The Option Investor Newsletter Wednesday 10-30-2002 Copyright 2002, All rights reserved. 1 of 2 Redistribution in any form strictly prohibited. In Section One: Wrap: Better Than Futures Corner: P & L examples from Tuesday's Futures Trade Signals. Index Trader Wrap: There were times when.... MUI CONTENT OF THE DAY: RS Funds Options 101: Important Changes in the VIX Updated on the site tonight: Swing Trader Game Plan: Getting Weaker Posted online for subscribers at http://www.OptionInvestor.com ******************************************************************* MARKET WRAP (view in courier font for table alignment) ******************************************************************* 10-30-2002 High Low Volume Advance/Decl DJIA 8427.41 + 58.47 8459.31 8307.42 1702 mln 1155/538 NASDAQ 1326.73 + 26.19 1334.63 1300.55 1089 mln 1377/251 S&P 100 452.60 + 3.74 455.20 446.69 totals 2532/789 S&P 500 890.71 + 8.56 895.28 879.19 RUS 2000 374.17 + 5.54 374.17 368.14 DJ TRANS 2277.25 + 29.02 2298.89 2246.63 VIX 36.08 - 0.72 37.67 35.76 VIXN 51.29 - 1.18 54.58 50.38 Put/Call Ratio .85 ******************************************************************* Looking Ahead by Steven Price There are slow days and there are excruciatingly slow days. This one was the latter. We got little momentum to trade, but we did get a look at previous support and resistance levels and some surprising action in a couple of sector indices. By the end of the day, most averages were positive, but there wasn't a lot of commitment in the numbers. It appears as though we are in a holding pattern ahead of Thursday and Friday's economic data, and next Wednesday's FOMC interest rate decision. As that economic data flows in, speculation will fly as to just how much the Fed will lower rates. The debate about whether or not rates will be lowered, has turned into a debate over whether it will be a 25 or 50 basis point move. Goldman Sachs indicated it is looking for a 50 basis point cut next week, while the consensus is for 25 points. This may simply be the firm backtracking to its August prediction of a 75 basis point cut by the end of the year. With only two meetings left before the end of 2002, it doesn't leave much time for that prediction to pan out. The FOMC meets November 6 and December 10. The Fed Funds futures are currently predicting a 25 basis point cut, as can be seen below. Chart of the Fed Funds Futures Another indicator of how far we've come and whether we will run out of steam here is the bullish percentage. Bullish percent measures the number of stocks in a particular index currently giving point and figure buy signals. While the bullish percents of the Nasdaq Composite and S&P 500 are currently in the middle of their ranges, the Dow and NDX have reached significant resistance points. The Dow has rebounded from a low of 4% to a current reading of 56%, just below its bearish resistance line. The last rebound stopped dead at this level, as evidenced by the previous column of "X". The fact that the Dow's recent rally became range bound, between 8200 and 8550, as the index hit its bearish resistance line, may not be entirely coincidental, as many institutions pay close attention to the bullish percentages. Chart of the Dow Bullish Percentage The Nasdaq 100, which includes some of the largest tech stocks in the market, has also run into bearish resistance on the bullish percentage chart. It rebounded from a low of 14%, to a current reading of 54% and is right below its bearish resistance line at 58%. Similarly to the Dow, it failed this level on the last attempt, shown in the previous column of "X". Chart of the NDX Bullish Percentage With consumer spending making up two thirds of GDP, we are heading into a crucial time of the year, as the holiday shopping season is around the corner. The market has been able to shake off bad news from the techs recently, and continue to hold up over Dow 8000 and Nasdaq 1300. However, if consumer spending drops off heading into the busiest time of the year for retailers, it will be hard to sustain the current rally. Yesterday's Consumer Confidence data, which missed expectations by about a thousand miles, sent the retail group lower, but wasn't enough to keep them down. Concrete evidence of that lack of confidence may now be appearing. This morning saw a downgrade of Wal-Mart (WMT) by Goldman Sachs, which took the stock off its recommended list and labeled it a "market performer." Goldman's analyst was concerned about same store sales comparisons heading into the holiday season and the fact that WMT has lowered its monthly growth expectations to 2-4%, from the usual 4-6% (something we've been pounding the table on recently in this space). WMT is the biggest of the big retialers and even Goldman says, "(T)he company is best positioned for current lackluster spending environment." However, it also commented on a "an increasing challenge coming up against these strong results in, if we are correct, a decelerating consumer-spending environment next year." If we continue to see a drop in consumer spending in 2003, then any recovery may be stretched back to 2004 at the earliest. What may also be significant is that the retail sector, as measured by the Retail Index (RLX.X), finally broke down through its 50-dma, after rebounding from that level on recent pullbacks. The RLX also has rounded off to its second lower low, including the second peak of a double top formation. Traders looking for shorts in the sector should now watch for intraday resistance under the 50-dma, as well as continued weakness from WMT. Chart of the Retail Index (RLX.X) The networking sector rallied on news from France's Alcatel, which said the company's cost-cutting plan is ahead of schedule. The company also said it has increased its cash position, soothing bankruptcy concerns. Alcatel still said sales dropped 17.2% and the bottom line was affected by higher than expected write-offs. The sales decline was worse than expected, but the company's comments about returning to profitability in 2003 helped boost the Networking Index more than 8% and Lucent almost 20% to $1.20. The semiconductors got mixed news, as Maxim Integrated Products (MXIM) reported earnings after the bell on Tuesday that met expectations, but warned about poor visibility for its end users and a lack of long-term orders, as a result. Today, however, Microchip Technology (MCHP) said at the Prudential Technology Conference that it was raising its fiscal 2004 earnings guidance and revenue forecasts. That was the first time in a while that we have heard anything but the opposite from the sector and it seemed to underscore comments from IBM's CEO that the economy may have bottomed. The news was enough to get the Nasdaq rolling, as the COMP tacked on 26.19, to close at 1326.73. The Semiconductor Index (SOX.X) also rallied, and managed its first close over 300 since September 11. The Sox has pulled back and tested its 50-dma several times since breaking through on October 21, and continues to set higher highs and higher lows. It is difficult to believe in a sector that has had mostly bad news, with no prediction of a turnaround, until this morning. It is also a group that has posted a 41% gain since October 9, without any real positive fundamental news. Bulls can point out, however, that the run has come during the meat of earnings season and that the prior sell- off was based on earnings expectations that were far worse than what we got. I would certainly feel more comfortable if less than 90% of the companies reporting earnings in the sector had not made negative comments about business conditions in the near future. I have been looking for a ceiling on the sector for short plays, but have yet to see it, now that the SOX is back above 300. Chart of the SOX One report that did not receive much press in today's news was the Market Composite Index of Mortgage Loan Applications. The index can be seen as a leading indicator for housing, as applications are usually filed several weeks before purchases. The index showed a 19.3% decline in mortgage loan applications for purchases and refinancings for the week ending October 25. While housing has remained strong, this will be a sector to keep an eye on, as much of the economy has hinged on the housing market. Housing stocks have begun to sink, as mortgage rates have crept higher, and this data seems to confirm the effects are real. The Dow Jones Home Construction Index (DJUSHB) has rolled over and is once again testing support at the 300-level. Builders may be whistling a different tune soon, as seasonal changes and creeping rates combine to put a crimp in record home purchasing rates. Shorts in the sector are looking more attractive, but I'll wait for the DJUSHB to break below 300 to avoid a bounce. Chart of the DJUSHB The Dow and S&P continue to move sideways, as we await the flood of data this week. Tomorrow we will get initial jobless claims for last week. The consensus estimate is 400K, and this will be one of the main indicators the Fed will look at when assessing the health of the economy. A decrease in claims from the previous week's 389K may reduce the need to jump start the economy with the first rate cut in almost a year. However, it is more likely that any number over 400K will simply jump start speculation that the cut may be 50 basis points. The other big numbers tomorrow are 3rd quarter GDP, which is expected to reflect an annualized growth rate of 3.6%, and the Chicago PMI, expected to be 49.0. Anything below 50 reflects a contraction and would underscore the need for a rate drop. Friday's data includes nonfarm payrolls, unemployment rate, personal and construction spending, the ISM index (like the Chicago PMI expected to indicate contraction), construction spending and auto and truck sales. It will be interesting to watch the market action the next two days, in response to the economic data, as it may be counterintuitive to what we might expect. Poor economic data may send us higher, as it will raise expectations of a 50 basis point cut, while good economic data may send us lower. The SPX has yet to close over 900, and that should be the first sign for bulls that want to jump on the bandwagon. However, next Wednesday's FOMC announcement should shake out investors who are less than committed and next Thursday may be the first day of a longer term trend. ************ FUTURES WRAP ************ Futures: P & L examples from Tuesday's Futures Trade Signals by Alan Hewko futures@OptionInvestor.com ___________________________________________________ Abbreviations used by the Futures Market: Ticker $ move per index pt ES = E-mini SP500 December futures ES02Z $ 50 per ES pt YM = E-mini Dow $5 December futures YM02Z $ 5 per YM pt NQ = E-mini NDX 100 December futures NQ02Z $ 20 per NQ pt _____________________________________________________________ NOTE: My cable modem which died early this morning prevented any internet access of any type all day and since I have no idea when a technician from my ISP shall arrive to replace the damaged cable modem, there shall be no Futures Wrap for today. There's been two repair trucks here for three hours, and at 5:00 PM ET I don't know if I'll have a working cable modem or not for Thursday. It was frustrating watching CNBC and seeing Dow hold 8300 and not be able to a Long; or Dow hitting its 8450 resistance and not being able to take a 30-40 Short on it [grins]. Since I already had some charts on my hard-drive, I thought I would take this opportunity to answer some reader questions. In case you are wondering how I was able to upload this article to the website, the answer is my public library and Yahoo email. [grins] PROFIT EXAMPLES FROM TUESDAY'S FUTURES TRADE SIGNALS As many of you know, Futures comments such as support and resistance numbers as well as actual Trade Signals are provided each day in a real-time manner via the OptionInvestor.com's Market Monitor. The below examples are from Tuesday's posted Future's Trade signals, and is the best way I can answer continuing questions regarding Future's Margins and computing the Dollar profit/loss on a Trade. Tuesday's two trades were both on YM (Dow $5 futures) or the YM02Z, and each futures contract is worth $5.00 for each 1 point move in the Dow; hence the name "Dow $5". Also, margin on this contract will vary between $500 and $1500 per contract so I'll continue to use the average of $1000. What this means is that you would need $1,000 for each YM Contract you wished to daytrade. If you have $5,000 in your futures account, you could buy or sell up to five contracts for Daytrading. If you have $25,000 in your futures account, you could buy or sell up to 25 YM contracts. Many of you are familiar with OEX options, and it's not uncommon to see an OEX option with a price of $16 and ten of them would require a cash amount of $16,000 to buy or sell ten of these OEX options. A similar $16,000 in a futures account would allow you to day- trade up to 16 YM Dow futures contracts; and that's the dollar amount I will use for the below example. (note: since I do not have internet access to confirm these numbers online, I'm doing them from memory) TRADE Example 1: Entry: Open a LONG YM at 8180. There were 3 Exits on this trade, 1/4 Size for +30, 1/2 size of position for +55, and 1/4 Size for +35 to finally go Flat: Remember, this examples you are using $16,000 of cash in your futures account. Buy Number of YM YM Profit or Profit or or Sell Contracts Price Loss in YM points Loss in Dollars =============================================================== Buy 16 8180 0 0 Sell 4 8210 + 30 + $ 600 (4x$5x30 YM pts) Sell 8 8235 + 55 + $2200 (8x$5x55 YM pts) Sell 4 8215 + 35 + $ 700 (4x$5x35 YM pts) TOTALS: This example shows a $ 3,500 gain. Using the $16,000 amount of money you would have needed to do this trade the $3500 would represent a hypothetical gain of + 22%. (As a FYI, the last 4 contracts were "almost" held throughout the afternoon. They were not as the Profit trail-stop was hit, but merely as example, if they had been held at Break-even stop loss instead and held until Dow kissed the 8400 cash number, YM at that point was 8385. Let's redo the above numbers then with those numbers: Buy Number of YM YM Profit or Profit or or Sell Contracts Price Loss in YM points Loss in Dollars ==============================.================================ Buy 16 8180 0 0 Sell 4 8210 + 30 + $ 600 (4x$5x30 YM pts) Sell 8 8235 + 55 + $2200 (8x$5x55 YM pts) Sell 4 8385 +205 + $4100 (4x$5x205 YM pt) TOTALS: This example illustrates a potential $ 6,900 gain. Using the $16,000 amount of money you would have needed to do this trade the $6900 would represent a hypothetical gain of + 43%. TRADE Example 2: This trade was a quick scalp from the Dow cash 8400 level rather late in the day at 3:30 PM; and had a rather respectable % gain in one hour even with the Dow not really moving that much. Entry: Open a SHORT YM at 8367 (near 3:30 PM) Exits were for +30, +15, +25 Entry time: 3:30 PM. Exit time of final contracts covered to go flat: 4:30 PM Total time in trade: one hour Buy Number of YM YM Profit or Profit or or Sell Contracts Price Loss in YM points Loss in Dollars =============================================================== Short 16 8367 0 0 Cover 8 8337 + 30 + $1200 (8x$5x30 YM pts) Cover 4 8352 + 15 + $ 300 (4x$5x15 YM pts) Sell 4 8342 + 25 + $ 500 (4x$5x205 YM pt TOTALS: This example shows a potential $ 2,000 gain. Using the $16,000 amount of money you would have needed to do this One-Hour trade the $2000 would represent a hypothetical gain of + 12.5%. Below is a chart showing the Dow cash index during the time of these two trades. Chart: Dow Industrials (cash) for Tues. Oct. 29 I'll now use a prior ES and NQ chart to provide similar possible Dollar Profit or Losses. Note, the below trades are merely examples and weren't "real" trades, but the math of course is the same. TRADE EXAMPLE 3: Chart: ES02Z (E-mini SP500 Futures) ES (E-mini SP500 futures) are worth $50 for each 1 point move, and also, on average, have a day-trade margin of $1000 per contract. Using the same $16,000 cash in your futures account we've used above, you would be able to day-trade up to 16 ES contracts. You are flat, and near 14:30 (2:30 PM) in the above chart, you see the possible double bottom at ES 868. By the time you see the trade and get your LONG, ES is at 870.75 x 871.00 ENTRY: LONG 16 ES Contracts at 871.00 Your first exit is on 1/4 of your position size which is 4 contracts at ES 876; and you exit the remaining 12 contracts at 881 3:30 PM as there's a possibility the 880 support will fail going into the close. Buy Number of ES ES Profit or Profit or or Sell Contracts Price Loss in ES points Loss in Dollars =============================================================== Buy 16 871.00 0 0 Sell 4 876.00 + 5 + $1000 (4x$50x5 ES pts) Sell 12 881.00 + 10 + $6000 (12x$50x10 ES pts) TOTALS: This example shows a hypothetical gain of $ 7,000. Using the $16,000 amount of money you would have needed to do this trade this would have been a potential + 44% gain. Time in the Trade : Approx. 90 minutes TRADE EXAMPLE 4: Chart: NQ02Z (E-mini NDX Nasdaq 100 Futures) NQ (E-mini NDX Nasdaq 100 futures) are worth $20 for each 1 point move, and also, on average, have a day-trade margin of $1000 per contract. Using the same $16,000 cash in your futures account we've used above, you would be able to day-trade up to 16 NQ contracts. You are flat, and near 10:30 AM in the above chart, you see NQ trading at known chart support of 955. You decide to open a LONG at this support level. By the time you see the trade and get your LONG, NQ is at 955.50 x 956.00 ENTRY: LONG 16 NQ Contracts at 956.00 For hours, NQ simply drifts sideways at the 950 level, and you maintain your Longs. You are using an 8 NQ point stop-loss, or 948 (956-8). Near 1 PM, NQ breaks down, and your 8 NQ point stop-loss hits on the entire position, taking you to FLAT, and giving you a 8 point NQ loss on this trade. Buy Number of NQ NQ Profit or Profit or or Sell Contracts Price Loss in ES points Loss in Dollars =============================================================== Buy 16 956.00 0 0 Sell 16 948.00 - 8 - $2560 (16x$20x8 NQ pts) TOTALS: This example shows a loss of $ 2,560. Using the $16,000 amount of money you would have needed to do this trade this represents a hypothetical loss of - 16%. Time in the Trade: Approx. 2.5 hours TRADE EXAMPLE 5: This example is on a POSITION trade held for two weeks. On Oct. 10th, the Dow touched 7200. A few days later, you become bullish and open a POSITION trade of LONG YM (Dow $5 Futures) at 7500 and hold it for 2 weeks. Being well aware of the resistance level in the Dow at 8500, you exit the trade at 8500 for 1000 point gain. Entry: Open a LONG YM at 7500. The $16,000 cash we've used for each of the above example still applies, except there is one important difference. Because we are NOT doing a day-trade but are rather taking the position home, the margin rules are different. Rather than each YM contract requiring cash of $1,000 for daytrading, you are now required to have $2,000 (or double) for each YM contract to be taken home. Therefore, the number of YM contracts you can buy here is reduced from 16 to 8. ($16,000 divided by $2,000 = 8 YM contracts) Entry: LONG 8 YM contracts at 7500 Exit: SELL (to close) 8 YM contracts at 8500 Buy Number of YM YM Profit or Profit or or Sell Contracts Price Loss in YM points Loss in Dollars ==============================.================================ Buy 8 7500 0 0 Sell 8 8500 + 1000 + $ 40,000 Profit $40,000 = 8 YM contracts x $5 per point x 1000 points TOTALS: This two-week example of a major market move illustrates a potential $40,000 gain. Using the $16,000 amount of money you would have needed to do this trade the $40K represents a hypothetical gain of + 250%. Time in Trade: 2 weeks Obviously, trades such as this only will occur a few times a year at best, but it does show the tremendous possibilities for POSITION trading futures once this current market becomes less range-bound of ES/SPX 875 to 900. Lastly, in this last example, it would have been a very smart to HEDGE this position by buying some protective DJX (Dow Jones Index) puts, perhaps costing $2000 to $3000 to protect yourself if you were wrong. Investors should always remember that there is significant risks in trading futures. The potential gains are balanced by the potential risks. Traders can attempt to limit these risks by using stops but there is never a guarantee. Alan Hewko As always, any questions or comments, please email them to futures@OptionInvestor.com ******************** INDEX TRADER SUMMARY ******************** There were times when.... When looking at the charts of various market indexes, sectors and individual stocks, there were times today when I thought the indexes looked lower, then an hour later, here would come a rally and things looked like they might blow up to the upside. Then wait an hour and the proverbial "house of cards," was about to crumble. It wasn't just the equity markets that saw some intraday up and down action. Even the "steadier" bond market seemed uncertain of things ahead of tomorrow weekly jobs data and advance Q3 GDP data. The market looks jittery right now and the FOMC meeting isn't until next week. December Treasury futures had Treasuries little changed by session's end after early selling, turned to buying into the close. At one point, YIELDS actually turned red with bond prices showing gains. At session's end, Treasury futures for the 5, 10 and 30-year traded inside of Tuesday's trading range. If I have one word of wisdom for any trader right now, it would be to trade partial positions, have one bullish index trade in place and one bearish trade in place. Every trader "knows" that if the economy were to every jump back into robust growth mode, the technology and perhaps the NASDAQ- 100 Index (NDX.X) 986 +2.63% would stand to benefit most. Conversely, if thing go the course of recent past, then it would also be the NASDAQ-100 Index that would continue to suffer. I think it is IMPOSSIBLE to try and predict just how the market will respond to a 25 basis point rate cut, which looks to be set in stone. Add to his some comments from Goldman Sachs that the Fed will cut 50-basis point on Wednesday, and further uncertainty builds. With Fed funds currently at 1.75%, that give the Fed room for 7 more 25-basis point cuts. The bearish economy camp will look back at the sharp decline in the Q2 GDP report along with plummeting consumer confidence and tell the bull's they're dangling at the end of a rope. A rope where the noose just hasn't been tightened enough to bring a bull to his knees. Some think a 25 basis point, let a lone a 50 basis point cut is admittance from the Fed at how fragile it views the state of the economy. On the other side of the coin is the bull's camp that springs new optimism. With consumer confidence below last year's recession lows and post terrorist levels, the bad news is out. Bulls will say last weeks better than expected jobless data should already have consumer confidence beginning to up-tick. As the Fed lowers rates to stimulate economic growth, the rise we're seeing in tech and talk of "trough quarters" for the telecom equipment and semiconductors sectors will be realized in the months to come. Dow Industrials Chart - Daily Interval Dow bull's breathe a sigh of relief today after the triple-bottom sell signal in the point and figure chart yesterday. It would take a trade at 8,600 to get the p/f chart back on a buy signal and that's where we have horizontal resistance for the Dow over the past 8 sessions. One piece of DIVERGENCE I pick up on the Dow's bar chart compared to late August is a bit of a "kink" developing in the Stochastics. We can perhaps see how the 50-day SMA comes into play here as the Dow rebounded intra-day yesterday from the 50-day SMA. There's nothing that says MACD has to roll over like it did in late August, which had the Dow falling back below its 50-day SMA on an extended run lower. While the Dow looks range-bound right now between 8600-8250, there's enough uncertainty ahead of next week's Fed meeting and tomorrow's economic data that a break from the range, up or down could see an extended move take place. I tend to be more "bullish" the Dow from a risk profile and fundamental view of potential economic growth. However, it is concerning that the "generals" of the Dow have General Electric (GE) and General Motors (GM) trading more like deserters in the scope of a potential economic recovery. Today's action saw no net change in the very narrow Dow Industrials Bullish % ($BPINDU), with current status still "bull confirmed" at 56.67%. S&P 500 Index Chart - Daily Interval Yesterday's trade at SPX 875 had the SPX giving a double-bottom sell signal. Today's reversal back to 885 then higher has the bearish vertical count column now completed and hints of potential downside risk to 830. It would currently take a trade back above Monday's spike higher and a trade at 910 to negate the current bearish count. Technology sectors lead the SPX gains after IBM executives said they're seeing signs of a bottom in the economy. Networking, Fiber Optic and Wireless sectors were bolstered after French telecom service provider Alcatel (NYSE:ALA) $5.11 +32.7% reported a net loss of $-1.33 per share, compared to the estimate of one analyst that bothers to follow the stock and estimate for a $-0.33 per share loss. Alcatel said it has been reducing its debt burden with positive cash flow and expects to show a profit in 2003. Chuckling.... while the MARKET was buying telecom-related sectors (I still think bulk of buying is massive profits being taken by shorts) on renewed hopes that they will be earnings to the bottom line in the future, retailers were seeing selling after Goldman Sachs downgraded Wal-Mart (WMT) $53.90 -4.7% saying the stock has simply outperformed the S&P 500 by too much the past couple of years and trades at a historically high P/E multiple relative to the S&P 500. See what happens to you when you make money, while the broader market list of stocks experience bottom line slowdowns? E-gad, I can't figure out these fundamental-based analyst calls. Today's action saw the S&P 500 seeing a net gain of 3 stocks to a point and figure buy signal, with the S&P 500 Bullish % ($BPSPX) edging back higher to 49.00%. So far, the internals as depicted by the bullish % are mimicking the externals of the S&P 500 and current status remains "bull alert." S&P 100 Index Chart - Daily Interval Last night's comments about the higher relative low in the OEX point and figure chart found some bullish e-mails coming in from some longer-term, yet cautious bulls. Here's a very simplistic bar chart. Suffice it to say, a close below 435 in the OEX would be viewed as BEARISH. The ability for the OEX to hold above its old downward trend on a CLOSING basis shows there's still some demand to hold the OEX together. If not, then where the heck were bears today when they had every opportunity to put a lid on things early in the session? Just as a trade at 465 would be a spread-triple-top buy signal on the OEX p/f chart, then so would a break and close above 465 on the bar chart. When in an UPWARD trend, no matter how short, a close above 465 has seen higher price follow through. When in a DOWNWARD trend, no matter how short, a close below 435 has seen lower price follow through. Today's action saw the OEX Bullish % ($BPOEX) rise 1% to 56%. This matches Monday's high reading and the internals continue to hold up. NASDAQ-100 Index - Daily Interval I don't profess to me much of a Bollinger Band technician. Just trying to get a little different look at the NDX. First glance has me thinking the NDX might be losing a bit of steam near-term, but a move CLOSE 1,001 could see some more shorts come in to cover on a following session. After a sharp 8 session move higher, the last 8 have been bound between 953 and 1001 for he most part. A close below 952 has the 21-day SMA in play at 911. If that's broken, the bottom of Bollinger Band and base- retracement become targets. It's staggering to look at the NDX on a weekly interval chart. While I'm a bit "tongue and cheek" with my Alcatel (ALA) comments from above, when you look at the fun bears have had in the NDX and technology stocks the past couple of years, a 32% surge in ALA seems like a lot. It is if you initiate a short in the stock the day before that kind of move takes place. However, the weekly chart really bring some smelling salts to the table if any trader doesn't think there can't possibly be further short-covering that could take place. After today's action there was no net change in the NASDAQ-100 bullish % ($BPNDX). Current status remains "bull alert" at 54%. Jeff Bailey ************************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.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** ************************** WEEKLY FUND FAMILY PROFILE ************************** RS Funds RS Investments, formerly known as Robertson Stephens Investment Management, is a San Francisco-based investment adviser focused on equity investments in small- and mid-sized public companies. The firm manages over $4 billion in mutual funds, institutional accounts, and alternative investments. Assets under management today are less than half what they were in 2000. RS is perhaps best known for their investment ability in identifying emerging business trends and analyzing companies involved with the "New Economy." RS manages eleven no-load mutual funds, including eight growth- oriented funds and three value-driven funds. According to data from Morningstar, the eleven funds total $2.4 billion in assets today, though 70% of total fund assets are held in two RS funds: Emerging Growth (RSEGX) and Diversified Growth (RSDGX). The RS Emerging Growth Fund ($1.2 billion), the firm's flagship mutual fund, is small-cap growth oriented, but currently closed to new investors. The RS Diversified Growth Fund ($0.5 billion) has a small-cap growth bias as well, and is currently open. The RS Funds may be purchased directly or through the major fund networks on a no-load, no-transaction fee (NTF) basis. Expenses range from 1.33% to 1.88% of assets, using data from Morningstar. For complete fund information, call the RS Funds at 800-766-3863 or log on to www.rsfunds.com. Please read the prospectus before investing. Firm History Robertson Stephens Investment Management (RSIM) was established in 1981 as a subsidiary of Robertson Stephens & Co., a private investment-banking firm serving the "equity" financing needs of emerging growth companies. RSIM was organized to leverage the parent company's underwriting, financing, trading, and venture capital expertise. In 1997, Robertson Stephens & Company's investment banking and asset management entities were sold to Bank of America, but in 1999, RSIM executives negotiated a buyout with Bank of America and the firm returned to private ownership. The firm is today independent and employee-owned. Fund Overview As stated earlier, RS Investments manages eight growth-driven funds and three value-driven funds. A summary is shown below. RS Growth Funds: Aggressive Growth Fund (RSAGX) Multi-Cap Growth Diversified Growth Fund (RSDGX) Small-Cap Growth Emerging Growth Fund (RSEGX) Small-Cap Growth (Closed) Information Age Fund (RSIFX) Sector Internet Age Fund (RIAFX) Sector MidCap Opportunities Fund (FSMOX) Mid-Cap Growth Smaller Company Growth Fund (RSSGX) Small-Cap Growth Value + Growth Fund (RSVPX) Multi-Cap Growth RS Value Funds: Contrarian Fund (RSCOX) Mid-Cap Value Global Natural Resources Fund (RSNRX) Sector Partners Fund (RSPFX) Small-Cap Value At RS Investments, research is the cornerstone of the investment process and culture. Their investment professionals perform on- site meetings, discussions with company management, and in-depth financial analysis. RS analysts combine hands-on experience and an in-depth, industry knowledge in identifying opportunities and offer investment insight. The RS website states that the secret to their performance is in their "people." The firm's focus is on their team of investment professionals and the passion that they bring to their portfolio management roles. Most of them are focused primarily on the New Economy. Each RS fund features one or more focused entrepreneur ("portfolio manager") at the reins. The firm contends that it's well positioned to stay connected with New Economy companies and venture capitalists being headquartered in San Francisco. Jim Callinan is managing director and portfolio manager with RS Investment Management, his employer since June 1996. Before he joined RS, Callinan spent nine years with Putnam Investments as senior VP and portfolio manager. Callinan manages the flagship Emerging Growth Fund (closed) and Aggressive Growth Fund, which was launched in May 2000 following the close of Emerging Growth Fund. It can invest in companies of any size and has a "multi" cap growth style. Callinan is one of three co-managers running The Information Age Fund and the RS Internet Age Fund. John Wallace is another star growth manager with RS Investments, his employer since 1995. Previously, he was a VP and portfolio manager with Oppenheimer Management Corporation for nine years. He co-manages Diversified Growth Fund, a small-cap growth fund, along with John Seabern, and is sole manager of two mid-growth products: MidCap Opportunities Fund and RS Value & Growth Fund. Andy Pilara is a managing director with RS Investments and runs the show on the value side. He joined the firm in 1993 and had his own investment advisory firm named Pilara Associates before joining RSIM (now RS Investments). Prior to that, he worked in institutional sales with Dean Witter Reynolds. Wallace is sole manager of three RS value-oriented funds: Partners Fund, Global Natural Resources Fund, and The Contrarian Fund. Note that the firm's board of trustees has approved a merger of the RS Aggressive Growth Fund into the RS Emerging Growth Fund, and will seek shareholder approval later this year. Both funds are managed by Jim Callinan. Because of the contraction in the value of large-cap growth stocks, many of the stocks previously off limits for purchase by the RS Emerging Growth portfolio are now available for investment. This merger would allow Callinan and his team of analysts to focus effort on a single investment portfolio of smaller, rapidly growing companies. It would also likely reduce expenses for Aggressive Growth fund shareholders. Favorite Funds Should the RS Emerging Growth Fund reopen to new investors, the flagship fund run by Jim Callinan would be worth considering if small-cap growth stocks lead the way as they often do following recessions. In 1999, this fund delivered an astonishing 182.6% total return for investors to rank in the 2nd percentile of the small-cap growth category, per Morningstar. The average small- cap growth fund that year earned a whopping 62.6% total return. In April 2000, RS Emerging Growth Fund closed to new investors. It has since fallen on hard times like so many pro-growth fund portfolios. If you look at this fund's long-term track record, however, you can see that it has added value. For the 10-year period as of September 30, 2002, Emerging Growth Fund returned 10.3% a year on average, a 1.3% advantage to the S&P 500 large- cap index and 3.3% better than the Russell Midcap Growth index. The fund's performance over the last ten years, which Callinan deserves partial credit, ranks it in the top quintile (20%) of the Morningstar small-cap growth category. If you seek small/mid-cap growth exposure today, you might want to consider one of the portfolios John Wallace manages is or co- manager of. We like the RS Value + Growth Fund (RSVPX), though Wallace replaced former fund manager Ron Elijah in mid-2001, so you can't attribute the fund's track record to him. It invests primarily in equity securities of mid- and large-cap companies (market caps over $1.5 billion) and has a multi-cap growth bias overall. Those seeking specific exposure to mid- and small-cap growth stocks may consider the RS Diversified Growth Fund or RS MidCap Opportunities Fund. The Diversified Growth Fund (RSDGX) invests primarily in small-growth companies but can invest some assets in large companies and attempts to be fairly diversified across industry sectors (hence it's name). Like RS Emerging Growth Fund, the RS Diversified Growth Fund put up great numbers from 1997 to 1999, including a 150.2% return in 1999. Like its small-cap growth sibling, the Diversified Growth Fund has since struggled in the market correction. Again, it is helpful to look at this fund's track record over a longer period. For the trailing 5-year period through October 29, 2002, Wallace, Seabern and their team of analysts produced a 4.6% average total return for investors. That beat the S&P 500 index by an average of 4.0% a year and the Russell 2000 Growth index by 12.5% a year, ranking in the top 15% of the small-cap growth fund category per Morningstar. The RS Partners Fund (FSPFX), run by Andy Pilara, is the value- driven product we like the best. In that fund, Pilara normally invests in stocks of companies with market caps of $1.5 billion or less that the firm believes are undervalued. However, note that Morningstar has put the fund in its small-cap growth style box since 2001, a bit of a contradiction to its value-oriented approach. Morningstar also compares the Partners Fund against "world stock" funds, with roughly 16% of stock assets invested abroad, per the latest fund report. So, it is not your typical small-cap value product. Pilara's undervalued approach has produced superior returns over the last three years. According to Morningstar, the fund sports an annualized total return of 15.63% for the 3-year period ended October 29, 2002, ranking in the best 1% of the world stock fund category. That average return was 28.6% better than the average return generated by the MSCI World index. The fund's annualized return of positive 0.8% over the past five years just missed the first quartile within the category and represented a 5.7% return advantage to the MSCI World benchmark. One of Pilara's other charges, RS Global Natural Resources Fund, has a positive YTD total return of 11.5% as of October 29, 2002. Conclusion It should be noted that some of the RS growth funds, such as the Emerging Growth and Diversified Growth portfolios, have greater- than-average volatilities. Like Alger, Janus, Berger, and other pro-growth managers, these growth-driven funds will run with the bulls and tank with the bears. Accordingly, they're geared more to risk-tolerant investors who can stomach such NAV fluctuations. Even RS Partners Fund has fallen into Morningstar's small-growth style box, so it seeks value opportunities in growth equity turf, both domestically and abroad. Those with less cast-iron stomachs may prefer Pilara's undervalued growth style to the other growth funds offered by Robertson Stephens. Its risk or volatility has been closer to that of the stock market (S&P 500 index as proxy). Because the RS growth funds and RS value funds have outperformed at different times, you may want to hedge your bets by investing in one growth product and one value product to obtain an overall "blend" style. For more information, log on to www.rsfunds.com. Steve Wagner Editor, Mutual Investor email@example.com *********** OPTIONS 101 *********** Important Changes in the VIX by Mark Phillips mphillips@OptionInvestor.com Those of you that have been following my rambling discourse on the VIX over the past month already know that we've seen 3 months of unprecedented high levels of volatility in the markets. I've penned a couple of articles recently trying to ascertain what the VIX might be trying to tell us about what is happening, and more importantly, what might be about to happen. Since I don't want to rehash our prior discussions today, if you're just tuning in, be sure to check out the prior articles in this series. Looking For Odd Clues What's Wrong With The VIX? I was looking for the VIX to break out of its recent 39-51 range to give some sort of indication as to whether to favor the upside or downside for the broad market. Remember that historically, a high VIX (above 30) has been a time to buy, while a low VIX (below 20) has been a signal to sell. Needless to say, those simple rules haven't provided much useful guidance over the past 3 months, as the VIX has stubbornly remained above the 30 level since the first week in July! Granted, my VIX charts only go back to 1994, limiting my field of view to bull market conditions, but late 1998 is the only other time period that showed sustained high volatility. And that period of VIX greater than 30 'only lasted for a little less than 2 months. So I continue to believe that we are in uncharted territory here. In the past few months, we've had several instances where the VIX has spiked over 50, and we have had a couple of explosive rallies off the lows, the first one amounting to about 1545 DOW points and the second one delivering 1350 points so far. In all that time, the VIX has not cracked the 30 level. What could this strange behavior be telling us? Simply put, it tells us that option sellers are much more unsure of themselves (and the markets) are demanding a much fatter premium before they are willing to write those options. That's what the VIX always measures -- the degree of uncertainty or fear that exists in the marketplace at any given point in time. By historical measures, we really are in uncharted territory, but that doesn't mean we can't use the tools we are familiar with to start charting this unfamiliar land in which we find ourselves. That is what I attempted to do in the prior two articles, and the way things have shaped up in the past week, it looks like we might have stumbled onto something useful. Things started getting interesting last Thursday, with the VIX falling to the 38 level intraday, hinting perhaps that some of the fear was dissipating. But the action really heated up on Friday with the strong rally into the closing bell that drove the VIX down near the 36 level. I went into the significance of that move in the LEAPS commentary last weekend, and if you're interested in catching up, you can read all about it HERE. The way I see it, something fundamental changed in the market late last week that caused a portion of that 'fear premium' to disappear EVEN BEFORE the strong afternoon rally. That hypothesis has been put to the test this week and I think it has held up rather well. Comparison of S&P 100 Index (OEX) To VIX - 30 Minute Interval Isn't it interesting how the VIX and OEX diverged late last week, and that divergence has continued this week. While the VIX found a floor (support) near 38 on Thursday, that level provided resistance on Tuesday, despite the fact that the OEX actually traded at a LOWER level than it did last Thursday and Friday. Certainly we would have expected the VIX to trade a bit lower on Monday, with the OEX moving slightly above the highs of last Thursday, but if everything had remained the same, the sharp selloff yesterday 'should' have driven the VIX back above 40. That didn't happen, and so we can reasonably conclude that something significant has changed. I believe what has changed is that option writers are not as uncertain about the direction of the market as they were a week ago. That doesn't mean that I think we have a strong rally ahead of us. What it means is that those who are writing the options feel the risks of a dramatic selloff in the near term have been reduced. Perhaps it is expectations of an interest rate cut by the Fed, or maybe they are looking at the seasonal pattern where the markets have a tendency to put in a bottom in late October/early November. It could even be related to expectations of the markets behaving better heading into the mid-term election. One thing that I know isn't responsible is an improving economic picture. The abysmal Consumer Confidence numbers yesterday bear that out, and yet the markets rebounded and the VIX remained fairly muted, even on the early selloff. Monday's low print on the VIX was 34.20, which marked its lowest level since August 28th. And turning once again to the Point and Figure chart on the VIX, the column of O's on the current Sell signal extended to 15 O's. Performing a quick vertical count calculation produces a 'target' of 19 for the VIX. Don't for a minute think that I give that target much credence. I think the likelihood of the VIX moving into the lower end of its historically normal range in the next 30-60 days is remote, at best. But we can't argue with the fact that the current VIX chart is the most equity-friendly it has been since late August. I would need to see the VIX moving back above 42 before I would be concerned that the 'equity-friendly' tone had appreciably changed for the near term. Let's turn our attention to the bigger picture on the VIX and where it might be headed. Recently I've had several readers that have asked if perhaps the VIX is changing its spots and moving into a new permanently higher range. It's certainly a valid question, given the high levels of volatility we have seen over the past couple years. But there just isn't enough data to make that sort of assessment. Looking at a monthly chart of the VIX for the period of time for which Qcharts provides data shows periodic excursions out of the 20-30 range, from which it always reverts back to the mean. To be sure, this is the longest excursion out of the range that we can see on this chart. Monthly Chart of the VIX You can see in the chart above that the floor near 20 is very consistent for the VIX range, while we occasionally get excursions to the upside that become rather extended both in terms of magnitude and duration. While this chart is limited to looking back to mid-1997, I did manage to pull up a chart of the VIX on BigCharts.com that goes back to 1993. As you can see, the VIX was confined to a much narrower range between 1993 until early 1997. Then the VIX broke into its current 20-30 range that we are familiar with. Weekly Chart of the VIX Going Back to 1993 So what would we need to see to make the statement that the VIX is moving into a permanently higher range? First off, we need to see the VIX come down and test the 30 level as support over a period of several months. We got that first test in August, and we might just get another test over the next few weeks. If we are going to label the VIX as having moved into a new, higher range, I would want to see from 3-5 successful rebounds from the vicinity of 30, without spending any significant time down in its historical 20-30 range. To make that determination, we're going to need more time. But if I had to hazard a guess, I would say the answer is no. I believe the VIX will eventually fall back into the range it has maintained over the past 5 years, although we will continue to have periodic excursions outside of that range. The one big wild card in the whole shooting match is the makeup of trading volume in the equity markets. I believe a big part of the recent rise in the VIX is due to the fact that a much larger percentage of overall trading volume is coming from the proliferation of hedge funds and program trading. I think this adds to the volatility and that is reflected in a higher VIX reading. If we remain in an environment that is dominated by this sort of trading, then I would say yes, it is possible that the VIX is moving to a higher range. But, even in that case, we are going to need to see the passage of a lot more time before we can make a definite determination of the new/old long-term range for the VIX. Until then, let's stick with what we know for sure. And that boils down to trading as we have, based on the historical observations and looking for important inflection points in the charts like what we have seen over the past week. I sure hope that helps! If you've got any questions on this topic, or another one that you'd like me to address in a future article, be sure to send me an email and I'll address them as time permits. For all the rest of you big kids out there (like me), be sure to have a Happy Halloween! Mark ************************Advertisement************************* If you trade options online, then you need an online broker that: offers true direct access to each option exchange offers stop and stop loss online option orders offers contingent option orders based on the price of the option or stock offers online spread order entry for net debit or credit offers fast option executions PreferredTrade offers these online option trading features and more; call 1-888-889-9178 or click for more information. http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** *********************** SWING TRADER GAME PLANS *********************** Getting Weaker The markets finished in the positive but the underlying strength was far from exciting. The afternoon rally was much weaker and could not hold the highs from earlier in the day. It was reported that equity funds saw outflows of -$16.1 billion in September and it was the fourth month in a row for net withdrawals. All indications are that October has not changed and funds are still bleeding cash. To read the rest of the Swing Trader Game Plan Click here: http://www.OptionInvestor.com/itrader/indexes/swing.asp ************************Advertisement************************* _If you haven_t traded options online _ you haven_t really traded options,_ claims author Larry Spears in his new compact guide book: _7 Steps to Success _ Trading Options Online_. Order today and save 25% (only $15) by clicking on PreferredTrade and clicking on the link to the book on its home page. http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** ******************* 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. To subscribe you may go to our website at www.OptionInvestor.com and click on "subscribe" to use our secure credit card server or you may simply send an email to "Contact Support" with your credit card information,(number, exp date, name) or you may call us at 303-797-0200 and give us the information over the phone. You may also fax the information to: 303-797-1333 ********** DISCLAIMER ********** Please read our disclaimer at: http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html ************************************************************** ADVERTISING INFORMATION For more information on advertising in OptionInvestor Newsletter, or any Premier Investor Network newsletter please contact: Contact Support
The Option Investor Newsletter Wednesday 10-30-2002 Copyright 2002, All rights reserved. 2 of 2 Redistribution in any form strictly prohibited. In Section Two: Stop Loss Updates: TRMS, HIG Dropped Calls: None Dropped Puts: None Play of the Day: Call - TRMS Big Cap Covered Calls & Naked Puts: Updated on the site tonight: Market Watch Market Posture ************************Advertisement************************* Quit paying fees for limit orders or minimum equity • No hidden fees for limit orders or balances • $1.50 /contract (10+ contracts) or $14.95 minimum. • Zero minimum deposit required to open an account • Free streaming quotes Go to http://www.optionsxpress.com/marketing.asp?source=oetics24 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ************************************************************** ************************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.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** *********************************************************** Stop-Loss Adjustments *********************************************************** TRMS - call Adjust from $48 up to $50 HIG - put Adjust from $49.50 down to $45.00 *********************************************************** DROPS *********************************************************** calls ^^^^^ none puts ^^^^ none ************************Advertisement************************* _If you haven_t traded options online _ you haven_t really traded options,_ claims author Larry Spears in his new compact guide book: _7 Steps to Success _ Trading Options Online_. Order today and save 25% (only $15) by clicking on PreferredTrade and clicking on the link to the book on its home page. http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** ********************** PLAY OF THE DAY - PUT ********************** TRMS -Trimeris - $53.35 +1.50 (+2.11 for the week) Company Summary: Trimeris, Inc. is a biopharmaceutical company engaged in the discovery and development of novel therapeutic agents for the treatment of viral disease. The core technology platform of fusion inhibition is based on blocking viral entry into host cells. Trimeris has two anti-HIV drug candidates in clinical development. FUZEON, currently in Phase III clinical trials, is the most advanced compound in development. A New Drug Application (NDA) and Marketing Authorisation Application (MAA) have been submitted for FUZEON with the US FDA and the EU EMEA, respectively. Trimeris' second fusion inhibitor product candidate, T-1249, has received fast track status from the FDA and is in Phase I/II clinical testing. Trimeris is developing FUZEON and T-1249 in collaboration with F. Hoffmann-La Roche. (source: company release) Most Recent Write Up: Trimeris has re-tested support at $50 several times this week, but has rebounded to put together a series of higher lows the last three days. It also broke through $52 intraday, a level it hasn't seen since May. The stock traded as high as $52.28 this morning, before pulling back with the rest of the broader markets. It found support, however, at $51 and then made another run at $52 into the close. While it was unable to hold this level, the fact is that it continues to set higher highs. It also added another box the point and figure chart. The recent $51 box constituted a spread triple top breakout, which carries with it the possibility of a bull trap. A bull trap is a one-box breakout on a triple top, followed by a quick reversal down. The trade of $52 got us past this possibility and also broke above the previous top on the bearish resistance line. The current bullish vertical count for TRMS is $77, but achieving that count will likely depend on the success of the company's new HIV drug, which is currently under FDA priority status review, and should receive a decision by March 16. New entries can look for intraday support over $52. Place stops at $48.00. Why This Is Our Play of the Day: Trimeris has been moving sideways the last two weeks, after finding new support over $50. The stock has pulled back on several occasions, before taking runs at successively higher levels. TRMS experienced a spread triple top point and figure breakout at $51, then tacked on another box at $52 to get us past the possibility of a bull trap. The next barrier was the $53.20 mark, which had served as intraday resistance all the way back in May. The stock not only traded through that level intraday, but closed above it today, at $53.35. A look at the weekly chart of TRMS shows a steady series of higher lows, along an ascending trendline from September 2001. The last time the stock closed above $53 was in January of 2001 and the next level of resistance looks like $55, followed by $57.50. While we wouldn't normally pick a stock with $1.65 to the next resistance level as our play of the day, this breakout has come as the company is getting close to market with its new HIV drug. Rather than a possible $1 billion a year in revenue being speculative, and years away, we are now only a few months from the FDA's March 16 decision deadline. We feel this time frame can get the stock rolling, now that it has hit another relative high. Traders may want to look for a pullback above $52 for ideal entry, as that was the most recent resistance level the last several days. It will also prove to us that prior resistance has now become support, as well as maximizing profits. Momentum traders can look for intraday support over $53 as a sign to initiate long positions. BUY CALL NOV-50*RQM-KJ OI= 1127 at $4.90 SL=2.50 BUY CALL NOV-55 RQM-KK OI= 337 at $1.70 SL=0.75 BUY CALL DEC-50 RQM-LJ OI= 20 at $7.00 SL=3.50 BUY CALL DEC-55 RQM-LK OI= 7 at $3.50 SL=1.75 Average Daily Volume = 523 k ************************Advertisement************************* If you trade options online, then you need an online broker that: offers true direct access to each option exchange offers stop and stop loss online option orders offers contingent option orders based on the price of the option or stock offers online spread order entry for net debit or credit offers fast option executions PreferredTrade offers these online option trading features and more; call 1-888-889-9178 or click for more information. http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** ************** MARKET POSTURE ************** Non-Committal To Read The Rest of The OptionInvestor.com Market Watch Click Here http://www.OptionInvestor.com/marketposture/mp_103002.asp ************ MARKET WATCH ************ Leaning Bearish To Read The Rest of The OptionInvestor.com Market Watch Click Here http://members.OptionInvestor.com/watchlist/wl_103002.asp ******************* 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. To subscribe you may go to our website at www.OptionInvestor.com and click on "subscribe" to use our secure credit card server or you may simply send an email to "Contact Support" with your credit card information,(number, exp date, name) or you may call us at 303-797-0200 and give us the information over the phone. You may also fax the information to: 303-797-1333 ********************************************* SPREADS, COMBINATIONS & PREMIUM-SELLING PLAYS ********************************************* Optimistic Investors Buy The Dip! By Ray Cummins Stocks moved higher Wednesday after some positive comments from Big Blue's (IBM) CEO, which led to a rally in computer hardware issues. The Dow Industrial Average advanced 58 points to 8,427, buoyed by gains in blue-chip computer, financial and drug components. The NASDAQ also surged, up 26 points to 1,326 as networking companies soared higher on reassuring revenue comments from France's Alcatel (NYSE:ALA). Telecom, semiconductor and Internet stocks also rose. In the broader market groups, oil shares rebounded from a recent slump and utility, biotechnology, airline, and banking issues were generally higher. Retail stocks under-performed after a downgrade of Wal-Mart (NYSE:WMT). The Standard & Poor's 500 Index climbed 8 points to 890. Trading volume came in at 1.4 billion on the NYSE and at 1.6 billion on the technology exchange. Advancers outpaced decliners by roughly 5 to 3 on both the Big Board and the NASDAQ. Treasury issues retreated amid gains in the equity markets and the Fed's announcement of a quarterly refunding auction of $22 billion in 5-year treasury notes and $18 billion in 10-year treasury notes. The 10-year note slumped 6/32 to yield 3.96% while the 30-year bond slipped 1/4 to yield 5.03%. *************** SUMMARY OF CURRENT POSITIONS - AS OF 10/29/02 *************** The following summary is a reasonable account of the positions previously offered in this section. However, no representation is being made as to the actual performance of a position and in fact, there are frequently large differences between the summary results and those of actual traders, due to the variety of ways in which each play can be opened, closed, and/or adjusted. In addition, the summary might not be completely representative of the manner in which the average trader would react to changing conditions in a position and to the options market in general. The play commentary (when provided) is simply a service to help new traders understand when positions might be opened and closed. In most cases, actions taken based on the commentary would be far too late to be effective, thus it is not intended as a substitute for personal trade management nor does it replace your duty to diligently monitor and manage the positions in your portfolio. Naked Puts Stock Strike Strike Cost Current Gain Potential Symbol Month Price Basis Price (Loss) Mo. Yield GILD NOV 25 24.35 33.87 $0.65 7.03% TARO NOV 27 26.90 34.20 $0.60 5.41% AMGN NOV 40 39.40 48.68 $0.60 5.34% ATH NOV 65 63.80 65.58 $1.20 5.16% * ERTS NOV 55 54.30 63.45 $0.70 4.50% FRX NOV 90 88.20 98.75 $1.80 5.14% INVN NOV 22 22.10 35.30 $0.40 5.46% OVER NOV 22 22.10 27.64 $0.40 5.98% TRMS NOV 40 39.35 51.85 $0.65 5.61% WMT NOV 50 49.25 56.47 $0.75 4.27% AZO NOV 75 74.25 84.30 $0.75 4.30% CCMP NOV 35 34.10 43.23 $0.90 11.63% CEPH NOV 40 39.40 50.60 $0.60 7.02% CTSH NOV 55 54.40 67.05 $0.60 5.56% INVN NOV 25 24.70 35.30 $0.30 5.38% SLM NOV 95 93.90 102.09 $1.10 4.55% SRCL NOV 30 29.70 36.35 $0.30 4.70% Anthem (NYSE:ATH) is a candidate for early exit as the issue has fallen below a recent technical support area. Naked Calls Stock Strike Strike Cost Current Gain Potential Symbol Month Price Basis Price (Loss) Mon. Yield KSS NOV 65 65.90 58.25 $0.90 5.79% SIAL NOV 50 50.75 44.84 $0.75 5.07% BZH NOV 75 75.90 66.15 $0.90 6.61% DHR NOV 70 70.85 57.86 $0.85 6.73% SPW NOV 52 52.85 41.00 $0.35 5.09% Put-Credit Spreads Stock Gain Symbol Pick Last Month L/P S/P Credit C/B (Loss) Status INTU 45.90 49.40 NOV 35 40 0.60 39.40 $0.60 Open MME 38.08 37.50 NOV 30 35 0.55 34.45 $0.55 Closed HCA 51.18 48.18 NOV 45 48 0.30 47.20 $0.30 Closed UNH 97.98 94.68 NOV 85 90 0.65 89.35 $0.65 Open EBAY 63.51 61.18 NOV 50 55 0.45 54.55 $0.45 Open FPL 57.52 59.05 NOV 45 50 0.40 49.60 $0.40 Open RKY 69.30 69.59 NOV 60 65 0.75 64.25 $0.75 Open Mid-Atlantic Medical Services (NYSE:MME) and HCA Inc (NYSE:HCA) both succumbed to the selling pressure in the health services segment thus conservative traders should consider exiting these position to lock-in profits and/or limit losses. Also, traders should monitor United Health Group (NYSE:UNH) for a move below $92, which would suggest the beginning of a new bearish trend. Call-Credit Spreads Stock Gain Symbol Pick Last Month L/C S/C Credit C/B (Loss) Status AHC 62.35 49.68 NOV 75 70 0.60 70.60 $0.60 Open HET 44.70 42.73 NOV 55 50 0.50 50.50 $0.50 Open TLM 35.81 35.08 NOV 45 40 0.50 40.50 $0.50 Open TEVA 64.90 71.05 NOV 75 70 0.90 70.90 ($0.15) Closed CB 58.53 54.85 NOV 70 65 0.60 65.60 $0.60 Open RCII 44.16 44.96 NOV 55 50 0.50 50.50 $0.50 Open The previously closed position in H&R Block (NYSE:HRB) is now positive (Murphy's Law!) and today's move to a recent high in Teva Pharma (NASDAQ:TEVA) suggests further upside activity in the issue. Conservative traders should consider exiting the position to limit losses. Credit Strangles Stock Strike Strike Cost Current Gain Potential Symbol Month &Price Basis Price (Loss) Mon. Yield CDWC NOV 55C 56.10 48.87 $1.10 7.51% CDWC NOV 40P 38.85 48.87 $1.15 9.04% GILD NOV 40C 40.50 33.87 $0.50 5.77% GILD NOV 27P 26.90 33.87 $0.60 7.46% CCR NOV 55C 55.75 50.55 $0.75 6.09% CCR NOV 40P 39.50 50.55 $0.40 5.05% Synthetic Positions: Stock Pick Last Position Credit C/B M/V Status THC 51.55 39.25 NOV55C/46P 0.00 46.62 0.10 Closed ANSI 37.38 31.40 NOV40C/35P 0.10 34.90 0.80 Closed The previously closed position in Expedia (NASDAQ:EXPE) was big winner during the market downturn and Advanced Neuromodulation (NASDAQ:ANSI) offered an acceptable early-exit profit (on 10/11) when the issue rallied to a new high at $39.01. However, both ANSI and Tenet Healthcare (NYSE:THC) should have been closed when they broke below recent (bullish) trend-lines. Questions & comments on spreads/combos to Contact Support *************** NEW POSITIONS 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. The positions with *** will be included in the weekly summary. Those with "TS" (Target-Shoot) are below our minimum monthly return but may offer a favorable entry price with a limit order, due to the daily volatility of the underlying issue. *************** BULLISH PLAYS - Premium Selling All of these issues have robust option premiums and relatively favorable technical indications. However, current news and market sentiment will have an effect on these stocks, so review each play thoroughly and make your own decision about its future outcome. *************** CCMP - Cabot Microelectronics $45.84 *** Premium Selling! *** Cabot Microelectronics (NASDAQ:CCMP) is a global supplier of high performance polishing slurries used in the manufacture of advanced integrated circuit (IC) devices, within a process called chemical mechanical planarization (CMP). CMP is a polishing process used by IC device manufacturers to planarize or flatten many of the multiple layers of material that are built upon silicon wafers and necessary in the production of advanced ICs. Planarization is a polishing process that levels, smoothes, and removes the excess material from the surfaces of these layers. CMP slurries are liquid formulations that facilitate and enhance this polishing process and generally contain engineered abrasives and proprietary chemicals. CMP enables IC device manufacturers to produce smaller, faster and more complex IC devices with fewer defects. CCMP - Cabot Microelectronics $45.84 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 35 UKR WG 2,344 0.30 34.70 5.9% *** SELL PUT NOV 40 UKR WH 1,498 1.05 38.95 15.3% SELL PUT NOV 45 UKR WI 1,798 2.50 42.50 24.4% *************** CDWC - CDW Computer Centers $51.80 *** A Big Day! *** CDW (NASDAQ:CDWC), ranked #414 on the Fortune 500, is a leading provider of technology solutions for businesses, government agencies and educational institutions nationwide. CDW is a principal source of technology products and services including top name brands such as Cisco, Compaq, Computer Associates, Hewlett-Packard, IBM, Intel, Microsoft, and Toshiba. The firm distributes contracts to various end users for both customized and standardized on-site services supplied directly by providers such as HP Services and Unisys and for training programs provided by firms such as KnowledgeNet and Productivity Point International. CDWC was founded in 1984 as a home-based business and today employs 2,800 coworkers whose efforts generated net sales of $4 billion in 2001. CDW's direct model offers one-on-one relationships with its knowledgeable account managers; purchasing by telephone, fax, the company's award-winning site or customized CDW@work(TM) extranets; custom solutions and daily shipping; flexible financing solutions; and pre- and post-sales technical support, with factory-trained and A+ certified technicians on staff. CDWC - CDW Computer Centers $51.80 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 45 DWQ WI 1,328 0.60 44.40 7.9% *** SELL PUT NOV 50 DWQ WJ 419 1.40 48.60 13.1% *************** COCO - Corinthian Colleges $39.72 *** Solid Earnings! *** Corinthian Colleges (NASDAQ:COCO) is one of the largest for-profit post-secondary education companies in the United States. As of September 30, 2002, the company operated 64 colleges in 21 states including 16 in California and 12 in Florida. Upon the opening of the previously announced four new branch campuses in Dallas (2), Austin (1), Texas, and Norcross (1), Georgia, the firm will operate 68 colleges in 21 states. Corinthian serves the large and growing segment of the population seeking to acquire new, career-oriented education to become more qualified and marketable in today's increasingly demanding workplace environment. COCO - Corinthian Colleges $39.72 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 32.5 UCS WZ 187 0.35 32.15 7.4% *** SELL PUT NOV 35 UCS WG 381 0.75 34.25 12.0% *************** GILD - Gilead Sciences $34.60 *** Still In A Range! *** Gilead Sciences (NASDAQ:GILD) is an independent biopharmaceutical company that discovers, develops and commercializes therapeutics to advance the care of patients suffering from life-threatening diseases. The company has five products that are marketed in the United States and in other countries worldwide. These are Viread, a drug for treating HIV infection; AmBisome, a drug for treating and preventing life-threatening fungal infections; Tamiflu, a drug for treating and preventing influenza; Vistide, a drug for treating cytomegalovirus (or CMV) retinitis in AIDS patients, and DaunoXome, a drug for treating AIDS-related Kaposi's sarcoma. GILD - Gilead Sciences $34.60 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 30 GDQ WF 2,584 0.45 29.55 8.8% *** SELL PUT NOV 32.5 GDQ WZ 546 1.00 31.50 14.9% *************** KLAC - KLA-Tencor $36.28 *** Semiconductor Rally! *** KLA-Tencor (NASDAQ:KLAC) is a supplier of process control and yield management solutions for the semiconductor and related microelectronics industries. The firm's comprehensive portfolio of products, software, analysis, services and product expertise is designed to help integrated circuit (IC) manufacturers manage yield throughout the entire wafer fabrication process, from research and development to final mass production yield analysis. KLAC - KLA-Tencor $36.28 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 30 KCQ WF 20,160 0.50 29.50 10.9% *** SELL PUT NOV 35 KCQ WG 5,322 1.65 33.35 21.1% *************** NBIX - Neurocrine Biosciences $44.28 ** Earnings Due! *** Neurocrine Biosciences (NASDAQ:NBIX) develops and intends to commercialize drugs for the treatment of neurologic and endocrine system-related diseases and disorders. The company's product candidates address a number of worldwide pharmaceutical markets, including insomnia, anxiety, depression, cancer, diabetes and multiple sclerosis. The company has approximately 15 products in various stages of research and development, including 7 programs in clinical development. The company's lead clinical development program is a drug for the treatment of insomnia which is being evaluated in Phase III clinical trials. The company's earnings are due after the market closes today (10/30/02). NBIX - Neurocrine Biosciences $44.28 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 35 UOT WG 647 0.40 34.60 8.2% *** SELL PUT NOV 40 UOT WH 1,496 1.05 38.95 13.8% *************** NVLS - Novellus Systems $32.33 *** Chip Sector Favorite! *** Novellus Systems (NASDAQ:NVLS) manufactures, markets and services semiconductor processing equipment. The company's products are comprised of advanced systems used to deposit thin conductive and insulating films on semiconductor devices, as well as equipment for preparing the chip's surface before these deposition processes. Novellus is a supplier of high productivity deposition and surface preparation systems used in the fabrication of integrated circuits. Chemical Vapor Deposition systems use chemical plasmas to deposit all of the dielectric (insulating) layers and certain of the metal (conductive) layers on the surface of a semiconductor wafer. The Physical Vapor Deposition systems are used to deposit conductive metal layers by sputtering metallic atoms from the surface of a target source via high DC power. Electrofill systems are used for depositing copper conductive layers in a dual damascene design architecture using an aqueous solution. NVLS - Novellus Systems $32.33 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 27.5 NLQ WY 1,320 0.45 27.05 10.0% *** SELL PUT NOV 30 NLQ WF 4,156 1.00 29.00 16.4% *************** QLGC - Qlogic $35.45 *** On The Rebound! *** QLogic (NASDAQ:QLGC) designs and supplies unique storage network infrastructure components and software for server and storage subsystem manufacturers. The company's products are based on SCSI, iSCSI, Fibre Channel and Infiniband standards. The firm is an end-to-end supplier of Fibre Channel network infrastructure components that aid in the transfer and acquisition of data within the SAN. Products include its SANblade HBAs, SANbox Fibre Channel Switches and SANsurfer Tool Kit management software. QLogic is the only HBA vendor to support SCSI, Internet Protocol, Virtual Interface and FICON protocols with the same Fibre Channel HBA. In addition, the company designs and supplies controller chips used in hard drives and tape drives as well as enclosure management and baseboard management chip solutions that monitor the health of the physical environment within a server or storage enclosure. QLGC - Qlogic $35.45 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 27.5 QLC WY 2,565 0.30 27.20 7.7% *** SELL PUT NOV 30 QLC WG 1,409 0.50 29.50 10.3% SELL PUT NOV 32.5 QLC WZ 2,170 0.95 31.55 14.8% *************** SRCL - Stericycle $35.42 *** Trading Range? *** Stericycle (NASDAQ:SRCL) is a leading provider of waste management services in the United States. Stericycle operates on a regional basis and internationally, providing waste collection, treatment, and disposal services. The company also has a fully integrated, national medical waste management network. Stericycle's network includes 36 treatment/collection centers and 94 additional transfer and collection sites. The firm uses the network to provide medical waste collection, transportation and treatment and many related consulting, training and education services and products. The firm's Stericycle's treatment technologies include its proprietary electro-thermal-deactivation system (ETD), as well as traditional methods, such as autoclaving and incineration. SRCL - Stericycle $35.42 PLAY (sell naked put): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL PUT NOV 30 URL WF 1,074 0.25 29.75 5.3% *** SELL PUT NOV 32.5 URL WZ 1,701 0.55 31.95 8.9% *************** BULLISH PLAYS - Credit Spreads *************** TRMS - Trimeris $53.35 *** New 18-Month High! *** Trimeris (NASDAQ:TRMS) is engaged in the discovery and development of fusion inhibitors, a new class of antiviral drug treatments. Fusion inhibitors impair viral fusion, a complex process by which viruses attach to and penetrate host cells. If a virus cannot enter a host cell, the virus cannot replicate. By inhibiting the fusion process of particular types of viruses, the company's drug candidates under development offer a novel mechanism of action with the potential to treat a variety of medically important viral diseases. Trimeris is a development stage company. The firm has invested a significant portion of its time and financial resources in the development of T-20, its lead drug candidate. If Trimeris is unable to commercialize T-20, its business will be significantly harmed. TRMS - Trimeris $53.35 PLAY (conservative - bullish/credit spread): BUY PUT NOV-45.00 RQM-WI OI=84 A=$0.60 SELL PUT NOV-50.00 RQM-WJ OI=31 B=$1.05 INITIAL NET-CREDIT TARGET=$0.50-$0.55 POTENTIAL PROFIT(max)=11% B/E=$49.50 *************** UN - Unilever $62.81 *** Favorable Earnings! *** Unilever N.V. (NYSE:UN) is a worldwide supplier of consumer goods in foods, household care and personal product categories. Since January 2001, the company's operations have been organized into two major global divisions, Foods and Home & Personal Care. This structure allows for improved focus on its division's activities at both the regional and global levels. These global divisions' operations are organized into businesses on a regional basis, with the exception of DiverseyLever and Prestige within Home & Personal Care, and the global businesses of Ice Cream and Frozen Foods and Foodservice within the Foods Division. UN - Unilever $62.81 PLAY (conservative - bullish/credit spread): BUY PUT NOV-55.00 UN-WK OI=256 A=$0.25 SELL PUT NOV-60.00 UN-WL OI=822 B=$0.70 INITIAL NET-CREDIT TARGET=$0.50-$0.55 POTENTIAL PROFIT(max)=11% B/E=$59.50 *************** BEARISH PLAYS - Naked Calls Based on analysis of option pricing and the underlying stock's technical background, these positions meet our fundamental criteria for bearish "premium-selling" strategies. Each issue has robust option premiums, a well-defined resistance area and a high probability of remaining below the target strike prices. As with any recommendations, these positions should be carefully evaluated for portfolio suitability and reviewed with regard to your strategic approach and personal trading style. *************** GSK - GlaxoSmithKline $37.68 *** Trading Range? *** GlaxoSmithKline (NYSE:GSK) is a research-based pharmaceutical and healthcare company that is engaged in the creation and discovery, development, manufacture and marketing of pharmaceutical products, vaccines, over-the-counter medicines and health-related consumer products. GSK is committed to making products aimed at improving the quality of human life and is active in four major therapeutic areas: anti-infectives, central nervous system, respiratory and gastro-intestinal/metabolic. In addition, GlaxoSmithKline has a growing portfolio of oncology products. GSK - GlaxoSmithKline $37.68 PLAY (conservative - sell naked call): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL CALL NOV 42.5 GSK KV 2,334 0.25 42.75 4.5% *** SELL CALL NOV 40 GSK KH 2,253 0.50 40.50 7.2% *************** OHP - Oxford Health $36.63 *** Negative Earnings Report! *** Oxford Health Plans (NYSE:OHP) is a healthcare company providing health benefit plans in New York, New Jersey and Connecticut. The company's product line includes its point-of-service plans, the Freedom Plan and the Liberty Plan, health maintenance organizations, preferred provider organizations, Medicare+Choice plans and also third-party administration of employer-funded benefit plans. The company offers its products through its HMO subsidiaries and also through Oxford Health Insurance, a health insurance subsidiary. OHP - Oxford Health $36.63 PLAY (conservative - sell naked call): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL CALL NOV 42.5 OHP KV 5,178 0.20 42.70 4.2% *** SELL CALL NOV 40 OHP KH 878 0.60 40.60 9.6% SELL CALL NOV 37.5 OHP KU 429 1.30 38.80 16.4% *************** RYL - The Ryland Group $40.14 *** Post-Earnings Slump! *** The Ryland Group (NYSE:RYL) is a homebuilder and mortgage-finance company. The company has built more than 190,000 homes during its 34-year history. Ryland homes are available in more than 260 new communities in 21 markets across the United States. In addition, the Ryland Mortgage company has provided mortgage financing and related services for more than 165,000 homebuyers. The company's operations span all the significant aspects of the home-buying process, from design, construction and sale to mortgage financing, title insurance, settlement, escrow and homeowners insurance. RYL - The Ryland Group $40.14 PLAY (conservative - sell naked call): Action Month & Option Open Closing Cost Target Req'd Strike Symbol Int. Price Basis Mon. Yield SELL CALL NOV 45 RYL KI 458 0.40 45.40 6.6% *** SELL CALL NOV 42.5 RYL KV 2,136 1.00 43.50 12.9% *************** BEARISH PLAYS - Credit Spreads All of these positions are favorable candidates for "bear-call" credit spreads, based on the current price or trading range of the underlying issue and its recent technical history or trend. The probability of profit from these positions may be higher than other plays in the same strategy, due to disparities in option pricing. However, current news and market sentiment will have an effect on these issues, so review each play individually and make your own decision about its future outcome. *************** ATK - Alliant TechSystems $59.40 *** Earnings Due! *** Alliant Techsystems (NYSE:ATK) is a supplier of aerospace and defense products to the U.S. government, America's allies and major prime contractors. ATK also is a supplier of ammunition to federal and local law enforcement agencies and commercial markets. ATK designs, develops and produces rocket propulsion systems for a range of government and commercial applications. The company is also the sole supplier of the reusable solid rocket motors used on NASA's Civil Manned Space Launch Vehicles. ATK designs, develops and manufactures conventional munitions for the U.S. and allied governments as well as for commercial applications. The firm manufactures and develops small-caliber ammunition for the U.S. military, U.S. allies, federal and local law enforcement agencies, and commercial markets. The company's quarterly earnings are due on 10/31/02. ATK - Alliant TechSystems $59.40 PLAY (conservative - bearish/credit spread): BUY CALL NOV-70.00 ATK-KN OI=899 A=$0.35 SELL CALL NOV-65.00 ATK-KM OI=942 B=$0.80 INITIAL NET-CREDIT TARGET=$0.50-$0.55 POTENTIAL PROFIT(max)=11% B/E=$65.50 *************** HET - Harrah's Entertainment $41.93 *** Sector Slump! *** Founded 65 years ago, Harrah's Entertainment (NYSE:HET) is the most recognized and respected name in the casino entertainment industry. Harrah's operates 26 casinos in the United States primarily under the Harrah's name. Harrah's goal is to provide great customer service in exciting and entertaining environments to become the first choice for casino entertainment. Harrah's concentrates on building loyalty and value for its customers, shareholders, employees, business partners, and communities by being the most service-oriented, technology-driven, diversified company in gaming. Harrah's Code of Commitment seeks to promote responsible gaming among Harrah's customers, and identifies the firm's commitment to employees and the communities where Harrah's casinos are located. HET - Harrah's Entertainment $41.93 PLAY (conservative - bearish/credit spread): BUY CALL NOV-47.50 HET-KW OI=920 A=$0.25 SELL CALL NOV-45.00 HET-KI OI=1377 B=$0.50 INITIAL NET-CREDIT TARGET=$0.30-$0.35 POTENTIAL PROFIT(max)=14% B/E=$45.30 *************** ********** DISCLAIMER ********** Please read our disclaimer at: http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html ************************************************************** ADVERTISING INFORMATION For more information on advertising in OptionInvestor Newsletter, or any Premier Investor Network newsletter please contact: Contact Support
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