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Daily Newsletter, Sunday, 11/07/2004

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PremierInvestor.net Newsletter          Weekend Edition 11-07-2004
                                                    section 1 of 3
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: Breakout in Progress         
Market Sentiment: Fourth Quarter Rally     
Watch List: Mining to Drugs and more!          

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
       WE 11-05        WE 10-29        WE 10-22        WE 10-15 
DOW    10387.54 +360.07 10027.5 +269.66 9757.81 -175.57 -121.82 
Nasdaq  2038.94 + 63.95 1974.99 + 59.85 1915.14 +  3.64 -  8.47 
S&P-100  557.90 + 17.25  540.65 + 15.49  525.16 -  6.64 -  6.67 
S&P-500 1166.17 + 35.97 1130.20 + 34.46 1095.74 - 12.46 - 13.94 
W5000  11049.59 +340.64 11068.9 +320.91 10748.0 - 90.63 -125.85 
SOX      417.83 +  5.58  412.25 + 17.09  395.16 + 13.79 -  8.15 
RUT      604.29 + 20.50  583.79 + 16.02  567.77 -  0.65 -  6.23 
TRAN    3572.50 + 75.08 3497.42 +125.48 3371.94 + 19.26 + 16.68 
VXO       14.36           16.57           16.09           15.89 
VXN       19.47           21.90           21.36           21.80
=================================================================

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

If investors had realized how strong the post election Bush
bounce was going to be the margin of victory may have been
a lot wider. The markets are in breakout mode and a sudden
burst of jobs activity should guarantee they stay that way.

Dow Chart

 
Nasdaq Chart

 
SPX Chart

 


What a week! The Dow was up +3.6% and the SPX stretched 
its streak of consecutive daily gains to nine days. The
SPX has not posted a streak like that since 1997. New 
multiyear highs are popping up everywhere. Bulls have 
broken out of the channel and new individual 52-week 
highs were seen on 722 stocks on Friday. For the third
consecutive day up volume has been nearly 3:1 over down
volume and that volume has been strong with four 
consecutive days in the 4.5 billion share range. 

The markets exploded out of the gate on Friday and the
incentive was a blowout jobs report. The headline Jobs
number showed a gain of +337,000 jobs and nearly twice
the official estimates of +160k-175K and nearly three 
times the whisper number at 125,000. It was a monster
number and there was improvement in almost every area.
Even September's gains were revised up +43,000 from the
prior 96,000 estimate. August gains were revised up 
by +70,000 to 198,000 from 128,000. This was a simply
incredible report given the persistent weakness in the
various economic reports over the last month. 

The first conclusion analysts jumped to was a strong 
bounce in temporary jobs due to the hurricane rebuild
effort. There was an increase in construction of +71K
jobs and the BLS said many of these were hurricane
related. More important was an increase of +272,000
jobs in the service sector. Temporary employment jumped
+48,000 and suggests there could be a continued increase
in permanent jobs ahead. Total Household employment,
a completely different survey, jumped +298,000 for the
month. Adding it all together we saw a +337K headline, 
+43K increase for Sept, +70K increase in Aug and a gain
in household jobs of +272k for a grand total of +722,000
jobs. It does not get any better than this and it erased
the "Bush Jobs Deficit" completely. How ironic that the
Jobs release in October was well below estimates and
allowed Bush to be verbally abused at even a higher
intensity level for the last month of the campaign. 
All during that time the actual numbers were exploding.
Hindsight is always 20:20.

The markets could not have been more excited. A monster
increase in jobs for the October period suggests Nov
and Dec could also be strong. Holiday retailers should
be ecstatic as jobs produce happy consumers. That allows
for profits in the entire retail food chain and a ripple
effect that will be felt by manufacturers. 

The downside of the jobs numbers was a sharp increase
in the expectations for continued rate hikes. On Thursday
the expectations were only slightly over 50% for a hike
in December and that jumped to 81% on Friday. There is
some talk now that a 50 point hike could be in the cards
for November. Obviously this would not be received well
by traders but with oil falling it might be a minimal
impact. 

Oil hit a low near $48 on Friday and well below the 
$55.65 high we saw last week. Unfortunately the rate of
decline is slowing and we saw a rebound at the close to
$49.65. As I pointed out on Thursday night the price of
oil has always rebounded from the 50 day average since 
October of last year and that average is $48.72 tonight.
Oil has hovered between $49-$51 for a week and a break 
back over $51 could start the cycle all over again. Gas
is back over $2 again and a survey taken last week showed
69% of consumers were planning on spending less this
holiday as a result of higher energy prices on already
tight budgets. 

The Dow posted another strong gain of +73 points and
after a late morning break from the highs at 10400 it
returned to test them again right at the close. The
morning jump pushed it over the 10350 resistance and
then used that same level as support on the intraday dip.
The long term down trend may be over but there is still
a rough road ahead. The 10450-10550 resistance range 
that has held since March is probably not going to fall
easily. I believe it will fall and with the current
momentum it could easily fall soon. However I have
some concerns I will point out in a minute. 

The Nasdaq managed to post another gain despite a lack
of excitement in techs. Without help from the SOX the
Nasdaq is clawing its way higher but well below the
ramp speed of the other indexes. With very strong 
resistance just ahead at 2050 there could be some
hesitance to join a party that is out of chips. I 
believe this will change also but even if it didn't 
a Nasdaq adding +15 points a day consistently is not
really a bad thing from an investor point of view. 
Next week we have Dell and Cisco earnings and while
they are not expected to move the market higher with
blowout earnings they could confirm increased growth
in the tech sector. 

SOX Chart

 
Russell Chart 

 
Wilshire Chart

 

The Russell was the index I felt might be indicating 
that the rally may slow next week. The opening spike 
shot up to over 607 but it declined most of the day 
with only a small bounce into the close. The Russell 
has very strong resistance at 606 and it is knocking 
on the door but the energy seems to be slowing. The 
Russell is up +7% over the last two weeks and while 
there was some consolidation just before the election
it still needs to rest. 

The concerns I mentioned earlier are the strongly 
overbought conditions and the very strong overhead
resistance. Couple those with the Fed meeting next
Wednesday and a strong economic calendar and there 
is ample reason for a pause. I do not believe the 
rally will fail and return to the prior trend but 
I do believe we could see some consolidation at or
below the current levels. I would look at any dip
as a buying opportunity. 

The market positives are far too many for the bears
to ignore. The missing piece of the economic puzzle
was the weak labor market and Friday's report completes
that bullish puzzle. Oil has lost its luster and while
it may turn higher again most investors have now become
immune to the constant sound bites about the price of
oil. Economic prosperity can withstand high oil prices
better than a stagnant economy and we could be on the
verge of a turnaround. The terrorist threat appears
to be dwindling and dozens of analysts have said the
Bin Laden tape could be a sign they are losing their
credibility around the globe. We had dozens of high
profile public events in the U.S. and the Olympics 
in Greece and despite high profile threats that they
would decimate us nothing happened. The Bush election
is being proclaimed the best thing for the markets 
short of abolishing the IRS and the odds are good he
might pull that off as well. Add in the potential for
privatizing social security and market analysts are 
positively giddy. 

Analysts don't create a bull market by calling their
brokers to place orders. They create a bull market
by energizing millions of investors with excitement
that prompts them to call their brokers or click a
mouse. The hysterical frenzy on stock TV this week
is bordering on unbelievable. Headliners are actually
yelling at each other and physically pounding the 
table screaming buy. Yes, I am talking about Cramer. 
The man was just getting over a weeklong bout of
hoarseness and yelled himself into a stuttering fit
on Friday telling a guest real estate analyst who
was recommending real estate as an investment that 
he was crazy and he was going to short him and use 
the money to buy more stocks. Granted Cramer is not
your ordinary talking head but he is a high profile
symbol of the bullishness in the market. 

With the markets at new highs and no sellers in sight
it should make technical analysts more cautious about
the impending resistance levels. Instead most analyst
panels look more like the hear no evil, see no evil, 
speak no evil monkeys. Everybody is afraid to say
anything negative. The negatives I see are the current
escalation of aggression in Iraq, the impending death
of Arafat and growing tensions over Iran and North
Korea. Second term presidents are dangerous. They are
not known for restraint because they have run their
last election campaign. I just found out today that
there is a growing wave of boycotts in Europe against
US products to protest the election. Games are being
played in the currency markets that could eventually
topple not only the rally but the economy as well. 
The dollar has been crushed since the middle of October
and it was especially bad over the last three days.
Analysts suspect government intervention from overseas
in an effort to warn Bush he better think twice before
making any major policy changes that impact them. The
current account deficit must be addressed or the dollar
will become the next "oil" and one that could actually
tank the current economic boom. On Friday bonds sold 
off, gold hit a 16 year high and the dollar hit an all
time low against the Euro. Definitely some economic 
problems ahead as evidenced by those events. 

Dollar Chart - Five Year lows

 


For next week we have a strong economic calendar but
after the jobs numbers there should be nothing that
can trip up the rally. The markets may pause ahead
of the Fed meeting on Wednesday on fears of a 50 
point hike instead of just a 25 but the outlook
statement can only be positive. I would look to buy 
any dip above Dow 10250 and the 200 day average. The
SPX closed at a new 32 month high at 1166 and should
be in breakout mode. The official analyst target is 
1250 for the year end. 

The impending death of Arafat on November 15th could
cause some market ripples but they should be minimal.
The latest rumor suggests that Arafat will not be 
allowed to officially die until after Ramadan ends
which is Nov-13th in Palestine. This also gives
them time to find a burial location. Opposing forces
are currently locked into a fierce battle over the 
prospective location. Sharon has vowed he will not be
buried in Jerusalem as long as he is Prime Minster. 
It is traditional for Muslims to be buried within 24
hours of death and the arrangements need to be in 
place before he dies such a long way from home. His
death would trigger 40 days of mourning and many say
some serious Fatah infighting, the potential for
a new series of suicide bombings and Israeli 
reprisals. This could be a very serious event.

The historical trend for a post election rally is 
still intact. However several other trends have gone
down in flames. The Redskin loss the weekend before
the election has predicted the defeat of the incumbent
correctly since 1933. It obviously failed this year. 
The Stock Traders Almanac claims that since 1904 any
time the Dow has lost more than -0.5% in October the
incumbent has lost. This year broke that 100-year
trend with the Dow loss and the Bush win. There were
several others but you get the picture. Hey, the SOX
came back from a 0-3 deficit to win the playoffs and
the series. This is a year for historical trend breaks.
Let's hope the trend for November and December to be
the top two market months of the year is not the next
trend to break. 
  
Sell Too Soon!

Jim Brown

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

Fourth Quarter Rally
- J. Brown

The fourth-quarter, end-of-year, post-election rally has begun.  
The Industrials have broken through the top of its descending 
channel. The NASDAQ is back above 2000 and the S&P 500 index is 
hitting new 2 1/2 year highs.  Volume has been very strong and 
market internals have been bullish since the November 2nd 
election.  Wall Street is not only happy that the election is 
over, that Bush won and that he was the clear winner but the 
markets are also excited about the super-strong jobs number on 
Friday.  Boosting investor sentiment was the absence of terrorist 
events, a pull back in oil, and news that Arafat is on the way 
out providing an opportunity for a new leader to emerge and press 
forward on any peace process.

We're finally seeing some selling in bonds as investors rotate 
money back into stocks.  Plus, it would appear that bonds may 
have put in a double-top over the last six-weeks or so.  

In spite of all the bullish euphoria if you look at the sentiment 
indicators we have a mixed bag.  Nothing goes up in a straight 
line and right now stocks look overbought and due for a pull 
back.  Don't panic.  It's perfectly normal for stocks to 
oscillator up and down in this new up trend.  Currently the ARMS 
index short-term moving averages have fallen into bearish 
territory suggesting we're near a top.  The volatility indices 
second that notion with the VIX/VXO at bearish reversal levels.  
In contrast what we see as a long-term positive are the bullish 
reversals in the bullish percent data.  

Yes, the fourth quarter rally appears to have started.  Now we 
just need to get a bit of a consolidation to let off some steam 
and give us another entry point.  You can bet that there is a 
crowd waiting to buy the next dip.  

Looking toward next week the focus will be on Wednesday's FOMC 
meeting and any change in interest rates.  As long as they don't 
surprise us with a 50-point jump stocks should do okay.  Plus, 
we'll hear from tech giants Cisco Systems (CSCO) and Dell Inc 
(DELL).  Guidance from these two companies could have an impact 
on investor sentiment and the rally in techs. 

Welcome to November.  According to the Stock Traders Almanac the 
months of November and December happen to be two of the strongest 
months of the year for stocks.



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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9585
Current     : 10387

Moving Averages:
(Simple)

 10-dma: 10060
 50-dma: 10114 
200-dma: 10247 



S&P 500 ($SPX)

52-week High: 1170
52-week Low : 1031
Current     : 1166

Moving Averages:
(Simple)

 10-dma: 1132
 50-dma: 1119
200-dma: 1119



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1301
Current     : 1525

Moving Averages:
(Simple)

 10-dma: 1485
 50-dma: 1432
200-dma: 1437



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

CBOE Market Volatility Index (VIX) = 13.84 -0.13
CBOE Mkt Volatility old VIX  (VXO) = 14.36 +0.15
Nasdaq Volatility Index (VXN)      = 19.47 -0.69 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.69      1,138,538       785,612
Equity Only    0.51        879,460       444,502
OEX            0.82         65,124        53,610
QQQ            1.50         41,605        62,484


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

Bullish Percent Data

           Current   Change   Status
NYSE          68.0    + 1.2   Bear Correction
NASDAQ-100    62.0    + 7     Bull Confirmed***
Dow Indust.   60.0    + 3.4   Bear Correction***
S&P 500       68.4    + 2.4   Bull Confirmed***
S&P 100       69.0    + 4     Bull Confirmed***


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: 0.78
10-dma: 0.81
21-dma: 1.03
55-dma: 1.03


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    1558      1812
Decliners    1318      1211

New Highs     261       137
New Lows       10        17

Up Volume   1360M     1355M
Down Vol.    703M      517M

Total Vol.  2123M     1892M
M = millions


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

Commitments Of Traders Report: 11/02/04

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

Considering the fact that the latest data was taken as of
election day, Nov. 2nd, it's no surprise to see both 
commercials and small traders hedging their bets.  The 
next round of data should be more informative. 

Commercials   Long      Short      Net     % Of OI
10/12/04      423,472   436,780   (13,308)   (1.5%)
10/19/04      432,945   441,041   ( 8,096)   (0.9%)
10/26/04      441,263   445,992   ( 4,729)   (0.4%)
11/02/04      446,192   441,676   ( 4,516)   (0.4%)

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
10/12/04      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%
11/02/04      136,290   132,040     4,250     1.5%

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

E-mini traders are not as humble as the larger S&P futures
traders.  Commercials remain bearish and small traders 
have pushed their bullish bias to new multi-week levels. 
Just remember, this data is post-election. 

Commercials   Long      Short      Net     % Of OI 
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%)
11/02/04      307,053   580,081   (273,028)  (30.7%)

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
10/12/04      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%
11/02/04      395,029     63,746   331,283    72.2%

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


NASDAQ-100

Just as small traders pushed their bullish S&P bias to multi-
week extremes; they've done the opposite on the NDX with a 
new multi-week bearish extreme and a new low for the year.

Commercials   Long      Short      Net     % of OI 
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%
11/02/04       53,002     31,231    21,771   25.0%

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
10/12/04        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%)
11/02/04        8,886    36,621   (27,735)  (61.3%)

Most bearish reading of the year: (27,735) - 11/02/04
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

Neither commercials nor small traders seem willing to place
any big bets but both are somewhat bullish on the Industrials.

Commercials   Long      Short      Net     % of OI
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%
11/02/04       25,319    24,261    1,058       2.0%
 
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
10/12/04        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%
11/02/04        7,952     6,306    1,261      8.8%

Most bearish reading of the year: (12,106) -  3/09/04
Most bullish reading of the year:   8,523  -  8/26/03
 

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

Hecla Mining - HL - close: 7.18 change: +0.34

WHAT TO WATCH: Investors have reacted positively to HL's recent 
earnings report and news that gold is hitting 16-year highs 
doesn't hurt the mining sector.  The five percent rally through 
resistance at $7.00 looks like a potential entry point.  Volume 
has been strong for two days in a row and short-term technicals 
are bullish.  Plus, its MACD indicator is nearing a new buy 
signal.  Bulls need to watch out for current resistance at $7.50.  
The P&F chart looks positive as well with a new buy signal and a 
$13 target.




---

Dionex Corp - DNEX - close: 58.84 change: +1.64

WHAT TO WATCH: We don't see any specific news to account for 
Friday's breakout in DNEX.  Shares have spent the last five weeks 
consolidating between $54 and $57.50.  Friday's breakout not only 
puts DNEX at a new all-time high but its MACD has produced a new 
buy signal.  The P&F chart is very bullish with a spread, triple-
top breakout and a $94 price target.  We'd probably target a move 
to $65.00.  Expect some resistance near $60.  




---

Taro Pharmaceuticals - TARO - close: 27.95 change: +1.40

WHAT TO WATCH: TARO has spent the last few days consolidating its 
breakout over resistance at $25.00 and the bottom of its gap 
down.  Now shares have pushed through the simple 100-dma and look 
ready to challenge resistance at the top of the gap near $30.00.  
Aggressive traders may want to consider positions here.  We'll 
watch for a move over $30.




---

UnitedGlobalCom - UCOMA - close: 8.06 change: +0.57

WHAT TO WATCH: The 7.6 percent rally on volume that was 8.5 times 
the normal looks like a news-inspired move.  Yet we can't find 
any news on UCOMA to account for the bullish breakout over its 
simple 200-dma and resistance at $7.85-8.00.  We did see that 
UCOMA is due to report earnings on Tuesday, Nov. 9th but unless 
someone leaked the numbers early we can't imagine what is driving 
the stock.  The move has produced a new MACD buy signal.  This 
looks like a momentum-type entry point but we'll wait to see what 
happens after its earnings report.





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

OMI $27.82 +0.55 - OMI has broken out of a eight-month 
consolidation/trading-range and is now hitting new all-time 
highs.

HNT $25.26 +0.86 - HNT has rallied to resistance at the simple 
and exponential 200-dma's.  Watch for a breakout.

QLGC $33.28 +0.38 - The move over $33.00 is bullish but the next 
real hurdle is the bottom of the gap down at $35.00.

SUNW $4.78 +0.17 - SUNW is seeing a decent follow through on its 
breakout over resistance at $4.55.

AVT $18.24 +0.67 - AVT has broken through its simple 100-dma but 
is still trading under resistance at $18.50. 

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PremierInvestor.net Newsletter          Weekend Edition 11-07-2004
                                                    section 2 of 3
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:

Tech Stocks
  Bullish Play Updates:  JNPR, OVTI
  Closed Bullish Plays:  PLAB, SFNT
  
Active Trader (Non-tech)
  New Bearish Plays:     TSCO, WGR
  Closed Bearish Plays:  AFG

Stock Splits
  Announcements:         None


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

============
PLAY UPDATES
============

  --------------------
  Bullish Play Updates
  --------------------

Juniper Networks - JNPR - close: 27.84 chg: +0.57 stop: 23.49

It was an okay week for JNPR.  The stock continues to track 
higher but is struggling with resistance near the $28.00 level.  
It may be a coincidence but the NWX networking index is testing 
resistance near the 240 level.  We would keep an eye on the NWX, 
which also has some resistance at the 200-dma overhead.  A 
breakout here would be very bullish.  We also need to be aware of 
Cisco Systems (CSCO)'s earnings report due out Tuesday after the 
closing bell.  How the market interprets CSCO's earnings news and 
guidance could have a big affect on JNPR.  The P&F chart on JNPR 
remains bullish and now points to a $43 target.  We are targeting 
a move to $30.00.  If shares of JNPR dip watch for a bounce from 
$26.00, which could be used as a new buying opportunity.

Annotated Chart:

 

Picked on October 31 at $26.61 
Gain since picked:      + 1.23
Earnings Date         10/14/04 (confirmed)
Average Daily Volume:      9.1 million 



---

OmniVision Tech - OVTI - close: 15.98 chg: +0.19 stop: 14.40      

Shares of OVTI continue to stair step higher or should we say 
OVTI remains in its stair-step pattern. The stock has been 
consolidating sideways for the last few days so it's time for 
shares to step up again.  The $16.40 level appears to be the top 
of the current week-long trading range.  A breakout at $16.40 
should lead to the next step higher.  Watch out for the 
exponential 200-dma near $17.00.  Given the sideways 
consolidation we're going to raise our stop loss to $14.99.  Keep 
an eye on the SOX semiconductor index.  The SOX was slow to join 
the rally this past week so could play catch up this week.  
That'd be good news for OVTI.  Remember, our profit target was a 
move into the $17.00-17.50 range.  If OVTI cracks $17 we'll 
probably exit.

Annotated Chart:

 

Picked on October 20 at $15.03
Gain since picked:      + 0.95
Earnings Date         11/17/04 (unconfirmed)
Average Daily Volume:      5.0 million 




============
CLOSED PLAYS
============


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

Photronics - PLAB - close: 17.15 change: -0.10 stop: 16.75

The action in PLAB has bothered us all week.  After failing to 
breakout over the $18.00 level in mid-October shares are now 
slipping lower under a series of lower highs.  So far support 
near $17.00 and its simple 200-dma is holding up but we don't 
trust it.  The stock has broken its two-month trend of higher 
lows.  We'd rather be safe than sorry so we're closing the play 
now.  If PLAB can breakout over $18.00 we might be tempted in a 
new bullish position.  

Picked on October 20 at $17.48
Gain since picked:      - 0.23
Earnings Date         08/18/04 (confirmed)
Average Daily Volume:      576 thousand



---

SafeNet Inc - SFNT - close: 33.00 change: -0.10 stop: 27.00

SFNT produced some decent follow through on the breakout over 
$30.00 and its simple 200-dma.  Yet so far the stock can not seem 
to get over the $33.50 level.  The last three days have been very 
bullish for the market as a whole but SFNT has been unable to 
push higher.  We're going to exit now and book a small gain.  
Readers may want to keep SFNT on their watch list for a bounce 
from $30.00 or a move over $34.00.  Either could be potential 
entry points. 

Picked on October 31 at $30.63 
Gain since picked:      + 2.37
Earnings Date         10/28/04 (confirmed)
Average Daily Volume:      363 thousand




==================================================================
Stock Bottom / Active Trader (AT) section
==================================================================

=========
NEW PLAYS
=========

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

Tractor Supply Co - TSCO - close: 35.68 change: -0.12 stop: 37.05

Company Description:
Tractor Supply Company operates 500 stores in 32 states, focused 
on supplying the lifestyle needs of recreational farmers and 
ranchers. The Company also serves the maintenance needs of those 
who enjoy the rural lifestyle, as well as tradesmen and small 
businesses. Stores are located in towns outlying major 
metropolitan markets and in rural communities. The Company offers 
the following comprehensive selection of merchandise: (1) equine, 
animal and pet products, including everything necessary for their 
health, care, growth and containment; (2) maintenance products 
for agricultural and rural use; (3) hardware and tool products; 
(4) seasonal products, including lawn and garden power equipment; 
(5) truck, trailer and towing products; and (6) work clothing for 
the entire family. (source: company press release)

Why We Like It:
Traders have several reasons to think that TSCO looks like a 
bearish candidate.  First and foremost is the twelve-month trend 
of lower highs and lower lows.  Second is the lack of 
participation in the market's post-election rally and the surge 
higher in the retail sector.  Third are the bearish technical 
indicators like the MACD, which is nearing a new sell signal.  
Fourth is the bearish P&F chart with a $31 target.  Altogether it 
looks like a great candidate to short.  The closest level of 
resistance is the $37.00 mark so we're putting our stop loss at 
$37.05.  We're going to target a drop into the $31-30 range.  
Conservative traders who would prefer a bit more momentum can 
wait for TSCO to trade under $35.25 before initiating positions. 

Annotated Chart:

 

Picked on November 07 at $35.68 
Gain since picked:       - 0.00
Earnings Date          10/11/04 (confirmed)
Average Daily Volume:       422 thousand



---

Western Gas - WGR - close: 27.01 change: -2.69 stop: 29.31

Company Description:
Western is an independent natural gas explorer, producer, 
gatherer, processor, transporter and energy marketer providing a 
broad range of services to its customers from the wellhead to the 
sales delivery point. The Company's producing properties are 
located primarily in Wyoming, including the developing Powder 
River Basin coal bed methane play, where Western is a leading 
acreage holder and producer, and the rapidly growing Pinedale 
Anticline. The Company also designs, constructs, owns and 
operates natural gas gathering, processing and treating 
facilities in major gas-producing basins in the Rocky Mountain, 
Mid-Continent and West Texas regions of the United States.
(source: company press release)

Why We Like It:
Something doesn't smell right here.  WGR reported earnings on 
Friday and smashed estimates with profits 9 cents above analysts' 
expectations.  Yet the stock immediately sold off.  Shares fell 
more than nine percent on volume that was ten times the average.  
WGR's decline proved to be a breakdown below support at $28.00 
and its simple and exponential 200-dma's.  Furthermore it 
produced a bearish sell signal on its P&F chart that points to a 
$22 target.  Why the negative reaction to WGR's positive earnings 
surprise?  We don't know.  We could not find anything that might 
suggest they guided lower or issued cautious comments in the 
conference call.  We're going to play the breakdown and target a 
move into the $22-23 range.  Conservative traders may want to 
wait and watch for a breakdown under possible support at $26.00.  
More aggressive traders can try and short a failed rally under 
$28.  Normally we would not play something this close to 
earnings, nor would we usually chase a big move like this.  
Unfortunately for shareholders of WGR the stock was already 
suffering after the big August decline and WGR was not trading in 
sync with the rest of the energy sector. 




Annotated Chart:

 

Picked on November 07 at $27.01 
Gain since picked:       - 0.00
Earnings Date          11/05/04 (confirmed)
Average Daily Volume:       506 thousand



============
CLOSED PLAYS
============

  --------------------
  Closed Bearish Plays
  --------------------

American Fincl Grp - AFG - close: 30.76 chg: +0.12 stop: 31.01

Wouldn't you know it!  Just when it looked like AFG was beginning 
to roll over under resistance at $31.00 the stock pierced 
resistance to hit our stop loss.  The $31 level has been 
resistance for years so we felt comfortable with our stop at 
$31.01.  AFG continues to look short-term overbought and 
vulnerable to profit taking under $31.00 so we'll keep it on one 
of our watch lists.  If you like to trade stocks in a channel one 
could short AFG here and target $28.50-29.00. 

Picked on October 24 at $27.77
Gain since picked:      + 2.99
Earnings Date         10/21/04 (confirmed)
Average Daily Volume:      193 thousand




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

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

None



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

*****************************************************************
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Newsletter, or any Premier Investor Network newsletter please
contact Contact Support.

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

Copyright (c) 2001-2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter          Weekend Edition 11-07-2004
                                                    section 3 of 3
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 three:

Market Watch for Week of November 8th, 2004
   - Major Earnings
   - Stock Splits
   - Economic Reports

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


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

=========================================
Market Watch for the week of October 11th
=========================================

-----------------
Earnings Calendar
-----------------

*This is not a complete list.  We only try and highlight the 
more significant earnings reports.


Symbol  Co               Date           Comment          EPS Est

------------------------- MONDAY -------------------------------

ACME ACME Communications  Mon, Nov 08  After the market    -0.21
APL  Atlas Pipeline Ptrnr Mon, Nov 08  After the market     0.42
BEV  Beverly Enterprises  Mon, Nov 08  After the market     0.18
BAB  British Airways      Mon, Nov 08  During the market    n/a
CYD  China Yuchai Intl    Mon, Nov 08  ----- n/a -----      0.38
TCR  Cornerstone Realty   Mon, Nov 08  After the market     0.20
CNO  Conseco Inc          Mon, Nov 08  Before the bell      0.34
BAP  Credicorp            Mon, Nov 08  During the market    0.34
XTXI Crosstex Energy      Mon, Nov 08  ----- n/a -----      n/a
INVX Innovex              Mon, Nov 08  After the market    -0.09
JMDT Jamdat mobile        Mon, Nov 08  After the market     0.09
LABS LabOne               Mon, Nov 08  Before the bell      0.39
MCCC Mediacom Comm.       Mon, Nov 08  Before the bell      0.01
MWY  Midway Games         Mon, Nov 08  After the market    -0.24
MNTG MTR Gaming Group     Mon, Nov 08  After the market     0.22
PSUN Pacific Sunwear      Mon, Nov 08  After the market     0.40
PAX  Paxson Communication Mon, Nov 08  After the market     n/a
PPC  Pilgrim's Pride      Mon, Nov 08  Before the bell      0.83
KWK  Quicksilver Resrcs   Mon, Nov 08  After the market     0.17
RMD  ResMed Inc           Mon, Nov 08  After the market     0.43
PKS  Six Flags Inc.       Mon, Nov 08  After the market     0.99
SMTX SMTC Corp.           Mon, Nov 08  ----- n/a -----      n/a
VTIV Ventiv Health        Mon, Nov 08  Before the bell      0.17
WR   Westar Energy        Mon, Nov 08  Before the bell      0.63
WWCA Western Wireless     Mon, Nov 08  ----- n/a -----      0.53


------------------------- TUESDAY ------------------------------

KDE  4Kids Entertainment  Tue, Nov 09  After the market     0.27
ANF  Abercrombie & Fitch  Tue, Nov 09  After the market     0.57
AOLA America Online-Latin Tue, Nov 09  Before the bell      n/a
SIL  Apex Silver Mines    Tue, Nov 09  ----- n/a -----     -0.08
BKH  Black Hills Corp.    Tue, Nov 09  ----- n/a -----      0.53
BWNG Broadwing Corp.      Tue, Nov 09  Before the bell     -0.60
BBW  Build a bear workshp Tue, Nov 09  Before the bell      n/a
CVC  Cablevision Systems  Tue, Nov 09  Before the bell     -0.35
CTIC Cell Therapeutics    Tue, Nov 09  ----- n/a -----     -0.50
CNP  CenterPoint Energy   Tue, Nov 09  Before the bell      0.00
CSCO Cisco Systems        Tue, Nov 09  After the market     0.21
CHRZ Computer Horizons    Tue, Nov 09  After the market     n/a
CSC  Computer Sciences    Tue, Nov 09  After the market     0.66
DISH Echostar             Tue, Nov 09  Before the bell      0.23
FOSL Fossil, Inc.         Tue, Nov 09  Before the bell      0.31
GMST Gemstar-TV Guide     Tue, Nov 09  After the market     0.00
HPC  Hercules             Tue, Nov 09  Before the bell      0.26
IPXL Impax Labs           Tue, Nov 09  Before the bell      0.06
IFX  Infineon Tech        Tue, Nov 09  ----- n/a -----      0.23
KANA KANA Software        Tue, Nov 09  After the market    -0.13
LZB  La-Z-Boy Inc.        Tue, Nov 09  After the market     0.21
LII  Lennox Intl.         Tue, Nov 09  After the market     0.47
LGF  Lions Gate Ent.      Tue, Nov 09  After the market     0.02
MMC  Marsh & McLennan     Tue, Nov 09  Before the bell     -0.05
MCLD McLeodUSA, Inc.      Tue, Nov 09  Before the bell      n/a
OLGC OrthoLogic           Tue, Nov 09  Before the bell     -0.18
PCTY Party City           Tue, Nov 09  Before the bell     -0.21
SCHS School Specialty     Tue, Nov 09  Before the bell      1.50
BID  Sotheby's Holdings   Tue, Nov 09  Before the bell     -0.38
PGR  The Progressive      Tue, Nov 09  ----- n/a -----      n/a
TKTX Transkaryotic Ther   Tue, Nov 09  ----- n/a -----     -0.56
XYBR Xybernaut Corp       Tue, Nov 09  ----- n/a -----      n/a


------------------------ WEDNESDAY -----------------------------

ACAD Acadia Pharma.       Wed, Nov 10  After the market    -0.37
PLB  American Itln Pasta  Wed, Nov 10  Before the bell     -0.26
ANN  AnnTaylor  Stores    Wed, Nov 10  a8     0.28
RMK  Aramark Corp.        Wed, Nov 10  Before the bell      0.46
DHI  D.R.Horton           Wed, Nov 10  Before the bell      1.23
ENER Energy Conv. Devices Wed, Nov 10  ----- n/a -----      0.05
FIC  Fair Isaac Corp.     Wed, Nov 10  After the market     0.20
FD   Federated Dept. Stor Wed, Nov 10  Before the bell      0.35
REV  Revlon               Wed, Nov 10  Before the bell     -0.09
SFP  Salton Inc.          Wed, Nov 10  Before the bell      n/a
SBUX Starbucks            Wed, Nov 10  After the market     0.25
TOT  Total                Wed, Nov 10  Before the bell      2.29
WFMI Whole Foods Market   Wed, Nov 10  After the market     0.46


------------------------- THURSDAY -----------------------------

AEG  AEGON N.V.           Thr, Nov 11  ----- n/a -----      n/a
A    Agilent Technologies Thr, Nov 11  After the market     0.31
AEOS American Eagle       Thr, Nov 11  Before the bell      0.75
BF   BASF                 Thr, Nov 11  ----- n/a -----      n/a
BEAS BEA Systems          Thr, Nov 11  ----- n/a -----      0.08
BKE  Buckle               Thr, Nov 11  ----- n/a -----      0.61
DELL Dell Inc.            Thr, Nov 11  After the market     0.33
DT   Deutsche Telekom     Thr, Nov 11  Before the bell      n/a
KSS  Kohl's               Thr, Nov 11  After the market     0.42
PBY  Pep Boys             Thr, Nov 11  Before the bell      0.20
PIXR Pixar Animation      Thr, Nov 11  After the market     0.24
SI   Siemens AG           Thr, Nov 11  ----- n/a -----      n/a
TGT  Target Corp          Thr, Nov 11  Before the bell      0.37
PLCE Children's Place     Thr, Nov 11  Before the bell      0.61
TIF  Tiffany & Co.        Thr, Nov 11  ----- n/a -----      0.19
URBN Urban Outfitters     Thr, Nov 11  Before the bell      0.29
ZOLL Zoll Medical         Thr, Nov 11  Before the bell      0.25


------------------------- FRIDAY -------------------------------

BSY  British Sky Brdcstg  Fri, Nov 12  ----- n/a -----      0.45
PSS  Payless Shoesource   Fri, Nov 12  Before the bell      0.04


----------------------------------------------
Upcoming Stock Splits In The Next Two Weeks...
----------------------------------------------

Symbol  Company Name              Ratio    Payable     Executable

DVN     Devon Energy              2:1      Nov 15th    Nov 16th
NFB     North Fork Banc           3:2      Nov 15th    Nov 16th
FBNC    First Bancorp             3:2      Nov 15th    Nov 16th
FINL    The Finish Line Inc       2:1      Nov 17th    Nov 18th
SSD     Simpson Manufacturing     2:1      Nov 18th    Nov 19th
STJ     St. Jude Medical          2:1      Nov 22nd    Nov 23rd

-----------------------------------
Economic Reports & Events This Week
-----------------------------------

Wednesday's FOMC meeting will take center stage this week.  Wall
Street will also digest more manufacturing data and retail sales
figures.  Q3 earnings reports are starting to wind down.

==============================================================
                       -For-           
----------------
Monday, 11/08/04
----------------
Kansas City Fed manufacturing index

-----------------
Tuesday, 11/09/04
-----------------
Wholesale Inventories for September
Richmond Fed manufacturing index

-------------------
Wednesday, 11/10/04
-------------------
FOMC meeting on interest rates
Trade Balance numbers for September
Import & Export prices for October

------------------
Thursday, 11/11/04
------------------
Weekly initial jobless claims   Last: 332K   Est: 339K
Veteran's Day - Bond market holiday

----------------
Friday, 11/12/04
----------------
Retail sales for October
Michigan Sentiment numbers (preliminary) for November
Business Inventories
FOMC minutes released for Sep. 21st meeting


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

NTT     Nippon Telephone           22.25     +0.62
DB      Deutsche Bank              81.16     +1.59
FRE     Freddie Mac                67.18     +0.71
UTX     United Technologies        97.25     +1.30
BA      Boeing Co                  51.15     +0.56
CHA     China Telecom              33.56     +0.90

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

NVDA    NVIDIA Corp                17.64     +2.23
GT      Goodyear Tire & Rubber     11.80     +1.57
SKS     Saks Holdings              14.02     +1.53
VCLK    Valueclick Inc             10.91     +1.34
SKO     Shopko Stores              19.83     +1.83
WFII    Wireless Facilities         8.70     +1.34

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
AVE     Aventis                    91.35     +3.46
MMM     3M Co                      81.40     +3.32
AMGN    Amgen Inc                  60.66     +1.66
ECA     Encana Corp                51.50     +1.66
MAR     Marriott Intl Inc          58.07     +1.08
S       Sears Roebuck              45.88     +8.70
ELN     Elan Corp                  27.88     +1.38

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

GOOG    Google                    169.35    -15.35
RIMM    Research In Motion         77.75    -10.33
UVN     Univision Communications   28.79     -4.01
AVY     Avery Dennison             54.90     -6.99
TPP     Teppco Partners            37.69     -1.01
WGR     Western Gas Resources      27.01     -2.69
CPT     Camden Property            44.27     -2.08
WLS     William Lyon Homes         65.10     -2.48
PETD    Petroleum Development      33.43     -3.35

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

SPG     Simon Property Group       57.70     -2.58
KIM     Kimco Realty               53.24     -2.20
BXP     Boston Properties          58.10     -1.84
MAC     Macerich Co                57.75     -3.65
ARI     Arden Realty               33.90     -1.32

=================================================================
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=================================================================
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
contact Contact Support.

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


Copyright (c) 2001-2004  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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