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Daily Newsletter, Wednesday, 02/05/2003

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The Option Investor Newsletter                Wednesday 02-05-2003
Copyright 2003, All rights reserved.                        1 of 2
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Repeat Performance
Futures Wrap: (See Note)
Index Trader Wrap: (See Note)
Weekly Fund Family Profile: Undiscovered Managers Funds
Options 101: What Do You Want?

Updated on the site tonight:
Swing Trader Game Plan: Nothing New

Posted online for subscribers at http://www.OptionInvestor.com
*******************************************************************
MARKET WRAP  (view in courier font for table alignment)
*******************************************************************
02-05-2003                   High    Low     Volume Advance/Decl
DJIA     7985.18 -  28.11   8152.53 7967.82   1675 mln  513/1116
NASDAQ   1301.50 -   4.65   1332.82 1299.35   1326 mln  473/703
S&P 100   426.01 -   2.83    435.62  425.19   totals    986/1819
S&P 500   843.59 -   4.61    861.63  842.11
RUS 2000  366.99 -   1.73    373.06  365.95
DJ TRANS 2156.42 +  11.04   2191.72 2145.08
VIX        36.81 +   0.11    37.51   35.52
VIXN       48.51 +   0.20    49.11   47.14
Put/Call Ratio 1.09
*******************************************************************

Repeat Performance
By Steve Price

That's it?  That's all we got from Colin Powell's carefully
prepared multimedia presentation?  No sell-off?  No Breakout?  I
had planned on writing an in depth analysis of the big move
following the U.N. presentation.  Certainly North Korea's
indication that it was reactivating its nuclear program would get
the market moving south, and it did.  But only until Colin Powell
began speaking. Once the speech began we started heading higher,
and held those gains throughout and after the presentation.

Powell essentially presented a slew of evidence regarding Iraq's
attempts at hiding weapons.  He showed aerial photographs of
cargo trucks leaving weapons sites two days before inspectors
arrived.  He played tapes of Iraqi officials talking about hiding
modified vehicles (believed to contain weapons facilities),
deleting references to nerve agents and cleaning up sites to get
rid of forbidden ammo.  He showed photos of sites being bulldozed
to remove evidence of chemical agents in the top soil.  He
outlined Hussein's links to terrorism and demonstrated how the
country is likely acquiring aluminum tubes for uranium
enrichment, rather than conventional weapons.  He cited inside
sources and Al Qaeda operatives.

When all was said and done, the reaction from other countries,
including Russia, China and France, was a big "whatever, dude."
There was no smoking gun and he said nothing to the extent that
the U.S was heading into Iraq with or without a coalition.
France, Germany and Russia all said that they want to give
inspectors more time to confirm U.S. allegations.  Of course,
that seems circular logic after the essence of Powell's speech
was that we weren't going to find a smoking gun because Iraq is
involved in a massive campaign to hide it.

We got a continued rally following the speech and ran right up
into the same resistance levels we have tested for the last week.
I like to look at the point and figure charts, which measure more
decisive moves, as they require a bigger swing to register
movement.  Only a full box move, which in the case of the Dow is
50 points, registers another tick.  It takes three of these moves
in an opposite direction to reverse a current bullish or bearish
column.   Those charts are now registering reversals on an almost
daily basis.  In fact, the Dow reversed lower yesterday, showing
us on the verge of a very bearish triple-bottom breakdown, which
was confirmed by a similar formation in the SPX.  In fact, that
bearish reversal turned out to be a pretty good buying
opportunity.  Prior to that, we had seen a reversal higher that
turned into a great shorting opportunity.  In fact each bullish
and bearish reversal we have gotten over the last week has
actually been an opportunity for a contrary trade.  A look at
these signals on the charts below just highlights how
schizophrenic the last couple weeks of trading have been.
Sentiment changes on an almost daily basis and today's rally
should be taken in that context.


60 minute Chart of Dow




Daily Chart of the Dow





Point and Figure Chart of the Dow




Of course, today's action is a little different in the timing.
We did get two big news/market events out of the way prior to
this move that had been weighing on the market over the past few
days.  Networking giant Cisco reported earnings after the bell
Tuesday.  This morning's reaction to its release carries more
weight than some of the movement we've seen previously, as it
followed releases from IBM and Microsoft that moved the markets
in a direction that continued for some length.  Those earnings
reports from Microsoft and IBM, which both beat estimates, but
were accompanied by cautious statements about 2003, sent the
markets into a free fall.  We had already begun to roll over from
highs around Dow 8800 when those reports came out, and the drop
picked up speed until finally settling into our current range
between Dow 7900 and 8200.  Cisco beat earnings, but missed
revenue forecasts.  It also said it was operating in the "most
challenging environment the information technology industry had
ever faced."  After selling off after the initial release, the
stock found buyers and traded higher today. One thing traders
need to be aware of is that a significant percentage of Cisco's
revenue came from government spending, masking a continuing soft
private IT spending environment.  Of course everything traded
higher following the Powell speech, which leads us to the next
point.

We have been waiting for Secretary Powell's presentation to give
us a clue as to when we might begin an Iraqi invasion.  As I've
said before, I remember a law school professor cautioning me,
when trying to decipher Supreme Court decisions, to look at what
they do, not what they say.  Applying that logic here, we
essentially got a repeat of what we've already seen.  The U.S.
presented evidence of Iraqi deceit. It did not say it was going
to invade with or without a coalition.  President Bush did
mention that possibility in his State of the Union address, but
the general feeling is that the U.S. will invade when it does get
a coalition, which it likely eventually will. There was nothing
to suggest we'd be invading prior the next weapons inspection
report on February 14. But in reality, we did nothing to change
the timeline today and that seems the most reasonable explanation
for post-speech the rally.

The boost we got across the board during the Powell speech was
certainly something to indicate that Iraq is still dominating the
news front.  However, after seeing the futures trading down
overnight following Cisco's release, most techs opened to the
upside this morning.  That was a full hour before the speech
began and gave us an indication that the response to Cisco's
comments wasn't similar to the one we got from IBM and Microsoft.
In the end, after the late day drop, Cisco finished unchanged at
$13.20. That could simply be because we have already sold off
from those reports and this one wasn't any worse, even if it was
disappointing.  It could also mean that we were seeing short
covering ahead of the Powell speech.  With so many factors to
figure in, we need to focus on what we saw.  In essence, it goes
back to the rule I mentioned earlier - what they did, not what
they said.

What they did was rally stocks right back to the same level of
resistance we have seen for the last week, where we stopped dead
in our tracks.  As I mentioned earlier, PnF reversals (which
these were) over the past week have simply provided an
opportunity for contrary action at support and resistance levels.
Traders entering short positions when the Dow hits 8150 and
buying in those positions when the Dow hits 7950 have had a
pretty good week.  It is a tight range to have to trade within,
but has worked like clockwork recently.  The intraday swing today
was a textbook example of selling strength/resistance and buying
weakness/support.  Of course, in an overall downward trending
market it feels much better to initiate the sale first.  However,
if we take the emotion out of it and simply trade what we see,
either side of the range has provided equally good opportunities.
The reversal we saw today, after topping out at Dow 8150 looked
pretty  powerful and bearish, but so did the bounce off of 7950
all the way back up yesterday afternoon and this morning.

One indication that war tensions eased after the Powell speech
came from the gold market, which bid higher once again this
morning, as it has the last couple of days leading up to the
speech.  The defensive play has never been more obvious than it
has recently, but gold bugs weren't feeling so bold this
afternoon. The gold futures traded all the way up to 388.90
before Powell spoke, then plummeting after the speech all the way
down to 371 after hours.

Chart of Gold Futures




Crude oil futures actually remained close to unchanged.  However,
there were reports that Venezuela, which has increased its
production recently, in spite of the ongoing general strike, had
also increased exports.  We also got news that OPEC production
had been higher than expected.  That news likely would have
dropped oil prices if not for the uncertainty surrounding action
in Iraq.  While gold futures reflected a lower state of alert,
oil prices did not.  They also did not reflect imminent, action,
however, remaining close to unchanged.

So what do we make of the future trading environment?  Today's
action was tough to decipher, as we got a bullish reaction, then
a decisive turnaround into the red by the close.  The Nasdaq
Composite, which took out support at 1300 intraday on Tuesday,
showed an initial gain of 27 points, before rolling over to
settle just above that 1300 level, with a close of 1301.   A
close beneath 1300 would be a good indication that the next drop
may not be bought.  However, until we see that next dip give way,
then we have to stick to what we have seen.

We can listen to the talking heads give us lessons all day on
television about where we are headed next.  However, the tone
certainly changes quickly from day to day. When we do finally get
a breakout, the general rule is that the longer the
consolidation, the bigger the breakout/breakdown.  Remember that
any upside breakout still has possible strong resistance at
former strong support around Dow 8300, along with a head and
shoulders neckline break in the 8200-8300 range.  On the
downside, there is little to support us before we hit the July
lows.  Trade what you see, because opinions have been wrong more
than right in recent sessions.


************
FUTURES WRAP
************

Check the Site Later Tonight For John’s Future Trader Article
http://members.OptionInvestor.com/futureswrap/fw_020503_1.asp

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

Check the Site Later Tonight For Jeff’s Index Trader Article
http://members.OptionInvestor.com/itrader/marketwrap/iw_020503_1.asp


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**************************
WEEKLY FUND FAMILY PROFILE
**************************

Undiscovered Managers Funds

This week we look at the Undiscovered Managers Funds, a family of
no-load funds created to provide individuals with the opportunity
to invest with some of the best, but still unknown, institutional
money managers.  The Undiscovered Managers Funds' management team
employs a rigorous screening process to identify sub-advisors for
the mutual funds.  Each mutual fund is designed to fit a specific
asset class, such as small-cap or mid-cap, and/or a certain style
of equity management, such as value or growth.

The Undiscovered Managers Funds come in Investor Class Shares and
Institutional Class Shares.  We'll focus of the four mutual funds
currently available in the retail market (in the form of Investor
Class Shares).  The Investor Class Shares of the UM Funds have no
front-end or back-end loads but have a minimum initial investment
of $10,000.  Additional information is available by calling their
toll free number at 1-888-242-3514, or by visiting them online at
www.undiscoveredmanagers.com.

Fund Overview

The Undiscovered Managers Funds offer four equity mutual funds in
the Investor Class Shares, which seek to provide long-term growth
of capital for shareholders.  Two of the funds are sub-advised by
Fuller & Thaler Asset Management, an investment firm that applies
principles based on behavioral studies in selecting stocks.  One
of the funds invests in growth stocks, while the other invests in
stocks possessing value characteristics.  Most companies that the
funds invest in are in the small-cap to mid-cap sectors (extended
market).

Below is a summary of the four equity fund products offered, and
their respective sub-advisors.  For their services, each advisor
receives a management fee, payable by the fund.

 UM Behavioral Growth Fund (UBRRX)
 Sub-Advisor: Fuller & Thaler Asset Management, Inc.

 UM Behavioral Value Fund (N/a)
 Sub-Advisor: Fuller & Thaler Asset Management, Inc.

 UM Small Cap Growth Fund (N/a)
 Sub-Advisor: Mazama Capital Management, Inc

 UM Small Cap Value Fund (USVRX)
 Sub-Advisor: J.L. Kaplan Associates, LLC

Mazama Capital Management serves as the investment sub-advisor to
the UM Small Cap Growth Fund.  This money manager seeks growth of
capital by investing primarily in stocks of growth companies with
market caps of $2.5 billion or less at the time of purchase.  The
sub-advisor in this case is willing to pay a higher price for the
stock at time of purchase, provided the stock has superior growth
characteristics.

J.L. Kaplan Associates serves as the sub-advisor for the UM Small
Cap Value Fund (USVRX).  This shop seeks long-term capital growth
by investing primarily in small-cap stocks, which are believed to
be undervalued at the time of purchase and have growth of capital
potential.  In selecting stocks, James L. Kaplan weighs things as
the company's earnings power and the value of company assets.

According to Morningstar, the UM Behavioral Growth Fund has a mid
cap growth style, while its sibling, UM Behavioral Value Fund has
a small cap blend style.  The UM Small Cap Growth Fund managed by
Mazama Capital Management and the UM Small Cap Value Fund managed
by J.L. Kaplan Associates have equity styles that are true to the
respective names.  Considering the relatively low correlation the
four funds have with the broad market indices, they probably best
serve a supporting role in one's long-term financial plan.

Fund Performance

Only two of the four funds available in the Investor Class Shares
are currently rated by Morningstar for risk-adjusted performance.
Relative to other mid-cap growth funds, UM Behavioral Growth Fund
has produced average total returns with average risk for a 3-star
overall rating from Morningstar.  The Investor Class Shares of UM
Behavioral Value Fund are relatively new and are not yet rated by
Morningstar.  The fund's Institutional Class Shares have a 3-star
overall rating as well.

In the five years that the UM Behavioral Growth Fund has existed
and in three years that the UM Behavioral Value Fund has been on
the market, Fuller & Thaler Asset Management has produced second
quartile type numbers.  Since category performance has been near
the middle of the pack, rather than towards the upper end of the
second quartile, Morningstar rates performance as merely average.

The UM Small Cap Growth Fund is relatively new too and isn't yet
rated by Morningstar.  In its short life, this fund has not done
too well, ranking in the bottom quartile of the small-cap growth
category, per Morningstar.  The UM Small Cap Value Fund has been
around longer and receives a Morningstar 4-star rating for risk-
adjusted return performance.  Relative to other small-cap value
funds, this fund has generated above average returns with below
average risk.

Below is a performance summary through February 4, 2003 for the
four Undiscovered Managers Funds.  For our purposes, we'll show
the performance numbers associated with the institutional class
shares of the UM Funds since they have the longer track records.

 1-Year Return (-21.2% S&P 500):
 -17.2% UM Behavioral Growth Fund (UBRLX) 12th Percentile
 -17.3% UM Behavioral Value Fund (UBVLX) 56th Percentile
 -35.2% UM Small Cap Growth Fund (USRLX) 84th Percentile
 -11.3% UM Small Cap Value Fund (USVLX) 41st Percentile

 3-Year Annualized Return (-14.7% S&P 500):
 -25.3% UM Behavioral Growth Fund (UBRLX) 67th Percentile
 + 1.0% UM Behavioral Value Fund (UBVLX) 40th Percentile
 + 8.1% UM Small Cap Value Fund (USVLX) 34th Percentile

 5-Year Annualized Return (-2.0% S&P 500):
 - 0.4% UM Behavioral Growth Fund (UBRLX) 42nd Percentile
 + 6.1% UM Small Cap Value Fund (USVLX) 11th Percentile

You can see that the two UM funds that have been around for five
years have both beaten the broad S&P 500 index, one slightly and
one by a wide margin.  The UM Small Cap Value Fund's 6.1% annual
equivalent rate of return over the past five years was also good
enough to rank in the top 11% of the Morningstar small-cap value
category.

Both value products have done relatively well for the past three
years relative to the broad indices and category peers while the
growth products have struggled.  The UM Behavioral Growth Fund's
17.2% loss over the past 12 months was less than the market, and
less than the average mid-cap growth fund.

Conclusion

Investors seeking long-term capital growth may wish to consider
one or more of the Undiscovered Managers Funds for the "explore"
portion of their investment portfolio.  While the UM Funds offer
individuals access to good, but not yet well-recognized managers,
only a couple of their mutual funds sport even a five-year track
record of performance.  For that reason, only the bold and brave
should probably venture over to the UM Funds.  Risk-adverse fund
investors may want to look elsewhere or to give the Undiscovered
Managers Funds more time to prove themselves.

Steve Wagner
Editor, Mutual Investor
steve@mutualinvestor.com


***********
OPTIONS 101
***********

What Do You Want?
by Mark Phillips
mphillips@OptionInvestor.com

In watching the intraday market action today, I was struck by
just how schizophrenic market participants are in this
news-driven environment.  Colin Powell's UN presentation seemed
to be just what the bulls wanted to hear (or just what the
shorts didn't want to hear) and by the end of the lunch hour,
the DOW was once again testing that 8150 level.  That was all
she wrote though, with negative comments from other members of
the UN council providing less than supportive comments and thus
began the long slide to the lows of the day, which is very close
to where the major indices sat as the closing bell rang.  The
question I would pose to the market is "What do you want?"

As soon as I posed that rhetorical question in my mind, I was
reminded of the quirky sci-fi series from the mid-1990's Babylon
5, in which the bad guys "The Shadows" continually posed the
question "What do you want?" in pursuit of individuals that
were willing to help them further their agenda.  What does this
have to do with the current market?  The Shadows continually
worked behind the scenes and were seldom seen, much like the
real drivers in this market are seldom seen.  While the media
attributed today's wild swings in the market to the ongoing
debate over Iraq, I think it is important to note that the
fundamentals and technicals continue to be the dominant force
at work, with sentiment providing for the bulk of the intraday
noise.

Everyone knows we're deep in the clutches of a nasty bear market,
and the primary reason is fundamentals.  Earnings are lousy, and
with the economy on the ropes, there just don't seem to be any
signs of that picture improving anytime soon.  That persistent
bearish picture is the dominant factor that has kept the broad
market posting one lower high after another throughout the past
year, as price action is continually pressured by the declining
200-dma.  More and more, the daily price action is being driven
by the action of the new momentum traders, the hedge funds.
These hedge funds capitalize on each shift in trader sentiment
caused by the latest news release, earnings report or political
statement.

The dominance of these funds' activity in the markets can be
seen on two fronts.  First, daily volume on both the NYSE and
NASDAQ continues to atrophy, allowing the same amount of hedge
fund trading volume to constitute a progressively larger portion
of total daily volume.  The other visible result of the dominance
of the hedge funds is that Buy and Sell programs seem to cover
much more ground, much more quickly than in the recent past.
The result is that when these funds decide to either go long or
short, they have a larger impact on the movement of the market.
Look at the magnitude of the movement generated today.  The
shorts covered as Colin Powell's speech got underway, quickly
driving the DOW up to 8152.  Action stalled out and then
proceeded sharply lower on renewed shorting.  This was all on
news that really wasn't news at all.  His presentation was very
much in line with what was expected and the response of other
members of the international community was as expected also.

In fact, 7 out of the last 8 days have seen the DOW stage a
triple-digit move.  But it remains pinned between 7900-8150.  A
tremendous amount of energy has been expended, yet we really
have gone nowhere since the close of 7989 on January 27th.  This
back and forth action shows the indecisive nature of the market
right now and clearly the market 'wants' something before moving
outside this range.  It is my belief that the market isn't
expecting any good news to come out of Corporate America anytime
soon.  So that leaves the Iraq situation.  That is the issue
that the market 'wants' resolved and it will have a hard time
moving significantly out of its current range until it has a
better idea of how and when this crisis will be resolved.

Does that mean that we can't break down from here?  Not by a
long shot.  But I think any downside action is going to be
limited to roughly the 7700 level.  What about an upside
breakout?  Less likely, in my opinion, but it could happen.
That breakout won't really occur until the DOW prints 8200, and
then we have heavy overhead resistance in the 8250-8300 area,
the site of the recent H&S neckline break.  That leaves maybe
200 points of downside potential on a breakdown and less than
100 points of upside potential on a breakout.  That sure doesn't
look like a winning proposition to me, especially with the
current range of just over 200 points.

So what's a trader to do?  My primary advice (echoing Steve
Price's sentiments) is that conservative traders should not be
in this market at all.  Those that are comfortable with playing
such a volatile market need to significantly reduce position
size and play the range UNTIL it breaks.  That means buying
bounces from support and selling rollovers from resistance,
setting stops just below support or just above resistance,
respectively.  What am I personally doing?  Sitting on my hands.
I am not an overly conservative trader, but the rapidity with
which the market turns have been coming over the past week, my
head has been spinning.  What does this have to do with being
an Options 101 column.  It is my way of reminding you (and
myself) that there are three valid positions: long, short and
flat.  Or put another way, "What do you want"?  Do you want to
chase every turn hoping to be on the right side of a major move?
Or do you want to preserve your capital for when conditions are
aligned in your favor?  The current market environment,
news-driven as it is, is a great time to be flat.  Trending
markets will return, and our primary job is to make sure our
capital is safe to deploy when conditions are more favorable.

I hope this helps!

Mark


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***********************
SWING TRADER GAME PLANS
***********************

Nothing New
By Steve Price

Let's see, we got through both of the big events we were waiting
for and what have we learned from it? Not much

To read the rest of the Swing Trader Game Plan Click here:
http://www.OptionInvestor.com/itrader/indexes/swing.asp


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The Option Investor Newsletter                Wednesday 02-05-2003
Copyright 2003, All rights reserved.                        2 of 2
Redistribution in any form strictly prohibited.


In Section Two:

Stop Loss Updates: None
Dropped Calls: None
Dropped Puts: None
Play of the Day: Put - AT
Spreads, Combinations & Premium-Selling Plays: The Countdown To War!

Updated on the site tonight:
Market Posture: Back In Range
Market Watch: Range Breaks


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*****************
STOP-LOSS UPDATES
*****************

None


*************
DROPPED CALLS
*************

None


************
DROPPED PUTS
************

None


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*********************
PLAY OF THE DAY - PUT
*********************

AT - Alltel Corporation $46.87 (-0.79 this week)

Company Summary:
Alltel is a customer-focused technology company that provides
communications and information services.  The company's
communications operations consist of its wireless, wireline and
emerging business segments.  AT also sells telecommunications
products and publishes telephone directories.  The company owns
a majority interest in wireless operations in 69 Metropolitan
Statistical Areas, and a majority interest in 132 Regional
Service Areas.  Long-distance services are provided on both a
facilities-based and resale basis by the company's subsidiaries.

Recent Write-Up:
Failed bounces are the rule so far this
week, as Monday's afternoon rally failed miserably this morning,
sending the broad market back to test the recent lows.  AT
managed to just barely kiss the 200-dma ($47.29) yesterday and
aggressive traders that opened bearish positions on the marginal
failure at that level were rewarded today as the stock gapped
down and broke the $46 support level.  It should come as no
surprise that there wasn't much downside follow-through after
$46 was broken, as we've got the PnF bullish support line
resting there at $45, 50-cents below the intraday low.  But
there's no question the stock is technically weak, now solidly
below that 200-dma.  Additional rally failures near the 200-dma
can be used to open new positions, although we also need to
monitor the Northern Telecom index (XTC.X), which is stubbornly
holding above its own 200-dma at $432.  Traders looking to enter
on additional weakness need to be careful due to that bullish
support line, and if trading a breakdown under today's intraday
low will want to see the XTC index close below its 200-dma.
Lower stops to $47.75, which is just above the recent intraday
highs and the declining 10-dma.

Why This Is Our Play of the Day:

AT made another run at the 200-dma on today's post-Powell rally.
However, it not only failed that level, but sunk all the way down
to a new relative low following the failed rally.  There are
obviously shorts looking to hammer this stock on each rebound
attempt.  While we did hit a new relative low intraday, we have
yet to break down below the bullish support line at $45.  If we
do get that breakdown, it could be a swift trip down to $40, as
there is little support on either daily or PnF charts between
those levels. A true breakthrough of bullish support does not
actually come until the stock trades $44 and more conservative
traders can wait for that trade for a definite signal.  However,
more aggressive traders can target a momentum move below $45 if
the market continues its late day rollover. Keep an eye on the
broader markets, however, as a move below the lows of the last
week would give us bearish confirmation, while another bounce
from those levels can leave new shorts gasping for air.

BUY PUT FEB-50*AT-NJ OI=1732 at $5.10 SL=2.55
BUY PUT FEB-45 AT-NI OI=  81 at $1.40 SL=0.70

Average Daily Volume = 1.25 mln



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*********************************************
SPREADS, COMBINATIONS & PREMIUM-SELLING PLAYS
*********************************************

The Countdown To War!
By Ray Cummins

Stocks ended lower Wednesday after U.S. Secretary of State Colin
Powell made a strong case for a war against Iraq in his speech to
the United Nations.

Technology stocks were big winners initially, gaining momentum
after the speech, but the advance turned to losses by day's end
as semiconductor, telecom and Internet shares consolidated.  The
NASDAQ Composite Index finished down 4 points at 1,301.  Stocks
on the Dow Industrial Average (NYSE:DJIA) were also higher early
in the session but strength in Alcoa (NYSE:AA), General Motors
(NYSE:GM) and Home Depot (NYSE:HD) could not overcome losses in
the other blue-chip components.  The Dow ended 28 points lower at
7,985.  Concerns about the impending military action pulled the
broader markets lower with the S&P 500 index finishing down 4
points at 843.  A few market segments enjoyed buying pressure
including consumer durables, construction and airlines.  Volume
was moderate with 1.42 billion shares changing hands on the Big
Board and 1.35 billion shares trading on the NASDAQ.  Declining
stocks outpaced advancers by roughly 3 to 2 on both the New York
Stock Exchange and the technology exchange.  The U.S. bond market
benefited from the slump in equities with the yield on ten-year
treasuries closing at 4.00%.

***************

SUMMARY OF CURRENT POSITIONS - AS OF 2/4/03

***************

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.


MONTHLY YIELD: MAXIMUM & SIMPLE

The Maximum Yield (listed in the summary and with new option
selling plays) is the greatest possible profit available in the
position.  This amount, expressed as a percentage, is based on
the initial margin requirement as determined by the Board of
Governors of the Federal Reserve, the U.S. options markets and
other self-regulatory organizations.  Although increased margin
requirements may be imposed either generally or in individual
cases by various brokerage firms, our calculations use the widely
accepted margin formulas from the Chicago Board Options Exchange.
The "Simple Yield" is based on the cost of the underlying issue
(in the event of assignment), including the premium from the sold
option, thus it reflects the maximum potential loss in the trade.


Naked Puts

Stock  Strike Strike  Cost Current   Gain    Max   Simple
Symbol  Month  Price Basis  Price   (Loss)  Yield  Yield

ASA      FEB    35   34.45  41.60   $0.55   4.44%  1.60%
COF      FEB    25   24.35  31.04   $0.65   7.31%  2.67%
IGEN     FEB    35   34.05  39.13   $0.95   8.27%  2.79%
INVN     FEB    22   22.05  24.94   $0.45   6.32%  2.04%
PHM      FEB    45   44.05  50.05   $0.95   5.39%  2.16%
AMGN     FEB    48   46.30  51.83   $1.20   5.40%  2.59%
BSTE     FEB    35   33.85  33.79  ($0.06)  0.00%  3.40% *
CEPH     FEB    45   44.15  46.12   $0.85   5.04%  1.93%
GENZ     FEB    30   29.40  30.65   $0.60   5.18%  2.04% *
ACDO     FEB    33   31.45  29.85  ($1.60)  0.00%  3.34% *
ACDO     FEB    35   34.50  29.85  ($4.65)  0.00%  1.45% *
AMGN     FEB    47   46.90  51.83   $0.60   3.66%  1.28%
AU       FEB    30   29.55  36.44   $0.45   4.94%  1.52%
CEPH     FEB    45   44.25  46.12   $0.75   5.18%  1.69%
SYMC     FEB    40   39.45  46.91   $0.55   4.22%  1.39%
COP      FEB    45   44.45  50.05   $0.55   4.35%  1.24%
CYMI     FEB    30   29.20  31.30   $0.80   9.95%  2.74%
DISH     FEB    22   22.20  25.44   $0.30   5.19%  1.35%
FTE      FEB    22   22.20  25.68   $0.30   5.86%  1.35%
MERQ     FEB    30   29.75  35.18   $0.30   5.03%  1.01%
MUR      FEB    37   37.10  42.85   $0.40   4.12%  1.08%
QCOM     FEB    35   34.40  36.60   $0.60   6.20%  1.74%

As noted in last week's summary, positions in Accredo Health
(NASDAQ:ACDO), Biosite (NASDAQ:BSTE) and Genzyme General
(NASDAQ:GENZ) were candidates for early exit and the warning
was certainly appropriate in Accredo.  Shares of the Health
Services firm plunged after company officials reported that
profit more than doubled in 2002 but revenue in fiscal 2003
would be lower than previously forecast.  A number of new
upgrades were issued after the plunge but it is doubtful the
share value will recover in the near-term.  Additions to the
"early-exit" watch-list include Cephalon (NASDAQ:CEPH) and
Qualcomm (NASDAQ:QCOM).


Naked Calls

Stock  Strike Strike  Cost   Current  Gain    Max   Simple
Symbol Month  Price   Basis  Price   (Loss)  Yield  Yield

EXPE     FEB    75    76.25  56.12   $1.25   6.84%  1.64%
MBG      FEB    30    30.65  24.75   $0.65   6.68%  2.12%
QCOM     FEB    42    43.05  36.60   $0.55   5.07%  1.28%
CCMP     FEB    60    61.15  43.17   $1.15   6.10%  1.88%
KLAC     FEB    45    45.80  32.30   $0.80   6.83%  1.75%
LLTC     FEB    32    33.25  26.30   $0.75   6.68%  2.26%
QLGC     FEB    47    48.40  33.09   $0.90   6.19%  1.86%
CDWC     FEB    50    50.55  43.82   $0.55   4.59%  1.09%
CTSH     FEB    65    65.75  60.69   $0.75   4.41%  1.14%
NVLS     FEB    37    37.85  29.06   $0.35   5.41%  0.92%
EXPE     FEB    70    70.45  56.12   $0.45   3.20%  0.64%
ZBRA     FEB    60    60.75  57.35   $0.75   5.77%  1.23%


Put-Credit Spreads

Stock                                             Gain
Symbol  Pick   Last  Month L/P S/P Credit  C/B   (Loss) Status

AGN     60.51  59.89  FEB   50  55  0.50  54.50  $0.50   Open
BRL     77.63  77.57  FEB   65  70  0.40  69.60  $0.40   Open
FIC     44.63  48.42  FEB   35  40  0.45  39.55  $0.45   Open
AET     44.21  41.50  FEB   35  40  0.50  39.50  $0.50   Open
BR      42.71  44.77  FEB   38  40  0.25  39.75  $0.25   Open
MMM    127.50 123.10  FEB  115 120  0.55 119.45  $0.55   Open
BLL     52.73  52.75  FEB   45  50  0.40  49.60  $0.40   Open
EBAY    74.93  73.10  FEB   65  70  0.55  69.45  $0.55   Open

As previously noted, P.F.Chang's (NASDAQ:PFCB) close below the
sold strike at $35 signaled our exit in the position.


Call-Credit Spreads

Stock                                             Gain
Symbol  Pick   Last  Month L/C S/C Credit  C/B   (Loss) Status

HET    37.47   35.20  FEB   42  40  0.40  40.40  $0.40   Open
PHA    42.00   40.88  FEB   50  45  0.60  45.60  $0.60   Open
ZBRA   57.32   57.35  FEB   70  65  0.50  65.50  $0.50   Open
ATK    59.65   50.31  FEB   70  65  0.50  65.50  $0.50   Open
GS     73.51   67.52  FEB   85  80  0.40  80.40  $0.40   Open
PDX    34.40   35.95  FEB   45  40  0.65  40.65  $0.65   Open
ABK    55.74   51.70  FEB   65  60  0.50  60.50  $0.50   Open
FITB   56.49   52.43  FEB   65  60  0.50  60.50  $0.50   Open
HAR    55.62   59.50  FEB   65  60  0.60  60.60  $0.60  Closed
GM     37.28   36.12  FEB   42  40  0.25  40.25  $0.25   Open
WB     35.72   35.40  FEB   40  37  0.25  37.75  $0.25   Open
XL     75.92   74.03  FEB   85  80  0.50  80.50  $0.50   Open

Harmon Electronics (NYSE:HAR) should have been closed when the
issue moved above the sold call) strike at $60.


Calendar Spreads (Reader's Request)

Stock   Pick   Last     Long     Short    Current   Max     Play
Symbol  Price  Price   Option    Option    Debit   Value   Status

APA	  60.74  62.80   APR-65C   FEB-65C   1.35    1.60     Open
STJ	  43.69  40.74   APR-45C   FEB-45C   1.20    1.00     Open

Apache Oil (NYSE:APA) offered an acceptable entry point and the
position is profitable after only one week in play.


Credit Strangles

No Open Positions


Synthetic Positions:

No Open Positions

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 new 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.

***************
AVCT - Avocent  $27.55  *** Solid Earnings! ***

Avocent Corporation (NASDAQ:AVCT), together with its wholly owned
subsidiaries, designs, manufactures and sells analog and digital
KVM (keyboard, video and mouse) switching systems, as well as serial
connectivity devices, extension and remote access products and also
display products for the computer industry.  The firm's switching
and connectivity solutions provide information technology managers
with access and control of multiple servers and network data centers
from any location.

AVCT - Avocent  $27.55

PLAY (sell naked put):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  FEB 25   QVX NE     60     0.25  24.75   5.4%   1.0% *
SELL PUT  FEB 27.5 QVX NY     37     1.05  26.45  16.5%   4.0%
SELL PUT  MAR 25   QVX OE     51     0.95  24.05   6.9%   4.0%


**************
FTE - France Telecom  $25.50  *** European Telecom ***

France Telecom is a French telecommunications operator with over
100 million customers worldwide.  France Telecom provides retail
consumers, businesses and telecommunications carriers with a range
of telecommunications services, including local, long distance and
international telephony, as well as data, wireless communications,
multimedia, Internet, cable television, broadcast and value-added
services.  France Telecom is also a major participant in developing
satellite and undersea cable systems and it has its own Telecom 1
and Telecom 2 satellites.

FTE - France Telecom  $25.50

PLAY (sell naked put):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  FEB 22.5 FTE NX      47    0.30  22.20   7.6%   1.4% *
SELL PUT  FEB 25   FTE NE     202    1.00  24.00  17.8%   4.2%
SELL PUT  MAR 20   FTE OD      12    0.65  19.35   7.8%   3.4%
SELL PUT  MAR 22.5 FTE OX      25    1.25  21.25  10.2%   5.9%


**************
MERQ - Mercury Interactive  $35.07  *** Bullish Outlook! ***

Mercury Interactive (NASDAQ:MERQ) is a provider of integrated
performance management solutions that enable businesses to test
and monitor their Web-based applications.  Its software products
and hosted services help Global 2000 companies enhance the user
experience by improving the performance, availability, reliability
and scalability of their Web-based applications.  Its many hosted
services provide its customers with a cost-effective solution that
quickly meets business needs without dedicating significant time
and internal resources.  Its integrated performance management
solutions enable customers to more quickly identify and correct
problems before users experience them.  The company also provides
outsourced load testing and Web performance monitoring services
that complement its software products.

MERQ - Mercury Interactive  $35.07

PLAY (sell naked put):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  FEB 30   RQB NF     962    0.30  29.70   6.2%   1.0% *
SELL PUT  FEB 35   RQB NG   6,763    1.50  33.50  18.4%   4.5%
SELL PUT  MAR 30   RQB OF     356    1.10  28.90   7.6%   3.8%


**************
PTEN - Patterson-UTI Energy  $32.34  *** Solid Earnings! ***

Patterson-UTI Energy (NASDAQ:PTEN) is an operator of land-based
drilling rigs in North America.  Formed in 1978 and reincorporated
in 1993, the company focuses its contract drilling operations in
Texas, New Mexico, Oklahoma, Louisiana, Mississippi, Utah and
Western Canada (Alberta, British Columbia and Saskatchewan).
Patterson-UTI's operates in three industry segments: contract
drilling, which the company markets to major and independent oil
and natural gas producers and operators; drilling and completion
fluids services, which provides drilling fluids, completion fluids
and related services to oil and natural gas producers, and pressure
pumping services, which provides pressure-pumping services in the
Appalachian Basin.

PTEN - Patterson-UTI Energy  $32.34

PLAY (sell naked put):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  FEB 30   NZQ NF   1,360    0.35  29.65   6.0%   1.2% *
SELL PUT  FEB 32.5 NZQ NZ     110    1.05  31.45  14.1%   3.3%
SELL PUT  MAR 30   NZQ OF     541    0.85  29.15   5.1%   2.9%


**************

BULLISH PLAYS - Credit Spreads

These candidates are based on the underlying issue's technical
history or trend.  The probability of profit in these positions
may also be higher than other plays in the same strategy, due to
small disparities in option pricing however, each play should be
evaluated for portfolio suitability and reviewed with regard to
your strategic approach and trading style.

***************
BHE - Benchmark Electronics  $34.68  *** Bullish Earnings! ***

Benchmark Electronics (NYSE:BHE) is in the business of making
electronics and provides the its services to original equipment
manufacturers of telecommunication equipment, computers and
related products for business enterprises, video, audio, and
entertainment products, industrial control equipment, testing
and instrumentation products and medical devices.  The services
that the firm provides are commonly referred to as electronics
manufacturing services.  Benchmark Electronics provides its
customers comprehensive and integrated design and manufacturing
services, from initial product design to volume production and
direct order fulfillment.  The company also provides specialized
engineering services, including product design, printed circuit
board layout, prototyping and test development.

BHE - Benchmark Electronics  $34.68

PLAY (conservative - bullish/credit spread):

BUY  PUT  MAR-25.00  BHE-OE  OI=1010  A=$0.40
SELL PUT  MAR-30.00  BHE-OF  OI=1010  B=$1.00
INITIAL NET-CREDIT TARGET=$0.65-$0.70
POTENTIAL PROFIT(max)=15% B/E=$29.35


**************
GYI - Getty Images  $30.85  *** A Profitable Year! ***

Getty Images (NYSE:GYI) is a provider of imagery and related
products and services to businesses worldwide, distributing
products digitally via the Internet and on CD-ROMs, as well as
in film transparency form.  The company has customers in more
than 55 countries.  Getty developed a solution to aggregate and
distribute visual content, and, since 1995, has brought many of
the visual content industry's collections under one centralized
corporate structure.  The company provides its relevant imagery
to creative professionals at advertising agencies, graphic design
firms, corporations and film and broadcasting companies; press
and editorial customers involved in newspaper, magazine, book,
CD-ROM and online publishing, and also corporate communications
departments and other business customers.  The firm offers a
comprehensive and user-friendly solution for its customers'
imagery and related product needs, including still and moving
images and related products and services.

GYI - Getty Images  $30.85

PLAY (moderately aggressive - bullish/credit spread):

BUY  PUT  FEB-25.00  GYI-NE  OI=84   A=$0.25
SELL PUT  FEB-30.00  GYI-NF  OI=190  B=$0.75
INITIAL NET-CREDIT TARGET=$0.55-$0.65
POTENTIAL PROFIT(max)=12% B/E=$29.45


**************
MUR - Murphy Oil  $42.63  *** Oil Service Sector ***

Murphy Oil Corporation (NYSE:MUR) is a worldwide oil and gas
exploration and production company with refining and marketing
operations in the United States and the United Kingdom.  The
firm's operations are classified into two business activities:
Exploration and Production; and Refining and Marketing. Murphy's
principal exploration and production activities are conducted in
the United States, Ecuador and Malaysia by wholly owned Murphy
Exploration & Production Company and its subsidiaries; in western
Canada and offshore eastern Canada by wholly owned Murphy Oil and
its subsidiaries; and in the U.K. North Sea and Atlantic Margin
by wholly owned Murphy Petroleum Limited.  Murphy Oil USA, Inc.,
a wholly owned subsidiary, owns and operates two refineries in
the United States.  MOUSA markets refined products through a
network of retail gasoline stations and branded and unbranded
wholesale customers in a 23-state area of the southern and
Midwestern United States.

MUR - Murphy Oil  $42.63

PLAY (less conservative - bullish/credit spread):

BUY  PUT  FEB-37.50  MUR-NU  OI=100  A=$0.10
SELL PUT  FEB-40.00  MUR-NH  OI=221  B=$0.35
INITIAL NET-CREDIT TARGET=$0.25-$0.35
POTENTIAL PROFIT(max)=11% B/E=$39.75


**************

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.

***************
CTSH - Cognizant Technology  $60.69  *** Pure Premium Selling! ***

Cognizant Technology Solutions (NASDAQ:CTSH) delivers full life
cycle solutions to complex software development and maintenance
problems that companies face as they transition to e-business.
These information technology (IT) services are delivered through
the use of a seamless on-site and offshore consulting project
team.  The company's solutions include application development
and integration, application management and re-engineering
services.  The company's customers include ACNielsen Corporation,
ADP, Incorporated, Brinker International, Incorporated, Computer
Sciences Corporation, The Dun & Bradstreet Corporation, First
Data Corporation, IMS Health Incorporated, Metropolitan Life
Insurance Company, Nielsen Media Research, Incorporated, PNC
Bank and Royal & SunAlliance USA.

CTSH - Cognizant Technology  $60.69

PLAY (sell naked call):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL CALL FEB 70   UPU BN   1,486    0.65  70.65   7.9%   0.9% *
SELL CALL FEB 65   UPU BM   2,354    1.50  66.50  13.3%   2.3%
SELL CALL MAR 70   UPU CN     125    1.35  71.35   5.7%   1.9%


**************
KLAC - KLA Tencor  $32.79  *** Sell The Rally! ***

KLA-Tencor (NASDAQ:KLAC) is a supplier of process control and
yield management solutions for the semiconductor and related
microelectronics industries.  The company's large portfolio
of products, software, analysis, services and expertise is
designed to help integrated circuit manufacturers manage yield
throughout the entire wafer fabrication process, from research
and development to final mass production yield analysis.  The
company offers a broad spectrum of products and services that
are used by every major semiconductor manufacturer in the world.
These customers turn to the company for in-line wafer defect
monitoring; reticle and photomask defect inspection; CD SEM
metrology; wafer overlay; film and surface measurement; and
overall yield and fab-wide data analysis.

KLAC - KLA Tencor  $32.79

PLAY (sell naked call):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL CALL FEB 37.5 KCQ BU   3,279    0.25  37.75   5.5%   0.7% *
SELL CALL FEB 35   KCQ BG   8,279    0.80  35.80  13.0%   2.2%
SELL CALL FEB 32.5 KCQ BZ   1,087    1.85  34.35  23.1%   5.4%


**************
NVLS - Novellus Systems  $28.73  *** Chip Sector Slump! ***

Novellus Systems (NASDAQ:NVLS) manufactures, sells and services
semiconductor processing equipment.  The company's products are
comprised primarily of advanced systems used to deposit thin
conductive and insulating films on semiconductor devices, as well
as equipment for preparing the device surface prior to 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 employ
a chemical plasma to deposit all of the dielectric (insulating)
layers and certain of the metal (conductive) layers on the surface
of a semiconductor wafer.  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  $28.73

PLAY (sell naked call):

Action    Month &  Option    Open    Last  Cost    Max.  Simple
Req'd     Strike   Symbol    Int.    Price Basis  Yield  Yield

SELL CALL FEB 32.5 NLQ BZ   5,725    0.25  32.75   4.1%   0.8% *
SELL CALL FEB 30   NLQ BF   4,895    0.90  30.90  10.7%   2.9%
SELL CALL MAR 32.5 NLQ CZ   2,398    1.00  33.50   7.9%   3.0%
SELL CALL MAR 35   NLQ CG   2,742    0.40  35.40   4.5%   1.1%


**************

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.

***************
FNM - Federal National Mortgage  $64.10  *** Trading Range? ***

Federal National Mortgage Association (NYSE:FNM), commonly known
as Fannie Mae, is a company that works to assure that mortgage
money is readily available for existing and potential homeowners
in the United States.  Fannie Mae does not directly lend money
to homebuyers, but works with lenders to ensure that there is no
shortage of funds available for mortgage loans.  The method in
which Fannie Mae accomplishes this is by purchasing mortgages
from a variety of institutions that make up the primary mortgage
market.  Primary market lenders include mortgage companies,
savings and loans, commercial banks, credit unions and state and
local housing finance agencies. These are the businesses where
the mortgages are originated and the funds are loaned directly
to the borrower.  Fannie Mae then purchases the mortgage, thus
allowing the primary market lender to replenish their funds and
lend more money to homebuyers.

FNM - Federal National Mortgage  $64.10

PLAY (conservative - bearish/credit spread):

BUY  CALL  MAR-75.00  FNM-CO  OI=8042   A=$0.15
SELL CALL  MAR-70.00  FNM-CN  OI=17392  B=$0.65
INITIAL NET-CREDIT TARGET=$0.55-$0.65
POTENTIAL PROFIT(max)=12% B/E=$70.55


**************
ONE - Bank One  $35.65  *** Next Leg Down? ***

Bank One (NYSE:ONE) is a multi-bank bank holding company that
provides domestic retail banking, finance and other credit card
services, worldwide commercial banking services, and trust and
investment management services. Bank One operates banking offices
in Arizona, Colorado, Florida, Illinois, Indiana, Kentucky, Ohio,
Michigan, Ohio, Oklahoma, Texas, Utah, West Virginia, Wisconsin,
and in certain international markets.  Bank One also engages in
other businesses related to banking and finance, including credit
card and merchant processing, consumer and education finance, real
estate-secured lending and servicing, insurance, venture capital,
investment and merchant banking, trust, brokerage, investment
management, leasing, community development and data processing.
These activities are conducted through bank subsidiaries and other
non-bank subsidiaries.

ONE - Bank One  $35.65

PLAY (conservative - bearish/credit spread):

BUY  CALL  FEB-40.00  ONE-BH  OI=6295  A=$0.10
SELL CALL  FEB-37.50  ONE-BU  OI=2908  B=$0.35
INITIAL NET-CREDIT TARGET=$0.25-$0.30
POTENTIAL PROFIT(max)=11% B/E=$37.75


**************
TOT - TOTAL Fina Elf  $67.33  *** Trading Range? ***

TOTAL Fina Elf (NYSE:TOT) is engaged in all aspects of petroleum
industry, including upstream operations (oil and gas exploration,
development and production); downstream operations (refining and
marketing); and the trading and shipping of crude and petroleum
products.  TOTAL also produces Petrochemicals and plastics, as
well as intermediates and performances polymers and specialties
for industrial and consumer use.  In addition, the company has
interests in coal mining and in the nuclear power, cogeneration
and electricity sectors.

TOT - TOTAL Fina Elf  $67.33

PLAY (moderately aggressive - bearish/credit spread):

BUY  CALL  FEB-75.00  TOT-BO  OI=478  A=$0.20
SELL CALL  FEB 70.00  TOT-BN  OI=518  B=$0.70
INITIAL NET-CREDIT TARGET=$0.50-$0.60
POTENTIAL PROFIT(max)=11% B/E=$70.50


**************


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MARKET POSTURE
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Back In Range

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MARKET WATCH
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Range Breaks

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