Schaeffer's Daily Market Blog Features Alcoa, Schering-Plough, Jones Apparel Group, Apple Computer and Time Warner.

CINCINNATI -- Among the stocks featured in the January 10 edition of Schaeffer's Market Blog are Alcoa (NYSE:AA), Schering-Plough (NYSE:SGP), Jones Apparel Group (NYSE:JNY), Apple Computer (NASDAQ:AAPL), and Time Warner (NYSE:TWX). Schaeffer's Market Blog are just one of the many free market commentaries written everyday at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. The Market Blog is written throughout every trading day by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1

Schaeffer's Market Blog for Monday, January 10, 2005:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

10:00 AM Alcoa Set to Kick Off Earnings Season

Alcoa (NYSE: AA) will announce fourth-quarter earnings results after the closing bell this evening, unofficially kicking off earnings season. Looking at the sentiment backdrop heading into the announcement, it seems there is a certain amount of pessimism creeping into the picture. The Schaeffer's put/call open interest ratio (SOIR) is at 0.62 and is trending higher. The current reading is higher than 61 percent of the readings taken over the past year. The short-interest ratio is at 2.92 and the number of shares sold short increased by 29 percent during the most recent reporting period. Analysts are expecting the company to earn 41 cents per share for the quarter.

10:31 AM Pessimism Growing Towards Schering-Plough

Over the past few months, pessimism has built on Schering-Plough (NYSE: SGP). The Schaeffer's put/call open interest ratio (SOIR) has grown from 0.32 in mid-September to 0.63 today. The reading back in September was the lowest for the past 52 weeks, and the current reading is higher than 87 percent of the readings. The short-interest ratio has increased from 3.43 in August to 4.82 today. Despite the growing pessimism, SGP shares have staged a rally since late October, resulting in gain of more than 25 percent.

11:32 AM Banc of America Upgrades Jones Apparel

This morning, before the market open, Banc of America upgraded Jones Apparel (NYSE: JNY) from "neutral" to "buy." Before this morning's upgrade, two-thirds of the analysts covering JNY rated it a "hold," according to Zacks. There are now four "buy" ratings, five "hold" ratings, and no "sell" ratings on the equity. Option activity on JNY is neutral, with 5,700 calls compared to 5,700 puts in the near term. The resultant Schaeffer's put/call open interest ratio (SOIR) of 1.00 is right in the middle of all readings taken over the past year. A look at the recent price action shows that JNY has pulled back nearly six percent from its highs in early July. Today the stock is trading $1.29 higher to $37.06.

11:46 PM Options Trade Actively on Apple Computer Ahead of Earnings Report

On Friday, options traded briskly on Apple Computer (NASDAQ: AAPL), as call volume was 3.3 times heavier than average and put volume was 3.4 times heavier than average. More than 87,000 call contracts traded, with the most active being the January 70.00 strike (AAQ AN). Investors traded nearly 26,200 AAQ AN contracts Friday. More than 40,800 put contracts crossed the tape, with the most active being the January 55.00 strike (AAQ MK). The stock closed sharply higher Friday after First Albany raised their AAPL estimates due to stronger-than-expected iPod sales. AAPL is scheduled to report its quarterly earnings Wednesday after the market close.

12:14 PM A Rollout of a Call Position on Time Warner

Media company Time Warner (NYSE: TWX) has two of the most actively traded options on the American Exchange (AMEX) in midday trading. TWX's January 2005 19 call (TWX AT) and its April 19 call (TWX DT) have each traded just over 35,000 contracts on the AMEX. The volume on the TWX AT option executed as one large block trade at 10:12 a.m. eastern time while the TWX DT volume crossed the tape as two trades of 17,500 each at 10:11 a.m. Both were marked spread, indicating that they were probably related. The TWX AT trade executed nearer the bid price at 0.30, suggesting it was a sale. The TWX DT trades went off nearer the ask price at 1.00 and 1.05, indicating they were purchases. With 60,540 and 5,704 contracts of open interest, respectively, this may have been a rollout of a bullish long call position to a longer-term option.

The above are just a few of today's Daily Market Blog entries. Click here to read all of today's Daily Market Blog: http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method.