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TOMORROW

Consumer confidence and Chicago PMI are out 30 minutes into the session. Confidence will be of much more importance after the Michigan numbers disappointed investors last week. After earnings let investors down, we will see a shift back to looking at economic numbers with more scrutiny. If outlooks are blas , the only thing that can drive earnings is really strong economic numbers. They have been in a slump lately; solid, but not hitting line drives and home runs. Investors need some homeruns to view stocks as having a chance of increasing their earnings to match prior expectations.

The action intraday has been typical of a downtrend: early attempt at rallying and then selling all session. Even with today's recovery late in big techs we still cannot put much into that move. this typical up then down action is usually followed by just giving up on the open and taking stocks lower hard. That is what triggers the bounce, and it usually happens intraday. The hope that keeps springing up finally turns to despair and selling early. That helps reverse the action and start a bounce up to the nearest resistance level.

At this point we would prefer just to see the major indexes turn and plummet very hard on high volume. In reality it will most likely take more grinding to work the sentiment indicators higher and get the indexes at a point where they can sustain a rally beyond a day and a half. The futures were up after hours today; again hope springing to life. Does not look like the indexes are ready to start the day down and really clean the place out for a move back up. When we see that happen we will no doubt be at the point where our puts are hitting their targets and we will start taking that money off the table and then watch for the bounce that the ARMS index is indicating (after so much selling, some bounce is certainly coming). It might give us a head fake first with a mini rally to resistance and then more selling before the stage is set. For now the bias is still downside for the big stocks, and we will let our downside plays work for us while the stronger upside plays hold the line, waiting for the next rally to really jump back up.

Support and Resistance

Nasdaq: Closed at 1656.93
Resistance: The March down trendline at 1690 (February low at 1696). 1743 to 1750 may act as some resistance (the 18 day MVA is at 1749.17), then 1775. 1850 is next (200 day MVA at 1846.10), followed by 1875, the bottom of the November consolidation.
Support: Right at the lower channel line from the March downtrend (1640). Then not much until 1613 to 1626 (April 2001 low at 1619 intraday).

S&P 500: Closed at 1065.45
Resistance: 1075 is the February lows that did not hold. 1100 represents former price consolidations as well as the March down trendline at 1098. The 10 day MVA (1095.97) and the 18 day MVA (1107.03). After that is 1125 and the 200 day MVA (1129.46) is sitting right above that level. There is some resistance at 1150 as well. After that there is a lot more, but w will take one step at a time.
Support: Completed the 3-month head and shoulders pattern and broke lower. Not 1050 represents the October lows and the last price consolidation level before the September low.

Dow: Closed at 9819.87
Resistance: The 200 day MVA (9930.91), then 10,100 held for many tests before breaking. The March down trendline at 10,115, a key point on any relief bounce. The 18 day MVA is at 10,129.58, another point of resistance in downtrends. 10,300 blocked the move the last time it made to that level, and the up trendline from September is right there at 10,350. After that is 10,400, the barrier to the upper half of the March trading range. The top of the June, July, and August 2001 trading range at 10,600 (10,679 intraday high) marks the top half of the March trading range.
Support: 9500 to 9600 are next as the index has entered into that shelf of support from 9500 to 10,100.

Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.

4-29-02
Personal Income, March (8:30): ): 0.4% actual versus 0.4% expected and 0.6% prior
Personal Spending, March (8:30): 0.4% actual versus 0.4% expected and 0.6% prior

4-30-02
Chicago PMI, April (10:00): 55.50 versus 55.7 prior
Consumer Confidence, April (10:00): 108.0 versus 110.2 prior

5-1-02
Auto Sales, April (00:00): 6.0M versus 6.0M prior
Truck Sales, April (00:00): 7.3M versus 7.3M prior
ISM Index, April (10:00): 54.6 versus 55.6
Construction Spending, March (10:00): -0.1% versus 1.1% prior

5-2-02
Initial Claims, 4/27 (8:30): NA versus 421K prior
Factory Orders, March (10:00): 0.7% versus 0.3% prior

5-3-02
Nonfarm Payrolls, April (8:30): 60K versus 58K prior
Unemployment Rate, April (8:30): 5.8% versus 5.7% prior
Hourly Earnings, April (8:30): 0.3% versus 0.3% prior
Average Workweek, April (8:30): 34.3 versus 34.2 prior
ISM Services, April (10:00): 57.5 versus 57.3 prior

TEAM TRADES

With the market continuing its downtrends after breaking support, we were looking over the weekend for stocks doing the same with a lot of vigor. There were quite a few choices, one of them was EMR in the rapidly weakening electronics sector. The buy point was 53.60, and in the first hour it tested to just above that level and bounced without hitting the buy point. It bounced as far as the 15 minute MVA and started down. 45 minutes later it was back at 53.60, bounced one more time and then ducked below the buy point. Volume was not huge, but the test of the 200 day MVA Friday was on moderate volume as well. The stock had breached the 200 day MVA Thursday on high volume, so with the price action we were willing to go ahead and enter the play. The June 60 put options were trading at 7.20 by 7.40 right at the break, and by the time we got the order in after the alert was sent the ask was at 7.60. We put in a limit at that price since we wanted the fill and the spread was very narrow for options. The stock acted just as the market: it sold down the rest of the session, riding below the 15 minute MVA all the way. A strong downtrend intraday complementing a strong breach and weak test of the 200 day MVA.

PLAYS TO LOOK AT: No announcements from today's candidates, but ACDO and RCII still are looking solid. PII continued blasting up!

BONUS PLAYS: Huge drop on the put play by EMR! MCY made the breakout move!

RI (Ruby Tuesday--$25.23; +0.47; optionable): Restaurants
http://biz.yahoo.com/p/r/ri.html
STATUS: Completed its eleven-week cup with a solid move earlier this month, but after the final surge over the left-side high RI started to form its handle. Good price/volume in the cup, and it continues in the handle, which shows RI pulling back over the last week with generally below average volume. Today RI bounced up slightly from near its 18 day MVA (24.61), moving on continued light volume of 235k (avg. 403k). Money flow and buying are strong, and relative strength has broken out ahead of price. Target: 31
BUY POINT: Breakout: 26.10 on volume of 600k. Stop: 24.50
POSITION: Stock and/or July $22.50 calls to buy (RI GX).

TBCC (Tbc Corp--$14.59; +0.50; optionable): Auto parts wholesale
http://biz.yahoo.com/p/t/tbcc.html
STATUS: TBCC made a strong move in February out of its lateral range, and continued steadily up. It started to trend back in mid-March (high 16.36), and has slowly and steadily drifted toward the 50 day MVA (14.16) on low volume. It finally touched through the 50 day Friday, and today reached down to 13.84 but recovered to close, with volume spiking up to a strong 114,500 (avg. 88,800). The volume spike on the move from support points to a potentially strong bounce, and we will look for that move to trigger a new high. Target: 18.
BUY POINT: Bounce: 15.05 on increased volume. Stop: 14
POSITION: Stock only.

MTB (M&T Bank--$84.43; -0.12; optionable): Regional bank
http://biz.yahoo.com/p/m/mtb.html
STATUS: Broke from a cup with handle (dating back to August) early this month. It was not an extreme move as the stock steadily moved up along its 10 day MVA. MTB has turned laterally and is tightening over the short-term MVA's (10 & 18 day at 84.08 and 83.46), showing a small ascending wedge. Today MTB gapped back to open but held over the 18 day, pushing back up to close as volume spiked way up to 424k (avg. 241k). Looking for another breakout, this time with a lot of volume to push it on a run to 100.
BUY POINT: 85.11 on minimum volume of 360k or better. Stop: 81.
POSITION: Stock and/or July $80 calls to buy (MTB GP).

PRE-ANNOUNCEMENTS: BMS made a strong move down on the put play, and ATK still looks good.

MHK ($65.00; +0.70): Forecast to announce a split at its May 16 shareholder meeting. Earnings were April 15. Pushed up slightly from support today (10 day MVA at 64.26) in its cup with handle. Looking good, and the breakout is 67.05 on volume of 965k (avg. 645k; today down to 417k), with stock and/or August $60 calls to buy (MHK HL - 79 open interest).

RCII ($55.25; +0.84): Did not get the announcement after hours, but blew out earnings. The stock hit the buy point Monday with good volume behind it, pulling back to close from an intraday high of 56.41. After hours RCII was trading over 58so things are looking good for today's buys. We can look at new or additional positions after a gap up tomorrow; if we get a gap up to 58, we can look for a pullback to test and hold the 57 range. On a strong move up from there, September $55 calls to buy (RQG IK), and we can add to stock positions.

ACDO ($61.19; +1.18): Did not get the announcement today, but could be poised to take off again. Dropped initially on earnings news, but after hitting down to 57.50 (50 day MVA at 56.42), ACDO stormed back to close with a doji over its recent support of the short-term MVA's (18 day at 60.10). Volume was huge at 1.49m (avg. 673k). The breakout is 63.36 on continued strong volume, with August $60 calls to buy (DZU HL). We can also add to stock positions.

BBBY ($36.45; +0.10): Researching a new date. Last week broke from an ascending wedge which move also took it out of its five-month range. After hitting 37.70 Friday it pulled back, but tapped the former highs at its low today. Still carefully watching how it handles support, protecting profits from a strong drop, but if it can continue to hold over 36 we can look at new or additional positions on a strong move back up. After holding 36, a move back over 37 on above average volume (3.17m; today down to 1.8m), with August $35 calls to buy (BHQ HG).

XL ($92.11; -0.96): Never gave us a bounce, and now is falling. It made double tops at 98, and gave up the 50 day MVA (93.73) last week. XL tested back over that level today, hitting 94.50 but then dropping back on increased, below average volume (709,700; avg. 853k). Looking for a continued drop on increased volume, targeting the 200 day MVA (currently 87.66). On a drop through 91.50, a quick aggressive play with June $100 puts to buy (XL RT - 10 open interest).

PRE-SPLITS:

PRHC ($36.79; -0.37): Splits 3:2 effective 5-1-02. Has made a nice move, breaking over the center of its large double bottom and down trendline. Today it test that trendline at its low of 36.07, rising back up to close with a doji. One we are looking for to show strength through the split. On a move from here over 37.20, June $35 calls to buy (PUH FG).

FULT ($24.90; +0.16): Splits 5:4 effective 5-21-02. A doji today as FULT continues in its consolidation that looks to be a jagged ascending wedge. We continue to look for the breakout at 25.40 on minimum volume of 1.27 million (average 94,600), with stock.

IFIN ($71.71; -2.06): Splits 2:1 on or about June 14. Gave up the nice consolidation and dropped, today giving up the 50 day (73.52) on increased volume (181k; avg. 165k). We could see IFIN test back toward the 50 day, but on a drop back through 71.50, targeting 68 with June $80 puts to buy (FLQ RP - no open interest as yet).

CONTINUING CANDIDATES: TGH blasted off with the merger announcement with Anthem! We sent out an alert so that subscribers could consider taking profits. CYN is testing its breakout, ETH continued up, APPB looks like it is going to pull back a bit and rest, and THC we are watching carefully to see how it handles support at the 18 day.

JCI ($84.25; -2.86): Double topped at 93, and then dropped back through the 50 day (87.29). After momentarily catching support at 85 and testing the former support, today JCI dropped back hard from the 50 day (volume 565,700; avg. 454k). Closed at the low, so we will see if it continues down hard from here or if it tries to test 85. On a failed test of 85 and drop back through 84.25, targeting 80 with July $90 puts to buy (JCI SR - 21 open interest).

POST SPLITS:

JEC ($39.37; +0.06): Still testing last Tuesday's breakout, showing a tight doji today while continuing to hold comfortably over its 10 day MVA (38.81). This is the second flag pattern tossed out by JCI on the breakout move, and we can looking at new options positions on a move over 40 with volume of 220k (today down to 185k; avg. 192k). Still targeting 44, with July $37.50 calls to buy (JEC GU).

Good Investing!
Jon L. Johnson and the Stock Split Report Staff.

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.

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