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Daily Newsletter, Monday, 11/15/2004

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PremierInvestor.net Newsletter                   Monday 11-15-2004
                                                    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: Bionic Bulls   
Watch List: More Tech to Watch  


===============================================================
MARKET WRAP  (view in courier font for table alignment)
===============================================================
      11-15-2004           High     Low     Volume   Adv/Dcl
DJIA    10550.24 + 11.23 10563.02 10517.13 1.84 bln 1498/1321
NASDAQ   2094.09 +  8.75  2094.13  2078.84 1.87 bln 1705/1350
S&P 100   566.09 -  0.13   566.64   564.40   Totals 3203/2671
S&P 500  1183.81 -  0.36  1184.48  1179.85
SOX       429.57 +  5.76   432.63   420.53
RUS 2000  623.86 +  1.88   623.86   618.97
DJ TRANS 3611.51 - 16.69  3626.99  3594.12
VIX        13.38 +  0.05    14.06    13.25
VXO (VIX-O)14.21 +  0.16    14.80    14.00
VXN        18.50 -  0.32    19.73    18.42
Total Volume 3,717M
Total UpVol  2,359M
Total DnVol  1,317M
Total Adv  3203
Total Dcl  2671
52wk Highs  419 
52wk Lows    16
TRIN       0.69
PUT/CALL   0.56 
===============================================================

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

Bionic Bulls
Jonathan Levinson

Bulls and bears alike were on the alert for an overdue pullback 
in the indices as option expiration week kicked off.  A premarket 
dip was bought, however, as was every other dip that followed for 
the rest of the day as the indices held their gains, closing 
mixed to positive by session's end.



Daily Dow Chart


The daily Dow chart contains one year's worth of daily data to 
provide some longer range perspective at the expense of short 
term detail. Today's 46 point range broke Friday's high in the 
morning and managed to trade both sides of unchanged for the rest 
of the day.  Once again, there was no pullback, which has been 
the case for nearly all of the move off the October lows.  This 
move is comparable to the December 2003 rally, only it has been 
generally steeper, more like an upside crash than a rally.  The 
move for the past two weeks has resulted in a trending daily 
cycle upphase, with the 10 day stochastic currently buried in 
overbought territory.  This would be the logical spot for at 
least a corrective downphase to kick off, but the bids have been 
relentless.  Bears will want to see a move below 10480-10500 
before thinking about trying to catch the rising knife.  
Resistance going back to February-March 2004 is from 10560-10600.

Daily S&P 500 Chart


Unlike the Dow, the SPX has reached new highs for the year on 
this rally, not because it traveled further but because it 
launched from a much higher relative low of 1089.  It too has 
maxxed out its daily cycle and is due for some downside.  It was 
a slow day, however, with the SPX respecting a less than 5 point 
range.  Today's CBOE total put to call ratio never made it 
above .54, with a low of .44.  While the CBOE put to call ratio 
is a secondary indicator only, due to the multitude of bearish 
and bullish strategies using puts or calls or both, extreme lows 
in put volume over call volume tend to coincide with market tops.  
Today's intraday p/c ratio readings are in that neighbourhood, 
reiterating the message of the trending 10-day stochastics, but 
without cooperation from the price, bearish traders will be left 
holding a great set of arguments and a great big loss.  Better to 
let a new trend at least suggest itself before trying to 
anticipate a decline, however likely.  In this case, we'd want to 
see a close below 1170 at minimum, better yet below 1162 support, 
which should produce preliminary sell signals in the daily cycle 
oscillators.  Until then, the trend will remain clearly up, 
regardless of what the indicators may be cautioning. 


Daily Nasdaq Chart


The Nasdaq traversed all of 16 points for the session, finishing 
8.75 in the green despite intraday bearish divergences galore.  
Volume was moderate and the price held up.  Like the Dow,
 the COMPQ has failed to touch, let alone exceed the year highs, 
but the descending channel breakout is full of bullish promise if 
the price can be driven above 2160.  A quick look at a 3 year 
weekly chart holds up the possibility that this year's decline 
was in fact a corrective bull flag within the rally from the 2002 
lows.  In that case, there's the potential for a move of a 
similar magnitude of the 2003 rally having just commenced on the 
breakout above 1950.  On the other hand, a failure at or below 
2160 would set up a bearish double top.  Given the overbought 
readings on the daily cycle oscillators, I'm more inclined toward 
at least a correction from here.  But until such commences (which 
it clearly has not), the powerful rise from October has to be 
respected.  Bears need to see a close below 2045, confirmed with 
a break below 2035-2025 support, to suggest that a new daily 
cycle downphase (and not just a whipsaw) is underway.


Weekly TNX Chart


Bonds traded a narrow range today around unchanged, finishing 
slightly higher, with ten year note yields (TNX) losing 1 bp to 
finish at 4.19%.  The weekly cycle upphase that launched on the 
successful test of lower rising wedge support confirmed with a 
bullish Macd cross last week.  On this basis, the 3.96%-4.0% 
support level should not be broken on any pullback from here, and 
above 4.26%, 4.38%-4.4% is next resistance for the TNX.


Weekly chart of Crude oil


Crude oil fell below 46 to a 9 week low of 45.30 on the Nymex as 
the financial press reported that rising US reserves had eased 
fears of a Winter supply squeeze.  There was also talk of the 
absence of any weekend supply disruptions that helped move the 
market lower.  The Nigerian labor dispute has yet to be resolved, 
though the government offered to reduce pump prices by 10% which 
the Nigeria Labor Congress was considering today.  Other 
potentially bullish factors cited in support of the price of oil 
were ongoing supply uncertainties, the risk of a colder than 
usual winter, and the threat of sabotage arising from the 
conflict in Iraq.  Crude oil futures recovered part of their 
losses to close -1.16% at 46.775.

Whatever the external factors attributed to the decline, the 
weekly chart's bearish stochastic divergence was sounding the 
alarm from the time of the initial move to 46.  The sharp break 
from the record highs fits well with that divergence, and with a 
downphase now in progress, traders should be looking for a 
pattern of lower highs and lower lows until the next weekly cycle 
upphase gets underway.  45-46 is confluence support on this 
chart, but given the ongoing downphase, we should see that level 
broken and a retest of stronger support at 42.  A bounce at or 
above that level would be clearly bullish for the price of oil, 
given the strong rally of the past 3 years.


In corporate news, meat processor TSN reported a drop of 66M or 
19 cents per share from Q3 to Q4 on rising sales of 7.1B from 
6.6B.  Estimates were for 19 cents per share.  The company 
projects 2005 earnings to come in between $1.15 - $1.45 per 
share.  Analysts are expecting the company to $1.30 per share in 
2005.    TSN closed higher by 1.18% at 17.08.

Insurer/asset manager AIG is reportedly close to reaching a 
settlement with the SEC in the PNC affair, in which AIG has been 
under investigation for allegedly helping PNC to commit 
accounting fraud.  Sources claim that the settlement will cost 
AIG more than 10M, but would help it avoid prosecution by the 
Department of Justice.  AIG added 2.97% to close at 62.84.

GLBC reported a wider loss for Q3 2004 of 102M, up from 80M in Q3 
2003 on revenue of 617M, down from 696M one year ago.  The 
company attributed the declines to its ongoing financing and 
business tweaks, and noted that its gross margins are improving.  
The stock closed lower by 3.05% at 14.60.

Home improvement supplier LOW beat estimates by a penny, 
reporting earnings of 66 cents per share or 522M.  Q3 2003's 
earnings were 452M or 56 cents per share.  Sales were higher by 
16.2% at 9.1B for the quarter, with same-store sales up 5.2%.  
The company estimates Q4 earnings of 58-60 cents.  Analysts are 
estimating 60 cents for the next quarter.  LOW dropped 1.66% to 
close at 59.25.

Gold miner KGC announced the revision of its previously reported 
Q3 earnings of 9.4M to a loss of 133.6M on the basis of a 143M 
reduction in goodwill attributed to its Paracatu mine in Brazil.  
The company noted that its cashflow of 62.5M was unaffected by 
the revision.  KGC got clocked for 5.26% to close at 7.93.

Foodmaker KFT announced that it is in an agreement to sell is 
candy business, including Life Savers, Altoids, Creme Savers, 
Trolli and Sugus, to WWY in a deal worth approximately 1.48B. KFT 
closed lower by .57% at 34.68, while WWY gained 1.07% to close at 
68.08.

DJ announced that it is in a deal to purchase MKTW for 519M or 18 
per fully diluted share, which, including MKTW's 56M cash on hand 
amounts to a net price of 4563M.  According to MKTW, the price 
represents a 46.5% premium on the average trading price over the 
past 60 days.  DJ, which owns the Wall Street Journal, expects 
that the deal will extend its reach and deliver a larger and 
broader audience for online financial news.  After the bell, 
ratings agency Standard & Poors placed DJ on credit watch, with 
the negative implications that such carries, pending a review of 
the company's financial strategies.  S&P stated that any 
downgrade would likely be limited to "one notch".  DJ rose .2% to 
close at 45.10, while MKTW gained 7.92% to close at 18.12.

Reuters reported on the "60 minutes" story last night to the 
effect that MRK had evidence as early as 2000 that Vioxx was 
unsafe.  Two studies, the "Vigor" study of 1999 and the "Topol" 
study of 1998 demonstrated that users of the drug were 
respectively 5 and 6 times more likely to suffer serious 
cardiovascular events than those who did not.  As of the end of 
last month, MRK had been named as a defendant in approximately 
375 lawsuits associated with Vioxx.   The company disputed the 
Topol study, but the 2000 "Approve" study established that 
patients taking Vioxx were exposed to twice the normal risk of 
heart attacks and strokes.  It was on the basis of this study 
that MRK recalled Vioxx on September 30, 2004.  MRK gained 2.42% 
to close at 27.09.

Software provider MUSE reported Q4 earnings of 7 cents or 5.4M, 
beating estimates for 1 cent per share.  On a GAAP basis, the 
company's profit was 4.2M or 5 cents, up from a loss of 2 cents 
per share or 1.8M in Q4 2003, with revenues rising 8% over last 
year's Q3.  MUSE rose 20.87% to close at 5.56.

Cigar and consumer products producer SYBR reduced its loss from 
627K or 34 cents per share to 170K or 8 cents per share, with 
revenue up from 10.3M in Q3 2003 to 13.8M in the current quarter, 
a 34% y-o-y increase.  SYBR added 41.89% to close at 5.25.

In economic news, the lone report for the day was a minor one, 
the New York Empire State Index for November, which came in a 
19.76 compared with estimates of 20.6.  The number was up from 
its October reading of 17.4.  The New Orders component was down
from 21.2 in October to 18.5 in the current month, while 
shipments rose from 19.1 to 21.8.

Associated Press reported that John Snow was staying the course, 
saying that the US supports "the strong dollar" but adding that 
the international forex markets should determine its value.  Snow 
was in Ireland when he stated, "Our policy on the dollar is well 
known. We support a strong dollar. A strong dollar is in 
America's interests...  Our basic policy, of course, is to let 
open, competitive markets set the values. Markets are driven by 
fundamentals and towards fundamentals."   The comments to the 12-
nation eurozone members were in response to the expression of 
concern that the dollar's decline will price European exports out 
of the US market.  The article reported that currency traders 
have a dim view of the "fundamentals" to which Mr. Snow 
ostensibly referred, citing the expanding budget and trade 
deficits under the current administration, the latter of which 
has risen from 496B to 592B over the past year. 

There were 4 resignations announced by the White House, with 
Secretary of State Colin Powell, Energy Secretary Spencer 
Abraham, Agriculture Secretary Ann Veneman and Education 
Secretary Rodney Paige leaving.  No replacements had been 
announced as of this writing.  With respect to Powell, who, as 
Reuters reported, "... was often seen representing more moderate 
views on foreign policy in the Bush administration," an unnamed 
State Department official said that Powell would be staying on 
until his replacement had been named.  Later in the day, there 
were rumors circulated that Condoleezza Rice might succeed him.

In other news, Federal Reserve Governor Mark Olson delivered a 
speech today in which he said that the Fed should continue to 
seek a policy stance that is "more appropriate for sustained 
economic expansion."  By this, he was referring to the ongoing 
rate hikes, which he said need to continue at a measured pace.

For tomorrow, the Producers Price Index and Core PPI will be 
released at 8:30AM, the first half of the monthly story that gets 
completed on Wednesday by the Consumer Price Index release.  The 
October PPI is estimated at +.6% after last month's .1% gain, 
with the core PPI estimated at .1%, down from .3%.  After today's 
slow drift, traders are hoping that the release of this data will 
spur a clear directional move.   With today's action tense but 
narrow, it's not at all clear what the market has in store for 
the next 4 days' worth of op-ex week trading.  On the one hand, 
the heaviest front-month option strikes or "maximum pain" strikes 
are generally far south of current prices.  This would generally 
favor a strong downside move as large option writers push the 
underlying price to a level of maximum profitability for their 
expiring short contracts.  On the other hand, the strong rally of 
recent weeks has likely caused many of these participants to 
hedge by, among other things, buying the underlying securities 
which they may have been short via naked call writes.  In that 
event, the rally may have been fueled by option-relating hedging 
in a bullish feedback loop-  that would certainly explain the 
relentless grind higher across the indices.

While "maximum pain" related bearishness lines up well enough 
with the overbought daily and intraday oscillators across the 
indices, it's important to note that option writers who are 
sufficiently margined to move the indices are equally capable of 
dynamically hedging so as to defy the max-pain objectives.  This 
is the reason we've seen so many op-ex week max-pain misses this 
year.  While many traders and their indicators feel that a 
corrective (or impulsive) pullback is overdue, the price is the 
bottom line.  Traders will want to see that pullback begin and 
break some support levels before yielding to their guts-  as 
we've seen over the past weeks, the market is not subject to 
gravity in the short or even medium terms, and until the price 
reverses, it's safest to stay with the trend. 


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

Applied Materials - AMAT - close: 16.78 change: +0.61

WHAT TO WATCH: AMAT's point and figure chart is still stuck in a 
down trend and a sell signal but its daily chart is showing signs 
of life.  The SOX semiconductor index out performed the markets 
today with a 1.35 percent rally.  AMAT out did its fellow chip 
stocks with a 3.77 percent gain.  The move pushed AMAT through 
the top of its four-week trading range and through technical 
resistance at its simple 100-dma.  This could be a bullish entry 
point for the aggressive traders out there.




---

SanDisk Corp - SNDK - close: 22.74 change: +0.92

WHAT TO WATCH: Well that didn't take long.  We just had SNDK on 
Sunday's watch list for a breakout over resistance at $22.00.  
Normally the top and bottom of a gap tend to be resistance 
levels.  Now that SNDK has broken into the gap it can attempt to 
"fill the gap", which is a common pattern.  Volume was above 
average on today's 4.2 percent rally, which is bullish.  We would 
look for SNDK to run towards the $25-26 levels but watch out for 
the cloud of moving averages overhead.




---

Siebel Systems - SEBL - close: 9.78 change: +0.22

WHAT TO WATCH: Software maker SEBL has been consolidating under 
resistance at $10.00 in a trading range between $8.50 and $10 for 
the last six weeks.  Some of the short-term technicals suggest 
SEBL is making a run at resistance again.  Except this time 
round-number resistance at $10.00 is bolstered by its simple 200-
dma.  A breakout here would be very bullish indeed. 




---

Broadcom - BRCM - close: 29.90 change: +0.57

WHAT TO WATCH: BRCM has produced a higher low in late October and 
now shares are making a run at resistance in the $30-30.50 range.  
Looking at the P&F chart we notice it has resistance labeled at 
$31.00.  A breakout over $31 would reverse BRCM's sell signal 
into a new triple-top breakout buy signal.  Unfortunately, buyers 
need to be able to push through the $31 level and its simple 100-
dma.  If BRCM trades over $31.00 we'd watch for a run toward $35.





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

VRTS $22.33 +0.37 - It looks like VRTS traded one trading range 
for another.  The current range is $21 to $22.75.  Watch for a 
breakout over $23.00.

BEAS $8.54 +0.10 - BEAS continues to channel higher but this time 
shares are challenging technical resistance at the exponential 
200-dma.

QLGC $34.92 +0.85 - QLGC is inching ever closer to a breakout 
over the bottom its gap down and 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.

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


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







PremierInvestor.net Newsletter                   Monday 11-15-2004
                                                    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: ASKJ, OMM, TSCO    

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

ASKJ - tech stock short -
  Uh-oh!  Things are not looking well for our bearish
  play in ASKJ.  Today's 1.9 percent gain puts ASKJ 
  very close to our stop loss.
 
 OMM - non-tech long -
  Hmm... candlestick traders should note that today's
  candle looks like a bearish engulfing pattern.  That 
  is NOT good news.  We are looking for a pull back
  but if shares trade under $18.00 watch out.
  
TSCO - non-tech short -
  Heads up!  It's do or die time for TSCO.  The stock is
  coiling for a breakout over resistance at $37.00.  
  Make sure your stop loss is in place.
 

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

Value Plays With Bullish Signals
---------------------------------
Ticker  Company Name               Close     Change

TM      Toyota Motor Corp          79.17     +0.93
MRK     Merck & Co                 27.09     +0.64
SLF     Sun Life Financial         32.80     +0.56
PKX     Posco                      41.75     +0.75
AET     Aetna Inc                 110.14     +2.83
ATH     Anthem Inc                 96.48     +1.72

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

ARBA    Ariba Inc                  16.59     +1.02
DHB     DHB Industries             18.65     +2.49
AGI     Alliance Gaming            11.52     +1.42
NAVR    Navarre Corp               18.13     +1.74
NANO    Nanometrics                16.71     +1.65
IDSY    I.D.Systems                17.57     +1.42

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
PIXR    Pixar                       91.34     +4.80
GWW     W.W.Grainger                61.30     +1.24
WSM     Williams Sonoma             41.21     +1.16
SFD     Smithfield Foods Inc        27.58     +1.16
HNT     Healthnet Inc               27.60     +1.67
NAV     Navistar Intl Corp          40.55     +1.07
PETC    Petco Animal                37.12     +1.31

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

CHRW    C.H.Robinson Worldwide     52.07     -2.42
GR      Goodrich Corp              30.97     -1.69
BKS     Barnes & Noble             25.81     -10.72
HYDL    Hydril                     41.08     -2.76

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

JBHT    JB Hunt Transport          40.37     -1.24
LSTR    Landstar System            68.41     -2.58
UNT     Unit Corp                  36.02     -3.09

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