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Daily Newsletter, Thursday, 04/11/2002

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The Option Investor Newsletter                Thursday 04-11-2002
Copyright 2001, All rights reserved.                       1 of 3
Redistribution in any form strictly prohibited.


Posted online for subscribers at http://www.OptionInvestor.com
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************ 
        04-11-2002        High      Low     Volume Advance/Decline
DJIA    10176.08 -205.65 10378.89 10176.08 1511 mln   1072/2081	
NASDAQ   1725.24 - 41.83  1762.28  1725.24 1620 mln   1214/2334
S&P 100   549.46 - 15.89   565.35   549.46   totals   2286/4415
S&P 500  1103.69 - 26.78  1130.47  1103.69           
RUS 2000  503.73 -  7.57   511.30   503.60
DJ TRANS 2792.29 - 51.15  2843.88  2791.56
VIX        22.24 +  2.02    22.55    20.48
Put/Call Ratio      0.91
************************************************************
Minor Meltdown!
by Leigh Stevens

The Dow Average suffered its worst slide since Feb. 4th., shaving 
almost 2% off it closing price level of Wednesday.    

With institutional, or should we say industrial-strength, selling 
going on today, the S&P 100 and Dow stocks market especially got 
hammered, keyed by Q1 earnings disappointment from General 
Electric (GE), a reported SEC investigation into IBM accounting 
practices, and distaste for AT&T's proposed 1 for 5 reverse stock 
split. These developments proved unnerving to fund managers and 
investors.  

Few money managers and analysts (such as our commentator last 
night), could see much fundamental reason for the Wednesday run 
up, with much of that  attributed to a large institutional buy 
program. I don't mean one related to index arbitrage, but the 
systematic buying of a sizable block of blue chips.  In fact, 
today, a large institutional sell program was around, possibly 
related to some large fund readjusting its portfolio.  

Due to the narrow number of stocks that were getting sold, NYSE 
decliners did not totally swamp advancing issues.  NYSE advancers 
were 1072, and declining issues stood at 2081. However, volume 
stats told the story, as declining volume was a whooping 1.5 
billion versus advancing volume of 246 million.  You'll note that 
total NASDAQ total volume was LESS than NYSE, which is unusual.  
As one of the media talking heads said today, the institutions 
were BACK, big time.  

The hourly charts tell today's story - 

DOW (DJX) DAILY & HOURLY CHARTS - 


 

S&P 500 (SPX) DAILY & HOURLY CHARTS -


 

TRADING STRATEGY & WHAT I'M WATCHING -

As Buzz noted last night, if you're looking to exit some puts and 
short positions, wait until the hourly oscillators are all the way 
down again and that has happened again as can be seen above. The 
S&P (SPX) is down into a support area in the low 1100 region, so 
I'm watching if a rebound in IBM and a bounce due to no more 
earnings reports Friday, ignite an oversold bounce.  If so, it 
might be worth playing for short-termers.   

The technical negative for anything more than a short-term play, 
is the continued trade of the S&P under its 50 and 200-day moving 
averages.  The Dow had been holding above its 50-day average, but 
slipped under it today - a moderate rebound would put it back 
above it. The Dow is digging into a support area in the low-10,000 
area that has held before.  

It seems likely that the see-saw pattern continues until the 
extreme jitters engendered by earnings season, settle out.  If 
hedged, short and in index puts, there is no fundamental reason to 
change strategy this early in the reporting cycle.  

Technically, the market is now quite oversold and extended on the 
downside. However, as I'm reminded recently, watching any long 
index positions I've attempted get swamped, it's still a bear 
market. A trading range may be developing here however; e.g., 1100 
- 1170, in the S&P 500 (SPX). This range offers some great plays. 
The Indexes are on the low end of possible ranges now. However, 
1100 SPX and DOW 10,000 should develop as solid support before 
taking more than a flyer on the long side.  

Some sharp upside moves are now coming on the upside, with good 
volume, but absent a 2-3 day sustained rally, the intermediate 
trend is still down.  Bigger surprises are still coming mostly on 
the downside.     

STOCKS & EARNINGS NEWS - 

GE - Posted a loss of 3.45, for the day (-9.27%) and had their 
worse drubbing since 9/11.  The company had it's first ever 
teleconference, the company tried to put a positive spin on their 
business. Investors were more interested in the money than the 
spin! The slowing economy was seen to be now clearly affecting the 
biggest and best of American corporations. 

GE earned 2.5 billion, or 25 cents a share, compared to 2.6 
billion a year ago or 26 cents a share.  25 cents was not far off 
from consensus estimates but revenues were under expectations due 
to slowing profit trends in some of their core businesses was 
enough to cause a number of big funds to readjust their holdings 
of GE downward. GE is the biggest company in terms of 
capitalization on the NYSE. This heavyweight then impacted the 
cap-weighted S&P indices proportionally more than in the Dow 
Average, which is an arithmetic average. 

IBM - losing another 5+ percent today on top of an already steep 
YTD loss. IBM is now off some 20% for the month.  Word that the 
SEC, as reported by the research service, SEC Insight, had opened 
a preliminary investigation into IBM's accounting's practice, 
caught market participants in a very unforgiving mood for even the 
hint of this kind of activity. No more cooking the books!  

** After the close it was reported that the SEC had CLOSED it's 
probe of the company and stock moved up in after-hours trading. 

AT&T (T) - Worth mentioning because its weakness (-1.15 or -nearly 
8%) was a drag on the DJX, as it weights as much as GE.  Because a 
negative mood prevails, investors react quite badly to any 
attempts to improve company performance by "financial engineering" 
such as the proposed 1 for 5 reverse split; i.e., for every 5 
shares owned, a shareholder would get 1 new share. The flavor of 
this had the feeling to too many 
owners of the stock of desperation. No more Internet type stock 
ploys!  AT&T, along with Dow stocks IBM and Merck, all reached new 
52-week lows.  

MERRILL LYNCH (MER) - Mother Merrill, as the monster broker is 
known on the Street, was down some 7%, as the firm continued to 
feel shareholder wrath at the widening probe by the NY State 
Attorney General -- they allege that analysts laid off turkey 
stocks on the public to gain fat fees on the investing banking 
side. The Analyst side of the room is supposed to be walled off – 
they call it the "Chinese Wall" even -- from the interests and 
activities of the fat cat investment bankers.  Did they bump into 
each other in the cafeteria? 

WE'RE STILL SHOPPING! - Dow stock Wal-Mart (WMT) reported that its 
same store sales rose 9.5 percent, whereas Gap (GPS) saw a 12 fall 
off in March comparable sales. Target (TGT) said its March 
comparable-store sales increase 6.8% and made the claim that above 
plan sales gave it confidence it would outperform prior 
expectations for the quarter.

Wal-Mart was up 1.1 percent, Target +1.8 percent and Gap off 1 
percent

YAHOO (YHOO) - The stock suffered a drop of 15%, even after 
reporting late-Wed., earnings in line with expectations and 
increasing its profit forecast for the balance of 2002.  Is there 
no Justice!  There is also none for AOL Time Warner as it fell to 
a new 52-week low.  Seems that GE was not the only conglomerate to 
fall out of favor.  Apple Computer (AAPL) bucked the tide and 
gained nearly 2% on a research rating upgrade.  Network Associates 
(NET) was also up a couple percent, after posting better than 
expected Q1 results -- possible lesson, keep those consensus 
numbers low!

BOND MARKET - The bond market gained from equities troubles, as 
prices were bid up, as yields rose 9/32nds in the 10-year Govt. 
note. 

EARNINGS REPORTS AHEAD - Juniper (JNPR) reported Q1 net after the 
Thursday close, of $0.00 a share, in line with consensus. This 
versus year-ago EPS of $0.25. Tomorrow there are no big reports 
due, so maybe market people can escape out of town in a hurry on 
Friday. 

POLITICS & OIL – 
On the political front, Secretary of State Colin Powell hit the 
shores of Israel and talked about the need to separate the two 
parties with some possible US (troop) presence, as well as the 
need to establish a Palestinian state. His presence in the region 
lent hope that something could be done to keep a lid on the 
violence.  

The price of crude oil has jumped nearly $7 in the past three 
months, with spot trading around $26. Oil markets were quiet today 
however, as export blockages in Venezuela were discounted in that 
Russia and Norway seemed ready to make up any shortfalls.  
Estimates were around that oil prices at $40 a barrel could shave 
as much as 1 percent off from GDP, but the likelihood of that kind 
of jump seems remote.    

ECONOMY - 
The Labor Department said today that import prices rose at their 
fastest rate in 18 months in March as imported oil prices rose 
sharply. 

Meanwhile, continuing claims for unemployment benefits rose to a 
19 year high, the result of the federal extension of benefits for 
an extra 13 weeks.The data highlight a possible bind for the 
Federal Reserve. The labor market appears to be recovering only 
slowly, arguing for patience in raising interest rates. However, 
the Fed does not want to let higher oil prices fuel inflationary 
expectations. The question is whether the Fed will opt for a pre-
emptive rate hike to dampen potential inflation.

Leigh Stevens
Chief Market Strategist
LStevens@OptionInvestor.com


********************
INDEX TRADER SUMMARY
********************

INDEX TRADER WRAP; 4/11/02

Train Wreck
by Leigh Stevens


Yesterday's rally faded faster than the good will the public
used to have for all those bullish Internet reports that
Merrill Lynch cranked out.  My anticipation of upside follow
worked well early-March, but I must be looking at a rear
view mirror when I predicted upside follow through on the
S&P indexes cause all we get are train wrecks. We're in a
nasty time when the market has something to vent its spleen
on and will crush the disappointers on earnings.
 
Recapping, my suggested 1/2 position call buy on OEX 
pullback to 563-565 area, with the second 1/2 on a retest of
Wed. low in 558 area, would have been stopped out at 557.
Getting short on the break of S&P 100 at 557 gave me a
little back and hopefully that play got done by others. Many
that I hear from are only playing the downside. So, I'll
look at these well-defined channels we've been in on the
hourly charts and figure that rebounds to resistance
continues to work as areas to sell.

Some of the bearish climate has lifted with IBM and Merrill
tonight, so suspect the oversold will lead to another
bounce.  But they are likely to hit the market again next
week.  

Option traders picked up the volume in calls today.  NYSE
volume was above Nasdaq which was unusual and downside NYSE
volume was 6 times upside volume -- selling climax?
Doubtful, based on the fundamental uncertainty.  And, some
of my technical indicators have turned south again.

DJX Daily & hourly charts:

 

Minor support (dashed green line) is 10,154, then at lower
trend channel line at 10,075.  These are the areas to get
long for anyone wanting a counter-trend play.  Upside
resistance at the upper hourly channel line in 10,350 area,
is the place to buy DJX puts.

SPX Daily/hourly:

 

S&P 500 playbook would be to buy at the low end of the
hourly downtrend channel at 1100-1103, short & long puts on
a rebound to the 1125 - 1130 area, at top of channel.

OEX hourly:

 

Short and long puts in the 563 are suggested if OEX rebounds
to the upper channel line. Call purchases for appear like
the place to play the long side, around closing lows in the
549-550 area.

QQQ Daily/hourly: 

 

Short in 34.5 area, and buying around 33 would be playing
the current range within the hourly downtrend channel.
Could be a double bottom, but the tech earnings are more
heavy next week, so the NAS 100 could get whacked next week.
Oversold readings abound, but what else is new?

Long/Call Positions:
Long QQQ at 34.30 
Stop: 32.50.  
Objective: 38.00  

My original objective is based on the prospects for a move
back up to the longer-term Dec.- Feb.- early-March down
trendline on the daily charts, which would be a typical
recovery type bounce.


Leigh Stevens
Chief Market Strategist 
lstevens@OptionInvestor.com 


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****************
MARKET SENTIMENT
****************

Capitulation or Exhaustion?
By Eric Utley

I can't decide if Thursday's sweep lower was a capitulation that
marked a short- to intermediate-term bottom.  Or merely short-term
selling running its course.  Volume was on the rise again, but
it wasn't the type of washout volume you'd expect to accompany
a capitulation bottom.  Nor did I witness the type of fear-
induced selling that accompanies a capitulation, at least not on
a broad scale.

Anecdotally, all 30 of the sectors that I track finished lower
today.  That's the first time that has happened this year.  From
a sector standpoint, the selling was indeed broad.  And then
there's the extreme reading of the ARMS Index.  The 5-day moved
above 1.70, and the 10-day moved above 1.50.  I haven't seen Mr.
Arms on CNBC yet, but imagine he's due for an appearance with
the ARMS Index where it is.

Perhaps more important than all else, the Nasdaq-100 Bullish
Percent ($BPNDX) is trading near where it bottomed in February.
I think this begs monitoring closely for the tech bears.  The
way to play a possible reversal in the $BPNDX is through
lowering stops on open bearish positions.  I wouldn't
necessarily get bullish on tech stocks based on the potential
for a bottom in the $BPNDX, but I would be careful with where
I define my upside risk.

Sticking with bullish percent data, the S&P 100 Bullish
Percent ($BPOEX) reversed into Bear Alert Thursday.  In a way,
I think more downside risk has shifted into the S&P names,
namely the big caps, and away from the tech sector, at least
over the intermediate-term.  While the bullish percent charts
don't necessarily help us answer the question of capitulation
or exhaustion, they do help to manage risk.

-----------------------------------------------------------------

Market Averages


DJIA ($INDU)

52-week High: 11350
52-week Low :  8062
Current     : 10176

Moving Averages:
(Simple)

 10-dma: 10305
 50-dma: 10189
200-dma:  9958

http://www.OptionInvestor.com/charts/financial.asp?ticker=$INDU

S&P 500 ($SPX)

52-week High: 1316
52-week Low :  945
Current     : 1104

Moving Averages:
(Simple)

 10-dma: 1128
 50-dma: 1127
200-dma: 1137

http://www.OptionInvestor.com/charts/financial.asp?ticker=$SPX

Nasdaq-100 ($NDX)

52-week High: 2071
52-week Low : 1089
Current     : 1325

Moving Averages:
(Simple)

 10-dma: 1394
 50-dma: 1449
200-dma: 1518

http://www.OptionInvestor.com/charts/financial.asp?ticker=$NDX

Healthcare ($HMO)

The HMO.X finished 0.10 percent lower Thursday.  It was the
best performing sector.

Leaders to the upside included First Health Group (NASDAQ:FHCC),
Apria Healthcare (NYSE:AHG), Aetna (NYSE:AET), United Health
(NYSE:UNH), and Tenet Health (NYSE:THC).

52-week High: 540
52-week Low : 366
Current     : 536

Moving Averages:
(Simple)

 10-dma: 522
 50-dma: 494
200-dma: 440


Internet ($INX)

The INX.X was crushed for six percent Thursday.  Yahoo's
(NASDAQ:YHOO) earnings report failed to inspire bullishness.

Leaders to the downside included Yahoo, Overture (NASDAQ:OVER),
Double Click (NASDAQ:DCLK), Inktomi (NASDAQ:INKT), and
FreeMarket (NASDAQ:FMKT).

52-week High: 243
52-week Low :  76
Current     :  98

Moving Averages:
(Simple)

 10-dma: 109
 50-dma: 115
200-dma: 128

-----------------------------------------------------------------

Market Volatility

The VIX spiked up to the tune of 10 percent in Thursday's
session.  The index closed just off of its 50-dma.

The VXN moved firmly above its 50-dma with the 3.80 percent
rally Thursday.

CBOE Market Volatility Index (VIX) - 22.24 +2.02
Nasdaq-100 Volatility Index  (VXN) - 43.67 +1.60

-----------------------------------------------------------------

          Put/Call Ratio  Call Volume   Put Volume
Total          0.91        635,113       575,334
Equity Only    0.73        511,124       373,417
OEX            1.00         29,093        28,998
QQQ            0.21         49,684        10,516
 
-----------------------------------------------------------------

Bullish Percent Data

           Current   Change   Status
NYSE          65      + 0     Bull Confirmed
NASDAQ-100    36      - 1     Bull Correction
DOW           63      + 0     Bear Alert
S&P 500       71      - 1     Bull Confirmed
S&P 100       68      - 2     Bear Alert

Bullish percent measures the number of stocks in an index 
currently trading on a buy signal on their point and figure 
chart.  Readings above 70 are considered overbought, and readings 
below 30 are considered oversold.

Bull Confirmed  - Aggressively long
Bull Alert      - Cautiously long
Bull Correction - Pause or pullback in upward trend
Bear Alert      - Take defensive action if long
Bear Confirmed  - High risk if long, good conditions for shorting
Bear Correction - Pause or rebound in downtrend

-----------------------------------------------------------------

 5-Day Arms Index  1.72
10-Day Arms Index  1.57
21-Day Arms Index  1.36
55-Day Arms Index  1.24

Extreme readings above 1.5 are bullish, and readings below .85 
are bearish.  These signals don't occur often and tend be early, 
but when the do, they can signal significant market turning 
points.

-----------------------------------------------------------------

Market Internals

        Advancers     Decliners
NYSE      1072           2081
NASDAQ    1214           2334

        New Highs      New Lows
NYSE      265             62
NASDAQ    223             90

        Volume (in millions)
NYSE     1,511
NASDAQ   1,621

-----------------------------------------------------------------

Commitments Of Traders Report: 04/02/02

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the 
Chicago Mercantile Exchange and Chicago Board of Trade. COT data 
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being 
financial institutions. Commercials are historically on the 
correct side of future trend changes while small specs tend 
to be wrong.  

S&P 500

S&P commercials grew even more bearish during the most recent
reporting period, although by a smaller rate than the period two
weeks ago.  The group shed more longs than shorts for a small
increase in the group's net short position.  Small traders didn't
get any more bullish since reaching their yearly high, but they
didn't get any more bearish neither.  The group's position
remained near the yearly bullish high.

Commercials   Long      Short      Net     % Of OI 
03/19/02      322,938   410,494   (87,556)  (11.9%)
03/26/02      317,671   410,186   (92,515)  (12.7%)
04/02/02      313,294   406,337   (93,403)  (13.0%)

Most bearish reading of the year: (111,956) -   3/6/01
Most bullish reading of the year: ( 36,481) - 10/16/01

Small Traders Long      Short      Net     % of OI
03/19/02      145,262     43,066  102,196     54.3%
03/26/02      148,111     40,409  107,702     57.1%
04/02/02      149,449     43,139  106,310     55.2%

Most bearish reading of the year:  36,513 - 5/01/01
Most bullish reading of the year: 107,702 - 3/26/02
 
NASDAQ-100

Nasdaq commercials grew less bearish last week by reducing
their net short position by about 3,000 contracts.  Small
traders went in the opposite direction with a significant drop
in their net bullish position.

Commercials   Long      Short      Net     % of OI 
03/19/02       24,792     33,699    (8,907)  (15.2%)
03/26/02       25,275     33,880    (8,605)  (14.5%)
04/02/02       26,211     31,840    (5,629)   (9.7%)

Most bearish reading of the year: (15,521) -  3/13/01
Most bullish reading of the year:   7,774  - 12/21/01

Small Traders  Long     Short      Net     % of OI
03/19/02       11,637     5,527     6,110     35.6%
03/26/02       12,760     6,264     6,496     34.1% 
04/02/02       10,615     7,769     2,846     15.5%

Most bearish reading of the year:  (9,877) - 12/21/01
Most bullish reading of the year:   8,460  -  3/13/01

DOW JONES INDUSTRIAL

Dow commercials grew slightly more bullish last week by adding
a few longs and maintaining their short position.  The net long
position increased by fewer than 1,000 contracts.  Small traders
dumped a few longs, resulting in an increase to the group's net
short position.

Commercials   Long      Short      Net     % of OI
03/19/02       20,858    13,283    7,575     22.2%
03/26/02       17,973    12,539    5,434     17.8% 
04/02/02       18,717    12,549    6,168     19.7%

Most bearish reading of the year: (8,322) -  1/16/01
Most bullish reading of the year: 15,135  - 10/16/01

Small Traders  Long      Short     Net     % of OI
03/19/02        4,651    10,367    (5,716)   (38.1%)
03/26/02        5,818     9,308    (3,490)   (23.1%) 
04/02/02        5,192     9,007    (3,815)   (26.9%)

Most bearish reading of the year:  (8,777) - 10/12/01
Most bullish reading of the year:   1,909  -  1/16/01

-----------------------------------------------------------------


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The Option Investor Newsletter                 Thursday 04-11-2002
Copyright 2001, All rights reserved.                        2 of 3
Redistribution in any form strictly prohibited.



****************
PICKS WE DROPPED
****************

When we drop a pick it doesn't mean we are recommending a sell
on that play. Many dropped picks go on to be very profitable.
We drop a pick because something happened to change its
profile. News, price, direction, etc. We drop it because we
don't want anyone else starting a new play at that time.
We have hundreds of new readers with each issue who are
unfamiliar with the previous history for that pick and we
want them to look at any current pick as a valid play.


CALLS:
*****

HLIT $10.19 -0.92 (-1.05) HLIT's relative strength finally
gave way in today's session as the stock shed more than 8%.
The weakness came from further selling in the networking
sector, which as a whole finished 2.92% lower in today's
session.  HLIT looks to have broken from its consolidation
and it now appears that the trend is to the downside.  Look
for any bounce early tomorrow to cut losses.


PUTS:
*****

None


***********************************************************
DAILY RESULTS
***********************************************************

Please view this in COURIER 10 font for alignment
*************************************************

CALLS              Mon    Tue    Wed    Thu

COF      62.28    1.30   0.24   1.40  -2.12  Trading range bound
THC      71.85    1.26   0.73   0.86   0.33  Another new high
UNH      78.35   -0.36   0.22   0.66   0.40  Ticking ever higher
HLIT     10.19    0.27  -0.32  -0.08  -0.92  Dropped, RS gone
WLP      67.32    0.60   0.38   0.79  -0.47  Flirting with $68
HIG      68.45    0.02   0.61  -0.44  -0.86  Two day pullback, EP
AZO      70.83    1.56  -0.24   0.52   0.43  New, break at $72
KKD      40.02   -0.54   0.15   0.69   0.15  New, shorts covering


PUTS

TMPW     29.84    0.82  -0.75  -0.23  -1.91  Broke the $30 level
GNSS     21.12   -0.37  -0.94  -0.11  -0.53  Closing in on $20
CDWC     48.76    0.07  -0.16   1.21  -2.02  Rolled at $51 again
VRSN     24.03    0.58  -0.92  -0.29   0.29  Watch the 10-dma
RETK     23.82    0.26  -0.05   0.12  -2.15  Head and shoulders
SGP      29.00   -0.32  -0.97  -0.79  -0.27  Shorts covered, entry
BRCM     33.50    1.30  -1.10   0.52   0.19  Still trending lower
WPI      24.00   -0.10   0.10   0.58  -0.78  Lost ST support
HGSI     17.23   -1.47  -0.70   0.42  -0.07  Rolled over big Thu
ENZN     39.73   -1.37  -2.12   2.52  -1.64  Rolled at the 10-dma
GS       81.24   -0.09  -1.46  -0.11  -3.25  Thank you Mr. Spitzer


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********************
PLAY UPDATES - CALLS
********************

COF $62.28 -2.12 (+0.82) Like clockwork, COF traded up to the $65
level in today's session, then rolled over.  The stock's
trading range, as it turned out, remained well defined
through today's session.  Those who took the entries made
available on the moves down to the $61 level earlier this week
should've been able to book some decent short term gains on the
rally up to $65.  Whether COF breaks out remains to be seen.
We've got two more days to play this call head of the company's
earnings report early next week.  A rebound in the broader
market tomorrow, including the financial measures, could be the
ticket for a breakout in this stock.  Aggressive traders can
attempt a very short term trade on a move above the $65 level
with sights on the $67 level to the upside.

THC $71.24 +0.33 (+3.18) THC continued on its tear in today's
session, trading higher for the sixth straight session.  The
stock finally eclipsed the $70 level in yesterday's session,
then traded above $71 in today's.  The stock's strength is
amazing, and its sector's strength is too.  The HMO Index
($HMO) hit another all time high in today's session.  While
we enjoy the strength in this sector and THC, it comes with
some difficulty.  Finding favorable entry points and
managing risk in those positions is growing increasingly
difficult with the extended nature of THC and its sector.
The way that readers can manage against any downside is by
using extremely tight stops to protect against potential
downside.  If they're going to keep buying these stocks
higher, that's fine by us.  But in case the group is due for
a profit taking pullback, a tight stop will help readers to
hold onto gains and protect against further downside.  In
THC a stop at yesterday's intraday low at $69.80 or today's
low at $70.70 will help to make this position easier to
manage.  We're using the $69.80 level as our coverage stop.
The other option traders have is to use further strength
above current levels to take profits. 

WLP $67.32 -0.47 (+1.30) WLP spent the last two days kissing up
against the $68 level.  The stock came within a penny of hitting
$68 yesterday, and fell short by 4 pennies in today's session.
The $68 level may be a short spot for a big position taking
profits after the recent two week rally.  When that seller is
gone, look for WLP to pop above the $68 level.  From a broader
perspective, the stock's sector continued on its tear in
today's session, hitting another all time high.  Continue
using the HMO.X as a guide for determining entry points and
exit points into the WLP play.  Those traders who've been in
positions for the last several days might start looking to
lock in gains on further strength or use ultra tight stops to
protect profits from any downside.  The stock is a bit
extended to the upside and due for the a pullback.  The same
could be said for the sector.  On an extended pullback, we'll
look for entries on weakness down near the 10-dma at the $65.50
level.

HIG $68.45 -0.86 (-0.67) HIG spent the last two days bumping up
against the $70 level.  Its pullback in the last two trading
days isn't a cause for concern.  We like the routine action in the
stock's price, and are now looking to get long some call plays
on the pullback, ahead of the company's earnings report in
just over one week.  Additionally, the broader insurance
sector was weaker in today's session, adding to the pullback in
HIG.  Being that it's market and sector related weakness
pressuring HIG lower, we're even more comfortable with looking
to enter new call plays near support.  If the short term
aggressive ascending support line continues to prop HIG up,
then the 10-dma should be a good spot to look for a rebound in
the coming days.  If the stock continues lower below its 10-dma
into tomorrow's session, then traders should start looking for
bounces from the $68 level, which is where our stop currently
sits.  We're playing this one tight because it's primarily a
momentum play, a bet on a continuation of the short term trend.
But the broad market may remain a variable in that equation.
Further weakness in the S&P 500 could cause this play to end
poorly.  Keep that in mind when looking to enter on dips.

UNH $78.35 +0.40 (+0.91) Seemingly unstoppable, shares of UNH
keep inching higher, in blatant defiance of the crippling broad
market weakness that is plaguing so many sectors and stocks right
now.  But the Health Care index (HMO.X) is standing tall, trading
up to almost $540 on Thursday, showing its relative strength for
all to see.  Shares of UNH followed the HMO index higher again,
popping to a new all-time high of $78.47 and closing very near
that level on solid volume.  UNH tends to walk gradually higher
for a period of weeks before profit-taking hits for a quick sharp
decline. While there aren't any overt signs of weakness right
here, we feel the need to cinch those stops up a bit more (this
time to $76.90) to preserve our gains.  Intraday dips that are
followed by a rebound from above our stop are still buyable, but
be on the lookout for profit taking, as the daily Stochastics is
once again entering overbought territory.  Don't forget that
earnings are due out next Thursday before the market opens.


**************
NEW CALL PLAYS
**************

KKD - Krispy Kreme Doughnut $40.02 +0.15 (+0.45 this week)

Krispy Kreme Doughnuts, Inc. (Krispy Kreme) is a branded specialty
retailer of premium quality doughnuts. Krispy Kreme is a
vertically integrated company structured to support and profit
from the high volume production and sale of high quality doughnut
products. The Company's business is driven by two complementary
business units: Store Operations, both company and franchise; and
KKM&D.

The shorts could be getting nervous.  Especially after this stock
finished higher today.  One of the few names to withstand the
massive selling spree today, KKD shorts look to be getting a
little jumpy.  The stock finished above its 10-dma for the first
time since March 22 on fairly active volume.  Moreover, the stock
penetrated the $40 level which had been a staunch resistance
level for the last two weeks.  With the market as weak as it was
today, any sign of strength in the coming sessions should have
the shorts on the run to cover.  Aggressive bulls can look to
enter positions at current levels early Friday morning, or on a
break above today's intraday high at the $40.26 level.  We'll
target the $42 level in the very short term, with the potential
for a quick trade up to the $44 mark not out of the question.
Intraday weakness along the 10-dma, which now sits at $39.67,
can be used for short term entries.  Heavier selling could have
KKD back down near its 50-dma at the $39.12.  Our stop is
initially in place at the $38.25 level, which gives this play a
favorable potential reward versus risk ratio.

***April contracts expire next week*** 

BUY CALL APR-40 KKD-DH OI=3838 at $0.80 SL=0.25 
BUY CALL MAY-40*KKD-EH OI=2687 at $1.95 SL=1.00 
BUY CALL MAY-45 KKD-EI OI=2976 at $0.45 SL=0.00 
BUY CALL AUG-45 KKD-HI OI=3551 at $1.55 SL=0.75 

Average Daily Volume = 593 K


AZO – AutoZone, Inc. $70.83 +0.43 (+2.27 last week)

AutoZone is a retailer of automotive parts and accessories,
primarily focusing on do-it-yourself customers.  Each of its
more than 2900 stores in 42 states and Mexico carries an
extensive product line for cars, vans and light trucks,
including new and re-manufactured automotive hard parts,
maintenance items and accessories.  Approximately half of its
domestic stores also have a commercial sales program, which
provides commercial credit and prompt delivery of parts and
other products to local repair garages, dealers and service
stations.

In an increasingly volatile market, pockets of strength are
harder to find and utilizing relative strength to find them is
more important than ever.  Despite the weakness in the Retail
sector (RLX.X) on Thursday, the interesting thing is that this
sector is continuing to gain strength relative to the broader
market.  In fact, the RLX is just about to break out to a new
high on its relative strength chart relative to the SPX.  Within
this group, shares of AZO are looking particularly strong, after
rebounding from the $65 support level again last week.  Now AZO
is right on the cusp of a breakout of its own, coming to rest
just below the $71 triple top.  This play is one where we want to
wait for the breakout above resistance before playing, as entering
prior to that event could be unpleasant if the breakout never
materializes.  When AZO prints $72, we'll have a triple-top
breakout on the PnF chart, giving the bulls license to take a run
at the next level of resistance near $75.  Recall that AZO was
one of the strongest Retail stocks of last year, and now that it
has consolidated those gains, it may just be ready to take a run
at new highs as well.  The current vertical count from the PnF
chart indicates the stock has upside to the $86 level, so a
breakout could indeed be powerful.  With the gyrations in the
broad market that we've seen in recent days, we want to give AZO
a bit of wiggle room ahead of the breakout attempt, so we are
initiating the play with our stop set at $68

*** April contracts expire next week ***

BUY CALL APR-70*AZO-DN OI=886 at $1.75 SL=0.75
BUY CALL APR-75 AZO-DO OI=439 at $0.25 SL=0.00
BUY CALL MAY-70 AZO-EN OI=220 at $3.20 SL=1.50
BUY CALL MAY-75 AZO-EO OI=110 at $1.15 SL=0.50

Average Daily Volume = 978 K



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*******************
PLAY UPDATES - PUTS
*******************

CDWC $48.76 -2.02 (-0.82) Once again, CDWC rolled from the $51
mark in yesterday's session, following through to the downside
late in today's trading.  Short term traders can look to book
quick gains if they choose on further weakness in tomorrow's
session.  Those who are looking for a breakdown below the
200-dma, it may come next week.  CDWC's inability to clear its
short term resistance reveals that a large seller remains in
this stock.  Hopefully that materializes into a breakdown
below the 200-dma next week.  That level currently sits below
at the $47.27 mark.  A break below there is tradable by
momentum players, but we'll continue to prefer entering on
intraday rallies to resistance.  Look to the broader tech
sector for market sentiment.

RETK $23.82 -2.15 (-1.82) After its big intraday rally earlier
this week RETK has spent the last two days weakening.  The
stock's weakness is probably coming from the weakness in the
broader software sector, as RETK now appears to be playing
catch up to the downside with its group.  On a short time
frame chart, RETK looks to have formed a head and shoulders
top over the last two weeks, with the shoulders around the
$26 level, and the head up at the $28 level during the intraday
spike earlier this week.  The neckline appears to be right
around the $24 level.  Recent trades down to the $23.82 and
$23.90 level reinforce the neckline at $24.  A breakdown below
that level, which appears to have happened in today's session,
should lead to further downside.  Traders can confirm a
breakdown with a decline below $23.75.  Entries on a decline
below that level can be taken tomorrow morning.  Otherwise,
look for rallies near intraday resistance, such as $25.50.
Our downside is now targeted at $22 in the short term, then
$20 later next week.

ENZN $39.73 -1.64 (-1.64) ENZN announced late yesterday that it
had entered into a strategic collaboration with Micromet to
develop the "next generation of antibody based therapeutics."
While the news may have contributed to the strength in the
stock yesterday, we think that its rally was more a product
of the short covering in the broader Biotechnology Sector
Index (BTK.X).  Amazingly, the BTK bounced from fractionally
above the 450 level yesterday, which scared the bears into
covering.  But the buying was short lived, as ENZN rolled
over this morning and continued lower throughout the day.
The 10-dma, now at $42, continued to serve as resistance in
today's session.  With some of the oversold nature of the
stock now removed after yesterday's short covering rally,
traders can again look for the breakdown below the 450 level
in the BTK, and use that move to enter bearish positions in
ENZN.  A break below today's low may serve to strengthen
conviction to the downside.

BRCM $33.50 +0.19 (+0.90) As the Tech sector has continued
to languish this week, the Semiconductor (SOX.X) and Networking
(NWX.X) indices have been leading the way.  And with a less than
stellar earnings report from JNPR tonight, these sectors look
vulnerable to further downside as we head into the weekend.  BRCM
has actually held up rather well this week, considering the
breakdowns in both the SOX and NWX, and that raises the
possibility that it is gaining some relative strength.  Whether
the strength is improving or not, BRCM is still in a very weak
state, languishing well below the $35.50 resistance level (also
the site of our stop).  As long as the underlying sectors remain
weak, we can continue to use failed rallies at resistance to
initiate new positions, ideally near the $35 level.  Momentum
traders that want to trade a breakdown will need to wait for
support near the $30.50 level to give way before playing.
Earnings for BRCM will be released next Wednesday, after the
closing bell.

GNSS $21..12 -0.53 (-1.95) With the Semiconductor index (SOX.X)
continuing to drift lower, following the break of the $570 support
level earlier in the week, it is no great surprise that shares of
GNSS are continuing to drift lower.  Continually pressured by an
ever-steepening descending trendline, GNSS is getting closer to
a breakdown under recent support near $30.75.  Last week's
reaction low near $20 might also present some mild support along
with the $19.70 level, which was the low in mid-September.  But
after that, the bears will likely be focused on filling the gap
from last May, down to the $15 level.  The descending trendline
from the last month is now at $22.70, and a rally to and rollover
from that level would make for a great downside entry for those
still looking to take an entry.  Otherwise, we'll need to wait for
the $20 level to give way as support before taking a position.  We
are lowering our stop to $23.50 tonight.

GS $81.24 -3.25 (-4.91) Right place and right timing add up to
solid gains.  Our timing couldn't have been much better on
initiating some bearish coverage of the Brokerage stocks, as the
XBD index gave up more than 4% on Thursday amid renewed concerns
about legal action against MER.  Fearing that the potential damage
(and rightly so) won't be confined just to one company, investors
sold the group wholesale on Thursday, obliterating the tenuous
$498 support level, as the XBD fell almost to the 200-dma at
$475.57.  GS fell through the $84 support level (site of the 38%
retracement of the fall rally) and dipped almost to the 50% level
($80.16) before catching a bit of a bounce in the afternoon.
Amazing how those retracement levels come into play, now isn't it.
That extended the current PnF column of O's to give us a fresh
bearish target of $70.  The only possible problem is support in
the $78-80 area from February.  With daily Stochastics buried in
oversold, our best entries will come from failed rallies near
resistance, possibly near $81.50, but more likely up in the
$83.50-84.00 area.  We are lowering our stops to the $84.50 level
tonight. Momentum traders that missed the breakdown on Thursday
will need to wait for the $78 support level to give way before
initiating new positions.

HGSI $17.23 -0.07 (-1.82) Despite a couple of feeble attempts,
the Biotech index (BTK.X) just can't seem to put together a decent
rebound and it looks like the $450 support level is destined to
give way to the continual bearish assault.  In the midst of an
ever-more stingy FDA, investors are losing their conviction for
holding stocks in this arena.  The bearish overtones can still be
seen in shares of HGSI, as two attempted rallies were rebuffed on
Thursday, first at $18.35 and then near $17.90.  At the bell, HGSI
settled just above $17 and appears headed back towards the recent
lows near $16.40.  Selling the rallies is still working just fine
for now and a rollover near the $18 level still looks good for
fresh entries.  But only short-term traders should consider that
feat.  HGSI is set to announce earnings on Monday before the open,
so we'll be dropping the play this weekend.  We're leaving our
stop in place at $18.50.  

SGP $29.00 -0.27 (-0.11) The oversold bounce in SGP on Wednesday
was just what eager bears were waiting for to initiate new
positions in this ailing Drug stock.  SGP bounced up to the $29.25
resistance level on Wednesday, following news that the FDA issued
marketing approval for ADRX's extended-release potassium chloride
extended release tablets, a bioequivalent of SGP's K-Dur product
for the treatment of cardiovascular disease.  But that appears to
be the extent of the excitement as the stock stagnated below the
$29 level throughout the day on Thursday.  We now have solid
actionable points for new and existing positions, with firm
resistance at $29.75 and support at $27.70.  A failed rally at
resistance or a drop below support can both be used for initiating
new positions, and risk is easy to manage with our stop, which
remains at the $30 level.  With the DRG index giving back most of
Wednesday's gains today, it looks like the sector is set to break
the lows set earlier this week near $361.  Such a breakdown will
likely drag SGP lower as well.  With earnings set to be released
next Thursday before the opening bell, we have just under a week
to play.

TMPW $29.84 -1.91 (-1.97) The employment report this morning was
apparently not filled with the good news that many TMPW investors
were hoping for, as the selling party started early and continued
right into the closing bell.  Support at the $31 level fell away
almost immediately and it is looking like $30 support could give
way in short order as well.  The next solid support is found in
the vicinity of $27.50, and we'll want to consider harvesting some
gains near that level if the bulls try to mount a rebound.  The
bottom line is that the fundamental picture is terrible, and it
is unlikely to improve between now and the company's earnings
announcement next month.  Fading the intraday rallies is still the
best way to play, and we can now use the $31 level as a solid
level of resistance for initiating new entries.  We're lowering
our stop tonight to $31.50.  For those that still want to play
increasing weakness in the stock, with daily Stochastics still
pointing earthward, look to initiate new positions  on a drop
below Thursday's lows.  Just keep a sharp eye on support near
$27.50, as a short-covering rally could be lurking just around
the corner.

VRSN $24.03 +0.29 (-0.32) It was hard to find a sector of the
market that didn't finish Thursday's session in the red, and the
Software index (GSO.X) was weak again as well.  That didn't help
the case for VRSN investors, who continued to watch the stock
languish under the declining 10-dma, currently $25.03.  So long
as the GSO index continues tracking lower, VRSN should follow
suit.  VRSN hasn't been able to push through the 10-dma since
falling below it in the middle of March, and the stock is getting
closer to a breakdown below the $22 support level.  Selling the
intraday rallies when they fail continues to be the best entry
strategy, and the $25 level is shaping up as formidable
resistance.  For those looking to enter on the next breakdown,
keep an eye on the $22 level, as a violation of that support will
likely usher in a fresh wave of sellers, eager to drive VRSN down
to fresh 3-year lows.  

WPI $24.00 -0.78 (-0.20) After last week's sharp drop to the $24
level, shares of WPI have been languishing sideways, awaiting the
next catalyst to drive the stock one way or the other.  It appears
that catalyst is coming in the form of renewed weakness in the
overall Biotechnology sector (BTK.X) which is getting closer and
closer to breaking down below the important $450 support level.
If this support gives way, the BTK looks vulnerable to the
$415-420 area at least.  And that sort of weakness will definitely
pressure WPI lower.  The bears took a shot at selling WPI below
the $24 level on Thursday, actually tracing an intraday low at $23
before the midday rebound back to $24.  Resistance is still firmly
in place at $25 and then again at $25.50.  Look for a rollover
below our $26 stop to initiate new positions, looking for
confirmation from the BTK index breaking support.


*************
NEW PUT PLAYS
*************

None


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DISCLAIMER
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The Option Investor Newsletter                 Thursday 04-11-2002
Copyright 2001, All rights reserved.                        3 of 3
Redistribution in any form strictly prohibited.



**********************
PLAY OF THE DAY - CALL
**********************

COF - Capital One Financial $61.46 (-2.39 last week)

Capital One Financial Corporation is a holding company whose
subsidiaries provide a variety of products and services to
consumers using its proprietary information-based strategy. The
Company's principal subsidiary, Capital One Bank, a limited
purpose credit card bank, offers credit card products. Capital
One, F.S.B., a federally chartered savings bank, offers consumer
lending and deposit products.

Most Recent Update  

Like clockwork, COF traded up to the $65 level in today's session,
then rolled over.  The stock's trading range, as it turned out,
remained well defined through today's session.  Those who took
the entries made available on the moves down to the $61 level
earlier this week should've been able to book some decent short
term gains on the rally up to $65.  Whether COF breaks out
remains to be seen.  We've got two more days to play this call
head of the company's earnings report early next week.  A
rebound in the broader market tomorrow, including the financial
measures, could be the ticket for a breakout in this stock.
Aggressive traders can attempt a very short term trade on a move
above the $65 level with sights on the $67 level to the upside.

Comments

COF wants to breakout, it just needs the broader market to
cooperate.  We may get that cooperation in the coming days.  If
so, look for COF to advance above the $65 level on healthy
intraday volume.  Use a move up to the $67 level to exit
ahead of the company's earnings report early next week.

***April contracts expire in two weeks*** 

BUY CALL APR-60 COF-DL OI=3615 at $3.30 SL=1.75 
BUY CALL APR-65*COF-DN OI=5270 at $0.70 SL=0.25 
BUY CALL JUN-65 COF-FM OI=1472 at $3.20 SL=2.00 
BUY CALL JUN-70 COF-FN OI=1418 at $1.80 SL=1.00 

Average Daily Volume = 3.03 mln



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**************
TRADERS CORNER
**************

Do You Have Trader Status, Part V?
Buzz Lynn
buzz@OptionInvestor.com

The Tax Man cometh!  (And he taketh away if we're not careful.)  
That said, we've had numerous requests from readers on finding 
good tax advisors, how to qualify for trader status, and what 
legitimate means of tax reduction mechanisms are available to us 
average Joe (and Josephine) traders out there.  Just as we would 
not ask a brick maker about fine jewelry, so too should we not 
seek tax council from a trader and erstwhile writer.  What we need 
in both cases is an expert qualified to give the guidance sought.  
That counts us out and puts Jim Crimmons of Tradersaccounting.com 
(www.tradersaccounting.com) in the "Expert" chair.

When we left off Tuesday, Jim had just talked about maximizing 
your 401K contribution and was about to get into some common Q&A 
when we ran into time and space constraints.

For those who missed the previous episodes leading up this point, 
you can brush up here:

http://www.OptionInvestor.com/traderscorner/032602_1.asp
http://www.OptionInvestor.com/traderscorner/032702_1.asp
http://www.OptionInvestor.com/traderscorner/040402_1.asp
http://www.OptionInvestor.com/traderscorner/040902_1.asp

Now, on with our chat.

Me: You were going to walk through some Q&A that readers might 
have following the final examples in the April 9th episode, then 
detail the benefits of creating a formal retirement plan, and 
finally finish up with a great tax saving tool, the living trust.  
Where do you want to start?

Jim:  With questions you might have:

Q.  Will Susan and Sam have to pay employment taxes?

A.  Yes, there will be payroll taxes on wages paid.  The amount of 
payroll taxes for 2002 will be around 15.3% on the amount of wages 
paid up to $84,900, and then 2.9% on all wages above that.  This 
payroll tax is for Social Security (12.4%) and Medicare (2.9%).  
Many of you have not maximized out your permitted contributions to 
a plan yet, so here is an excellent way to do so while you are 
benefiting yourself.

In our example two above, Susan would have had to pay a total of 
$13,892 in payroll taxes to receive her $116,000 in payroll.  Half 
of these taxes are an expense to Straddle Option, LLC.  Using our 
30% Federal Tax rate on the expense we will save a further $2,084 
in Federal Income Tax.  Our net cost for our one-time payroll tax 
is now a total of –$192!  Yes, in this example we have saved $192 
in taxes!  We accomplished this by paying $13,892 in payroll 
taxes, but saving $14,084 in federal income taxes because of the 
expenses we were generating.  State income taxes have not been 
addressed, so the probability is that you will save more than 
this!

Using this example, every dime you make trading in your tax-
deferred retirement account will be profit, since we paid all of 
our expenses up front.  That profit now grows exponentially 
because no tax is being paid.  

This is how you grow serious wealth for your family!

Q. I understand if I am over 50 years or older I can contribute an 
additional $1,000 each year to a maximum of $12,000 into my 401K, 
increasing my limit to $41,000 in the year 2002.

A. This is true with the new tax law.

Me:  Enumerate the benefits of a formal retirement plan please, 
Jim.

Jim:  Sure.

1. Earnings Within The Plan Accumulate Tax-Deferred:

The pension plan is a tax-deferred entity.  Since no taxes are 
paid that reduce capital, the contributions within the plan will 
grow more rapidly than if the funds were taxed annually.

2. You Control Investments—Trade on Margin or Trade Options or Go 
Short!

You will serve as the trustee of the Pension Plan.  As such, you 
will have full control to invest your retirement account as you 
see fit.  There are few limits on the types of investments that 
can be made.  Your investments can be in the stock or other 
security market, in real estate, or any other prudent investment.  
(Note that trading on margin may trigger a tax.  Profits 
attributable to margin trades are subject to UBTI, Unrelated 
Business Taxable Income.)

3. Borrow From Your Plan:

Subject to regulation, the business is allowed to loan money out 
of the Pension Plan with no penalties or taxes incurred.  How 
would you like to be able to access your Pension monies through 
such a loan?  The ability to borrow up to $50,000 (The amount of a 
loan is limited to $50,000 for a plan participant or half the 
participant’s account, whichever is less. from your plan is a 
ready way to provide liquidity in a time of need, to fund a 
business, or for any investment purpose.  The interest you pay on 
the loan helps your retirement account grow.

4. Borrow to Purchase a Home:

Many people have done this in the past.  Your retirement plan can 
be a great source of funding to purchase a new home or second 
home.  You, as plan trustee, are the bank in this case, so you 
pass judgment on your credit worthiness (no more having to explain 
to some loan officer, and pay points or other ridiculous fees).

5. Roll Your Existing Retirement Investments to One Plan:

One of the interesting aspects of the new tax law is that you can 
roll over almost all bona fide retirement accounts into a 
qualified plan.  What this means to you is that you will be able 
to take all of your existing qualified plans, and all of your 
IRA’s (whether or not they represent former roll-overs) and roll 
them into one qualified plan, with you as the trustee.  This gives 
you greater control of all your retirement funds.  You will then 
also be able to continue adding funds to this retirement account 
from your business as discussed above.

6. Control Timing Of Distributions:

You can take retirement distributions from your Pension Plan 
without a penalty as early as age 55 or as late as age 70 1/2.  
Remember, you as trustee will be in complete control, subject to 
regulation, of your retirement account!

7. Asset Protection of your Retirement Money:

In the past few years we have seen an erosion of the protection of 
peoples IRA’s due to state law and IRS mandate.  As can be 
witnessed by the O. J. Simpson case, a qualified retirement 
account is almost completely protected from outside lawsuits and 
liens against the owner of the retirement account.  This will give 
you the protection you need and deserve for your retirement 
monies.

Me:  I can't think of anyone who can't benefit from this.  So who 
really needs a Qualified Retirement Plan?

Jim:  Two different types of forward-thinking individuals need to 
have this type of plan.

1.  Persons with an IRA, or other retirement plan from previous 
employers, who want to take control of their life and their 
retirement funds.  We hope you have lived long enough to realize 
that no one will manage your money for you as well as you can 
yourself.  Whether you are purchasing mutual funds or butterfly 
spreads with the money, take control of your future!

2.  Persons with a closely-held active business, who want to build 
some of the profit from the business into wealth for their family 
to use, as well as creating a tax advantage for themselves in 
doing so.

TradersAccounting.com has enlisted the resources from one of the 
largest pension plan administrators on the west coast to set up 
qualified plans for our clients.  This company really listens to 
what you want and, in keeping with IRS and Labor Department 
guidelines, gives you the retirement account that you want and 
deserve. 

If you are in either of these situations, you need to call us at 
once and let us work with you to maximize your future wealth!  

[Editor's note: shameless plug in an educational environment :-)]

Me:  Wow!  Ask for a drink of water and we get a fire hose!  I 
have to admit, those are some compelling strategies to save money 
and legitimately minimize the Federal Tax bite.  I imagine the 
same would be true of state taxes too unless we happen to live in 
one of the six states with no state income tax at all.

Jim, you mentioned that you also wanted to talk about living 
trusts as the single greatest estate planning and tax saving there 
is.  Individual filings are due on Monday.  Still have time?

Jim:  I have time, but it would double the length of your article 
tonight.  I hate to do this because I know your size constraints.  
Given that Living Trusts will have no effect whatsoever on your 
readers' 2001 tax situations, perhaps we could do that and 
conclude the series next Tuesday?  

Me:  OK, let's plan on that for next Tuesday and we'll wrap up our 
trader status/tax series then.  Until then make a great weekend 
for yourselves!  We'll visit again in Monday's Wrap.


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************
MARKET WATCH
************

A handful of plays were triggered in Thursday's session.  Two more 
debut tonight, one's an old candidate.


To Read The Rest of The OptionInvestor.com Market Watch Click Here
http://members.OptionInvestor.com/watchlist/041102.asp


**************
MARKET POSTURE
**************

Thursday's trading saw several important breakdowns.  Most of the 
damage occurred in technology.


To Read The Rest of The OptionInvestor.com Market Posture Click Here
http://www.OptionInvestor.com/marketposture/041102_1.asp


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DISCLAIMER
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