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Email Version, Section 1, Monday 06/04/01
The Newsletter           Monday 06/04/01 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 | Oil Stocks See Slick Gains
Definition of the Day
Monday's Split Announcements | None
Tuesday's Expirations
Tuesday's Play-of-the-Day |HRB

Market Commentary

Oil Stocks See Slick Gains

Oil stocks gushed higher on Monday, giving the market a slippery
foothold on which it could add to Friday's gains.  I say slippery
since the only real reason behind the renewed interest in oil
stocks was today's impromptu Iraqi move to halt all oil exports.
Not surprisingly, this move served to boost oil to over $28 per
barrel.  While the Iraqis succeeded in temporarily shaking up the
oil market (they supply over 2 million barrels per day to the
worldwide market), OPEC has vowed to offset any shortfalls in
supply due to the Iraqi protest of a shorter extension to their
U.N humanitarian program.

In addition to the goose from oil stocks, the market was
encouraged by some Monday Greenspan rhetoric out of Singapore
that echoed previous views that inflation is essentially dead.
While addressing an international monetary conference, the Fed
chief said that the strong dollar and the inability of businesses
to pass along higher prices are keeping inflation in check.

The largest beneficiaries of the "inflation: where are you?"
remarks were the treasury investors.  With inflation worries
largely out of the picture, the long end of the curve put on more
points.  The benchmark 10-year note added 9/32 and the 30-year
bond gained 10/32 to yield 5.34% and 5.685% respectively.  If
treasurys can keep this up, mortgage rates might follow, spurring
another wave of refinancing.

Other than the excitement out of the oil patch and the Greenspan
comments via satellite, the market once again did its best
impression of drying paint.  Volume was once again light and
volatility was the name of the game.

Today's Markets

Chartists rejoice!  The Dow (INDU) is once again over 11,000 and
is looking good.  In fact, the old-economy index landed at
11,061.52 after rising 71.11 during Monday's tame session.
Granted, we are far from the Dow being out of the woods (61
points is not much of a buffer) but the simple fact that
resistance gave way during such a light volume day is
encouraging.  Speaking of volume, only 840 million shares changed
hands on the NYSE.

The NASDAQ (COMPX) on the other hand never wandered too far from
breakeven.  The tech heavy index meandered aimlessly throughout
the day to finish up 6.49 at 2,155.93.  Trading was also slow on
the NASDAQ, with volume coming in at 1.3 billion.

The broader market, as measured by the S&P 500 (SPX.X) also
posted slight gains on the day, finishing up 6.44 to 1,267.11.
According to Brian Belski of US Piper Jaffray, the large cap
stocks that make up this index have stabilized as far as downward
earnings revisions are concerned.

Stocks and Sectors on the Move

The single largest drag on the NASDAQ today was, in fact, the
semiconductor stocks.  Word out of the Semiconductor Industry
Association today was that chip sales for April totaled $13.72
billion, down 10.2% from last April's reading.  This combined
with negative calls out of Bear Sterns and Goldman Sachs on the
state of the chip industry was enough to put a 1.7% dent in the
PHLX Semi Index (SOX.X).

Upside movers today included the computer hardware stocks and the
oil service stocks.  In the hardware arena, Compaq (NYSE:CPQ)
added $0.03 to $15.93, even as JP Morgan Chase cut their second
quarter outlook on the company.  Dell Computer (NASDAQ:DELL) rose
$0.25 to $24.61 and Apple (NASDAQ:AAPL) put on $0.94 to $20.89.

In the oil service sector, many stocks had already fallen through
support levels before today's renaissance.  So even though they
are moving again, most will encounter resistance levels soon.
Some movers included Schumberger, affectionately called Slob,
(NYSE:SLB)up $2.28 to $64.92, Halliburton (NYSE:HAL) up $1.52 to
$47.51 and Baker Hughes (NYSE:BHI) up $0.40 to $39.60.

Looking Forward, Always Forward

Here we go round the mulberry bush (you can tell I just wrapped
up a marathon session of reading children's books with my two-
year-old).  However, folksy as this top 40 children's rhyme is,
it captures the essence of what this market is doing and will
probably continue to do well into the summer.  By this I mean
chasing its own tail in circles, with little conviction in either

Heck, even if the Fed cuts another 25-basis points like it is
expected to do, the odds of further rate cuts after the mid June
meeting diminish drastically.  This fact alone will no doubt be
dwelled upon throughout the summer, as earnings continue to
disappoint (as expected) and market moving news takes a
backburner to the beaches and bratwursts.

What does this mean for swing traders like us?  It means keep
buying strong volume breakouts as long as they keep working and
keep your profits on a short leash.  This means take the 5% gain
if the stock starts acting weak.  You can always get back in at
support levels should you miss the next leg up.

Craig Seidler

Definition of the Day

Selling Short

This is the act of borrowing a security from a broker with the
agreement that the stock is to be returned.

For the complete definition, please go to:

Monday's Split Announcements


Tuesday's Expirations by Payable Date

Cross Timbers Oil (XTO) splits 3:2

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

The PLAY LEGEND: Play Recommendations.

Play-of-the-Day is our number one play recommendation for the
FOLLOWING trading day.

You will see:
Stock Symbol, Company Name, Closing Price, Change for the Week.
Following the play you will find: 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.

Play of the Day (For Tuesday)
Monday, June 4, 2001

HRB | H&R Block $62.26 +1.30

Sunday's Comment:

HRB's MACD is set to issue another buy signal with one more up
day like Friday's. Support has come in at $59 and resistance
should be showing up at $61. Traders looking to initiate
positions in HRB could do so on a break over $61.75 on volume of
at least 600,000 shares. Volume is key on this break, so don't
cheat if volume is lacking.

Monday's Update:

Traders listening to our Sunday update on HRB are already sitting
on some gains.  HRB did in fact breakout above resistance at
$61.75 and on even greater volume than we anticipated.  HRB
traded 700,000 shares on Monday, which is a sure sign that
institutions are still on the hunt. In addition, the pop above
resistance was enough to cause the MACD to issue another buy
signal.  Traders looking to get into HRB at this point could do
so on a pullback and subsequent bounce off of $61.75, or a break
above today's high of $62.50 on volume of at least 600,000
shares.  We will probably move our stop up to $59.25 tomorrow to
protect some gains, but for now our stop remains at $58.40.

Picked on April 18th @ $52.85
Change since picked +9.41
Stop Loss @ $58.40


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