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Email Version, Section 1, Wednesday 04/18/2001
The Newsletter        Wednesday 04/18/2001 1 of 1
Copyright 2001, All rights reserved.
Redistribution in any form is strictly prohibited.

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

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In This Newsletter:

Market Commentary | Fed Speaks, Wall Street Listens
Definition of the Day
Wednesday's Split Announcements | MKT, SOTR
Thursday's Expirations
Thursday's Play-of-the-Day | OMC


Market Commentary

Fed Speaks, Wall Street Listens

Well, the Street finally got what it wanted today -- an inter-
FOMC meeting interest rate cut, and the response was as swift as
it was bullish.  Both major market exchanges were literally
blasted into orbit thanks to the Fed's surprise announcement to
cut both the fed funds and discount rates by 50 basis points.

Since the beginning of the year, the Fed has cut the fed funds
rate four times and 200 basis points to lower this key overnight
lending rate from 6.5 to 4.5 percent.  Of these four cuts, two
have been inter-meeting and for 50 basis points each.  The last
inter-meeting cut occurred on January 3rd and sparked a month-
long rally in the equity markets.

The reason for the Fed's blind-side move was obvious to even the
most obtuse market observer.  Still, Greenspan & Co. took the
time to explain its actions:  "Capital investment has continued
to soften and the persistent erosion in current and expected
profitability, in combination with rising uncertainty about the
business outlook, seem poised to dampen capital spending going
forward.  This potential restraint, together with the possible
effects of earlier reductions in equity wealth on consumption and
the risk of slower growth abroad, threatens to keep the pace of
economic activity unacceptably weak."

Whatever the reason, traders immediately took to rotating out of
the safer sectors and into the growth-oriented sectors.

Of course, most of the so-called growth issues reside on the
Nasdaq Composite Index (COMPX).  This formerly high-octane index
reverted to form today to add 156.22 points, or 8.12 percent, to
close at 2,079.44, its fourth-largest percentage gain in its 30-
year history.

What's more, much of the gain occurred before the Fed
announcement, as the COMPX was trading 5 percent higher after
Intel (Nasdaq:INTC) said business is improving. The good folks at
the computer giant reported first-quarter sales that beat reduced
forecasts and said second-quarter sales will be better than some
analysts expected as business from personal-computer makers
picked up in March.  For the day, Intel soared $5.24 to $31.28.

Also adding fuel to the COMPX rocket were Oracle (Nasdaq:ORCL),
Applied Materials (Nasdaq:AMAT), JDS Uniphase (Nasdaq:JDSU) and
Juniper Networks (Nasdaq:JNPR), all of which added more than 10
percent to their share value today.

But don't think that technology was the only winning sector
today, because it wasn't.  Deep cyclicals and financials found
room on the podium as well.  General Motor (NYSE:GM),
International Paper (NYSE:IP) and DuPont (NYSE:DD) moved higher,
as did financial behemoths J.P Morgan Chase (NYSE:JMP), Citigroup
(NYSE:C) and American Express (NYSE:AXP).

As the more perceptive reader will easily discern, all of the
aforementioned dinosaurs reside on the Dow Jones Industrial
Average (INDU), which engaged in a nifty rally of its own today.
This Old Economy barometer surged 399.10 points, or 3.91 percent,
to close at 10,615.83.  More impressively, though, today's
advance removed two key resistance levels in one shot - 10,300
and 10,600.

The S&P 500 Index (SPX) rounded out today's trifecta by adding
46.35 points, or 3.89 percent, to close at 1,238.16.  The SPX
advance was indeed fortuitous for Goldman Sachs' fabled stock
siren Abbey Joseph Cohen, who once again called the market
undervalued this morning.  According to Ms. Cohen, profit growth
should reaccelerate in the second half of 2001.

Today's monster rally occurred on huge volume and wonderful
breadth.  Volume stood at 1.90 billion on the NYSE,  its second-
busiest day, and at 3.18 billion on the Nasdaq Stock Market, its
second-busiest day too.  Market breadth was extremely positive,
with winners trouncing losers by 20 to 11 on the NYSE and by 29
to 12 on the Nasdaq.

Today's gains in stock was darn close to being a totally free
lunch, meaning Treasurys weren't sacrificed for equities' gains.
In fact, the 10-year Treasury note was up nearly 5/8 point to
yield 5.146 percent while the 30-year bond rose 1/5 to yield
5.657%.  Moreover, at today's prices, the 2-year note has widened
to nearly 1.50 percentage points from the 30-year bond, which is
the biggest difference in nearly seven years.  In layman's terms,
we once again have a true normal yield curve, which historically
has boded well for the market.  In the past, there has been an
observable relationship between the slope of a yield curve and
subsequent economic growth.

As for economic news (which also contributed to the Treasury
market's gains) the February trade gap narrowed to $26.99 billion
vs. expectations of a $32.7 billion deficit. It was the narrowest
level in 14 months.  Meanwhile, the index of leading indicators
fell 0.3 percent, while the coincident index increased 0.1
percent in March. Taken together, these indices suggest further
weak growth ahead, but do not yet signal a recession is imminent.

Looking ahead, traders will be watching for Thursday's
jobless claims number, which will be released at 8:30 AM EDT.
The trend has been up in recent weeks, so it will be interesting
to see if the Fed's action today was an attempt to avert a
prolonged recession.

At this point, the $1 million question on everyone's mind is, can
this rally last?  To which I'll answer, the market is probably
split.  Many trader are still concerned over the state of
corporate profits.  Earnings growth is expected to fall to 1.6
percent in 2001 compared to 9.2 percent in 2000, according to
First Call.

Nevertheless, given market reaction to companies beating lowered
earnings expectation, don't be surprised if the rally should
continue.  To that end, International Business Machines
(NYSE:IBM) reported first-quarter earnings of $0.98 a share,
which was inline with the consensus estimate.  What's more,
revenue increased to $21 billion from $19.3 billion a year ago,
beating the market consensus for $20.7 billion.  Big Blue
finished the day up $6.80 to $106.50.  In after-hours trading,
though, it was trading near $113.50.

Another company moving in anticipation of its earnings
announcement was Apple Computer (Nasdaq:AAPL).  After the market
close, the Technicolor computer maker said it earned $40 million,
or $0.11 a share, which handily beat the First Call estimate by
$0.03.  Apple closed normal trading up $2.34 to $22.75.  However,
in after-hours trading, it was changing hands at $26.00 a share.

So, don't be surprised if the COMPX continues to rally tomorrow,
at least for the first hour or so of trading.  Traders seem to be
genuinely heartened by the unexpectedly strong corporate results.
(Okay, so they're beating a lowered bar.  At least they are
beating something.)

As for me, I don't expect the rally to go on much longer before
we get a pullback.  The Nasdaq has advanced 27 percent since
April 4, when it touched a year-to-date low of 1,619.  Let's face
it, market rallies don't extrapolate indefinitely.  In fact, all
of the market surges of the last 13 months have led to lower
lows, though I don't see us going that way either.

To be sure, the chart on the COMPX looks darn good.  In fact, the
COMPX could run as high as 2,250 to 2,300 before it again runs
into resistance.  Furthermore, the index has not only broken free
of its intermediate down trend, but it has also cleared immediate
resistance at 2,000.

Chart of the NASDAQ Composite:

It appears traders may have finally found that "V" bottom they've
long been waiting for.  Then again, appearances can be deceptive,
so trade carefully.

S.P. Brown

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Definition of the Day

Import Prices

This report is released by the Bureau of Labor Statistics and
measures the changes in the price of products purchased from other
countries by the U.S.

For the complete definition, please go to:

Wednesday's Split Announcements

Wednesday, April 18, 2001, During the Market

Advanced Marketing turns the page to reveal a 3-for-2 stock split

During regular trading today, Advanced Marketing Services
(NYSE:MKT) announced a 3-for-2 stock split payable May 11 for
shareholders of record as of April 27. The motion was first
announced at Advanced Marketing Services' Board of Directors
meeting, held earlier today.

For the complete announcement, please go to:


Wednesday, April 18, 2001, After the Market

SouthTrust Approves Stock and Cash Dividends

After the closing bell, SouthTrust Corporation (Nasdaq:SOTR)
announced the board of director's approval of a 2-for-1 stock
split, payable in the form of a 100 percent stock dividend. The
payable date is set for May 11 for shareholders of record as of
April 30, 2001. SouthTrust currently has about 169 million shares
outstanding, 164 million in the float, and 500 million shares
authorized. This will be the ninth stock dividend since the
Company's IPO.

For the complete announcement, please go to:

Thursday's Expirations by Payable Date


Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.

Anything else is too slow!

===================== Plays

The PLAY LEGEND: Play Recommendations.

Play-of-the-Day is our number one play recommendation for the
following trading day.
Updates are just that - updates on continuing plays
New plays are brand new for the newsletter.
Closing plays are plays that we feel have lost the advantage.

You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked

BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average

At the website, we have comprehensive profiles
for each stock that we are playing or have played in the past, as
well as hundreds of others. Please take the time to visit the site
to view the profile of the stock(s) you wish to learn more about.


HRB - H & R Block Inc. $52.85 +0.67 (+2.07)

Shares of tax and investment services provider H & R Block seem to
be enjoying a post-tax filing season rally thanks to a reported 10
percent increase in tax preparation revenues. For the day, HRB
surged ahead $1.00, hitting our Watch List trigger price of $52.39
on strong volume of 700,000 shares traded.  HRB has added over two
dollars to its value this week since gapping up Monday from a
bullish hammer position formed last week.  HRB may also be moving
higher in anticipation of a possible split announcement.  To that
end, HRB has 400 million shares authorized and only 91 million
shares outstanding, meaning it has more than enough shares to
authorize a 2-for-1 stock split.  The last time HRB announced a
split it was trading near $60.  But even if a split is not in
short order, we still like the stock based on its technical
indicators.  HRB's MACD has recently turned positive and its On-
Balance Volume is trending towards new highs.  As it now stands,
the stock has strong support at its 40-dma at $49.25 and no
immediate resistance until the July 1999 high of $59.50.  Traders
considering a position in HRB should look for strong volume,
250,000 shares or more traded by noon EST, on a move through
Wednesday's intra-day of $53.49 or a bounce off the 5-dma at
$51.70 before placing their trades.

Picked on April 18th@ $52.85
Change since picked 0.00
Stop Loss @ $49.25


Thursday's Play-of-the-Day

Wednesday, April 18, 2001

OMC - Omnicom $91.15 +2.85 (+4.65)

Tuesday's Comment:

Omnicom, a major player in the world of advertising, received a
new high profile client yesterday that helped the stock get off
to a good start this week. Goodyear Tire and Rubber (NYSE:GT) has
awarded OMC with its $60 million North American advertising
budget. Every positive move for OMC increases the likelihood that
management will announce a split. The company's last split was
announced in September of 1997 when the stock was trading at
$70.50. OMC closed above the 50-DMA of $86.56 today and this
event is a good sign that more gains are in the offering.
Potentially profitable positions can probably be initiated as
long as OMC stays above $$86.56. There is some resistance at
$90.00. Therefore, one may want to be patient if there is a gap
up to just below this resistance on tomorrow's open. That said, a
close above $90.00 may provide a good buying opportunity in
anticipation of a continued move on Thursday. The MACD is
accelerating its ascent and the Money Flow is making new highs.
These are two good technical signs that OMC will continue to move

Wednesday's Update:

Advertisers historically respond very positively to rate cuts.
With this being the fourth interest rate cut so far this year,
OMC should be set to take on more business from clients that now
have access to cheaper money.  Today's move higher on more than
two-times average trading volume showed just how much investors
are anticipating an up tick in business for OMC.  Looking at the
chart, OMC traded right up to the bottom of the gap created back
in early March.  This may well turn out to be resistance, but any
move above today's high might be a good entry point into OMC, as
this would be a confirmation of the lack of overhead sellers.
Support has come in at the 5-dma recently and we will look for to
continue offering support as OMC tries to conquer resistance.
Our stops remain at $80.00 to protect on the downside.

Picked on April 18th @ $86.50
Change since picked +4.65
Stop Loss @ $80.00


Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.

Anything else is too slow!


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