The Option Investor Newsletter Thursday 03-20-2003 Copyright 2003, All rights reserved. 1 of 3 Redistribution in any form strictly prohibited. In Section One: Wrap: War Rally? Readers Write: Now We’re Going To See What This Market Is Really Made Of... Futures Markets: War Market, Market Wars Index Trader Wrap: Market Sentiment: The Energizer Market Weekly Manager Microscope: Marty Zweig: Zweig Fund (ZF) Updated on the site tonight: Swing Trader Game Plan: The Trend Continues Posted online for subscribers at http://www.OptionInvestor.com ************************************************************ MARKET WRAP (view in courier font for table alignment) ************************************************************ 03-20-2003 High Low Volume Adv/Dcl DJIA 8286.60 + 21.20 8318.81 8130.86 1.66 bln 1847/1348 NASDAQ 1402.77 + 5.70 1411.41 1371.90 1.55 bln 1760/1423 S&P 100 445.79 + 0.95 447.79 437.35 Totals 3607/2771 S&P 500 875.84 + 1.82 879.60 859.01 W5000 8284.59 + 26.20 8314.22 8123.18 RUS 2000 370.49 + 1.98 371.27 362.64 DJ TRANS 2170.55 + 21.40 2177.11 2117.77 VIX 35.26 - 0.92 38.10 34.36 VXN 48.48 + 0.28 49.57 46.75 Total Volume 3.577B Total UpVol 2,110B Total DnVol 1,378M 52wk Highs 145 52wk Lows 116 TRIN 1.03 PUT/CALL 0.56 ************************************************************ War Rally? The great war rally sputtered to a start with about as much enthusiasm as the bombing in Baghdad. We got a couple of buying spurts intraday after bouncing back from the morning "sell the news" drop and Baghdad got a couple bombs on three buildings. The lack of shock and awe in the rally matched the lack of shock and awe in the bombing. Both started with a whimper. Dow Chart - Daily Nasdaq Chart - Daily Wilshire 5000 Chart - Daily The Jobless Claims fell slightly from 425K to 421K but the estimate was for a drop to 415K. The four-week moving average rose to 425K and continuing claims to 3.55 million. Not a great piece of economic news for any post war rally. The continuing claims rose to the highest level since November. The weak job market in February continues to get weaker in March and there is no improvement in sight. The Conference Board Leading Indicators fell -0.4% in February and this was the first decline since September 2002. Even worse than the CBLI was the Philadelphia Fed Survey which came in at -8.0% compared to the consensus of +1.0%. This 9% difference shows how far the manufacturing sector has fallen in the last month. According to all reports activity just stopped in mid February and has not returned. New Orders fell to -4.3 from +14.1 and prices paid rose to 25.1 from 16.2. Inventories continued to fall as well as the average work week and delivery times. Excess capacity and weak demand continues to pressure the workforce and produce more layoffs. The only material improvement was the six month outlook which went from 24.7 to 46.4 solely on the hope that the Iraq war would be over and the economy would begin to recover. The Fed minutes for the January meeting showed that the Fed expected an economic recovery soon but that the confidence in that outlook by some Fed members was wearing thin. There was increased concern that the Iraq war was not the actual problem and even after the conflict is over we could see more weakness. Considering this was at the January meeting and with the increased confusion expressed at the March meeting it appears that the frustration is continuing to build. The FOMC still felt the current stimulus in place would be enough to power the economy but was looking forward to the President's plan as well. This official view was different to the view from Greenspan when he testified before Congress after the meeting. In general the consensus was still a better economy 4-6 months out but that view was getting weaker. The Dow managed to close positive for the seventh consecutive day but just shy of 8300. The Dow has not had a seven day streak since July 2000. The Nasdaq spent the day fighting to break and hold 1400 and despite a dip at the close it managed to close at 1402. This is a minor victory but still a victory. This comes only a day before a quadruple witching Friday with single stock futures adding to the expiration matrix. The war rally sputtered and coughed today as it did in the futures over night. The bombs fell and so did the averages as institutions sold into every rally attempt. The selling was not strong but just strong enough to keep the markets from making any major gains. It would appear the buyers are waiting for the "shock and awe" phase of the attack to spend their money, if they have any left. The Dow hit a high today of 8318, which just happens to be the 100DMA and strong resistance. The Nasdaq high of 1411 was just below the 200 EMA of 1415. Now let's review the circumstances. The markets have stretched their winning streak to seven days and nearly +900 points in the case of the Dow. This was in anticipation of a rally on the start of the war. The major indexes have risen to strong resistance and slowed to a crawl. The war started and despite a nice rebound from a -100 point opening dip there was no monster rally. It appears the post war rally may be a figment of the bulls imagination. Obviously it is too soon to form that opinion but there are some other indicators to watch. The VIX fell to 35 and is not showing any real fear of a drop. Option activity is minimal and is not showing any expectations of a bounce or a dip. Yesterday we had significant put buying on the S&P-500 but today was minimal. Basically all the bets have been placed. Buyers loaded up over the last week in anticipation of a repeat of the 1991 rally and in effect pushed that rally forward in time. Even the drop in oil prices to $28 from last months near $40 level failed to spark the markets and this is a MAJOR economic plus. I am not going out on a limb and say there is not a continuation of this rally in our near future. The shock and awe campaign is rumored to be starting tomorrow due to the final approval by Turkey to allow multiple battle groups to over fly their country. This could trigger another bout of buying but the basic problem still remains. It is the economy not the war. Yes, the fear and uncertainty of war has impacted our economy but the real problem is lack of demand, high unemployment and lack of any single factor to power a rebound. Just starting the war will not solve this. There is now a greater chance of a terrorist attack or multiple terrorist attacks. Remember, even though Osama thinks Saddam is crazy (pot calling the kettle black?) he started plotting attacks on the US when we attacked Iraq the first time. His justification was the killing of Muslims by the great satan regardless of the reason. We have even less reason this time around and the Homeland Security briefings have said they have received specific and credible intelligence of potential new attacks. (Heard that before?) My point tonight is simple. A short war is already priced in and anything contrary to that opinion will cause bulls to exit early. The rally is priced in and lack of any continuation may cause bulls to start taking profits off the table. There are very few reasons for traders to add to long positions now. There are many reasons for traders to reduce long positions with no magic bullet taking out a certain key leader in Iraq. In short the balance of risk has shifted from the bears to the bulls. When we were at 7400 there was no future for the shorts. At 8300/1400 there is no future for the bulls without a major news event to break the status quo. I am not giving up on a war rally but I am definitely keeping my eye on the down side potential as well. Enter Very Passively, Exit Very Aggressively! Jim Brown Editor ************* READERS WRITE ************* Now We’re Going To See What This Market Is Really Made Of... By Rick Utt Lets get some things straight. Business has hit the skids, prospects of a recovery in the near term are dim, layoffs have not slowed down (my brother in law was done away with in a mass layoff from Siemens just yesterday) and if anything has really changed economically in the last week or two, outside of speculative oil prices, its been for the worse. So why such a monstrous rally? If you have read the few things I’ve written for OIN you know I prefer to think like the market maker rather than the buyer or better said, the storeowner rather than the customer. If we look at ourselves as the customer, always scouring the isles for bargains we can resell to others, chances are we can make some money here and there on good deals if we can find the right buyer. But we can also lose money by purchasing things that our customers can get from the storeowner at a better price. The storeowner has the flexibility to adjust prices according to supply and demand. We don’t. We bought something at a price and we have to sell it at a better price. As the storeowner or market maker we have to look at what will be the most profitable way to conduct business. Granted we can make money whether the market goes up or down, but if we drive the market to extremes and prepare along the way, we can make a whole bunch of money when the market moves in the opposite direction. This is why in major downtrends we need to look at rallies as suspect and in uptrends when the market sells off dramatically, we do the same. Violent moves in the market are total market manipulation and nothing less. Those days when you’re long and you see your stock plummet before your very eyes does not mean everybody got together without you and decided to sell. Its just the market makers deciding they want more stock and they want it at a lot better price than you paid for it. They have that ability, they pay big money for it and they use it to their full advantage. With that in mind, how is the market maker going to maximize their profit in a market that is slowly going down? Do they look for opportunities to short stock when it might jump up a quarter or two and cover it when they’ve made a few cents profit or would they be more opportunistic and use the uncertainty of a major event like a war as a catalyst to get a rally going that may create, pardon the expression, the mother of all shorting opportunities? Everybody certainly was saying a rally was imminent as soon as the shooting started, and when everybody says something about the stock market you can pretty much count on everybody being dead wrong! Just like when everybody says “buy”, its time to sell. The rally started when no one expected, as usual. The rally has been straight up, no “ifs, ands or buts” about it. And any rally worth its salt, rallies, pulls back, rallies, pulls back and so on. Each one of those pullbacks is a marker for traders as to the strength of the rally and it builds a foundation along the way. However, what if there was no time for that process to take place? Or what if it was designed for that process not to take place. Then you would have a rally with no markers, no strength, and one that looks like a pole standing straight with nothing to brace it, ready to topple. That is exactly what has happened with this particular rally. What we have are all the things that are big negatives for rallies and, and this is a big “and”, we have had a rising volatility index (VIX) or “fear index” as its called, with a rising market. Of course how this plays out remains to be seen but in the end it always plays out and this is not a combination with which we should feel comfortable. Lets play a game with charts and see if this gives us any insight as to what may happen. Volatility Index daily bar chart The Volatility Index has been lining itself up to tell us something since last July. In “equity speak”, this would be a “Bullish Wedge” when it breaks to the upside. “A” was resistance it set up for itself and then dropped back to take a run at it and broke through. “B” was the same. However not only did “B” break through resistance, it broke through the wedge as well. After that happened it quickly came back is if nobody was to notice and basically sat there while the Dow has rallied from bottom to top, 902 points in the last seven days. The fact that it has hardly moved and at times even increased while the indexes rallied is a phenomena in itself. By looking at this, one would think the market has been put on hold, however we know by looking at the breakout, its already tipped its hand. Our chart game is called “upside down” and here is where it may give us a clue Volatility Index daily bar chart – upside down! Sometimes its easier to understand gravity than trajectory. If ever you want to confirm an opinion when charting a stock, turn it upside down. Declines are exactly the same as rallies in reverse and visa versa. It’s a trick I tried a long time ago and it quickly removes any bias you may have in looking at stock movement. Now, does this chart look like the VIX is getting ready to shoot through the top or is it rolling over and getting ready to collapse? The fact that it has violated the latest support (red line with the arrow) and it has violated the uptrend line shows that it has no strength whatsoever and looks to be hanging very heavy. And any arguments for the upside are nil at this point because it has no momentum either. Is there any doubt that we are in for a rising VIX? Not only is it evident with this picture, but put all the other pieces of the puzzle together as well, i.e., a huge rally but no VIX movement, the rally has no foundation, pullbacks or earmarks of any rally with substance and it takes place the week prior, and up until the day of, a global confrontation in the center of the world’s energy arena. Is it any wonder the “fear index” has refused to drop? I’ve been harping on the VIX for some time now. Whether it has any validity or not I think will be shown shortly. I think its mapped out too perfectly to be coincidental but either way we’ll learn something from where it goes from here and how it reacts with the market as it does. Whatever happens will be very interesting and just the fact that we’re paying attention to it now gives us an added advantage in an arena where advantages are extremely hard to come by. *************** FUTURES MARKETS *************** War Market, Market Wars By Vlada Raicevic Daily Settlement Numbers 4:15pm ET Contract Last Net High Low Dow 8286.60 +21.15 8318.81 8130.86 YM 03M 8261 +21 8302 8100 Nas 100 1080.24 +5.27 1089.21 1052.92 NQ 03M 1082 +6 1094 1056 S&P 500 875.84 +1.82 879.60 859.01 ES 03M 875.25 +2.50 879.25 857.25 Daily Pivots Contract S2 S1 Pivot R1 R2 YM 03M 8029 8160 8231 8362 8433 NQ 03M 1040 1062 1078 1100 1116 ES 03M 849.63 864 871.63 886 893.63 We had our first real pullback in the markets at the open. Then the war news started rolling in, and we had a very strong V-bounce off the morning lows. We had three waves up, which failed at 879.25, close to strong resistance at 880. As has been the norm, selling was reluctant, and buying was strong. There was a lot of indecision today, with traders realizing that we are overbought, but not wanting to get run over by shorting, and/or not wanting to miss THE HUGE WAR RALLY that has been advertised since the concept was brought up many weeks ago, and repeated over and over and over and over again in the standard and financial press. Technicals were tough to trade: there was a perfect rising wedge on the ES that broke down out of the wedge, was immediately bought, moved back into the wedge, and then broke up out of the wedge to the day highs, and then rolled over again to break down out of the new wedge created. Are you confused yet? While it would be wonderful for me to type up a nice, clear sentence or paragraph to explain the price action today, I’m at a loss. We got more bad economic news today, but it was bombed into oblivion by the war, ignored, as much of recent economic issues have been. We all know what happens if you cut yourself, get an infection, and then ignore it for a few weeks because you were too busy with your macrame hobby. Those with a bearish bent are wagging their fingers and saying “just you wait, Mr. Market”, the cold-water-in-the-face moment is coming. They may be right, and personally, I believe they are right. There is much to be worried about with regards to the economy, and by extension, the market. However, we will attempt to do the right thing and trade what we see. What do we see? As a technical trader, the uncertainty and mixed signals tell me to wait for this whole mess to resolve. However, this could take awhile. If you are trading, short or long term, the main question at this time is: How much risk are you willing to take? Low risk traders should be on the sidelines, high risk traders should be allocating only a small amount of their capital. In looking at the daily ES and YM charts I see a topping formation. With smaller candles forming a slight rounding top, echoed by the RSI which is rounding over. NQ made a lower low and lower high today. Keep in mind that the old saying “lower high, lower low” isn’t always bearish. Several candles like this can create a small downward channel, and if the market is in an uptrend, this small channel is actually a bull flag. But herein lies the uncertainty. Some would argue we are in a downtrend, others would argue that we have tested the bottom successfully, and that we are now in the first leg of a bullish turn. Maybe. But keep those economic indicators from the past few months in mind when thinking long term bullish. Each day I hope for some kind of confirmation, and each day I’m disappointed. On the daily there really isn’t a true rollover which we can point to and say, “aha!”. In fact, the chart looks suspended in time, echoing the indecision in the markets. Therefore, let’s look at shorter timeframes again to see if they tell us anything. ES 270 Minute All Sessions Chart: We are still within the boundaries of the trendlines, with the lower trendline broken on this mornings lows, but price closed well above it, and trendline above pierced a few times, but still holding as resistance. I’ve added a line (blue) to include the brief high made above the initial trendline to see if it holds any additional moves up. From this chart you can see that the move up has basiscally ended. Is this consolidation before another push up, or is it distribution, which, once it ends, we head down? ADX shows that selling has finally picked up a little, but the last candle reverses the pattern with an uptick in buying and a downtick in selling. However, the trend on D+ and D- is definitely bearish in nature. Macd, RSI and Stochastic are all still in bullish territory. ES 60 Minute Chart: Weakness continues to mark this chart. Price gapped below the rising wedge, and then that broken trendline acted as resistance on todays rise. Although price broke above yesterday’s highs, it was barely noticed by Macd and CCI, RSI made a lower high, and ADX shows buying continues to fall off. NQ 270 Minute All Sessions Chart: While the YM charts continue to look just like the ES, the NQ, which has been weaker lately had a better day. The NQ broke below two recent uptrend lines (red and blue), and new line has been drawn along today’s lows. The move up after today’s early morning drop was enough to bring Macd close to crossing up, has fast Stochastic ready to cross the centerline (although Slow Stochastic is rolling over), and has D+ looking like it wants to reverse the slide down, as does the RSI. This chart tells us that the slide in the NQ has slowed down and may be on the verge of turning up again. Although the chart still has bullish undertones, with Macd and RSI still above centerline, the recent bearish attitude was winning out until today. NQ 60 Minut Chart: Price down out of the rising wedge, and then moved back inside it, then broke down out of it again (red lines), which is bearish as it could not hold a bullish reversal back into the wedge. New line drawn (orange) to include recent trend, and new longer term line drawn off the bottom (green line). Macd bounced off centerline, but it was a weak bounce, and RSI formed a bearish divergence. CCI has flatlines, telling us nothing, but it did move back above its moving average. D+ has flatlined, not supporting the three hour move up off the morning lows. ----------------------------------------------------------------- Renko Charts. These will be updated when necessary. Daily Renko for ES: Daily Renko for NQ: Daily Renko for YM: This one is a little more difficult. I set the box size to 5 rather than 2, and I don’t display the huge climb from the recent rally (it would take up most of the chart). With the larger box size, the absolute numbers have a slightly larger margin of error. ******************** INDEX TRADER SUMMARY ******************** Check the Site Later Tonight For Jeff’s Index Trader Article http://members.OptionInvestor.com/itrader/marketwrap/iw_032003_1.asp ------------------------------------------------------------ WINNER of Forbes Best of the Web Award optionsXpress voted Favorite Options Site by Forbes Easy screens for spreads, collars, or covered calls Free streaming quotes Real-time option chains, charts + calculators Go to http://www.optionsxpress.com/marketing.asp?source=oetics21 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ **************** MARKET SENTIMENT **************** The Energizer Market by Steve Price Today certainly gave us some conflicting signals, with the Dow and other indices trading in extremes as the markets adjusted to the start of war. The first move was lower, as bulls took some profits off the table from the past few sessions. We cracked a few seemingly important support levels, only to find buyers stepping back in to buy the dip. There has been much talk about a war rally and the possibility that we have already seen the buying in anticipation of a repeat of 1991. However, if appears that sinking oil prices and the removal of market uncertainty have kept the money flowing back into equities. At the end of the day, it was clear that we are... stilllll going. One indication that bullish sentiment is alive and well is the bond market. One of the more interesting observations that I've discussed in recent articles was the bounce in yields (reflecting selling in bonds) that came at the same time as the Dow/SPX/OEX all filled their bearish head and shoulders objectives. At the same time those objectives were filled, the ten and thirty year yields hit their October lows. The yield charts tend to mirror the equities, since they show an inverse relationship to bonds (as the price of a bond goes up, its yield drops). The bounce off the October lows indicated a reallocation of money from bonds back into stocks at that time and the yields soared over the past few sessions along with stocks. The ten-year made it all the way up to almost 4% where it stalled on Wednesday. It found legs again Tuesday (as bond selling continued) along with stocks in the afternoon rally and broke through that 4% mark that has served as closing resistance since the end of January. It reached a high of 4.044 and by the end of the day, finished at 4.006. The close above 4.0 is yet another bullish sign. There is intraday resistance at 4.1%, so that should be the next level for traders to watch. The SPX had failed on Wednesday just 0.01 shy of a bearish resistance breakthrough on the point and figure chart and stalled out again there on the first rally attempt. However, the afternoon breakout took us as high as 879.60 and led to that complete breakthrough. The OEX had a breakthrough on Wednesday on its 2.5 point PnF chart and the Dow has finally cracked the 8300 level from the downside. That 8300 level in the Dow is important as it served as long term support before the head and shoulders breakdowns last September and again in January. It served as support for the shoulder formations in the last pattern and for the neckline in the former. It was the first close below 8300 that sent us reeling in both instances and a close above it certainly appears to put us back on the path to 8800. We weren't able to achieve that close today, but we are getting closer. The SPX was able to maintain a close above the 875 breakthrough level. While it may not be straight up from here, we continue to add to the bullish sentiment that has turned the bullish percents higher in the Dow, SPX and NDX and it appears we have seen a significant turning of the tide that may not end soon. While it seems less effective to study the technicals as we head into war, knowing world events could render them useless for short periods of time, they do measure the ultimate response to those events and for that reason, may actually cut through some of the noise and opinions we hear from analysts. After all, the true measure of financial opinions is where you put your money. If institutions think we are undervalued they will buy and if they think we are overvalued they will sell. The charts let us know exactly what is happening, regardless of the reasons behind it. As the price of oil continues to plummet, in spite of the flaming Iraqi oil fields, cost reductions will eventually make their way into consumers' pockets and businesses' cost savings. That may be the quickest way to turn the economy back around and it seems that plenty of investors feel the same way. If the war goes as quickly and neatly as many people think it will, then there may be some basis for the rally. Many companies are citing the war as the main reason that there is a hold on spending. However, right now that is the easy excuse for a poor economy. Oil futures are approaching the $27-$28 top we saw as resistance through much of last fall. We got a bounce off that level this morning, which also coincided with the 200-dma on the futures contract. If the drop in price slows, the equity rally may slow as well. In what the U.S. calls a financial offensive, the government seized and confiscated all non-diplomatic Iraqi government assets held in the U.S. and directed other countries to do so, as well. Treasury Secretary Snow said that any country that did not comply with the request might face denied access to U.S. markets. Turkey also voted to allow the U.S. use of its airspace, which according to many experts should help the U.S. effort significantly. Each chart I look at appears very overbought and I can't help but think, "There's no way that is sustainable," or "it's got to be time for a pullback." However, we continue to climb higher and I keep prodding myself with the adage that the trend is in effect until demonstrated otherwise. Right now, the recent uptrend is still in effect. Traders should be careful with this particular trend because of the global pressures; but until something changes, lean long - just do it with risk capital only. ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10673 52-week Low : 7197 Current : 8287 Moving Averages: (Simple) 10-dma: 7895 50-dma: 8072 200-dma: 8447 S&P 500 ($SPX) 52-week High: 1176 52-week Low : 768 Current : 875 Moving Averages: (Simple) 10-dma: 839 50-dma: 855 200-dma: 893 Nasdaq-100 ($NDX) 52-week High: 1734 52-week Low : 795 Current : 1080 Moving Averages: (Simple) 10-dma: 1026 50-dma: 1009 200-dma: 994 ----------------------------------------------------------------- The Semiconductor Index (SOX): The SOX crept higher again today, flirting with that resistance at 331 I talked about earlier in the week. It reached a high of 334 intraday, but fell back to 329 at the close. The break above 331 was promising, but a close would have been better for bulls. The next level of resistance here is 350 and there are a number of stocks that are flirting with corresponding resistance. OI has added MXIM to our call list with a trigger of $40.50. Other stocks to watch for a breakout in the sector are LLTC above $35 and CCMP above $48. Look for support in the SOX above 331 before leaping, though. 52-week High: 393 52-week Low : 214 Current: 329 Moving Averages: (Simple) 21-dma: 296 50-dma: 293 200-dma: 314 ----------------------------------------------------------------- The VIX has continued to hold above support at 34-35%. The descending trend line from the July 2002 and October 2002 highs continues to keep a lid on it, while it finally broke below the 200-dma at 35.62, but not by much. Traders should continue to watch the 34-35% level for signs of a breakdown, which would be bullish for equities. Until then, the VIX is signaling caution for long positions at this level. CBOE Market Volatility Index (VIX) = 35.26 -0.92 Nasdaq-100 Volatility Index (VXN) = 48.48 +0.28 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.56 854,816 480,038 Equity Only 0.52 515,240 269,260 OEX 0.86 60,455 51,823 QQQ 0.41 95,961 39,566 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 38.1 + 1 Bull Correction NASDAQ-100 45.0 + 1 Bull Alert Dow Indust. 30.0 +10 Bull Alert S&P 500 36.8 + 2 Bull Confirmed S&P 100 35.0 + 8 Bear Confirmed Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-Day Arms Index 0.68 10-Day Arms Index 1.30 21-Day Arms Index 1.37 55-Day Arms Index 1.29 Extreme readings above 1.5 are bullish, and readings below .85 are bearish. These signals don't occur often and tend be early, but when they do, they can signal significant market turning points. ----------------------------------------------------------------- Market Internals Advancers Decliners NYSE 1698 1120 NASDAQ 1680 1358 New Highs New Lows NYSE 59 28 NASDAQ 46 34 Volume (in millions) NYSE 1,661 NASDAQ 1,549 ----------------------------------------------------------------- Commitments Of Traders Report: 03/11/02 Weekly COT report discloses positions held by small specs and commercial traders of index futures contracts at the Chicago Mercantile Exchange and Chicago Board of Trade. COT data can be found at www.cftc.gov. Small specs are the general trading public with commercials being financial institutions. Commercials are historically on the correct side of future trend changes while small specs tend to be wrong. S&P 500 Commercials added to both sides of the equation, with an additional 14,000 long contracts and 13,000 shorts. Small traders mirrored that activity, adding 5,000 longs and 4,000 shorts. Commercials Long Short Net % Of OI 02/18/03 423,871 481,871 (58,000) (6.4%) 02/25/03 424,276 482,476 (58,200) (6.4%) 03/04/03 426,053 472,492 (46,439) (5.2%) 03/11/03 440,688 485,938 (45,250) (4.9%) Most bearish reading of the year: (111,956) - 3/6/02 Most bullish reading of the year: ( 16,472) - 10/01/02 Small Traders Long Short Net % of OI Small Traders Long Short Net % of OI 02/18/03 155,475 91,102 64,373 26.1% 02/25/03 157,790 91,083 66,707 26.8% 03/04/03 164,759 98,636 66,123 25.1% 03/11/03 169,450 102,631 66,819 24.6% Most bearish reading of the year: 36,513 - 5/01/01 Most bullish reading of the year: 114,510 - 3/26/02 NASDAQ-100 Commercials added almost equally to both sides with 3,700 long contracts and 3,000 shorts. The slightly higher addition to the long side was similar to the activity in the S&P. Small traders got longer as well, with 3,000 additional long contracts and 1,600 additional shorts. Commercials Long Short Net % of OI 02/18/03 38,486 50,501 (12,015) (13.5%) 02/25/03 38,787 51,745 (12,958) (14.3%) 03/04/03 39,934 52,978 (13,044) (14.0%) 03/11/03 43,641 56,020 (12,379) (12.4%) Most bearish reading of the year: (15,521) - 3/13/02 Most bullish reading of the year: 9,068 - 06/11/02 Small Traders Long Short Net % of OI 02/18/03 25,482 9,425 16,057 46.0% 02/25/03 25,378 7,431 17,947 54.7% 03/04/03 24,240 8,038 16,202 50.2% 03/11/03 27,196 9,674 17,522 47.5% Most bearish reading of the year: (10,769) - 06/11/02 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Commercials broke ranks in the Dow, adding 1,600 short contracts and only 400 longs. Small traders added 300 long contracts and reduced shorts by about the same amount. Commercials Long Short Net % of OI 02/18/03 18,812 11,939 6,873 22.4% 02/25/03 19,985 11,866 8,119 25.5% 03/04/03 21,326 12,724 8,602 25.3% 03/11/03 21,726 14,370 7,356 20.4% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 02/18/03 5,561 8,973 (3,412) (23.5%) 02/25/03 4,872 8,723 (3,851) (28.3%) 03/04/03 5,233 8,075 (2,842) (21.4%) 03/11/03 5,549 7,727 (2,178) (16.4%) Most bearish reading of the year: (8,777) - 10/12/01 Most bullish reading of the year: 1,909 - 1/16/01 ------------------------------------------------------------ VOTED one of "Best Online Brokers" (4 stars)--Barron's optionsXpress's "order-entry screens...go far beyond... other online broker sites"--Barron's 8 different online tools for options pricing, strategy, and charting Access to options specialists via email, phone or live chat online Real-Time Buying Power, Account Balances or Cancels Go to http://www.optionsxpress.com/marketing.asp?source=oetics22 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ ************************* WEEKLY MANAGER MICROSCOPE ************************* Marty Zweig: Zweig Fund (ZF) This week, at the request of one reader, we look at Marty Zweig's Zweig Fund (ZF) a "closed-end" investment company that operates a mutual fund with a limited number of shares outstanding. Unlike "open-end" management companies, which create new shares to meet investor demand, such closed-end funds start with a set number of shares and are listed on a stock exchange. The Zweig Fund trades on the Big Board ("NYSE") and has approximately 60,000,000 shares outstanding, per Morningstar's report. As of March 14, the Zweig Fund traded at a 9.6% discount (market price to net asset value). Mr. Zweig has served as president of Zweig Advisors since 1971. His bio reads that he's also currently research director with Avatar Investors Associates, an asset management firm that manages pension plans and other securities accounts. Zweig has provided investment-advisory services since 1971 as well as portfolio-management services since 1972. Zweig is also a frequent contributor to Barron's as well as regular panelist on Wall Street Week. In 1998, Zweig was described by one article as "perhaps the most successful predictor of market trends in the history of Wall Street." Prior to January 3, 2003, however, Morningstar rated his Zweig Fund just 1 star for "risk-adjusted" returns relative other "large-cap value" closed funds. One star is Morningstar's lowest star rating and is assigned to the bottom 10% of funds in a category. On January 3, Morningstar increased the Zweig Fund rating to two stars, signifying "below-average" relative returns within the large-cap value category. Zweig has managed the Zweig Fund since its inception in 1986 and has co-managed the closed-end fund with Jeff Lazar since January 1995. Investment Style/Strategy Zweig and Lazar take a "risk-adverse" approach to the management of the Zweig Fund based on various proprietary models. They use several factors to predict market trends, such as the prime rate, Fed discount rate, installment debt indicator, and the Value Line Composite Index. They utilize equities and/or debt securities in rising markets, and money market securities to protect capital in falling markets. Their goal is to achieve "above-average" return over a complete market cycle with a reduced amount of risk. Zweig also looks at momentum, sentiment, and seasonal indicators. He is a momentum player, buying stocks already moving upward, but only when the market overall is in an upward trend. He also runs contrary to certain "sentiment" indicators including cash balance levels (in funds) and secondary offerings, and takes into account such seasonal indicators as trading before holidays and "January" effect. Zweig admits that pegging such indicators as "sentiment" is more an art than science. As of June 30, 2002, the Zweig Fund had 78% of assets invested in common stock, warrants, options and other equities, with 22% held in cash and fixed income securities maturing in less than 1 year. The equity portion of the fund portfolio had an average P/E of 20 and an average market capitalization of $75 billion (ultra large- cap). Annual portfolio turnover was reported to be 57.7 percent. Per the most recent Morningstar report, the Zweig Fund's average market cap was $40.5 billion at February 28, 2003, with about 48% of stock investments in giant-cap stocks and another 36% invested in large-cap stocks. Based on the fund's average style, it lands in the Morningstar large-cap value style box. Investment Performance/Ratings While Morningstar's portfolio data other than average market cap is stale, they do provide up-to-date performance numbers through March 14, 2003. They also provide annual (year-to-year) returns and trailing 10-year average annual return as of February 28, so you can get a very good idea of how well the Zweig Fund has done compared to other large-cap value, closed-end funds. Below is a summary of returns and category percentile rankings (1-best, 100- worst) per Morningstar. Year-To-Year (NAV) Returns/Rankings: +14.5% 1996 90th Percentile +21.8% 1997 88th Percentile + 5.9% 1998 85th Percentile +12.9% 1999 17th Percentile - 6.2% 2000 96th Percentile -14.6% 2001 96th Percentile -23.9% 2002 85th Percentile - 2.0% 2003(YTD) 2nd Percentile As you can see, the Zweig Fund landed in the bottom quintile six times since 1996, and in the bottom decile three times. Looking at "annualized" return performance next Morningstar provides the following information: Average Annual (NAV) Returns/Rankings: -34.7% 1-Year 27th Percentile -15.7% 3-Year N/a - 8.2% 5-Year N/a + 2.5% 10-Year 99th Percentile Morningstar didn't indicate the fund's category rankings for the trailing 3-year and 5-year periods, but the 99th percentile rank over the past decade speaks for itself. That falls way short of the goal to achieve above-average return over a complete market cycle. A look at Morningstar's risk data also suggests that the Zweig Fund has fallen short of its "reduced risk" objective. In the Morningstar report, the fund's 10-year risk level is roughly equal to average (1.00), and its trailing 3-year and 5-year risk levels were above average (1.16 and 1.09, respectively). Over the past three years, the Zweig Fund has a "negative" Sharpe ratio of 1.48, and a negative alpha score of 4.15. That suggests that Zweig and Lazar have basically failed to generate investment results that are commensurate with the risk incurred. A "7" bear market decile suggests the fund hasn't done well in bear markets. The result, a Morningstar 1-star rating for the trailing 5 years, and 2-star rating for the trailing 10-year period. So, taking in account risk and cost, the Zweig Fund has not gotten the job done for investors. Conclusion I was asked by one of our readers to look at the Zweig Fund as a "competitor with Vanguard, Lipper, American Century, et al." It may offer a high yield today, but yield is just one piece of the puzzle. Looking at this fund on a "total return" basis relative to its large-cap value closed-end fund peers, the Zweig Fund has disappointed. It is my opinion that there are better investment options both in the closed-end world and the open-end fund world. I shall tell you that my feelings are partly based on experience. When I was director of pension investments for a large corporate pension plan (1994-1999), our plan utilized the TAA (or tactical asset allocation) services of Avatar Investors Associates, which Marty Zweig serves/served as director of research. After several years of "poor" relative performance, I recommended and received approval to fire Avatar. In my opinion, the Zweig Fund belongs in the "avoid" category. Steve Wagner Editor, Mutual Investor email@example.com ------------------------------------------------------------ We got trailing stops! Trade online with trailing stops at optionsXpress, at no extra cost Trailing stops based on the option price or the stock price Also place Contingent, Stop Loss, and "One Cancels Other" orders $1.50 /contract (10+ contracts) or $14.95 Minimum--NO Hidden Fees! Go to http://www.optionsxpress.com/marketing.asp?source=oetics23 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ *********************** SWING TRADER GAME PLANS *********************** The Trend Continues The war rally lives. It did not appear that way this morning as the Dow dropped to a triple digit loss. However, the bulls came in and bought the dip and pushed to us higher through some significant technical levels mid-day. To read the rest of the Swing Trader Game Plan Click here: http://www.OptionInvestor.com/itrader/indexes/swing.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. 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The Option Investor Newsletter THursday 03-20-2003 Copyright 2003, All rights reserved. 2 of 3 Redistribution in any form strictly prohibited. In Section Two: Dropped Calls: None Dropped Puts: CAI Daily Results Call Play Updates: BCR, BVF, ERTS, MME, STN New Calls Plays: BRL, MXIM Put Play Updates: LLY New Put Plays: NOC **************** PICKS WE DROPPED **************** When we drop a pick it doesn't mean we are recommending a sell on that play. Many dropped picks go on to be very profitable. We drop a pick because something happened to change its profile. News, price, direction, etc. We drop it because we don't want anyone else starting a new play at that time. We have hundreds of new readers with each issue who are unfamiliar with the previous history for that pick and we want them to look at any current pick as a valid play. CALLS: ***** None PUTS: ***** CAI $32.71 +1.16 (+1.14) How's that for a delayed reaction. Despite the strong rebound in the NASDAQ last week, shares of CAI continued to languish, looking ripe for a breakdown under the $30 level when we added it to the put list on Tuesday. Alas, it wasn't to be, as the stock rebounded sharply from that level yesterday and then broke out of its recent consolidation to the upside on Thursday. Fortunately, we had set an entry trigger of $29.50 (which was never achieved), so we're going to pull the plug tonight. Since our trigger was never satisfied, traders should not have entered the play, and therefore no harm done. *********************************************************** DAILY RESULTS *********************************************************** Please view this in COURIER 10 font for alignment ************************************************* CALLS Mon Tue Wed Thu Week BCR 62.35 1.29 1.31 0.30 0.95 Adding to gains BRL 53.81 1.92 -1.03 0.72 1.00 New, relative highs BVF 39.45 0.64 -0.09 0.20 -0.15 Waiting for $40 ERTS 58.95 2.11 -0.10 0.22 0.45 Approaching 200-dma MME 38.53 1.76 -0.18 1.16 -0.36 Took a rest MXIM 39.56 2.25 0.44 -0.03 0.00 New, Over $40 STN 21.21 0.70 -0.13 0.28 0.61 28% ? PUTS CAI 32.71 -0.83 -0.59 -1.25 1.16 Drop, untriggered LLY 56.63 1.90 0.68 0.55 -0.17 Not going anywhere NOC 84.95 1.77 -0.19 -0.20 -2.50 New, Party's over ------------------------------------------------------------ We got trailing stops! Trade online with trailing stops at optionsXpress, at no extra cost Trailing stops based on the option price or the stock price Also place Contingent, Stop Loss, and "One Cancels Other" orders $1.50 /contract (10+ contracts) or $14.95 Minimum--NO Hidden Fees! Go to http://www.optionsxpress.com/marketing.asp?source=oetics23 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ ******************** PLAY UPDATES - CALLS ******************** BCR $62.35 +0.95 (+3.95) Momentum traders got their wish today, as BCR continued its relentless march up the chart, helped along by the persistently bullish broad markets. We were looking for a push through the $61.25 level to initiate new momentum-based positions in our last update, and BCR obliged on Wednesday, closing at a new 52-week high of $61.40. Then the bulls got serious on Thursday, propelling the stock through that level and finally cresting the $62 level before once again closing very near the high of the day. BCR is moving up in a very aggressive ascending channel right now, and it can't be expected to last indefinitely. Rather than continuing to chase the stock higher from here, we're going to wait for the next pullback before recommending new entries. Look for a pullback and bounce near the $60.60-61.00 area as a solid entry point, with the $60 level being the last line of bullish defense. We're raising our stop to $59.75 tonight, as that is just below the top of Tuesday's gap. --- BVF $39.45 -0.15 (+0.39) While the rest of the market is grinding higher, our BVF play seems to have fallen asleep. Currently stuck in the $39-40 area, the stock is working off its near-term overbought condition, while waiting for the next upward push from eager buyers. While the price action this week is certainly less than inspiring, we've got our eye on the 6-week ascending trendline (currently $38), and expect it to provide support for that next push up. The $38 level is also significant historical support (old resistance) and that's where bargain hunters will want to lie in wait. Any pullback near that level should find eager buyers, and new entries on a rebound from there should be favorable. If looking for signs of a breakout before playing, traders will want to focus on the $40.25 level. This is just above Tuesday's intraday high, and a trade above that level would have the stock moving to new multi-month highs. Below the ascending trendline is the 20-dma at $37.29 and that will be the bulls' last line of defense. If they can't hold that level on a more significant pullback, then we'll want to be out of the play. Accordingly, we're raising our stop to $37 tonight. --- ERTS $58.95 +0.45 (+2.47) ERTS may have eased back from the sharp gains seen late last week and earlier this week, but the bulls have got to be pleased with the way the stock is continuing to post higher intraday highs and lower intraday lows. We suspected it was going to be difficult to break through the $60 level, at least on the first attempt. With significant historical resistance at that level, as well as the 200-dma at $60.03, a pullback after the first test of that level would be expected. So it is actually rather surprising that there wasn't more weakness today after ERTS traded an intraday high of $59.72. On Balance Volume is continuing to rise, but daily Stochastics are looking a bit toppy here. Traders that entered the play at lower levels would be prudent to harvest gains on another push near the $60 level, waiting for the next pullback to re-enter the play at a lower level. We raised our stop to $56 earlier in the week, and it has been encouraging to see intraday support begin to build at a higher level, near $57.50. Another rebound from that area can be used to initiate new positions, but we're going to avoid suggesting new momentum entries at this time. Keep stops set at $56. --- MME $38.53 -0.36 (+2.53) It's been a rather bumpy road, but our MME play continues to perform admirably in what is undoubtedly a volatile market. After rebounding again from just below the $36 level on Monday, the stock took off like a shot, propelled higher along with the rest of the market. It took until yesterday to finally get through the $38 resistance level, but the buyers got the job done, and on stronger than average volume too. Thursday's session was another one of consolidation, with MME posting an inside day. The last pullback found strong support just above the 20-dma (currently $36.29), and if this uptrend is to continue, then that moving average will need to continue to fulfill the role of support. Aggressive traders can enter new positions on an upside break of the inside day formation with a trade above $39.20, while those with a more conservative risk profile will want to take advantage of a dip and bounce in the $37.00-37.50 area. We're raising our stop to $36 tonight, just below the 20-dma. --- STN $21.21 +0.61 (+1.35 for the week) STN followed through on its breakthrough of the $20 resistance level that had been in place for two years by adding another $1.21 on top of it. It appears to be on its way toward the point and figure bullish vertical count of $30, but let's not get too far ahead of ourselves. Our target on the play is a more conservative $25. Traders will also note the reverse head and shoulders pattern with the head just over $11 and the neckline right around $19. That pattern would imply a move to $27 now that it has been broken. Without recent news, it appears that STN is following the blueprint laid out during the first gulf war, when casino stocks gained 28% in the month following the start of that conflict. Other stocks in the sector have also been showing impressive gains, with MGG adding $1.07 and moving into a gap and MBG also gaining ground. Both of those stocks have their 200- dmas overhead, while STN passed its own back in September and hasn't looked back. New entries can look for a pullback to support above $20, or target a momentum move above today's high of $21.30. We are raising our stop to $18.75, just below the 21-dma. ************** NEW CALL PLAYS ************** BRL - Barr Labs - $53.81 +1.00 (+3.18 for the week) Company Summary: Barr Laboratories, Inc. is a specialty pharmaceutical company engaged in the development, manufacture and marketing of generic and proprietary pharmaceuticals. Why We Like It: Standard & Poor's estimates that generic drugs will grow at an annually compounded rate of 11% over the next few years and could eventually take in $18.5 billion in annual sales. Part of the reason for the estimates is that the current administration has made access to generic versions of expensive drugs a priority as a way to reduce health costs. While the period of exclusivity for such products is limited to six months, BRL made use of that period to sell $311 million worth of their generic version of Prozac last year. While the profits from that substitute have fallen dramatically since the exclusivity period ended, the company just received permission to sell generic versions of Shire Plc's attention deficit drug Adderall. BRL is also challenging Shire's patent protection for Adderall XR, which accounted for $317 million of Shire's $27 million in sales from the Adderall line of products. Barr will have six months of exclusivity to sell generic versions of Adderall in three new doses. The stock had been testing the $53 level in mid-January, before dropping into the $47 range in early February. It has now bounced and taken out those relative highs, reaching a high of $54.45 intraday. The move above $54 was not only a breakout on the daily charts, but also on the point and figure chart. The stock has now broken out from a bullish pennant formation on that chart, where it gave a buy signal at $53 and finds its next level of resistance at $60. A look at the weekly chart shows the stock bouncing from an ascending trend line begun in mid-October, when it began setting a series of higher highs and higher lows. We like entries at current levels, but if the stock experiences a pullback after the recent gains in the broader markets, the most profitable entries may come on a bounce from recent support at $52, which also acted as resistance before the latest breakout. Note the stock underwent a 3-for-2 stock split on March 18, but has not yet shown any signs of post-split depression. We will place our stop at $50.48, just below the converging 50 and 21- dmas. More conservative traders can set a stop just below that recent support at $52, possibly at $51.50. BUY CALL APR-50 *IOB-DJ OI=48 at $4.70 SL=2.35 BUY CALL APR-53 IOB-DY OI=352 at $2.40 SL=1.20 BUY CALL MAY-53 IOB-EY OI=1032 at $3.30 SL=1.65 BUY CALL MAY-55 IOB-EK OI=15 at $2.40 SL=1.20 Average Daily Volume = 965 K --- MXIM – Maxim Integrated Products $39.56 +0.00 (+2.03 this week) Company Summary: MXIM designs, develops, manufactures and markets a broad range of linear and mixed-signal integrated circuits, commonly referred to as analog circuits. The company also provides a range of high-frequency design processes and capabilities that can be used in custom design. MXIM's objective is to develop and market both proprietary and industry-standard analog integrated circuits that meet the increasingly stringent quality standards demanded by customers. Why We Like It: With the war rally well underway, the NASDAQ is leading the way on the upside, and leading the way in that area of the market is the Semiconductor index (SOX.X). In fact, both indices are now solidly in the green for the year. As of yet, there still isn't a solid fundamental catalyst, although the better than expected Book to Bill number released earlier this week certainly didn't hurt. The continuation of the rally this week pushed the SOX through its 200-dma for the first time since last May and there are some stocks in the sector that are looking downright bullish. MXIM stands out as it has already had quite a run, up almost 20% in a little over a week. The stock is currently doing battle with its 14-month descending trendline ($39.50) and a decisive breakout here could usher in another strong upward surge. Even yesterday's Pacific Growth downgrade couldn't dampen investors' appetite for the stock and it held firm again today. Monday's trade at $40 finally generated a new PnF Buy signal, and due to the length of the column of X required to achieve that feat, the bullish price target is at an astronomical $63. Clearly, we aren't going there anytime soon. But that doesn't change the very bullish picture being presented here. There is the risk that MXIM could still roll from the site of its descending trendline, so we want to set a trigger for the play of $40.50, just above Thursday's intraday high. Aggressive traders can enter the play on that breakout, while those with a more cautious approach will want to wait for a pullback and rebound from the $38.50-39.00 area before jumping aboard. MXIM will need to hold above its 10-dma ($37.02) to keep its bullish trend intact on a more significant pullback, so we're initially placing our stop at $37. The $350 level will be pivotal for the SOX to clear if MXIM is going to have some significant upside from here, so traders that take the momentum entry will want to watch the SOX for the confirmation of sector-wide strength. BUY CALL APR-40*XIQ-DH OI=2128 at $2.60 SL=1.25 BUY CALL APR-45 XIQ-DI OI= 571 at $0.85 SL=0.40 BUY CALL MAY-40 XIQ-EH OI=4246 at $3.70 SL=2.00 BUY CALL MAY-45 XIQ-EI OI=3255 at $1.70 SL=0.75 Average Daily Volume = 7.71 mln ------------------------------------------------------------ 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 ------------------------------------------------------------ ******************* PLAY UPDATES - PUTS ******************* LLY $56.63 -0.17 (+2.65) Following the selloff to the $53 area last, shares of LLY have been struggling to move higher with the broad market. While the stock has managed to move higher with the rest of the market, it has been an uphill battle, as the $57 level continues to provide formidable resistance. Even with the DRG index cresting its year-long descending trendline and 200-dma near the $296 level, the index hasn't been able to move through the $300 level, which provided resistance earlier this year. LLY has managed to get through its 20-dma ($55.96), but with daily Stochastics topping out in overbought territory, and news in the sector as it relates to patent protection and product development continuing to be bearish, we're betting that the $57 level is going to hold. To be sure, in such a bullish market environment, new bearish plays here are risky, but attractive on a risk/reward basis. We're still looking for a return to the lows of last week and then a trip down to the $50 level. Aggressive traders can take advantage of the recent strength to enter new positions on a rollover near the $57 level, keeping in mind that our stop is set at $57.10 (on a closing basis). The more conservative approach will be to wait for a break back under the $55 level before entering the play. ************* NEW PUT PLAYS ************* NOC - Northrup Grumman Corp. $84.95 -2.50 (+0.55 this week) Company Summary: Northrup Grumman is a defense company that provides products, services and solutions in defense and commercial electronic, systems integration, information technology and nuclear and non-nuclear shipbuilding and systems. NOC has operations in 44 states and 25 countries, serving United States and international military, government and commercial customers. In December 2002, the company merged with TRW, a provider of technology products and services for the aerospace, information systems and automotive markets. As a result, TRW became a wholly owned subsidiary of NOC and in March 2003, the company sold the automotive business of TRW, while retaining a 19.6% equity interest. Why We Like It: The war rally may be well underway for the broad markets, but from the looks of Thursday's action, it may already be over for the Defense stocks. While the Defense index (DFI.X) did manage a respectable rebound from its recent all-time lows over the past week, Thursday's rollover from the $460 level doesn't look very encouraging for the bulls. The selling was pretty broad-based throughout the sector, as reports continue to circulate that the Iraq war is unlikely to have an impact on the businesses of the major defense contractors. Leading the way lower on Thursday were shares of NOC, serving up a 2.85% decline after rolling over from the $88 resistance (former support) level. The PnF chart shows just how weak the stock is, failing to generate even a single Buy signal since early January, and that one turned out to be a head fake. On its pre-war decline, NOC actually achieved its bearish price target of $79, and with selling coming back into the stock, we're looking for that level to be revisited over the near-term, especially if the war proceeds smoothly, keeping the DFI index under pressure. With fairly decent support at the $84 level and resistance at $86, $87 and $88, we've got a little bit of everything in terms of potential entry points. The ideal entry would come from a failed rally in the $86-87 area, but we do have to contend with the possibility that NOC breaks down under $84 and just keeps on going. Momentum traders can target a drop under $83.75 for new entries. We're going to start with a fairly wide stop at $88.25 to allow for a solid bounce and failure, as a close above $88 would be a big warning sign that the rollover that began today doesn't have the downside potential we expect. If entering on a failed rally, confirm sector weakness with the DFI index rolling below the $465 level. If entering on a breakdown, look for the DFI index to confirm with its own break under $443. BUY PUT APR-85*NOC-PQ OI=2626 at $3.50 SL=1.75 BUY PUT APR-80 NOC-PP OI=1131 at $1.65 SL=0.75 Average Daily Volume = 1.43 mln ------------------------------------------------------------ optionsXpress has "...a lot of bang for the buck."--Barron's $1.50 /contract (10+ contracts) or $14.95 Min. No hidden fees Easy screens for spreads, collars, or covered calls! Contingent, Stop Loss, Trailing stop, or OCO 8 different online tools for options pricing, strategy, and charting Go to http://www.optionsxpress.com/marketing.asp?source=oetics25 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ ********** 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 Thursday 03-20-2003 Copyright 2003, All rights reserved. 3 of 3 Redistribution in any form strictly prohibited. In Section Three: Play of the Day: CALL - MXIM Traders Corner: Keep A Paper Trail – Keep Your Profits Traders Corner: Putting It All Together_3 Options 101: Does "Close" Count? ********************** PLAY OF THE DAY - CALL ********************** MXIM – Maxim Integrated Products $39.56 +0.00 (+2.03 this week) Company Summary: MXIM designs, develops, manufactures and markets a broad range of linear and mixed-signal integrated circuits, commonly referred to as analog circuits. The company also provides a range of high-frequency design processes and capabilities that can be used in custom design. MXIM's objective is to develop and market both proprietary and industry-standard analog integrated circuits that meet the increasingly stringent quality standards demanded by customers. Why We Like It: With the war rally well underway, the NASDAQ is leading the way on the upside, and leading the way in that area of the market is the Semiconductor index (SOX.X). In fact, both indices are now solidly in the green for the year. As of yet, there still isn't a solid fundamental catalyst, although the better than expected Book to Bill number released earlier this week certainly didn't hurt. The continuation of the rally this week pushed the SOX through its 200-dma for the first time since last May and there are some stocks in the sector that are looking downright bullish. MXIM stands out as it has already had quite a run, up almost 20% in a little over a week. The stock is currently doing battle with its 14-month descending trendline ($39.50) and a decisive breakout here could usher in another strong upward surge. Even yesterday's Pacific Growth downgrade couldn't dampen investors' appetite for the stock and it held firm again today. Monday's trade at $40 finally generated a new PnF Buy signal, and due to the length of the column of X required to achieve that feat, the bullish price target is at an astronomical $63. Clearly, we aren't going there anytime soon. But that doesn't change the very bullish picture being presented here. There is the risk that MXIM could still roll from the site of its descending trendline, so we want to set a trigger for the play of $40.50, just above Thursday's intraday high. Aggressive traders can enter the play on that breakout, while those with a more cautious approach will want to wait for a pullback and rebound from the $38.50-39.00 area before jumping aboard. MXIM will need to hold above its 10-dma ($37.02) to keep its bullish trend intact on a more significant pullback, so we're initially placing our stop at $37. The $350 level will be pivotal for the SOX to clear if MXIM is going to have some significant upside from here, so traders that take the momentum entry will want to watch the SOX for the confirmation of sector-wide strength. BUY CALL APR-40*XIQ-DH OI=2128 at $2.60 SL=1.25 BUY CALL APR-45 XIQ-DI OI= 571 at $0.85 SL=0.40 BUY CALL MAY-40 XIQ-EH OI=4246 at $3.70 SL=2.00 BUY CALL MAY-45 XIQ-EI OI=3255 at $1.70 SL=0.75 Average Daily Volume = 7.71 mln ------------------------------------------------------------ WINNER of Forbes Best of the Web Award optionsXpress voted Favorite Options Site by Forbes Easy screens for spreads, collars, or covered calls Free streaming quotes Real-time option chains, charts + calculators Go to http://www.optionsxpress.com/marketing.asp?source=oetics21 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ ************** TRADERS CORNER ************** Keep A Paper Trail – Keep Your Profits By Mike Parnos, Investing With Attitude Does Saddam Hussein wear glasses? That’s the question of the day. Considering the bar isn’t set very high for our government’s intelligence network, Saddam probably put on one of those Groucho disguises -- confident that we’d never figure it out. It’s been said that Saddam has recruited a dozen look-alikes to confuse our agents. How would you like to have that on your resume? Or, possibly, on your tombstone. Three would have been plenty. Well, we may not be able to keep track of Saddam Hussein or Osama Bin Laden or even Jimmy Hoffa for that matter, but we can keep track of our trades. ___________________________________________________________ An IRS Agent’s Dream Come True Over the years, through necessity more than anything else, I devised a spreadsheet on which to keep track of my trades. It has all the gory details of every trade I make during the year. It’s what an IRS agent dreams about – somewhere between the bondage and winning the lottery dreams. The spreadsheet, hopefully pictured below, shows everything, including date of purchase and sale, the kind of equity or option, the number of shares or contracts, the total amount credited and debited, the profit of the specific trade, a year- to-date profit figure as well as the strategy used. At a glance you can see what strategies have worked well for you and which ones have not. If you’re using the strategy checklists I’ve put together, you can compare the results with your reasons for entering the trade. You can see if you generated the most profit (or limited a loss) that you could out of the trade. It will help define the areas of your trading that need work. For those wise CPTI students whom are paper trading, this is also an ideal learning tool. If you’re a CPTI trader, you aren’t constantly jumping in and out of positions, so you won’t require that many sheets. However, if you’re doing Iron Condors, you’ll use four lines because there are four options involved in the two-spread strategy. A Straddle would require two lines, etc. This spreadsheet was set up in Microsoft Excel. Drop me a note and I’ll be glad to send you the spreadsheet. Within the spreadsheet, there are a few formulas for adding various columns, etc. Will they transfer when I send you the spreadsheet? Hell if I know. You’re asking the wrong guy. I haven’t even figured out toasters yet. Deductive Reasoning Equals Deductions Fact: For every dollar you save, that’s about $1.50 you don’t have to earn to replace it. It’s similar when it comes to tax deductions. If you don’t take all the deductions you’re entitled to, you’re giving more money to the government than necessary. Depending on your bracket, for every dollar you don’t take as a deduction, you’re giving away $.35-.40. Let me put it in terms CPTI students will understand. For every $30 of deductions you overlook, that’s a large pizza with two toppings being eaten by a government employee instead of you. For Those Of You Who Have Trading Profits Now, don’t get greedy. You don’t want to send up red flags. That’s all you need -- an IRS agent with a flashlight and a magnifying glass giving your life a body cavity search looking for hidden profits or unjustified deductions. Here are some items you might consider for deductions. Computer equipment purchase, new office furniture, financial magazines, your OI subscription, quote service, charting services, your cable modem charges, software for your spreadsheet program, office supplies, and, don’t forget, at least 25% of your liquor bill. ___________________________________________________________ Sunday Preview It’s that time of the month again. We’re going to see how this month’s CPTI portfolio performed and put on some new positions for the April option cycle. Should be interesting. ___________________________________________________________ CPTI Portfolio Update Position #1 – OEX Bull Put Spread – Trading at $445.79. Believing the market is not likely to go down to retest its July and October lows near 400, we sold 10 contracts of the OEX March 400 puts and bought 10 contracts of the OEX March 390 puts for a credit of $1,400. If war breaks out, it might be a quickie. The market may spike up – which it did. How high? It looks like about 800 DOW points. Who knows? That’s why we didn’t put a bear call spread on top to create an Iron Condor. The OEX tested the 400 level, but bounced up nicely. With a day to go, we’re just fine. If you need any more trading maintenance dollars, you could buy back the March $400 put for a nickel and release the $10,000 that was being held against the bull put spread. ____________________________________________________________ Position #2 – XAU Iron Condor – Trading at $64.65. We created an Iron Condor with a 15-point range $65 to $80 for March. We were able to place spread orders and take in $1,400 for our 10-contract position. The objective is for the underlying, at expiration, to finish anywhere within the spread. We closed this position early because XAU broke down through support. We still managed at small $400 profit. For traders who didn’t close the position, XAU has peeked back up above the sold strike and has been hovering around the $65 strike. With only one day to go we’re down to the short hairs – and this trade has turned the short hairs gray! Look for the market makers to do whatever they can to keep XAU as close to $65 as they can. _________________________________________________________________ Position #3 -- OIH -- Diagonal Calendar Spread – Trading at $56.97. We thought that there was about $8-10 of uncertainty built into the price of a barrel of oil. When, and if, the war is resolved, the price of oil should work its way down, along with the price of oil stocks. We bought 10 contracts of the July OIH $55 puts and sold 10 contracts of the March OIH $50 put at a debit of $3.85. With March expiration upon us, our $50 put is essentially worthless. This is why I don’t like directional trading. There we were, last Friday, sitting with $1.00 profit and OIH seemingly on its way down – which would have generated substantially more profit. Did I make the typical trader’s blunder by not just taking a profit while it was there? Maybe so. The price of oil has, as we predicted, tumbled. Then, why the hell haven’t the stocks in the OIH tumbled as well? ____________________________________________________________ Position #4 -- QQQ ITM Strangle – Currently trading at $26.80. This is a long-term position we created four months ago. We own the January 2005 $21 LEAPS calls and the January 2005 $29 LEAPS puts. We sold 10 contracts of the QQQ April $28 the QQQ April $22. We moved our short sells in by one point because a lot of premium has disappeared from the QQQs in the last two months. If the market continues its move up, we’ll watch the deltas on our $28 calls. ____________________________________________________________ Position #5 – MMM Iron Condor – Currently trading at $130.61. We created an Iron Condor with a 15-point range $115 to $130 for April. We were able to take in $1,550 for our 10-contract position. The objective is for the underlying, at expiration, to finish anywhere within the spread. With the pre-war market run-up, MMM today violated the $130 strike call. Hopefully, some profit-takers will enter the market to bring MMM’s price down and give us a little breathing room. The resistance around $130 is substantial. Will it hold for another month? I still like our chances, but we’ll keep a watchful eye on it. ____________________________________________________________ Note: Because I’m out of town, I won’t be able to respond to emails until Wednesday. ________________________________________________________________ Happy trading! Remember the CPTI credo: May our remote batteries and self-discipline last forever, but mierde happens. Be prepared! In trading, as in life, it's not the cards we're dealt. It's how we play them. Your questions and comments are always welcome. Mike Parnos CPTI Instructor ************** TRADERS CORNER ************** Putting It All Together_3 By Leigh Stevens lstevens@OptionInvestor.com Using the most recent price/indicator action of two key indexes, the S&P 100 (OEX) and the Nasdaq 100 tracking stock (QQQ), I'll point out past and current price/oscillator divergences, support/resistance forecasting and use of my sentiment indicator. This in terms of what you can go through in an analysis process that I have found "works" for the indexes to keep in a trend or to get ready for (trend) reversals. What I tend to look at first is for any obvious chart patterns, such as trendlines and trend channels, breakouts above/below prior swing highs or lows and the support/resistance implied by those patterns - also, any support and resistance areas implied by moving averages and the fibonacci retracements of the last big price swing. The only obvious point to look for resistance in my mind in this first OEX chart of the hourly bar chart is the fibonacci 62% retracement level of the recent low to the prior significant high. On the support side, because the OEX cleared prior multiple highs at 432, I assume there may now be support or buying interest at the prior high - resistance once broken tends to "become" support as traders still short at 432 will cover. What makes me suspect the above OEX hourly picture may be shaping up to correct is the bearish hourly price and stochastic divergence. This shows up especially on the 5-period (hourly) stochastic - divergences don't always show up best on the stochastic indicator and I tend to use to single point RSI (Relative Strength Index) indicator most - but, SOMETIMES the stochastic model shows a divergence which is significant to ward of a trend correction. The OEX here has gone on to higher highs, whereas the Stochastic models are either making a series of lower relative highs (5,3,3) or going sideways as is the case with the 21-period (hourly in this case). What is so valuable in divergences is that they so often DO signal upcoming trend corrections - at least suggesting, in this case, to take profits on long calls as the risk of a corrections is GREATER than the probability of a further run up. However, the further above a 62% retracement that the index goes, the greater is the likelihood of a 100 retracement, or what I call a round trip move. (And, a round trip retracement - especially when the Index gets overbought leads to a great likelihood of a double top.) On corrections - there are 2 types - one is a significant PRICE correction or reversal, where prices retrace anywhere from 38 to 50 to around 62% of the prior move. The other kind of correction is a "TIME" correction where prices mostly go sideways and the oscillator indicator goes back down and "throws off" the extreme. More on oscillator divergences at - http://www.OptionInvestor.com/traderscorner/080102_1.asp and - http://www.OptionInvestor.com/traderscorner/072502_1.asp Now there is another possibility in the chart pattern - whether it is significant that the OEX has broken out above the implied upper end of its trend channel per the chart BELOW - sometimes price channels are significant, sometimes now. I couldn't give the odds, but its of far LESS significance than divergences. The above chart takes in more time in hourly trading - a 100 days, on close only basis (line chart). You'll note that the bottom line - the trendline that has 3 or more points - is an INTERNAL trendline, so it "cuts through" the 1 downward spike. An internal trendline connects the MOST number of swing lows or highs whereas a conventional trendline connects only the extremes. In the real world of trading, internal trendlines often work the best in my experience - certainly, drawing trendlines can be more art than mechanical method. NEXT, I tend to look at a bigger picture view and at daily moving averages - or go from the daily to the hourly - anyway, back and forth (also, checking the weekly chart). The 21-day moving is often very significant in trading the indexes. Note how recent highs stopped right in the area of this key trading average. But when the OEX had a decisive upward penetration of this average, there, a good-sized move has followed. Moreover, the rally took out the prior downswing low - taking out potential resistance. ENVELOPE lines or moving average envelopes are set in relation to some moving average. The S&P has been tending either to top or bottom at 6% above or below the 21-day average OR just slow down its trend momentum and "hug" the envelope line per the example of some the prior declines. However, prices this far above/below the moving average puts you on alert for a possible trend reversal - at least you can figure you have gotten already the best part of the move. The 6% envelope implies resistance and a possible place to buy puts at and above 452. However, if prices get to this area and don't fall back much and only mostly consolidate sideways, I look at the possibility for a retracement back to the 475 area which then might set up a double top. [Technical analysis is an ongoing process of assessing the trend - versus fundamental analysis where, for example, you might have a fixed view that the lack of consumer and business confidence will continue to cause a weak economy and you are bearish on the dominant trend.] SECONDLY I point out price/oscillator divergences noted above. Two bullish divergences show up on the RSI, whereas one bearish divergence signaled a top when the Stochastic diverged from price action. Note the commentaries on the chart. We have no current divergences showing up on the daily chart above. LAST but not least on the OEX is further consideration of other key moving averages, especially the 50 and 200-day. Tough resistance may come in at 433, as it did one the two other occasions noted with the 2 prior down (red) arrows at that line. The other big consideration I have with the S&P is what is happening with my trading "sentiment" indicator of CBOE daily equity call volume versus put volume. This indicator, where I enter the figures daily to keep it up - no place else to "get" this figure that way I keep it - is shown at the bottom of the OEX chart below. "Major" signals are when both the daily readings get extreme but also a 5-day moving average of it also. Or, it may be the case when there are multiple single day readings. The limitations of this indicator is that you then have to pin down the variable number of days ahead BEFORE the trend reverses. As noted on the chart below the "lead time" is less at tops in a bear market. The bottoms take longer to set up. But, in either case you can usually assume that a reversal to the trend is coming and it will be a SUBTANTIAL move most likely. Now, one variation of "sentiment" here is noted in the circle with the cyan or blue fill - here, there were some high bullish sentiment readings (2 times more equities call volume than put volume) occurred AFTER the top - this is where you can figure that the index is going to have a another down "leg" as traders are fighting the decline so to speak. Hard to believe folks but the majority view is usually WRONG in the stock market - kind of perverse that way! QQQ, in the next chart (hourly) has a prior recent bearish hourly price/RSI divergence - not a current one - highlighted below, as well as indicating the bullish divergence at the Feb. bottom: Price resistance above is well-defined in the area of the cluster of prior hourly closing highs. Support around 25.2 is suggested by the "line" of prior tops - resistance, once broken tending to "become" new support. The idea that prior support levels become resistance and vice versa (prior resistance highs becoming support later on), also can apply to trendlines. I assume that not only the prior resistance indicated at 25.4 may be support on a pullback, but that lower support around 24.7 at the previously broken down trendline, may the lower part of a support zone. Of course the possibility of a reversal at the QQQ prior top around 27.7 is what is leading me to calculate what might be support if the Q's pull back from this recent high. Above this area potentially stronger resistance comes in at the higher peaks at 28.3 - 28.8. You can usually assume, until the market proves otherwise, that the areas where selling occurred heavily before will bring in at least profit-taking selling again. The overall list of my prior Trader's Corner articles (in alphabetical order) and my technical "checklist" is at - http://www.OptionInvestor.com/traderscorner/tc_022703_2.asp *********** OPTIONS 101 *********** Does "Close" Count? Buzz Lynn buzz@OptionInvestor.com "Only in horse shoes and government work", might come the answer. But what about analysts? Do they ever hit their mark? Fundamentals Guy was pouring over some trade publications still received from his past life in the commercial real estate business - shopping center sales and leasing, to be exact. What struck me was the similar number of downgrades made to various retail chains compared to the number of upgrades. In the heyday of the equities bubble, we had to search high and low, then in a haystack for the proverbial needle of Downgrade in which to pop the bubble. In other words, analysts NEVER downgraded stocks back then and the field was heavily loaded with Upgrades. But now, at least by the ratings I read for the month of January, Upgrade quantities roughly equaled Downgrade quantities, at least amongst the retailers whom I used to follow closely. I wondered why since I figured Downgrades were a taboo among the analysts at large. First, a couple of details to give us all a flavor of what we're talking about. During the month of January, there were 54 rating changes - either Upgrade or Downgrade - in the retail sector, 24 of which were Downgrades. Doing the math, 30 were upgrades. Yes, the figures are still skewed toward Upgrades, but no longer the lop-sided field it use to be. Companies getting an upgrade during January included 99 Cents Stores, Abercrombie and Fitch (2 upgrades), Amazon.com (yes, the shopping center business now considers Amazon a retailer), American Eagle Outfitters, Bebe Stores (4 upgrades), Best Buy (Warrant Buffet's Berkshire Hathaway disclosed heavy buying in October through December, 2002), BJ's Wholesale, Chico's (3 upgrades), Costco, Dillard's, Dollar Tree, Duane Reade, Friedman's, Gymboree, Michael's (2 upgrades), Movie Gallery, Radioshack (2 upgrades), Talbot's, Target, The Gap, Wet Seal, and Wild Oates Downgraded companies included Bed Bath & Beyond, Border's, Duane Reade, Federated Department Stores (2 downgrades), Gart Sports, Great Atlantic & Pacific Tea Company (A&P Markets), Gymboree, Haverty Furniture, Hibbett Sporting Goods, Home Depot (2 downgrades), Lowe's, Pacific Sunwear, Restoration Hardware, Ross Stores, Saks (2 downgrades), Too Inc., Urban Outfitters, Wet Seal (2 downgrades), Whole Foods, and Williams-Sonoma. It's interesting to note that Duane Reade, Gymboree, and Wet Seal were all upgraded or downgraded, both, by different firms during the same period, and sometimes on the exact same day. Some days, you feel like a nut; sometimes you don't! Anyway, I guess that's why there are chocolate and vanilla - we get to choose our favorite - upgrades from some; downgrades from others. Forget the specifics though of which companies received what rating change. That really doesn't matter. The big picture is that analysts were not afraid to hand out downgrades any longer. There seems to be no fear or trepidation about doing so. That seemed odd to me. Then I stopped to think a bit about what might cause such a seeming anomaly. DUH! In the old days, Upgrades meant job promotions, fat bonuses, and your children being accepted to exclusive schools. Just ask defrocked telecom analyst, Jack Grubman! All those benefits inured to Jack and others because their well-timed upgrade, which was placed to goose the price of the stock, meant juicy underwriting fees to the firm - fees said analyst got a piece of - for a supposedly unbiased (hack, sputter) analysis of the stock in question. The logical conclusion was that analysts NEVER issue a downgrade (or do so very quietly where and when the fewest will notice) when they are trying to woo business. It looks bad for the firm and they'll go hungry because they will be out of a jobs. Just common sense, really In a nutshell, and just like any other sales endeavor in life, the higher the gross proceeds of the underwriting, the more money the seller (aka underwriter/broker) gets to keep. As an analyst of said underwriting firm, a favorable rating was a part of the sales pitch to get the underwriting business, a part of which would go back in your pocket if they, in fact, successfully got the business. Frankly, with a lack of a "Chinese Wall" at many brokerage firms separating analysts from underwriting divisions, it paid to be unscrupulous. To put it bluntly, nobody buys stock on a downgrade and thus brokerage commissions to the firm diminish. Downgrade a stock? Decrease the firm's income. Lose your job. Perhaps that is no longer as much the case as it use to be. I can't think of the last time a new company went public, let alone went public with a lot of hype and astro-projection behind it. It appears that the underwriting business has all but dried up. I don't suppose that comes as a surprise to anyone, given the decline in overall equity values over the past three years. If the public is in a mood to sell equities, there sure isn't anybody lining up to buy the new or secondary issues, hence dried up underwriting market. The fact is, the market has changed dramatically. Nowadays, for any analyst on Wall Street, there is no bonus. . .that is unless keeping your job is actually the bonus, which to some, it might be. I imagine that if I were an analyst and my underwriting overrides had gone away, I'd be looking for another way to make money in a different facet of the same business, instead of issuing fraudulent upgrades in hopes of winning business that no longer exists. To that end, I'd be faced with the reality that I better start doing some real analysis, issue some real ratings, and hope I'm right. In other words, I'd seek to sell some honest analysis work instead of trading favors with the underwriting department. They are out of work. I can still have work if I choose to straighten up and fly right. Personally, I think that's exactly what's happened. I'm not saying every analyst has all of a sudden sprouted a new golden halo, but the fact that Upgrades have been reduced and Downgrades have grown more commonplace tells me that there is no longer the negative stigma attached to issuing downgrades. Sure, it's not a desirable thing to do. But there is no longer punishment for analysts or their firms in the form of cancelled underwriting contracts. Very few of those seeking to be underwritten are actually "underwrite-able". About the only punishment they can offer in response to an analyst downgrade is the childhood equivalent of someone telling your mom that you are being mean to them. Sooner or later, everyone is mean to someone, especially on Wall Street. And on Wall Street, mean comes with the territory. Still, commissions drive the business and the objective is to get people to buy stocks. That will never go away. But it is heartening to see that analysts are slightly more compelled now to issue more honest ratings (in the form of an unashamed Downgrade) than to continue foisting total books of fiction about how the Next Big Thing (Cabbage Patch Doll Adoption Agency?) is going to make us all billionaires. The system isn't perfect. It never has been and never will be. But it's far better now than the depths three years ago from which it has crawled. I'm not suggesting that from here on out we take every analyst's rating change as the gospel, but both upgrades and downgrades are probably much more unbiased in their arrival than they use to be. Until next time, make a great week for yourselves! Buzz ------------------------------------------------------------ VOTED one of "Best Online Brokers" (4 stars)--Barron's optionsXpress's "order-entry screens...go far beyond... other online broker sites"--Barron's 8 different online tools for options pricing, strategy, and charting Access to options specialists via email, phone or live chat online Real-Time Buying Power, Account Balances or Cancels Go to http://www.optionsxpress.com/marketing.asp?source=oetics22 Note: Options involve risk. Risk disclosure: http://www.optionsxpress.com/welcome_risk_index.htm ------------------------------------------------------------ ********** 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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