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PremierInvestor.net Newsletter                   Monday 10-25-2004
                                                    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: The Decline that Wasn't   
Watch List: Healthcare to Media and more!


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      10-25-2004           High     Low     Volume   Adv/Dcl
DJIA     9749.99 -  7.82  9777.87  9708.40 1.70 bln 1497/1306
NASDAQ   1914.04 -  1.10  1920.71  1905.91 1.59 bln 1631/1358
S&P 100   524.00 -  1.16   525.16   521.90   Totals 3128/2664
S&P 500  1094.80 -  0.94  1096.81  1090.19
SOX       397.87 +  2.71   402.36   394.29
RUS 2000  571.67 +  3.89   573.64   565.71
DJ TRANS 3380.17 +  8.23  3391.12  3344.77
VIX        16.58 +  1.30    16.71    16.02
VXO (VIX-O)16.87 +  0.78    17.34    16.40
VXN        22.70 +  1.34    22.73    22.14
Total Volume 3,292M
Total UpVol  1,669M
Total DnVol  1,573M
Total Adv  3128
Total Dcl  2664
52wk Highs  116 
52wk Lows    87
TRIN       1.10
PUT/CALL   0.76 
===============================================================

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

The Decline that Wasn't
Jonathan Levinson

The indices opened lower and got slammed in the morning as oil 
reached a new record high.  Bonds and gold were rallying, and it 
appeared that bull season was on.  The moves did not stick, 
however, as all markets corrected their early morning extremes, 
moderating throughout the session.  The indices closed 
fractionally negative.

Breadth was mixed, with declining volume leading advancing volume 
1.08:1 on the NYSE, 1.85:1 on the Amex and advancing volume 
leading declining volume on the Nasdaq 1.18:1.  Volatility rose 
for both the S&P and Nasdaq indices.  Overall, it was a sideways 
day within a daily descending trend, with tension running much 
higher than actual price action.


Daily Dow Chart


The Dow dropped 7.82 points to close at 9750, a new closing low 
on the 6 month chart.  The decline since the October high has 
been steady, with a consistent pattern of lower highs and lower 
lows.  Today's rejection at the lows is potentially bullish, but 
only if bulls can build it into a successful attempt on upper 
resistance, first at 9800 and more importantly at 9900, above 
which a new daily cycle upphase should kick off.



Daily S&P 500 Chart


The SPX lost less than a point with the 1094.8 close, but it was 
enough to keep the daily candle from printing green. The daily 
cycle downphase continues here, and below 1103 resistance, this 
remains a bearish chart.  The pattern appears to be a bullish 
descending wedge projecting to an implied target of 1142 on a 
break above the upper descending resistance line.  However, 1103 
and 113-15 are very stiff resistance, and bulls had their hands 
full merely trying to regain Friday's closing levels.


Daily Nasdaq Chart


The Nasdaq broke its rising support line off the August low on a 
closing basis, well behind the other indices.  Nevertheless, the 
daily cycle downphase continues to suggest a slow rollover from 
the October highs, with bears eyeing the 1900 support level, 
below which 1875-1880 come into view.  As noted below, the 
Nasdaq's 1 point loss comes despite an upgrade to the chip sector 
from Smith Barney, as well as a sizeable addition to dealer 
reserves from the Fed's open market desk.  While the Nasdaq has 
been outperforming its peers for weeks, today's action showed 
that it is not immune to the broader market weakness.




Weekly TNX Chart




The ten year note yield (TNX) continued to respect its downtrend 
from the June high but continues to test support in  the 3.9%-
3.95% area.  TNX still has a ways to go before testing lower 
rising bear wedge support at 3.885%.  The weekly cycle upphase 
trying to form has so far generated no traction in the TNX, and a 
failure at 3.885% would be very bullish for bonds, projection a 
test below 3.6% on the wave to a retest of the July 2003 lows for 
the TNX.  For the day, the TNX closed lower by 1.2 bps at 3.972%.




Weekly chart of Crude oil



December crude oil futures reached a new high of 55.75 on the 
Nymex amid threats of a lockout by the Norwegian Shipowners 
Association ("NSA").  The NSA called for a lockout to take effect 
on November 8th if certain strike actions aren't terminated in 
the meantime.  With supply as tight as its become in recent 
months, any threat of disruption is reflected in the price of 
front-month futures, which rose to a new high on the news.  An 
hour later, it was announced that the Norwegian government would 
intervene to avert the oil workers' strike and the threatened 
lockout, helping prices ease off their highs.  Nymex crude 
settled at 54.55 for its afternoon session, unchanged for the 
day.

There's little to add to the weekly 3 year chart of crude oil- 
the picture is far more eloquent than I.

Smith Barney was out this morning with bullish recommendations on 
chipmakers and citing the "onslaught" of negativism in the sector 
that contributes to a bullish risk/reward profile.  Analyst Glen 
Yeung was recommending that investors be "overweight" the sector 
into 2005.  Along with the comments, Smith Barney upgraded TXN, 
ALTR, IDTI, ADI and IRF from "hold" to "buy".  The Philly 
Semiconductor Index (SOX) closed higher by .69% at 397.87.



UBS and Gallup reported that investor optimism reached a 12 month 
low in October on fears surrounding rising energy prices and the 
weak employment market.  The UBS Index of Investor Optimism 
declined 12 points to 62, the lowest reading in a year and well 
below its 124 reading when established in 1996.


New home sales were released by the National Association of 
Realtors at 10AM today, the lone economic report for the day.  
New home sales exceeded expectations for a 6.51M unit rate, 
coming in at 6.75M units in September.  This follows an upwardly 
revised 6.55M unit rate in August. The NAR attributed the buying 
to low mortgage rates.  Homebuilder PHM was upgraded by CSFB to 
"outperform" from "neutral" based on analyst Ivy Zelman's opinion 
that the stock's valuation is too low.  PHM closed higher by 
8.51% at 51.50.


In corporate news, NYSE specialist firm LAB announced a loss of 1 
cent per share for Q3, with revenue declining from 70.9M in Q3 
2003 to 64.7M this quarter. The firm cited "lower principal 
trading revenues at the company's specialist subsidiary due to 
continued lower equity volumes and volatility."  LAB finished the 
day down 1.46% at 7.40.


Heath and hygiene product maker KMB reported higher earnings for 
Q3 of 89 cents per share, up from 83 cents in Q3 2003, missing 
consensus estimates by a penny.  Revenues were up 6.2% to 3.87B, 
in line with expectations.  The company lowered expectations by 
4-5 cents per share for Q4 to 89-91 cents per share.  Analysts 
were projecting earnings of 95 cents for Q4.  KMB lost 6.39% to 
close at 59.03.

Telecommunications provider BLS announced Q3 earnings of 46 cents 
per share, down 2 cents from Q3 2003's level.  This included a 3 
cent charge for hurricane-related expenses, which results in a 2 
cent miss against analyst expectations.  Revenue was lower by .9% 
in the quarter.  BLS closed lower by .49% at 26.42.

Commercial leasing company R reported net income of 83 cents per 
share, up 45% from Q3 2003's 63 cents.  These results beat 
estimates by 4 cents.  R closed flat at 47.45.


Banker PFS reported a 64% increase in net income for Q3 of 13.3M 
or 19 cents per share, up from 16 cents or 8.1M in Q3 2003.  This 
represents a 64% increase in net income, but a 1 cent miss 
against analyst expectations of 20 cents per share for the 
quarter.  PFS gained 3.88% to close at 17.67.


AXP reported Q3 earnings of 69 cents or 879M, meeting 
expectations.  This represented a 14% rise from Q3 2003's 59 
cents of 770M net income.  Revenue rose from 6.4B last year to 
7.2B, also meeting expectations.  AXP lost 1.12% to close at 
51.15.


GOOG once again provided bears with a religious experience, 
surging to a new record of high of 194.43 and surpassing YHOO in 
market capitalization as reported by Marketwatch in the 
afternoon.  At 188.40, GOOG is valued at 51.1B, while at 34.84 
YHOO is valued at 47.4B.  GOOG closed higher by 8.68% at 187.4.


Toyota Motor Credit Corp., a subsidiary of TM, announced its 
intention to restate earnings for 2003 and 2004 following a 
review of its accounting policies.  The company noted that 
certain of its recognition of some costs and fees related to its 
acquisition of finance and lease contracts were not GAAP-
compliant, but that it doesn't expect the restatement to affect 
previously stated cashflow.  The company added that the 
restatement may result in higher financing revenue and net 
income.  TM rose .19% to close at 75.39.


After the bell, FLEX announced earnings that met expectations at 
16 cents per share but missed on revenues with 4.14B vs. 4.2B 
expected.  The stock got smoked for 5.34%, trading 11.87 as of 
this writing.

For tomorrow, the earnings rush continues, with consumer 
confidence for October as the lone economic report for the day.  
With crude oil making record highs on a daily basis, election 
tensions running high and earnings being reported, there's little 
to suggest a serious test of the ongoing daily cycle downphase.  
Nevertheless, upside resistance is clear, and traders should 
remain mentally nimble in the event of an upside break.  Until 
then, the daily cycle bears remain in control. 
 

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

LCA-Vision - LCAV - close: 23.59 change: -1.51

WHAT TO WATCH: Watch out below!  The 6 percent decline on above 
average volume looks pretty ominous.  LCAV is due to report 
earnings tomorrow morning but from today's action it looks like 
investors don't have any confidence in the report.  LCAV broke 
support at the $25.00 mark and its simple 50 and 200-dma's.  This 
looks like an opportunity to short the stock toward more 
significant support at the $20.00 level.  




---

Scientific Games - SGMS - close: 20.11 change: +1.02

WHAT TO WATCH: The bulls appear to be circling SGMS for a 
potential move higher.  The stock had a huge run through most of 
2003 and into April of 2004.  Since then SGMS has been digesting 
those gains in a sideways trading range between $16 and $20.  Now 
the stock's trading range has narrowed to $18.50 to $20.00 over 
the last several weeks.  This Monday SGMS actually managed to 
breakout and close over round-number resistance at $20.00 on 
about twice the average volume.  This looks like an entry point 
for a run toward its all-time highs near $22.00 and potentially 
higher.  The P&F chart points to a $28 target.  Watch for 
earnings on or around Nov. 1st. 




---

Matrixx Initiatives - MTXX - close: 12.98 change: +1.23

WHAT TO WATCH: We normally would not look at MTXX as a potential 
play because the stock normally trades about 60,000 shares a day.  
Yet today MTXX vaulted higher with a 10.4 percent gain on almost 
ten times the average volume.  The move was fueled by its 
positive Q3 results announced this morning.  Furthermore the 
rally is a breakout over resistance in the $12.50 range to new 
eight-month highs.  Aggressive traders may want to keep an eye on 
it for some follow through.




---

Westwood One - WON - close: 20.93 change: +0.55

WHAT TO WATCH: Shares of WON have been stuck in a long-term 
descending trend for months.  We are not looking for a trend 
change but the short-term action looks almost bullish.  WON 
bounced from four-year lows in late September and has been 
consolidating sideways between $20 and $21.25.  Bulls can use a 
breakout over $21.25 as an entry point for a short-term pop.  
Bears can watch for a breakdown under $20.  Earnings are expected 
on Friday morning. 





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

K $43.15 +0.74 - Kellogg beat estimates by 4 cents and raised its 
Q4 guidance today but shares didn't react much.  The stock has 
resistance at the $43.50 level.  If K can breakout it will be 
poised to make the long, slow climb toward its all-time highs 
near $50.

HE $28.25 +1.54 - The normally sedate shares of Hawaiian Electric 
soared 5.7 percent on Monday after reporting strong Q3 results.  
The move is a major breakout over resistance at the $27 level.

LNY $25.05 -1.30 - LNY is breaking significant support at $26.00 
on a downgrade.  The stock looks vulnerable to more selling but 
watch for earnings on Wednesday.

ROCK $35.42 +0.87 - Gibraltar Steel appears to be bouncing from 
its simple 50-dma and is now back above round-number resistance 
at $35.00.
 

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

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

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







PremierInvestor.net Newsletter                   Monday 10-25-2004
                                                    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:  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
==================================================================

None 


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

IBM     Intl Business Machines     88.43     +1.04
UTX     United Technologies        91.67     +0.67
OXY     Occidental Petroleum       58.46     +0.69
K       Kellogg Co                 43.15     +0.74
GDW     Golden West Financial     112.55     +2.32
MGG     MGM Mirage                 52.73     +0.66

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

MDG     Meridian Gold Inc          18.96     +1.79
XXIA    Ixia                       12.38     +1.42
GERN    Geron Corp                  7.75     +1.05
MTXX    Matrixx Initiatives        12.98     +1.23

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
GOOG    Google                    187.40    +14.97
PGR     Progressive Corp           90.89     +2.17
NEM     Newmont Mining             47.66     +1.54
INFY    Infosys Technologies       67.01     +1.19
ETR     Entergy Corp               64.45     +1.68
VFC     VF Corp                    53.76     +3.74
MHK     Mohawk Industries          84.20     +1.81

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

LLY     Eli Lilly & Co             50.44     -1.41
DNA     Genentech Inc              44.00     -3.82
KMB     Kimberly Clark             59.03     -4.03
ZMH     Zimmer Holdings            67.90     -1.12
MGA     Magna Intl Inc             68.77     -1.70
RAI     Reynolds American          67.03     -1.16
WFMI    Whole Foods Market         80.33     -1.76
IMCL    ImClone Systems            46.91     -2.42
SEPR    Sepracor Inc               42.45     -1.76

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

MRVL    Marvell Technology         27.05     -1.04
FMD     First Marblehead           48.66     -3.54
AMG     Affiliated Managers Group  53.85     -1.19
CLP     Colonial Properties        40.89     -1.27
HUBG    Hub Group Inc              39.37     -3.03


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

For more information on advertising in PremierInvestor.net
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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