HomePrint NewsletterDisclaimerContact UsYour FeedbackFree SampleHelp

Back IssuesAbout UsOur SuggestionsLoginAccount Maintenance

Market Digest Online, Inc. Newsletter 5/25/00

Whisper Stocks Market Digest Online marketdigest@mindspring.com (615) 370-9254 www.marketdigestonline.com Market Digest Online, Inc.

MDO COMMENTARY: As we told you a couple weeks ago, there's been a DRAMATIC SHIFT in investor sentiment. The shift in investor sentiment has been to stocks which are currently making money and currently have low P/E's. But the shift continues to worsen, as buying evaporates. Optimism has given way to pessimism. Trading volume has dried up. Buyers have disappeared. Months ago after the Fed had raised interest rates three consecutive times, the market ignored the rate increases. We wondered what was wrong. Was this a completely different bull market we were in. Why did the market continue to go up in the face of interest rate hikes? Remember this current carnage as a lesson, as the markets do not ignore interest rate hikes. Sooner or later stocks will decline in the face of rate hikes. How well we know that today. Good news is ignored. Bad news is magnified. In other words, a bear market has a chokehold on Wall Street. It's becoming a common place for the Nasdaq to lose 100 to 200 points. The Nasdaq is now off 34% from its March high. The average stock on the Nasdaq is down 47% from its 52-week high and 16% this year. Almost three out of four Nasdaq stocks are down at least 30% from their 12-month highs. Until recently, the best tech stocks were holding their own. But now stocks such as Cisco Systems, Microsoft and Qualcomm are trying to break critical support levels. Remember what we told you April 13, 2000 on Microsoft when MSFT was priced at $79 3/8? For the record, the Nasdaq was priced at 3839 on April 13. Here's what we said.... "FROM 04/13/2000....MICROSOFT: (MSFT) $79 3/8 Down $4 1/2 and traded on the Nasdaq Stock Exchange..... As if Microsoft didn't already have enough problems to deal with, the stock generated a technical sell signal on Tuesday when it closed below the $85 level. The stock has broken technical support that has been in place since last November and it is critical that the stock hold the $75 level. Microsoft is well below all critical moving average levels. What worries us as it specifically relates to Microsoft is that if Microsoft starts to unravel, so will the rest of the market - particularly the Nasdaq. And to be very frank, we don't like the prospects here. If Microsoft does not hold support at the $75 level, it's probably headed another 10 points lower in the near-term." Last April, one of our worries was Microsoft. Now that Microsoft is priced at $65, the Nasdaq is 569 points lower. Our worry today is that other well known and highly touted tech issues look like they want to break down. Yesterday, Qualcomm broke critical support levels at $78. Will the further likely declines in the big name tech stocks take the Nasdaq with it? Just like it was with Microsoft, the answer to that question is probably YES. "Buyers are like deer in the headlights, and Fed Chairman Greenspan is driving the bus," said fund manager Louis Navellier. So Mr. Greenspan's rate hikes have been like lethal injections to Wall Street. Several weeks ago many bulls argued that the "new economy" stocks were immune to rate hikes. The thinking was that fast-growing tech companies didn't have to rely on bank loans to raise money. Robust cash flows and the use of stock as currency in acquisitions were enough to fuel future growth. Bulls believed that potential for big profits way down the road - no matter how far down the road - were enough to justify high valuations. But Wall Street is suddenly afraid of the Fed. The Nasdaq had declined five sessions in a row - until yesterday -since the Fed raised rates another 50 basis points on May 16. That was its sixth increase in rates since last June and investors have already started to brace themselves for yet another rate hike. Don't get excited about Wednesday's 200 point reversal after the Nasdaq was down 100 points. A plus was the volume, but we have yet to have big volume on a down day. A further worry is that higher interest rates could thrust the economy into a recession which in turn would impact corporate earnings. And today's higher interest rates probably won't be reflected in corporate profits for another four to five months. In the meantime, tech valuations are still high. The average Nasdaq stock trades at 168 times its trailing 12-month earnings......reason enough to continue the strategy we've been preaching. Stay away from or shorting (or buying puts) on high valuation stocks and concentrating your buying or trading on stocks establishing new 52-week highs, including value stocks. Worsening problems on Wall Street (but an eventual big plus) is the fact that short-term investors and day traders who frantically bought stocks when prices were soaring have been wiped out by the recent correction. With the day traders now out of the picture, volume has dried up.....but it will return, as the savvy institutions are just waiting for the proper time to jump back in the market. So how much longer will it be before the market gets some legs to steady itself? Most believe buying will finally return once the Fed stops jacking up interest rates. And we're lowering our target on the Nasdaq to 2700. CONTINENTAL AIRLINES: (CAL) $45 Up $2 15/16 and traded on the New York Stock Exchange.... On May 8, MDO recommended Continental Airlines at $42 7/8. This airline clearly has the best growth prospects of any of the airline issues. The company's main advantage: It fields the youngest fleet of planes in the industry (average jetliner age is 7.4 years). With a P/E of only 7.3 times earnings, the stock appears to represent good value. In addition, the company plans to buy back $327 million worth of its own shares in the open market. The 52-week high is $46 5/8. ABBOT LABS: (ABT) $43.46 Up $.71 and traded on the New York Stock Exchange..... Abbot Labs is working well. Originally recommended on May 9 at $38 13/16, we liked the stock technically and we still like it. Since the stock broke a double top at 35, it has methodically worked its way higher. We were expecting the stock to make another technical breakout above the $41 level and that's exactly what it did. The Abbot Labs June 37.5 Call Options (ABTFU), which were recommended at $2 11/16, closed yesterday at $6 1/8 for a 128% return on your investment. The June 40's (ABTFH) were recommended at $1 9/16 and closed yesterday at $4 for a 137% return on your investment. The close above $41 was a break of a spread quadruple top, which will likely take the stock to the mid- to high-$40s. With the latest technical breakout, there's no overhead resistance, so look for new highs in the near term. HERE'S THE CHART: Chart courtesy of www.prochart.com REHABCARE GROUP: (RHB) $42 3/4 Up $1 5/15 and traded on the New York Stock Exchange..... Another one that's working well is Rehabcare Group. All we need here is a close of $43 for a double top breakout that will likely take the stock to the high $40's in the near term. The 52-week high is $42 15/16 and as you can see, we're very close to making another technical breakout. The company is a major provider of contract rehabilitation services; clients include hospitals, long-term-care units, and outpatient facilities in all 50 states. The company manages and provides staff for medical rehabilitation, skilled nursing, and therapy operations, primarily at acute-care hospitals (about 50% of sales), but also at outpatient clinics and even schools. Subsidiary Healthcare Staffing Solutions offers temporary therapist and nurse staffing services to hospitals, nursing homes, and contract therapy companies throughout the US. RehabCare Group is growing through acquisitions. The chart and technicals both point to higher share prices. HERE'S THE CHART: Chart courtesy of www.prochart.com ON THE SHORT SIDE........ XCELERA.COM: (XLA) $23 5/16 Down $2 15/16 and traded on the Nasdaq Stock Exchange.... We had you go short this stock on April 17 at $92. Xcelera.com has since had another 2-for-1 stock split, so our effective short sale recommendation came at a split adjusted $46. This stock has had several technical breakdowns in the last few weeks and yesterday, XLA issued another sell signal when it closed below $26. This down move will probably take the stock to the high teens. Here's part of what we told you in our original short sale recommendation...... (remember - the prices mentioned should be divided by two since the stock has since had a 2-for-1 stock split). "XLA broke down technically on Monday when it closed below the $152 level." In Friday's session, XLA traded to a low of $59. The chart of this one looks very similar to the chart of Microstrategy. At the very least, we see XLA trading to the low $50s and a close below $51, takes the stock to the $40's. With five 2-for-1 stock splits in the last seven months and a market cap of still $3.6 billion. Xcelera.com is a prime example of the speculative froth still contained in may of the dotcom stocks. Amazingly, the 52 week low is $1 1/2, so at Friday's close, XLA is still up 4,500% from its 52 week low. Still looks like there's a lot of hot air to be let out of this one.." The problem here remains the fact that this company still has a market cap of $2.43 billion and no earnings. The stock is still up 3,000% from its 52-week low. With no current earnings, we don't care what the projected growth rate of this company is, this stock is likely headed lower. PRICELINE.COM (PCLN) $36 1/2 Down another $4 and traded on the Nasdaq Stock Exchange.... . Originally recommended as a short sale candidate on April 14, 2000 at $62 1/8, PCLN closed at yet another new 52-week low on Wednesday. This stock continues - almost daily - to make lower lows. There's no technical support and we've still got a market cap of $6.2 billion with no prospect of immediate earnings. This one could easily be cut in half again from current price levels. Stay short. RED HAT: (RHAT) $15 3/4 Down another $1 and traded on the Nasdaq Stock Exchange.... Here's another short working extremely well!! From a 52-week high of $151 5/16, Red Hat continues to close lower with each passing day. The 52-week low is $7 and it wouldn't surprise us at all to see this stock trade below the $7 level. Even around the $7 level, Red Hat would still have a market cap of $1 billion. At yesterday's close, Red Hat had a market cap of $2.38 billion and no earnings. Our June 22.5 Put Options (RCVRX) recommended at $3 1/2 closed yesterday at $7 1/4 for a 107% return on your investment. HERE'S THE CHART: Chart courtesy of www.prochart.com CISCO SYSTEMS: (CSCO) $55 1/8 Up $4 37/64 and traded on the Nasdaq Stock Exchange..... Yesterday, Cisco gained what it lost on Tuesday. Over the short term, we still like the short side. JDS UNIPHASE: (JDSU) $83 1/2 Up $4 3/8 and traded on the Nasdaq Stock Exchange..... Same here. JDSU gained back four of its six points lost on Tuesday. Over the short term, we still think the short side is the right side. QUALCOMM: (QCOM) $76 3/4 Down $2 5/8 and traded on the Nasdaq Stock Exchange.... After trading to a low of $69 25/32, Qualcomm bounced back with the reversal in the Nasdaq. However, the close below $78 was a technical breakdown and a sell signal which could take the stock another 20 points lower. Qualcomm recently flashed a sell signal when it closed below $93. As you can see from yesterday's close, the previous sell signal took the stock 24 points lower (intra day), and yesterday's sell signal has the potential to do the same. Option speculators should consider the July 75 Put Options (AAFSO), currently priced at $9 1/2. Remember, options are very speculative, and this one is nothing but premium......but if we're right, this position could give you a minimum double.

VTAR Axxel Knutson tradingweapon@aol.com 800.696.9002 VTAR © [Volume Trade Analysis Research] ©

THE MARKET: On April 29th we suggested: "In effect, a "stockpickers" market and not a market based on the "latter fool" theory. This means less dramatic market moves replaced by more selective and perhaps shorter-lived stock movements. We like this kind of market the best because we think we do our best work in these more difficult markets." And that is pretty much the same even after this « point increase. But is this the end of the world as far as stocks? Far from it in my opinion. Surely there are still many high tech NASDAQ stocks that have lots of air underneath them. Take for example Cisco [CSCO-55.38] or Nortel Networks [NT-56.44], but in the main, very many high techs have already defined, or nearly so, the limits of their lower consolidation bands. The follow-on move of Monday was in response to a very poor week overall last week and Tuesday's drop was more of the same. But we are running out of gas on the downside and most would do well to ignore the carnage. Tough to do.we know.very tough. The joy in all this is that we are entering upon a market that offers opportunities with much lower risk levels, much, much lower PE [or actual earnings-can you imagine?] and even dividends. Many current investors have never received a dividend and in fact some even question why these credits are hitting their accounts! Some change. So, here we have NASDAQ still not out of the woods and the general market performing in neutral. 5.23.00 DJIA: 10,422.27NASDAQ: 3164.55S & P 500: 1373.86Russell 2000: 459.01 Let's recap those stocks of a month ago.the original price is in [$$], the current price in BOLD. ORIGINAL COMMENTS IN QUOTES THE DOW STOCKS [the best of them] Citigroup [C-59] 62.31 holds".very well regardless of the current market emotions and has the 50-60 base to launch an attack of some strength. Numbers under $60 work better than numbers above." We had numbers under $60 and we are expecting an attack on the high 60's and that will give us a potential target of about $75. Hardly a guarantee. In terms or Riggs National [RIGS-13.25] it was about ready to bound into the mid teens when the market got to it on Friday. Quite temporary in our view and great book value. Walt Disney [DIS-43.31] 40.06 ".also with the base and that goes back three years. Appears in process now." Maybe one more minor break just below $40. General Electric [GE-52.41] 50.00 ".is not interested in down markets and resultantly we believe that GE has enuf electricity to continue its stellar performance. Accumulate the break of $50 if possible. [adj for 3:1 split]" Maybe one more chance to buy just under $50. Try it? General Motors [GM-93.63] 74.63 ". massive base and has the potential power for appreciation. Strong Buy. In process at the moment." The GMH deal torpedoed the stock on a temporary basis.but this presents an unusual buying opportunity. Johnson & Johnson [JNJ-82.50] 87.00". not as dramatic as those above, bet we have to classify as a Buy. Perhaps a minor break to just under 80?" Looks very easy to the upside. Merck [MRK-69.50] 73.81 ".doing nothing for about three years.that is changing. Buy around $64." No change. JP Morgan [JPM-128.38] 133.06 ".who likes old fat men with cigars? We do. Maybe just as powerful as C, so a "Strong Buy." A great Friday and more good Fridays to come in our view. United Technologies [UTX-62.19] 60.81 Buy and could really spring." Still has great power. We will likely see a break under $60 for a buy point.. our guess? $57 «. NOW THE GROUPS: ADVERTISING - Very mixed group, our only selection in the group is ADVO, Inc. [AD-30] 32.38 ". with a solid mid-twenties base and the trailing 12 month earnings at $1.93 vs. $1.33 18 months ago.15.3 x's earnings-no div. Accumulate the break just under $30. You got the break under $30. Now just stay. Acts well in a crummy market, eh what? AEROSPACE- Mixed group, but we will buy Northrop Grumman Corp [NOC-71.68] 76.94 and a great Friday. ". 9.6 times erratic earnings and a 2.4% yield. But recent strength suggest you should accumulate the consolidation just under $70." Well, that worked. Some very minor consolidation is possible. A break of $70? Iffy. Boeing [BA-37.13] looks ready to spring and is a buy at the market. Like now.We also like Lockheed Martin [LK-24.88] particularly if it can just come back a little and break $23. Rockwell International just gave an initial Buy signal [ROK-40.25] and moved well Friday. And held well Monday and Tuesday as well. AIR FREIGHT Atlas Air [CGO-34.94] 31.00 ".looks as if it will kiss the 30's goodbye and if so, the $50's are surely in target-no guarantees, of course, but worthy of portfolio inclusion here. Trailing 12 at $1.83 at 17x's and zip div. Quite strong in the last few days but it does look higher." We may kiss just under $30.it moved to $36, but the heights go to it. Monday had the break of $30.we think that was "it." AIRLINES - The worst looks discounted with fuel prices perhaps topping and the economy so good no one is stealing the little knives and forks anymore. With that in mind. Southwest Airlines [LUV-21.69] 20.25 ". out of the gate first and a buy on a break back into the teens. Strong Buy and a buy here." The break of $20 outlined the lower level we think. We also like KLM Royal Dutch Airlines as a replacement [KLM-20.50] and a buy here. Delta [DAL-52.75] 55.19 their planes could use a new paint job-aren't they just ugly as hell? Of course. Still, DAL not painting their planes is bringing it to the bottom line with $9.14 for the trailing 12 up about 50% in 18 months and a little pathetic dinky dividend [still I will cash the check]. Buy. ALUMINUM - We are on the base with Aluminums.but that is about all. AUTO/TRUCK AFTERMARKET [sounds exciting that "aftermarket"]Mixed signals for the group, but we are impressed with Bandag [BDG-27.06] but it should give back nearly 100% of the recent run-up from $23 to 29 «. But when it does, buy it. So buy. We think the fuse is lit. AUTOS [cars] [and one beer]Just buy them Ford [F-54.75] 51.38 ". based at "The American Road" - Dearborn, Michigan on the banks of the Rouge River has had three dividend increases in 18 months and a solid base capable of supporting some very nice, relatively low risk price movement. So let's take Henry up on it and buy." It's working and the spike to nearly $57 has been consolidated. Remain in "Strong Buy" mode.GM.we talked about this already.like buy. GM-74.63 stronger than F, perhaps, but in the short run, F has the "AD" Volkswagen [VLKAY-7 5/8] 8.00 ". ADR's- bottom pick this efficient manufacturer in spite of the fact that the dummies bought Rolls Royce and had to give Rolls to BMW.can you believe it? Anyway, the Jetta is doing fine, Audi is the same, the Beatle ditto and the Brazil deal will moderate to the upside soon." No change-very positive. VW making noises as if they will have an improved 2000-2001 year. We agree.We have no opinion on the Japanese manufacturers. But Japanese beer.Buy Kirin Brewery [KNBWY-133 «] at the market. We have a base, fully consolidated and ready to break to the upside. AUTO/TRUCK PARTS - We have the base.let's see the players.and the winner is Eaton Corp [ETN-77.69] A buy and the last few days has resulted n a slight discount. FOREIGN BANKS Under review. BANKS - MAJOR REGIONAL Acting pretty well in this market. State Street Corp [STT-96.88] 119.25 ". is our buy choice$3.81 from $2.44 in 18 months for the trailing 12 for 25.2 x's earnings. A base and VTART power. A break of $95 for the buy point." Just going.man.just going. Mellon Financial Corp [MEL-36.13] now also added as a "Strong Buy." BANKS-MONEY CENTER We mentioned JP Morgan FINANCE- S & L'S Golden West [GDW-39.00] the one to try to buy and trade. BEVERAGE-ALCOHOLIC Coors, Adolph [RKY-51] 58.63 ". not powerful.but not weak either. Not a bad choice. Beginning violence-we like that. Buy the break of $50." You got the break of $50.and off and running. Average to the upside. Still a Buy. BEVERAGES-SOFT DRINKS PepsiCo [PEP-39.44] the only choice. BUILDING MATERIALS Masco [MAS-22.44] 20.19 ".with flat earnings, we would be bottom-picking.but the choice in the lot" We will exit in favor of Sherwin-Williams Co. [26.25] and prefer a buy on a consolidation of the strength on Thursday to 26.97. Very nice repetitive power. See Paints below. CEMENTS - The group is going.let's go with it. Martin Marietta Materials [MLM-53] 51.50. and still 15 points or so from a recent top-Buy. In process to the upside now by the looks of it." Southdown [SDW-63.25] has the power and Friday's move was quite spectacular although somewhat speculative in the short term. Buy the pullbacks to just under $61. BUILDING MATERIALS-PAINT [this is exciting isn't it?] Sherwin-Williams [SHW-24.88] 26.25 ". and a buy on any retracement toward $20 even. $1.80 vs. $1.55 for the 18-month deal 14x's and a 1.9% yield. Try the low 20's." And prefer a buy on a consolidation of the strength on Thursday to 26.97. Try a break of $25 for the buy. Very nice repetitive power. See Paints below. BROADCAST MEDIA - "Most look icky except Univision Communications because our national language will soon be Spanish Buy [UVN-109.25] but is the 10K in Spanish? Strong Buy here. "[UNV-95.69] Forget it. EXIT. No help from the group. CHEMICALS 4.22.00: Group is expanding from the base-we have new stocks to look at. OM Group, Inc. [OMG-46] 49.00 ". and a buy around $35. Earnings $2.32 up from $1.84 and two dividend increases in 18 months. 18.9 x's trailing 12 and a yield of 0.9%." A nice move to nearly $50, but now trying to consolidate. Not too likely, so buy. Air Products [APD-38.63] a new buy-a very nice week with an upside gap.Buy. FMC Corp [FMC-64.81] moving out of the base and a very nice Friday. Buy. Hercules Inc. [HPC-17.19] bottom-pickers can look here and maybe get a mirror reverse move of the $27 to 14 "clunk." Buy. COMMUNICATIONS EQUIPMENT - Taking a well deserved rest, but we can point to Commscope, Inc. [CTV-47.50] 38.02 ". as a buy at the moment. Earnings progression 0.57 to $1.32 for the year and one half and looks as if it has legs." 5.22.00: No help from the group. EXIT. Mitel Corp ADR's [MLT-25.13] 19.25 ". look fresh and volatile. The base, unfortunately, is at $8.00 and the recent spike to about $32 is being consolidated with the market, but will put this on our "OK to Trade [OTT]" list without any further recommendation at this time. In process here." Exit. Group just stinks. COMPX International [CIX-19.75] 20.00 ". is fresh and developing with earnings slightly ahead for the period and the recent establishment of a dividend. We like when that happens and we will explore further. Strong Buy just under $20. We like the violence." Nice move to just over $23.00 but we are exiting the group, so EXIT. Seagate Technology [SEG-50.72] 46.56 ".and just starting to lift when the market creamed the initial advance. But this is developing and we want it. The market has given you an opportunity. Take it. In process." Very much in process and the exception. We like this. COMPUTER SOFTWARE - Again a major resting phase----we will rest with it. MSC Software [MNS-9.50] 8.75 ". began its lift from the base and market slapped it. But earnings are coming; recent quarter $0.44 vs. minus $1.36 a year ago and the previous two quarters are showing earnings. Our guess.it was a bottom. Three Five Systems, Inc. [TFS-56.50] 71.25 ".very worthy of trading and appears powerful with earnings on the move. Not cheap, but not much stock out and there is room to run from here. Traders most appropriate can dive in during pullbacks. Due for a minor consolidation.so waits." It will likely have a bad week after a great week last week. A buy in about ten days or so. CONGLOMERATES Kanab Services [KAB-5.75] 5.13 ". buy this little pullback-it would be nice under $5. Earnings? 18 months ago $0.31 and now $1.67 for the trailing 12-extrordinary items likely, but still.. Accumulate gently." A very nice acquisition for sure withy a trading move to nearly $7.00. It has given al of that back and now is rated a "Strong Buy." Katy Industries [KT-11.00] has the base and the move off the base on Friday was quite vigorous with a move to $12.25. Buy any weakness below this number. National Service Industries [NSI-23.31] down from the $40's and a base of sorts at $20. A nice series of moves last week-let's try here. Strong Buy. Operates in lighting equipment, chemicals, textile rental and envelopes. For the 6 months ended 2/29/00,total revenues rose 19% to $1.23B. Net income fell 11% to $44.7M. Revenues reflect growth in the lighting equipment, chemical and envelop segments and acquisitions. Earnings were offset by increased borrowings to finance acquisitions. CONSUMER PRODUCTS Fedders Corp [FJC-5.69] appears ready to spring out of the fives.target would be $7.00.Lennox International [LII-11.44] products for the heating, ventilation, air conditioning and refrigeration markets: Bohn, Larkin, Heatcraft are the product names + Lennox.Maytag [MYG-35.81] a number of false starts, but now it looks for real. Accumulate. Very nice week. CONTAINERS - Not much of group.but there are good choices. Crown Cork & Seal, Inc. [CCK-17.44] market related panic selling brought this down from the mid-20's to a break to $13.00. We think we will see a mirror move and that will take us to about $25. OK with us. COSMETICS Carter Wallace [CAR-19.38] reported very gig earnings about two weeks ago and the stock moved off the base in the high teens to nearly $24. It is giving that back now and is a "Strong Buy" on this break of $20. Aggressively accumulate. ELECTRICAL EQUIPMENT Amphenol Corp [APH-63.75] 51.63 ". has legs and is developing in power.not last year's stocks if you get my meaning. If you don't get my meaning then read a few more of these newsletters and you will understand the verbal shorthand [or you won't-who can tell?]. Split 2:1 last week. In process." Going to the base. Nuts. Exit. Alpha Technologies [ATGI-8.38] ".a recent break to $8.00 has been consolidated. Now another buy signal and we are at $8 again. Very little speculation. Buy. Manufactures thermal management products, electronic connectors, and custom designed subsystems. Lamson & Sessions Co. [LMS-8.00] pressing the upside with the potential for a very nice trade. Try 7 7/8 for a move potential of $10 «-11 . Manufacturer and distributor of a broad line of thermoplastic electrical, consumer, telecommunications andfluid drainage products. Molex, Inc. [MOLX-43.63] Here is an example of an electronics/high-tech company that is an exception. Buy. The recent move to $61 has been consolidated here just under $50 and we expect a successful test of the recent high. From Market guide: Manufactures electronic, electrical and fiber optic interconnection products and systems; switches; and application tooling. For the 9 months ended 3/31/00, net revenue increased 27% to $1.6B. Net income increased 23% to $157.4M. Revenues reflect strong demand in the fiber optic, telecommunications and networking markets. Buy the break of $40 Nortech Systems, Inc. [NSYS-4.25] NASDAQ small cap- inexpensive stock, but here is the story: Manufactures wire harness, cables, electronic sub-assemblies and components, printed circuit board assemblies, monitors and medical imaging products. For the 3 months ended 3/31/00, sales increased 33% to $12.6M. Net income increased 65% to $410K. Revenues reflect additional revenues generated by internal growth. Buy. ELECTRIC PARTS DISTRIBUTORS Arrow Electronics [ARW-43.81] 33.69 ". and you know where the arrow is pointing? Up. Earnings flat, so do your fundamental homework." Gave up the move into the $40's.that's OK, buy here and any further minor crunch. We think it will recover and attack the highs. Aztec Manufacturing [AZZ-13.63] 16.44 ". not likely under ten, but he recent dividend increases are attractive and the base is wonderful. Accumulate here at 11.2 x's and 1.2% div." Very nice stab to new highs and still not much speculation. But it could retrace the move and that would take you to $13 « and that would be a good place to add. ELECTRONICS - Again a generally resting group.but there are plays 4 U:TDK Corp. ADR-Japan [TDK-135] 115.25 ". magnificent base and developing power. Buy, but in the $120's." Glad for the $120's, but now much in doubt. EXIT. ELECTRONICS - CONTROL/DEFENSE.... We are looking at Perkin Elmer [PKI-55.50] 55.00 ". and classify it as a trader's entry-which means, OK to trade and keep a bullish view. Strong buy here. Do it." The move from the base [the forties] resulted in a double to $80 early in the year. But that move is nearly consolidated. ELECTRONICS INSTRUMENTATIONPE Biosystems Corp [PEB-60] 52.00 ".we like it. We like it under $50. Patience my son..that break could happen this coming week. Monitor for that occurrence." We did not get our "gift" of sub $50, but it is close enuf. PE Biosystems (PEB), based in Foster City, Calif., and Rockville, Md.-based Celera (CRA) units of privately held PE Corp. Celera is attempting to unravel the mystery behind the human genome. PE Biosystems manufactures genetic-sequencing machines and leases them to Celera and other labs. PE Biosystems net income at $56.1 million, [26 cents a diluted share], compared with $51.5 million, [25 cents a diluted share According to Dow Jones: "The human genome contains the complete set of human genes on two strands of DNA, or deoxyribonucleic acid. In essence, DNA carries the instructions for heredity. These instructions are written in a billion three-letter words, and Celera is ripping them apart and attempting to put them back together again in order to find each gene's purpose. The hope is that such discoveries will revolutionize medical treatment. In order to process the information, Celera first has to determine which parts of the DNA molecules are relevant, since there also exists a lot of "junk" DNA. To do this, it uses sequencers, and that's where PE Biosystems comes in." Long termers should relax. Celera Genomics [CRA-82.00] 58.50 ". we like it; we like it a lot.and with a top at $262 it has some room. The most recent attempt failed. This one could make it. Buy." See comments re: PEB above. A little tougher than PEB.and difficult to buy. ELECTRONICS SEMICONDUCTORS Advanced Microdevices [AMD-87.50] 75.50 ". ignoring the high-tech sell off and with good fundamental reason. Buy." And still ignoring the high tech sell off. But will suffer.EXIT. Infineon Technologies [IFX-67.88] 60.69 ". on watch list-interesting volatility. Positive." Doing the high tech nosedive. Maybe a break of $40 for a buy point? We shall see. Kyocera Corp ADR [Japan] [KYO-166.06] 141.75 ". appears powerful. Buy. But the $150's." Well, we have to take a stand somewhere and this looks like a triple bottom and a great move at the end of the year. Buy. Micron Technology [MU-69.65] 58.38 ". not our fav, but it will do. Legs, we think. Buy." Yes, it does look like a buy. If the high techs ever get a breather, this should move.it should. National Semiconductor [NSM.60.50] 50.00 ".it has legs we think. Strong Buy. " Probably a break of $50.00.but not overly dangerous. Intel [INTC-123.94] the techs will kill it short term.but may resist. Motorola [MOT-88.00] we think the selling is overdone from the $178 level and given the break of the even number of $100, that is enuf for us. Buy, but we want a big discount even from here.let's say $76? ENGINEERING AND CONSTRUCTION Morrison Knudsen [MK-9.19] 7.81 ". in spite of the fact these people cannot spell my name correctly, it is a Buy. We are under the long-term base and have repetitive buy signals according to VTART and earnings are up abut 50% in 18 months." About ready to resume the upside. A break of $7 for a decent buy point? FERTILIZERS Scotts Co. Class A [SMG-36.63] Strong Buy. The base in the $20's supported a move to $41.that being consolidated can now take us to a test of that number and beyond. We are hoping for a break to the sub $35 level that would consolidate the recent strength for $28-$40. FINANCE-STOCKBROKERS Gabelli Asset Management [GBL-19.88] 23.25 ".His time has come. Accumulate. It took long enuf! Try $17." A little spiky. Sell. We may return. CONSUMER LOANSWe do not follow. FINANCE-LEASING... We do not follow FOODS - Not much here but take a look at these.ML Macadamia Orchards [NUT-5.13] 4.88 ". with a 7.6% yield part of which could be return of capital. Base at $4.00 and at the bottom of a ten-year decline." No change. GAMING - Generally moderately strong group Jackpot Enterprises [J-10.81] 12.19 ". re-tracing the entire $8-20+ move. Embryonic in development, so buy this pullback. Earnings $1.19 vs. $0.85 18 months back-last quarter could have been better." The move to $14 5/8 was useful, so now we will watch the consolidation which should take it to only a minor break of $12. HEALTHCARE - A group we have disliked for some time may now be worthy of some investment.Carter Wallace see above. Alza Corporation [AZA-44.06] 50.13 ".long on research and finally long on earnings as we look ahead. Buy." No change-legs, we think. Nycomed Amersham PLC- [UK] [NYE-41.25] 40.94 ". Strong Buy. A very nice lift off the $40 base to about $60 and it gave 80% of that back. Developing strong patterns according to VTART so Buy." And buy some more.very little speculation numbers in our work. HEALTHCARE-HMO'S.... Do not follow. HEALTHCARE-MED PRODUCTS Beckman Coulter, Inc. [BEC-64.81] 60.13 ". moving off the base with earnings after big write-offs in '98. Took a little over a year off just to discourage shareholders, but now appears ready to seek new interesting levels. In process here." No change. Enzo Biochemical [ENZ-41.00] 36.25 ". a nice stock for us in '99 with a high over $130, but now consolidating that advance. Somewhat a "falling knife" but worthy of accumulation in the thirties and hopefully the twenties. Strong Buy." No change Arrhythmia Res Tech, Inc. [HRT-1.94] 2.06 ". ASE Very cheap stock with earnings but stocks in this price range ASE or not require additional research. But this does appear powerful." A move to $250, but we are looking for more. New VTART buy signal. HEALTHCARE-OPTICAL Bausch & Lomb [BOL-60.44] 70.00 ". strong buy-in process.an attack on the low 70's is quite likely." And here we are. HEALTHCARE-OUTPATIENT - Negative HOMEBUILDING William Lyons Homes [WLS-8.25] 6.50 ". great base $4-6 and a good lift-strong earnings but the source is under research by us so do your own fundamental work. ' EXIT. We can do better. HOTEL/MOTELF our Seasons Hotels [FS-56] 57.88 ". quiet since June but could get legs. Earnings $2.03 vs. $0.91 for the trailing 12 months vs. 18 months ago. Big move last week.buy the pullback that should occur." Sharp up-moves. Hold. MGM Grand [MGG-29.50] 33.25 ". starting to bound out of the four-year sideways consolidation. Buy. Recent establishment of a dividend. 35 x's trailing 12." Nice spike to about 35.now consolidating.maybe a buy point at $30.75? HOUSEHOLD FURNITURE AND APPLIANCES Rent-Way, Inc. [RWY-25.95] 26.56 ". $0.97 to $1.55 for the trailing 12 months vs. 18 months ago." And moving out on very little spec. Hold and buy. HOUSEHOLD PRODUCTS - No interest at present HOUSEWARES Blyth Indus. Inc. [BTH-29.69] 33.00 $1.75 vs. $1.18 for the trailing 12 months vs. 18 months ago. Has taken the last fours years off. That's enuf. Buy. New ten-cent div last quarter. 18.1 times. Try $27." You got the $27-and now you have $32.Maybe now a minor break of $30 for another buy point? INSURANCE BROKERS - Are strong. as are P/C companies.we will revisit later. INSURANCE COMPANIES - And so too are insurance companies LEISURE - I have plenty of interest in leisure at the moment, but not in the stocks. MACHINERY-AG.... Now an important group for us. Alamo Group [ALG-12.88] in process, so only traders at this point. Let it go and establish the long position on the pullback. Deere [DE-47.31] blew the street away with its earning last week. Has learned to live with adversity [low corn prices] and its consumer products group is kicking ass [as they say]. No discount likely. Get it done. *Manitowoc Co., Inc. [MTW-34.25] difficult to buy cheaper.. but Buy. Doing a lot of things right they design and manufactures commercial ice machines and refrigeration products, cranes and related products, and provide ship-repair and construction. For the FY ended 12/99, sales rose 16% to $805.5M. Net income rose 30% to $66.8M. Strong acceptance of new products and recent acquisitions. MACHINERY-INDUSTRIAL Dover [DOV-50.56] 49.75 ". on watch list." Graduated to the Buy List, but we want sub $45 please. MACHINERY-MACHINE TOOLS Agilent Technologies [A-88.63] 58.00 ". on watch list-but we have no interest at all at current levels." OK, let's break $40 for the buy point. MINING-COAL.... Dug a hole so deep it can't get out. MINING-IRON ORE... Not yet. MINING-PRECIOUS METALS.... But diamonds yes. MOBILE HOMES.... Always interesting to shop for mobile homes during tornado season.just sit in your pickup and watch them go buy. We will review later. OFFICE EQUIPMENT/SUPPLIES... Not at the moment OIL & GAS DRILLING Diamond Offshore Drilling [DO-40.31] 41.00 ". a solid 30-40 base and developing power. Positive. Earnings trailing off so do your checks." Consolidation of the 37-43 move appears complete. Buy. Rowan Companies [RDC-27.94] 29.75 ". Strong Buy right here and in process." Maybe we can do better in the group.we will see. But we like the sub $30 for the buy point. Transocean Sedco Forex [RIG-47] 47.94 we will find something better. This little break could be a buy point for us. OIL & GAS PIPELINES - Do not follow OILS-DOMESTIC... The group is positive-we have enuf. OILS-EXPLORATION Apache [APA-48.44] 56.44 ". a solid base and strong VTART numbers. Buy." Consolidating the recent $60 move.that's OK. Canadian Occidental Pet [CXY-23] 25.75 ". ASE with earnings coming on stream and a strong base.buy." Consolidating the recent strength.also OK, a buy sub $25. Vastar Resources, Inc. [VRI-80.63] 79.75 ".buy." Looks like an upside punch coming. Canadian 88 Energy Corp. [EEE-1.75] We like this little Canadian West Central Albert deep driller. The recent move to about $1.90 appears consolidated. AMEX. Cabot Oil & Gas [COG-21.56] in process, so look to trade. Buy any break of $20. Home Stake Oil & Gas [HSOG-8.25] is acting quite violent.but since we are in the base [just above] we think we have some legs here. Buy, but be careful, this stock is thin. Enterprise Products Partners [EPD-21.06] with a nice base at the $19 level, this recent violence to the upside should extend. Buy any break of $20. Kerr McGee [KMG-58.50] still 7 points below the recent high and could easily attack that number and progress beyond. Buy maybe a break of $55. Louis Dreyfus Natural Gas [LD-33.06] moving recently but without speculation. Looks to extend. Buy. Maynard Oil Co. [MOIL-16.00] big move $10-25 looks consolidated. Buy for a re-test any break of $15.00. Nuevo Energy Co. [NEV-18.63] to likely test the $25 recent high. Buy a break of $18. Occidental Petroleum Corp. [OXY-24.13] we like Canadian Oxy as well. Buy. Plains Resources [PLX-15.50] at the top of the based and ready for a break.so Buy. Perhaps a mirror move of the drop 20 to 9 _? OILS-INTERNATIONAL Elf Aquitaine ADR [France] [ELF-89.25] 89.63 ". buy." And now a Strong Buy. Imperial Oil [IMO-23.50] 23.25 ".. ASE about to lift off this great base in our opinion. Strong buy." Big move last week $23-26 and immediately gave it back. This appears very temporary. Strong Buy here. Total Fina S.A. [France] [TOT-75.63] 75.25 ".buy." Now a Strong Buy a break of $75. Royal Dutch [RD-62.69] Strong Buy right here.Exxon Mobil [XOM-83.00 Strong Buy and still within the base. Do it. *Texaco [TX-57.06] ditto XOM. Strong Buy. Conoco Class A [COC.A-25.13] Strong Buy OIL-REFINING Petro-Canada [PCZ-16.88] 19.75 ". Buy.very "correct" base and developing VTART power. 2% yield at 23X's." Remains a very Strong Buy. Tosco [TOS-32.06] 32.56 ". Buy-also a nice base and power. Earnings $2.95 vs. $1.58 for the trailing 12 months vs. 18 months ago. 10.8 x's with a yield of 0.9%." No change. OIL WELL EQUIPMENT Cooper Cameron Corp [CAM-75] 71.56 ".buy." We can do better, EXIT. Friede Goldman, Intl [FGH-6.19] 7.38 ". bottom picking, but FGH can move once it gets moving. Strong Buy." Let's reduce to "Buy." Stock acts fine, but ratings downgrade on debt is no fun. Fuelcell Energy, Inc. [FCL-40.75] 38.94 ". buy." We think this week. Smith International [SII-76] 79.63. Step progression to the upside with developing power. Buy. Ratings downgrade by an analyst stopped upside breakout. We disagree. Strong Buy. Enterprise Oil Plc Adr's [ETP-23.00] everything going well for this Brit pete explorer. Buy. PAPER & FOREST PRODUCTS - Do not follow PHOTOGRAPHY - Nope POLLUTION CONTROL - Can't see it. PRINTING SPECIALTY - Not clear PUBLISHING - Nope PUBLISHING-NEWSPAPERS - Not yet RAILROADS AND RAIL EQUIPMENT - Need more development-we will pass. RESTAURANTS Ruby Tuesday [RI-10.47] 22.38 ". strong earnings $0.37 to $0.66for the trailing 12 months vs. 18 months ago. Could break to the upside. Buy in the 9.00 range." No change. Acts well.buy the break of $11. Taking some time off.EXIT. RETAIL APPAREL Gucci [GUC-87.63] 81.00 ". consolidating the move to $111+ - the earnings are there-the power to test the highs as well. Positive." Second break to $80. No change. Home Depot [HD-56.50] 49.75 ". and we are not impressed. We are surely not impressed with morons screaming on the PA system, "PRICE CHECK ON AISLE 167 FOR THE LAVENDER TOILET PLUNGER AND COMBO TEA BAG SQUEEZER" 5.22.00: and still not impressed." But the break of $50 could bring in buy side traders. RETAIL DRUGS Forest Labs [FRX-84.06] 88.25 ". and still a winner-$0.44 to $1.44 for the trailing 12 months vs. 18 months ago is not too shabby. Buy." No change. RETAIL FOOD - Do not follow RETAIL-SPECIALITY Circuit City [CC-58.81] 58.06 ". we see no end in sight for this well performing stock. Not cheap at 31.6 x's, but we think it has legs from here" No interest in selling whatever. Buy and buy here. SCHOOLS & SCHOOL EQUIPC ompetitive Technologies [CTT-15.36] 16.68 ". Positive. We would like to see a break back toward ten. That is what we would like." No change. SHIPPING - Nope SHOES Timberland [TBL-69.38] 70.81 ".big move last week, but ware not so overpriced and earnings are really moving. $2.12 to $3.48 for the trailing 12 months vs. 18 months ago and from a quiet base of abut two years. Buy." Looking for a spike to have traders exit short term. STEEL - Too hard TEXTILES - Nope TIRE AND RUBBER Carlisle Companies, Inc. [CSL-41.19] 43.00 "Positive-Buy" - Consolidation coming, but we will hold.TOBACCOWe do not recommend companies that purposely kill people. TRUCKERS.... Out of gas [of course.too simple wasn't it] UTILITIES-ELECTRIC... We do not recommend individual companies. If Utilities are desired Utility Index shares are available. UTILITIES-TELECOM... Many will be taking a rest for six months or so-we will re-visit Labor Day. MISC. Keithley Instr- Inc. [KEI-55.75] 56.25 ". very thin, only 7.5 million out with earnings $0.40 to $1.80 for the trailing 12 months vs. 18 months ago and three dividend increases in that same time frame. Appears very powerful and volatile. Strong Buy." Looks a little toppy, but will likely hold well. L3Communications Holdings [LLL-53.75 55.25 ".] In the base and moving off it to the upside. Buy." But at a break of $53. Note: If we update this report [and that depends on how much I value sleep] we will give readers some idea where we are on the recommendation, and how stupid or smart we are, since a most recent change, a plus or minus sign and a rounded percentage will be included. Neutral, Neutral/Negative or Neutral/Positive ratings are not ratings at all and represent "no opinion." A rating change or initiation occurs with a rating of positive, negative, buy, avoid, sell, strong buy. To give us a positive percentage, the stock must go in the anticipated direction after the signal-minor changes such as accumulate, buy, positive and strong buy all assume upward price movement. Sell, avoid, negative will assume downward price movement. If a position is reversed then the percentage goes to the "Actual" profit or loss column. You can also pose questions to AXXel direct at AOL.com on AOL's MarketTalk hosted by Sage at AOL on Tuesdays at 2PM EST. Go to AOL and hit Keyword "PF Live" about 1:55 PM ET and you will get right in. You may also hear AXXel babble on www.radiowallstreet.com every Thursday at 2PM and live message board after and from once/twice/week on the BBC "World Service" and "Radio Scotland if you are into short wave or stranded on Diego Garcia or the Cape Verde Islands. DISCLAIMER: Investment decisions should not be based solely on our proprietary indicators, which are intended as an adjunct to your additional analysis. Please accept these comments as market commentary. We do not intend these comments to replace detailed fundamental analysis. We urge you to accomplish that additional research via your contacts on the Internet or through a trusted financial advisor. If you want additional information on any of the securities discussed within, we will give it upon your request. This report has been prepared from original sources and company data we believe to be reliable, but we make no representation as to its accuracy or completeness. This report is published solely for information purposes. It is not to be construed either as an offer to buy or sell or the solicitation of an offer to buy or sell any security or the provision of or an offer to provide investment services in any state where such an offer, solicitation or provision would be illegal. Any opinions expressed herein are statements of our judgement on this date and are subject to change without notice and we may not update that change to you. The opinions expressed are that of AXXel Knutson and are not necessarily representative of First Allied. First Allied Securities, Inc., its affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold, or sell a position in the securities mentioned herein. The author of this report, Axxel Knutson, does not invest in any of the securities mentioned in this report nor does his immediate family unless such securities are included in mutual funds or index options. Equity investment involves risk of capital loss. We recommend that your portfolio be diversified by company size, industry group, geographic region and by currency. It should not be assumed that future selections will be profitable or will equal the performance of past selections. Securities listed herein illustrate selections made using proprietary indicators known as VTART [Volume Trade Analysis ResearchT]. These names, VTART, Tradingweapon, www.tradingweapon.com TradingEngineT, www.tradingengine.com T, Volume Trade Analysis ResearchT, are servicemarks/trademarks of AXXel Knutson . Diversify. All recommendations and commentary are directed toward sophisticated, aggressive traders who have significant experience trading in a volatile market and who possess the financial resources to risk a loss of some or all of their invested funds. Commissions and, if you use margin, interest charges will lessen any return on investment. VTAR [Volume Trade Analysis Research] centers around the proprietary analysis of trading volume, price, general fundamental analysis, beta concerns, group rotation and detailed analysis of risk as it relates to entry and exit points in highly liquid stocks. If you want me to handle your account...... In response to inquiries relative to opening securities accounts handled directly by AXXel Knutson, here is the deal: Accounts are handled directly by Knutson [Tradingweapon.com is the business name for AXXel Knutson, who is a Registered Principal of an independently owned office of Supervisory Jurisdiction [OSJ] with First Allied Securities, Inc. Tradingweapon.com offers all of its securities business through First Allied Securities, Inc., a member of the NASD/SIPC. Bear Stearns Securities Corp. is the clearing agent for First Allied. There are no additional investment management fees and there is no sharing of profits or losses. Client-selected stocks may not enter the account unless approved by AXXel and this is not a likely occurrence. AXXel hates your stocks. The minimum account accepted is $150,000 and this has increased from his minimum in 1999. It will likely increase later in the year as well. Sob stories are listened to for amounts under $150k but rarely accepted unless AXXel is in the mood. These accounts tend to be trading accounts so don't even ask if you can't stand the activity and at times total inactivity and cash. AXXel does not personally trade in the same stocks as clients or those written about in his newsletters or spoken about in media appearances although First Allied Securities, its brokers and its officers may take and have positions although they receive no advance notice of new recommendations or changes in opinion. The opinions expressed within are those of AXXel Knutson and may not be shared by First Allied Securities, Inc.

Options, Futures, OEX Buddy Cafferky dapper@usit.net (800) 746-7938 www.grayghost.com Options Fast Track

RAINMAKER CORPORATION MARKET NEWSLETTER - (800) 746-7938: "Ready, Get Set..." Put/Call ratio 60/50; 139 Oex; 36 spx; 132 Djx. Downside failsafes have been met in the Indu, Spm, Compq and the Oex. With the paltry put/call reading in the Spx together with treating of the United Airlines purchase of US Air as a non event, cannot but conclude that there is more downside work to be done. In case you have misplace Monday's targets: Indu 10,254; Spm 1,352; Compq 2,952; Oex 715 Although the market could end up lower by the end of the week, a dribbling, dull market is no place to play puts, so lets exit the puts and settle in to some calls for a day or so and hope that the Spx p/c ratio improves. OEXFT (June 800 calls) "Ticket to Ride" (Buy OEX FT @ 2 + sell @ 10) FUTURES FAST TRACK - (414) 351-1992 INDEX: This higher close in SPM creates a negative seven down "but" daily cycle for Thursday. With that in mind, minor proportional resistance and the ten day average will provide a hard ceiling around 1425. As we look ahead, a Friday settlement above 1415 will generate a bearish seven up weekly cycle. WARNING: These observations and comments are a distillate of a mostly daily review of the internal condition of selected markets, and do not constitute a solicitation for business. We make these findings available to corporate as well as individual clients. This material is intended solely for the use (and entertainment at times) of the aforementioned, who are presumed to be fully aware of the risks of trading derivative products. However, if the reader is uncertain about the extent of these risks, then perhaps the following additional information and disclosure is appropriate: 1)Trading derivatives may result in the loss of home, reputation and all worldly possessions; 2) Marital stress can develop during and after trading; 3) This activity may result in the development of deep psychological and emotional problems, which could lead to long stays in hospitals and mental institutions; 4) Under the pressure caused by trading, the emotional and financial stress could cause a person to contemplate personal destructive behavior.

The Buy, Sell, or Hold Co Stephen K. Vosko cv@vosko.com www.buysellorhold.com The Buy, Sell or Hold Co.

The market rallied on Wednesday with the leadership restricted to the large cap tech issues. They brought many sectors with them but could not come to the aid of the ailing retail sector. Costco's (COST) earning disappointment wrecked havoc in the whole sector. Home Depot (HD) continued its slide, as did Walmart (WMT). Intel (INTC) led the rally. Intel had two announcements; 1. The company announced it would spend $2 billion to expand its production facility in New Mexico to meet the expanded demand for its chips. This news helped down the food chain sparking many equipment makers such as Applied Materials (AMAT). Even Microsoft, after seeing deep lows, rebounded and was up solidly even in the face of what appeared to be bad news from Judge Penfield Jackson in the remedy phase of the trial. The Judge abruptly ended the pleadings, hastened the government to update and amend remedy pleadings and looked seriously at an alternative result of breaking Microsoft into three parts. Note that Intel essentially but not quite earned back most but not quite all it lost in the session before. Microsoft was bouncing off an almost 50% decline from its high. Volume was a bright spot as the rally solidified. The Nasdaq traded over $2 billion shares on the regular session, not a record but much better than recent weeks. The NYSE traded over 1 billion shares when it has been averaging about 850 million of late. The volume up tick on a turnaround was encouraging. The Nasdaq Comp bounced back inside its lower Bollinger band. Support remains 3100 followed by 2950-3000. Resistance remains at 3579 and 4000. The latter should pose substantial resistance for a number of factors. The greater the number of indicators that point to the same level, stronger it should act is the normal rule. The S&P 100 (OEX) bounced off support near 727-730 to close right near short-term resistance at 750. If it can break resistance, the next target will be 770-780 followed by 800. There is further support at the 721 recent low. The Usual Big Disclaimer.... This report is for informational purposes only. Investment decisions should not be made based on this newsletter alone. This report is not an offer to sell or a solicitation of an offer to buy any security. The information contained in this report has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. Any opinions expressed are subject to change without notice. This newsletter and/or its associated individuals may, from time to time, own or have positions in the securities discussed herein and are not acting as registered investment advisors.

From the House Daily Stock Market Opinions Check this section for Market Direction From Wall Street`s best analysts

MARKET OPINION: We're looking at real bear market action in NASDAQ, as it is now lower by 34.6% since its closing high. Low volume continues to be a big problem. Remember, low volume in a falling market is deadly bearish!! NASDAQ is at a new low, so we'll check something that provides a glimmer of hope. For example: On 4/14 NASDAQ posted its closing low of 3321. On that day, there were 442 new lows. On 4/17, NASDAQ hit its intraday low of 3227, and that was accompanied by 488 new lows. On Tuesday when the NASDAQ was down 200, it posted new closing and intraday lows, and there were only a mere 155 new lows - a positive non-confirmation that shows, believe it or not, less selling pressure now than last month! If the market can start to pick up some high volume, both on the downside and then the upside, the market might be able to work itself into a tradable rally!! No buying until then - O.K.?? - Ralph Bloch MARKET OPINION: We look for a test of (NASD 3100-3000), and we cannot rule out a move to the bottom of this range. We believe the Composite is now completing a 5-wave decline similar to the painful correction and basing process of Q3 1998. While sentiment data and critical put/call ratios were neutral yesterday, the recent combination of market-basing put/call ratios and plunging major survey bullishness indicates that a bearish consensus has arrived on Wall Street. In addition, for the first time in more than a year, there is a strong probability that the Fed will be out of the way for at least four to six months following the June FOMC meeting - and during the election period. This window of opportunity could turn out to be the best time to be long stocks during this year. The month-end seasonal strength period begins on Friday and lasts for one week. Once again, the speculative trading play is to buy an obvious, blowout down-TICK low with tight stops; conservative traders should wait for price/volume confirmation. Investors are 55% in stock. The next fax will be transmitted for Friday or Tuesday, depending on tape activity. - The Traders Focus MARKET OPINION: With fund managers literally talking about 'taking a vacation' until things cool off and with threats of yet even higher interest rates, investors may be best advised taking a vacation themselves. We are always taught, however, to buy low and sell high and it should not be lost on us where stocks are currently trading, relative to where they've been. I've learned that the market always fails near its major lows when forming a bottom, encouraging the bears and discouraging the bulls, and we're sure seeing signs of that here. Sentiment readings are off the charts in bearishness while CNBC is now exploring other places you can put your money outside of the stock market. Believe me, the 'forces that be' would love for you jump back into the market at substantially higher prices, while keeping you out while they load up. The magic number on Nasdaq remains 3800! Should that level again be penetrated, many analysts would, no doubt, come out with major buy signals. With Nasdaq now flirting with 3000 (some say we're headed to 2500), it makes sense to keep a sharp lookout for bargain basement prices, especially if you're trading. If you're courageous, there are some stocks and stock groups that have been attracting attention, e.g., oil service, food shares, drugs, golds, waste management. Good luck. - The Volume Reversal Trader

Wirehouse Opinions Wirehouse Opinions Daily Recs from Wall Street`s Major Brokerage Houses Condensed Recommendations

AMGEN: (AMGN) $59 5/8 Up $4 1/16.... Buy. Positive Phase III data on Abarelix for advanced prostate cancer at (ASCO) meeting, with several products rapidly advancing in development. We believe company is poised for a new growth phase. - Paine Webber; Buy. Positive results from 2 Phase III trials of Abarelix depot for the treatment of prostate cancer, NDA filing on track for 4Q 00, 00 est. $1.06, 01 est. $1.37. - J.P. Morgan BANK OF NEW YORK: (BK) $48.... Buy. Raised target from $46 to $56, remains among the most efficient and profitable organizations in banking, stock trading at huge discount vs. the processors. - Ing Barings Furman Selz MED DESIGN CORP.: (MEDC) $12 1/4 Down $1 9/16.... Initiate coverage with Buy. Company designs and develops retractable safety needles and devises, co. currently has a portfolio of 22 safety needle products for applications in blood collection, target $25, best suited for aggressive risk tolerant investors. - Paine Webber NOKIA: (NOK) $47 Up $2.... Buy. Company is off to a solid start for this qtr, it continues to take market share and is adding to industry leading position, EPS est 00 $0.77, 01 $1.02. - Bear Stearns INTUIT: (INTU) $35 1/16 Up $8.... Buy. 3rd qtr EPS exceed our est and consensus, upside was due to higher then anticipated interest income, raising EPS est 00 from $0.56 to $0.58, 01 EPS est $0.65, target $55. - Abn Amro; Market Prefromer. The company reported solid 3rd qtr in line with our est, raising EPS est 00 from $0.55 to $0.57, 01 EPS est $0.70. - J.P. Morgan; Strong Buy. Company reported 3rd qtr EPS ahead of our est, the qtr highlighted by a strong tax season on the PC and Web, significant internet revenues growth and robust international growth, raising EPS est 00 from $0.56 to $0.59, 01 from $0.68 to $0.72, 02 from $0.85 to $0.87. - UBS Warburg AMR CORP.: (AMR) $30 1/16 Down $2 9/16.... Downgrade from Buy to Market Perform. We think their is a substantial chance that (AMR) will make a competing bid for US Airways. - DLJ PROMOTIONS.COM: (PRMO) $5 3/8.... Strong Buy. Last week management outlined healthy growth prospects at our conference. - Ing Barings Furman Selz ANADARKO PETROLEUM: (APC) $50 7/16.... Top Pick. Target $70. A closer look at solid internal growth potential should confirm that (APC) / (UPR) deal will get the job done. - DLJ UAL CORP.: (UAL) $53 3/16 Down $7 3/16.... Downgrade from Buy to Under Perform. Company likely to announce acquisition of US Airways today for $60 per share, downgraded because potential for operational dislocations and thus earnings pressures are hugely troubling to us. - DLJ APPLE COMPUTER: (AAPL) $87 11/16 Up $1 7/8.... Reit market perform 3Q is on track, demand trends have been somewhat mixed with iMac sales running below plan and PowerBooks ahead of plan, 00 est. $3.68, 01 est. $3.85. - Chase Hambrecht & Quist ROPER INDUSTRIES: (ROP) $33 1/4.... Buy. EPS for 2Q of $0.44 matches our est., management reiterates guidance for fiscal 00 est. of $1.80-$1.90, co. announced completion of acquisition, 00 est. $1.90 and 01 est. $2.20. - Ing Barings Furman Selz STARBUCKS CORP.: (SBUX) $31 Up $2 11/16.... Upgrade from Buy to Strong Buy due to valuation and likely accelerating flow of positive news over the next several Qs, 00 est. $0.76, 01 est. $0.93. - Chase Hambrecht & Quist PERRY ELLIS: (PERY) $9 3/16.... Accumulate. Reported 1Q EPS of $0.53 slightly above our $0.52 est., revenue substantially ahead of our est., significant growth and private-label programs, lowered target from $13 to $12.50. - Prudential TELABS: (TLAB) $61 15/16 Up $3.... Strong Buy. Company to host its 2nd annual analyst meeting on Wed. and Thurs. of this week, we expect the focus to be on new products, target $76. - Prudential MICROSOFT: (MSFT) $65 9/16 Up $2 3/8.... Buy. Company is having a meeting today with Judge Jackson to discuss the path forward to a final decree, EPS est 00 $1.70, 01 $1.88. (TMX) Reit buy fundamental outlook remains positive, 00 est. lowered from $3.64 to $3.50 and 01 est. from $4.00 to $3.80. - J.P. Morgan UNICOM CORP.: (UCM) $43 3/16.... Buy. Merger of UCM and (PE) seems on track, settlement is due in June, target $47, EPS est 00 $3.25, 01 $3.68. - UBS Warburg EXODUS COMMUNICATIONS: (EXDS) $58 Down $4 5/8.... Buy. Announced an alliance exchange program, we believe program has ability to make co.s data centers more attractive places to co-locate. - CIBC World Markets MICROCELL: (MICT) $27 9/16.... Upgrade from Hold to Buy. Strong operating performance not reflected in declining stock price, stock appears significantly oversold, target $60. - CIBC World Markets NEXTLINK COMMUNICATIONS: (NXLK) $60 1/4 Up $3 3/8.... Buy. Made 2 LT positive announcements yesterday, first being the purchase of Fiber Networks in Europe from (LVLT) and $400 million in additional funding from Forstmann Little, believe co. is paying a very reasonable price for networks. - CIBC World Markets; Strong Buy. Company stock under pressure, we feel price weakness creates buying opportunity. - Legg Mason CROSSROADS SYSTEMS: (CRDS) $43 Down $7 7/8.... Strong Buy. Company posted 27% sequential revenue gain in line with our est., raised revenue projections for FY 00 and 01, stock looks cheap at this level. - SG Cowen LIFEPOINT HOSPITALS: (LPNT) $21 3/8.... Strong Buy. Investor meeting highlights the underlying positives of co.s story, stock very attractive despite strong performance, target $24, 00 est. $0.48 and 01 est. $0.59. - SG Cowen

Futures Fourth Time Dave Norton Nortdav1@NASPA.NET (414) 351-1992 Futures Fourth Time

LONG DAY TRADES: BDM, COFN, FCQ MARKETS EXPECTED TO CLOSE HIGHER TODAY: FCQ, CN, WN, SMN, ON, COFN, TYM, BDM, CDM, GCQ, SIN MARKETS EXPECTED TO CLOSE LOWER TODAY: COPN CATTLE: August Cattle closed lower as we desired, but of course it lost too much ground for us to maintain any interest in trying to pick a bottom. August Feeder Cattle managed to hold above the ten day average and Thursday is three up "but" calling for a higher close. Because of the action in Cattle, I have to view this as a marginal day trade candidate on the long side. PORK: This new low close in August Hogs negates what might have been a friendly daily cycle for Thursday. Measured from a different place, Thursday is a swing day. BOT: July Corn is three down on Thursday and that argues for a higher close. The pattern at this point is not all that inspiring and the market is trading below the moving average. So I'll pass on trading the long side. The same timing and attitude applies to July Soybeans. I'm nervous about the number of times SN has probed the 5.40 level. Each time, it becomes less reliable as support. July Soybean Meal is also three down, but not yet close enough to the ideal price support at 175. BON closed lower as expected and that leads to nothing in the way of timing for Thursday. If we push the issue, July Wheat can be viewed as a seven down situation, but price support is nearly a dime away so here too, I'll pass. METAL: August Gold is three down and should close higher and that settlement will have to be above 280 in order to call it bullish. July Silver is also three and seven down. A close above 5.05 will be very encouraging to the bullish argument. July Copper remains below the ten day average and Thursday is a three up situation. Plan for a lower close. N. Y.: July Crude Oil regained the ten day average, so a test of the contract high at 30.35 is next on the agenda. July Cocoa closed higher as planned and that means the upward trend should continue. July Coffee has not come down as far as we want, but Thursday is the third day of decline, so the buying pressure should resume. Lacking price support, call this a higher risk day trade candidate on the long side of COFN. July Cotton closed lower as indicated, but not by enough to inflict damage to the trend. Mixed impressions for Thursday. Sugar has not suffered a significant downward correction since it left the bottom late in March. There is nothing in the current action to suggest we are about to have one, but keep in mind that June will be the third month of advance. FINANCIAL: June Bonds are three and seven down on Thursday, so let's buy it for a day trade. Plan to keep the position if the close is above 94-00. IMM: SFM closed higher as expected although it is not showing much enthusiasm in that direction. CDM is seven down on Thursday so plan for a higher close. CRB: This Index is coming to the end of the sixth week of advance and showing no signs of slowing down. The seven up cycle will help it do that next week. INDEX: This higher close in SPM creates a negative seven down "but" daily cycle for Thursday. With that in mind, minor proportional resistance and the ten day average will provide a hard ceiling around 1425. As we look ahead, a Friday settlement above 1415 will generate a bearish seven up weekly cycle.