June 20, 2004


Issue #122

Greg Fry
   Greg Fry

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WEEK ON WALL STREET: Week In Review  /   by Bob Coppo

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Our new Week on Wall Street columnist is Bob Coppo. Bob is Managing Director and Chief Technical Analyst for JNL Financial Consultants, Inc. The company has operated StockmarketTimer.com on the internet since 1997 and provides investment advice to both individual and institutional clients. Make sure to visit his site, StockMarketTimer.com.

Bob Coppo
Week on Wall Street
The Week on Wall Street

Friday's Action:   Stocks finished modestly higher Friday with traders reluctant to make major moves amid continued uncertainty about interest rate hikes and worries about inflation. Volume was fairly light despite it being a quadruple witching day. Major world markets posted mostly higher results on Friday. London's FTSE closed up 0.28%; Frankfurt's DAX closed up 0.36%, and Paris' CAC 40 finished higher by 0.61%. Japan's Nikkei closed down 1.95%, Hong Kong's Hang Seng closed down 1.88%, and Sydney's All Ordinaries finished higher by 0.47%. In economic news, the Current Account deficit for the first quarter widened to a record $144.9 bil from a revised $127.0 bil in the previous quarter. Volume came in at 1.49 billion shares traded on the NYSE and 1.73 billion shares traded on the Nasdaq. Market breadth was mixed, with NYSE advancing issues over declining issues by 1.27, and up volume over down volume by 1.57; Nasdaq declining issues over advancing issues by 1.13, and up volume over down volume by 1.33. Leading sectors were Gold Bugs, +2.47%, Gold/Silver, +1.95%, Chemicals, +1.22% and Biotechs, +1.21% Laggards were Hardware, -0.63%, Retail,-0.41% and Natural Gas, -0.27%. Sep Nasdaq 100 futures closed 1.50 pts lower to settle at 1468, while the Sep S&P's settled up 2.40 pts at 1134.

Weekly Recap:   Stocks finished the week essentially where they started, as investors hugged the sidelines. Through Thursday, volume at the NYSE averaged some 1.25 bln shares, and on the quadruple witching Friday, it failed to top 1.50 bln. Under more normal trading conditions, volume has approached 2.0 bln shares for a quarterly expiration. Concerns about interest rates, inflation, oil prices, Iraq, terrorism, and the outcome of the presidential election have dampened investor enthusiasm, offseting encouraging earnings and economic news.

The result has been a range-bound market that is expected to continue at least until the June 30 FOMC meeting and when coalition forces turn over the reigns of government to the Iraqi's at the end of the month. There are no guarantees that market interest will pick up after the end of June, however, as the fear of terrorist activities will most certainly heighten leading up to key events this summer, such as the Democratic National Convention in Boston during July 26-29, the Summer Olympics in Athens during Aug 13-29, and the Republican National Convention in New York City during Aug 30-Sept 2.

For the week, the Dow gained +0.1%, the S&P 500 finished -0.1% lower, while the Nasdaq slipped -0.7%. The small cap Russell 2000 edged up -0.2%. Next week the economic calendar is light, but there will be some important earnings reports from the likes of Walgreen, Goldman Sachs, Morgan Stanley, FedEx and Nike. Each should generate some added trading interest, but overall, the action is likely to remain lackluster as investors will probably continue to hang back until the pivotal June 30 date.

Is the Economy Really Expanding?:   One indication of whether an economy is expanding or contracting is measured by the production of iron and steel products. Similar to other favorite measures of economic growth, like rail car loadings, the Baltic Dry Index, or Mr Greenspan's favorite, corrugated box production, steel production is an indication of the economy's consumption of tangible finished materials, i.e., autos, white goods, building products, etc. So far this year, steel production has totaled 47 million tons with an average capacity utilization rate of 90.3%. That compares to year-ago figures of 45 million tons and an average capacity utilization rate of 85.3%. And the rate of production is expanding, not contracting. Last week's figures were 4.9% higher than the previous week, while capacity utilization edged up to 92.0%. Steel production is "on a roll" (no pun intended) and that should be good news for the US economy.

Update on SMT's Market Trend Indicator:   Our Market Trend Indicator (MTI) picked off the latest market rally in good fashion. Looking at the chart below, the MIT generated a buy signal on May 12th, two days after the Dow bottomed on May 10th and three trading days before the Nasdaq bottomed on May 17th. The sell signal came on June 15th as the major averages were making an "M" top. Investors trading the 2 beta NDX funds (Rydex or Profunds) had gains of 8.7%.

The MTI has consistently out-performed a buy-and-hold strategy. The indicator is updated each evening after the market close and is available to subscribers of our Basic Service. To learn more about the MTI and the other features included in this service, click HERE.

The COT Report:   The latest Commitments of Traders report from the CFTC shows that Commercial Hedgers bought some 9,600 S&P 500 futures contracts last week to bring their net short position to -15,292 contracts. Large Traders remained net short -38,967 contracts, with the entire offsetting net long position of +54,259 contracts held by Small Traders, the so-called "weak hands". For the Nasdaq 100 futures, Commercials bought some 600 contracts to bring their net long position to +24,201 contracts. Small Traders were net short -20,086 contracts in the Nasdaq. Commercial action in Dow futures saw the smart money buy some 6,900 contracts, reversing their position back to net long by +5,672 contracts.

Commercial Hedgers were better buyers in the S&P's last week but remained net short, while Small Traders were better sellers. For the short term, their actions could be considered mildly bullish, but for the intermediate term, their opposing positions should be considered bearish.

Sentiment Surveys:   The latest Investors Intelligence survey showed that the percentage of bullish newsletter writers came in at 55.7%, while the percentage of bears was 17.5%. The bullish ratio (bulls/bulls +bears) was 76.1%.

The latest AAII survey showed a decrease to 41% bulls, and an increase to 28% bears. The bullish ratio came in at 59%, while the 4-week moving average is 60%. One thing to note about the AAII survey is that, while membership in this organization is quite large as investor groups go, the number of members that actually participate in the survey is very small. Thus, large fluctuations in survey results from week to week are not uncommon.

The latest Market Vane survey came in at 65%, indicating that the majority of commodity trading advisors (CTA's) remain bullish on the future direction of the S&P's.

The Short Term Outlook; 1-5 Days:   We said in Thursday night's column that price action was mixed, and that's how the market ended on Friday. Friday's price action was also mixed, so we don't have a clear directional bias for Monday. While the major averages mucked around on Friday to closed slightly positive, there were a few short-term bearish developments. Oil workers in Norway initiated a strike and global oil output is expected to be reduced by 10%. That pushed crude oil prices back to a 10-day high, trading at $38 the barrel. Unlike strikers in Nigeria, who are routinely bought off by government bribes, the Norwegian workers tend to stick to their guns. A prolonged oil strike in Norway will undoubtedly put upward pressure on energy prices, and that's a negative for the stock market.

Thursday night after the close, the Semiconductor Equipment and Materials International announced that its book-to-bill ratio is showing waning demand. As a result, the PHLX Semiconductor Index (SOX) was one of the few tech sectors to lose ground on Friday. Shares of chip heavyweight Motorola shed more than four percent after a major brokerage firm downgraded the stock to "equal weight" from "overweight". The firm also lowered its target price for the security to $20 from $25, stating that the "1Q04 margin performance will be difficult to sustain". As long as the SOX continue to languish, the techs in particular and the market in general will have difficulty finding any traction to sustain a move higher.

Also potentially negative was the action of the Nasdaq Volatility Index (VXN) on Friday. While the NDX managed to eke out a gain of just 0.04%, the VXN dropped 6.14% and once again broke through support. Since volatility is "mean-reverting" and the VXN is "out-of-bounds", the expectation is for the VXN to revert back towards its mean. And rising volatility means a falling NDX.

SMT's Pivot Point Forecast; 1-2 Weeks:   Our Pivot Point RS indicator is currently on a SELL signal. Our next Pivot Point is forecast to occur on or near June 18th.

The 60-min NDX chart below shows that the StochRSI indicator is in the NEUTRAL zone. For Monday, resistance for the S&P's comes in at 1141 and then 1145. Support lies at 1127 and then 1121. For the Naz, resistance comes in at 1481 and then 1495. Support lies at 1457 and then 1448.

The Intermediate Term Outlook; 2-6 Weeks:   The Risk Aversion Indicator, represented by the NDX:Dow Ratio, has been a good forecaster of the general market trend over the last couple of years. As the chart below shows, the ratio crossed below its 70-day exponential moving average at the end of January, coinciding with the year-to-date high for the Nasdaq Composite on Jan 26th. The slope of the EMA has now turned flat however, confirming the trading range the market has been locked in over the last three months.

Our Market Trend Indicator is currently negative and trended slightly lower on Friday.

Good Trading!

Charts and data appearing in today's column are courtesy of:

LAST WEEK'S PICKS: Split Decision

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Last week's Fresh Picks staggered through the five sessions to end the week with an average loss per pick of 3%.

Spec play CTLM did little to help our cause, hitting our suggested stop-loss trigger early in the week for a 6% loss. Our longer-term rec, UTEK, fared better but still ended the week with just a breakeven return.

Make sure to also have a look at the Track Record page on the site for our 2003 monthly breakdown showing each and every Fresh Pick from the year, along with its price when recommended and where it ended the year. For specific targets and stops, please see the archives.

Have you traded any of our recommended plays along the way? We'd love to hear from you and how you did. Please send your stories to comments@talkingpoints.com.

TECH WATCH: Biotech Agriculture Becoming More Transparent / by Jeff Neal, Technical Market Columnist

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Jeff Neal is a veteran options strategist and trader with over a decade of experience in the trading business. Jeff has had a diversified business career operating a very successful management consulting business with his clients representing some of the largest companies in the world.

He has a B.S. in Computer Science from Indiana University and an MBA in Finance from the University of Indianapolis. Jeff is a writer, mentor, and options strategist for Optionetics (http://www.optionetics.com/) and as head of his own hedge fund is an active options trader in both the equity and futures markets.

Jeff Neal - Staff Writer & Options Strategist - Optionetics.com ~ Your Options Education Site

Jeff Neal
Tech Watch

Biotech Agriculture Becoming More Transparent

By Jeff Neal

After years of public clamoring for more information about just how biotech crops are being genetically engineered to generate drugs, the U.S. Department of Agriculture is ready to consider changing their policies regarding this type of information. The department cites that new procedures are required given the magnitude of biotech crop studies looming on the horizon.

The plan is that when the U.S. Department of Agriculture [USDA] grants a permit to cultivate drug yielding plants, they then will post this information online detailing the risks involved along with the environmental impact associated with that plant. This kind of data has never before been available to the public and marks a clear shift in the department’s philosophy and policies.

In addition, the USDA will provide acreage statistics required for each crop along with the actual number of crops planted. Because this type of information was never given to the public before the task of measuring the possible impact of any specific test was virtually impossible.

As it stands currently the only biotech seeds being utilized by American farmers are in corn, soybean, canola, papaya and cotton, which are herbicide and disease resistant. There are no commercial products that presently have plants specifically engineered to produce drugs. However, this type of technology is very important to the biotech industry primarily because of the enormous potential of manufacturing expensive drugs very cheaply. The concern especially from food industry officials is that these biotech crops, which are similar in appearance to the non-biotech crops, is that they may somehow get into the nation’s food supply causing a major health problem.

This more generous information sharing policy by the USDA is supposed to be formally implemented in the coming months with some details still remaining to be hashed out. This is good news for the public given that industry research shows that applications for the planting of biotech crops that yield drugs and industrial type chemicals is increasing significantly. This of course is after the downturn experienced in 2002 when a corn-cultivated vaccine to stop diarrhea in pigs was nearly released into the food supply. This scare dampened this type of research for some time.

In fact, according to the Center for Science in the Public Interest, the USDA garnered just four applications for growing these pharma crops from July 2002 to June 2003. This was a major drop-off considering the department granted 25 permits for such crops from July 2001 to June 2002. The recent pickup in these type permits has officials of the biotech industry very excited while at the same time food industry officials are less than pleased. Representatives of the food industry insist that these pharma type crops pose a major threat to the integrity of this country’s food supply.

The dispute will probably come to ahead when a large gathering of biotech professionals are scheduled to meet in San Francisco for 10th annual Biotechnology Industry Organization conference. As they are meeting there is also expected to be many thousands of biotech protestors outside expressing their strong discontent in a loud and vociferous manner. Regardless of what particular side of the issue you fall on the fact that the USDA will start releasing the necessary information about these projects allows us to make far more informed decisions about their viability.

Happy Trading.

MARKET TA: Riding the Waves / by Dale Woodson, Technical Market Columnist

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Dale Woodson is the editor of Woodson Wave Report, a market-timing newsletter. Woodson Wave Report identifies turning point targets in the Dow, NASDAQ, and S&P 500 index as well as the bond and gold markets using Elliott Wave analysis and fibonacci ratios. Since publishing the newsletter began online in 1998, Woodson Wave Report has been downloaded in twenty-five different countries.

We encourage our subscribers to visit his site at http://www.woodsonwave.com and please see Dale's complete bio following his column.

Dale Woodson

Dale Woodson
Market TA columnist

TIMER DIGEST’S (P.O. BOX 1688, Greenwich, CT. 06836/ 203-629-3503)

















Year 2012



1932 or 1942


Year 2012*



12/6/74 or 8/12/82


Year 2012





.618 = 5803





Complete @ 8062 on 9/21/01





Complete @ 10,673 on 3/19/02





Complete @ 7197 on 10/10/02





Topping, high 10,753 on 2/19/04





 .500 = 6865/ .618 = 5803





Year 2012

* "…it should terminate about the year 2012"

* "...not expected to terminate until about 2012"

R. N. Elliott, Educational Bulletin O

R.N. Elliott, Interpretive Letter No. 17

October 26, 1942.



August 25, 1941.

Primary degree wave 2 down (1987 - 1990) running flat correction.

Primary degree wave 3 up (1990 - 1999)



Primary degree wave 4 down (8/24/99 -?)





In our blueprint for wave (E) down in the May 10 report, we had proposed an ideal wave structure that labeled this third wave as complete today, May 18, 2004. Wave one came to completion a fibonacci 34 days after the wave (D) high on 3/24/04. A fibonacci 89 days from that high marks today, May 18, 2004. As I write this at midday, the market appears stuck in a fourth wave, which upon completion, will yield to wave five down. The end of this third wave is near and should come to completion within the next day or so.

The May 13 email alert noted that the Dow had just completed wave iii of v of 3 down. The chart above illustrates that point. Of course, third waves are always followed by fourth waves. Note that the fourth wave high should hold below the previous first wave low. In this case, that mark is 10,285. The fibonacci retracement levels for this fourth wave remain as stated in the May 13 email alert at 10,055 and 10,180.

At a minimum, the wave v of 3 should break below the 9853 low of wave iii for completion. Wave 3 will gain equality with wave 1 at Dow 9788 and this third wave will gain a fibonacci 1.1618 ratio to wave one at Dow 9326.

Dale Woodson is editor of Woodson Wave Report, a market-timing newsletter. Woodson Wave Report identifies turning point targets in the Dow, NASDAQ, and S&P 500 index as well as the bond and gold markets using Elliott Wave analysis and fibonacci ratios. Since publishing the newsletter began online in 1998, Woodson Wave Report has been downloaded in twenty-five different countries.

Timer Digest rates Woodson Wave Report as the #5 stock market timer and #5 bond market timer for the three-year period from 12/31/98 through 12/31/2001. Woodson broke into the top ten rated stock market timers by placing #7 in the year 2000. He followed that up with a #4 rating for the year in 2001. These ratings were achieved during a period when market timing was extremely difficult as the bull market was turning over to bear and most were caught off guard.

While there is no feeling like catching a turn on the dime, Dale especially enjoys writing the newsletter. He is most proud of the numerous correspondences complimenting him on his writing abilities. He has a real passion for his work. He knows that the market will move in certain Elliott wave patterns and fibonacci sequences. His challenge is to identify those patterns and sequences in advance, while there is still time to profit from them.

Woodson Wave Report offers monthly, quarterly and yearly subscriptions. Newsletters are delivered via email and URL links and are published on the first Friday of every month. Special interim reports are released as market conditions warrant and targets are achieved. All new annual subscribers receive two months free.

You can subscribe to Woodson Wave Report via the secure online order form link below: http://www.woodsonwave.com/orderform.html

Disclaimer: The Woodson Wave Report combines Elliott Wave analysis and Fibonacci ratios to identify turning point targets in the Dow, NASDAQ, S&P 500 cash, bond and gold markets with respect to both price and time. The monthly newsletter is generally released on the first Friday of the month and special interim reports are issued as market conditions warrant and as targets are achieved. The information contained in the report is prepared solely for informational purposes and should not be taken as an offer to buy or sell any investment vehicle. Past performance is no guarantee of future results. Woodson Wave Report is waived of any liabilities.

GOLD RUSH: Summer Doldrums/ by John Dowdee, Ph.D., Gold Editor

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Summer Doldrums

Both gold and gold stocks continued in a consolidation phase. Gold opened the week at $384.70 and then meandered between $382 and $390 before exploding upward on Friday by over $6 an ounce. This late action propelled the yellow metal above its 50 day moving average to a high of $396.90 before it settled backward to close the week at $395.70. The next resistance is the 200 day moving average (currently at $396.51) and then the psychologically important $400 level.

To understand where we are today, it is instructive to review some history. The gold bull market started in early 2001 and advanced steadily (with only minor pullbacks) to almost $370 in February of 2003. Then we experienced an 18% correction as bullion plummeted by $70 an ounce (in two months) to bottom at $320 in mid-April. From that nadir, bullion marched upward until early this year, when it double topped around $433, and then plunged down by over $60 an ounce (in about 6 weeks) to a low of $371. The bears rejoiced and the bulls sold at fire sale prices. The “talking heads” opined that the bull was dead and that precious metals would never return to their former glory. But as you can see from the weekly chart, the correction we have just experienced, although deep and scary, was really only a “normal” correction.

It is my belief that the worst is behind us. However, we are in the summer doldrums and I would not expect gold to blast upward in the next week or two. The summer months, as indicated by the white vertical lines on the weekly chart, are typically the quite time before the storm. Let’s review the record. In 1999, gold sunk to around $250 in July only to blast to $338 in October. In 2001, there was a similar occurrence with the yellow metal advancing from $265 to $294. Ditto for 2002, as gold bounded upward by $40 from $310 to $350. Last year also continued the scenario with gold sprinting from $344 in the summer to over $400 by the end of the year. The only recent anomaly was in 2000 when gold continued to decrease. My prediction is that gold will back and fill for several more weeks and will not make a new high until the fall or winter, which (if true) will allow plenty of time to buy the dips.

A few words about the dollar. The dollar bounced around its 50 day and 200 day moving averages for most of the week but then collapsed on Friday as new trade deficit numbers were announced. Support is at 89 and then at 88. The dollar may rally again but as I discussed last week, long term I am very negative on the greenback.

Gold stocks, as measured by the XAU index, mirrored the metal but are still not technically as strong (although strengthening). The XAU stayed within its consolidation range: opening the week at 82.89 and then rising steadily to the 50 day moving average before rebounding to close the week at 85.99. The next resistance is the 50 day moving average at 86.95, then the top of the consolidation range at 92, followed by the 200 day moving average at 96.69 then finally the important 100 level. As with gold, the long term XAU chart shows that the bull market is intact (the up trend from November 2000 has not been breached) and that the current pullback is just a normal correction.

Based on the above analysis, I am beginning to cautiously accumulate gold stocks on weakness. Over the long term, I believe that gold (and especially gold stocks) will offer opportunities for exceptional gains. However, the ride will not be smooth and the potential rewards will often be offset by the agony of losses. As always, we advise you to never depend on anyone else’s opinion. You should do your own due diligence and evaluate your risk tolerance before making decisions to buy (or sell) any stocks or funds. Best of luck!

MR. SWING'S PLACE: Weekly Swing Trading Ideas / by Larry Swing

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Each week, Mr. Swing analyzes his database of more than 9,200 securities to scan for swing trading opportunities. But be warned: Do not expect a fast way to make money. Mr. Swing is going to show you how you can accumulate small gains weekly, ultimately making money through a disciplined, low-risk trading approach. While he realizes that this short-term swingtrading approach is not for everyone, he hopes that the information given at MrSWING.com will be useful to you in the near future...

These are your Swing Trading Opportunities for this week:

Talking Points member - Over the nearly two years that we have carried the Mr. Swing's Place column, Larry's picks have consistently put in great performances. Don't miss out on the full swing-trading content available at Mr. Swing.com. Take advantage of some of the great programs available by clicking here.

Long Swings:


^ click here
XRX,Xerox Corp
WMI,Waste Management
MWY,Midway Games
EL,Lauder (Estee) Co


Short Swings:


^ click here
UNH,UnitedHealth Group
LEH,Lehman Br Holdings
NDN,99(Cents) Only Stores
TRB,Tribune Co.
ESRX,Express Scripts

^ click here

MAV20 >=500000 AND CLOSE>7 AND ADX10 > 30 AND PDI10 > MDI10 AND HIGH < SMAC5
^ click here
HMY,Harmony Gold Mining ADR
GFI,Gold Fields Ltd ADR
AU,Anglogold Ashanti Ltd ADS
NDN,99(Cents) Only Stores

MAV20 >=500000 AND CLOSE>7 AND ADX10 > 30 AND PDI10 < MDI10 AND LOW > SMAC5
^ click here
XRX,Xerox Corp
WMI,Waste Management
LAMR,Lamar Advertising A
UNM,UnumProvident Corp

MAV20 >=500000 AND CLOSE>12 AND ( ADX10+ ADX20)/2 > 30 AND ( PDI10+ PDI20)>( MDI10+ MDI20) AND LOW< LOW1 and LOW1< LOW2 AND HIGH< HIGH1 and HIGH1< HIGH2

^ click here
PAAS,Pan Amer Silver
TTN,Titan Corp
RIO,Comp Vale do Rio Doce ADS
MATK,Martek Biosciences
MRX,Medicis PharmaceuticalA

MAV20 >=500000 AND CLOSE>12 AND ( ADX10+ ADX20)/2 > 30 AND ( PDI10+ PDI20)<( MDI10+ MDI20) AND LOW> LOW1 and LOW1> LOW2 AND HIGH> HIGH1 and HIGH1> HIGH2

^ click here
BRCM,Broadcom CorpA
XRX,Xerox Corp
BUD,Anheuser-Busch Cos


^ click here
WB,Wachovia Corp
ABX,Barrick Gold
AU,Anglogold Ashanti Ltd ADS
CELG,Celgene Corp
NLY,Annaly Mortgage Mgmt


^ click here
KR,Kroger Co
LMT,Lockheed Martin

MAV20 >=500000 AND CLOSE>12 AND (CLOSE1 - LOW1) <= 0.1 * ( HIGH1- LOW1) AND ( CLOSE - LOW) >= 0.95* ( HIGH- LOW) AND CLOSE > SMAC15 AND CLOSE > SMAC50
^ click here
AU,Anglogold Ashanti Ltd ADS

MAV20 >=500000 AND CLOSE>12 AND( CLOSE1 - LOW1) >= 0.9 * ( HIGH1- LOW1) AND ( CLOSE - LOW) <= 0.1 * ( HIGH- LOW) AND CLOSE< SMAC15 AND CLOSE < SMAC50
^ click here
XLNX,Xilinx Inc
DISH,EchoStar CommunicationsA
FITB,Fifth Third Bancorp
ATVI,Activision Inc

^ click here
SU,Suncor Energy
POG,Patina Oil & Gas

^ click here
GDT,Guidant Corp

^ click here
UNH,UnitedHealth Group
OHP,Oxford Health Plans
HEW,Hewitt AssociatesA
BBH,Biotech HOLDRs Tr Dep Receipt
DST,DST Systems

^ click here
MAS,Masco Corp
IP,Intl Paper
TXT,Textron, Inc
HRP,HRPT Properties Tr SBI
XLI,S&P Sel Industrial SPDR Fund

MAV20 >=200000 AND CLOSE>7 AND HIGH>=MAX40 and HIGH1 <> MAX40_1 AND VOLUME>1.5 * MAV20 AND CLOSE > OPEN AND VOLUME1 < MAV20 and ( ( CLOSE - LOW ) ) >=0.75*( HIGH - LOW )
^ click here
ISLE,Isle of Capri Casinos

MAV20 >=200000 AND CLOSE>7 AND LOW<=MIN40 AND LOW1<> MIN40_1 and VOLUME>2*MAV20 AND CLOSE < OPEN AND VOLUME1 < MAV20 and ( ( CLOSE - LOW ) ) <=0.25*( HIGH - LOW)
^ click here

COCO,Corinthian Colleges

^ click here


REVIVAL (Track1) + REVERSE (Track2) + TRIANGLE (Track3) are different scans developed by MrSwing.
Try for yourself to find the LIST that fits you the BEST...
Tracks, Breakouts & Reversals are explained in our new section called: SWINGLAB...

REVIVAL (Track1) + REVERSE (Track2) + TRIANGLE (Track3) are different scans developed by MrSwing.
Try for yourself to find the LIST that fits you the BEST...
Tracks, Breakouts & Reversals are e explained in our new section called: SWINGLAB...

ISLE (Short) - Chart of the Week
Larry Swing


Isle of Capris Casinos Inc. has been selected as one of my top (short) swing ideas for this week. To reduce your capital outlay and increase your leverage, I recommend buying this Company’s put options to maximize short-term profitability. Please read on for more swing details… 

Recommended Option Swing Play:


Isle of Capris Casinos Inc. (NASDAQ:ISLE)
Industry: Casinos & Gaming   Sector: Services 

Employees: 11,000  Market Cap: 549.8 Million
Institutional Ownership: 44.4%
Insider Ownership: 50.0%
Shares Issued & Out: 29.6 Million
Short Position of Float: 9.3%

Option Information:
Company Information: www.casinoamerica.com

Option Information: www.optionsxpress.com
Symbol: QEPSX   Type: PUT   Exchange: AMEX
Strike Month: JULY 2004   Strike Price: 22.50  Last Close: $2.75

Swing Trade Information:
Trade Strategy: Buy Put Options (Short-Term : Bearish)
Trade Targets: Common (7%) / Option (70%+)
Composition: 40 % Technical / 60 % Fundamental
Trade Duration: 1 up to 15 trading sessions
Risk/s: strong market rally; pre-mature short covering; sector (broad) short covering

Entry Strategy: Buy QEPSX When ISLE Trades Below $18.40

I recommend that traders buy the put options (symbol:QEPSX) when the underlying common stock (symbol:ISLE) trades “just below” 1-day support: $18.50.

Exit Strategy:  Sell QEPSX When ISLE Trades Down 7% to $17.10
I recommend that traders close out their put option positions once the underlying common (ISLE) trades down 7% and below my swing target of $17.10.


Advanced Trader Tip: “If” ISLE begins falling at market opening Friday June 18th., initiate your put option positions immediately. However, if ISLE rises at market opening wait for 15-30 minutes for short covering to finish. I expect ISLE will fall and test new intra-day lows “after” this initial short covering session.

Stop-Loss: Place a 4% Mental Stop-Loss Limit: (Based On The Common )
If the common stock rises 4% above your equivalent entry price of your options, I recommend selling all of your options “at market” to minimize losses.

Note: You should move your mental stop loss down as the common stock falls. The best way to protect your intra-day profits and minimize potential loss, is to keep your stop-loss about 4% from the common’s intra-day low price.

Urgent: Don’t forget to write down the equivalent entry and target price for the underlying common stock, as soon as you purchase your options. It is much easier for novice option traders to buy or sell these options based strictly on the price or movement of the underlying common stock.

Potential Risk/s: favorable market conditions; sector price strength; analyst upgrades and/or positive earnings revisions.


Need More Help: *also see Larry’s trading tips at the bottom*

Business Description:

Isle of Capri Casinos is a developer, owner and operator of branded gaming and related lodging and entertainment facilities in growing markets in the United States. The company wholly or partially owns and operates gaming facilities under the name Isle of Capri. In addition, the company wholly owns and operates a pari-mutuel harness racing facility and owns interests in and operates gaming activities aboard a cruise ship based.


Fundamental Catalyst/s:

1. Misses Guidance By $0.02 After-Hours (June 17/04)
Isle of Capri Casinos, Inc. after-hours Thursday June 17, 2004, reported a net loss of $4.3 million, and loss per diluted common share of $0.15 for Q4 of 2004, compared to net income of $18.2 million, or $0.60 per share last year. On an adjusted basis, excluding these charges, the Company had a profit of $11 million, or 35 cents a share, which missed the mean estimate of 37 cents expected from Wall Street and was down from the profit of $19.5 million, or 65 cents a share, a year ago.


This earnings shortfall comes despite the fact that revenue came in at $292.6 million for the quarter, up from $275.9 million a year ago and better than the $282.2 expected by analysts. Going forward, ISLE's management said that weakness in its Louisiana, Mississippi and Colorado markets would continue into the first quarter, which they will offset with more aggressive promotions. Ahead of the earnings release, shares of ISLE fell 30 cents, or 1.6%, to $18.55 at close on June 17, 2004. The stock was down an additional 1% in after-hours trading.


In summary, ISLE reported earnings, on an adjusted earnings per share basis, are down 46% from $0.65 per share in Q4 of 2003 to $0.35 per share in Q4 of 2004. ISLE’s year end earnings were down 6% from $1.54 per share in 2003 to $1.44 for fiscal year-end 2004.


2. S & P Affirms Negative Bond Outlook

On May 26, 2004 Standard & Poor's Ratings Services affirmed its existing ratings on the Biloxi, Miss.-headquartered gaming company, including its 'BB-' corporate credit rating. The outlook is negative. Total debt outstanding at Jan. 25, 2004, was approximately $1.022 billion. The ratings reflect Isle's aggressive growth strategy, the second-tier market position of many of its properties, and increased expansion capital spending. These factors are offset by the company's diverse portfolio of casino assets, relatively steady historical operating performance, and credit measures that have historically been maintained in line with the rating.


In summary, S&P bond rating on ISLE is negative and should give short sellers another reason to step to the plate in the short-term.


3. Low Analyst Confidence
The average Wallstreet Analyst recommendation on FBN has fallen from 2.50 to 2.60. The higher the score the lower the mean analyst confidence is. The mean analyst rating scale is as follows: (Strong Buy) 1.0 - 5.0 (Strong Sell). Also, ISLE’s mean rating of 2.6 is a HOLD rating, versus an industry average rating of 2.36. 

4. Possible Downgrades and Negative Earnings Revisions

It is very likely one or more Wallstreet Analysts may downgrade ISLE on Friday or Monday following weak financials and missed guidance after-hours. Analysts may also revise short and long term earnings estimates downwards as well. Both actions are bearish for ISLE in the short to mid term.


Technical Catalyst/s:


1. Should Test 26 Week Lows & Multiple Sell Signals

Based on my technical analysis of ISLE, my research indicates the stock’s short, medium and long term trends are “Bearish”. ISLE is trading below its 20, 50 and 200 day moving averages by a minimum of 15%. On June 16, 2004 ISLE signaled a significant SELL SIGNAL and REVERSAL to the downside, when the stocks 50 dma crossed over and below its 200 dma.  This is a very bearish technical event!


Within the last 3 trading sessions Relative Strength Index (RSI), Commodity Channel Index, and  Average Directional Index (ADX) all revealed sell signals. The stock’s has bearish 15, 45, and 100 day trends and is close to testing ISLE’s 26 week low at

$18.47, set on Nov. 18, 2003.


A high volume close below ISLE’s 26 week low, on high volume, will break significant support and will signal another “Sell Signal” for tech traders. If this occurs, I expect the stock to test $13.29 within the next 30 days.



Mr.Swing DISCLAIMER: Information for the stock observations was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the stock observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MRSWING.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the strategies described above. © Copyright 2002, MrSwing.com. All rights reserved. COPYING AND OR ELECTRONIC TRANSMISSION OF THIS DOCUMENT WITHOUT THE WRITTEN CONSENT OF MRSWING.COM IS A VIOLATION OF THE COPYRIGHT LAW.

THE TRADER'S MINDSET: The Day Trader's "Edge" / by Bennett McDowell, Columnist

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Founder and President of TradersCoach.com, Bennett started his financial career on Wall Street with the firm J.J. Kenny Co. in 1984 after serving as an officer in the U.S. Navy. Bennett also served as a Retirement Plan Specialist with the Equitable in New York and has investment real estate experience as well. In addition, his 1979 Economics BA degree from Syracuse University in upstate New York gave him a foundation on which he was able to build a solid background in Finance.

Bennett has extensive experience in trading the financial markets and is currently an active trader including day trading the financial futures markets. He also coaches many traders through his company TradersCoach.com.

Considered an expert in technical analysis and complex computer trading platforms and applications, Bennett has educated and helped traders worldwide improve their trading. Bennett is well known for helping traders overcome sabotaging psychological issues that keep them from reaching their full potential. In addition to his educational and coaching abilities, Bennett, a registered securities broker, manages money and trades for clients throughout the United States.

Bennett released his home study course Applied Reality Trading, also known as "ART" in January 2002. His cutting-edge course teaches traders his state of the art Pyramid Trading Points, Money management, and developing the "Trader's Mindset." Bennett is also known for developing The Trader's Assistant - a premier trade-posting record-keeping system for traders, as well as writing and publishing The Survival Guide For Traders, a book on how to set up and organize your trading business.

Bennett provides private consultation/coaching services to many traders throughout the world by telephone, video conferencing, and in person. Working with Bennett, traders spend time focusing on trading system development, trading psychology, and disciplined money management.


The Trader's Mindset Columnist
The Day Trader’s “Edge”

In this article, we will discuss “Day Trading” and developing your trading “edge”. Exactly what is it, how to do it, and why it is so tough.

“Day Trading” in it's truest since means to only trade during the day and close out all your open trades by the time the market closes.  So, when you finish trading for the day, your trading account is "flat" and is "all cash" meaning no positions are being held over night.  This is “Day Trading” in the purest since.  There are many shades of gray in defining “Day Trading.”  Some traders use 30 minute charts and hold positions overnight and call this “Day Trading” because they are using an intraday chart to base their trading decisions.   Thus, they consider themselves “Day Traders.”  I actually would consider them short term position traders or even perhaps overnight "Swing" traders.  So, for our discussion here, let's use the purist definition for “Day Trading,” we do not hold positions overnight.

To be successful in trading regardless of the time frame, you must have an “edge”, and once you have it, stick with it to be a consistent winner.  As a “Day Trader” you must decide on how you are going to trade, what is your “edge”.  Are you going to trade intraday trends or are you going to scalp?  Deciding how you are going to trade will depend on your personality and beliefs about trading.

But realize when trading on such a short time frame of say one minute, 5 minute, or even 10 minute time frames, “Day Trading” takes a lot of energy, and can be emotionally draining.  Some days after I “Day Trade,” I feel like I just played an intense tennis matches or a game of intense golf.  And “Day Trading” is much like competing in sports!   Because in “Day Trading,” you are definitely competing against other traders during the day.  It is not buy and hold where an investor depends on the fundamentals to make money.  It is a game where you play to win, just like in athletics!  “Day Trading” surely is a zero sum game meaning that for every winner there is a loser. Top athletes practice, practice, and practice until they perfect their skill. Much like these top athletes, traders need to practice, practice, and practice to become top traders. Traders should practice their trading through “paper trading” until they are consistently profitable. “Paper trading” is a great way to perfect your trading skills without risking your hard earned trading capital.

Many good “Day Traders” in fact are athletes, but athletes like Tennis Players, Golfers, and sports where individual competition vs. team playing are emphasized.  Why is this?  Because individual athletes that place winning solely on their shoulders can candle the stress of Day Trading where winning is also squarely on the trader's shoulders.  There is a difference from that of a team player who relies on the whole team to win.  Individual athletes have developed a tough mindset that performs well under pressure.

Good “Day Traders” do not look for "holy grail" trading system!  Instead they focus on their “edge” just like an athlete focuses on their “edge” in sports.  A tennis player with an excellent back hand relies on that back hand to win.  A trader with an excellent trade set up relies on that set up to win.  Once you have your "secret" edge, the hard work of staying out of the market until the proper time and controlling your emotions while trading is key.  You must be disciplined in not being sucked into a trade based on the markets seductive environment.  Only trade when your “edge” says too! 

Like an athlete, a trader will have both good days and bad days.  On the bad days, it is usually because you head is really not in the game of trading or you are tired, or have other stuff on your mind.  Just like when you have a bad game of tennis or golf, it usually is because you head was just not in the game that day.  It is not because you need some additional skill or a new trading system!  This of course is assuming your trading is generally consistently profitable and you just had a bad day.  The best thing to do if you do not feel like trading is don’t trade that day or week.  Instead take time off, and when you’re ready get back in the game.  You will feel refreshed and ready to win!

That is your goal in trading, find your edge, and align that edge with your personality for a winning game!

Bennett McDowell, President
Free Video – Trading The Perfect Business!
10755-F Scripps Poway Parkway, #477
San Diego, CA. 92131

Copyrighted © 2003 TradersCoach.com, Inc. All rights reserved.

CONTRARIAN CORNER / by Jeff Weber, Columnist

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As a leading contrary investing expert, Jeff has written own investing book, I Guarantee You Will Buy Low Sell High and Make Money, which shows you when to buy and sell the stocks he recommends in his book. You can order the book by clicking on the title and it comes with a free one-year subscription to his newsletter, one month of coaching articles, and one year free email support.

Jeff Weber of JJJ Investing Services
Jeff Weber
Jeff Weber
Contrarian Columnist

The Contrary State of the Union message

So far has been pretty good for the stock market – the Standard & Poor’s 500 is up 9% since January, 2004. Things have changed in the last six months. Last year the economy gave a confusing message and internationally things looked good. The times have changed. Back in 2003, corporation profits were growing and demand was growing, but the jobs’ picture looked bad. Of course, nobody was worrying about interest rate hikes either.

Even the war in IRAQ looked good for the stock market with the capture of Saddam Hussein. But as the war continued into this year, it has been a Bear war – not a Bull war. The longer we stay there, the less the people of Iraq think we are friends and now over 90% of Iraqis view us as an occupying Army. And Americans like the war less and less – their faith in our leaders has gone done and now some polls show John Kerry leading. Well, this has transferred to the stock market. Nothing “the non-contrarians” like less than uncertainty. And since they still make up the vast majority of investors, of course the market has not been advancing at a rapid rate. But it is not falling at a rapid rate either.

So us contrarians have not really been hurt by the actions of the majority – we are kind of in idle, waiting for the traffic jam to clear so we can drive on. And contrarians know to be patient – we don’t need to see our stocks rise every day – we are in the market for the long-term. We know what we are doing and will continue to do what we are doing through feast and famine.

So now the economy is a little different than it was six months ago. Ironically as always good things cause bad reactions. Because employment is rising, the same economic recovery that advanced the market last year; is now holding the market back. If lots of people are finding jobs, don’t you think they will start buying more things and that will cause companies to make and sell more things and that will cause the companies to make higher profits and that will cause their stocks to go up – sounds logical to us contrarians.

And remember the majority, the herd; the non-contrarians go mostly by emotions. They really want to believe the Federal Reserve will greatly raise interest rates despite the strong language from the Federal Reserve that interest rates will only rise slowly. Remember this is an election year and Alan Greenspan wants to continue as Chief of the Federal Reserve.

And so what if the Fed raises interest rates. Raising rates only hurts stocks in the short-term, not the long-term. Remember my recent column explained how interest rate raises help stocks in the long-term! Most analysts figure there will potholes on the road to 2005 but they feel stocks will be higher at the end of 2004. So view the six months as offering good-buy opportunities for the long-term. Thanks to the majority, no matter how many windows of opportunity you missed, there’s always another window opening for you thanks to the majority, institutions, pension plans etc.

. Look at what S &P economists are predicting for this year. They are predicting the economy will grow at a 4.8% for 2004 – the best growth for the Gross Domestic Product since 1984! Overall the Dow Jones is estimated to finish at 1210, which is jump of 8.8% for 2004. So why are the majority worried? They don’t like reality and just want to stay worried – well it’s a free country but lots of things I want cost money. I will continue to be a contrarian – I can’t afford not to!!!

Here are three stocks I like:

Checkpoint (NYSE: CKP $17.48)
52-week High - $22.45 52-week Low - $13.50
Earnings on the rise

China Mobile (NYSE: CHL $14.88)
52-week High - $18.25 52-week Low - $11.55
Pays 1.5% Div; earnings on the rise.

Clear Channel (NYSE: CCU $37.83)
52-week High - $47.76 52-week Low - $36.36
1.1% Div.; earnings way up in last two years.

INSIDE TRACK: Weekly Insider Report / By Jeff Williams

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Jeff Williams is a partner with http://www.insiderreview.com For the past seven years Jeff has done extensive investment research as a member of an institutional investment team. His background consists of a degree in Finance from the University of South Florida with a minor in Economics. Jeff's everyday activities as an insider stock analyst consist of analyzing data available through a multiple of sources as it applies to all publicly traded companies. With this information he can then make short-term and long-term evaluations on a company’s present and future performance based on insider buying patterns. Each month Jeff will share with you his thoughts on stocks he believes to display the most interesting insider buying patterns.

Jeff Williams
Inside Track Columnist

Open market insider trading activity for IDGR June 2004

Industrial Distribution Group, Inc.

Industrial Distribution Group, Inc. (IDGR) is a nationwide supplier of maintenance, repair, operating, and production (MROP) products and services to manufacturers and other industrial users. The Company provides value-added services and other arrangements, including Flexible Procurement Solutions, such as storeroom management. IDGR specializes in cutting tools, abrasives, hand and power tools, coolants, lubricants, adhesives, safety products, and machine tools, supplying virtually any other MROP product that a customer may require. The Company's operations are organized into four regional divisions. IDGR has sales coverage in 43 of the top 75 manufacturing markets in the United States and has an active presence in Mexico and China. IDGR has approximately 20,000 active customers (customers that purchased at least one item in the last 12 months), including General Electric Company, Borg-Warner Inc., Ford Motor Company, Duracell Corporation and The Boeing Company.

Mr. Lingenfelter was named President of the Southern region in January 2002. Prior to that time, Mr. Lingenfelter served as President of the IDG-Charlotte business unit (from January 2001) and as President of The Distribution Group, Inc. (from 1997), one of the companies that combined to form us in 1997 and with whom he had been an executive since 1988. Prior to 1988, Mr. Lingenfelter served Ingersoll-Rand Company, including as Vice President of Sales and Marketing for its Tools Group. Mr. Lingenfelter received his undergraduate degree in Mechanical Engineering from the Indiana Institute of Technology.

We are impressed, in particular, with this large purchase by Lingenfelter. Lingenfelter last bought in August 2002.  Why has he waited almost two years to make another purchase?  It is also important to not the the stock has been performing well recently.  Looking at the chart, IDGR has been in a steady up-trend for some months.  There has been a recent pull back and insiders seem to have bought into this dip.  This large purchase by Lingenfelter along with the buying by other insiders, including the CFO, is very encouraging in our opinion.  We expect more good news from the company and a higher stock price in the coming months.

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FRESH PICKS: On the Prowl

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Weekly Stock Picks From Bob Coppo - New Feature!  

Top Stock Picks for Monday, June 21st, 2004:

Bob Coppo is Managing Director and Chief Technical Analyst for JNL Financial Consultants, Inc. The company has operated StockmarketTimer.com on the internet since 1997 and provides investment advice to both individual and institutional clients. Make sure to visit his site, StockMarketTimer.com.

1. BEAS (BEA Systems, Inc., Software and Programming) $7.93 - Buy. We start off the week with a recognizable tech name scraping 52-week lows. "BEA Systems, Inc. (BEA) is a provider of application infrastructure software and related services that help companies build distributed systems that extend investments in existing computer systems and provide the foundation for running an integrated business. BEA's products have applications in a variety of industries, including telecommunications, commercial and investment banking, securities trading, government, manufacturing, retail, airlines, pharmaceuticals, package delivery and insurance. " Looking at the week ahead, we're a bit concerned about the overall market and would caution that the best option may be to take a seat on the sideline to see where we're going. With continuing instability in Iraq, and the impending transfer of power, as well as the likely return to rate hikes, volume will likely be light and direction uncertain. In the event that the Nasdaq does show some life, we like the looks of BEAS at this level for a short-term trade in the minimum. The stock is clearly oversold here, down 30% since late April and with an RSI buried near the bottom. The company continue to grow revenue - for the three months ended April 30, revenues rose 11% to $262.6 million while net income increased 4% to $25.3M. However, the market has not been kind to tech over recent months, and BEAS has been caught in the current. Friday's close fell below the post-gap May low of $8.05, breaking the floor with no support below. Therefore, we'd look at $8.05 as a buy trigger point as we'd like to see the stock back above that line before jumping in. With a 50-day MA of $10.17, there's some decent upside to be had when it turns. There's also quite a bit to like in the fundamentals here, including a profit margin of 11.52%, operating margin of 17.31%, a return on assets of 5.89% and a return on equity of 13.33%. Additionally, BEAS has more than $1.5 Billion in cash and an attractive forward P/E of just 18.44. Short-term price target: $8.90 (12% gain) Stop loss trigger: $7.55 (5% loss)

BEAS Chart

2. LEXR (Lexar Media, Inc., Photography) $7.60 - Buy. Our second pick for the week ahead is one we love for the longer term. "Lexar Media, Inc. designs, develops, manufactures and markets high-performance digital media that the Company markets as digital film, as well as other flash-based storage products for consumer markets that utilize flash memory for the capture and retrieval of digital content for the digital photography, consumer electronics, industrial and communications markets. To address the market for compact digital data and media storage solutions, the Company also markets its JumpDrive products, which are high-speed, portable universal serial bus (USB) flash drives for consumer applications that serve a variety of uses, including floppy disk replacement. In addition, Lexar Media markets a variety of connectivity products that link its media products to personal computers (PCs) and other electronic host devices." Revenue and profits are solid as well, as for the three months ended March 31, revenues totaled $164.7 million, up from $54.6 million while net income totaled $9.4 million, up from $4.3 million. Looking at the recent news items for LEXR, it's a bit difficult to wade through the slew of class-action lawsuit announcements. But buried in all of that, you'll notice a big deal unveiled last month with Kodak, where the camera giant will be marketing LEXR's memory cards. The stock is radically oversold here, having fallen more than 50% from it's early-April peak of $18.05. It also looks quite undervalued, with a forward P/E of just 10 to go along with the big growth cited above and zero debt. We like LEXR a lot down here, but as with BEAS, don't jump the gun if the market overall is not cooperative. We would look to the May low of $8.49 as an initial target here. Remember also that LEXR is in uncharted waters at this price and nothing in the way of support exists below, so be careful and consider timing entry based on a clear reversal. Short-term price target: $8.49 (12% gain) Stop loss trigger: $7.20 (5% loss)

LEXR Chart

As always, do your own research before buying or selling any security. Our recommendations are for informational purposes only and are only our opinions. Make sure to read our Disclaimer

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