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Email Version, Section 1, Sunday 04/01/2001
The Newsletter         Sunday 04/01/2001 1 of 2
Copyright 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

 - Your World Leader for Trading Stock Splits on the Internet -

Posted online for members at:

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charts and graphs, click here:

In This Newsletter:

Market Stats
Market Commentary - Prelude To A Rally?
Definition of the Day
Friday's Split Announcements - None
Monday's Expirations
Event Calendar - Next Week's Economic reports
Upcoming Splits for next two weeks
Successful Announcements - Last Week
New Candidates List
Expected/Likely Announcements for the Coming Week


Market Stats For the Week

Index                     Close    Change    Support   Resistance

DJIA (INDU)            9,878.78   +374.00      9,100       10,000
Nasdaq (COMPX)         1,840.25   - 88.49      1,700        2,250
S&P 500 (SPX)          1,160.33   + 20.43      1,080        1,375
Russell 2000 (RUT)       450.53   +  7.26        410          508
PHLX Semi (SOX)          545.04   - 96.91        530          800

Market Commentary

Prelude To A Rally?

Okay, so maybe I am jumping the gun, but for the second
consecutive week, the three major indices closed a Friday in the
black.  Only a fortnight again such an event seemed as unlikely
as a British cow avoiding a premature trip to the abattoir.

To be sure, the three major indices have performed miserably
through the first quarter of 2001. The Nasdaq Composite Index
(COMPX) fell 25.5 percent after falling for the last three
quarters in 2000, marking the first time it has tanked for a full
12-month cycle since 1984.

Not that 2001 has been any kinder to blue-chip and broader
markets, because it hasn't.  The Dow Jones Industrial Average
(INDU) finished the quarter down 8.4 percent, posting its worst
quarter since 1978 and snapping a two-quarter winning streak that
was sparked by traders' search for anything sans tech.
Meanwhile, the S&P 500 Index (SPX) finished off 12 percent,
posting, like the COMPX, its fourth-straight quarterly loss.

But if I may be so bold as to invoke a meaningless clichi or two,
that was then and this is now and sunk costs are sunk.  In other
words, the future is what matters, and if we can say that the
future began on Friday, then we can say that it's off to a
respectable start (just don't say that the future began on
Thursday or Wednesday or you'll ruin my segue).

To that end, the COMPX closed Friday with a gain of 19.69 points,
or 1.08 percent, to 1,840.26.  Leading the COMPX advance were
four issues that couldn't catch a break to save their lives
earlier in the week.  Cisco Systems (Nasdaq:CSCO), Sun
Microsystems (Nasdaq:SUNW), JDS Uniphase (Nasdaq:JDSU) and Oracle
(Nasdaq:ORCL) all managed to post a modest gain.

Still, that wasn't enough to erase earlier losses.  For the week,
the COMPX jettisoned 4.6 percent of its value.

Despite tech's mounting losses, I'm becoming more bullish on the
COMPX.  For all of last week, the COMPX remained above its two-
month long downtrend.  What's more, the bottom line of a popular
wedge formation suggests that 1,750 is the downside limit.
Obviously, there is still risk, but with many big-cap tech issues
trading at 60 to 70 percent discounts (including the
aforementioned tech quartet) to their 52-week highs, I'm thinking
that the risk/reward scenario on the COMPX is favoring long-side

Chart of the NASDAQ Composite:

My bullish sentiment also applies to the Old Economy.  On Friday,
the INDU rose 79.72 points, or 0.81 percent, to 9,878.78, which
means the average has now put 500 points between itself and the
official bear market close of 9,378.  The INDU was buoyed by
American Express (NYSE:AXP), which gained $2.34 to $41.30 on
speculation that Citigroup (NYSE:C) may be interested in making
an offer for the company.  Other notable winners included J.P.
Morgan Chase (NYSE:JPM), Exxon Mobil (NYSE:XOM), International
Paper (NYSE:IP) and Alcoa (NYSE:AA).

Moreover, for the week, the INDU posted a 3.9 percent gain.

Much ado has been made of the INDU obliterating its 50 percent
retracement from its all-time high of 11,720.  However, I think
it's more noteworthy that the INDU broke through its bottom
regression line, which could provide immediate resistance at
10,000.  Should the INDU break this resistance (which I think
could happen soon because of recent strong momentum), the next
significant resistance level comes at 10,750, the top of the
downward regression.  This is in contrast to the 50-percent
retracement at 10,500, which many technicians are pointing to as
the next resistance level.  I don't buy it, though.  To me,
10,500 represents eventual support, not current resistance.

Chart of the Dow Jones Industrial Average:

Of course, as many traders are aware, we can't get too gung-ho
about this market until the official arbiter of bull and bear
markets, the S&P 500 Index (SPX), recovers.  On Friday, this
broad-market index rose 12.38 percent, or 1.08 percent, to
1,160.33, meaning its now trading at 24 percent discount to its
all-time closing high of 1,527.

However, I think the worst may be over for the SPX, particularly
if it has caught support at its intermediate upward trendline,
which, according to the chart, it appears it has.

Chart of the S&P 500 Index:

As for stock news on Friday, more specifically Splittrader stock
news, our Current Play list continues to hold its own.  Our
biggest winner this week was electronic game maker THQ Inc.
(Nasdaq:THQI), which gained 10.1 percent for the week to close at
$38.00.  The second biggest gainer was mortgage insurer Radian
Group (NYSE:RDN), which moved higher 9.5 percent to 67.75.

Regrettably, there were losers.  The biggest loser was low-end
retailer Rent-A-Center (Nasdaq:RCII), which gave back 6.7
percent.  Another notable loser was Smithfield Foods (NYSE:SFD).
Smithfield had the misfortune of being associated with the Tyson
Foods (NYSE:TSN) and IPB Inc. (NYSE:IBP) takeover fiasco.

In a move that humbled many an arbitrageur's portfolio, Tyson,
the nation's largest poultry processor, recanted its $30-a-share
takeover offer for IPB, the nation's largest meatpacker.  With
Tyson headed for the exits, IBP plunged $6.39 to $16.40 while
Tyson rose $1.97 to $13.47.

Enter Smithfield, the nation's largest pork processor.  Given its
plunge, IBP is once again perceived to be an attractive takeover
candidate, since it's now trading for roughly 10 times projected
2001 profits of $1.50 a share.  This had many arbs thinking that
Smithfield may make a bid for IBP.

In other words, they sold Smithfield on Friday.  The company's
shares tanked $5.25 to $32.50 on Friday.  We were stopped out at
$33.25 despite having a stop-loss set at $35.25 because of the
stock's gap-down open.  Still, we were able to exit with a small
gain.  However, had Tyson stuck to its guns, Smithfield would
have been our biggest gainer for the week.  Oh, well.

While we're on the subject of our Current Play list picks, here's
an interesting tidbit.  Over the past five months, the
Splittrader portfolio of plays has lost 2 percent in value.
Granted, losses are nothing to brag about; however, over the same
time period the Dow Jones Industrial Average (INDU) has lost 9
percent, the Russell 2000 Index (RUT) has lost 9 percent, the S&P
500 Index (SPX) has lost 18 percent, the Wilshire 5000 Total
Market Index (TMW) has lost 19 percent and Nasdaq Composite Index
(COMPX) has lost 44 percent.

Keep in mind, too, that we employ a long-only strategy (enacted
in October 2000).  What's more, the majority of our picks are
split run and split candidates, meaning there still is value to
be created anticipating stocks that could split.

Here's another consideration:  we don't cherry pick our plays to
represent our gains.  Many financial information sites will post
their best picks on their start page, leading readers to believe
that these picks are representative of overall portfolio
performance.  WE REFUSE TO DO THAT.  In fact, since we switched
to a long-only strategy, we've kept a detailed Excel spreadsheet
of all our picks (November to the present), which I'll avail to
any reader for the asking (e-mail  And if you
want to see all of our play results since our inception, just
click on the "Play Results" section on the left-hand side of our

But enough of us, let's see what else happened on Friday.

In economic news, the University of Michigan consumer sentiment
index improved modestly in March, coming in at 91.5 vs.
February's 90.6 reading, snapping a three-month decline.  Street
analysts had predicted numbers from 90.2 to 91.0.  The survey
seemed to indicate that consumers aren't as depressed about the
stock market's losses as the experts thought.

Also on Friday, the Chicago Purchasing Managers (CPM) fell to
35.0 percent in March, its lowest reading in 19 years. This (CPM)
index is often an indicator of the National Association of
Purchasing Management Index (NAPM), which is due next week and is
traditionally the first reading on the economy of every month.
This NAPM report could sway the Fed to consider an inter-FOMC
meeting interest rate cut.

Speaking of NAPM, this index reading will kick off this week's
slate of economic data releases on Monday.  The NAPM index is
forecasted to post at 42.5 this month, up from 41.9 in February.
Still, a reading less than 50 is indicative of a contracting

On Tuesday, factory orders for February are due for release and
are predicted to have increased 0.2 percent, up sharply from a
3.8 percent decrease in January.

Finally, on Friday, we get the week's most anticipated economic
data set with the unemployment report, which is expected to rise
slightly to 4.3 percent this month, up from 4.2 percent last
month.  Moreover, average hourly earnings -- the gauge of wage
inflation most closely watched by the Fed -- are expected to
increase 0.3 percent this month, off from a 0.5 percent increase
in the prior month.  Overall, the U.S. economy is expected to
have added 75,000 non-farm jobs in March, off from the 135,000
non-farm jobs added in February.

Taken together, the week's economic reports should help investors
anticipate whether the economy is approaching a V-shaped (quick),
U-shaped (slow-but-sure) or L-shaped (not in the cards) recovery.

As for the Federal Reserve, it will likely remain at the back of
the bus, at least through this week, leaving the driving to
corporate earnings, which, so far this year, have driven the bus
like Mr. Magoo.  So far, 984 companies have issued comments about
their earnings and 682 have been earnings warnings.  In the year-
ago period, 272 companies issued comments and only 122 were
negative.  Keep in mind, the confessional season begins in
earnest next week.

This week's earnings will bring announcements from major
electronics retailers Circuit City (NYSE:AA) and Best Buy
(NYSE:BBY), as well as blue-chip manufacturing bellwether Alcoa

Don't expect this trio to knock your socks off.  According to
analysts surveyed by First Call, S&P 500 companies' earnings will
drop 8 percent this quarter and 6 percent in the second quarter.

Despite the continued dearth of positive earnings news, I still
think you have good reason to turn that frown upside down.  Like
I've said in the past, I think the worst is over.  Everything we
currently know about earnings, the economy and the Fed is priced
into today's security prices.

The fact is, with everyone expecting the worst, it's not going to
take much good news to get this market moving in the right
direction again.

S.P. Brown

Editors Note:

If you have not yet reserved a seat at the April Trading Expo
in Denver this week, then you are missing out on the opportunity
of a lifetime.  This group of speakers will never be offered
again.  Over a million investors have read their books and
newsletters and heard them speak individually. Next weekend
you can hear them all in one place with over 50 hours of
in-depth options and stock trading education.  Take a couple
days off from the markets and learn how to win more and
lose less.

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April 5th-9th, Denver Colorado

OptionInvestor is proud to announce our third annual Spring
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Jeff Bailey, Editor,
Learn the basics of Point and Figure Charting while analyzing
how supply and demand on an institutional level affects the
markets and the stocks you want to trade.

Mark Skousen, Ph.D., Editor, FORECASTS & STRATEGIES
The Global Economy and its Impact on Us.
Learn from a professional economist who turns his understanding
of economics into highly valuable investing advice.

Harry Browne, Author of Fail-Safe Investing
Sixteen Golden Rules of Failsafe Investing.
A powerful session that translates the essence of the book
into guiding principles.

Jim Brown, Founder,
Austin Passamonte, Editor,
Jeff Bailey, Editor,
Preparing for Battle.  This is a very popular session where
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choosing your hot list.

Tom DeMark, Author of three books on DayTrading Options
Day Trading Options.  An extremely popular subject taught by one
of the world's foremost authorities on chart analysis.  Tom wrote
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Steve Nison, Author, Japanese Candlestick Charting Techniques
Candlestick Charting.  Is that a doji or an evening star formation?
How can this benefit your trading success?  Candlestick chart
analysis is another hot topic that traders are always eager to
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Candlesticks" and has written two books on the subject.

Austin Passamonte, Editor,
Buzz Lynn, Contributing Editor,
Beating the Market with Indexes.  This is another tag team event
where you'll hear from two of our staff from as
they discuss topics like:  Don't Pick Stocks, Pick Markets; and
Market Timing Equals Sector Profits.

Rance Masheck, President,
Calendar Spreads & Bull Call Spreads.  Some of the first strategies
a beginner will encounter in spread trading are these two spreads.
Both simple and effective they continue to draw experienced traders
over and over again.

Mark Skousen, Ph.D., Editor, FORECASTS & STRATEGIES
Scrooge Investing - The Best Bargains in Beaten Down Stocks for
2001.  This is a great topic and Mark's background as an economist
really offers some new insight into the challenge of choosing your

Jeff Bailey, Editor,
Calculating the Bullish Percent.  Applying your new knowledge
in Point and Figure charting to decipher how many stocks in
a sector are showing buy signals.

Jim Brown, Founder,
Austin Passamonte, Editor,
Pre-Market Analysis.  A very popular session where multiple
speakers team together offering insights on: Pulling the Trigger,
Amateur Hour, and Market Hype.

Dick Arms, Inventor of the Arms Index, Founder,
Increase your profit potential with Equivolume Charting, volume
adjusted moving averages and the TRIN

Derek Baltimore, Co-Editor,
Risk Management in a declining Market

Buzz Lynn, Contributing Editor,
Sector Trading with IShares.  You may know of DIAMONDS for the
Dow Jones, SPDRs for the S&P 500, and the QQQs for the NASDAQ but
there is a growing list of IShares and HOLDRS that offer great
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Jon Najarian, Founder, Mercury Trading, Floor-Trader CBOE
Successful Option Trading. "Doctor J" is the name and options is
the game.  Jon has twenty years of experience as a professional
option trader.  His firm makes markets in over 90 high-tech and
biotech stocks and trades up to 40,000 options per day.

Matt Russ, Editor,
How to Profit from Option Pricing, Market Making and Volatility

Rance Masheck, President,
Straddles. An excellent strategy for today's markets.  Traders
should be very familiar with the proper execution of a straddle to
benefit from expected volatility.

Jeff Wright, Preferred Trade
Understanding Option Basics and the roll of an options floor trader.

Buzz Lynn, Contributing Editor,
Slump Busting.  Are you on a losing streak?  Learn what you need
to do to BUST out and break the pattern.

Jim Brown, Founder,
Big Cap Strategies, Naked Puts, Zero Risk Trading, Making Dollars
not Dimes.

Jim Crimmins, President,
Tax Strategies for the Active Trader.  It's that time of year
again and Uncle Sam wants a cut of your trading profits.  Let Jim
offer some advice on how traders should handle such taxing issues.

Molly Evans, Writer/Trader, IndexSkybox &
The Organized Trader.

Rance Masheck, President,
Five Point Star Trader System.  Learn what you need to know
about a stock before making a decision to trade.

Austin Passamonte, Editor,
Swing Trading & Day Trading Index Options.  Many consider Index
option trading to be the pinnacle of equity options.  Learn more
about the do's and don'ts for Index Option trading.

Eric Utley, &
Psychology of trading and the Importance of the top down
approach to trading.

Buzz Lynn, Contributing Editor,
Trading with Qcharts.  Learn how to properly set up, use, and
deploy the best features and techniques.

Derek Baltimore, Co-Editor,
Exit Strategies, knowing when to quit

Tim Taylor - Preferred Trade
Using Direct Access Trading Platforms

Each topic will be covered in 1-2 hr general sessions taught
by one or more OptionInvestor staff and presented on three
giant screens. In the evening we will offer five of our popular
chalk talk sessions for that personal question and answer

Unlike other seminars with only two or three instructors, you
will get in-depth knowledge from many different instructors
who are experts in their field.

The cost for the four-day workshop, April 6th to 9th is only
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have attended a prior OIN seminar.

This is not a prepackaged presentation that gets repeated over
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Definition of the Day

Odd Lot

A purchase or sale of less then the average trading unit. For
most securities, an odd lot is any transaction involving less
than 100 shares

For the complete definition, please go to:

Friday's Split Announcements


Monday's Expirations by Payable Date

Federal Screw Works (FSCR) splits 5:4

Event Calendar

For the week of April 2, 2001

Auto Sales                Mar  Forecast:   6.6M  Previous:     7.0M
Truck Sales               Mar  Forecast:   7.2M  Previous:     7.5M
Construction Spending     Feb  Forecast:  0.40%  Previous:    1.50%
NAPM Index                Mar  Forecast: 42.50%  Previous:   41.90%

Factory Orders            Feb  Forecast:  0.20%  Previous:   -3.80%
Chicago Fed Activity Idx  Mar  Forecast:    NA   Previous:   -0.71%

NAPM Services             Mar  Forecast: 51.50%  Previous:   51.70%
Oil and Gas Invtenty   20-Mar  Forecast:    NA   Previous:   301.5MB
Semiconductor Billings    Feb  Forecast:    NA   Previous:    -5.7%
Vehicle Sales             Mar  Forecast:  14.0   Previous:    17.5M
Idx of Online Shopping    Mar  Forecast:    NA   Previous:   154.4

Initial Claims        31-Mar  Forecast:     NA   Previous:     362K

ECRI Wkly Leading Idx 30-Mar  Forecast:     NA   Previous:     -4.9%
Nonfarm Payrolls         Mar  Forecast:     70K  Previous:      135K
Unemployment Rate        Mar  Forecast:   4.30%  Previous:     4.20%
Hourly Earnings          Mar  Forecast:   0.30%  Previous:     0.50%
Average Workweek         Mar  Forecast:   34.1   Previous:     34.2
Wholesale Inventories    Feb  Forecast:   0.10%  Previous:    -0.30%
Consumer Credit          Feb  Forecast:   $9.5B  Previous:    $16.1B
ECRI Future Inflation    Mar  Forecast:     NA   Previous:    111.3

Week of April 9th
Apr 11  Export Prices ex-ag.
Apr 11  Import Prices ex-oil
Apr 12  Initial Claims
Apr 12  PPI
Apr 12  Core PPI
Apr 12  Retail Sales
Apr 12  Retail Sales ex-auto
Apr 13  Business Inventories

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Upcoming Splits

Symbol  Company Name                Splits  Payable    Executable

FSCR  Federal Screw Works            5:4  04/02/2001  04/03/2001
RMCI - Right Management Consult.      3:2  04/06/2001  04/09/2001
JP   - Jefferson Pilot                3:2  04/09/2001  04/10/2001
UCBH - UCBH Holdings                  2:1  04/10/2001  04/11/2001
GVA  - Granite Construction           3:2  04/13/2001  04/16/2001
SBL  - Symbol Technologies            3:2  04/16/2001  04/17/2001
CAH  - Cardinal Health                3:2  04/20/2001  04/23/2001
MBI  - MBIA Inc.                      3:2  04/20/2001  04/23/2001
SBUX - Starbucks Corp.                2:1  04/27/2001  04/30/2001

Successful Announcement Predictions For The Past Week

Symbol         Company              Date Announced

             No Split Announcements


New Split Candidates:

ADVP - AdvancePCS   $54.25 (+1.44)
ADVP last announced a 2:1 split back in July of 1999 when the
stock was trading at $50.25/share.  One look at this healthcare
management provider will confirm that ADVP is right back into
split territory and then some.  We are targeting ADVP's earnings
release date of 5/10 as the next likely time for a split



HF - Heller Financial, Inc.  $35.15 (+0.66)
Heller has been making new highs on increasing volume and is
closing in on the key $40 split level for the financial industry.
The company has 500 million shares authorized and 46 million
outstanding.  Although the company has never split its shares
before, we are anticipating a 3:2 split announcement out of the
company's next earnings release date of 4/19.



LEN - Lennar Corporation  $39.86 (+1.09)
This skyrocketing homebuilder last spilt its shares 3:2 in 1994
at around $33/share.  With its recent burst, the stock is now
above $40, which is well into split territory.  Its next earnings
announcement isn't until June, so we will keep an eye out for a
BoD in the mean time as far as a probable time for another 3:2
split announcement.



SRCL - Stericycle, Inc.  $44.63 (+4.75)
This medical waste service company has been on a roll this year.
It is up 46% from mid January and just made a new high this past
week.  While SRCL has never split its shares, we feel it has
entered historical split-levels for the healthcare industry.  It
has 30 million shares authorized and 15 million outstanding.  We
feel a 3:2 split could be in the cards when the company reports
earnings on 5/28.



TARO - Taro Pharmaceutical  $43.81 (+1.43)
Taro has been trending higher at a 45-degree angle since June of
last year.  Now that it has breached the $40 level, we feel it is
time to anticipate a split announcement.  The company has 50
million shares authorized and only 10 million outstanding so a
2:1 could be on the horizon.  We are looking ahead to Taro's
earnings report date of 5/24 as the next probable time for a
split announcement


Expected/Likely Announcements for the Coming Week

                                       Date Expected
Symbol         Company                 To Announce

THC            Tenet Healthcare, Corp.    04/04


THC - Tenet Healthcare, Corp.   $44.00 (+2.66)

Tenet last split 2:1 back in September of 1991.  This steady as
she goes stock has been hovering at split levels for four months
now, so a split announcement at its 4/4 earnings release is a bit
of a wildcard.  Nonetheless, given the number of authorized
shares, THC could easily enact another split.  A split
announcement might also be the catalyst to get our favorite
healthcare stock on the run again.


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