/CALL   0.81 
===============================================================

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

Setups
Linda Piazza

With the Nikkei dark in overnight trading and bond markets closed
for Columbus Day, Monday proved to be a set-up day for trades
that might materialize later in the week.  Our Canadian neighbors
likely spent the day celebrating their Thanksgiving rather than
participating in our markets.  Closed government offices meant
that no economic releases were scheduled, and the holiday
produced light volume.  Total volume on the NYSE remained under 1
billion shares, at 944 million shares, while volume on the Nasdaq
was a stronger 1.2 billion.  

Those explanations could be embraced by fundamental traders,
while technical analysts would point to the need for a
consolidation day after several large-range declines late last
week.  On the SPX, the consolidation took the form of a possible
bear flag, seen here on the SPX's 60-minute chart.

Annotated 60-Minute Chart of the SPX:

 

This chart points out the potential role that Monday's tepid
trading action played in setting up a trade for later in the
week.  Bears would like to see the SPX move a bit higher into
resistance before rolling down again so that they'll have some
distance away from the 200-sma.  

A move above 1132-1133.50 suggests that something more bullish
occurs, however.  If that move occurs, bears would do well to
step aside and watch for a retest of the October high.  

That potential bear flag on the 60-minute chart shows up as an
inside-day candle on the daily one.

Annotated Daily Chart of the SPX:

 

Like the SPX, the Dow produced an inside-day candle.  Proponents
of inside-day theory would go long these indices on a move above
Monday's high with a stop below Friday's low.  Especially with
the Dow, that appears to be a risky move.  Much resistance
gathers above the Dow's closing position in the form of gathered
moving averages and historical resistance.  With the Dow still in
a downtrend, selling rallies appears to be a better approach.

Annotated Daily Chart of the Dow:

  

Merrill Lynch (MER) and Dow component Johnson & Johnson (JNJ)
report before the bell, with component Intel (INCT) reporting
after the close, so there's a possibility that reactions to
earnings or anticipation of earnings could get a directional move
started.  As long as the Dow remains within its descending
regression channel, any bounces should probably be watched for
potential bounce-and-rollover bearish entries rather than for
bullish ones.

With rising crude costs in the overnight market, techs had
generally shown weakness before the open on Asian and European
markets.  Rising crude costs also raised the specter of weakened
demand.  Deutsche Bank's downgrade of Texas Instruments (TXN) and
Micron Technology (MU) to sell ratings from their previous buy
and hold ratings didn't improve early sentiment toward techs. 
When downgrading TXN, Deutsche Bank cited the company's commodity
product exposure, saying that exposure could cause a decline in
gross margins.  In a pre-market note, Lehman mentioned continued
cautiousness toward analog semis MCRL, LLTC and MXIM.

In that climate, INTC earnings will assume extra importance. 
INTC printed a doji Monday and both TXN and MU sprang up from
their day's lows, with such action allowing the SOX to spring
from its day's low, too.  All three are components of the SOX. 
Among the SOX components, strongest gains were seen in AMD (3.33
percent), BRCM (2.19 percent) and ALTR (0.92 percent), however.  

Annotated Daily Chart of the SOX:
 
 

Together with YHOO, also reporting after the bell tomorrow, INTC
may also hold the short-term fate of the Nasdaq in its grasp.

Annotated Daily Chart for Intel:

 

Although standard technical analysis suggests that a breakdown
entry on the Nasdaq occurs on a move below Monday's inside-day
low, the converging 100-sma and 200-sma just below make that a
problematic entry.  Bears instead might hope for a bounce-and-
rollover entry.

Both the TRAN, the Dow Jones Transportation Index, and the
Russell 2000 may offer arguments against the sell-the-rally
conclusion, and both should be watched.  After the close, a CNBC
commentator noted that crude prices have escalated 65 percent
year to date.  In a move that seems counterintuitive to some, the
TRAN has been climbing along with crude costs, from its 2365.36
year opening level to today's 3336.17 closing level.  For most of
the year, it's been climbing within an ascending regression
channel.  Although the TRAN produced a tweezer-top reversal
signal at the top of its ascending regression channel last week,
it has not retreated far and remains within striking distance of
the top of its regression channel.

Annotated Daily Chart for the TRAN:

 

Annotated Daily Chart for the Russell 2000:

 

MER and JNJ report before the open, but influences on our markets
begin this evening by the time the newsletter arrives at your
email address.  That's when the Nikkei will seize its first
opportunity to react to the drubbing U.S. markets received Friday
and further gains in crude.  Fighting and a strike in Nigeria,
difficulties ramping up production again in the Gulf of Mexico,
and worries about Yukos after a Russian court ruled that the
company must pay $1.34 billion in fines and penalties supported
crude prices Monday.

Watch how the Nikkei reacts and then how our markets react in
response to gauge strength or weakness.  A strong Nikkei decline
met with steady futures prices indicates strength.  A strong
Nikkei climb met with weakness in futures prices indicates
weakness.  At tomorrow's open, watch for breakouts above
yesterday's highs or lows on the SPX, OEX, Dow, NDX, and Nasdaq,
indices that all produced inside-day candles Monday.  For all but
the most adept scalpers, upside breaks should be treated as
opportunities for a new bounce-and-rollover entries, with the
rollover perhaps provided as soon as late tomorrow or Wednesday.

Tuesday's economic releases begin at 8:55, with Redbook Retail
Sales. The RLX, the S&P retail index, gained 1.01 percent Monday,
posting one of the strongest index gains behind the BTK, the
biotechnology index.  The BTK gained 1.19 percent. 

Economic releases continue at 10:00, with the September Richmond
Fed Manufacturing Index, followed at one-hour intervals by the
September Kansas City Fed Manufacturing Index and the August
Chicago Fed Manufacturing Index.  Those had last shown a gain of
18 and 15, and a drop of 0.6, respectively.  

Drawing at least as much attention as those economic releases
will be the after-the-close earnings reports of Intel (INTC) and
Yahoo (YHOO), of course, and all who consider taking positions
Tuesday should know before entering new positions whether they
intend to hold overnight.  Volume might continue to be light
ahead of those releases, so continue to be careful about new
entries.



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

Greater Bay Bancorp - GBBK - close: 31.81 change: +1.50

WHAT TO WATCH: The BIX and BKX banking indices continue to churn 
under overhead resistance but that's not stopping shares of GBBK.  
This regional bank soared almost 5 percent on huge volume to 
break through the top of its nine-month trading range.  This 
looks like a bullish entry point but we wouldn't want to chase 
it.  Watch it for a pull back and consider a run into its 
(unconfirmed) October 20th earnings report.

Chart=


---

Energy Conversion Devices - ENER - close: 15.82 change: +1.33

WHAT TO WATCH: Alternative energy-related stocks surged today and 
ENER broke out over resistance at $15.00 with a 9 percent rally 
with big volume to back it up.  The move also broke through its 
200-week moving average and produced a new buy signal on its 
daily MACD indicator.  On top of it all the rally today produced 
a new triple-top breakout buy signal on its P&F chart with a $22 
target  We would not want to chase it here but a pull back to 
$15.00-15.25 might be a tempting entry point.  FYI: we couldn't 
find an earnings date.  

Chart=


---

EchoStar - DISH - close: 33.17 change: +1.46

WHAT TO WATCH: Positive broker comments today about the satellite 
TV industry helped send DISH up 4.6 percent on above average 
volume.  The rally today was also a breakout over its simple 200-
dma and its simple 50-week moving average, while also confirming 
a new MACD buy signal on the daily chart.  More aggressive 
traders may want to use the move as an entry point.  

Chart=




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

AFG $29.85 +0.57 - AFG is bouncing from its exponential 200-dma 
and the bottom of its eight-month trading range.  

LVLT $2.98 +0.26 - Somebody got excited about LVLT today with a 
9.5 percent rally on above average volume.  This may be worth 
investigating and watching for a move over its simple 100-dma 
just overhead.

AMZN $40.15 +0.15 - We're watching AMZN for a reaction to YHOO's 
earnings news, which is due out after the close on Tuesday.  
Currently AMZN looks poised to turn lower.  Watch for a breakdown 
under $39.00.

ASKJ $31.80 -0.78 - ASKJ is also looking vulnerable and poised 
for more weakness with today's crack under the simple 100-dma and 
bearish MACD sell signal.  Wait for YHOO's earnings news.

ISIL $15.66 +0.09 - ISIL dipped to a new relative low before 
bouncing into the close.  Watch for a reaction after Intel's 
earnings news tomorrow. 
 


=================================================================
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send email to remove@PremierInvestor.net
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact advertising@PremierInvestor.net.

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


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







PremierInvestor.net Newsletter                   Monday 10-11-2004
                                                    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:  None

Stock Splits
  Announcements:        MACR


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

MACR - tech stock long play -
  MACR bounced strongly today with a 2 percent rally
  back above the $22.00 level.  


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

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

AIG     American Intl Group        67.48     +0.58
HD      Home Depot                 40.07     +1.05
FOX     Fox Entertainment          29.35     +0.60
FITB    Fifth Third Bancorp        50.13     +0.53
PGR     Progressive                85.31     +1.26
PCAR    Paccar Inc                 69.87     +1.46

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

BLX     Banco Latino Americano     17.12     +1.66
LDIS    Leadis Tech                16.34     +1.11
ENER    Energy Convrsn Devices     15.82     +1.33
MFLX    Multi-Fineline Electronix  12.56     +1.76

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
DISH    Echostar Communications    33.17     +1.46
AC      Alliance Capital Mgmt      37.40     +1.23
SNDA    Shanda Interactive         31.90     +3.37
GBBK    Greater Bay Bancorp        31.81     +1.51
BLUD    Immucor Inc                28.22     +1.25
SFCC    SFBC Intl Inc              29.57     +3.36

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

CHIR    Chiron Corp                34.25     -1.38
STN     Station Casinos Inc        47.38     -1.52
IDXX    IDEXX Labs                 49.07     -1.10
MVK     Maverick Tube              28.07     -2.31
LSS     Lone Star Tech             29.25     -8.95
LDG     Longs Drug Stores          23.30     -2.02
WLS     William Lyon Homes         73.96     -3.04

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

TS      Tenaris Sa                 46.29     -1.42
OII     Oceaneering Intl           36.40     -1.46
SNDK    SanDisk Corp               28.96     -1.24
PCU     Southern Peru Copper       52.26     -0.88
DO      Diamond Offshore Drilling  33.10     -0.74
NLS     The Nautilus Group         23.26     -1.15
OSTK    Overstock.com              38.43     -1.12


=================================================================
To stop receiving this PremierInvestor.net Newsletter,
send email to remove@PremierInvestor.net
=================================================================
DISCLAIMER
=================================================================

This newsletter is a publication dedicated to the education
of stock traders. The newsletter is an information service
only. The information provided herein is not to be construed
as an offer to buy or sell securities of any kind. The
newsletter picks are not to be considered a recommendation
of any stock but an information resource to aid the investor
in making an informed decision regarding trading in stocks. It
is possible at this or some subsequent date, the editors and
staff of PremierInvestor.net may own, buy or sell securities
presented. All investors should consult a qualified professional
before trading in any security. The information provided has
been obtained from sources deemed reliable but is not
guaranteed as to accuracy or completeness. PremierInvestor.net
staff makes every effort to provide timely information to its
subscribers but cannot guarantee specific delivery times due to
factors beyond our control.

Please read our disclaimer at:
http://www.optioninvestor.com/page/oin/aboutus/disclaimer.html

*****************************************************************
ADVERTISING INFORMATION

For more information on advertising in PremierInvestor.net
Newsletter, or any Premier Investor Network newsletter please
contact advertising@PremierInvestor.net.

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

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








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