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Portfolio Activity - New Positions

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Relief Rally Underway!

The major equity averages opened sharply higher Monday as optimism among investors prevailed despite the recent declines in stock prices. The broader indices climbed nearly 1% by 11:00 AM EST and buyers continued to support the rally following the release of favorable housing data and a slew of analyst upgrades.

The activity was a nice "change of pace" in the wake of Friday's slump and (recently closed) positions in Sealed Air (NYSE:SEE), Black & Decker (NYSE:BDK) and Pixar (NASDAQ:PIXR) rebounded during the morning session. Chiron (NASDAQ:CHIR) was up slightly and Estee Lauder (NYSE:EL) also moved higher after Barrons said the issue was "poised for a bounce as the cosmetics maker pushes ahead with efforts to boost operating margins and revive brand appeal."

As expected, Infospace (NASDAQ:INSP) was held in check by "general caution" ahead of the company's upcoming earnings report. However, the lack of buying pressure is not significant as the overall market attitude is probably more important than technical character or fundamental valuation when it comes to the post-announcement reaction. If investors believe that share values have reached a "bottom" in the near-term, even a mildly upbeat report will be seen as favorable. Obviously, we hope that is the outcome in this case but if stocks sell-off during Tuesday's session, we may be in for an unwelcome surprise.

With regard to the other new positions, the recommended spread in Investors Financial Services (NASDAQ:IFIN) was available at the target price as the issue moved higher in conjunction with homebuilder/REIT stocks. In contrast, Baker Hughes (NYSE:BHI) has been slightly less productive with a maximum credit of $0.20 for the suggested spread, on a total of 8 contracts traded in the first hour of the session.

MCM Staff

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