A STRATEGY IN NEED OF A NAME

By Mike Parnos

Apparently, a bunch of you liked the strategy I discussed in Thursday's column.  How could I tell?  Well, in addition to the emails I received, the volume on the December RUT far out-of-the-money puts looked suspiciously telling.

The Dec. 450 had a volume of 7, the 490 - 13, the 500 - 2, the 510 - 2, the 520 - 2, the 530 - 2, 540 - 2, and the 550 - 2.  That's a bit unusual, so I think that members of the Couch Potato family might be responsible for a bunch of those.  Those strikes don't typically get traded. 

There were also a bunch of May far OTM puts purchased that I suspect were bought to temporarily protect the short RUT December puts.  The volume on those strikes was higher, so it is more difficult to identify.  There are currently no May strikes below 490.  

I even noticed a few contracts being traded in the December 910 and 930 calls.  Apparently some folks have taken the initiative to do the call side and make the position a "naked strangle."   Actually, for those who are buying protective puts and calls for the naked positions, it's now a diagonal calendar credit spread - or something like that.  Boring.

Let's Have Some Fun
I think this strategy deserves a better name - maybe something with some "trade" appeal, or an interesting acronym.  Should we come up with another name for this position?  Or should we just leave it alone?  I'll take any and all suggestions.  If I get some good ones, I'll post them and we can vote.

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While We're There . . .
Since we're looking at the RUT option chain, let me make an observation and ask a question.  Based on Friday's chain, the December 400 puts have an open interest of 2,490.  The 450 puts have an open interest of 933.  The 490s open interest is 15.  The 500s open interest is 1,900.  The 510s is 24.  The 520s is 14.  The 530s is 23.

Notice a pattern?  Why do you suppose the open interest in the December 400 puts is 2,490 and the 500 puts is 1,900 while the 490s, 510s, 520s, & 530s are all below 25?   My seminar grads know the answer.  Do you?

Some folks believe that the open interest numbers can provide some support and/or resistance information.  It may, in some instances.  As you know, I?m not sold on it.  Many aspects of technical analysis escape me.

The answer to the question is actually pretty simple.  The 400, 450 and 500 strikes have been available much longer.

If you go many months out and far out of the money, you'll notice that it's the round numbered strikes that are available.  This is particularly true on the S&P 500 chain.  Just look at the S&P July options.  They are in 25-point strike price increments.  If anyone is interested in trading the July S&P options, they will trade the strike prices being offered, or not at all.

As time moves on, and we get closer to July, the market makers will open up other strikes to be traded - when they believe there will be enough demand to make it worth their while.  

So, the large open interest numbers do not necessarily tell us anything more than the option traders traded what is available.  It is possible that these same traders will be poised to close or adjust their positions as the underlying moves toward these strikes.  That is a piece of information - for what it's worth.

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By The Way . . .
Remember about a week ago the email that was sent to me questioning my approach and style of trading?  Well, I heard back from the sender.  He is just a guy who was looking for a service to provide trades and who wasn't specifically looking for a teacher.  He didn't really do much research on our service before he shot off the email.  We exchanged a few emails and he seems to be a nice enough fellow and he does wish us all the best in our trading.

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S&P 500 Support & Resistance -  Closed at 1370.40
Resistance:
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
The 90 day SMA at 1386
1396 is the January 2008 peak
1406 is the August and November 2007 closing low
1420 is a longer term trendline from the August 2003/September 2004 lows

Support:
The 50 day EMA at 1351
The 18 day EMA at 1341
1325 from May 2006 peak prior to the summer 2006 correction
1324 is an ancient trendline
1317 is the early February low
1305 to 1302 from an August 2006 peak and matches a range of support from March and April 2006.
1294 from the January 2006 peak
1288 from June 2006
1280 from June and August 2006
1272.66 is the March 2008 low
1270 is the January intraday low
1260 from July 2006
1258 to 1255 from May and June 2006 lows

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Your Tax Rebate
As you may have heard the Bush Administration said each and every one of us would now get a nice rebate.
If we spend that money at Wal-Mart, all the money will go to China.
If we spend it on gasoline, it will all go to the Arabs.  
If we spend it on fruit and vegetables, it will all go to Mexico, Honduras, and Guatemala.      
If we purchase a good car, it will all go to Japan.  
If we purchase useless crap, it will all go to Taiwan and none of it will help the American economy.
We need to keep that money here in America. So, the only way to keep that money here at home is to buy prostitutes and beer, since those are the only businesses still in the US.

My name is Elliot Spitzer and I approved this ad...
 

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NEW SEMINAR DATE - LAS VEGAS - June 21 & 22
I will be presenting a two-day advanced CPTI seminar in Las Vegas on June 21^st & 22^nd (Saturday & Sunday).  Come on down!  As of this evening, eight spots remain.

I?ve also negotiated an unbelievably low room rate for the weekend.  Vegas is great for a getaway as well as for attending a seminar.  Check out your calendar and contact me as soon as possible.  Send your phone number to me at - mparnos@optioninvestor.com.  I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) at the Las Vegas seminar will be Mike Cavanaugh, my personal broker and option strategist extraordinaire.  Actually, he knows this stuff better than I do.  I guaranteed you'll be impressed.

Early Bird Special - SAVE $100 - 11 Days Left
If you reserve your spot for the upcoming Las Vegas seminar by April 11^th, you will only pay $895 - that's $100 off the normal low seminar price of only $995.

Reserving early will accomplish a few different things.  The earlier you reserve, the lower your airfare will be.  Plus, you will be assured of a spot.  The last two Las Vegas seminars have sold out well before the seminar dates.

Las Vegas Retakes Are Gone
As you may know, if you have previously taken one of my seminars (at any location), you are entitled to retake the seminar a second time at NO CHARGE!  There were five retake spots available for the Vegas seminar.  They are now gone.  If you would like to be put on a waiting list, contact me.  There is the occasional cancellation.

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CPTI APRIL POSITIONS
CPTI April Position #1 - RUT Bull Put Spread ? 713.73

On 3/5, with the RUT at about 674.50, we sold 20 RUT April 560 puts and bought 20 RUT April 550 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

CPTI April Position #2 ? SPX Bull Put Spread ? 1370.40

On 3/10, with the SPX at about 1288, we sold 20 SPX April 1110 puts and bought 20 SPX April 1100 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future ? IF it makes sense.

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CPTI MAY POSITION

CPTI May Position #1 ? SPX Bull Put Spread ? 1370.40

On 3/31, with the SPX at about 1316, we sold 20 SPX May 1130 puts and bought 20 SPX May 1120 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future ? IF it makes sense.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the March profits, our new cash total is $60,460 ($58,660 $1,800).

ZERO PLUS POSITION - SPX - Bull Put Spread - 1370.40

On 3/31, with the SPX at 1316, we sold 30 SPX May 1130 puts and bought 30 SPX May 1120 puts for a credit of $.55 ($1,650).  Maintenance is $30,000.   We have plenty of time to find a bear call spread.  Let?s hope the market cooperates.

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SEMINAR DATE -

LAS VEGAS - June 21^st & 22^nd   

Take your trading from a "hobby" to a profitable "business."  You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills.  Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number.  I will personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade.  Take advantage of the "early bird special" and save $100.  You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

59 OUT OF 64 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

ANATOMY OF A TRADE

By Mike Parnos

I thought it would be a good idea to go through the thought process of exploring a new trade possibility, analyzing it, and then executing a trade.  What you're about to read is real.  It's not hypothetical, nor are you in the Twilight Zone.

On March 28^th, the RUT was trading near 690 - not real low and not real high.  I got an email from David, a seminar grad.  He told me of a trade he put on and wanted to know my opinion. Very interesting.

The day before, David went all the way out to the December 2008 cycle and sold two contracts of the Russell 200 (RUT) 450 puts for a credit of about $7.20, taking in $1,460.  I thought about it.  What could the downside be?  First, he did the position uncovered.  Second, he would be exposed to the markets for nine months - the same as being pregnant.

How much maintenance is required on such a ballsy trade?  Well, David has taken advantage of the customer portfolio margining maintenance program offered by his broker, BrokersXpress.  Using customer portfolio margining resulted in his broker holding only about $3,000 in initial maintenance.  Notice that I said "initial."  With portfolio margining, the amount of maintenance held will fluctuate depending on the up and down moves in the market.  When you are short a put, the maintenance will increase if the index moves down.  Conversely, the maintenance will go down if the index moves up - further out of the money.

Unfortunately, not everyone will qualify for the customer portfolio margining. Only a few brokerage firms currently offer it.  If you're interested in more info on who offers the customer portfolio margining, send me your phone number.  I'll call you to discuss it.  You can still do this strategy without the customer portfolio margining, but the maintenance requirement would be substantially higher. 

Also, not all of you will have the trading approval level to trade uncovered options.  That is something you will have to resolve with your broker.  It's typically based on your trading experience and, to a degree, your account size.   

Now, here are the good points of this strategy.  First, $7.20 is a nice chunk of premium.  If you divide the $7.20 by the nine months of exposure, you get $.80 per month.  When is the last time we got $.80 on a monthly RUT bull put spread?  Like never.   

How about the sleep-ability factor?  Sounds silly, but it's important.  With a 240-point cushion, I think I could sleep pretty well.  I checked the delta.  It was -1.  That means there is a 99% probability for success.

If everything works out, and the short RUT 450 puts expire worthless, that's a very nice return on the initial maintenance level - about 50% for nine months.  In the market, a 50% return is something most traders would kill for - annually.  And this was for only nine months.

I decided to give it a try.  By the time I made my decision, the RUT had moved down to the 690 area and the RUT 450 put had increased a little in value.  I was able to sell four puts for $8.00, taking in about $3,200.  This translates into an average of just under $.90 per month.

I'm a pretty patient guy.  However, I don't know how long I'll be able to keep my hands off the trade.  Right now, with the RUT at 713, I could likely buy back the short 450 options for $6.00.  That would result in an $800 profit, for less than a week. ($8.00 - $6.00 = $2.00 x 4 contracts).  Hopefully, I'll have the discipline to hang on for awhile.  I won't need the maintenance dollars for anything else, so I don't have that motivation to close the position.  As many of you know, I have a tendency to lock in smaller profits and wait for the next opportunity.  With this strategy, I don't think the profit would be jeopardized by being patient.  We'll see. 

Now, even though there is, now, a 263-point cushion, there are those will still worry about the end of the world.  In spite of the 99% probability, there are those personalities that will dwell on the 1%.  It's possible to buy a bit of insurance along the way - just in case. 

I'm thinking out loud as I write this.  Looking at tonight's option chain, the May 500 RUT puts could be bought for $.25 ($250 per contract) or less.  That would provide protection for at least two option cycles.  Then, as time goes on, you could buy other options to protect subsequent cycles.  The price may vary - up or down, depending on where the RUT is trading.  Considering how much premium was taken in initially, a portion of it can easily be budgeted for far OTM protective puts still leaving plenty of profit.

Getting back to David.  Here's a seminar grad who took what he learned at the two-day advanced seminar and got creative.  He didn't reinvent the wheel, but he has discovered a variation that fits nicely something that we can do.  With the help and guidance of our broker, Mike Cavanaugh, as they say on American Idol, David made the song his own.  Good job.

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NEW SEMINAR DATE ? LAS VEGAS - June 21 & 22
I will be presenting a two-day advanced CPTI seminar in Las Vegas on June 21^st & 22^nd (Saturday & Sunday).  Come on down!  As of this evening, eight spots remain.

I?ve also negotiated an unbelievably low room rate for the weekend.  Vegas is great for a getaway as well as for attending a seminar.  Check out your calendar and contact me as soon as possible.  Send your phone number to me at - mparnos@optioninvestor.com.  I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) at the Las Vegas seminar will be Mike Cavanaugh, my personal broker and option strategist extraordinaire.  Actually, he knows this stuff better than I do.  I guaranteed you'll be impressed.

Early Bird Special - SAVE $100 - 11 Days Left
If you reserve your spot for the upcoming Las Vegas seminar by April 11^th, you will only pay $895 - $100 off the normal low seminar price of only $995.

Reserving early will accomplish a few different things.  The earlier you reserve, the lower your airfare will be.  Plus, you will be assured of a spot.  The last two Las Vegas seminars have sold out well before the seminar dates.

Las Vegas Retakes Are Gone
As you may know, if you have previously taken one of my seminars (at any location), you are entitled to retake the seminar a second time at NO CHARGE!  There were five retake spots available for the Vegas seminar.  They are now gone.  If you would like to be put on a waiting list, contact me.  There is the occasional cancellation.

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CPTI APRIL POSITIONS
CPTI April Position #1 - RUT Bull Put Spread - 713.57

On 3/5, with the RUT at about 674.50, we sold 20 RUT April 560 puts and bought 20 RUT April 550 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

CPTI April Position #2 - SPX Bull Put Spread - 1369.31

On 3/10, with the SPX at about 1288, we sold 20 SPX April 1110 puts and bought 20 SPX April 1100 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

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CPTI MAY POSITION

CPTI May Position #1 - SPX Bull Put Spread - 1369.31

On 3/31, with the SPX at about 1316, we sold 20 SPX May 1130 puts and bought 20 SPX May 1120 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the March profits, our new cash total is $60,460 ($58,660 $1,800).

ZERO PLUS POSITION - SPX - Bull Put Spread

On 3/31, with the SPX at 1316, we sold 30 SPX May 1130 puts and bought 30 SPX May 1120 puts for a credit of $.55 ($1,650).  Maintenance is $30,000.   We have plenty of time to find a bear call spread.  Let's hope the market cooperates.

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SEMINAR DATE -

LAS VEGAS - June 21^st & 22^nd   

Take your trading from a "hobby" to a profitable "business."  You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills.  Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number.  I will personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade.  Take advantage of the "early bird special" and save $100.  You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

59 OUT OF 64 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

AN INDICATOR YOU CAN'T REFUSE

By Mike Parnos

On the surface, it looks like the market wants to continue down to retest the recent lows.  But, the undercurrent of low volume makes one wonder if we're just being set up for an upside move.   Monday should be fun.  It's the end of the month and the end of the quarter.   Mutual fund managers like to screw with their portfolios.  They sell their losers so those stocks are not listed amongst the holdings to lure in potential mutual fund investors who bother to look at the fund's holdings.

We'll have a lot of economic data this week, but we already know that the economy is weak.  So, that won't likely move mountains or markets.  We also have the beginning of earnings season.  A lot of reason for the markets to go both up or down.

There are many ways to interpret the data - dozens of indicators that market technicians swear by.  In hindsight, these indicators are accurate - until they're not.  I'm sure that sooner or later we'll bounce off some sort of Fibonacci line or something.  Sooner or later we will - and we'll hear an "Aha! I told you so."

To stay on the cutting edge of technical analysis, I've come up with a new proprietary indicator.  I'm sure that soon there will be books written about it.  It's called the Lincoln Wave Trend Index (LWTI).  You can forget Stochastics, Bollinger Bands, MACD, RSI, MOM, SUV, KYMG and GFY indicators.  You won't need them anymore.  You won't need any expensive sophisticated software, either.  The Lincoln Trend Wave Index is calculated daily.  About 20 minutes before the market opens, you take a Lincoln head penny and toss it 11 times.

If you get six or more heads, the market is going up.  Six or more tails means the market is going down.  If you get more heads than tails three days in a row, it constitutes a trend.  If you get four days in one direction, prepare for a reversal.  What about the wave?  Those who believe this crap, can take their room temperature IQs and "wave" goodbye to their money.

We're Getting Closer
With three weeks left in the April option cycle, I'll be looking for potential short straddle plays.  I usually put on these hypothetical trades with slightly more than two weeks left.

If you were putting on a short straddle today, where would you look?  The SPX is at 1315.22.  If we put on a short straddle in with 1315 being the center strike, we could take in over 60 points of premium.  That would make our profit range from 1255 to 1375.

Looking at the charts, the 1255 parameter would be a bit below the 1270 closing lows earlier this month.  The 1375 parameter would actually be below the 1395 levels touched in January.  Perhaps we can either raise the bridge or lower the water.  If these support and resistance levels are meaningful for you, you can put on a short straddle with a slightly bullish bias ? and use a center point of 1335.

What does that accomplish?  Well, it makes the profit range is about 1275 to 1395 - closer to being in line with the above support and resistance levels.  Looking at the option chain, the amount of premium is the same - approximately 60-61 points.

That's just another alternative - a way of thinking about how to incorporate some chart stuff into the decision making process before putting on a trade.   It's still a little early for me.  I'll let you know when I feel more comfortable about placing a hypothetical trade.

Feedback
I was pleasantly surprised and gratified by some of the feedback I received as a result of my rant on Thursday night.  Here are just a few of the responses.  This is what makes it all worthwhile.

Mike - I am a happy long time subscriber and have the profits to prove it.  Your system is the most consistent winner that I have used. - Dave

Mike - I've been trading for 50 yrs. Thanks for the education, maybe an old dog can learn new tricks. - Leonard

Mike - you taught me how to fish and I thank you for that - this is a system that works for me and I am happy to have learned it. Any one who thinks they know everything about iron condors or bull put spreads is fooling themselves.

I have had one losing month. That is something you also must learn for yourself. I called you and you generously gave me the best advice ever, BUT only I could execute and learn from that advice. That loss was the best thing that could have happened to me - it made me focus on risk as you tried to teach us. - Rick

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S&P 500 Support and Resistance - Closed at 1315.22
Resistance:
1317 is the early February low
1322 is an ancient trendline
1325 from May 2006 peak prior to the summer 2006 correction
The 18 day EMA at 1326
The 50 day EMA at 1349 is key resistance on a rebound
1368 is the high in this recent lateral consolidation
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
1396 is the January 2008 peak
1406 is the August and November 2007 closing low
1419 is a longer term trendline from the August 2003/September 2004 lows

Support:
1305 to 1302 from an August 2006 peak and matches a range of support from March and April 2006.
1294 from the January 2006 peak
1288 from June 2006
1280 from June and August 2006
1272.66 is the March 2008 low
1270 is the January intraday low
1260 from July 2006
1258 to 1255 from May and June 2006 lows

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NEW SEMINAR DATE - LAS VEGAS - June 21 & 22
I will be presenting a two-day advanced CPTI seminar in Las Vegas on June 21^st & 22^nd (Saturday & Sunday).  Come on down!  As of this evening, eight spots remain.

I've also negotiated an unbelievably low room rate for the weekend.  Vegas is great for a getaway as well as for attending a seminar.  Check out your calendar and contact me as soon as possible.  Send your phone number to me at - mparnos@optioninvestor.com.  I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) at the Las Vegas seminar will be Mike Cavanaugh, my personal broker and option strategist extraordinaire.  Actually, he knows this stuff better than I do.  I guaranteed you?ll be impressed.

Early Bird Special - SAVE $100 - 11 Days Left
If you reserve your spot for the upcoming Las Vegas seminar by April 11^th, you will only pay $895 - $100 off the normal low $995 seminar price.

Reserving early will accomplish a few different things.  The earlier you reserve, the lower your airfare will be.  Plus, you will be assured of a spot.  The last two Las Vegas seminars have sold out well before the seminar dates.

Las Vegas Retakes Are Gone
As you may know, if you have previously taken one of my seminars (at any location), you are entitled to retake the seminar a second time at NO CHARGE!  There were five retake spots available for the Vegas seminar.  They are now gone.  If you would like to be put on a waiting list, contact me.  There is the occasional cancellation.

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CPTI APRIL POSITIONS
CPTI April Position #1 - RUT Bull Put Spread - 683.18

On 3/5, with the RUT at about 674.50, we sold 20 RUT April 560 puts and bought 20 RUT April 550 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

CPTI April Position #2 ? SPX Bull Put Spread - 1315.22

On 3/10, with the SPX at about 1288, we sold 20 SPX April 1110 puts and bought 20 SPX April 1100 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the March profits, our new cash total is $60,460 ($58,660 $1,800).

ZERO PLUS POSITION - SPX

On 2/6, with the SPX at 1342, we sold 30 SPX March 1140 puts and bought 30 SPX March 1130 puts for a credit of $.60 ($1,800).  Maintenance is $30,000.  Position closed 100% profitable.  Profit: $1,800.  I?ll be looking for our next position.  Stay tuned.

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SEMINAR DATE -

LAS VEGAS ? June 21^st & 22^nd   

Take your trading from a "hobby" to a profitable "business."  You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills.  Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number.  I will personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade.  Take advantage of the "early bird special" and save $100.  You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

59 OUT OF 64 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

PARDON MY RANT

By Mike Parnos

Yesterday, I received this email.

"Perhaps I misunderstood the nature of your service. Does the "Couch Potato Trader" provide buy/sell recommendations? or is it a service to sell seminars?

Appreciate your prompt reply.

Thanks."

Here was my reply:

Have you bothered to read the postings?  If you have, you will have seen that there are trade suggestions on a regular basis.  Each column lists current open positions.   The suggested trades have a remarkable track record.  The column includes trading strategies and a great deal of educational material.  Check back through the archives.

The seminar services I provide are for those traders who are serious about trading and who want to speed up the learning process and have an incredible two day experience.  They are not for lemmings who just blindly place suggested trades.  They want to know the whys and the hows.  They want to learn to fish - not to just be given a fish.  They want to know how to handle it if there's a problem.

In which category are you?

I hope that helps.

Mike

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Too Harsh?
Was I too harsh?  I don't think so.  I believe he was both serious and sarcastic.  Actually, I like sarcasm.  I've been known to use it myself from time to time.  But, when I use it, I can back it up.  And I would have, at the very least, had the balls to sign my name to my email.

I realize that nobody, and certainly no business, is going to make everybody happy.  Those are unrealistic expectations.  Those who try are just kidding themselves and will eventually drive themselves crazy.  Life is too short.  I'll just be myself and let the chips fall where they may.

A parting thought to this guy if he doesn't like the way I do things -- don't let the door hit you where the good lord split you!  Sayonara.

While We're On The Subject
I receive frequent emails from trial subscribers and new Couch Potato Trader subscribers asking me how they can get up to speed on the strategies that we use.  There are a few ways you can learn about what we do at the Couch Potato Trader.  You can go back and read archived columns.  There are specific educational columns about popular non-directional strategies.  Plus, other columns contain little pearls of wisdom, trading tips, trading psychology etc.

If you navigate through my past postings, you'll also get a good feel for how I suggest trades, discuss their status, and how I feel about adjustment alternatives.  In other words, you'll need to do some homework.  Think of this as school. 

This is the approach used by the majority of Couch Potato subscribers.  After they read about a strategy we use, they send me a specific questions and I gladly answer.  I may even call a subscriber on occasion when the question requires a bit more explanation than can be answered in a brief email if they sign their name and include their phone number.  I welcome these questions.  I admire the desire to learn and the effort put forth to that end.  I'm willing to go above and beyond when it's obvious a subscriber has done his/her homework and has the passion to learn.

In the above email response, you see I used the word "lemming."  That's the term I use for those who choose not to learn.  There are those who want to use the Couch Potato Trader as a tout sheet for trades.  That's fine, but what happens if the suggested trade doesn't get filled?  What happens if the trade starts to go against them?  Without the confidence and sense of creativity that comes from knowledge, they may find themselves up the creek.

Other subscribers choose to attend my seminar and take advantage of the one-on-one interaction and training.  To each his own.

What Do You Think Of This?
I often get emails from subscribers who make me wonder.  Here's a scenario.  I may suggest a 20-contract 1140/1130 SPX bull put spread with the SPX at 1325 for a net credit of $.60.  That's a typical Couch Potato trade.

Shortly after the trade is emailed to subscribers, the market dips 15 points.  Now, here is the difference between a trader and a lemming.  The lemming will put in the trade as suggested.  Moments later, he will be filled at $.80-.90.  "Wow," he thinks.  He sends me an email bragging about his success.

What should he have done?  Anyone who has attended my seminar, read past postings, or has a trader?s mentality, will understand that if the SPX has moved down 15 points, the game has changed.  To retain a good safety level, he would simply lower the strikes of the bull put spread to 1130/1120 or perhaps 1120/1110 - where you may still be able to get the originally suggested $.60 premium.  It ain't rocket science.  Why wouldn't a trader want to be 10-15 points safer if possible?

The problem is that, most of the time, the initial trade will work out just fine.  The trader wearing blinders will make the $.80-.90 premium and he'll think that he's got it all figured out.  Will those 15 points make a difference?  You bet.  Especially the way the market has been trading in recent months.  At some point, it will come back to bite this guy in the butt - and it might be a sizable bite.  I just hope it's not financially terminal.

Unfortunately, if I walk off a cliff, there are an astounding number of traders who will follow me off the cliff.  That would make for quite a mess at the bottom.  Some might survive the fall, but their money would be gone.

OK.  I'm done for now.  Sorry if I got carried away.  The guy's email just set me off a bit.  I welcome your thoughts on the topic.  It's fine to not agree with me.  I won't be angry.

The Market
Another down day - 15.37 points on the S&P.  In this volatile environment, it seems almost calm.  Is the market being resilient in the face of bad news?  Or, is it on its way back down to shake out the last batch of sellers before it begins to build a base and work it?s way back up?

I will be looking for additional bull put spread plays if the market continues down.  I?m resisting the urge to put on bear call spreads because I've seen (just last week) what the market can do.  Two days in one week the Dow was up over 400 points and the S&P was up 50 or more points.  I don't know why, but that scares me more than the downside.

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NEW SEMINAR DATE - LAS VEGAS - June 21 & 22
I will be presenting a two-day advanced CPTI seminar in Las Vegas on June 21^st & 22^nd (Saturday & Sunday).  Come on down!  As of this evening, eight spots remain.

I've also negotiated an unbelievably low room rate for the weekend.  Vegas is great for a getaway as well as for attending a seminar.  Check out your calendar and contact me as soon as possible.  Send your phone number to me at - mparnos@optioninvestor.com.  I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) at the Las Vegas seminar will be Mike Cavanaugh, my personal broker and option strategist extraordinaire.  Actually, he knows this stuff better than I do.  I guaranteed you?ll be impressed.

Early Bird Special - SAVE $100
If you reserve your spot for the upcoming Las Vegas seminar by April 11^th, you will only pay $895 - $100 off the normal low seminar price of only $995.

Reserving early will accomplish a few different things.  The earlier you reserve, the lower your airfare will be.  Plus, you will be assured of a spot. 

Las Vegas Retakes Are Gone
As you may know, if you have previously taken one of my seminars (at any location), you are entitled to retake the seminar a second time at NO CHARGE!  There were five retake spots available for the Vegas seminar.  They are now gone.  If you would like to be put on a waiting list, contact me.  There is the occasional cancellation.

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CPTI APRIL POSITIONS
CPTI April Position #1 - RUT Bull Put Spread ? 692.39

On 3/5, with the RUT at about 674.50, we sold 20 RUT April 560 puts and bought 20 RUT April 550 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future - IF it makes sense.

CPTI April Position #2 ? SPX Bull Put Spread ? 1325.76

On 3/10, with the SPX at about 1288, we sold 20 SPX April 1110 puts and bought 20 SPX April 1100 puts for a credit of $.55 ($1,100).  Maintenance is $20,000.  We will look to put on a bear call spread in the future ? IF it makes sense.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the March profits, our new cash total is $60,460 ($58,660 $1,800).

ZERO PLUS POSITION - SPX ? 1329.51

On 2/6, with the SPX at 1342, we sold 30 SPX March 1140 puts and bought 30 SPX March 1130 puts for a credit of $.60 ($1,800).  Maintenance is $30,000.  Position closed 100% profitable.  Profit: $1,800.

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SEMINAR DATE -

LAS VEGAS - June 21^st & 22^nd   

Take your trading from a "hobby" to a profitable "business."  You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills.  Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number.  I will personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade.  Take advantage of the "early bird special" and save $100.  You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

59 OUT OF 64 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

HAVE A HAPPY EASTER!

By Mike Parnos

I hope all of you are enjoying a delicious Easter dinner with family and friends.  We spend most of our time here talking about money - and, yes, money is important.  However, family plays an important part in our lives.

We should rally around those family and friends who bring joy into our lives.  Those are the folks who are a positive influence to our lives.  Surround yourself with these people.   Embrace them.  Let them know how much you appreciate them.

On the other hand, you might be sitting across the table from one of those family members (every family has them) who has a habit of making bad life decisions.  Let me warn you - don't let these people's problems become your problems - regardless of their relationship to you.  Family relationships are more of a coincidence than anything else.  Because someone happened to be born to the same parents doesn-t make him/her any different.  I know that sounds a bit cold, but there's a good reason.  In life, as in trading, sometimes you have to cut your losses to preserve your capital.  In this case it's to preserve your sanity and your emotional stability.

It's important to have a clear mind when you trade.  It's tough enough to navigate through our own lives, making logical everyday decisions and keeping the boat traveling on still water.  The last thing you need in your lives is extra-curricular stress. 

For what they're worth, here are a few life lessons I've learned along the way include:
1) People rarely change.  They are who they are and what they are - good or bad.  They may alter their behavior for a time - normally just long enough to suck you in again.  Then, they revert back.  Leopards can't change their spots.

2) Don't loan friends money - ever.  You'll likely end up losing both - the friend and the money.

3) Don't get involved in family problems.  They can drain you both emotionally and financially.  It's easier to say than it is to do.  But, if you want to be successful, it's necessary.

4) Don't fall prey to guilt.  It's a favorite method of manipulation.  You've likely worked hard to achieve (and earn) what you have.  Keep it.  The people who are trying to manipulate you are playing the blame game.  They see nothing as being their fault.  They're trying to avoid taking responsibility - the national pastime (my apologies to baseball).

5) Live within your means.  Every dollar you don't spend is a $1.50 you don't have to earn

OK, so much for my two-cents worth of philosophy.  It works for me.  Perhaps it could work for you too.

In the meantime, I hope you've enjoyed your day.  The three-day weekend has done wonders for our positions.  We'll see if we can find some new ones for April.

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NEW SEMINAR DATE - LAS VEGAS - June 21 & 22
I will be presenting a two-day advanced CPTI seminar in Las Vegas on June 21^st & 22^nd (Saturday & Sunday).  Come on down!

Join me as we discuss non-directional strategies, trade selection, entry points, exit alternatives, premium negotiation, maintenance alternatives, taxes, and much more - all subjects necessary to enlighten and to maximize your trading business.  Don't procrastinate!  The seminars often sell out - especially the Las Vegas seminars.

I've also negotiated an unbelievably low room rate for the weekend.  Vegas is great for a getaway as well as for attending a seminar.  Check out your calendar and contact me as soon as possible.  Send your phone number to me at - mparnos@optioninvestor.com.  I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) at the Las Vegas seminar will be Mike Cavanaugh, my personal broker and option strategist extraordinaire.  Actually, he knows this stuff better than I do.  I guaranteed you?ll be impressed.

Early Bird Special - SAVE $100
If you reserve your spot for the upcoming Las Vegas seminar by April 11^th, you will only pay $895 - $100 off the normal low seminar price of only $995.

Reserving early will accomplish a few different things.  The earlier you reserve, the lower your airfare will be.  Plus, you will be assured of a spot.  The last two Las Vegas seminars have sold out well before the seminar dates.

Las Vegas Retakes - Only 2 Left
As you know, if you have previously taken one of my seminars (at any location), you are entitled to retake the seminar a second time at NO CHARGE!  There were five retake spots available for the Vegas seminar.  Only two remain.  They are reserved on a first come first served basis.  As you can imagine, they go quickly.  Don't procrastinate. 

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