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Daily Newsletter, Tuesday, 10/19/2004

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PremierInvestor.net Newsletter                  Tuesday 10-19-2004
                                                    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:       Halloween Coming Early?
Watch List:        Internets to Steel stocks and more!
Market Sentiment:  Divided Focus

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      10-19-2004           High     Low     Volume   Adv/Dcl
DJIA     9897.62 - 58.70 10020.55  9894.89 2.16 bln 1124/2079
NASDAQ   1922.90 - 13.60  1952.85  1922.60 1.72 bln 1236/1887
S&P 100   530.99 -  4.19   538.10   530.93   Totals 2360/3966
S&P 500  1103.23 - 10.79  1118.03  1103.15 
SOX       388.00 +  3.94   395.63   384.35
RUS 2000  566.67 -  5.36   576.63   566.49
DJ TRANS 3345.34 - 37.34  3392.76  3345.25
VIX        15.13 +  0.42    16.32    14.32
VXO (VIX-O)15.63 +  0.94    15.64    14.46
VXN        20.84 +  0.12    20.89    20.10 
Total Volume 4,229M
Total UpVol  1,410M
Total DnVol  2,750M
Total Adv  2723
Total Dcl  4484
52wk Highs  241
52wk Lows   170
TRIN       1.45
NAZTRIN    1.20
PUT/CALL   0.95
=================================================================

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

Halloween Coming Early?
by Jim Brown

The markets may be warning us that Halloween is coming
early this year. The markets gave back an early bounce
to sink back to critical support and there were no bulls
in sight at the close. Dow support at 9900, Wilshire 5000
support at 10800 and SPX support at 1100 all appear to
be in danger of failing. Could this be predicting an ugly
October surprise?

Dow Chart

 
Nasdaq Chart

 
SPX Chart

 
Wilshire-5000 Chart

 

Today was not a good day for economics. The weekly Chain
Store Sales fell -0.2% after two weeks of gains. This is
not a big drop but shows retail simply can't maintain a
positive trend. Debt burdens are nearing record levels
and gas prices over $2.00 are cutting into budgets. Not
anything we did not already know. 

Worse news came in the form of the Consumer Price Index
which rose +0.2%. If you don't use food or energy the
core rate rose +0.3%. These levels would have been much
worse but there was actually a -0.4% decline in energy 
prices during the survey period. This held the headline
numbers down but as we all know the small drop in energy
prices did not last. The core inflation rate is now at 
+2.0% for the year and at levels not seen since Oct-2002.
Once the rebound in energy prices filter back through the
market this will be even higher. This could force the Fed
to continue the rate hikes despite a cooling of the economy. 

New Residential Construction fell to 1.898 million from
2.02 million in August. Starts fell -6% and it was the
largest decline since January and they are well below
their 12-month average. Multifamily units continue to 
buck the trend but single family homes are suffering.
There could be some benefit underway in the South for
hurricane recovery but it is still too early to tell.
With long-term rates stabilizing we could see a level
housing market for the near future. Permits suggest
we have reached a support level where demand could be
stable as long as jobs continue to hold. The ten-year
yield closed today at 4.04% and bonds could continue
to find buyers in a weak equity market. 

The challenge remains the job market and the Challenger
Survey announced on Monday showed 54,701 high tech jobs
were lost in Q3. This was up +60% from Q2 and +14% from
the same period last year. Challenger said tech companies
have no pricing power and they are having to sell for 
lower margins just to keep market share. After three 
years of cost cutting the only avenue left to reduce 
costs is to reduce jobs. Challenger said IBM and 
BearingPoint are hiring in the U.S. but are becoming
increasingly picky about who they hire. Service and 
consulting businesses like IBM are seeing their backlog
increase but tech manufacturing accounted for 56% of 
the Q3 job losses. 

IBM roared out of the gate this morning with a +3.50
gain to trade over $89 and contrary to the market did
manage to hold those gains. IBM reported profits on
Monday night that beat the street and were surprisingly
good. Emerging markets such as Brazil, China, India and
Russia grew by more than +30% with American revenue up
only +8%. IBM said it had more than $110 billion in
back orders. Profits for the quarter were $2 billion.
Not bad for a blue chip tech that was known for earnings
warning fears just a few quarters ago. 

Texas Instruments also beat the street and jumped +1.50
on the news. The TXN gains were not so spectacular and
came in part due to late quarter sales that boosted the
prior two months of weak results. This and several other
chip stocks helped push the SOX to resistance highs at
395 that were tested last Wednesday after the Intel 
earnings. Those highs did not hold then and they did
not hold again today. The SOX did close in positive
territory but well off its highs. 

It was not techs or software or even Internet stocks
that captured the spotlight today. It was the warlock
of Wall Street in the person of Elliott Spitzer making
headlines once again. The regulatory gargoyle jumped
from sector to sector as not only insurance companies
like MMC, CB and AOC took the heat but subpoenas spread
out to AET, CI, WLP and ATH with monster losses the rule
for the day. ATH -7.30, AET -11.57, CI -6.85 and WLP 
-11.30. The size of the losses and the widening scope 
of the witch hunt put fear into investors and every 
sector even remotely related saw selling. Financial
stocks suffered because they were not only grouped 
into the same indexes being dumped but due to fears 
the carnage would impact current loans and relationships
with the banking community. Somebody needs to put a 
leash on this wild man or maybe use a wooden stake
to prevent Count Spitzer from sucking the lifeblood
from any new victims. 

The markets sank from the open and never found a bid. 
Support levels were not broken sharply they just eroded
away with slow steady selling pressure. Although volume
on the NYSE was higher than recent levels at 2.16B shares
there was not a serious imbalance. Decliners beat the
advancers by slightly more than 2:1 and given the hit
to three letter insurance stocks listed above this was
not unreasonable. There were just very few buyers.

The Dow retreated to 9900 at the close and while that
is/was strong support the action at the close suggested
it may not hold tomorrow. This is the third retest in
the last four days and the odds are good this one will
not hold. The August low was 9783 and this could be the
next target. One analyst is suggesting we could go all
the way to 9500 and the bottom of the downtrend channel.

The Nasdaq is refusing to crack and holding above 1925
most of the day. The Nasdaq tried to hold the high ground
at 1950 but failed and pulled back to the middle of its
recent congestion range running from 1900-1950. This
divergence from the blue chips has more to do with the
insurance implosion than a tech rally. The IBM/TXN
earnings helped techs but swimming upstream in a down
market is a tough task. 

Tonight's earnings were a mixed bag with companies
beating estimates disappointing on guidance and those
that did not disappoint on guidance found some other
reason to trade lower. MOT, PLT, STK, STX, CYMI, MNST
and SIMG were some of the stocks beating estimates
after the close. MOT, CYMI, MNST, SIMG all traded down
along with ERTS which missed estimates. 

Very late after the market closed Teradyne, a maker of
semiconductor testing equipment, posted a serious warning.
TER posted earnings of +0.21 cents but warned that Q4
earnings would drop to only +0.04 cents due to customers
significantly slashing orders compared to Q3. They said
there was a significant reduction in capital spending as
chip makers tried to deal with snowballing inventory
levels. Revenue for Q3 was $457.8 million and current
Q4 orders are only $284 million. At the same time FSL,
Freescale Semi, a recent spin off from Motorola said
they were laying off -1000 workers and expected orders
to decline through Q4. 

The negative earnings and guidance from multiple companies
after the close sent the futures plunging to below 1100
on the S&P and buyers were just beginning to nibble at
8:PM. Will they return to positive territory by morning?   
Will it matter? With today's negative session and the 
nights earnings events you would expect Wednesday to be
less than exciting for the bulls. The key for traders is
not likely to be the chip woes but the ailing financial
sector. 

Eventually the fear will wear off and investors will 
tip toe back into the water but they may want to cling
to the safety of the bank for a few more days. Spitzer
needs to be sighted targeting somebody else before they
will feel safe entering the sector again. Since banks
are grouped with insurance companies in various funds
the financial sector may remain weak. Citibank said
after the close three top officials are leaving due to
the Japan scandal and Fannie Mae reported the SEC inquiry
had turned negative with a formal attack now underway.
This sent FNM plunging in late trading. 

Negative chip earnings, weak financials, an election tie
and a calendar month known for volatility. Sure sounds 
like a recipe for disaster. Helping to lubricate the 
selling was a firming in oil to near $54 once again and
money moving from equities to bonds. While myself and 
many others were expecting an election rebound to begin
this week I believe that potential is quickly eroding. 
If the Dow trades down to 9800 tomorrow it should be our
most likely spot to launch a rebound. Should that level
fail the sentiment could turn much uglier and the next
stop could be that 9500 I mentioned earlier. 

Wednesday will clearly be a battle between the technical
traders and market sentiment. Should they end up on the
same side the outcome could be dangerous. There are no
material economic events in the morning but we will get
oil and gas inventories at 10:30. A drop in inventories
could breathe new life in the lagging oil prices. Earnings
before the bell include AMR, BK, CL, CFC, DCN, DAL, EK, 
FLIR, GD, GENZ, HET, HON, JPM, NITE, LIN, LU, MGG, NTRS,
ODP, PFE, SWFT, UTX, WYE. Three of those are components
in the Dow and misses could be painful to the market. 
The airlines are expected to show large losses and the
transports should react to their guidance. Look for 
a bounce at 9800 should we trade that low but enter 
carefully. Given the weak market breadth and sentiment
I would be careful about rushing back into the water 
too soon or you may end up swimming with the fishes 
rather than surfing the waves. 

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

Overstock.com - OSTK - close: 45.57 change: +4.58 

WHAT TO WATCH: OSTK soared more than 11 percent today on what 
looks like record volume after the stock was upgraded to "market 
perform".  It seems like shares overreacted a bit but OSTK has 
relatively high short-interest at 36 percent of the float, which 
is only 10 million shares.  The stock was already trading near 
new all-time highs and it certainly notched another one today.  
We want to watch and see how investors respond to OSTK's earnings 
report that is due out this Thursday.  Currently the P&F chart is 
very bullish with a $59 target.

Chart=


---

American Pharma. Partners - APPX - close: 22.40 change: -2.40

WHAT TO WATCH: Some may call APPX part of the nanotechnology 
industry, others just a biotech stock.  Whatever you call it 
right now we're likely to use the term loser.  The stock has lost 
more than half its marketshare since April.  The recent 
consolidation near round-number support at $25 has failed into 
another high-volume breakdown today.  Furthermore APPX has 
slipped past possible support at the $22.50-22.65 region dating 
back to October 2003.  Now the next level of support appears to 
be the $20 mark.  The P&F chart is more bearish with a $12 
target.  Watch to see how investors react to APPX's earnings on 
Thursday, Oct. 21st.

Chart=


---

Nucor Corp - NUE - close: 39.45 change: -4.35

WHAT TO WATCH: Ouch!  NUE lost 9.9 percent on Tuesday with volume 
way above the norm.  One of NUE's rivals in the steel industry 
(STLD) beat estimates today but gave concern over a weaker 
forecast going forward.  The news impacted the entire sector.   
NUE was already suffering from the previous sell-off and a 
potential exit from the stock-split momentum crowd.  We think the 
stock is short-term oversold and due for a bounce but it may not 
occur until after NUE's earnings report on Thursday.  Watch to 
see where it lands.

Chart=



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

IACI $20.25 -0.22 - Internet empire builder IACI is still sinking 
under a trend of lower highs and lower lows.  Watch the $20 mark.

NOC $50.18 -0.45 - Defense giant NOC is starting to look tired as 
the three-week sell-off approaches support at the $50 mark. 

IST $25.75 -2.92 - IST is another steel stock that was caught up 
in the sell-off today.  Watch support at the $25 level.

PETM $30.53 +0.17 - PETM is still looking bullish to us but the 
stock is struggling to maintain upward momentum in this market.

VCP $31.99 -1.47 - Look out below!  VCP broke both its simple 
200-dma and exponential 200-dma as well as support near $33 with 
today's decline.  Volume was very strong.


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

Divided Focus
- J. Brown

Investors have a lot on their minds these days.  Normally 
investors would turn a white-hot spotlight on corporate earnings.  
They remain center stage today, especially as Wall Street ponders 
future earnings growth and just how fast or how slow earnings 
will grow in the fourth quarter and beyond.  Unfortunately, 
record high oil prices continue to upstage the Q3 earnings 
performance.  Yes, crude has slipped two days in a row now (whoa! 
is that a trend?)  but oil remains near its highs. Plus, the 
markets and individual investors are starting to grow more 
concerned about the rise in heating oil.  That's especially true 
now that winter's chill is not that far away.  

If you read most of the financial media tonight they'll probably 
suggest to you that tech stocks turned in a decent day.  That may 
be true for the likes of IBM and TXN who soared higher after 
beating earnings estimates.  Whether these two stocks gained on 
short-covering or investors breathing a sigh of relief that 
things were not worse than expected is up for grabs.  The bears 
will have to concede that the earnings numbers were indeed 
positive.  Unfortunately the NASDAQ Composite closed in the red 
and the SOX semiconductor index was the only major tech index to 
close in the green.  

Overall market internals were negative today.  Declining stocks 
outnumbered advancers by 2-to-1 on the NYSE and 18-to-11 on the 
NASDAQ.  Down volume was 2.5 times up volume on the NYSE and with 
a heavy volume day overall for the Big Board.  So far we're 
seeing stocks affected by the age-old tradition of "sell the 
news".  If earnings are inline or just slightly better than 
expected investors are still hitting the sell button - at least 
short-term.  

Speaking of earnings we're going to see a huge number of earnings 
on Wednesday and Thursday this week.  Tomorrow alone brings 
reports from Dow-components HON, JPM and UTX.  Plus, we'll hear 
from the likes of AMGN, COF, CHIR, DAL, and EBAY.  

Overshadowing both the earnings numbers and the rise in oil is 
probably the upcoming election.  Many feel that stocks are likely 
to churn sideways in choppy fashion between here and November 
2nd.  That's not a surprise given the incredible cacophony being 
generated by both sides.  Whether you think it's a good thing or 
a bad thing so far the media appears to be focusing on just the 
election itself and not the terror threat it was acknowledged to 
be just a few weeks ago.  Yup, investors definitely have a lot on 
their minds right now.


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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9497
Current     :  9897

Moving Averages:
(Simple)

 10-dma: 10026
 50-dma: 10116 
200-dma: 10282



S&P 500 ($SPX)

52-week High: 1163
52-week Low : 1018
Current     : 1103

Moving Averages:
(Simple)

 10-dma: 1118
 50-dma: 1109
200-dma: 1119



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1301
Current     : 1443

Moving Averages:
(Simple)

 10-dma: 1442
 50-dma: 1399
200-dma: 1440



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

CBOE Market Volatility Index (VIX) = 15.13 +0.42
CBOE Mkt Volatility old VIX  (VXO) = 15.63 +0.94
Nasdaq Volatility Index (VXN)      = 20.84 +0.12 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.95        856,237       810,611
Equity Only    0.87        728,489       633,400
OEX            1.39         15,123        21,170
QQQ            5.38         30,026       161,746


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

Bullish Percent Data

           Current   Change   Status
NYSE          63.1    - 1     Bear Correction
NASDAQ-100    47.0    + 3     Bull Alert      
Dow Indust.   53.3    - 0     Bear Confirmed
S&P 500       61.4    - 0.8   Bear Correction
S&P 100       61.0    + 1     Bear Correction


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

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


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

 5-dma: 1.06
10-dma: 1.18
21-dma: 1.11
55-dma: 1.15


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     929      1169
Decliners    1874      1845

New Highs      58        52
New Lows       55        48

Up Volume    571M      731M
Down Vol.   1531M      942M

Total Vol.  2150M     1689M
M = millions


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

Commitments Of Traders Report: 10/12/04

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

Commercial traders continue to hedge their bets on the large
S&P contracts as longs and shorts move closer to parity.  Small
traders didn't move much money either but remain net bullish.


Commercials   Long      Short      Net     % Of OI
09/21/04      404,746   425,560   (20,814)   (2.5%)
09/28/04      404,773   434,441   (29,668)   (3.5%)
10/05/04      421,217   435,736   (14,519)   (1.7%)
10/12/04      423,472   436,780   (13,308)   (1.5%)

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
09/21/04      134,943   108,036    26,907    11.1%
09/28/04      135,317   107,173    28,144    11.6%
10/05/04      137,210   114,489    22,721     9.0%
10/12/04      139,175   113,903    25,272     9.9%

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

Uh-oh!  This could spell trouble for stocks.  Commecials,
who are normally on the "right" side of the trade are upping
their short positions.  Meanwhile, small traders decreased
their short positions leaving them strongly net bullish.
This alone is a contrarian indicator for a market top.
Just remember that these readings were taken before the 
Wednesday-Thursday sell-off this past week.


Commercials   Long      Short      Net     % Of OI 
09/21/04      213,014   397,844   (184,830)  (30.2%)
09/28/04      226,020   420,714   (194,694)  (30.1%)
10/05/04      248,190   476,608   (228,418)  (31.5%)
10/12/04      258,457   517,805   (259,348)  (33.4%)

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
09/21/04      256,315     60,275   196,040    61.9%
09/28/04      262,501     68,255   194,246    58.7%
10/05/04      308,021     80,373   227,648    58.6%
10/12/04      309,720     62,502   247,218    66.4%

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 aren't changing their bets.  They remain
net bullish on the NDX.  Small trades have significantly 
reduced positions in both longs and shorts but remain 
strongly net bearish, which of course is bullish for the
NDX if you're a contrarian.


Commercials   Long      Short      Net     % of OI 
09/21/04       54,530     30,827    23,703   27.7%
09/28/04       55,045     32,319    22,726   26.0%
10/05/04       55,640     32,872    22,768   25.7%
10/12/04       52,572     32,775    19,797   23.2%

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
09/21/04        7,417    25,821   (18,404)  (55.3%)
09/28/04       10,078    22,917   (12,839)  (38.9%)
10/05/04       12,254    30,693   (18,439)  (42.9%)
10/12/04        8,756    24,400   (15,644)  (47.2%)

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 reduced both long and short positions
but remained net bullish.  In contrast small traders
significantly increased both their longs and their shorts on
the Dow Industrials but in essence remain rather neutral.


Commercials   Long      Short      Net     % of OI
09/21/04       30,816    27,200    3,616       6.2%
09/28/04       29,714    26,877    2,837       5.0%
10/05/04       27,498    25,772    1,726       3.2%
10/12/04       24,150    22,849    1,301       2.7%
 
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
09/21/04        4,467     6,748   (2,281)   (20.3%)
09/28/04        5,143     5,988   (  845)   ( 7.6%)
10/05/04        5,531     5,539   (    8)   ( 0.0%)
10/12/04        8,814     9,167   (  353)   ( 1.9%)

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
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Do not duplicate or redistribute in any form.







PremierInvestor.net Newsletter                  Tuesday 10-19-2004
                                                    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

Net Bulls (Tech Stocks)
  Closed Bullish Plays: MACR
  
Stock Splits
  Announcements:       ANNB

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

None


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

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

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

Macromedia - MACR - close: 23.89 change: +0.82 stop: 21.40     

MACR continues it pre-earnings rally and broke out above 
resistance at the $23.00 mark on Tuesday.  Today's 3.55 percent 
climb was fueled by stronger than average volume, which is good 
news for the bulls.  However, per our previous instructions not 
only are we closing MACR ahead of its Wednesday morning earnings 
report but MACR traded up and through our initial profit target 
at $23.50, where we had planned to exit.  Wall Street will be 
looking for earnings of 20 cents per share tomorrow.  

Picked on October 03 at $20.85 
Gain since picked:      + 3.04
Earnings Date         10/20/04 (confirmed)
Average Daily Volume:      867 thousand
Chart =



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

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

ANNB declares a 4-for-3 stock split

This morning before the market's opening bell Annapolis Bancorp, 
Inc. (NASDAQ:ANNB) announced that its Board of Directors had 
approved a 4-for-3 stock split in the form of a stock dividend.

This dividend will be payable on December 3rd, 2004 to 
shareholders on record as of November 5th.  Fractional shares 
resulting from the split will not be issued. 


About the company:
Annapolis Bancorp, Inc. is the parent company of BankAnnapolis, 
which serves the banking needs of small businesses, professional 
concerns, and individuals through six community banking offices 
located in Anne Arundel and Queen Anne's counties in Maryland. The 
company reported net income of $1,674,000 in 2003, up 36.4% from 
the prior year. Total assets at June 30, 2004 were $267.3 million.
(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     89.43     +3.51
TGT     Target Corp                48.51     +0.76
CSC     Computer Sciences Corp     48.39     +0.55
AHC     Amerada Hess               86.68     +0.69
BDK     Black & Decker             79.36     +2.55
NSM     National Semiconductor     15.98     +0.55

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

MICC    Millicom Intl Cellular     19.74     +2.33
ATHR    Atheros Communcations      10.71     +1.01
CAAS    China Automotive Sys       13.45     +1.35
FRGO    Fargo Electronics Inc      12.32     +1.31

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
PH      Parker Hannafin            68.51     +5.10
SWK     The Stanley Works          45.03     +4.01
STN     Station Casinos            50.44     +2.27
CKFR    Checkfree Corp             31.87     +3.09
JEF     Jefferies Group            37.41     +3.41
CPO     Corn Products Intl Inc     48.16     +1.26
KRON    Kronos Inc                 50.29     +2.86

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

UNH     United Health Group Inc    68.30     -5.05
BSX     Boston Scientific          35.44     -2.37
WLP     Wellpoint Health Network   90.50     -7.80
CMX     Caremark Rx Inc            28.98     -2.37
AET     Aetna Inc                  87.26    -10.48
CI      Cigna Corp                 60.65     -5.93
LNC     Lincoln National Corp      42.06     -2.24
SAFC    Safeco Corp                43.75     -2.00
NUE     Nucor Corp                 39.58     -4.22

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

AIT     Applied Industrial Tech    34.41     -1.79
JAKK    Jakks Pacific Inc          21.04     -3.11
UIC     United Industrial Corp     31.35     -1.76
MDU     MDU Resources Group        25.60     -0.97


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