Dow Jones 10,114.29 + 220.45 7:05 pm EST, Weds., December 5, 2001  NASDAQ   2,046.84 + 83.74 For info, visit access.smallcapnetwork.com .  S & P 500 1,168.77   + 23.97 To be removed, please click here .  Russell 2000    479.42   + 11.58 VOLUME 01: ISSUE 19    Small Cap Digest Trading Alert: Corning Incorporated  Christmas is coming early this year as the markets are "ON FIRE".  The dow is above 10,000 and Nasdaq is above 2,000.   How low our expectations have become.  The recent activity in the markets are bringing flashbacks of the late 90's.  At this pace we might start seeing some IPOs again.  Well, let's not get too ahead of ourselves here.  One the sectors picking up steam is the fiber optics arena.  This was the only game in town for most of 1999 and 2000.  Unfortunately, for JDS Uniphase (Nasdaq:JDSU) and Corning (NYSE:GLW)  the slowdown in capital expenditures by telecom companies the past year have left their toll on the companies.  However, it looks like Corning will is coming out of its funk. The company has broken out of its 50 day moving average.  Corning has not traded consistently above this indicator since February of 2001.  There is a potential breakout for this stock if it can hold above $9.00-$9.50 and consolidate before it pushes definitively over the $10.25 mark.  A breakout above $10.25 will bring in a flux of trading that will likely push the stock towards the $12.00 area.  There is around 30 million shares short on this Corning so a break out may create a buying frenzy. Some other things to consider is that Corning recently raised $600 million in seven-year senior unsecured convertible debentures.  This was a lot of money raised which means that lead managers on the deal, J.P. Morgan and Goldman Sachs may have a few positive words for the company.  The deal was started on Nov. 8th and subsequently buy ratings were initiated by Roth Capital, Thomas Weisel, and Needham & Company.  The timing seems awfully peculiar and looking into the future a few upgrades and positive mentions may be in store.  As always the individual investor will be the last to know.  That is unless you read the SmallCap Digest. Besides the technicals on the company, business is looking like it has bottomed.  A report by Salomon Smith Barney on November 16th indicated that purchase orders for the March '02 quarter may be placed in December.  Two carriers are rumored to be the customers.  Keep in mind that two carriers placing orders doesn't mean the sector will rebound.  There are too many fiber companies around and there is no doubt a few of them won't be here next here.  The key to investing in this sector is buying the leader and buying the highest quality company. Some may argue that JDS Uniphase is the leader but at over 11.5x 2002 revenues the company is trading at an absurd premium to Corning's 2.2x 2002 revenue estimates.  Let's also not forget that Corning isn't some fly by night company.  This company has been around since 1851 when Armory Houghton bought an interest in a glass company and moved it to Corning, New York.  In 1876 Corning Glass Works  became the new name of the company and later in 1989 Corning Incorporated was adopted.  This company is as "old economy" as it gets but the resiliency of the management team and its employees have turned a normal glass company into a powerful force in the telecommunications industry. The bottom line comes down to supply and demand.  For those of you who lost cable modem access due to the troubles with Excite@Home the move back to 56k is a miserable experience.  As long people demand high speed internet access in their homes and their office, Corning will continue its trend to becoming one of America's finest companies.  Sure, things won't be like it was in the "good ol' days" when the company was growing like gangbusters but then again that sort of environment was a bubble.  When the bubble burst it suffocated many companies but at $10 per share Corning offers a breath of fresh air.   D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a registered investment advisor or broker-dealer. 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