The Play Of The Day

May 4, 2000

Good Morning Stock Fans!

BREAKING NEWS: Productivity Report:

The Productivity Report hit at 8:30 AM EST. Labor Costs rose 1.8 % The most since Q2 1999 Productivity Gain is the smallest since Q2 1999, a 0.05 gain. The productivity report being to the low side means a lower real standard of living, and does not imply that inflation has been offset. Therefore it is seen today as an indicator that inflation is creeping into our environment.


The NASDAQ down as much as 192.00 came back yesterday about 35 mins ahead of the close after Tom Gavin at DLJ came out and said he didn't see a reason not to buy stocks at a discount. This in turn turned the NASDAQ composite around? Or did it? ( more on that in a second) The NASDAQ came flying back as the composite erased 114 points of its losses to close down only 78 points at 3,707.00.

Stock Fans, I did indeed as PLUS mambers know pick a great area to cover my shorts I had had for a few days and go all in at 3,593.00 as the PLUS Alert Email stated yesterday I would. as the NASDAQ stopped less then one point later heading south and turned sharply north! I did get JDSU at about . 1250 cent off the low of the day and then in amazement watched JDSU go from my purchase price of $88.8750 at 3:35 PM EST to go back all the way higher then where it began $95.00 on close! I did expect a bounce and was fortunate to call it right on, but the bounce was not in proportion to volume throughout the day and the range of the bounce wasn't at all like it should have been if it was buyer induced.


Well, the NASDAQ ahead of a big report today, Productivity Report had its market technicians ( MM) unable to get sellers to sell in volume decided to do something into the close. They decided to limit the supply of the stock they had gotten back for less all day, and that in turn pushed stocks up extremely fast, as the MM looked for investors to get stuck in stocks at higher prices, and then on a gap down sell back.


Well, the NASDAQ looks like it will not gap down. With CSCO reporting on the bell all eyes will be on it. I look for CSCO to beat the street's estimates, but then warn of a slow down and the NASDAQ then has its cataltys to set up to the down side for BIG economic report on Friday the Employment Report. Today Allen G will speak and stocks like JDSU selling down 6.00 on way low volume of 14.1 till 3:30 PM EST time yesterday went up into close 6 points back on 3 million shares. That is 4/1 shorted stock to bought stock. We will instead gap up today on open. With Allen G speaking in about 30 mins. I look for the gap to end and stock to sell off ahead of the Employment Report Tomorrow. Watch closely as MM may do exactly the same thing they did last night and bounce this market near the close. I will cover my shorts there and look to go long into the close. I will however not hold overnight. Yesterday was done to get investors to I think hold overnight for a gap as it rocketed on close. Today investors will be tricked again, I think. Only this time they will hold like yesterday, and the Employment Report should be bad for stocks and we should GAP DOWN in AM Friday, May 5, 2000!


Sell out longs today ahead of Allen G speaking, and then go short on the top. Go long into close as the market bouncers. If you think it may be strange to see buyers ahead of Friday's Employment Report it will be. They are shorting are those MM's again!

Today's Play of The Day is: ADC Telecommunications (Nasdaq: ADCT)

ADC Telecommunications, Inc. provides hardware and software systems and integrated solutions that enable customers to build and upgrade communications networks. ADC's products include hardware and software systems and integrated solutions. Broadband Connectivity products provide the physical contact points for connecting different communications system components and gaining access to communications system circuits. Business Broadband products enable telephone companies to deliver voice, video and Internet/data services to their business customers. These products include transport and access systems. Residential Broadband products include digital transport systems that enable cable TV operators to transport high-speed digital signals for two-way voice, data, Internet and video services to homes. The Integrated Solutions products include consulting, software and systems integration services to aid customers in integrating ADC and other complementary products in communications networks.

Stock Fans, we played this back on 4/14 for a nice run. ADCT is one hot stock. A hot stock in a cool market. ADCT's 10 day moving average crossed up, giving the buy signal. Volume has steadily increased, 1 day change +57%, 2 day change 22.3%, one month change 20%, 6 month change 85.7%. This stock has an accumulation rating of A. It has great earnings and sales increases quarter over quarter. The electrical semiconductor industry group is in the top 2 rated by group relative strength. ADCT's weekly chart shows that this stock's price is a steady up!

Buy Area:$58.00 to 58.65
TARGET:$64.51 to $67.45
Time Frame: 2 to 7 days
Type of Trade: Swing Trade
Daytrade for 1-2 point scalps. Avg. price range $4.95

BONUS (Short) PLAY #2: WatchGuard Technologies (NasdaqNM: WGRD)

WatchGuard Technologies is a provider of Internet security solutions that protect enterprises or telecommuters using the Internet for electronic commerce and communications. The Company's core market is small- to medium-sized enterprises (SMEs), and the Company has recently expanded its marketing focus to include larger enterprises as well as small offices and home offices (SOHOs), and telecommuters, particularly those using broadband Internet connections. The Company's subscription-based LiveSecurity solution broadcasts threat responses, software updates, information alerts, expert editorials, support flashes and virus alerts over the Internet, enabling enterprises to keep their security systems current with minimal effort. The dynamic nature of the Company's solution is made possible through an updateable security appliance that executes software sent from the remote management system receiving the Company's LiveSecurity broadcasts.

Stock Fans, WatchGuard Technologies is being distributed. It's closing priced crossed below the 10 day moving average initiating the sell signal. WatchGuard Technologies has been selling on increasing volume. The bull to bear ratio is 1:11. It has very tough competition in this sector. The sector itself has moved down considerably in the weekly ratings. From 7th place 3 months ago, to 15th place last week, to 41st place this week. The trend is clear. Looking to scalp this baby down as the market is sure to help.

Sell short: $46.00 to $47.00
Buy Stop:$49.35
TARGET: $39.875 to $42.30
Type of Trade: Short Trade
Time Frame: 2 to 5 days
Daytrade for 1-2 point scalps. Avg. price range $9.01


The same suspects as usual. The best way to be into FRIDAY is cash. Being SHORT might not be a bad idea as well. The NASDAQ is gapping today on rediculously low volume. They must take it higher to take it lower.

I still stand by 3221 comes before 4009!

Look for ALERT EMAILS on BUys and Sell Shorts today!

Have a great day!

More to come....

Stock jock!

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