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PremierInvestor.net Newsletter          Weekend Edition 12-05-2004
                                                    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: Did Santa Come Early?        
Market Sentiment: Looking for Santa    
Watch List: Homebuilders to Software and more!          

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
       WE 12-03        WE 11-26        WE 11-19        WE 11-12 
DOW    10592.21 + 69.98 10522.2 + 65.32 10456.9 - 82.10 +151.47 
Nasdaq  2147.96 + 45.99 2101.97 + 31.34 2070.63 - 14.71 + 46.40 
S&P-100  567.08 +  4.43  562.65 +  2.96  559.69 -  6.53 +  8.32 
S&P-500 1191.17 +  8.52 1182.65 + 12.31 1170.34 - 13.83 + 18.00 
W5000  11735.27 + 99.63 11635.6 +155.01 11480.6 -129.04 +200.13 
SOX      445.28 + 14.30  430.98 -  0.90  431.88 +  8.07 +  5.98 
RUT      642.21 + 11.05  631.16 + 17.71  613.44 -  8.54 + 17.69 
TRAN    3726.74 + 78.75 3647.99 + 80.34 3567.65 - 60.55 + 55.70 
VXO       13.61           13.35           14.60           14.05 
VXN       18.26           17.85           19.72           18.82 
=================================================================

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

Did Santa Come Early?
by Jim Brown

Many traders are beginning to wonder if Santa Claus 
came early to the market during the post election bounce.
Nearly everyone expected the Microsoft cash to provide 
a strong bounce to the market but so far the last two 
days have been less than exciting. The market is trying
to breakout to new highs intraday but can't hold the 
gains at the close. Volume has been very high for the 
last four days with an average volume of 4.7B shares. 
Only one of those days provided traders with decent gains.
The last two days only managed a +2 point net gain for 
the Dow after the +162 point gain on Wednesday. After 
two negative days early in the week of -46 and -47 the 
Dow only managed to gain +69 points for the week despite
the one triple digit day. High volume and no progress is
not a good sign that there are bullish days ahead. 

Dow Chart

 
Nasdaq Chart

 


It is far too soon to start ringing the alarm bells but
the last two days of market action have bears coming out
of hibernation. The two days of high volume and no gains
with an extra $25 billion in cash sloshing around in
trading accounts is forcing analysts to reevaluate their
outlook. I am definitely perplexed for multiple reasons.
November and December are historically the two best months
of the year but the last four weeks have been problematic
at best. The Dow jumped +350 points to 10400 in the first
five days of November. We have been moving sideways in a
200 point range ever since. 

Before anybody begins to panic we did close within nine
points of the high end of that range and we have set new
intraday highs on both of the last two days. While the 
bulls would liked to have seen a stronger move over the
last two days the conditions could still be seen as 
positive. 10600 is strong psychological resistance.

The Nasdaq is performing better but shares some of the
same characteristics as the Dow. It has traded in a 40
point range since Nov-12th and did not break above the
2100 level with conviction until Wednesday. It also 
posted gains on both Thr/Fri after Wednesday's +40 point
jump. The last two days the Nasdaq traded over its January
2004 high for the year at 2153 but could not close over
that level just like the Dow could not close over 10600.

The SPX has been much stronger than the Dow and Nasdaq
with a breakout to a new high for the year over 1160. 
That initial post election bounce then spent the rest
of the month trading in a narrow 1170-1190 range. The
Wednesday rally pushed us to the top of that range but
we have closed at 1190 now for three straight days. The
SPX could be the determining factor for our current 
malaise.

The SPX has rebounded +12% since the August lows and has
cleared all the normal resistance levels dating back to
late 2001. This has been a significant move higher and
once past 1200 the next bump in the road is 1225 then
1253. The problem appears to be 1200 as significant
selling appears on any move over 1190. A similar plateau
exists on the Russell-2000 which has stalled at 643 for
the last three days. Since that is less than two points
from an all time high just continuing to cling to the
high ground after a +25% rebound from the August lows
is remarkable. Unfortunately this is the very long term
uptrend resistance line from April 2002. A failure to 
breakout here could retard the overall market. 

SPX Chart

 
Russell Chart – Weekly

 
SOX Chart

 

Watching the last two days of strong volume and no real
movement puts the fear of the bear into almost everyone.
Depending on your viewpoint those paragraphs above could
be seen as a glass half empty or half full. I started
writing this analysis with a weakening bias and I was
questioning my assumptions for the last week. After 
getting to this point I am ready to reconfirm that bias.
Helping to rebuild my confidence is the SOX and the break
over 450 on Friday. We know that spike was Intel related
but it only capped a three day run to higher ground. SOX
450 is strong resistance but it is also confirmation of 
a strong breakout from the weakness of the last several
weeks. The next material resistance is not until 485 
and well over our current level. 

While I came into this article with a lot of questions
I believe it is too early to get out the fur coats. Just
because the market has not reacted as expected for two
whole days is no reason to throw out the assumptions as
invalid. I explained on Thursday night that some funds 
had hedged the Microsoft dividend bounce with futures
ahead of the event. Now that the money has hit their
accounts they have spent the last two days unwinding
those trades. The very high volume with no gains is
confirmation of this position change. Obviously only
a few funds took this route and we are seeing the 
results of that trade. For those funds that did not
hedge and simply waited for the cash to hit the account
were faced with either buying new multi year highs in
the case of the SPX or all time historic highs in the
case of the Russell. Most fund managers would rather 
not buy historic highs and would prefer at least a
minor pullback to enter. 

Those looking for a drop on Friday were faced with a
mixed message as the Dow and SPX barely dipped at the 
open on the bad Jobs report and tech stocks exploded 
out of the gate on the Intel news. If you were trying
to put a large amount of money to work on Friday your
safe options would have been limited. You might have 
been especially cautious given the questionable outlook 
from the Jobs report. 

The Jobs Report posted a gain of only +112,000 jobs and
well under the consensus of 200K and last months +337K.
Also the last month number was revised down to +303K and
September was revised down to +119K from +139K. Given the
downward revisions of -54,000 jobs and the weak headline
number for November the net job gain was only +58,000.
This is terrible news and while the spin masters tried 
to talk positively about the fifteen months of consecutive
gains and the monthly average of over +200K nobody was
buying the story. The hourly wage component rose only
a penny and the smallest gain since December 2003. The
average workweek fell back to 33.7 hours and only 0.1
above the post recession lows. Lower wages and lower 
hours means more job seekers than jobs and heavy 
competition for those available jobs. Employers are 
not having to pay up for qualified workers. 

It appears the job gains from last month were hurricane
skewed after all with only 11,000 construction jobs
created this month compared to +65,000 last month. The
manufacturing sector lost jobs for the third straight
month with a loss of -5,000 jobs in November. Despite
the beginning of the holiday retail season the retail
sector only showed a net gain of +9,000 jobs compared
to +17,000 in October. Retailers are still cautious
about hiring because of weak retail traffic and slow
sales.

The Jobs report on Friday and the weak retail sales on
Thursday prompted analysts to question the strength of
the economy and the likelihood of a strong holiday 
season. This causes traders to question earnings for
the 4Q and gave funds one more reason for not buying
the breakout highs on the SPX and Russell. 

Offsetting the negative economic news was another drop
in oil prices to touch $42 intraday and strong support.
More traders were calling $42 a bottom and a buying 
opportunity and comments from OPEC supported this view.
Just last week Saudi Arabia said they were going to 
increase output over the coming months by +14% to 13
million bbls per day to keep pressure on prices. On
Friday a senior OPEC delegate said the decline in oil
prices was troubling and if it continued OPEC would be
forced to slash output to maintain the higher prices.
At the same time the OPEC President said their fair 
price was still targeted at $28-$32 for an average
price of the various levels of crude. He also said that
OPEC would likely maintain production at current levels
for the first quarter of 2005. What was evident to most
was the OPEC lip service to $32 oil when OPEC delegates
were calling for production cuts to keep oil over $45.
This is equivalent to Treasury Secretary Snow giving
speech after speech in support of a strong dollar while
knowing that a weak dollar would be beneficial to the
trade deficit and to corporate America. This OPEC lip
service suggests that OPEC countries have already grown
accustomed to the higher prices and will not allow us
to move much lower. For this reason the slightly lower
oil on Friday did not help equities move higher. The
crash may be over and only higher prices ahead. 

Just as stocks began to rise in late morning trading
there was news from Madrid Spain that terrorists were
threatening to blow up multiple locations in Madrid.
Shortly thereafter there were multiple reports of 
explosions at different locations as those threats
were carried out. The markets turned lower on the news
as the terror threats became a news item again. About
an hour later there was a news alert that the U.S. Supreme
Court building was being evacuated after a possible threat.
The skittish market again weakened. The evacuation was
eventually blamed on a false alarm but the damage to the
markets was already in place. 

In stock news the highlight was IBM, which is trying to 
sell off its PC business to Lenovo Group, China's largest
PC maker. Toshiba said it had been contacted by IBM to
buy its PC division but had declined. Getting rid of the
PC business would be a positive move by IBM with profit
margins already getting squeezed to nearly nothing by
Dell and the rest of the pack. It would follow the
pattern by the current CEO of getting out of low margin
efforts and concentrating on the big money plays. IBM
rose +1.50 on the news to $97.50. It was also seen as
a positive for AMD who would likely be the preferred
supplier of processors for the IBM/Lenovo computers. 

IBM could be just about right on the timing as the
expiring tax cut for capital equipment has only four 
weeks left to live. According to several hardware 
analysts there is a last minute wave of buying in process
to capture the accelerated depreciation for equipment 
installed before year end. I must have heard/read at
least five different articles on Friday about the tax
orders and the lack of orders anticipated for Q1. This
is another reason funds may have been hesitant to buy
stocks. 

Like the terror threat, impending election and IRAQ war
put buyers on hold until the events passed the threat
of decelerating earnings for Q1 is already causing paralysis.
Depending on who you listen to the threat is either for a
general apathy to appear in late January or a 2-3 year
bear market to return. Very, very few analysts are calling
for a strong economy and another leg up for the current
rally. However, there has been no significant downturn in
guidance to support the negative view or significant upturn
to support the positive view. We are in a wait and see
environment. 

I had thought we were going to get through December before
these worries started paralyzing traders and putting them
in a defensive posture. I believed the Microsoft dividend
would provide enough liquidity to float all the boats for
the next two weeks. Logically it still should. TrimTabs
reported that $3.84B in new cash flowed into funds in the
week ended on Thursday. That is a nice chunk of change 
and a decent week. Assuming that cash flow continues we
should see another +$4B this week as well. This is the
normal support level for a bull market. Add in the MSFT
dividend at $25 billion and it is like getting an extra
six weeks of liquidity all in one week. It should float
the markets. To put it in better perspective funds have
received $88.5B in cash since Jan-1st 2004. The Microsoft
dividend expected to return to the market is $25B or 28%
of the annual cash flow seen by funds. Obviously having
a gift equivalent to 28% of your annual cash flow fall
into your lap on a single day SHOULD prompt a spending
spree of epic proportions. That spree was as absent as
the emperors clothes on Friday and harder to find than
weapons of mass destruction. 

Next week could be a different story. There are not any
material economic reports until Friday with the possible
exception of the Richmond Fed on Wednesday. There are no
holidays and no events likely to distract traders. If 
that money is still sloshing around in fund accounts it
should be put to work early next week. The key word is 
obviously "should". If it doesn't happen then get out 
the hammer and nails and start boarding up the windows
because storm clouds will not be far behind. We have 
all the positive factors I can imagine working for us
in terms of cash, calendar, fund performance and greed.
The only darkness ahead is not until the late January 
earnings guidance and it is far enough away the bulls
should ignore it. A market drop under these circumstances
would be very bearish and a signal the Santa Clause rally
could pass us by. 

There is still the conventional wisdom from the past
that has funds selling losers in early December but I
don't believe this is a factor today. They should have
sold them last week before the cash appeared so they
would be ready to party hardy over the next four weeks. 
The lack of an end of week rally continuation could be
attributed to many reasons. Until we see what next week
brings it will be difficult to say what really caused
our flat markets on Friday. Let's just hope it was a
hangover from too much celebration and backslapping 
when the Microsoft checks appeared. Fund managers 
anxious to close the books on an end of year bonus 
may have had their minds on other things. Let's hope
it is back to work as usual next week. 

One last thought. When managers do apply end of year cash
it normally gets applied to current winners to push them
even higher in a last minute tape painting binge to puff
up their end of year statements. If there are any losers
left to be sold you can bet that money will find its way
into the winner column as well. For us as traders it
suggests we should hitch our hopes on the rising stars
and not be bargain hunters over the next four weeks. The
guidance for long term investors is just the opposite. 
Look for those beaten down issues with real turnaround 
potential for your long term cash.

Enter Passively, Exit Aggressively!

Jim Brown


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

Looking for Santa
- J. Brown

Welcome to December.  December is historically one of the most 
bullish months of the year for stocks.  Traditionally the holiday 
shopping season keeps business running on all cylinders and moods 
tend to be more cheerful.  In another week or so investors will 
be looking for a seasonal "Santa Claus" rally as stocks tend to 
march higher ahead of the holiday.  

Last week closed out November and launched the markets into 
December with a big gain on Wednesday.  Unfortunately, there 
hasn't been much follow through.  Currently the expectation is 
for stocks to trend higher this week as money managers and 
investors put their Microsoft dividend cash back to work in the 
market - at least that's the hope.  

Looking ahead this is somewhat of an empty week for Wall Street.  
Last week was the parade of economic data.  Two weeks from now 
will be the FOMC meeting.  Plus, bulls will be looking for early 
signs of the January effect on small cap stocks around the 15th.  
Without the MSFT money to lift stocks traders might be tempted to 
do some profit taking.  

Overall sentiment remains positive.  The fact that stocks held 
their ground on Friday in spite of a terrible jobs number, 
terrorist explosions in Madrid and a bomb threat on the Supreme 
Court building is pretty impressive.  


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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9585
Current     : 10592

Moving Averages:
(Simple)

 10-dma: 10515
 50-dma: 10215 
200-dma: 10238 



S&P 500 ($SPX)

52-week High: 1188
52-week Low : 1031
Current     : 1191

Moving Averages:
(Simple)

 10-dma: 1181
 50-dma: 1143
200-dma: 1122



Nasdaq-100 ($NDX)

52-week High: 1581
52-week Low : 1301
Current     : 1614

Moving Averages:
(Simple)

 10-dma: 1583
 50-dma: 1495
200-dma: 1444



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

CBOE Market Volatility Index (VIX) = 12.96 -0.02
CBOE Mkt Volatility old VIX  (VXO) = 13.61 -0.30
Nasdaq Volatility Index (VXN)      = 18.26 -0.38 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.74        892,421       660,400
Equity Only    0.54        726,468       394,888
OEX            1.08         24,374        26,314
QQQQ           2.72         37,553       102,093


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

Bullish Percent Data

           Current   Change   Status
NYSE          75.7    + 0.1   Bear Correction
NASDAQ-100    78.0    + 2     Bull Confirmed
Dow Indust.   66.6    + 0     Bull Confirmed
S&P 500       74.2    + 0.4   Bull Confirmed
S&P 100       74.0    + 0     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: 0.98
10-dma: 0.92 
21-dma: 0.94
55-dma: 1.08


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    1679      1410
Decliners    1135      1606

New Highs     197       114
New Lows        9         8

Up Volume   1040M     1625M
Down Vol.    889M      768M

Total Vol.  1962M     2416M
M = millions


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

Commitments Of Traders Report: 11/30/04


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
Commercials traders didn't budge from their slightly bearish
tone last week while small traders have increased their bullish
attitudes.

Commercials   Long      Short      Net     % Of OI
11/09/04      447,779   449,171   ( 1,392)   (0.1%)
11/16/04      452,149   468,048   (15,899)   (1.7%)
11/23/04      462,408   491,384   (28,976)   (3.0%)
11/30/04      462,394   491,813   (29,419)   (3.0%)

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
11/09/04      148,415   136,325    12,090     4.2%
11/16/04      166,862   156,751    10,111     3.1%
11/23/04      171,192   150,606    20,586     6.4%
11/30/04      176,031   148,876    27,155     8.3%

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

Commercial traders added to both longs and shorts while 
small traders reduced some longs to lower their bullishness
by a few percentage points.

Commercials   Long      Short      Net     % Of OI 
11/09/04      337,164   672,903   (335,739)  (33.2%)
11/16/04      371,282   796,279   (424,997)  (36.4%)
11/23/04      412,724   849,091   (436,367)  (34.6%)
11/30/04      439,074   855,440   (416,366)  (32.2%)

Most bearish reading of the year: (436,367)  - 11/23/04
Most bullish reading of the year:  133,299   - 09/02/03

Small Traders Long      Short      Net     % of OI
11/09/04      392,253     58,999   333,254    73.8%
11/16/04      445,737     70,169   375,568    72.8%
11/23/04      400,995     62,080   338,915    73.1%
11/30/04      386,665     67,926   318,739    70.1%

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


NASDAQ-100

Sentiment is hitting new one-year extremes on the NDX.
Commercials are becoming more bullish while small traders
are becoming more bearish!

Commercials   Long      Short      Net     % of OI 
11/09/04       54,509     33,016    21,493   24.5%
11/16/04       55,737     33,683    22,054   24.6%
11/23/04       58,159     34,104    24,055   26.0%
11/30/04       56,629     30,571    26,058   29.8%

Most bearish reading of the year: (21,858)  - 08/26/03
Most bullish reading of the year:  26,058   - 11/30/04

Small Traders  Long     Short      Net     % of OI
11/09/04       10,213    38,251   (28,038)  (57.8%)
11/16/04       10,533    37,660   (27,127)  (56.2%)
11/23/04       11,153    39,712   (28,559)  (56.1%)
11/30/04        9,902    44,779   (34,877)  (63.7%)

Most bearish reading of the year: (34,877) - 11/30/04
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

Both the commercial traders and the small traders have
grown more bearish on the Industrials.

Commercials   Long      Short      Net     % of OI
11/09/04       22,863    22,463      400       0.8%
11/16/04       22,004    23,744   (1,740)     (3.8%)
11/23/04       22,527    25,537   (3,010)     (6.2%)
11/30/04       22,622    25,411   (2,789)     (5.8%)
 
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
11/09/04        6,165     6,483    ( 318)   ( 2.5%)
11/16/04        5,937     6,533    ( 596)   ( 4.7%)
11/23/04        5,833     8,299   (2,466)   (17.4%)
11/30/04        5,739     8,536   (2,797)   (19.6%)

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

Toll Brothers - TOL - close: 53.71 change: +1.83

WHAT TO WATCH: The housing sector appears to be on the move 
again.  After three weeks of consolidating sideways shares of TOL 
look ready to breakout over resistance at $54.00.  Short-term 
technicals have already begun to turn higher.  The bullish P&F 
chart points to a $69 target.  We would consider longs over $54 
with a $60 target but watch out for earnings.  TOL is due to 
report earnings on December 9th.




---

American Standard Cos - ASD - close: 41.46 change: +1.07

WHAT TO WATCH: ASD is on the move again.  After five months of 
consolidating under resistance at the $40.00 level shares have 
finally broken out.  Volume was well above average on Friday's 
2.6 percent again as ASD hit a new all-time high over the $41 
mark.  This looks like an entry point for new bullish positions.  
We would target a move into the $44-45 range.




---

BEA Systems - BEAS - close: 8.55 change: +0.15

WHAT TO WATCH: BEAS has been consolidating sideways in a range 
between $8.00 and $9.00 for the last few weeks.  The stock has 
been rising in a slow channel and just managed a bounce off the 
bottom of the channel.  Currently BEAS has technical resistance 
with the simple and exponential 200-dma's overhead.  We would 
watch for a move over $9.00 as a new momentum entry point.  In 
the news there has been renewed talk over BEAS as a potential 
takeover target with ORCL as a likely suitor. 




---

Pfizer - PFE - close: 27.89 change: -0.57

WHAT TO WATCH: Pfizer looks sick.  The stock has been under 
performing its peers in the DRG drug index.  The downward sliding 
channel has been rather consistent with the simple 50-dma as 
overhead resistance.  PFE just failed again at the 50-dma making 
this a new bearish entry point.  We would target a drop into the 
$26.00-25.00 range. 





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

CCU $33.15 -1.11 - CCU has rolled over under resistance at 
$35.00.  We're watching for a retest of support near $30.

ETM $34.75 -1.77 - ETM has a similar pattern to CCU but the 
failed rally just occurred on Friday with a breakdown under 
round-number support at $35.00.

MMC $29.12 +0.47 - We're still watching for a move over $30.00.
 

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PremierInvestor.net Newsletter          Weekend Edition 12-05-2004
                                                    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
  New Bullish Plays:     QLGC
  Bullish Play Updates:  SEBL

Active Trader (Non-tech)
  New Bullish Plays:     PNC, STJ
  Bullish Play Updates:  ACH, ONXX, PDCO, TARO, 

Stock Splits
  Announcements:         None


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

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

  -----------------
  New Bullish Plays
  -----------------

QLogic Corp - QLGC - close: 36.21 change: +0.32 stop: 33.99

Company Description:
Since 1993, over 50 million QLogic products have shipped inside 
servers, workstations, RAID subsystems, tape libraries, disk and 
tape drives. These products were delivered to small, medium and 
large enterprises around the world. Powering solutions from leading 
companies like Cisco, Dell, EMC, Fujitsu, Hitachi, HP, IBM, NEC, 
Network Appliance, Quantum, StorageTek and Sun Microsystems, the 
broad line of QLogic controller chips, host bus adapters, network 
switches and management software move data from storage devices 
through the network fabric to servers.
(source: company press release)

Why We Like It:
Intel's mid-quarter update Thursday night has given new life to the 
semiconductor sector.  While bulls might whine that the group 
didn't hold on to all of its Friday gains we're not complaining.  
We now expect more strength from the sector through the end of the 
year.  Looking over our choices on how to play the move in the chip 
sector we've decided on QLGC.  Not only has QLGC been consistently 
moving higher over the past several weeks but shares have broken 
out over resistance at the $35 level.  This should give QLGC a 
chance to "fill the gap" from last March.  Furthermore the P&F 
chart for QLGC is pretty bullish with a $53 price target.  Readers 
can choose their entry point: a bounce from $35.00 or a move over 
Friday's high at $36.68.  Our immediate target is $40.00. 

Annotated Chart:

 

Picked on December 05 at $36.21 
Gain since picked:       + 0.00
Earnings Date          01/12/04 (unconfirmed)
Average Daily Volume:       3.1 million 




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

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

Siebel Systems - SEBL - close: 10.38 change: +0.07 stop: 9.49

The strength in the GSO software index has been impressive.  The 
index is up three days in a row and breaking out to new 2 1/2 year 
highs.  Unfortunately, SEBL has been significantly lagging behind.  
Shares of SEBL still have a consistent up trend but the trajectory 
has been rather flat.  Readers may want to wait for SEBL to trade 
up and through the $10.50 level.  Hopefully the recent talk that 
ORCL is still looking for takeover targets and the fact that SEBL 
is a candidate will re-ignite some buying interest.  On Friday 
after the closing bell SEBL issued a press release about some sort 
of surprise announcement by the CEO on Tuesday, Dec. 7th regarding 
a strategic business initiative that is "unlike any other in the 
CRM industry."  

Annotated Chart:

 

Picked on November 17 at $10.18
Gain since picked:       + 0.20
Earnings Date          10/20/04 (confirmed)
Average Daily Volume:       7.5 million 




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

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

  -----------------
  New Bullish Plays
  -----------------

P N C Financial Services - PNC - cls: 55.87 chg: +0.34 stop: 53.99

Company Description:
The PNC Financial Services Group, Inc. is one of the nation's 
largest diversified financial services organizations providing 
consumer and business banking; specialized services for 
corporations and government entities including corporate banking, 
real estate finance and asset-based lending; wealth management; 
asset management and global fund services.
(source: company press release)

Why We Like It:
We are not overly bullish on the financials but both the BIX and 
BKX banking indices are trading relatively close to new all-time 
highs.  So what attracts us to PNC?  The answer is a Head & 
Shoulders pattern but not a normal one but an inverse or bullish 
H&S pattern.  The neckline or resistance is very clearly defined at 
the $56 level.  A breakout should lead to a rally towards the $63 
level.  We plan to use a TRIGGER over $56.00 to catch the breakout. 
Until then we'll sit on the sidelines.  Our entry point will be 
$56.15 and our initial target will only be $60.00.  Keep your ears 
open for any news out next week as PNC presents on Tuesday, 
December 7th at the Goldman Sachs conference.

Annotated Chart:

 
Picked on December xx at $xx.xx <-- see TRIGGER
Gain since picked:       + 0.00
Earnings Date          01/12/04 (unconfirmed)
Average Daily Volume:       997 thousand



---

St. Jude Medical - STJ - close: 40.64 chg: -0.19 stop: 37.49

Company Description:
St. Jude Medical, Inc. is dedicated to the design, manufacture and 
distribution of innovative medical devices of the highest quality, 
offering physicians, patients and payers unmatched clinical 
performance and demonstrated economic value. 
(source: company press release)

Why We Like It:
We like STJ for its technical breakout over major resistance in the 
$39-40 level.  The move appears to have been fueled by news of a 
new pacemaker launch in Japan on Thursday.  Volume was almost five 
times the average on the breakout.  Plus, it produced a quadruple-
top breakout buy signal on its P&F chart with a $60 price target.  
We're willing to go long above the $40 level or even on a dip back 
towards $39.50.  Our short-term target will be the $45 region. 

Annotated Chart:

 


Picked on December 05 at $40.64 
Gain since picked:       + 0.00
Earnings Date          01/19/04 (unconfirmed)
Average Daily Volume:       854 thousand



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

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


Aluminum Corp China - ACH - close: 62.60 chg: -0.25 stop: 59.75

Bulls need to pay attention here.  ACH has failed twice at $66 
resistance in the last several days.  Volume was somewhat heavy on 
Thursday's decline and the stock is now testing support at its 50-
dma and the $62 level.  This also happens to be near the bottom of 
its short-term rising channel.  A breakdown under $62.00 would be 
bearish although we expect round-number, psychological support at 
$60, bolstered by its 200-dma.  The entire industry of steel-
related stocks has been selling off the last few days but we're 
beginning to see signs of a bounce.  All of this together does not 
add up to a very attractive long candidate but we're willing to 
hold it for now.  Conservative traders may want to exit early if 
shares break $62 or $61.  

Annotated Chart:

 

Picked on November 14 at $63.45 
Gain since picked:       - 0.85
Earnings Date          00/00/04 (confirmed)
Average Daily Volume:       150 thousand



---

ONYX Pharma - ONXX - close: 31.86 change: +0.01 stop: 29.95

Our fill the gap play isn't moving very fast.  Our outlook on ONXX 
remains bullish but we're a bit disappointed that shares have not 
rebounded more strongly along with the DRG drug index.  The stock 
bounced strongly from round-number, psychological support at the 
$30.00 level on Thursday but we've not yet seen any follow through.  
Plan your trades carefully.  Another bounce from $30.00 could work 
but we'd rather see ONXX build a trend of higher lows.  An entry 
over Friday's high at $32.65 might work as well.  

Annotated Chart:

 

Picked on November 18 at $31.26
Gain since picked:       + 0.60
Earnings Date          11/04/04 (confirmed)
Average Daily Volume:       1.0 million 




---

Patterson Companies - PDCO - close: 42.23 chg: -0.68 stop: 37.99

There is nothing new to report on for PDCO.  We added the play on 
Wednesday following the move over $41.  We've been watching the 
stock for weeks as shares slowly climbed toward resistance at 
$40.00.  The stock eventually broke out over its eight-month 
trading range after its earnings report.  Volume has been above 
average on the rallies, which is always bullish.  The P&F chart is 
bullish with a triple-top breakout buy signal with a $54 target.  
We're aiming for a run towards $50 in the next six to eight weeks.  
If you expect the markets or PDCO to dip watch for a bounce above 
$40 as a new entry point.

Annotated chart:

 


Picked on December 01 at $42.06 
Gain since picked:       + 0.17
Earnings Date          11/24/04 (confirmed)
Average Daily Volume:       378 thousand



---

Taro Pharmaceuticals - TARO - cls: 31.55 chg: -0.43 stop: 27.75

So far so good.  TARO still looks attractive following its recent 
breakout over significant resistance at $30.00.  The early morning 
weakness on Friday was quickly bought as TARO neared the $30.40 
mark.  Our short-term target remains the $35 level and its 
exponential 200-dma.  Hopefully some recent news will help spur it 
along.  Late Friday evening word hit the wires that the U.S. FDA 
had approved TARO's Mometasone ointment for skin inflammation.  
We're not sure what sort of impact, if any, this will have on the 
stock but it can't hurt.  

Annotated chart:

_1
 

Picked on December 01 at $30.90 
Gain since picked:       + 0.65
Earnings Date          10/28/04 (confirmed)
Average Daily Volume:       629 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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Do not duplicate or redistribute in any form.





PremierInvestor.net Newsletter          Weekend Edition 12-05-2004
                                                    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 December 6th, 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 -------------------------------

CMGI  CMGI                Mon, Dec 06  After the market     n/a
JOSB  Jos A. Bank Cloth   Mon, Dec 06  Before the bell      0.24
NAV   Navistar Intl       Mon, Dec 06  Before the bell      1.80
VSTA  VistaCare Inc       Mon, Dec 06  After the market    -0.01

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

ALOY  Alloy               Tue, Dec 07  After the market    -0.03
CRMT  America's Car-Mart  Tue, Dec 07  Before the bell      0.53
ATLS  Atlas America       Tue, Dec 07  After the market     0.48
CASY  Casey's General St  Tue, Dec 07  After the market     0.31
CMTL  Comtech Telecom     Tue, Dec 07  Before the bell      0.32
GIII  G-III Apparel Grp   Tue, Dec 07  After the market     n/a
GRB   Gerber Scientific   Tue, Dec 07  Before the bell      n/a
HOV   Hovnanian Enterprs. Tue, Dec 07  After the market     2.08
NTOP  Net2Phone           Tue, Dec 07  After the market    -0.11
PLAB  Photronics          Tue, Dec 07  After the market     0.25
SAFM  Sanderson Farms     Tue, Dec 07  Before the bell      0.22
KR    Kroger Co.          Tue, Dec 07  ----- n/a -----      0.24
UTIW  UTI Worldwide       Tue, Dec 07  Before the bell      0.56

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

AZO   AutoZone Inc.       Wed, Dec 08  Before the bell      1.44
DAB   Dave & Buster's     Wed, Dec 08  Before the bell      0.01
DWA   Dream Works Anime   Wed, Dec 08  After the market     0.17
HITK  Hi-Tech Pharma      Wed, Dec 08  Before the bell      0.16
HURC  Hurco Companies     Wed, Dec 08  ----- n/a -----      n/a
IDT   IDT Corp            Wed, Dec 08  Before the bell      0.07
MOV   Movado              Wed, Dec 08  Before the bell      0.44
PRSF  Portal Software     Wed, Dec 08  After the market    -0.38
POWL  Powell Industries   Wed, Dec 08  Before the bell      0.05
TTC   Toro Co             Wed, Dec 08  Before the bell      0.21
ZILA  Zila                Wed, Dec 08  After the market    -0.04

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

ADIC  Adv Digital Info    Thr, Dec 09  After the market     0.02
BPUR  Biopure Corp        Thr, Dec 09  Before the bell      n/a
CAE   Cascade Corp        Thr, Dec 09  ----- n/a -----      0.48
CIEN  CIENA Corp          Thr, Dec 09  Before the bell     -0.07
COST  Costco Wholesale    Thr, Dec 09  Before the bell      0.40
ESL   Esterline Techn.    Thr, Dec 09  After the market     0.57
IPSU  Imperial Sugar      Thr, Dec 09  Before the bell      n/a
JJZ   Jacuzzi Brands, Inc Thr, Dec 09  ----- n/a -----      0.18
MATK  Martek Biosciences  Thr, Dec 09  After the market     0.30
NSM   Natl Semiconductor  Thr, Dec 09  ----- n/a -----      0.15
SHFL  Shuffle Master, Inc Thr, Dec 09  After the market     0.26
TOL   Toll Brothers       Thr, Dec 09  ----- n/a -----      1.97

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

HAYZ  Hayes Lemmerz Intl  Fri, Dec 10  Before the bell      0.07


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

Symbol  Company Name              Ratio    Payable     Executable

CAKE    Cheesecake Factory        3:2      Dec  8th    Dec  9th
GDW     Golden West Financial     2:1      Dec 10th    Dec 13th
BMI     Badger Meter Inc          2:1      Dec 10th    Dec 13th
BLUD    Immucor Inc               3:2      Dec 13th    Dec 13th
WIBC    Wilshire Bancorp          2:1      Dec 14th    Dec 15th
LCAV    LCA-Vision Inc            3:2      Dec 15th    Dec 16th
NBAN    North Bay Bancorp         3:2      Dec 16th    Dec 16th
CNC     Centene Corp              2:1      Dec 17th    Dec 20th
AIT     Applied Industrial Tech   3:2      Dec 17th    Dec 20th
SAVB    Savannah Bancorp          5:4      Dec 17th    Dec 17th

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

With just three weeks left until Christmas the economic calendar
lightens up a bit.  Watch for the Q3 numbers on Tuesday and the PPI
and sentiment numbers on Friday.


==============================================================
                       -For-           
----------------
Monday, 12/06/04
----------------
.none..

-----------------
Tuesday, 12/07/04
-----------------
Q3 Productivity (revised)
Consumer Credit for October
CSCO's two-day analyst meeting begins.
TXN's mid-quarter update.

-------------------
Wednesday, 12/08/04
-------------------
.none..

------------------
Thursday, 12/09/04
------------------
Weekly Initial Jobless Claims
Import Prices for November
Export Prices for November
Wholesale Inventories

----------------
Friday, 12/10/04
----------------
Producer Price Index (PPI) for November   Last: +1.7% Est: +0.2%
Core PPI for November
Michigan Sentiment for December (preliminary)


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

TOT     Total Sa                  107.98     +0.71
BCS     Barclays Plc               43.33     +0.84
CAJ     Canon Inc                  51.56     +0.78
MER     Merril Lynch               57.28     +0.53
MET     Metlife                    40.48     +0.51
SLM     SLM Corp                   51.91     +1.02

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

FLSH    M-Systems Flash Disk       18.64     +1.09
NTGR    Netgear                    17.51     +1.22
TTMI    TTM Technologies           11.80     +1.29
NUTR    Nutraceutical              17.18     +1.33
AUGT    August Technology          10.48     +1.49
IVII    Intervideo                 12.81     +1.35

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
ERTS    Electronic Arts            52.80     +2.42
HSY     Hershey Foods              54.62     +1.03
TU      Telus Corp                 26.64     +1.74
KLAC    KLA-Tencor                 48.94     +1.63
MGG     MGM Mirage                 63.54     +2.84
ASD     American Standard Cos      41.46     +1.07
NCR     NCR Corp                   65.88     +3.80

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

FITB    Fifth Third Bancorp        47.99     -3.67
IP      Intl Paper Co              40.52     -1.05
CCU     Clear Channel Comm.        33.15     -1.11
MBT     Mobile Telesys            133.70     -2.30
UVN     Univision Comm.            29.06     -1.04
KRI     Knight-Ridder              66.77     -1.25
MRX     Medicis Pharmaceuticals    35.45     -1.22
ETM     Entercom Comm.             34.75     -1.77

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

AAPL    Apple Computer             62.68     -2.53
CINF    Cincinnati Financial       44.32     -1.19
CCJ     Cameco Corp                94.75     -2.25
ENH     Endurance Specialty        33.26     -1.24
SIGI    Selective Insurance        43.79     -1.32
MATR    Matria Healthcare          33.07     -1.80

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

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