The Option Investor Newsletter Monday 03-12-2001 Copyright 2001, All rights reserved. 1 of 1 Redistribution in any form strictly prohibited. To view this email newsletter in HTML format with embedded charts and graphs, click here: http://www.OptionInvestor.com/htmlemail/031201_1.asp Posted online for subscribers at http://www.OptionInvestor.com ****************************************************************** MARKET WRAP (view in courier font for table alignment) ****************************************************************** 03-12-2001 High Low Volume Advance/Decline DJIA 10208.30 -436.30 10638.60 10166.60 1.23 bln 693/2415 NASDAQ 1923.38 -129.40 2004.09 1922.78 2.15 bln 707/3112 S&P 100 601.51 - 31.89 631.26 598.45 totals 1346/5527 S&P 500 1180.16 - 53.20 1228.88 1176.78 19.6%/80.4% RUS 2000 458.40 - 15.25 473.65 458.34 DJ TRANS 2861.19 - 80.98 2939.67 2858.49 VIX 35.11 + 5.76 35.37 31.38 Put/Call Ratio 0.91 ****************************************************************** Pouncing Bears, Hidden Bulls The general Investor's Intelligence sentiment indicators are still bullish. But if today's action is any indication, the bulls seem to be saying one thing, but letting their money do another. The continued broad based declines have the appearance of a much- anticipated major capitulation. Unfortunately, technical indicators, such as volume and advance/decline numbers do not support the supposition that we have seen the final capitulation. The NYSE saw only middling volume of 1.06 billion shares. Despite a decline in the Dow Jones Industrials of 436.37 points with a close at 10,208.25, most market pundits believe that if volume had crossed 2.3 billion shares, we probably would have seen the final capitulation. Decliners were definitely quite strong on the NYSE, beating advancers by a 23 to 8 margin. Again, market pundits are looking for an advance/decline ratio approaching 1 to 9 before becoming confident that we have seen the final capitulation. The Nasdaq (COMPX) did achieve decent volume of 1.90 billion shares, which accelerated into the close. It is entirely possible that the tech-heavy index is very close to its final capitulation sell-off. To that end, the Nasdaq closed down 129.40 points to 1923.38. Decliners trounced advancers by a ratio of 31 to 7. This number was closer to the desired levels that would indicate a final capitulation. Today's declines were characterized by a lack of bidding as opposed to intense selling, despite the acceleration of declines into the close. A lack of bids means there are very few market participants who are willing to step up to the plate and attempt to buy a stock. In such an environment, even light selling can cause major point declines as weak bids, characterized by low bid sizes (the amount of stock willing to be bought at the bid price), keep dropping. Today's excuses for not buying include the continued technology fallout following last week's negative news from Intel (Nasdaq:INTC) and Cisco Systems (Nasdaq:CSCO). Adding to the market's woes is the further collapse of the Japanese stock market, the NIKKEI, which is trading below levels last seen sixteen years ago. Japanese banks complete their fiscal year at the end of this month. When the balance sheets of these major financial centers become public, it may become evident that Japanese banks have been decimated by declining stock prices. There could be huge negative global economic consequences if several Japanese banks are approaching insolvency. OK, enough of the doom and gloom. Today marked the first day of triple witching week. If past experience is any guide, we should see the lows for the week by sometime tomorrow afternoon. We could also see a bounce rally start sometime late tomorrow that could follow through until the end of the week. The one technical indicator that supports this theory is the Relative Strength Indicator (RSI), which is showing oversold for both the Nasdaq and the S&P 500 (SPX). Major gainers were exceedingly hard to find today. One stock that did rally was United Dominion (NYSE:UDI), which gained $2.38 to $21.88 following the Company's agreement to be acquired by SPX Corp. (NYSE:SPW). The deal calls for UDI shareholders to receive 0.2353 shares of SPW for each share of UDI that they own. The deal places a decent premium of 30% on UDI based upon both stocks closing prices on Friday. SPW fell $8.08 to $95.52 in today's trading. There was some upside trading among top U.S. life insurance companies after it was announced that Britain's Prudential Plc agreed to buy American General Corp (NYSE:AGC) in a $22 billion stock deal. AGC finished the day up $0.55 to $38.80. Lincoln National Corp (NYSE:LNC) picked up $1.03 to $45.01. There were not any gainers on the Nasdaq's most active list. Cisco Systems (Nasdaq:CSCO) lost another $1.81 to $18.81. Microsoft (Nasdaq:MSFT) dropped $4.75 to $51.94. Ciena (Nasdaq:CIEN) was crushed $11.81 to $53.31. The broader market indices were all substantially lower. The S&P 500 (SPX.X) dropped 53.25 points to 1180.15. The S&P 100 (OEX) lost 31.88 to 601.52. The Nasdaq 100 (NDX) was particularly ugly as it declined 132 points to 1681. The Russell 2000 (RUT) was unable to avoid the carnage as it dropped 15.25 points to 458.40. At least some of the cash vacating the stock market found its way into Treasuries. The 10-year Treasury note gained a quarter point and now yields 4.915%. The 30-year government bond picked up 11/32 and now yields 5.30%. It was practically impossible to find a safe haven among the major industry sectors. The PHLX Semiconductor Index (SOX) began the day in promising fashion but closed down 17.05 points to 576.40. The PHLX Bank Index (BKX) was slammed 43.84 points to 843.68. The Biotechnology Index (BTK) was also crushed with a loss of 51.16 to 479.74. Looking for a winner? Try the PHLX Gold and Silver Index (XAU), which picked up 0.12 points to 55.13. March 20th never seemed so far away. The bond market has already priced in a rate cut of 50-basis points following next week's FOMC meeting. The way the stock market is behaving it is becoming increasingly clear that a more substantial rate cut may be necessary to resuscitated stock prices. Our next clue as to whether this will happen is tomorrow when February's Retail Sales numbers will be released. Consensus estimates are calling for an increase of 0.3%. If these numbers come out higher than expected, we could see an ugly opening. If we see numbers worse than expectations we may see the start of the bounce. The Nasdaq has clearly dropped below the critical support of 2000. The next support level will be the topic of conversation among many investors tonight. There is some evidence that there is support just below 1800. This price level was a swing point during the market's oscillations from February through November 1998. The Nasdaq bottomed in October 1998 at 1357.09 before starting its historic rally to above 5000. It is not out of the question for this next level of support to be eventually tested. Like I said before, the short term appears to be setting itself up for a bounce. This theory is mostly supported by the Relative Strength Index (RSI), which is showing an incredibly oversold condition that has previously resulted in bounce rallies. If we can close above 2000, then a rally to resistance at 2075 seems possible by the end of the week. Picking bottoms is not for the faint of heart. I also cannot stress enough the necessity of being disciplined with your stops if you see fit to go long this market. The Dow Jones Industrials (INDU) faked out technical traders last week. A close above the 50-DMA of 10,718 on Thursday should have resulted in a test of the 11,100 resistance. Obviously this did not occur, and the INDU plummeted once it crossed back below the 50-DMA, which closed today at 10,708. The MACD also issued a false buy signal last week and today's declines caused a sell signal according to this indicator. If 10,000 support does not hold tomorrow, it is quite possible that we could see a test of the support created by last October's slam-dunk to 9571.40. But maybe I got ahead of myself because the INDU is also oversold according to the RSI. Therefore, a short-term bounce due to triple witching expiration trading, as well as the oversold condition indicated by the RSI, should start tomorrow afternoon or perhaps Wednesday morning. But then again, who really knows in this market. Good Luck and may all of your trades be winning ones! Jim Booth Research Analyst ************************************ Spring Options Workshop and Bootcamp April 5th-9th, Denver Colorado ************************************ OptionInvestor is proud to announce our third annual Spring option workshop in Denver Colorado. This power packed five-day event is structured to fully educate you on advanced option strategies and will make you a better and more profitable trader. If you attended the March Denver Expo last year and thought it was the best function you had ever attended...you haven't seen anything yet! Great food, entertainment, education and just plain fun in sunny Denver. The biggest complaint in March was the massive weight gain experienced by the attendees from the gourmet menu. We know how to put on a function. Ask anyone who came last March! Current speakers include: Tom DeMark, author of "Day Trading Options", "Science of Technical Analysis" and "New Market Timing Techniques" and manager of a $4 billion hedge fund. John Najarian, "Doctor J" as he is known on the CBOE Richard Arms, inventor of the TRIN, or Arms Index, Equivolume charting and author of "Trading Without Fear." Mark Skousen, Editor of Forecasts and Strategies for over 20 years. Steve Nison, the worlds foremost expert on Candlestick charting. Author of "Japanese Candlestick Charting Techniques" and "Beyond Candlesticks." Harry Brown, author of seven investment books. Jim Crimmins, President of TradersAccounting.com Austin Passamonte, editor of IndexSkybox.com Jeff Bailey, editor of PremierBriefing.com Jim Brown, President of the Premier Investor Network. The detailed schedule will be posted in about two weeks. There will not be individual breakout sessions during the day. Each topic will be covered in 1-2 hr general sessions taught by one or more OptionInvestor staff and presented on three giant screens. In the evening we will offer five of our popular chalk talk sessions for that personal question and answer interaction. Unlike other seminars with only two or three instructors, you will get in-depth knowledge from many different instructors who are experts in their field. The cost for the four-day workshop, April 6th to 9th is only $2995 (spouse only $1495). This includes breakfast, lunch and supper each day. All course materials, a CD of all the presentations and a professional video package of the entire seminar so you can review the material at home in the comfort of your living room. There is also a $500 discount if you have attended a prior OIN seminar. This is not a prepackaged presentation that gets repeated over and over with stale information. This is a one-time production and everything is fresh, live and as current as we can make it. The videos will have your real time questions and answers and not some from a prior class. Where else can you get intensive yet personalized options education like this? Do not delay as seating is very limited. We guarantee you will not be disappointed! You can pay for your education one bad trade at a time or you can invest less money one time to learn how to do it right. 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Order your today! click here: http://www.sungrp.com/tracking.asp?campaignid=1779 ************************************************************** ************* NEW CALL PLAY ************* LOW VOLATILITY: MYG - Maytag Corporation $37.01 +0.40 (+0.40 this week) Selling its products to customers throughout North America and international markets, MYG is a producer of home and commercial appliances. MYG is also the majority owner in a joint venture in China, Rongshida-Maytag, which produces washing machines and refrigerators primarily for the Chinese market. MYG is among the top three major appliance companies in the North American market, offering consumers a full line of washers, dryers, dishwashers, refrigerators and ranges distributed through large and small retailers across the United States and Canada. In floor care, Maytag owns the Hoover brand, which is the market leader in North America and the brand with the highest consumer recognition and buying preference in floor care. With the major indices falling down around our ears, it is becoming increasingly difficult to find a bullish play with a positive looking chart. MYG is starting to look mighty attractive lately with increasing volume the past few days pushing the stock through the $36 resistance level, despite the broad market weakness. As a matter of fact, the buying activity today picked up speed with volume coming in at nearly double the ADV. Since early March, MYG is up better than 10%, and the price is now bumping the upper Bollinger band. This combined with the fact that daily Stochastics are deep in overbought territory gives us reason to be cautious, as profit taking could be lying in wait, just around the corner. But there is no arguing with the price chart, and if the bulls can maintain their upper hand, we could be in a position to enter on a pullback and ride MYG up to the next major level of resistance near $40. Aggressive traders will look for some mild profit taking to provide them with attractive entry points near the $36 support level, (also the location of our stop). As long as the bulls can keep the price from plunging below there on a closing basis, any bounce looks attractive for a nice low volatility play. While a continuation of the current rally is buyable above $37.50, be cautious due to the barrier presented by the upper Bollinger band. BUY CALL APR-35*MYG-DG OI= 611 at $3.40 SL=1.75 BUY CALL APR-40 MYG-DH OI=1099 at $0.95 SL=0.00 BUY CALL JUL-35 MYG-GG OI=1002 at $4.80 SL=3.00 BUY CALL JUL-40 MYG-GH OI= 834 at $2.10 SL=1.00 http://www.premierinvestor.net/oi/profile.asp?ticker=MYG ************ NEW PUT PLAY ************ AGGRESIVE: MWD - Morgan Stanley Dean Witter $56.00 -5.26 (-5.26 this week) Morgan Stanley Dean Witter & Co. is a global financial services firm that maintains market positions in each of its three major business segments: Securities, Asset Management, and Credit Services. MSDW conducts its businesses through several highly integrated subsidiaries and affiliates. In addition, MSDW provides its clients with a broad array of investment and credit products and services, including retirement plans, annuities, and defined contribution plan services for businesses. When viewed on a weekly chart, MWD's stock has formed a major head and shoulders pattern, and has just broken below a critical support level at $60, which held since October of 2000. The left shoulder formed on March 19th of 2000, with a high of $97, which failed during the market correction last year. This brought the stock to support at $59.50, which held during the summer. The head formed last September at $110.72, and most investors remember the ensuing correction with pain. When the stock sold off during the fall, the $60 level held in November. The right shoulder formed last January at $90, which is significantly lower than the first shoulder, and a bearish sign. Unfortunately for the shareholders, the brokerage industry has been deluged with bad news in the last several weeks, and no firms were spared from the carnage. The most important factor is probably the severely weakened IPO market, which is showing few signs of recovery. The major investment banks like Morgan Stanley and Goldman Sachs make a large percentage of their profits from initial public offerings, and very few people anticipated that it would get this bad. Merrill Lynch, JP Morgan-Chase, Lehman Brothers, and Salomon Smith Barney all cut estimates on the brokerage industry over the last few weeks, citing low trading volumes and a hostile market environment. As if this wasn't bad enough, MWD received some negative publicity last week. MWD and seven other Wall Street firms were named in a class action lawsuit today, which accuses the firms of violating antitrust laws in IPO allocations. The SEC is investigating this charge. While things look bad for this stock in the short-term, remember that we are in an oversold market which may experience short covering. Consider taking positions on a roll over from $56.50 if others in the brokerage sector like GS and BSC are weak. A break below $55 on strong volume would be another excellent entry point. Also, watch the XBD.X, the Securities B/D Index for sector action. We are setting stops at $59, so exit if MWD closes above $59. BUY PUT APR-60*MWD-PL OI=5059 at $7.50 SL=5.75 BUY PUT APR-55 MWD-PK OI= 977 at $4.60 SL=2.75 BUY PUT APR-50 MWD-PJ OI=2552 at $2.60 SL=1.25 http://www.premierinvestor.net/oi/profile.asp?ticker=MWD ***************** STOP-LOSS UPDATES ***************** BGEN - put play Adjust from $65 down to $64 NEWP - put play Adjust from $40 down to $37 AFFX - put play Adjust from $50 down to $43 SEBL - put play Adjust from $30 down to $28 BRCM - put play Adjust from $43 down to $38 VSTR - put play Adjust from $96.50 down to $92 ************* DROPPED CALLS ************* UNH $59.66 -1.33 (-1.33) With the market slumping across almost all sectors, call plays have been hard to come by. UNH has provided some decent trading opportunities but the absence of buyers has left UNH drifting from the $62 level. When we saw weakness at that area, we upped the stop to $60. Today's broad market sell-off spared none, and UNH fell through our stop, which coincided with the 10-dma. This violation may bring more downside risk to the play if UNH pulls back to its 50- and 100-dmas near $57.50. As a result, we must drop this call play. WM $49.98 -3.37 (-3.37) Not even a strong trending, stable regional financial services company could avoid the blanket selling today. It was ugly on the Street today and WM was no exception. The stock slipped quickly off the open this morning, violating our stop at $52.25 and support just below at $52. Shortly thereafter, $51 was by-passed and a final burst of selling pushed WM through key support at $50. It is exactly this type of sell-off that we employ stop loss orders. While this stock was a Low Volatility call play, it did offer steady, low risk trades. Tonight we must cut it loose for breaking our stop level on a closing basis. DORL $28.31 -1.38 (-1.38) A combination of resistance at $30 and the broad market sell-off caused traders to take profits in this Low Volatility call play. Buyers were nowhere to be found this morning after DORL hit an intraday high of $29.81. After that, it was all downhill as the stock sold-off to the $27.50 level. During that early morning selling, DORL did find support at our stop loss level of $28.75, if only briefly. Violation of this level should have set off alerts. Even though a buyer stepped in at the close to nudge the stock higher, we are dropping DORL tonight for closing below our stop. HI $58.43 -1.84 (-1.84) We initially picked this Low Volatility call play because of its break above previous resistance at $60. Technically, it looked like a promising move on high volume. Yet, since then, the stock has fallen prey to profit taking and buying interest has been quelled by the broader market's weakness. HI obviously did not work out as planned and made for a lousy play. This is unfortunate, but we implemented a stop loss of $59, which roughly corresponded with the 10-dma, in order to limit losses in the event that this occurred. Therefore, a close below our stop of $59 requires us to drop the play tonight. ************ DROPPED PUTS ************ ADBE $26.00 -0.94 (-0.94) One always hopes he knows when he has overstayed his welcome and leaves the party while still a welcome guest. We have been riding ADBE downwards and it has been good to us over the past couple weeks. However, with the NASDAQ still heading south at a high rate of speed, we are seeing diminishing returns from our play, as ADBE continues to hold above the $26 support level. Rather than hold on for that last little bit, we will gladly take our profits and run. There is bound to be another party we can attend, and it is likely just around the corner. ************** TRADERS CORNER ************** Back To Basics Of Investing By Molly Evans The Nasdaq's crumbling over the past year has provided many lessons for serious students of the market and trading. Probably no better example of "history repeats itself" can be found outside the environment of mass speculation. Had investors been aware of their ancestor's follies in speculative markets in bygone eras, the recent mania in technology stocks might have been much less dramatic. Had investors known that they were riding the crest of a huge tidal wave, they might have thought twice about chasing a stocks to daily record highs. Speculative bubbles have been a part of free markets from the beginning and the ending is always the same. Year 2000 is but another notch in the gun of the market. At major market peaks, greed always takes over. Even the professional investor feels that this time, he can get away with it. He realizes it's late in the trend but the greed causes him to abandon sound investment principles or at the very least, numbs him to the risk he assumes in joining and staying on the bandwagon. There are too many stories of investors losing most of their portfolios. After all, that four plus trillion dollars that has been lost from the markets since the peak last year has to have come from somewhere. As the market roared higher and higher, the public couldn't help but get caught up in the frenzy. As Justin Mamis says in The Nature of Risk, "Envy is the operative portion of greed. Whereas anxiety paralyzes, envy causes one to act - 'I want some of that too' -- the 'that' being the success others are having in the market. Envy in the marketplace - the torture of knowing that friends and neighbors are making oodles of money - brings out buy orders at the wrong time because it has taken a prolonged and increasingly obvious rise before this emotion can surface in full flower. The desire to possess in an absolute way is, in the stock market, called greed." We all know now that America was caught up in the greed, envy cycle. What everyone would give to have not bought Yahoo at $250/share or JDSU at $175, to have sold their CMGI at $135 and on and on. The road to repair is going to be a long one. This market is not easy. It's the likes which most any of us have never seen in our own trading careers. And now that the easy trades are gone, it is imperative that investors and traders alike get back to the basics of sound investing. Have people forgotten how to scrutinize a stock's prospects? Did they ever know in the first place? I have to seriously doubt that even a fraction of investors have any idea how to manage their own accounts or stock selections. If Wall Street's analysts couldn't even figure out how to rate stocks during and after a mania, how is the average investor going to know these things without much serious study and attention to detail? The saying goes, "No one cares about you more than you do." The onus to take responsibility and control of one's own portfolios is vital to one’s success. Individual investors and traders have to approach their investments seriously. This isn't a game. And in the history of the market, it has always taken time to build wealth. Increased education, money management, trading plans and discipline have never been so important to portfolio survival than they are now. Traders Corner articles are a forum to share interesting bits about the market, helpful tactics and rules of trading. Personally, I try to gear my writings towards those subjects that are my own weaknesses in discipline. I write about those things which I need to study more or work on in my own trading. Writing about or "teaching" those subjects helps to imprint the good behaviors into my own neural pathways. We all want to be great and wildly successful traders. How we get there is highly individualistic. I like to comb through books to learn the history of the markets and the successful methods of other traders. As I shouldn't start in on a long dissertation on a trading topic at this point of the article, I'd like to just briefly share one book that I find rather intriguing. "Sun Tzu's Art of War for Traders and Investors" is an adaptation of the ancient Chinese teachings from Sun Tzu, a Chinese general and philosopher in the sixth century B.C. by Dean Lundell. The concepts and methods of Sun Tzu have been studied and practiced for centuries in Asia and his work is required reading at American military academies. In recent years, the philosophies have shown up in corporate boardrooms. Dean Lundell simply adapted Sun Tzu's winning tactics to the modern art of investing. Sun Tzu's main concept was that you can win without having to fight. Through flexibility and adaptation to ever changing events and conditions, you can smoothly trade without the tension and irritability that fighting the market causes. Here's a poignant example of what you'll find: Sun Tzu says that wise generals are versatile. "The general who can easily adapt will know how to employ his forces. The general who does not, will not be able to take advantage of opportunities." Lundgren's adaptation of this is to not be a one-way trader. You should be as willing to sell as your are to buy. "The general public is usually unwilling to sell and does so only out of desperation and fear. Professional traders, on the other hand, are usually very willing to sell short, since prices usually decline much more quickly than they advance." Lundgren says that it would be irresponsible to advocate to the average investor to start selling short but in reality wouldn't that benefit the average investor to at least be aware of the strategy to recognize the opportunity as it arises? Sun Tsu teaches that there are five dangerous faults in generals: carelessness, timidity, a quick temper, fragility, and over concern for troops. Lundgren shows us that these same faults are found in traders and investors as well. One should not become careless and reckless with their trading. You trade for profits, not for fun and games. "Do not be timid; once you have identified an opportunity, attack. Act upon it. Do not get angry over a losing trade and swear to get even. You won't. Do not get down on yourself for a losing trade, or even a string of losing trades. Find out what you are doing wrong and correct the problem. Do not fall in love with a stock, a bond, or anything else. You must learn that this is conflict, and you must be rather mercenary with your trading and investing." The book is a quick and easy read, loaded with good "battle- tested and proven" ideology. I have it on my highly recommended list. Next week we'll look at more hard core trading caveats. Please do write in your questions or thoughts about what you'd like to see addressed in the newsletter. That is so helpful to us. Stay alive. Better days are ahead. A bear market offers quick profits and seemingly easy trades but it's difficult to determine where and when to enter and to take profits as fierce rallies come out of nowhere and eat those profits. Sometimes the best position is no position. MKE *************************ADVERTISEMENT********************* Why put all your risk into one stock when you can play the index instead? Learn how to invest in the OEX, QQQ, and SPX. Get intraday market updates, plays, education and daily commentaries by those who know. Sign up for a two week free trial and see for yourself at IndexSkybox.com: http://www.sungrp.com/tracking.asp?campaignid=1799 ************************************************************ ********************* PLAY OF THE DAY - PUT ********************* NEWP - Newport Corporation $33.40 -1.73 (-1.73 this week) The Newport Corporation is a global supplier of precision components and automated assembly, measurement, and test equipment for use in the fiber-optic communications, semiconductor equipment, computer peripherals, and scientific research markets. The Company's high precision products enhance productivity and capabilities of the Fortune 500 corporations, government agencies, and the other technology clients it serves. Optical components and devices for vibration and motion control account for about two-thirds of the company's sales. Most Recent Write-Up Shares of fiber optic and semiconductor subsystem manufacturer Newport failed to make much progress earlier in the week despite a rising NASDAQ. After being added to the S&P MidCap 400, the stock has since fallen under the swoon of post-index addition syndrome. Even news from the company that they were revising their earnings projections to the upside, thanks to their merger with robotics firm Kensington Laboratories, did little to ignite investor interest. Analysts have not been as optimistic about the company’s prospects going forward. First Union Securities trimmed their earnings estimates, as did Robertson Stephens, citing lack of visibility in the second half of the year along with continued weakness of capital spending in the Semiconductor and Networking industries. UBS Warburg cut their target price for the stock from $120 down to $60, along with the fiscal outlook for 2001. Friday's loss of $4.63 or over 11 percent resulted in a close just above support at $35. Further selling leading to a plunge below this level would allow cautious players to take a position. Aggressive traders may find intra-day spikes to resistance at $36, $37.50, $39 and $40 could provide targets for entry, but confirm the rollover with volume before making a play. To protect our gains, we are moving our stop price down from $43 to $40. A close above this level would trigger our stop, taking NEWP off our put play list. Make sure that market sentiment is on your side before initiating a play by tracking AMEX's Networking Index (NWX) and the Philadelphia Semiconductor Index (SOX). Comments With the market in extremely oversold territory, we will emphasize caution with this Put Play of the Day. If the negative sentiment continues for the broader market, we would look for NEWP to test the $30 level. Consider a break below $32.50 as a possible entry as long as the buyers are not stepping up in the market. If they do indeed show up early, look for rollovers from $35 or $37.50 for entries. A move over $37.50 and we stay out of this put, especially if the NASDAQ finds relief. Keep stops tight to avoid getting squeezed in a short covering rally. Our stop level is $37. The APR 30 and 35 strikes were just created yesterday, so watch for volume at these strikes. BUY PUT APR-40 NZZ-PH OI=315 at $11.00 SL=7.50 BUY PUT APR-35*NZZ-PG OI= 0 at $ 7.60 SL=5.75 BUY PUT APR-30 NZZ-PF OI= 0 at $ 4.80 SL=3.00 http://www.premierinvestor.net/oi/profile.asp?ticker=NEWP ************************Advertisement************************* Get 10 FREE Issues of Investor's Business Daily. No obligation. Nothing to cancel. http://www.sungrp.com/tracking.asp?campaignid=1783 ************************************************************** ******************* FREE TRIAL READERS ******************* If you like the results you have been receiving we would welcome you as a permanent subscriber. The monthly subscription price is 39.95. The quarterly price is 99.95 which is $20 off the monthly rate. We would like to have you as a subscriber. You may subscribe at any time but your subscription will not start until your free trial is over. 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