Option Investor
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Daily Newsletter, Thursday, 11/04/2004

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PremierInvestor.net Newsletter                 Thursday 11-04-2004
                                                    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:       Bush Bounce
Watch List:        Hardware to Specialty retail and more
Market Sentiment:  Stocks Rally, Day Two

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      11-04-2004           High     Low     Volume   Adv/Dcl
DJIA    10314.76 +177.70 10318.23 10127.98 2.25 bln 2510/ 742
NASDAQ   2023.63 + 19.30  2023.72  1992.07 1.85 bln 1858/1238
S&P 100   555.62 +  8.89   555.62   546.16   Totals 4368/1980
S&P 500  1161.67 + 18.47  1161.67  1142.34 
W5000   11371.20 +166.41 11371.20 11190.33
SOX       412.72 +  2.60   414.15   404.02
RUS 2000  602.13 +  6.80   602.13   591.77
DJ TRANS 3562.84 + 68.20  3565.73  3492.96
VIX        13.97 -  0.07    14.02    12.95
VXO (VIX-O)14.21 +  0.03    14.35    13.05
VXN        20.16 -  0.66    20.90    19.73 
Total Volume 4,460M
Total UpVol  3,274M
Total DnVol  1,108M
Total Adv  4967
Total Dcl  2252
52wk Highs  672
52wk Lows    80
TRIN       0.80
NAZTRIN    0.82
PUT/CALL   0.87
=================================================================

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

Bush Bounce
by Jim Brown

It appears on the surface a bull market has broken out
and while many credit Bush it may be just a relief rally
now that the election is over. Two days without constant
campaign ads could make any trader happy but more than
likely it is relief that there were no terrorist events
and the election outcome was settled in only one day. 

Dow Chart

 
Nasdaq Chart

 



The bull may be recovering his strength but his diet of
economic reports has not been helping his fitness program.
The Monster Employment Index this morning came in at 114
and exactly where it was in September. This could be a 
topping process as the index has been stuck in the 112-
114 range for the last three months. The 114 level is 
the highest reading for the year and is +21 points over
last October's level. Job listings dropped slightly in 
eight of the nine regions. The numbers for the index 
were rescaled beginning in Oct and the 114 headline 
equates to a prior reading of 151.

Jobless Claims fell slightly to 332,000 to continue the
EKG style volatility of the last ten weeks with alternating
numbers 20,000 claims apart. This is a pre hurricane level
but there is no indication that it will hold at this range.

Both of the above reports set the stage for tomorrows
jobs report and the consensus is for a gain of +160,000
jobs. We have a consecutive streak of positive job gains
dating back to September 2003 and Friday is not expected
to disappoint. At least it is not expected to be negative.
The whisper numbers have been less than exciting and if
anything the expectations are for a consensus miss at
+125,000. Friday's release is expected to set the stage
for next weeks Fed meeting and the guidance that comes
from that meeting. Nothing is expected to prevent them
from hiking rates another 25 points but the guidance for
the December meeting is the key. The Fed does not like
to hike rates just before the holidays but will do it 
if forced. I suspect the weak economics and a weak labor
market could put them on hold for December. Currently
the Fed Funds Futures are only showing a 51% chance of
a rate hike in December. 

Productivity rose slightly more than expected at +1.9%
but slower than the +3.5% average over the last three
quarters and +5.1% over the last six quarters. This
slower growth trend is encouraging because it shows
a level of growth that can be sustained. On the down
side unit labor costs rose +1.6% and the highest rate
of increase since Q1-2003. There was talk about the
slowing productivity suggesting longer term problems
for the economy. Higher productivity suppresses 
inflation and rising wage costs increases it. This
could be the beginning of a turning point. It was the
smallest increase in productivity since 2002. 

In stock news today the semiconductor sector took yet
another hit with BAC downgrading some of the big names.
KLAC and AMAT were cut to a SELL from neutral. BAC said
a glut of chip inventory and strong overcapacity in the
LCD market would depress earnings for quarters to come. 
AMAT, KLAC, LRCX, ASYT all fell on the news. The SOX
struggled to breakout of negative territory despite
the strong rally in progress. The SOX ended up only
+2.64 points and refuses to move over 415. 

The Dow took a hit early as Pfizer was slammed on 
comments in a Canadian newspaper that 14 people had
died while taking Celebrex. Pfizer fell -2.50 on the
news before the Canadian equivalent of our FDA said
there was no relationship between the deaths and
Celebrex. Pfizer also fired back that there was no 
proof in any form of a relationship, was misleading
and not supported by clinical facts. Pfizer repeated
that historical long term studies on more than 30,000
patients had shown no cardiac risks for Celebrex. If
they are lying or misrepresenting the facts it would
put them out of business. I believe they are being
painted with the same Merck brush and at $29 this is
a buying opportunity. Merck on he other hand is in
serious trouble. A FDA study posted yesterday showed
that VIOXX raised heart attack risk +370% over those
patients on Celebrex. Also, news continues to suggest
that Merck has known this and kept it quiet for at
least four years. With 30 million people having taken
VIOXX the outlook for Merck is not good. We have been
holding puts on MRK in the editors play section since
October 10th at $30.35. MRK closed today at $27 and
I am looking for it to drop into the teens once they
slash the dividend to pay for litigation and settlement
expenses. 

A major component to the equity rally today was a strong
drop in oil prices with a close at $48.85, -2.05 for the
day. I have been saying in this column for months that
I expected oil prices to fall after the election but
only on a temporary basis. The risk of a terrorist
attack designed to disrupt oil before the election has
passed and oil inventories rose +6.3 million bbls on
Wednesday. Saudi cut prices on two grades of crude due
to falling demand. Need I say more? The speculation
event is over and we could just wander until we see
what the winter brings in terms of weather. A cold
winter could put the pressure back on and a mild winter
could keep supplies intact and prices on hold. This is
only a temporary dip and should be used as a long term
buying opportunity for oil stocks. Fred Bergsten with 
the Intl Institute of Economics said today that we would
likely be seeing $60 to $70 oil soon based on long term
demand and current production trends.

Yassar Arafat died this morning at a hospital in France
but was resurrected after lunch. News stories abounded
all morning that he had died. Even Bush was asked during
his morning press conference how he felt about Arafat's
death. Later in the afternoon a carefully worded statement
from the hospital said Arafat had not died but was in a
grave condition. Rumors were flying that he was brain
dead and being kept clinically alive on life support 
until arrangements for transfer of power had been made.
The hospital said they made the statement at the request
 of his wife, "with respect to the discretion demanded 
by his wife". Another quote from a high-level Palestinian
official tonight says "Arafat is unconscious and has 
undergone a general systems collapse. He is being aided
by respiratory machines and his condition appears 
irreversible, but reports of his death are not true." 
Obviously we are all subject to the rumors in the press
and we will not know the real story until it plays out
but I think we can read between the lines.  

Google was knocked for a loss and traded down to $180
based on current expiring lockups, evaluation concerns
and a downgrade from UBS. UBS cut GOOG to a sell and
set a price target of $160. 39 million shares will come
out of lockup on Nov-15th and that will triple the current
shares available to trade. GOOG traded to a high of $201
on Wednesday. 

None of the above events slowed the post election bounce
and resistance levels were breaking across the board. 
The Dow rallied to close at 10314 and a gain of +177
points. Resistance at 10200 and 10250 were bowled over
with hardly a sign they were crossed. The longer term 
down trend from February is in danger of breaking and 
opening the way for a much stronger move higher. While
it is far too soon to be projecting new Dow highs for 
the year or a multi month rally ahead it does look 
promising. The Dow has a first test of out of trend 
resistance at 10350 and we could easily reach that 
level tomorrow. Should that level be broken the next 
really significant resistance range is 10450-10550. 
That is only a days trade away from our close tonight
if we could tack on one more triple digit move to the
current string of gains. Unfortunately the current 
nine-day rebound from 9708 has added +605 points in a
very short period of time. That could be stressing the
realm of potential for this week. 

The SPX has managed an even more impressive feat of
rebounding from its 1090 low on Oct-25th to close only
-2 points from a new high for the year. This is a major
move and we have seen multiple resistance levels fail
to make this happen. While I am very bullish on the 
outlook for the market as represented by the SPX I 
still have concerns about tomorrow. Just hitting a 
new high for the year at 1163 would be resistance 
enough but the 50% retracement level for the entire
bear market drop is 1061. That is EXACTLY where the
bounce on Thursday stopped. This is a major resistance
point and a breakout here would be huge with no real
resistance between the current level and 1250 other
than a speed bump at 1075 for the 2002 resistance highs.
I can't stress enough how important this resistance 
test will be. It is like the final hurdle in a race
and having nothing but open track remaining to the 
finish line. Let the sprint begin!

SPX Chart

 
Russell Chart

 

Adding to this euphoria was a remarkable day by the
Russell which closed at 601.63 and only five points
from a new all time closing high at 606. This is a
major breakout about to happen and a move over 606
will trigger the booster rockets for the current rally.
Again, like the SPX this 606 level has been resistance
for all of 2004 and was resistance at the top in 2000
as well. The all time intraday high was 614 in March
of 2000 but 606 was the close. This is a major hurdle
but I am more confident of the Russell trading higher
than the SPX on Friday. Actually I would not bet on
either until next week but I would happily be wrong. 

I saved the worst for last with the Nasdaq tacking on
a measly +19 point gain. The SOX weakness was a bitter
pill for tech traders and soured their appetite for
chip stocks. The Nasdaq has posted some big gains over
the last month when the Dow was lagging but has failed
to keep pace with the new highs of the Russell and SPX.
The Nasdaq did manage to close well over 2000 and the
next major resistance is 2050 with 25 point resistance
increments above 2050. Nasdaq 2116 is the 25% retracement
level of the bear market drop but we need another +100
points before we start worrying about that psychological
trip wire. 

SOX Chart

 
NYSE Composite Chart

 

One indicator of real market strength is the NYSE
Composite Index. ($NYA) Because the Dow is only 30 
stocks and can be significantly impacted by only one
stock, like the +4.23 gain in MO today, the NYA is a
better gauge of NYSE strength. The NYA closed at 6885
today and that is an ALL TIME HIGH for the index. Yes,
higher than 2000, higher than any prior level. The prior
high was 6812 back in Sept-2000. With the NYA in breakout
mode the next resistance could be near 7100 and again
at 7500. These numbers are air pockets more than real
resistance based on the recent gains. 

Also hitting resistance highs was the Wilshire 5000 at
its 11371 close. This equals the high for all of 2004
and is also a three year high. Like I said, bullishness
is breaking out all over. 

Wilshire 5000 Chart

 

As a trader I see these resistance highs being tested
across the board on the Russell, SPX and Wilshire and
think logically that we should see some profit taking.
One small fact always gets in the way. Logic rarely
works in the markets. While I was cautious in the
markets at the close today and took a winning futures
position off the table I believe the risk is to the
upside not the downside. 

A contrarian factor was the low on the VXO this morning
at 13.05. While this should have been a warning it was
justified by the strong order flow to the upside. The
A/D line was 6:1 advancers to decliners and the new
highs hit 674 across all markets a number we have not
seen since March 8th at 704. New lows were only 84. 
The internal strength was very strong and it was strong
yesterday as well. It definitely appears a bull market
rally has broken out as analysts expected. The VXO rose
in the afternoon as the rally progressed and indicated
traders were increasing their put buying and not entirely
confident the bounce would stick. This is good news and
represents a healthy market. 

Oil is moving lower and terror concerns have passed with
no attacks despite significant public events. Bush won
and he was the market favorite for his tax cuts and
business friendly positions. Traders on the floor clapped
and cheered on Wednesday when news broke about the Kerry  
concession. Think what you want about the candidates but
the market has clearly shown which it favored with the
Kerry drop on Tuesday and the bounce once Bush won. A
word of caution however, oil has rebounded from the 50
day average on every sell off for the last year. That
average tonight is 48.70. The close was $48.75.

Crude Oil Chart

 

This market picture should produce some exciting days 
ahead. Whether or not Friday will be one of them is up
for grabs. If we had a strong Jobs Report tomorrow I
think the odds are good we could see some further moves
higher. Even if it is weak I think the market would 
ignore it but a negative number could spoil the party
at least for Friday. Next Wednesday is a Fed meeting
but I doubt it will slow the buying. According to 
TrimTabs.com investors poured $1.8B into stock funds
this week with $1B going into ETF stocks alone over 
the last three days. The fund inflows more than doubled
last weeks numbers and money was coming out of bond funds
and international funds. The bull is back and the bears
have gone into hibernation. At least that is the way it
looks tonight but two days does not make a post election
market. Until the trend changes the game plan will be 
to buy the dips. Let's just hope the dips are small and
the rebounds are strong. 
  
Sell Too Soon! 

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

Dell Inc - DELL - close: 36.81 change: +0.45

WHAT TO WATCH: DELL has been a big winner the last few days.  The 
stock bounced from the $34 level on Oct. 26th and is now nearing 
major resistance at the $37.00 level.  Technicals have turned 
positive and readers can watch it for a breakout.  If DELL can 
push through the $37 mark it would produce a new spread, triple-
top breakout buy signal on its P&F chart, which happens to 
already point to a $45 target.  Watch for earnings on November 
11th.  




---

Tractor Supply - TSCO - close: 35.80 change: -0.42

WHAT TO WATCH: Hmm... TSCO is looking like a bearish candidate.  
The October rally is beginning to fade and there has been no 
participation in the market's post-election bounce.  The stock is 
already suffering in a long-term trend of lower highs and lower 
lows.  Now the MACD indicator is beginning to roll over and 
suggest a new leg down.  Consider shorts under $35.00 and target 
$31-30.




---

Williams Cos - WMB - close: 13.11 change: +0.33 

WHAT TO WATCH: We're still watching shares of WMB.  The company 
reported earnings today that beat estimates by 7 cents per share.  
Volume was very strong and WMB broke through resistance at the 
$13.00 mark to hit new two-year highs.  Most energy bulls are 
pretty positive on natural gas and WMB could be a way to play it.  
Watch for a bounce from $12.80 or a new high over $13.21. 




---

NVIDIA Corp - NVDA - close: 15.41 change: +0.28

WHAT TO WATCH: Semiconductor stocks didn't do quite so well today 
after a Wall Street firm downgraded the group.  NVDA managed to 
post a 1.8 percent gain anyway.  Bulls can be encouraged by the 
breakout over its simple 100-dma but the stock remains under 
resistance near $15.75-16.00.  Watch for the move higher and then 
consider positions, especially now after the company's earnings 
report.  NVDA managed to best estimates by 6 cents per share.




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

K $44.02 +0.75 - Kellogg may not be the most exciting stock in 
the market but shares were moving strongly higher today.  K has 
been consolidating between $40 and $43 for the past six months 
and is now breaking out to new five-year highs.  The next level 
of resistance is the $50.00 region.

MYL $16.42 -0.22 - There has been no participation in the 
market's post-election rally.  Shares are nearing support near 
$16.00.  Look for the breakdown.

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

Stocks Rally, Day Two
- J. Brown

Stocks soared for a second day in a row as Wall Street celebrates 
a relatively clean end to the election.  The fact that the 
election is over and without any terror incident is a big 
confidence booster for investors.  Adding to the bullish euphoria 
was a four-percent drop in crude oil prices.  The December 
contract for crude closed under $49 a barrel for the first time 
in over a month.  

Overall the market internals were very bullish.  Advancing stocks 
outnumbered declining stocks by 11-to-3 on the NYSE and 18-to-11 
on the NASDAQ.  New highs soared for the second day in a row.  
Today there was more than 500 new highs between the NYSE and 
NASDAQ.  Up volume was more than three times down volume on the 
NYSE and about twice the down volume on the NASDAQ.  Overall 
volume was heavy with a very strong day for the Big Board.  These 
kind of bullish internals are exactly what traders want to see in 
a rally.  

Traders witnessed tons of bullish breakouts in individual stocks.  
One in particular was Dow-component Wal-mart (WMT), which soared 
3.2 percent and broke out over resistance at $55 and its simple 
200-dma.  The company gave a mixed October sales report.  
Revenues were low but gross margins were stronger than expected.  
A change in the tax rate helped and the company guided net 
profits toward the upper end of its guidance.  WMT's strength 
helped propel the RLX retail index to new all-time highs.  

Investors have been expecting a post-election, fourth quarter 
rally and so far it's coming true.  The Dow Industrial's breakout 
over resistance at the top of its downward channel is very 
bullish.  The S&P 500's breakout over 1160 to hit new 2 1/2 year 
highs is very bullish.  The NASDAQ's move over 2000 is 
encouraging.  Everything seems poised to run.  The only thing 
that really concerns me is that so many stocks and so many 
sector-specific indices look overbought already.  Yet even though 
stocks probably need to pause they might not.  Anyone waiting on 
the sidelines doesn't want to be left behind.  This has pushed 
the VIX/VXO indicators to bearish reversal levels.  Normally this 
would be a caution flag and not a good spot to consider new 
bullish positions.  You can bet that there is probably a crowd 
just waiting to buy the dips.  

Tomorrow will be influenced by the Jobs report.  Estimates range 
from +160,000 to +180,000 jobs.  As long as the number is close 
stocks should weather the news pretty well.  Odds are growing 
that after a week of gains stocks probably need to see a little 
profit taking.  If the jobs number severely disappoints it could 
exacerbate any dip. 






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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9497
Current     : 10314

Moving Averages:
(Simple)

 10-dma:  9997
 50-dma: 10110 
200-dma: 10248



S&P 500 ($SPX)

52-week High: 1163
52-week Low : 1018
Current     : 1161

Moving Averages:
(Simple)

 10-dma: 1125
 50-dma: 1118
200-dma: 1119



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1301
Current     : 1516

Moving Averages:
(Simple)

 10-dma: 1477
 50-dma: 1430
200-dma: 1437



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

CBOE Market Volatility Index (VIX) = 13.97 -0.07
CBOE Mkt Volatility old VIX  (VXO) = 14.21 +0.03
Nasdaq Volatility Index (VXN)      = 20.16 -0.66 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.87      1,044,648       910,493
Equity Only    0.64        735,009       469,860
OEX            1.15         66,948        77,306
QQQ            0.58         46,415        26,731


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

Bullish Percent Data

           Current   Change   Status
NYSE          66.8    + 1.8   Bear Correction
NASDAQ-100    55.0    + 2     Bull Confirmed***
Dow Indust.   56.6    + 6.6   Bear Correction***
S&P 500       66.0    + 2.4   Bear Correction
S&P 100       65.0    + 4     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: 0.90
10-dma: 0.93
21-dma: 1.05
55-dma: 1.04


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    2218      1814
Decliners     609      1181

New Highs     378       139
New Lows        9        29

Up Volume   1755M     1156M
Down Vol.    448M      605M

Total Vol.  2224M     1813M
M = millions


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

Commitments Of Traders Report: 10/26/04

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 don't seem willing to place any big 
directional bets ahead of the Nov. 2nd election.  The longs
and shorts are pretty much dead even.  Small traders are 
also narrowing their bullish bias a bit.

Commercials   Long      Short      Net     % Of OI
10/05/04      421,217   435,736   (14,519)   (1.7%)
10/12/04      423,472   436,780   (13,308)   (1.5%)
10/19/04      432,945   441,041   ( 8,096)   (0.1%)
10/26/04      441,263   445,992   ( 4,729)   (0.0%)

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
10/05/04      137,210   114,489    22,721     9.0%
10/12/04      139,175   113,903    25,272     9.9%
10/19/04      147,148   124,827    22,321     8.2%
10/26/04      138,201   121,275    16,926     6.5%

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

Commercials have added to their longs and reduced some shorts
but they remain strongly net bearish here.  Small traders
reduced both their longs and shorts with almost no change in
their bias.

Commercials   Long      Short      Net     % Of OI 
10/05/04      248,190   476,608   (228,418)  (31.5%)
10/12/04      258,457   517,805   (259,348)  (33.4%)
10/19/04      264,860   531,541   (266,681)  (33.4%)
10/26/04      276,128   509,552   (233,424)  (29.7%)

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
10/05/04      308,021     80,373   227,648    58.6%
10/12/04      309,720     62,502   247,218    66.4%
10/19/04      353,903     66,027   287,876    68.5%
10/26/04      345,908     64,061   281,847    68.7%

Most bearish reading of the year: (77,385)  - 09/02/03
Most bullish reading of the year: 449,310   - 06/10/03


NASDAQ-100

There is still very little change in commercials' NDX positions.
Actually there is very little change in the small-traders'
positions too.

Commercials   Long      Short      Net     % of OI 
10/05/04       55,640     32,872    22,768   25.7%
10/12/04       52,572     32,775    19,797   23.2%
10/19/04       52,630     31,940    20,690   24.4%
10/26/04       53,233     31,323    21,910   26.2%

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
10/05/04       12,254    30,693   (18,439)  (42.9%)
10/12/04        8,756    24,400   (15,644)  (47.2%)
10/19/04       10,462    25,243   (14,781)  (41.3%)
10/26/04       10,521    25,388   (14,867)  (42.8%)

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 hedged their bets even more ahead of
the Nov. 2nd election so there is no clear up or downside
bias.  Small traders remain net bullish after the big
change two weeks ago.

Commercials   Long      Short      Net     % of OI
10/05/04       27,498    25,772    1,726       3.2%
10/12/04       24,150    22,849    1,301       2.7%
10/19/04       25,385    24,213    1,172       2.3%
10/26/04       25,707    24,855      852       1.6%
 
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
10/05/04        5,531     5,539   (    8)   ( 0.0%)
10/12/04        8,814     9,167   (  353)   ( 1.9%)
10/19/04        8,327     6,015    2,312     16.1% 
10/26/04        8,405     6,336    2,069     14.3%

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

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

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

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Do not duplicate or redistribute in any form.







PremierInvestor.net Newsletter                 Thursday 11-04-2004
                                                    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: OVTI, PLAB, SFNT, AFG  

Stock Splits
  Announcements:       TASR

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

OVTI - tech stock long -
  Be careful here.  The SOX semiconductor index doesn't
  look that strong.  Be sure that you'r happy with your
  stop loss.
 
PLAB - tech stock long -
  We are growing more concerned over PLAB.  The stock 
  is slipping back towards the $17.00 level and its simple
  200-dma.  There has been no participation in the post-
  election bounce.  If we don't see some strength soon we
  may close PLAB shortly.
 
 
SFNT - tech stock long -
  SFNT was strong on Wednesday but there was not any
  follow through on Thursday.  Shares are still struggling
  with the bottom of the gap down near $33.75.  Traders
  may want to consider taking some profits here.  We may
  do the same and close SFNT soon.  If shares hit $33.75,
  we'll close the play.
  
AFG - non-tech short -
  Even the post-election bounce can not provide enough
  juice to push AFG through hardened resistance at the $31.00
  level.  The stock has tried three or four times in the past
  two days and failed.  Technically this would be a low risk
  entry point to initiate new short positions. 
 

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

TASR shocks with a 2-for-1 stock split

This afternoon TASER International, Inc. (NASDAQ:TASR) announced 
that it will split its stock 2-for-1.  The split will take effect 
in the form of a 100 percent stock dividend.

This dividend will be payable on or about November 29th, 2004 to 
shareholders on record as of November 15th. Post-split TASR will 
have approximately 59.2 million shares outstanding.

This is TASR's third split this year.

About the company:
TASER International, Inc. provides advanced non-lethal devices for 
use in the law enforcement, military, private security and 
personal defense markets. TASER devices use proprietary technology 
to safely incapacitate dangerous, combative or high-risk subjects 
who pose a risk to law enforcement officers, innocent citizens or 
themselves. TASER technology saves lives every day, and the use of 
TASER devices dramatically reduces injury rates for police 
officers and suspects. TASER technology is currently in testing or 
deployment at over 6,000 law enforcement and correctional agencies 
in the U.S. and abroad. (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
---------------------------------
 
Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

KFT     Kraft Foods                34.52     +1.09
TM      Toyota Motor Corp          78.64     +0.94
BP      BP Plc                     60.15     +0.87
WFC     Wells Fargo & Co           61.42     +1.12
CVX     ChevronTexaco              54.39     +1.22
BAC     Bank of America            46.25     +0.61

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

HXL     Hexcel Corp                16.99     +1.04
CBK     Christopher & Banks        18.75     +2.34
DHB     DHB Industries             15.74     +1.69
VTIV    Ventiv Health              18.69     +1.30
MKTW    Marketwatch.com            16.06     +1.47
IFLO    I-Flow Corp                16.74     +1.92

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
WMT     Wal-Mart Stores            56.26     +1.78
MO      Altria Group Inc           54.23     +4.23
CVS     CVS Corp                   46.85     +2.47
GPS     Gap Inc                    22.14     +1.90
UNP     Union Pacific              65.50     +1.69
BNI     Burlington Nrthrn Santa Fe 44.00     +1.55
YUM     Yum! Brands Inc            45.72     +1.48

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

QCOM    Qualcomm Inc               38.07     -1.80
BOBJ    Business Objects           21.07     -4.19
WLS     Williams Lyon Homes        67.59     -2.11
IPMT    Ipayment                   40.40     -4.24
AWIN    Arch Wireless Inc          26.60     -2.59
JOSB    Jos A Bank                 26.59     -4.00
SAM     Boston Beer Co             22.94     -2.20

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

GOOG    Google                    184.70     -6.97
CSG     Cadbury Schwepps           33.40     -0.13
TSCO    Tractor Supply Co          35.80     -0.42


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

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







DISCLAIMER

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