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Email Version, Section 1, Sunday 05/27/2001
The Newsletter         Sunday 05/27/2001 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 -

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In This Newsletter:

Market Stats
Market Commentary - Rudderless
Definition of the Day
Friday's Split Announcements - LOW
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)           11,005.37   -296.37     11,000       11,350
Nasdaq (COMPX)         2,251.03    +52.15      2,235        2,328
S&P 500 (SPX)          1.277.89    -14.07      1,265        1,315
Russell 2000 (RUT)       508.62     +1.82        485          520
PHLX Semi (SOX)          654.87     -2.56        575          710

Market Commentary


Two weeks ago, investors acted like instinctual migratory birds
that seemed satisfied heading in one direction (up) just because
it felt right. This past week, however, the same investors that
would have bought stock if you had blindfolded them and spun them
around in circles, couldn't find north with a compass in hand.
The problems were twofold last week.  First, the wall of worry
that stocks traditionally climb in a bull market had subsided to
a picket fence of indifference and second, the Memorial Day
weekend served to infuse an air of "I don't care."

Traders obviously checked out early last week.  To wit, volume on
Friday was the lowest all year.  Only 828 million shares traded
on the NYSE and a mere 1.4 billion shares changed hands on the
NASDAQ (COMPX) on Friday.  For the week the DOW (INDU) lost 2.6%,
the S&P 500 (SPX.X) lost 1.1% and the NADAQ gained 2.4%.

It was certainly hard for most investors to concentrate on stocks
while there was barbecuing and beaching on the brain.  To this
end, not much technical significance can be placed on Friday's
and most of Thursday's market action due to a lack of volume.  As
all you chartists know, we study price movements combined with
volume, so when volume is sorely lacking, charting goes out the
window.  To clarify, however, there were surely stocks that saw
good volume both days due to news, etc. whose price movements
should not be discounted.

Getting back to the wall of worry notion, did anyone else notice
that the market moved higher and with more conviction when we
were still getting earnings warnings and "make or break" economic
data every other day?  This is not a new thing.  For decades,
stocks have needed adversity to move higher.  When we have a week
like last week's where earnings news was light to nonexistent and
economic data slowed to a trickle, traders get complacent.  When
traders get complacent they sell.

For all of you who have indicated that you are waiting for the
next wave of earnings warnings to drive the market down before
you buy, be careful.  Stocks are always the underdogs and
investors love routing for the underdogs.  In other words, the
upcoming earnings warning season might be the recipe for a slow,
(read: agonizing, hair pulling) bull market rally.

Although I make it seem as if everyone on the floor of the
exchange just sat around in lawn chairs all week sipping iced
tea, there were some relevant developments on the economic,
political and earnings fronts which made for some interesting

What economic data we did receive last week confirmed that we are
still bushwhacking our way through a downturn and that we are not
out of the heavy stuff just yet.

The semiconductor industry rang in late Tuesday with their book-
to-bill report for April.  The reading of 0.42 put a halt to the
six-day NASDAQ rally on Wednesday, as the reading was the lowest
in 10 years.  The ratio simply means that $42 worth of new orders
were received for every $100 worth of product shipped for the
month, indicating that the pickup is yet to come.  Some analysts
had predicted a book-to-bill ratio of 0.60 for April, but added
that the lower reading of 0.42 was not entirely unexpected.

Some semiconductor and chip equipment makers initially fell on
the news, but by week's end had recouped some of those losses.
This was due in part to a Friday Prudential upgrade of the chip
equipment stocks from "accumulate" to "strong buy."  Pru's
reasoning was that although there are currently few signs of a
bottom in the semis, investors should load up now in anticipation
of the next cycle.  For the week, Applied Materials (NASDAQ:AMAT)
finished down $1.29 at $53.71, Intel (NASDAQ:INTC) closed up by
$0.32 to $29.10, KLA-Tencor (NASDAQ:KLAC) added $1.15 to $56.61
and Advanced Micro Devices (NYSE:AMD) lost $0.55 to $31.94.  It
should also be noted that all of the above semi stocks are still
in near term up trends.

Besides economic news out of the semis, we received word on
Friday of slower new home sales and slower durable goods sales.
Orders for durable goods slipped 5% to $184.7 billion in April
according to the Commerce Department.  Economists were expecting
durable goods to be off only 2.3%.  In addition, April's existing
home sales fell 4.2% to a 5.2 million rate versus an expected
5.28 million rate.

As a result of the weak existing home sales report, the
homebuilding stocks, which have been forging ahead all year on
lower interest rates and an unflappable housing market, gave up
some ground on Friday.  Pulte (NYSE:PHM) knifed through its 50-
dma, losing $2.07 to $40.09, Ryland (NYSE:RYL) closed down $1.13
to $45.00 and Centex (NYSE:CTX) settled back down to its 200-dma
after losing $0.69 to close at $37.78.

Rounding out the light economic news on the week, we got a few
sound bites on the economy from the Fed Chairman himself during
his speech to the Economic Club of New York.  In short, Mr.
Greenspan believes that we are still not free of further economic
weakness and that further policy responses (interest rate cuts)
may be warranted.  He also indicated that he didn't think that
inflation is a worry, since there is a serious lack of pricing
power in corporate America.

Having probed deeper into the "Greenspeak", many market followers
have surmised that although the Fed may again cut rates soon, it
may be nearing the end of its string of cuts and will step back
and tend towards a neutral policy after next month.

Friday's Markets

Since Friday's volume was so light, the market decided to take
the path of least resistance and just drift lower with the tide.
For this reason, trading was choppy and volatile.

The NASDAQ (COMPX) closed down 30.99, or 1.36%, to 2251.03.
Advancers and decliners were just about even.  Although the
NASDAQ had a relatively better week when compared to the DOW and
S&P 500, it is still sitting perilously close to support at 2232.
We will be watching to see that this support level holds as we
start trading next week since the next stop after 2232 is support
at 2050.

The DOW (INDU) lost 117.05, or 1.05% to 11,005.37.  For a brief
period on Friday, the DOW wallowed around below the key 11,000
mark.  However, a late day surge into the close prevented a close
below the 11,000 support level.  The DOW needs to hold 11,000
next week, if only for psychological reasons.  It has some good
support just under 11,000, but if it looses 11,000, it may bring
more doubts as to the validity of the current rally.

Treasurys had a shortened trading day on Friday so trading was
range bound and subdued.  The 10-year note lost 5/32 to yield
5.51% and the 30-year bond gave up 3/32 to yield 5.85%.

Stocks and Sectors on the Move

As mentioned above, there was some political news this week that
caused some turbulence for some select stocks and sectors.
Vermont Senator James Jeffords announced Thursday morning that he
would be leaving the Republican Party, tipping the balance of
power back to the Democrats.  This announcement puts many items
on Bush's political agenda at risk since he no longer has the

The Jeffords led pullback on Wednesday (as rumors spilled out
about Thursday's announcement) was led on the downside by those
so called "Bush stocks" that had been outperforming the overall
market since the first of the year.  Those sectors that took hits
on the news were tobacco, drugs, oil and gas and oil service

But other news out of Washington on Saturday might make people
forget the Jeffords setback earlier in the week.  On Saturday,
Congress passed a 10-year, $1.35 trillion tax cut, which will
result in near term lump sum refund checks of $300 for
individuals, $600 for couples and $500 for single parents.  The
bill came with some concessions to Democrats, but nonetheless can
do nothing but help the stock market and current economic

Now that you have decided how you are going to spend your refund
check (sorry, Splittrader editors cannot except outside gifts)
let's move on to some losers and gainers on the week.

Ford (NYSE:F) had a rough week after it outlined plans on Tuesday
to break its alliance with Firestone and bare all the costs of a
tire recall.  In addition, it revised its production figures
lower due to the temporary shutdown of three plants.  Ford
finished the week down $2.39 to $24.74.

ADC Telecommunications also was out with bad news.  It was
earnings out after the bell on Thursday that prompted a Friday
sell off in the shares of the telecom equipment maker.  The
company met expectations of a loss of $0.15/share, but warned for
its third quarter and expects to exit some non-core business to
improve its outlook.  ADCT closed down $1.69 to $8.60 on Friday
to finish the week down $1.49.

On the upside, shares of PeopleSoft (NASDAQ:PSFT) added $1.77, or
4.1%, to $44.95 on Friday after Lehman Brothers upgraded the
stock to a "strong buy" and said that PSFT is well positioned to
weather the current economic environment due to its diverse
offerings.  Believe it or not, PSFT is up 132% since 03/16/01.
As I said in last Sunday's commentary, it's a stock pickers

Speaking of stock picking, you can greatly increase your odds of
latching onto a winner by first focusing in on the areas of the
market that are outperforming.  One way to do this is to first
hone down your quest for a winner to the market cap that is
currently working.  Last week I spoke of the mid caps, as
measured by the MID.X.  This week, I'd like to focus on the small
cap Russell 2000 (RUT.X) since it has edged out the mid caps and
is obviously under accumulation by the institutions.  Small cap
stocks are commonly defined as those under $1 billion (price of
shares multiplied by the number of shares outstanding).

Chart of the Russell 2000:

As compared to the above chart of the Russell 2000, the NASDAQ
100 (NDX.X) is sitting right on its base, as is the DOW.  The S&P
500 is only up 0.7% from its base and the MID.X is up 3% from its

Staying power is half the reason to own quality stocks.  And as
evidenced by the way the Russell held up last week, this is where
a lot of the sidelined money is flowing.  The more buying support
a stock has, the less the stock falls when the broader markets
sells off.

Looking Forward, Always Forward

Some folks are already calling the market's surge from its April
lows "The New Bull Market."  Well, the new bull is going to face
a good test this coming week, since many of the larger cap
indices are sitting right at support levels.  If these support
levels fail, it will put a serious dent in investor psychology
and could send us back near the April lows (although I don't
think we will get down that far).

To that end, this Memorial Day weekend, along with the required
barbecuing and summertime merriment, I will be sharpening my own
bullhorns.  I believe this market is going to hold and head
higher.  There are far too many blue chip stocks (like GE below)
that are hitting support levels and should at the very least, act
to keep the broader indices out of trouble next week.

Chart of General Electric:

So, this weekend, after you finish doing your own personal salute
to the official start of summer, think about how you will go
about capitalizing on a bounce off these market support levels,
or alternatively, your exit plan should they fail.

As an additional note, if you haven't noticed, more and more
stocks are deciding to split their shares.  Therefore, don't be
surprised if more split runs end up on the play list soon. Many
of these splitters are breaking out to new highs, so if you need
play ideas, please refer to our Current Play list on our

Have A Great Holiday Weekend

Craig Seidler
Assistant Editor

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Definition of the Day


A diamond is a reversal pattern.

For the complete definition, please go to:

Friday's Split Announcements

Friday, May 25, 2001, During the Market

Lowe's announces company's 11th stock split

Just after today's opening bell, the world's second largest home
improvement retailer, Lowe's Companies, Inc. (NYSE:LOW) announced
a 2-for-1 stock split. Common stock shareholders will receive one
additional share for each share owned on the payable date of June
29, 2001.

For the complete announcement, please go to:

Monday's Expirations by Payable Date


Event Calendar

For the week of May 28th, 2001

None Scheduled

Personal Income           Apr  Forecast:  0.30%  Previous:  0.50%
PCE                       Apr  Forecast:  0.40%  Previous:  0.30%
Consumer Confidence       May  Forecast: 110.3   Previous:  109.2

Oil & Gas Inventory    25-May  Forecast:    NA   Previous:324.6MB
MBA Mortage Survey     25-May  Forecast:    NA   Previous: 475.4

Agricultural Prices       May  Forecast:    NA   Previous:  3.90%
Initial Claims         26-May  Forecast:    NA   Previous:   407K
Chicago PMI               May  Forecast: 40.00%  Previous: 38.90%
Help-Wanted Index         Apr  Forecast:    NA   Previous:    66
Online Help Wanted Idx    May  Forecast:    NA   Previous:   105
Chicago Fed Idx           Apr  Forecast:    NA   Previous: -0.80%

Auto Sales                May  Forecast:    NA   Previous:   6.4M
Truck Sales               May  Forecast:    NA   Previous:   7.0M
Nonfarm Payrolls          May  Forecast:   -25K  Previous:  -223K
Unemployment Rate         May  Forecast:  4.60%  Previous:  4.50%
Hourly Earnings           May  Forecast:  0.30%  Previous:  0.40%
Average Workweek          May  Forecast:  34.3   Previous:  34.3
Construction Spending     Apr  Forecast:  0.30%  Previous:  1.30%
NAPM Index                May  Forecast: 43.50%  Previous: 43.20%
Employment Situation      May  Forecast:     0   Previous:  -223K
ECRI Future Inflation     May  Forecast:    NA   Previous: 107.4
ECRI Wkly leading Idx  25-May  Forecast:    NA   Previous: 122.5

Week of June 4th
Jun 05  Productivity-Rev.
Jun 05  Factory Orders
Jun 05  NAPM Services
Jun 07  Initial Claims
Jun 07  Wholesale Inventories
Jun 07  Consumer Credit

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Upcoming Splits

Symbol  Company Name                Splits  Payable    Executable

STT  - State Street Corp.             2:1  05/30/2001  05/31/2001
BAX  - Baxter International           2:1  05/30/2001  05/31/2001
DGX  - Quest Diagnostics              2:1  05/30/2001  05/31/2001
HTLD - Heartland Express              5:4  05/31/2001  06/01/2001
BJ   - BJ Services                    2:1  05/31/2001  06/01/2001
PKI  - PerkinElmer                    2:1  06/01/2001  06/04/2001
UHS  - Universal Health Services      2:1  06/01/2001  06/04/2001
KNGT - Knight Transportation          3:2  06/01/2001  06/04/2001
CRTQ - Cortech                        2:1  06/01/2001  06/04/2001
FIC  - Fair, Isaac & Co.              3:2  06/04/2001  06/05/2001
COLM - Columbia Sportswear            3:2  06/04/2001  06/05/2001
WFMI - Whole Foods Market             2:1  06/04/2001  06/05/2001
XTO  - Cross Timbers                  3:2  06/05/2001  06/06/2001
EQT  - Equitable Resources            2:1  06/11/2001  06/12/2001
OKE  - ONEOK                          2:1  06/11/2001  06/12/2001
APPB - Applebee's                     3:2  06/12/2001  06/13/2001
JNJ  - Johnson & Johnson              2:1  06/12/2001  06/13/2001
KKD  - Krispy Kreme Doughnuts         2:1  06/14/2001  06/15/2001
GNWR - Genesee & Wyoming              3:2  06/15/2001  06/18/2001
IBOC - Int'l. Bancorp                 5:4  06/15/2001  06/18/2001
EGBN - Eagle Bancorp                  7:5  06/15/2001  06/18/2001
SDS  - SunGard Data Systems           2:1  06/18/2001  06/19/2001
DP   - Diagnostic Products            2:1  06/18/2001  06/19/2001
SHFL - Shuffle Master                 3:2  06/18/2001  06/19/2001
FRED - Fred's                         5:4  06/18/2001  06/19/2001
CAKE - Cheesecake Factory             3:2  06/18/2001  06/19/2001
ESRX - Express Scripts                2:1  06/21/2001  06/25/2001
LNCR - Lincare Holdings               2:1  06/22/2001  06/25/2001
DAKT - Daktronics                     2:1  06/22/2001  06/25/2001
FHCC - First Health                   2:1  06/25/2001  06/26/2001

Successful Announcement Predictions For The Past Week

Symbol         Company                Date Announced

DP             Diagnostic Products       05/21
ESRX           Express Scripts           05/23
LOW            Lowe's Companies          05/25


New Split Candidates:

AAS - AmeriSource Health Corp $55.41 (-0.02)

AmeriSource has been on a steady up trend for a year, with a
range running up from $22.88 to $57.97. March of 1999 was the
last split announcement at which time the stock was trading at
$74.75. We've got a ways to go before that point, but the company
is showing some potential; we're going to keep them on our radar
screen for a possible play recommendation. The last BoD meeting
we have listed for AAS was in November 2000; the next earnings
release will be at the end of July.



AEPI - AEP Industries $64.50 (+1.81)

This plastic packaging manufacturer hit a new 52-week high of
$68.05 on 5/21 and, in fact, has seen gains of 50 points since
last June. The last split was at about $18 so we can be fairly
certain of a split announcement in the near-term. We are looking
towards the firm's next earnings release date on 6/11 as a likely
time for at least a 3:2 announcement. With 30 million shares
authorized and only 8 million outstanding, anything goes.



COF - Capital One Financial $67.23 (+0.66)

This financial company has seen strong gains over the last two
months, with current prices exceeding those of the last split
announcement in 1999 at $58.  There's some strong resistance at
the $72-73 range but another split could help alleviate that
issue. We expect to hear from COF at their next BoD meeting or
with their next earnings report in July.



EV - Eaton Vance Corp $37.63 (+0.35)

The last three split announcements we received from Eaton Vance
occurred within the $44-48 range.  If the stock continues to
close in on those prices, we can anticipate the next announcement
with either a BoD meeting or next quarter's earnings release.



IRF - International Rectifier $63.31 (+0.42)

This specialized semiconductor company announced its last stock
split in 1995 when shares were trading at about $50. With prices
currently exceeding that, we expect another split to occur if
these levels hold. Look to either July's earnings report or with
the next BoD meeting.



MTG - MGIC Investment Corp $66.84 (-1.07)

MTG is an insurance holding company who's stock has seen 19 point
gains just in the last five months. The previous stock split was
announced at $82 four years ago and as prices close in on those
levels again, we'd like to be prepared for any lucrative
opportunities. With 300 million shares authorized and 107 million
outstanding, there's ample room for a 2:1. The next earnings
release will be around July 11.



NVDA - NVIDIA Corp. $91.70 (+5.40)

This semiconductor company was just inducted to the Nasdaq-100
and the Nasdaq-100 Tracking Stock (QQQ) on Thursday, which only
confirms our feelings of an impending split announcement. NVDA
has had good momentum to the upside and share prices are just
about on top of the last split level of $94. NVDA just announced
earnings so we'll watch for the next quarter's report or a BoD
meeting as a trigger.


Expected/Likely Announcements for the Coming Week

                                       Date Expected
Symbol         Company                 To Announce

BKH            Black Hills Corp           05/30
XOM            Exxon Mobil                05/30
FCEL           FuelCell Energy            05/31
KSS            Kohl's Corp                05/31
PNY            Piedmont Natural Gas       06/01


BKH - Black Hills Corp $57.27 (+1.33)

BKH has announced five previous stock splits when prices were
under $50. The current stock price currently exceeds that and is
even trading at all-time highs, so we expect the next
announcement to occur at BKH's next BoD meeting on 5/30.
There are 50 million shares authorized and 26 million are
outstanding, so more than a 3:2 would require a shareholder vote.



XOM - Exxon Mobil $88.10 (-2.10)

Exxon last split in 1997 and the stock is nearing historical
levels again. There's a shareholder meeting on 5/30 at which time
we feel a split announcement is possible. There are 4.5 billion
shares authorized and nearly that many are currently outstanding,
therefore, a vote to increase the authorized shares would be



FCEL - FuelCell Energy $86.53 (-2.47)

FCEL is expected to report earnings on 5/31 and we have a
sneaking suspicion that we could get a split announcement at that
time. The stock has seen a recent pullback but a split could be
just the boost it needs. The last split was announced at $84 so
we're right within range.



KSS - Kohl's Corp $64.50 (+0.30)

Kohl's is still a little short of historical split levels, but we
wanted to alert you to the possibility of getting an announcement
with their shareholder meeting on 5/31. The last split was
announced at $76.81 but the company is poised for the next one
with enough authorized shares for a 2:1.



PNY - Piedmont Natural Gas $35.76 (-0.16)

Piedmont shareholders haven't seen a split since 1993 when the
stock was trading at about $40/share.  Current prices are pushing
that territory now so we may get a split announcement with the
BoD meeting on 6/1. This is a cautious expectation since PNY has
previously traded at current levels without declaring a split,
but we wanted to alert you to the possibility.


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