The Option Investor Newsletter Wednesday 03-21-2001 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/032101_1.asp Posted online for subscribers at http://www.OptionInvestor.com ****************************************************************** MARKET WRAP (view in courier font for table alignment) ****************************************************************** 03-21-2001 High Low Volume Advance/Decline DJIA 9487.00 - 233.80 9719.40 9461.50 1.31 bln 861/2205 NASDAQ 1830.22 - 27.22 1896.21 1820.75 2.10 bln 1242/2483 S&P 100 569.97 - 11.96 586.00 567.95 totals 2103/4688 S&P 500 1122.14 - 20.50 1149.39 1118.74 31.0%/69.0% RUS 2000 435.74 - 8.74 445.11 434.82 DJ TRANS 2678.83 + 2.97 2697.75 2661.45 VIX 36.39 + 1.35 36.91 34.41 Put/Call Ratio 0.86 ****************************************************************** Shorts still shorting! Still no joy on Wall Street tonight. With the Dow down over -525 points from its high on Tuesday they were still selling into the close. Heavy order flow met with no bids and the end is still not in sight. The Nasdaq tried to rally early but ended the day down another -27 points. No bargain hunters in sight and companies are still cutting estimates. Where will it stop? The early morning revelation that Carly Fiorina, in a keynote address at the CeBit trades show, said HWP revenue growth will drop to 2% from 15% for the first quarter and not improve for the rest of their fiscal year which ends in October. Even more bearish were the comments about Europe. She said "the slowdown is clearly spreading to other parts of the world" and she had no confidence about Europe's ability to withstand a slowdown. Carly joined the ranks led by CSCO CEO John Chambers in warning that the U.S. problem is worse than expected and spreading faster than the mad cow or the hoof and mouth disease currently in the news. Actually these CEOs are spreading their own form of the "foot in mouth" plague. After repeatedly saying things were fine not long ago each are now eating their words with these new revelations. Is SUNW next? They had previously pointed to Europe as a bright spot on the horizon and yet were caught off guard by the rapid deterioration in the U.S. Is Europe going to be the next warning for SUNW and IBM? Who knows but the large multinationals are starting to crumble on a daily basis as investors see smoke on the horizon. The shorts are still shorting and show no signs of quitting anytime soon. The CPI this morning was slightly higher than expected and while not showing any real signs of inflation will still make the Fed cautious. The Fed funds futures are now showing at least a +.25% rate cut in April which would be an intra-meeting move. The current feeling is that the Fed will not move for at least two weeks and will wait for the next round of economic reports before making a decision. With the global economy now showing signs of serious weakening the Fed not only has to worry about the U.S. economy but is faced with trying to stop the bleeding elsewhere as well. This is not their stated purpose but our economy does drive the world economy as well. If we fall into a recession then the economies around the globe that depend on us will also fall. The Dow is only 109 points above bear market territory and we could easily hit that tomorrow. After two days of triple digit losses there is still no sign of buying. The VIX spiked to almost 37 but could still go higher. The market internals are terrible with decliners beating advancers on the NYSE by 3:1 and 2:1 on the Nasdaq. About the only positive indicator is the put/call ratio which spiked up to .86 and is giving a soft buy signal. We are definitely in oversold territory but can still go lower. The Nasdaq loss today was mostly due to MSFT -2.75 and some biotech leaders. BGEN lost -3.44, AMGN -5.88, MYGN -4, GENZ -6.19, IDPH -7. The other Nasdaq big caps (and I now use the term loosely) managed a positive showing. SUNW +1, CSCO +.25, ORCL +.38, INTC +.94, JDSU +.94. Granted these gains were dwarfed by their previous losses but we are grasping at straws here!! There are basically four proxies for the market. CSCO, MSFT, GE, AOL. The health of the market can be seen in how these stocks react to current events. MSFT has not been as reliable recently since the antitrust trial has clouded their destiny. MSFT was a drag on the Nasdaq today losing -2.75 as worries continue to surface that they will miss estimates for this quarter. AOL (and previously YHOO) is the proxy for the Internet sector and AOL is on the verge of breaking down to retest recent lows of $32. It only lost just under a dollar today but posted the lowest close since Jan-4th. CSCO is struggling to maintain a bottom at $19 and every rally over $20 is met with heavy selling. With CSCO a proxy for the Internet networking sector any serious break under $19 could mean another leg down for that sector. JNPR a competitor of CSCO is holding over $50 but struggling as well. GE is commonly seen as a proxy for the Dow and is only +.36 over the intraday 52-week low from March 12th. With the manufacturing sector and finance sectors under serious pressure GE could easily fall further putting pressure on the Dow. Today's close on the Dow was the lowest since March-4th 1999 and only 109 points over the generally recognized bear market -20% drop. The Dow had been locked into a range between 10300-11000 for over two years but the continuing bearish forecasts of zero visibility has knocked more than -1369 points off the index in the last nine days. After trying valiantly to hold 10000 before the Fed meeting on Tuesday, all semblance of restraint has disappeared. The next two weeks include many Fed watched economic reports including Durable Goods, Consumer Confidence, GDP, Personal Income/Spending, Chicago PMI and Michigan Sentiment to name a few. Once into April we have Construction Spending, NAPM, Factory Orders and Non-Farm Payrolls. An educated gambler would probably do well to bet on any intra-meeting rate cut to not occur until after the Payroll Report on Friday April-6th. The Fed is not likely to move before they can tell if the employment is growing, indicating a recovery, or falling indicating a weakening economy. Unfortunately April-6th is over two weeks away and a lot of pain can still happen between now and then. Rumor has it that mutual fund outflows are running at an all time high. If Fidelity, Vanguard and Janus are forced to sell to cover redemption's then each level down fuels the next drop as more investors decide to move to the safety of money markets or CD type investments. Ironically, this may spell the end of the drop. When the herd heads for the barn the storm is usually over. That is little solace for those still in the market. In the Dessauer Seminar last week there was a lot of pain. I spoke with dozens of investors whose portfolios had fallen by -50% or more. I will have to admit however that this group was dead set against selling at the bottom. John Dessauer was comforting them that the worst was over and they were true believers. For someone that has held Lucent from $60 to $12 or WCOM from $50 to $16 the worst is over. Granted these stocks could trade lower but the risk of another -$5 drop holds a lot less risk for these investors than they have already suffered. When deciding when the market will bottom it is helpful to look at the market leaders and decide how much farther they can drop. SUNW has been flat and holding for two weeks. ORCL flat in a $2 range for last two weeks. INTC, still slipping and could see $20. MSFT, $50 and slipping on earnings warning fears and could see the December low of $40 again. Dell, actually showing a slight uptrend. WCOM flat between $15-$18. JDSU, still falling slightly above $22 and could easily see the teens. CSCO, struggling but holding $19. QCOM, rising slightly after bottoming at $50. JNPR, flat and holding $50. CIEN, flat and holding $50. I am actually encouraged about this analysis. The only really serious problems are MSFT, INTC and JDSU. Of the majors there appears to be the beginning of a bottoming process. This could be simply denial of the overall process and the bottoms are simply key points at which investors feel they cannot fall much further and therefore contain little risk. This does not mean that JNPR or CIEN can't break $50 but this appears to be a line on the chart that draws buyers. This is called support! If we can just get a few more charts to show support the rate of descent will at least slow. The fact that the Nasdaq only lost -27 after what was essentially another HWP warning was encouraging as well! Remember the Dow lost -230 but could not drag the Nasdaq lower. The Dow is close enough to the bear market level of 9377 that we could see technical bounce at any time. These imaginary points provide psychological support and program trading tends to launch buy programs when they are hit. I made a small mistake yesterday when I said the Nasdaq had lost $4 trillion in market cap. It was actually $5 trillion. HOWEVER, there is currently over $1 trillion in institutional cash on the sidelines and $2 trillion in individual investor accounts waiting for the bottom. All investors have not given up on investing. When the fog clears investors will go back into the market and very quickly. Until the bottom is reached they will wait patiently. The last three bear markets lasted from nine months to 24 months. The Nasdaq has been there for some time (since 4100) but the Dow is just now reaching those levels. The capitulation event or bottom signal has not yet occurred. Any bounce on Thursday should only be treated as a trading bounce and Friday could see renewed selling. With global economies showing signs weakness very few traders will want to be long over the weekend. Be patient and wait for the real bottom. Enter passively, exit aggressively! Jim Brown Editor ************************************ TOPICS and SPEAKERS 3rd Annual Trading Expo 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. --------------------------------------------------- Jeff Bailey, Editor, PremierBriefing.com Learn the basics of Point and Figure Charting while analyzing how supply and demand on an institutional level affects the markets and the stocks you want to trade. Mark Skousen, Ph.D., Editor, FORECASTS & STRATEGIES The Global Economy and its Impact on Us. Learn from a professional economist who turns his understanding of economics into highly valuable investing advice. Harry Browne, Author of Fail-Safe Investing Top Ten Things Every Successful Investor Should Know. A powerful session that translates the essence of the book into ten guiding principles. Jim Brown, Founder, OptionInvestor.com Austin Passamonte, Editor, IndexSkybox.com Jeff Bailey, Editor, PremierBriefing.com Preparing for Battle. This is a very popular session where multiple speakers team together offering insights on: planning your trades and the combination of research, market factors, and choosing your hot list. Tom DeMark, Author of three books on DayTrading Options Day Trading Options. An extremely popular subject taught by one of the world's foremost authorities on chart analysis. Tom wrote the book on day trading options, literally. Steve Nison, Author, Japanese Candlestick Charting Techniques Candlestick Charting. Is that a doji or an evening star formation? How can this benefit your trading success? Candlestick chart analysis is another hot topic that traders are always eager to learn. Nison is internationally recognized as the "Father of Candlesticks" and has written two books on the subject. Austin Passamonte, Editor, IndexSkybox.com Buzz Lynn, Contributing Editor, IndexSkybox.com Beating the Market with Indexes. This is another tag team event where you'll hear from two of our staff from IndexSkybox.com as they discuss topics like: Don't Pick Stocks, Pick Markets; and Market Timing Equals Sector Profits. Rance Masheck, President, SpreadTrader.com Calendar Spreads & Bull Call Spreads. Some of the first strategies a beginner will encounter in spread trading are these two spreads. Both simple and effective they continue to draw experienced traders over and over again. Mark Skousen, Ph.D., Editor, FORECASTS & STRATEGIES Scrooge Investing - The Best Bargains in Beaten Down Stocks for 2001. This is a great topic and Mark's background as an economist really offers some new insight into the challenge of choosing your investments. Jeff Bailey, Editor, PremierBriefing.com Calculating the Bullish Percent. Applying your new knowledge in Point and Figure charting to decipher how many stocks in a sector are showing buy signals. Jim Brown, Founder, OptionInvestor.com Austin Passamonte, Editor, IndexSkybox.com Pre-Market Analysis. A very popular session where multiple speakers team together offering insights on: Pulling the Trigger, Amateur Hour, and Market Hype. Dick Arms, Inventor of the Arms Index, Founder, ArmsInsider.com Increase your profit potential with Equivolume Charting, volume adjusted moving averages and the TRIN Derek Baltimore, Co-Editor, IntradayTrader.com Risk Management in a declining Market Buzz Lynn, Contributing Editor, IndexSkybox.com Sector Trading with IShares. You may know of DIAMONDS for the Dow Jones, SPDRs for the S&P 500, and the QQQs for the NASDAQ but there is a growing list of IShares and HOLDRS that offer great trading potential. Jon Najarian, Founder, Mercury Trading, Floor-Trader CBOE Successful Option Trading. "Doctor J" is the name and options is the game. Jon has twenty years of experience as a professional option trader. His firm makes markets in over 90 high-tech and biotech stocks and trades up to 40,000 options per day. Matt Russ, Editor, OptionInvestor.com How to Profit from Option Pricing, Market Making and Volatility Rance Masheck, President, SpreadTrader.com Straddles. An excellent strategy for today's markets. Traders should be very familiar with the proper execution of a straddle to benefit from expected volatility. Jeff Wright, Preferred Trade Understanding Option Basics and the roll of an options floor trader. Buzz Lynn, Contributing Editor, IndexSkybox.com Slump Busting. Are you on a losing streak? Learn what you need to do to BUST out and break the pattern. Jim Brown, Founder, OptionInvestor.com Big Cap Strategies, Naked Puts, Zero Risk Trading, Making Dollars not Dimes. Jim Crimmins, President, TraderAccounting.com Tax Strategies for the Active Trader. It's that time of year again and Uncle Sam wants a cut of your trading profits. Let Jim offer some advice on how traders should handle such taxing issues. Molly Evans, Writer/Trader, IndexSkybox & OptionInvestor.com The Organized Trader. Rance Masheck, President, SpreadTrader.com Five Point Star Trader System. Learn what you need to know about a stock before making a decision to trade. Austin Passamonte, Editor, IndexSkybox.com Swing Trading & Day Trading Index Options. Many consider Index option trading to be the pinnacle of equity options. Learn more about the do's and don'ts for Index Option trading. Eric Utley, OptionInvestor.com & IntradayTrader.com Psychology of trading and the Importance of the top down approach to trading. Buzz Lynn, Contributing Editor, IndexSkybox.com Trading with Qcharts. Learn how to properly set up, use, and deploy the best features and techniques. Derek Baltimore, Co-Editor, IntradayTrader.com Exit Strategies, knowing when to quit Tim Taylor - Preferred Trade Using Direct Access Trading Platforms 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. Click here for more info: https://secure.sungrp.com/workshop/april01/index.asp *************************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=1900 ************************************************************ ************* NEW CALL PLAY ************* AGGRESSIVE: PMI - PMI Group $59.75 +2.50 (+2.90 this week) PMI Mortgage Insurance company, with headquarter in San Francisco, is one of the largest private mortgage insurers in the United States. In addition, PMI Mortgage Insurance Company and its subsidiaries, provides private mortgage insurance in Australia, New Zealand, and the European Union as well as mortgage guarantee reinsurance in Hong Kong. PMI, along with its parent company, The PMI Group Inc, and its corporate affiliates, is a leader in risk management technology and provides various products and services for the home mortgage finance industry, as well as title insurance. While lower interest rates may not have stimulated the stock market to investors' satisfaction yet, the levels of mortgage refinancing are up 500% from last year. Since most Americans own a larger percentage of their net worth in their home than in the stock market, and the Federal Reserve is almost certain to continue the cycle of rate decreases, it is likely that we will see even more refinancing in the coming months. This is providing windfall profits to certain savings and loans, as well as the mortgage insurance and refinancing companies. While PMI suffered a steep drop from over $70 in December to under $50 in early January, the initial rate cuts by the Federal Reserve, as well as excellent company earnings reported on January 24, have re established the strong upward trend which began in March of 2000. On January 24, PMI reported record earnings per share of $1.57, up 30% from the year ago quarter. Since then, the company has announced the opening of their new subsidiary, PMI Europe, which commenced business early in February. Standard and Poors gave PMI Europe's credit a AA rating, and stated that the company has very strong capitalization, prospective strategic positioning, and very strong financial flexibility. Since the beginning of January, PMI formed a tight wedge with the upward line forming from $48 to resistance at the $56 level, and the downward line forming from $70 to the $56 level. This week, PMI burst out of the wedge to the upside, clearing the 50 dma of $57.25 with strong momentum. A pullback to support at $59,or $58.50 is possible, and would provide an entry point. The next major resistance level is at the 200 dma of $60.69, and a break above this on strong volume would provide a more conservative entry point. Monitor the insurance index, as well as other mortgage insurance companies like MTG for sector strength. We are setting stops at $56, so exit positions if PMI closes below $56. BUY CALL APR-55 PMI-DK OI= 10 at $5.90 SL=4.00 BUY CALL APR-60*PMI-DL OI=130 at $2.70 SL=1.25 BUY CALL MAY-55 PMI-EK OI= 0 at $6.80 SL=5.00 Wait for OI!! BUY CALL MAY-60 PMI-EL OI= 4 at $3.90 SL=2.50 http://premierinvestor.com/oi/profile.asp?ticker=PMI LOW VOLITILITY: USAI - USA Networks, Inc. $23.44 +0.75 (+0.25 this week) USA Networks, Inc. is a diversified media and electronic commerce company, which owns USA Network, cable television's leading provider of original series and feature movies, sports events, off-net television shows and blockbuster theatrical films. USA Network was the top rated basic cable network in primetime during the '90s, finishing #1 in household ratings in eight of the past ten years (including two ties). Other assets include: Sci Fi Channel, Studios USA, USA Films, USA Broadcasting, Home Shopping Network, Hotel Reservations Network and Ticketmaster. Proving that the whole is greater than the sum of its parts, USAI through its diverse holdings has managed to put together a unique set of assets that have appreciated in value by adding value to its broadening customer base. The company's Sci Fi channel has become a stunning success, broadcasting to over 70 million households and capturing top spot in reaching the highly-coveted demographic of adults between the ages 25 to 54. On the e-commerce side, a recent deal with Travelocity and Hotel Reservations Network along with today's alliance between Ticketmaster and media giant AOL have greatly extended USAI's online reach. Technically, the stock has been on a steady uptrend since the beginning last December. With what appears to be strong support at $22.25, a bounce off this level as well as the converged 5 and 10-dma near $23 may provide aggressive traders with potential entry points. Just make sure that USAI continues to close above our stop price of $22. For an entry on strength, wait for the stock to take out resistance at $24 on volume. Confirm upward movement with direction in industry peers COX and UVN. BUY CALL APR-20 QTH-DD OI= 811 at $4.00 SL=2.50 BUY CALL APR-22.5*QTH-DX OI= 633 at $2.06 SL=1.00 BUY CALL APR-25 QTH-DE OI=1225 at $0.88 SL=0.00 BUY CALL MAY-22.5 QTH-EX OI= 0 at $2.63 SL=1.25 Wait for OI!! BUY CALL MAY-25 QTH-EE OI= 3 at $1.44 SL=0.75 http://www.premierinvestor.com/oi/profile.asp?ticker=USAI ************ NEW PUT PLAY ************ LH - Laboratory Corp. $112.69 -11.41 (-11.79 this week) Laboratory Corporation of America Holdings (LabCorp) is the #2 clinical laboratory service in the world, behind Quest Diagnostics. LH performs 2000 types of tests for more than 100,000 clients, including health care providers, pharmaceutical firms, physicians, government agencies and employers. With 25 major laboratories and some 1200 service sites nationwide, the company emphasizes specialty and niche testing such as allergy tests, HIV tests, blood analyses, and substance abuse screenings. Heavily influenced by the selling frenzy in virtually every sector of the market over the past 2 weeks, LH has been having a rough go of things lately. After falling through its ascending trendline on March 7th, the bears became bolder, increasing their selling pressure and driving our new play down to its 200-dma (now at $122.88) late last week. Throw in some heavy market-wide selling, and it is no surprise that LH fell sharply today, giving up better than 9% to close just above the low of the day. Health Care stocks as a group didn't fare much better, with the HCX.X index falling more than 3% today, following a 3-week, 12% decline. Now that LH is solidly below the 200-dma and the $120 support (now resistance) level, the bulls will really have their work cut out for them if they hope to return LH to its winning ways of last year. In the meantime, it looks like easy pickings for put traders. Aggressive traders will want to look for a bounce from the current oversold conditions to initiate new plays. Our stop at $120 should curb any near-term rallies, although we would consider new plays up to the 200-dma, so long as the bears reassert control prior to the close. Given the accelerating decline this afternoon, where LH gave up nearly $9 in the final 90 minutes on heavy volume, entries on further weakness may be the first to materialize. Should selling pressure remain heavy tomorrow, consider new entries on a drop below today's low of $112.50. Just look out for possible support between $108-110, the support level established back in September-October of last year. As an additional tool for gauging the prudence of new positions, keep on eye on the Health Care index (HCX.X). As long as it continues to be weak, LH will likely have a hard time moving out of its bearish trend. BUY PUT APR-120 LH-PD OI=0 at $14.00 SL=10.50 Wait for OI!! BUY PUT APR-115*LH-PC OI=5 at $11.30 SL= 8.50 http://www.premierinvestor.com/oi/profile.asp?ticker=LH CLS - Celestica Inc $28.20 -2.55 (-6.05 this week) Celestica is a stellar provider in the electronics manufacturing services industry. The company provides a comprehensive suite of services from design, prototyping, assembly and testing to supply chain management and after-sales service. They rank #3 in the world, after Solectron and SCI Systems, with over 30 global facilities. Blue chip clients include Cisco, IBM, and Hewlett-Packard. Canada-based conglomerate Onex controls about 85% of the company's voting power. The technology sector continues to make a good whipping post for many downcast investors as the bloody carnage persists in the broader markets. Both Canadian and US stocks fell after yesterday's Fed decision. Celestica, which has already fallen from its lofty position amongst the stars, took a particular beating in the last couple of sessions. The faltering support at $40 first reared its ugly head as the NASDAQ crashed through the 2000 level; but then the roof fell in this week as the downgrades and warnings were announced. On Tuesday, Celestica's major rival Solectron (SLR) reported it would miss this quarter's profit forecast by an astonishing percentage. SLR announced a revised forecast of $0.12 to $0.16 versus the analysts' consensus estimate of $0.31. It's true that many of the industry's clients are facing hardships, but the severity of this scenario devastated the Street. On the news, traders put a big dent in CLS with a hefty 18.3%, or $6.90 cut on 2.6 times the ADV. Other leading contract equipment-manufacturing stocks such as Flextronics (Nasdaq: FLEX), Jabil Circuit (NYSE: JBL), Plexus (Nasdaq: PLXS), Sanmina (Nasdaq: SANM), and SCI Systems (Nasdaq: SCI) were all off significantly. Then came a slew of analysts who added more lead to the falling balloon. BMO Nesbitt Burns and TD Securities reduced target prices on CLS by 30% and 22%, respectively. Bear Stearns downgraded CLS from a Buy to Attractive and ING Barings cut their rating from a Strong Buy to Buy. The company's revenue and earnings forecasts were lowered by Goldman Sachs' and Merrill Lynch's, both of which cited a drop in original equipment manufacturers (OEM) demand that could result in a couple of quarters of flat sequential growth. And the list goes on. Some might hypothesize that a good deal of the damage is done, but on the flip side, there doesn't appear to be many buyers in sight. Of course, there's no questioning the oversold condition of the major indexes, so we must trade smart. Set protective stops and exit the play if CLS closes above the $32 mark. Entries might be found on further weakness tomorrow, if there's strong volume to back the decline. Otherwise you might find enterprising entries amid a volatile climate. For instance, a failed a rally at $33, or even the previous support of $35, presents an opportunity to jump into the put play. But be warned, this approach is more aggressive. Lock in gains quickly, no matter which strategy you employ. BUY PUT APR-35 CLS-PG OI= 319 at $7.90 SL=5.75 BUY PUT APR-30*CLS-PG OI= 831 at $4.20 SL=2.50 http://www.premierinvestor.com/oi/profile.asp?ticker=CLS ***************** STOP-LOSS UPDATES ***************** ABGX - put play Adjust from $20 down to $18 AETH - put play Adjust from $19 down to $17 BRCM - put play Adjust from $36 down to $34 FLEX - put play Adjust from $21 down to $20 OPWV - put play Adjust from $27 down to $25 RIMM - put play Adjust from $29 down to $27 ************* DROPPED CALLS ************* WCOM $16.75 -0.44 (-0.69) WCOM couldn't maintain its first class status amid the extended selling afflicting the broader markets. Today's instability at the $17 level gives us a clear signal to exit. Plus, the distinct violation of our closing stop leaves us no choice but to drop coverage on WCOM. Simply put, the repressive nature of the economy is over-shadowing the company's positive outlook and as a result, WCOM is now teetering on the brink of destruction. If stop losses didn't close you out of positions, buy into an intraday peak to salvage capital. WM $49.88 -1.40 (-1.62) A weak open today combined with a failed attempt early in the session quickly put the bears in charge. The stock's inability to resurface above $51 and the supportive 5 and 10 DMAs resulted in a 2.7% loss, on the day. WM steadily sold-off on moderate volume and breached our $50 protective stop. Granted the violation was by a mere fractional, we're sticking by our guns and exiting the play this evening. ************ DROPPED PUTS ************ No dropped puts tonight ************** TRADERS CORNER ************** Bond Yields and the Market By Mary Redmond Interest rates have an enormous effect on the stock market in both the long term and the short term. This includes the Fed Funds rate, the government bond rates, as well as the interest rates companies pay on their corporate debt. In broad terms, it is beneficial to the stock market when long term interest rates are low and trending lower. This reduces the cost of borrowing, which stimulates financial activity. In addition, when interest rates are high, the yield from money market funds and debt securities becomes more attractive than the stock market. During the 1970s, there were periods when government bond rates were 20%. During this era the markets performed very poorly, as investors flocked to the debt markets instead. Why buy a stock when you could double your money in five years with a bond? At this point, the yields on government securities are low by historical measures. However, short term traders may want to pay attention to the incremental movement of bond yields on a daily or weekly basis, as the stock market frequently follows the bond market. Bonds and stocks compete for investors' dollars. If money is flowing into the bond market, it usually comes out of the stock market and vice versa. When bond yields are falling, this means that money is flowing into bonds, and generally not the stock market. When bond yields are rising, this can indicate that there is selling occurring in bonds, and that the stock market is likely to be the recipient of the cash. It can be advantageous to determine how much of a rise or fall in bond yields can correspond to a rise or fall in the market. for example, traders might not want to use a move of only one basis point in bonds, or .01%, as a short term indicator. Last fall, the 10 year bond experienced heavy buying, as yields fell. On November 8, The 10 year bond (TNX.X) was yielding 5.88%. By January 2 it had dropped significantly by one hundred basis points to 4.88%. This coincided with a precipitous plunge in the major market indexes. The S & P fell from 1435 in November to 1273 in January. The QQQ fell from $87 in October to $52.77 in January. While this pattern is informative, short term traders want to examine how much of a rise or fall in five, ten, and thirty year bond yields is significant enough to impact the equity market. As an example, after tracking the TNX.X and the QQQ since February 26, it has become apparent that a change in ten basis points, or 10 in the TNX.X yield has usually resulted in a subsequent rise or fall in QQQ in the same direction as the yield move of one or two points. On February 26, the TNX.X was 51.2. It dropped to 50 on the 27th. The QQQ was trading at $51.80 on February 26, and $52 on the 27th. If you had taken a signal from the bond market, you could have sold the QQQ, as it dropped to $46.50 on March 1. On March 2, the TNX.X was 48.23. On March 5, it moved 49.92, a move upwards of over 15 basis points. On March 2, the QQQ was $47.50, and on March 5 it was $48.50. However, it wasn't too late to buy, as the QQQ moved to $50.54 on March 6. On March 6, the TNX.X was at 49.99. At the end of the day on March 7, it had moved down to 49.19. On March 7, the QQQ was trading at the $48 range for most of the day. By the 9th it had moved to $45.67. On March 14, the TNX.X was trading at 48.14. By the 16th it had moved to 47.14, which is a move of ten basis points. On the 14th the QQQ was $42.70. By the 16th it was down to $40.70. In conclusion, the short term movement of bond yields can be a very powerful indicator of short term movements in the markets, particularly when used in conjunction with other indicators, such as the VIX.X, VXN.X, and the moving averages of stocks. ************************Advertisement************************* Tired of waiting on trades to execute? Does your broker offer Stop Losses on Options? Trade instantly with Stop Losses at PreferredTrade Inc. Stop Losses based on the option price or the stock price. Move your trading into the next millennium with PreferredTrade. Anything else is too slow! http://www.sungrp.com/tracking.asp?campaignid=1913 ************************************************************** ********************* PLAY OF THE DAY - PUT ********************* VTSS - Vitesse Semiconductor $34.13 +0.63 (-4.93 this week) Vitesse Semiconductor is a supplier of high-performance integrated circuits targeted at systems manufacturers in the communication and automatic test equipment (ATE) markets. A leading manufacturer of gallium arsenide (GaAs) integrated circuits, a type of IC that performs at higher speeds than silicon chips. The company offers several products that address the needs of high-performance communications systems at data rates for the SONET, ATM, IP, Fibre Channel and Gigabit Ethernet markets. VTSS also provides gate arrays and custom products that offer a combination of high complexity, low power dissipation and high speed for the ATE market. Most Recent Write-Up Caution on the part of the sellers yesterday in light of the impending Fed announcement allowed Tech stocks to float higher and with that, VTSS moved ahead $2.25 or 5.76 percent on light trading, about 70% of ADV. Today, with traders disappointed from a 50 basis point rate cut, the bears once again took control. VTSS for its part lost almost 19 percent on over 1.35 times the ADV and in doing so, made a new 52-week low. Now a highly profitable play, we are reducing our risk exposure and as such, we are lowering our protective stop price from $42 to $36. A close above this level will result in profit taking on our part and dropping coverage. Weakness as VTSS approaches resistance at $34.75, $35 and $36 may allow for an aggressive play while the more risk averse may find an entry if the selling continues, taking the stock below today's closing price. Correlate entries with movement in industry peers QCOM and TQNT. Comments VTSS enjoyed a day of consolidation Wednesday in part from the strength in the broader semiconductor sector. However, the stock looks poised to trade lower and Wednesday's pause may provide profitable entries into new put plays. Look for weakness in the Nasdaq along with the SOX.X Thursday morning, and consider new entries into VTSS puts if the stock trades below the $34 level. Those traders wanting more confirmation might wait for the stock to take out its relative low at $32.63 before entering new put positions. BUY PUT APR-35*VQT-PG OI=1230 at $5.25 SL=3.25 BUY PUT APR-30 VQT-PF OI=2093 at $3.00 SL=1.50 http://www.premierinvestor.com/oi/profile.asp?ticker=VTSS ***************************************** BIG CAP COVERED CALLS & NAKED PUT SECTION ***************************************** The Bears ravage the landscape as the Bulls run for cover... Blue-chip stocks fell again today with the Dow Jones industrial average dropping to its lowest level in two years. The reason for the bearish move was an unexpected increase in consumer inflation. The strength of February's Consumer Price Index, the Government's main inflation gauge, simply added to the market's sullen outlook in the wake of an interest-rate cut that many analysts felt was far too small. The FOMC lowered its benchmark fed funds rate by half a percentage point to 5% Tuesday, in line with expectations, but widespread concern that the Federal Reserve hasn't done enough to revive the world's largest economy continued to weigh heavily on investors. The renewed selling pressure drove share values to levels not seen since 1998 and the outlook for corporate earnings suggests there is little chance of a sustained recovery in the near future. On the Dow, American Express (NYSE:AXP) was a big loser after analysts at J.P. Morgan raised concerns about the company's profit outlook. Indeed most financial services companies drifted lower as investors weighed reports of falling revenues at Lehman Brothers, Bear Stearns and Morgan Stanley Dean Witter against the perception that banks and brokerages are traditionally among the biggest beneficiaries of lower interest rates. Defensive drug issues offered no respite as shares of Procter & Gamble (NYSE:PG) and Johnson & Johnson (NYSE:JNJ) also slumped during the session. In the technology sector, 3Com (NYSE:COMS) posted mediocre third quarter earnings, blaming a slowing economy and lower demand for its lackluster performance. Microsoft (NASDAQ:MSFT) was another big loser, falling to $50 as analysts questioned the company's ability to persuade desktop customers to subscribe and developers to use its Web services. Bearish comments from Hewlett-Packard's (NYSE:HWP) chief executive limited the upside in computer stocks but Intel (NASDAQ:INTC) managed to bounce back from recent losses after its top officer Craig Barrett said he continues to hope for a recovery in demand for personal computers in the second half of the year, despite the industry's slump. In the broader markets, safe-haven segments including energy, conglomerates and consumer products ended lower while the transport sector saw select buying after FedEx (NYSE:FDX) said it earned $109 million, or $0.37 per share, topping the average analyst estimate by 1 penny. Shares in the banking sector also sagged, even though analysts say it is one of the groups that will prosper from lower interest rates. Summary of Previous Picks: NOTE: March prices as of Friday's Expiration Covered Calls: (Margin would double the listed Monthly Return) Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return ERTS MAR 45 42.88 47.38 $2.12 5.0% UHS MAR 85 83.15 84.80 $1.65 3.8% INTU MAR 35 33.25 30.00 -$3.25 0.0% Ouch! NVLS APR 40 37.56 41.13 $2.44 5.3% NVDA APR 45 42.81 61.44 $2.19 4.2% ERTS APR 45 43.00 50.25 $2.00 3.2% Positions closed: CCMP, SNPS Naked Puts: Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return INTU MAR 30 29.38 30.00 $0.62 10.0% NVDA MAR 40 39.25 59.63 $0.75 8.3% BRKS MAR 30 29.31 33.69 $0.69 8.3% ERTS MAR 40 39.12 47.38 $0.88 8.0% HGSI MAR 40 39.56 44.94 $0.44 7.3% UHS MAR 80 79.15 84.80 $0.85 6.0% SEIC MAR 38 36.97 34.25 -$2.72 0.0% Adj 2-1 split ERTS APR 45 42.81 50.25 $2.19 10.5% NVLS APR 35 33.81 41.13 $1.19 9.3% NVDA APR 40 38.75 61.44 $1.25 8.1% MU APR 30 29.38 42.01 $0.62 5.5% Positions closed: CCMP, AEOS, DIGL, SNPS Sell Strangles: Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return MUSE short Mar $40 put covered by shorting stock. MUSE MAR 95 96.06 33.77 $1.06 7.8% CERN short Mar $45 put covered by shorting stock. CERN MAR 65 66.19 39.38 $1.19 10.5% CEPH short Mar $50 put covered by shorting stock. CEPH MAR 60 61.75 45.63 $1.75 17.7% PLMD MAR 30 29.25 33.44 $0.75 16.8% PLMD MAR 50 50.69 33.44 $0.69 15.5% TWTC short Mar $60 put covered by shorting stock. TWTC MAR 80 80.69 54.25 $0.69 11.4% GMST APR 30 29.19 30.56 $0.81 7.2% Ready to cover? GMST APR 60 60.69 30.56 $0.69 6.2% Naked Calls: Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return BEAS MAR 80 80.94 30.19 $0.94 8.3% CMVT MAR 110 110.56 57.44 $0.56 6.8% CIEN MAR 100 100.44 52.81 $0.44 6.0% VSTR MAR 110 110.50 90.31 $0.50 5.7% WWCA APR 50 50.62 38.06 $0.62 6.0% CHKP APR 110 111.25 53.31 $1.25 5.7% Credit Spreads: Stock Pick Last Position Credit C/B G/L Status NBR $62.30 $54.17 MAR50p/55p $0.60 $54.40 $ -0.23 Final NOC $94.82 $87.40 MAR85p/90p $0.75 $89.25 $ -1.85 Final WPI $55.98 $55.56 MAR45p/50p $0.60 $49.40 $ 0.60 Final HAL $44.88 $38.79 APR35p/40p $0.75 $39.25 $ -0.46 Exit? NBL $50.11 $44.96 APR40p/45p $0.90 $44.10 $ 0.86 Alert EMR $66.31 $59.81 APR80c/75c $0.75 $80.75 $ 0.75 Open SII $74.80 $72.46 APR90c/85c $0.80 $90.80 $ 0.80 Open Positions closed: IVGN Debit Straddles: Stock Pick Last Position Debit G/L Status Positions closed: SDS - profit target ($1.25) met in 1 day; ASFC - stop loss; FAST - several chances to profit. New Candidates: This following group of plays is simply a list of candidates to supplement your search for profitable trading positions. As with any investment, you must decide if the selections meet your criteria for potential plays. Only you can know what strategies are suitable for your skill level, risk-reward tolerance and portfolio outlook. In addition, we recommend that you avoid any strategy or technique in which you are not completely comfortable with the potential loss, the necessary adjustments and the common entry-exit strategies. (We monitor the positions marked with ***). *************** BULLISH PLAYS - Naked Puts *************** LEN - Lennar $39.04 *** The Earnings Are In! *** Lennar (NYSE:LEN) is a homebuilder and a provider of residential financial services. Headquartered in Miami, Florida, the company has homebuilding operations in a number of Eastern states and is one of the nation's leading builders of quality homes for all generations, building affordable first-time family, move-up and retirement homes. The company's homebuilding operations also include the purchase, development and sale of residential land. The purchase, development and sale of residential land is mainly conducted through its own efforts and its partnership interests. The financial services operations provide mortgage financing, title insurance and closing services for Lennar homebuyers and others, package and resell residential mortgage loans and also mortgage-backed securities, perform mortgage loan servicing activities, and provide cable television and alarm monitoring services to residents of Lennar communities and others. Lennar was offered yesterday in the Spreads section, based on the company's earnings report. The results were excellent as Lennar beat Wall Street estimates with profits that more than doubled as net earnings increased 131% to $51.3 million. The company's earnings per share increased 88% and revenues were up 72% to 1.1 billion. The stellar earnings were due to lower interest rates, low unemployment and limited housing inventory which kept demand strong. Traders who agree with a positive outlook for the issue should consider this bullish combination position. LEN - Lennar $39.04 PLAY (conservative - bullish/credit spread): BUY PUT APR-30 LEN-PF OI=40 A=$0.65 SELL PUT APR-35 LEN-PG OI=504 B=$1.35 INITIAL NET CREDIT TARGET=$0.75-$0.80 ROI(max)=14% B/E=$34.25 http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=LEN ***** NVDA - Nvidia $61.44 *** The Rally Continues! *** Nvidia (NAADAQ:NVDA) designs, develops and markets 3D graphics processors, graphics processing units and related software that set the standard for performance, quality and features for every type of personal computer user, from professional workstations to low-cost PCs. The company's 3D graphics processors are used in a wide variety of applications including games, the Internet and industrial design. Its graphics processors were the first to incorporate a 128-bit multi-texturing graphics architecture designed to deliver to users of its products a highly immersive, interactive 3D experience with compelling visual quality, with realistic imagery and motion, stunning effects, and complex object and scene interaction at real-time frame rates. The company sells its products to major OEMs such as Compaq, Dell, Gateway, Hewlett Packard, IBM, micronpc.com, NEC, Packard Bell and Sony and add-in board manufacturers such as ASUStek, Creative Labs, Elsa, Guillemot and Leadtek. In February, Nvidia reported favorable profits, posting quarterly earnings of $0.38 a share, a penny higher than analysts expected. For the fourth quarter of fiscal 2001, revenues increased to $218 million, compared to $128 million for the fourth quarter of 2000, an increase of 70%. In the conference call, Nvidia President and CEO Jen-Hsun Huang announced that the company's next push would be into supplying the mobile computing market with 3D graphics chips, currently a nonexistent part of its revenue mix. Investors were happy with the outlook and analysts also noted that demand for the company's chips in the Taiwanese PC market continues to be strong. Growth at Edom, Nvidia's distributor in Taiwan, is being driven by system builders' market share gains and the company's own share gains in that segment. Last week, Prudential Securities analyst Hans Mosesmann upgraded the stock to a "strong buy" and issued a 12-month price target of $80 a share, saying Nvidia has regularly topped consensus forecasts while other chipmakers have continued to fall short of estimates or warn of disappointing sales ahead. Investors recently pushed the issue through resistance at $58 and the bullish activity suggests there is potential for additional upside movement. Technology traders can speculate on that outcome with these conservative positions. NVDA - Nvidia $61.44 PLAY (sell naked put): Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 35 UVA PG 891 0.63 34.37 4.9% Sell Put APR 40 UVA PH 1066 1.06 38.94 8.1% *** Sell Put APR 45 UVA PI 770 1.88 43.12 13.5% Sell Put APR 50 UVA PJ 931 3.00 47.00 18.9% http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=NVDA *************** Neutral Plays - Straddles & Strangles *************** JNPR - Juniper Networks $52.88 *** Premium Selling! *** Juniper Networks (NASDAQ:JNPR) is a global provider of Internet infrastructure solutions that enable Internet service providers and other telecommunications service providers, to meet the many demands resulting from the rapid growth of the Internet. The company delivers next generation Internet backbone routers that are specifically designed, or purpose-built, for service provider networks. Their flagship product is the M40 Internet backbone router, and it recently introduced the M20, an Internet backbone router purpose-built for emerging service providers. Juniper's unique Internet backbone routers combine the features of the JUNOS Internet Software, high performance ASIC-based packet forwarding technology and a special, Internet-optimized architecture into a purpose-built solution for service providers. The company's quarterly earnings are due April 12. Juniper has become one of the fallen giants of the technology industry, dropping from highs near $230 in the past 6-months and the selling pressure has only recently subsided. The issue is currently trying to establish a base in the $50 range and it appears to be relatively stable at that level. Our outlook for the issue is neutral-to-bullish and based on the inflated option prices, we have decided to sell premium for credit and use the earned income to offset any losses on the downside, in the event we accept assignment of the issue. If the price of the issue moves through the top of the current price channel near $77, we we will close the position or buy the stock to cover our sold options. JNPR - Juniper Networks $52.88 PLAY (aggressive - neutral/credit strangle): Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 30 JUX PF 1855 0.94 29.06 8.3% *** Sell Call APR 80 JUX DP 2694 0.88 80.88 7.8% *** - or - Sell Put APR 35 JUX PG 742 1.63 33.37 13.5% Sell Call APR 75 JUX DO 4048 1.44 76.44 12.2% http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=JNPR ***** VECO - Veeco Instruments $41.25 *** Trading Range? *** Veeco Instruments (NASDAQ:VECO) designs, manufactures, markets and services a broad line of equipment primarily used by manufacturers in the data storage, optical telecommunications and semiconductor industries. These industries help create a wide range of information age products for today and tomorrow, such as personal computers, network servers, fiber optic networks, digital cameras, TV set-top boxes and personal digital assistants. Veeco offers two primary product lines: Metrology and Process Equipment. A wholly-owned subsidiary of the company, CVC, provides cluster tool manufacturing equipment used in the production of evolving tape and disk drive recording head fabrication, optical components, passive components, MRAM, bump metallization, and next generation logic devices. VECO is an excellent candidate in the "premium-selling" category of options trading. Based on analysis of option pricing and the underlying stock's technical history, this position meets our fundamental criteria for a favorable Credit Strangle. The issue has robust option premiums, a well-defined trading range and a high probability of remaining between the target strike prices. However, current news and market sentiment will have an effect on the issue and, as with any recommendation, the position should be carefully evaluated for portfolio suitability and reviewed with regard to your strategic approach and personal trading style. VECO - Veeco Instruments $41.25 PLAY (aggressive - neutral/credit strangle): Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 30 QVC PF 685 1.25 28.75 13.3% *** Sell Call APR 55 QVC DK 93 1.00 56.00 11.0% *** - or - Sell Put APR 35 QVC PG 525 2.38 32.62 19.1% Sell Call APR 50 QVC DJ 338 2.00 52.00 19.8% http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=VECO *************** BEARISH PLAYS - Naked Calls & Combinations *************** GENZ - Genzyme $76.63 *** Breaking Down! *** Genzyme General develops and markets therapeutic products and diagnostic products and services, with an emphasis on therapies for genetic diseases. Genzyme General primarily consists of two business units, Therapeutics and Diagnostics. The Therapeutics business unit focuses on developing and marketing products for genetic diseases, including a unique family of diseases known as lysosomal storage diseases, and specialty therapeutics. Their Therapeutics business unit currently has three products on the market and several others in varying stages of development. The Diagnostics business unit develops, markets and distributes in vitro diagnostic products and genetic testing services. Genzyme General is a division of Genzyme Corporation and has its own common stock to reflect its value and track its financial performance. The company's earnings are due April 19. Stocks in the biotechnology segment have suffered from increased selling pressure in recent sessions and today GENZ succumbed to the downward trend. The issue fell $6.12 to a 2-month low near $76 on weakness in the sector and the sell-off came on the heels of disappointing company news last week. Genzyme said on Friday it has completed Phase 2 in the clinical trial of NeuroCell-PD, a treatment for Parkinson's disease, and found no difference in results from existing treatments. That is not good news for a drug in development and it certainly didn't help GENZ's recent share value performance. Now the stock has broken below a major technical support area and it is unlikely the stock will recover to our target strike prices in the coming month. GENZ - Genzyme $76.63 PLAY (aggressive - sell naked call): Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 85 GZQ DQ 2929 2.88 87.88 11.6% Sell Call APR 90 GZQ DR 3778 1.63 91.63 8.7% Sell Call APR 95 GZQ DS 3080 0.94 95.94 5.9% *** http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=GENZ ***** MMM - Minnesota Mining $103.63 *** Rolling Over! *** Minnesota Mining & Manufacturing (NYSE:MMM) is engaged in the research, manufacturing and marketing of products related to its technology in coating and bonding for coated abrasives. Characterized by substantial inter-company cooperation, 3M's business has developed upon the research and technology of its original product, coating and bonding. This process consists of applying one material to another, such as abrasive granules to paper or cloth (coated abrasives), adhesives to a backing (pressure-sensitive tapes), ceramic coating to granular mineral (roofing granules), glass beads to plastic backing (reflective sheeting) and low-tack adhesives to paper. Lots of stocks have fallen from favor in the last few sessions and it appears that a new downward trend in Minnesota Mining is well underway. The issue has broken the neckline of a near-term "head-n-shoulders" top formation and is on the verge of moving into a Stage IV downtrend. In the event of a recovery rally, the first area of resistance should be near $107 (the neckline) with both the 30- and 50-dmas at $110 proving to be a difficult obstacle for any upward movement. MMM - Minnesota Mining $103.63 PLAY (conservative - bearish/credit spread): BUY CALL APR-120 MMM-DD OI=3205 A=$0.90 SELL CALL APR-115 MMM-DC OI=1719 B=$1.55 INITIAL NET CREDIT TARGET=$0.75-$0.80 ROI(max)=17% B/E=$115.75 http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=MMM ***** PDII - Professional Detailing $53.25 *** A Trading Rut! *** Professional Detailing (NASDAQ:PDII) is a unique contract sales organization providing customized product detailing programs and other marketing and promotional services to the United States pharmaceutical industry. The company has designed programs that promote more than 90 different products, including prescription medications Imitrex, Flonase, Prilosec, Wellbutrin and Cardura, as well as a number of OTC (over-the-counter) products such as Bayer Aspirin, Pepcid AC and Monistat 5, to hospitals, pharmacies and physicians in more than 20 different specialties. The company is engaged by its clients on a contractual basis to design and implements product detailing programs for both prescription and OTC pharmaceutical products. PDII is a unique issue, having fallen precipitously from highs near $100 earlier in the year to a comfortable range near $55. Now the stock is forging a Stage I base with several areas of technical resistance and the issue will need to move through its 30-dma at $58.50 and its 50-dma at $65 just to reach overhead supply at $70, which coincides with the 150-dma. Traders who favor premium-selling positions can speculate on the continued neutral activity in PDII with these bearish positions. PDII - Professional Detailing $53.25 PLAY (aggressive - sell naked call): Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 70 PKU DN 6 2.00 72.00 16.0% Sell Call APR 75 PKU DO 18 1.38 76.38 11.6% Sell Call APR 80 PKU DP 10 0.94 80.94 8.2% Sell Call APR 85 PKU DQ 0 0.62 85.62 5.6% *** http://www.OptionInvestor.com/charts/mar01/charts.asp?symbol=PDII *************************ADVERTISEMENT********************* Mark Leibovit, the #1 market timer in the nation, will be on the Nightly Business Report discussing his Annual Forecast Model on Friday evening February 23 (between 5:30 and 7:00 p.m. ET). Mark is Chief Market Strategist for VRTrader.com, a Premier Investor Network website, a technical consultant and former 'Elf' on Louis Rukeyser's Wall Street Week for 7 years. His Annual Forecast Model has been subscribed to by Wall Street's most elite. Mark is presently ranked #1 timer in the nation by TIMER DIGEST and #2 on AmericasBestTimers.com. For information on his extremely accurate Annual Forecast Model for your own viewing, click here: http://www.sungrp.com/tracking.asp?campaignid=1892 ************************************************************ ******************* 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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