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Triple-witching week starts out bullish

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Traders expected some volatility this week and they haven't been disappointed as the first 90-minutes are underway.

The Dow Industrials (INDU) 9,596 +1.2% are posting a triple-digit gain and trading up 122 points as component American Express (NYSE:AXP) $37.81 jumps 5.3% despite Friday's article in The American Banker Online reporting that regulators are poised to impose strict standards requiring that card issuers adopt tougher account management practices and raise reserves. The standards are expected to be released as soon as the end of June. The article in The American Banker Online cites sources who say the regulatory effort will probably hit the largest, best-run credit card issuers the hardest. Names mentioned are Capital One Financial (NYSE:COF) $58.60 +5.3%, American Express (NYSE:AXP) $37.81 +5.3%, Citigroup (NYSE:C) $41.80 +3.98%, MBNA Corp. (NYSE:KRB) $34.50 +6.97%, Providian Financial (NYSE:PVN) $6.91 +3.13% and Household International (NYSE:HI) $52.70 +3.74.

All of the major market averages and sectors we follow on a daily basis are showing gains, except for the Gold/Silver Index (XAU.X) 74.87 -2.75%. June Gold futures (gc02m) are trading down 30- cents at $318.80.

Bullish news out of Rowan Company (NYSE:RDC) $23.18 +3.02% has the oil service space and Oil Service Index (OSX.X) 100.64 +2.3% showing some solid gains. Offshore rig contractor Rowan Company (NYSE:RDC) $23.18 +3.02% said that all of its 24 Rowan offshore rigs are now under contract, including six of its Gorilla Class rigs are now under contract, with the Gorillas II, III, IV and VI operating on well-to-well contracts in the Gulf of Mexico and Gorillas V and VII commencing operation in eastern Canada and the North Sea early in the third quarter.

Rowan Cos. Chart - $0.50 & $1 box

Trader's that believe in supply and demand and its impact on stock prices perhaps understand that today's news out of Rowan (RDC) may indeed be bullish for other rig contractors in the oil/natural gas sector. Today's news may start to see some supply of available rigs taken off the market in coming months, thus giving some contractors some pricing power going forward.

Dreyer's Grand Ice Cream packs on some weight

Shares of Oakland, California-based Dreyer's Grand Ice Cream (NASDAQ:DRYR) $67.29 +57% are surging today after the company entered into a strategic alliance with Swiss food giant Nestle S.A. wherein Dreyer's (DRYR) will acquire Nestle's U.S. ice cream business for 55 million shares of new Dreyer's stock. In addition, Dreyer's shareholders will receive the right to sell (put) their stock to the company for $83 per share, beginning in 2006. The transaction will increase Nestle's holding in Dreyer's to 67%.

Jeff Bailey
Senior Market Technician
Option Investor

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