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Daily Newsletter, Tuesday, 01/04/2005

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PremierInvestor.net Newsletter                  Tuesday 01-04-2005
                                                    section 1 of 2
Copyright (c) 2005, 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:       Why Worry?
Watch List:        Biotech, Software and more
Market Sentiment:  Q4 Hangover

=================================================================
MARKET WRAP  (view in courier font for table alignment)
=================================================================
      01-04-2005           High     Low     Volume   Adv/Dcl
DJIA    10630.78 - 98.70 10769.56 10605.15 2.13 bln  763/2420
NASDAQ   2107.86 - 44.30  2159.64  2100.56 2.73 bln  744/2414
S&P 100   566.77 -  5.56   574.49   565.51   Totals 1507/4834
S&P 500  1188.05 - 14.03  1205.84  1185.39 
SOX       410.36 - 13.90   426.10   406.08
RUS 2000  628.54 - 11.90   643.05   627.89
DJ TRANS 3678.33 - 82.00  3768.51  3674.94
VIX        13.98 -  0.10    14.45    13.93
VXO (VIX-O)14.13 -  0.07    14.96    13.89
VXN        20.06 +  0.56    20.81    19.57  
Total Volume 5,210M
Total UpVol    809M
Total DnVol  4,306M
Total Adv  1820
Total Dcl  5547
52wk Highs  142
52wk Lows    27
TRIN       1.68
NAZTRIN    1.34
PUT/CALL   0.77
=================================================================

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

Why Worry?
by Jim Brown

We expected a drop this week and I have reported those
expectations in this commentary more than once. After 
two days of decline the market pundits are suggesting 
the market conditions have changed and the bears are
coming out of the woods to feast on fresh hamburger.
Who is right and has investing as we knew it changed
over the last week?

Dow Chart

 
Nasdaq Chart

 
SPX Chart

 
Russell Chart

 


In my opinion nothing has changed. The economy is still
struggling along and the multitude of worries mentioned
on stock TV this week are just a rehash of the worries
the bulls trampled over the last quarter. I will try to
touch on the majority of those worries but first the
economics of the day. 

Chain Store sales fell back to mediocre at only a +0.2%
rate for the week ended Jan-1st. This is a very strong
shopping week and buyers failed to appear in droves but
the year over year number rose to +4.6%. Only a minor
increase week to week but strong gains over the prior
year. Retailers can now take their Rip Van Winkle nap
until next fall with only Valentines and Easter to 
provide any waking excitement. 

Factory Orders jumped only slightly more than expected 
at +1.2% for November. All components rose slightly with
the majority of the gains probably related to last minute
pre-holiday shipping and a rebuild cycle beginning for 
depleted year end inventories. No big excitement here. 

Auto sales rebounded strongly in December with red tag
specials and higher than ever cash back programs. The
annualized rate jumped to 18.4 million from 16.4 million
in November. This turned out to be the fourth strongest
year on record. Light trucks jumped +10.1% but Japanese
makers Toyota, Honda and Nissan topped the leader board
with even higher double digit gains as they increased 
their share of the market to greater than 40%. Hybrid 
vehicles are selling faster than they can make them as 
consumers try to avoid the high gas prices ahead. 

Economics were just like they have been for the last
three months with mixed messages across all components.
The biggest economic bombshell today did not come from
an economic report but from the Fed minutes from the
December FOMC meeting. The Fed stated that the economy
was expected to continue its leisurely pace of recovery
and the recovery was seen to be firmly entrenched. They
cited labor markets as improving and this should continue
to support consumer spending. 

The problems appeared in the interest rate outlook with
comments that the recent depreciation of the dollar, 
elevated energy costs and the possibility of slowing
growth as factors that could increase the risk of inflation.
They still see the risks to be balanced between inflation
and deflation but they are now leaning toward inflation
ahead. They said the increase in inflation signals over 
the last few months might be a warning sign that expectations
for low inflation were not as well founded as they had been
last summer. Fear is creeping into the Fed outlook and they
feel part of that creeping inflation is still being fueled
by excessive liquidity. In Fedspeak excessive liquidity
means interest rates are too low. 

"Some participants believed that the prolonged period of 
policy accommodation had generated a significant degree of
liquidity that might be contributing to signs of potentially
excessive risk-taking in financial markets evidenced by quite
narrow credit spreads, a pickup in initial public offerings, 
an upturn in mergers and acquisition activity, and anecdotal
reports that speculative demands were becoming apparent in 
the markets for single-family homes and condominiums." 

The bottom line for the report was a significant fear that
the Fed was losing control and could begin to ramp up the
rate hike cycle with more aggressive hikes. The Fed believes
that energy prices will remain low, a point I would argue is
in error, global growth will continue and trade deficits will
diminish due to the drop in the dollar. In general they are
nearly united in their view that the Goldilocks economy is
returning with the exception of a greater risk for inflation.

Where the Fed minutes should have painted a positive outlook
for investors given the Fed's rose colored glasses it also
shattered that outlook with worries that rates were going 
higher soon. There had been a near unanimous view that the
Fed would pause at the February meeting and take a longer
view of the economic picture before making any new changes.
After today's report the current 2.25% rate has now been
speculated to rise to as much as 4.25% by year's end. This
would mean at least one hike greater than 25 points or no
passes at any of the eight meetings scheduled for 2005. 

This sudden change from a no more hike sentiment to a full
and possibly aggressive hike scenario knocked the wind out
of the market this afternoon. The yield on the ten-year 
treasury spiked to 4.3% and the equity markets imploded. 
The Dow dropped -100 points on the 2:PM news to 10605 and
barely rebounded to close at 10632. The Nasdaq dropped 
another -21 points on top of an already steep decline to 
-59 off the highs at 2100. The Nasdaq only managed a very
weak +9 point bounce into the close. It was the worst day
for the Nasdaq in five months. 

Also helping the decline was a downgrade on AMZN to sell
at Smith Barney. Despite very strong sales this year the
analyst thinks other online firms are eating away at AMZN
market share and will continue to do so. Brick and mortar
retailers are reporting a much faster ramp in acceptance
of their online sites and the online retail space is 
becoming more crowded. AMZN dropped -2.38 on the news 
and took all the other Internet stocks with it. GOOG 
fell -8.21 from its all time high reached just yesterday. 

Another crowd favorite also took a major hit of -1.83 or
-14.8% after acknowledging accounting improprieties. The
company, Krispy Kreme Doughnuts, admitted it had padded
sales, double shipped, disguised problems at certain 
stores and misreported earnings. The stock dropped to $10
but my question is why not $1? This company appears to 
have committed multiple counts of fraud and could be
delisted very soon. Looks like the public still has a
sweet tooth for KKD. Maybe they should go back and look
up Boston Chicken, BOST. All the shareholders got greased
when BOST finally imploded after years of being the darling
of Wall Street.

Depending on which sentiment indicator you want to use the
2005 year is not off to a good start. Today was the last
day of the typical Santa Rally period following Christmas.
Needless to say the Dow or any of the indexes for that
matter did not see a visit from Santa. The Dow lost -200
points during the period after the Dec-23rd close. The
Nasdaq lost -53 points, Russell -22, -28 from its high
and the SOX -17 (-4%). If you were counting on Santa for
your sentiment then the Santa adage is running through 
your mind tonight. When Santa fails to call bears will 
come to Broad and Wall. It would appear on the surface
the door is open and the red carpet rolled out for their
arrival. 

The other market barometers include the first five days
scenario. Theoretically the first five days of January 
are supposed to predict the direction of the market for
the year. Not looking good for that one. Then there is 
the January barometer, as January goes so goes the year.
None of these predictors of market direction have very 
good records but they are all consistently prove more 
often right than wrong. Bah humbug!

We knew the market was going to sell off once the calendar
rolled over. We talked about it in this space several times.
When the indexes rally as they did in the fourth quarter
the money managers are just holding their breath hoping
to get to the new year before everybody pulls the rip 
cord on their profit parachute. Remember this table from
last Thursday?

Index Low 12/30 Gain
Dow 9708 10800 +11.2% from October low
Nasd 1899 2178 +14.6% from October low
$SPX 1090 1213 +11.2% from October low
Nasd 1750 2178 +24.4% from August low  
TRAN 2959 3807 +28.6% from August low
$RUT 516 653 +26% from August low
UTIL 260 336 +29.2% from May low   

Since August the Russell was up +26%, the Nasdaq +24%.
There were huge amounts of profit to be taken and the
managers are doing that this week. 

Whenever the market takes a sudden and unexpected (by
the uninformed) drop the talking heads on TV scramble 
to find the reason. Today we were told it was weakness
in China, unemployment in Germany, spiking oil prices,
sudden inflation fears and last but not least new Fed
fears. 

Obviously it was not oil since it fell over -$2 on Monday
and the market still tanked. Today it rebounded to erase
those losses but is still trading in exactly the same
range it has been trading for the last five weeks. Today
the oil worry is only smoke. It will eventually bite us
but not today.

The Fed outlook was blamed but there was really nothing
in the outlook that was different than any prior outlook.
The optimistic analysts had convinced themselves into
believing their own dreams that the Fed was done. The
Fed has never even hinted that it might pause. Every
comment has always been "accommodation will continue
to be removed at a measured pace." No change there. 

Some analysts blamed the drop on a lack of fund flows.
The $31B of expected money had failed to appear. This 
is also smoke. The money does not appear the first 
two days of the year. The majority appears over the 
second and third weeks of January. TrimTabs said today
they were still expecting $2.5B to $3B PER DAY over the
next two weeks. No change there. 

Are you starting to get the picture? Nothing has changed
and the current drop is just profit taking. Even Ralph
Acampora came out again today and affirmed his Dow 13K
forecast. Nobody expects a blowout market but they do
expect the markets to move higher over the next two 
quarters. 

Where to from here? The Nasdaq has been literally slammed
as funds took profit in techs. The index dropped back to
2100 today and decent support. It could stop there or it
could drop all the way back to 2050 but it will stop. 
When the rebound starts it is likely to be sharp and on
very strong volume. Be prepared.

The volume today was very strong and weighted heavily to
the downside. On the NYSE the down volume was 9:1 over
up volume with over 2B shares traded. Despite the beating
on the Nasdaq the down volume was only 4:1 over up volume.
The NYSE volume was drastically stronger because the 
majority of energy stocks are on the NYSE. Of the 350
energy stocks I cover in my Oil Crisis Report there are
only 36 listed on the Nasdaq. When you think about which
sector had the biggest gains the last six months it all
makes sense. The funds are taking profits in energy and 
tech. Crude was up nearly +$2 today but energy stocks
were down. This is clearly a buying opportunity in the
making. 

For the rest of the week I would look for a bounce but
possible not before even deeper support levels are tested. 
SPX 1175-1180, Nasdaq 2050 and Dow 10450 would be my worst
case support levels. I believe we will bounce before then
but these corrections nearly always get overdone as traders
react to the negative news in the press. The Nasdaq normally
corrects about -5% in January and even if you count from
Monday's high of 2191 to today's close at 2109 it is only
-3.7%. There could be some weakness remaining but once the
selling stops don't try to short the bounce. Managers will
not be under any pressure to buy until the real money flows
hit next week but they are generating a lot of cash from
these two days of selling. If somebody steps on the trip
wire we could change directions very quickly. Watch the
up volume. If we get a reversal in the volume from 9:1
negative to 4:1 or 5:1 positive then we have seen the
bottom. 

Pick your entry targets now. If you have no target you
will probably miss the bulls eye.  

Jim Brown
Editor


==================================================================
WATCH LIST
==================================================================

The PremierInvestor.net watch list is not designed to be read
as full fledged stock picks.  Rather we would prefer to offer
it as an extra tool in today's investor toolbox.  Think of it
as a radar screen with your own radar operator pointing out
interesting developments, technical patterns or potential plays
that you may or may not have seen on your own.  Due to time
constraints we do glance at the news but rarely do we have
time to fully read pertinent news stories, due background
research and other necessary screens that investors should do
before making a decision.  A common exercise is to read the
entry, glance at the sector and other stocks in that industry
and then compare what's happening in the stock to what's
happening in the broader market indices.  We hope you enjoy
the Watch List and that it proves to be a useful tool for your
own trading success.

STOCKS WORTH WATCHING
---------------------------------

Chiron Corp - CHIR - close: 34.68 change: +1.67

WHAT TO WATCH: If you're looking for a bullish candidate amid the 
market pull back then check out CHIR.  This stock added five 
percent on big volume following an upgrade to "buy" this morning.  
Bulls might want to use a trigger over the $35 level as an entry 
point with a target in the $38-40 range.




---

BEA Systems - BEAS - close: 8.64 change: -0.15

WHAT TO WATCH: BEAS has been challenging higher for months but 
after December's big failed rally near $9.75 the stock has been 
consolidating lower.  Now BEAS is testing major support at the 
bottom of its rising channel near $8.50 and its 200-dma.  A 
breakdown here could lead to a significant retracement.




---

Internet Security - ISSX - close: 21.39 change: -1.33

WHAT TO WATCH: Investors have been taking profits this week from 
their Q4 winners and ISSX certainly qualifies.  The stock surged 
from $13 in August to almost $26 in early December.  Now shares 
are breaking support at the 50-dma and the $22 mark.  We would 
watch the $20 level, which should be round-number support.  A 
bounce from $20 and aggressive bulls may want to consider longs.  
a breakdown under $20 and bears may want to consider a momentum 
play.






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


PWER $8.42 -0.23 - PWER has broken major support at its 50-dma 
and its simple and exponential 200-dma's near the $8.50-9.00 
range.  

PVN $16.14 -0.21 - The long-term uptrend for PVN is still very 
much intact but the stock is working on a new double-top pattern 
with the peaks in November and January at $17.00 resistance.

PFE $26.45 +0.00 - PFE has rallied back to resistance at its 
descending 50-dma following December's gap down.  Now the bounce 
appears to be failing.  Look for a drop under $26.00.

KVHI $11.14 +1.20 - KVHI soared more than 12 percent on huge 
volume this Tuesday to breakout over resistance at $10.50 and its 
200-dma. 

NGPS $35.91 -10.89 - Ouch!  NGPS fell more than 23 percent on 
massive volume as its rocket-like trajectory comes to an end.


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

Q4 Hangover
- J. Brown

I've got one word for the first two trading days of 2005 - yuck!  
Market pundits blame it on profit taking after the very strong 
fourth quarter rally.  Correct or not the market technicals have 
been very bearish both Monday and Tuesday.  Today declining 
stocks outnumbered advancers about 11-to-3 on the NYSE and more 
than 3-to-1 on the NASDAQ.  New highs have evaporated and down 
volume outweighed up volume by 9-to-1 on the NYSE and more than 
4-to-1 on the NASDAQ.  Yucky seems like an appropriate 
description.  

The talking heads on TV pointed out that last quarter's winners 
seem to be this week's losers as investors do some profit taking.  
Yet one guest on CNBC today was more encouraging.  Biderman from 
TrimTabs, who watches mutual fund money inflows and outflows, 
said almost all the new money coming into the market this week 
(about $1 billion a day) has been going into global equity funds.  
He suggested that investors were putting money to work overseas 
to avoid the continuing decline in the U.S. dollar.  He went on 
to say that if inflows into foreign funds have reached these 
heights that it could be a top.  Thus the U.S. dollar could 
turnaround soon and U.S. stocks are likely to do well in the 
second half of January.  He went on to remind viewers that there 
is a lot of money on the sidelines and January, a seasonally 
bullish time of year for stocks, could see some $60 billion in 
inflows for the month.

Let's hope he's right.  Normally the first two trading days of 
January are bullish as part of the seven-day post-Christmas 
rally.  Plus, the first five days of January tend to be bullish 
due to the new inflow of money into retirement accounts but if 
all this money is going into global funds then the early January 
barometer (the first five days) could turn bearish.  As I 
mentioned last week some traders look at the first five days of 
January as an early barometer for the month. Let's hope stocks 
rebound soon.


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

Market Averages

DJIA ($INDU)

52-week High: 10868
52-week Low :  9708
Current     : 10630

Moving Averages:
(Simple)

 10-dma: 10780
 50-dma: 10489 
200-dma: 10264 



S&P 500 ($SPX)

52-week High: 1216
52-week Low : 1060
Current     : 1188

Moving Averages:
(Simple)

 10-dma: 1207
 50-dma: 1178
200-dma: 1129



Nasdaq-100 ($NDX)

52-week High: 1635
52-week Low : 1301
Current     : 1571

Moving Averages:
(Simple)

 10-dma: 1611
 50-dma: 1568
200-dma: 1461



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

CBOE Market Volatility Index (VIX) = 13.98 -0.10 
CBOE Mkt Volatility old VIX  (VXO) = 14.13 -0.07
Nasdaq Volatility Index (VXN)      = 20.06 +0.56 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.78      1,071,868       831,280
Equity Only    0.60        823,299       494,997
OEX            0.99         33,587        33,327
QQQQ           2.33         53,555       124,869


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

Bullish Percent Data

           Current   Change   Status
NYSE          76.2    - 1     Bear Correction
NASDAQ-100    80.0    + 0     Bull Confirmed
Dow Indust.   73.3    + 0     Bull Confirmed
S&P 500       77.2    - 1     Bull Confirmed
S&P 100       78.0    + 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: 1.44
10-dma: 1.04 
21-dma: 1.07
55-dma: 1.01


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     636       741
Decliners    2221      2340

New Highs      53        57
New Lows       15        12

Up Volume    228M      530M
Down Vol.   1853M     2175M

Total Vol.  2146M     2718M
M = millions


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

Commitments Of Traders Report: 12/21/04


Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the 
Chicago Mercantile Exchange and Chicago Board of Trade. COT data 
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being 
financial institutions. Commercials are historically on the 
correct side of future trend changes while small specs tend 
to be wrong.  

S&P 500

Commercial traders are growing more bearish while small traders
are naturally moving the other direction and growing more 
bullish.

Commercials   Long      Short      Net     % Of OI
11/30/04      462,394   491,813   (29,419)   (3.0%)
12/07/04      450,072   498,057   (47,985)   (5.0%)
12/14/04      502,471   540,494   (38,023)   (3.6%)
12/21/04      455,238   502,538   (47,300)   (4.9%)

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
11/30/04      176,031   148,876    27,155     8.3%
12/07/04      187,707   135,776    51,931    16.0%
12/14/04      201,428   164,111    37,371    10.2%
12/21/04      157,015   106,205    50,810    19.2%

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

There has been a dramatic reduction in open positions for
both longs and shorts for both the commercial traders and
small traders.  The net result has produced an increase
in bearishness for professionals and an increase in bullishness
for small traders.

Commercials   Long      Short      Net     % Of OI 
11/30/04      439,074   855,440   (416,366)  (32.2%)
12/07/04      470,553   805,234   (334,681)  (26.2%)
12/14/04      556,980   899,616   (342,636)  (23.5%)
12/21/04      279,694   554,818   (275,124)  (32.9%)

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
11/30/04      386,665     67,926   318,739    70.1%
12/07/04      311,838     66,496   245,342    64.8%
12/14/04      398,915    137,598   261,317    48.7%
12/21/04      227,047     66,140   160,907    54.8%

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


NASDAQ-100

Hmm... we are seeing a dramatic reversal for both commercial
and small traders.  Commercials have significantly cut their
long positions reversing their bullishness into bearishness
for the NDX.  Small traders have drastically reduced their
short positions to flip-flop them from net bearish to net
bullish. 

Commercials   Long      Short      Net     % of OI 
11/30/04       56,629     30,571    26,058   29.8%
12/07/04       57,621     34,313    23,308   25.4%
12/14/04       73,554     50,286    23,268   18.7%
12/21/04       30,614     45,158   (14,544) (19.1%)

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
11/23/04       11,153    39,712   (28,559)  (56.1%)
11/30/04        9,902    44,779   (34,877)  (63.7%)
12/07/04       15,489    49,064   (33,575)  (52.0%)
12/14/04       26,781    58,159   (31,378)  (36.9%)
12/21/04       20,840     9,109    11,731    39.1%

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

Commercial traders have suddenly become a lot more bearish 
on the Dow Industrials.  Meanwhile small traders have
significantly cut their positions on both sides of the trade.


Commercials   Long      Short      Net     % of OI
11/30/04       22,622    25,411   (2,789)     (5.8%)
12/07/04       25,523    27,351   (1,828)     (3.4%)
12/14/04       36,960    38,566   (1,606)     (2.1%)
12/21/04       24,850    31,920   (7,070)    (12.4%)
 
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
11/30/04        5,739     8,536   (2,797)   (19.6%)
12/07/04        5,274     9,507   (4,233)   (28.6%)
12/14/04       13,445    19,089   (5,644)   (17.3%)
12/21/04        5,637     6,961   (1,324)   (10.5%)

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


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Copyright ) 2005  PremierInvestor.net. and
The Premier Investor Network.
Do not duplicate or redistribute in any form.

PremierInvestor.net Newsletter                  Tuesday 01-04-2005
                                                    section 2 of 2
Copyright (c) 2005, 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:  PDCO, STJ, ACI, BMS, USB, PNC, YUM

Net Bulls (Tech Stocks)
  New Bearish Plays:    VSEA

Active Trader (Non-tech Stocks)
  Closed Bullish Plays: ONXX, CYT

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

PDCO - long play -
  PDCO is holding up with traders buying the dip toward $42.00.
 
 
STJ - long play -
  Keep an eye on STJ.  A bounce from round-number support at 
  $40.00 could be a new bullish entry point.
 
 
ACI - long play -
  Coal-producer ACI has pulled back to major support near its 
rising 200-dma.  Watch for a bounce from $33.00 as a potential 
entry point.  If shares breakdown under $33.00 we may choose an 
early exit!
 
 BMS - long play -
  Hmm.... the drop under support at the $28.50 level is not good
  for the bulls.  Traders need to be cautious here.  
 
 
USB - long play -
  If the market continues to pull back then we'd look for USB to
  retest the $30.50 level.
 
PNC - long play -
  PNC has pulled back to support at the $56.00 mark.  This was old
  resistance so it should hold as support.  A bounce from $56 would
  be an attractive entry point for new bullish plays.
 
 
YUM - long play - 
  YUM is holding up relatively well but if it breaks down under the
  40 or 50-dma it will be time to exit!


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

---------
New Plays
---------

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

Varian Semi - VSEA - close: 33.53 chg: -1.78 stop: 35.25

Company Description:
Varian Semiconductor Equipment Associates, Inc. is a leading 
producer of ion implantation equipment used in the manufacture of 
semiconductors. The company is headquartered in Gloucester, 
Massachusetts, and operates worldwide. Varian Semiconductor 
maintains a web site at www.vsea.com.
(source: company press release)

Why We Like It:
The semiconductor sector has looked vulnerable for the last few 
weeks.  This is even more of a clue for future weakness because it 
occurred during December, traditionally one of the most bullish 
times of the year for stocks.  Now that December has passed the 
semis are showing their true colors.  VSEA looks like one to lead 
the group lower.  Yesterday shares broke support at $36.00 and its 
50-dma after Bank of America downgraded the stock from "neutral" to 
a "sell" rating while reiterating their $28 price target.  Today, 
with the three-percent decline in the SOX, shares of VSEA out did 
its fellows with a five-percent drop on big volume breakdown 
support at the $35.00 mark and its simple and exponential 200-
dma's.  We're going to open positions at current levels.  Our 
short-term target is $30.00.  More aggressive traders may want to 
wait and look for a failed rally under $34.50-35.00 as their entry 
point.  The P&F chart has reversed its recent buy signal into a 
sell signal with a $24 target.

Annotated chart:


Picked on January 04 at $33.53
Gain since picked:      - 0.00
Earnings Date         01/27/05 (confirmed)
Average Daily Volume:      700 thousand




==================================================================
Active Trader (AT) Non-Tech Stock section
==================================================================

============
Closed Plays
============

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

ONYX Pharma - ONXX - close: 31.06 change: -0.94 stop: 31.26

Ouch!  It looks like we were right to be cautious on Sunday.  
ONXX's trend of lower highs turned into more weakness with the 
broader market indices leading the way.  Shares broke support at 
$32.00 and hit our stop loss at $31.26.  We are stopped out at 
breakeven.  We would now look for ONXX to continue lower until 
shares hit round-number support at $30.00.  A breakdown there and 
readers may want to consider bearish positions. 

Picked on November 18 at $31.26
Gain since picked:       - 0.20
Earnings Date          11/04/04 (confirmed)
Average Daily Volume:       1.0 million 



---

Cytec Industries - CYT - close: 49.60 change: -2.60 stop: 47.99

It is never a good sign for the bulls when their stock falls almost 
five percent on very heavy volume with no news.  Either there is 
news out on CYT that we can't find or someone wants out really 
quick.  Neither circumstance can be good for us.  While we have not 
been stopped out yet we are choosing to cut our losses early with 
today's breakdown under round-number, psychological support at the 
$50.00 mark.

Picked on December 21 at $51.10 
Gain since picked:       - 1.50
Earnings Date          01/20/04 (unconfirmed)
Average Daily Volume:       357 thousand





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

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

None

==================
  Trading Ideas
==================

This section contains stocks that meet criteria which may make
them of interest to long and short side traders.  These are not
recommendations, nor have they been reviewed by PremierInvestor
editors for investment potential.  However, each of them has
technical and fundamental characteristics that make them worthy
of further review by traders and investors looking for fresh ideas.
New stocks will appear daily following the market close.

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

LVS     Las Vegas Sands            49.49     +0.98
CXW     Corrections Corp of Amer   42.08     +1.57
RWT     Redwood Trust Inc          62.55     +1.21
LPNT    Lifepoint Hospitals        35.52     +1.48
ROV     Rayovac Corp               34.18     +4.62
JOSB    Jos A Bank Clothiers       28.91     +0.74

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

RDA     Reader's Digest Assn       15.23     +1.28
GES     Guess? Inc                 13.41     +1.43
STEM    Stemcells Inc               5.97     +1.86
TCNO    Tecnomatix Tech            16.70     +1.51
KVHI    KVH Industries             11.14     +1.20

---------------------------------------
Breakout to Upside (Stocks over $20)
---------------------------------------
  
CHIR    Chiron Corp                34.68     +1.67
SONC    Sonic Corp                 31.44     +1.80
TONS    Novamerican Steel          60.68     +5.46

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

BAY     Bayer Aktien               32.47     -1.24
CA      Computer Associates        29.77     -1.05
EMN     Eastman Chemical Co        52.34     -4.96
CREE    Cree Inc                   35.54     -2.79
VSEA    Varian Semiconductor       33.53     -1.78
EDO     Edo Corp                   27.81     -2.73

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

AMX     America Movil              50.90     -2.55
CAH     Cardinal Health            55.53     -1.65
UNP     Union Pacific              66.02     -1.42
MON     Monsanto Co                52.45     -2.30
ADSK    Autodesk Inc               35.00     -2.43
ADBE    Adobe Systems              60.06     -1.63
POT     Potash Corp                79.20     -3.96
BG      Bunge Ltd                  55.43     -1.55


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