Schaeffer's Daily Market Blog Features Circuit City Stores, AK Steel, Semiconductor HOLDRS Trust, Applica, and McDonald's.

CINCINNATI -- Among the stocks featured in the December 31 edition of Schaeffer's Market Blog are Circuit City Stores (NYSE:CC), AK Steel (NYSE:AKS), Semiconductor HOLDRS Trust (AMEX:SMH), Applica (NYSE:APN), and McDonald's (NYSE:MCD). 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 Friday, December 31, 2004:

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

9:52 AM Circuit City Rebounding from Earnings Report

On December 6, Circuit City Stores (NYSE:CC) reported weaker-than-expected third-quarter earnings results and the stock dropped as low as $14.20. Since then the stock has bounced back and is currently trading at $15.87 while the pessimism has continued to build. The Schaeffer's put/call open interest ratio (SOIR) has jumped from 0.79 to 1.01. The current reading is higher than 99 percent of the readings taken over the past year. The short-interest ratio is at 3.12. Analysts have become even more pessimistic with two downgrades since the report leaving two "buy" ratings, 15 "hold" ratings, and six "sell" ratings.

10:24 AM AK Steel Options Very Active After Wall Street Journal Article

In yesterday's Wall Street Journal, there was an article about how China may become a net exporter of steel. This led to steel stocks getting hit pretty hard in yesterday's trading. AK Steel (NYSE:AKS) slipped 12.4 percent to close at 13.88. The options for AKS were active with the puts seeing 3.6 times more volume than usual and the calls saw 3.5 times more volume than on the average day. The net result was the Schaeffer's put/call open interest ratio (SOIR) rose from 0.74 to 0.77, marking the second straight day the ratio hit a new annual high. The stock is trading just above its 20-day moving average, which has provided support during the most recent rally.

10:56 AM SOIR for Semiconductor HOLDRS Trust Trending Lower

After spiking higher with the expiration of December options, the Schaeffer's put/call open interest ratio (SOIR) for the Semiconductor HOLDRS Trust (AMEX:SMH) has trended lower. The current SOIR reading is 0.81, down from 0.98 on December 20. The current reading is right in the middle of the past year's readings. The biggest put open interest for the January option series is the 35 strike, and the stock is already trading below this level, so it won't be getting any support from these puts. The peak call open interest is also at the 35 strike and there are almost twice as many calls open as there are puts, so it is more likely to serve as resistance.

12:52 PM Applica Vaults to New Highs

According to Hoover's, Applica (formerly Windmere-Durable Holdings) (NYSE:APN) is a holding company who makes small appliances (coffeemakers, toaster ovens, irons) and personal care products (curling irons, hair dryers, electric mirrors) through its subsidiaries. APN also makes private-label and licensed wares, as well as pet and pest control products. The stock is the biggest gainer on the New York Stock Exchange. APN is almost 10 percent higher today on no significant news. After breaking above former resistance at 4.50 in early November, the stock traced out a new higher base using that level as support. Today's rally vaults APN to a five-month high. Short interest is relatively high on APN. At just over 831,000, it generates a short-interest ratio of four days.

12:56 PM And the Winner Is?

Would you believe that out of all 30 Dow stocks, McDonald's (NYSE:MCD) is going to finish the year with the largest gain? Well it's true, as the shares of the fast food giant have gained more than 30 percent, with the next closest being Exxon Mobil's (XOM) 25-percent gain. The biggest loser is the much-loved Merck (MRK) at minus 30 percent followed by chip giant Intel (INTC) at minus 27 percent.

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.