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Daily Newsletter, Thursday, 04/10/2003

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The Option Investor Newsletter                Thursday 04-10-2003
Copyright 2003, All rights reserved.                       1 of 3
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Not Over Yet
Futures Markets: Floating Duck
Index Trader Wrap: (See Note)
Market Sentiment: Support Holds
Weekly Manager Microscope: David Williams: Excelsior Value &
Restructuring (UMBIX)


Updated on the site tonight:
Swing Trader Game Plan: Predictable Bounce


Posted online for subscribers at http://www.OptionInvestor.com
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      04-10-2003           High     Low     Volume   Adv/Dcl
DJIA     8221.33 + 23.40  8225.04  8145.87 1.47 bln 1822/1350
NASDAQ   1365.61 +  8.90  1368.11  1351.10 1.23 bln 1583/1467
S&P 100   441.73 +  2.20   442.89   438.26   Totals 3405/2817
S&P 500   871.58 +  5.59   871.78   862.76
W5000    8254.36 + 44.30  8256.45  8177.85
RUS 2000  372.69 +  0.41   373.68   371.40
DJ TRANS 2192.92 +  6.60  2195.72  2175.83
VIX        28.96 -  1.95    30.77    28.83
VXN        40.33 -  1.12    42.45    40.33
Total Volume 2.899B
Total UpVol  1,812B
Total DnVol    979M
52wk Highs  162
52wk Lows    91
TRIN       1.26
PUT/CALL   0.93
************************************************************

Not Over Yet

The war is not over and the bulls are not done. The markets
pulled back from the brink of disaster one more time despite
news from Iraq about new battles and more deaths. The Dow dipped
to support at 8150 and then slowly battled back to close positive
by +23 points. After Wednesday's thrashing we will be happy with
any gains we can get.

Dow Chart - 240 min



Nasdaq Chart -240 min




Saddam is doing his imitation of "where's Waldo" but nobody
cares. There was another new wave of jobless added to the rolls
last week when their luck ran out while waiting for the war to
be over. 405,000 new jobless claims were filed making it the
eighth consecutive week over 400,000 claims. The four-week moving
average fell slightly to just under 420,000. 802,000 workers
filed for extended claims after their initial 26 weeks of benefits
expired. This gives them another three months to find a job after
being out of work for more than six months already.

Those out of work consumers are not rushing to the malls. The
Chain Store Sales report showed a drop of -0.2% in March. This was
the first decline since March 1995. Wal-Mart managed only a +0.7%
increase which was their lowest increase in seven years. Apparel
stores fared the worst with FD, JCP and the LTD losing ground.
CHS, PSUN beat the trend with large gains as did COST and BJS
both wholesale club stores. Shoe stores as a segment did the
worst with a -10.7% drop followed by furniture stores at -6.3%
and department stores at -5.5%. A late Easter, bad weather, war,
unemployment and a decline in equity wealth were given as reasons.
Friday the same data will be reported in a different format with
the data adjusted for Easter and using only existing store sales.
This could show a gain instead of a drop.

The MAPI Survey showed some positive sentiment in the manufacturing
sector. The overall headline number slipped slightly from 67 to
63 but several key internal components improved. The new orders
index rose to 67 from 60 and the order backlog rose to 54 from 52.
These might not be soaring but it shows the expectation for future
improvement.

News Corp acquired control of DirecTV from GM after a multiyear
battle to get a satellite network. This is a killer deal for NWS
and allows them to compete directly with the other satellite
channels. This gives NWS the capability to reach 100 million
households around the world. Unfortunately for FOX shareholders
the acquisition came with a price. NWS is going to put the new
acquisition in its FOX subsidiary along with $4.5 billion in
debt that came with the deal. Also they announced creating 74
million new shares to help pay for the deal. FOX dropped from
$27 to $22 on the news. The new combination of assets will give
NWS a huge jump in the marketplace but shareholders got a nasty
surprise.

USAI announced it was buying the rest of Hotels.com that it did
not already own and would issue another 45.2 million shares to
cover the acquisition. ROOM jumped from $53 to $63 on the news.
USAI also jumped +6% on the news despite the 45 million new shares.
Obviously investors thought this was a good deal.

DNA dropped on news that sales of Rituxan were slowing despite
a strong +59% jump in earnings reported yesterday. IDPH which
co-markets the drug also fell. Also weighing on the biotech
sector was the potential delisting of IMCL which dropped -1.09.
While these two events were company specific there was weakness
across the sector.

The supersonic Concorde became the latest casualty of the weakness
in the airline industry. British Airways, BAB, announced they
would retire the airplanes at a cost of $130 million and Air France
said they would write off $65 million. The last Air France flight
will be on May 31st. There are 12 existing planes and they have
not shown a profit in a long time. They are aging and even when
they are 100% full they only operate at breakeven or small loss.
With current traffic on these flights running at 20% or less they
are burning cash. Boeing says there will not be any supersonic
airliners anytime in the near future as there is simply no demand.
Boeing also fell on news that the US may want to change the terms
of a 767 tanker deal for 100 planes. Rumsfeld said he wanted to
review the terms and decide if he wanted to lease or purchase of
some combination of the two. Either would be fine for Boeing but
anytime the government wants to review anything it sounds like
a long delay.

The war droned on today with Kirkuk falling to the Kurds without
a fight. Iraqi troops in Mosul were also reported to be trying to
negotiate a surrender with the coalition troops in the area. The
US said that the majority of the top 200 Iraqi leaders have been
killed or are missing. There was also a news report on FOX that
marines had found weapons grade plutonium in an underground bunker.
Marines also captured what appeared to be a mobile bioweapons lab
when the driver tried to run a checkpoint. All of these events did
appear to put a bottom under the market in late afternoon. When
the plutonium story broke there was a quick bounce which continued
until the close. The assumption was the discovery of nuclear material
justified the entire war and proved the larger threat to the US
and the world.

Despite the fact the Dow only managed +23 points the internal
indicators are showing clear signs of bullishness. The VIX closed
at 28.96 and a three month low. While this is a bullish sign of
lack of fear in the markets it is also eventually a bearish sign
from a contrarian viewpoint. Lack of fear means all the traders are
lining up on the same side of the market. Historically the VIX has
tended to drop just before earnings as investors enter positions
and then go vertical after those earnings disappointed. While the
indexes did not show it today the end of day bounce may be setting
us up for another retest of the recent highs. With multiple levels
of strong resistance above us it will take a strong buying binge
to breakout.

Traders hope earnings, which are starting to flow in volume, will
help convince investors and funds to lighten up on the selling
and switch to bullish positions. GE is going to lead the earnings
list on Friday and could give the markets a boost. Next week the
earnings ratchet up significantly. Next week is a critical week
for earnings and more importantly guidance. Monday has IBM, NVLS
and RMBS as the tech barometers. Tuesday we face the back to back
giants of INTC and MSFT. After IBM on Monday and INTC/MSFT on
Tuesday we should know the fate of the tech sector. Tech bulls
hoping for a positive surprise could bid up the markets in
anticipation of a positive guidance surprise.

For Friday the Dow has strong resistance at 8265 and then again
at 8330. Support is where we bounced today at 8150. This gives
us a narrow trading range while we wait for those tech earnings.
The Nasdaq bounced off support at 1350 today and recovered to
close at 1365. It was the strongest index this afternoon with
either short covering or tech bulls buying the dip. This is a
good sign considering the chip stocks are expected to report a
-70% drop in earnings over the next couple weeks. Almost all the
chip and software stocks have warned so there is the potential
for a positive surprise. The worst news possible is already
priced into the techs so any positive comments could cause a
bounce while negative guidance may have little impact. This
could be wishful thinking but that appears to be what is on
the mind of tech buyers today.

Economic reports on Friday could help or hinder this concept.
We have the PPI at 8:30 but that is not expected to move the
market. Retail Sales will also be announced at 8:30 but after
the Chain Store Sales today it is not likely to be a shock
and because of the reporting differences could actually be
positive. The big news tomorrow will be the Michigan Consumer
Sentiment for April. This is the first look for April and
there are some analysts that think it could improve from the
77.6 in March. The positive war news and the appearance of a
quick end could have lifted consumer attitudes over the last
two weeks. This along with the positive war news tonight could
provide an added incentive for anyone still short to cover
before the weekend. This should provide for an interesting
Friday.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor


***************
FUTURES MARKETS
***************

Floating Duck
By Vlada Raicevic

Daily Settlement Numbers 4:15pm ET

> DOW
Last: 8221.33
Net: +23.39
High: 8225.04
Low:  8145.87

> YM 03M
Last: 8204
Net: +24
High: 8216
Low:  8118

> S&P 500
Last: 871.58
Net: +5.59
High: 871.78
Low:  862.76

> ES 03M
Last: 871.50
Net: +4.50
High: 872.50
Low:  861.50

> Nas 100
Last: 1033.14
Net: +9.62
High: 1035.61
Low:  1018.17

> NQ 03M
Last: 1038.50
Net: +12
High: 1038.50
Low:  1019.50

DAILY PIVOTS

> YM 03M
R2: 8283
R1: 8253
Pivot: 8185
S1: 8155
S2: 8087

> ES 03M
R2: 880
R1: 877
Pivot: 869
S1: 866
S2: 858

> NQ 03M
R2: 1053
R1: 1048
Pivot: 1034
S1: 1029
S2: 1015

I've been sitting here, staring at today's 5 minute chart of the
ES.  I haven't drawn any lines, or checked any numbers.  I'm just
staring, and trying to make some sense out of what I saw today.
If you have ever watched a duck on a lake, you have noticed just
how unsinkable they are.  They just bob there, like a rubber ball.
Like our markets.  Chartists and market commentators will talk
about how we came close enough to support, and that traders
figured it was enough, and decided to buy back in.  I disagree
completely.  We did not get even a remotely satisfying bottom, one
that would be considered worthy of buying.  We opened nearly flat
and then sold off a little bit, then we went up and pierced the
high of the first 5 minute stick, then we sold off again to break
yesterday's low.  This was bought and we went above the earlier
high, but were immediately sold off to new lows.  Yes, higher
highs and lower lows, that's what bottoms are made of.

We kept grinding down to form new lows by one tick.  Bursts of
buying were met by bursts of selling.  The 50ema, which often acts
as support and resistance was being crossed every other bar.  We
rolled over and all indicators said we were selling, only to be
met with buying for yet another new high.  This too was sold and
gave signals that we were rolling over, but this time the 50ema
held as support and we bounced again to new highs.  At this point
price action got downright silly.  Explosions of buying was
absolutely pounded by sellers, and price just whipsawed back and
forth until the sellers finally gave up and we closed near the
highs of the day.

What did this do to the daily chart?  Almost nothing. Yet again.
Yesterday it looked like we would finally get a bit of real
selling to take us to strong support, to fill a gap, and then to
see just what the market had in store for us.  How it would handle
that retest.  We did not get the satisfaction, and it certainly
looked like there was a concerted effort to keep the market
afloat, and from even testing those support areas.  By keeping the
selling to a minimum, we did not create any fear, the VIX closed
down nearly two points, and options premiums were yet again
hammered, just prior to options expiry week.  It is quite amazing
that a day after strong selling, we would find almost no follow
through.  Since the daily charts have not changed, let's look at
the shorter term charts.

On the 270 minute chart, I placed the letter 'x' next to the doji
candles.  This I did with the near perfect doji's, although there
were plenty of imperfect one's scattered around as well.  Just
look at them all.  For two weeks we have been completely unable to
decide what to do.  Complacency is high, with bulls heavily
outnumbering the bears, yet we do not go up.  It seems that the
good bullish vibes are all about the future.  The thinking seems
to be, "We will go up.  We haven't gone up, but we will."  This
attitude has become so prevalent that I've been seeing even long
term bears buying into this story.

This chart shows us going back up to test the broken uptrend line,
and at the same time testing the new downtrend line.  both of
these were near the center of the blue regression channel, and so
with so much resistance, price stopped there.  Macd did go to the
centerline and stopped moving down.  Fast stochastic is now
bottomed and looks like it may move up.  And RSI/CCI both are
turning up.  ADX avoided crossing bearish.  Indicators are saying
that we could move up from here, but with so much overhead
resistance, it would be tough to do without good volume.  On the
other hand, if sellers become so incredibly shy that they
disappear entirely, it may not take all that much volume to bust
through resistance.

ES 270 Minute Chart:




In last night's wrap I stated that the 60 minute chart looked like
it was ready for a bounce.  However I thought we would get it
either prior to, or after reaching daily support levels.  The
bounce has come, and with it came a resetting of indicators which
now show a potential change in the 60 minute trend.  Macd is
crossed bullish (but below the centerline).  Fast stochastic is
moving up quickly, but the slower stochastic is still well below
any uptrend signal.  Also, RSI/CCI have crossed above their moving
averages.  Note that Wovo was the first to cross down and go red
(arrow), but that it has yet to cross the centerline to go green,
also note that while price made a lower low today, fast stochastic
and Wovo both made higher lows, showing a bullish divergence which
was followed by today's move up.

ES 60 Minute Chart:




I also want to point out today's 5 minute chart.  I've placed an X
at places where strong buying pressure was immediately met by
strong selling pressure, and placed a Y where strong selling
pressure was met by strong buying.  In hindsight you can see where
there was sustained buying for two small trends up which would
have been useful for an intraday trade.  These, however, were
surrounded by fast whipsaws, and partial rollovers. Note also that
the 50ema (purple line) was breached about 10 times today, making
it nearly useless as a support/resistance indicator.

ES 5 Minute Chart:




NQ 270 minute chart clearly shows how the NQs bounced well before
'expected'.  There was horizontal support (two thin lines), there
was lower regression channel, and two trendlines (red).  It must
be that bullish euphoria being so high of a bounce expectation,
that buyers lined up well before the support was even tested.
While that may seem crazy, it worked well for those that bought,
because price no only bounced hard, it broke above the recent
downtrend line (purple).  Wait, you say, didn't we just break an
uptrend line to the downside?  Indeed we did.  All indicators here
are still bearish, with none giving any reversal signals.

NQ 270 Minute Chart:




The NQ 60 minute chart shows more clearly how the NQs cheated the
bears who thought to either cover at support, or wait for a
potential break.  This chart is turning quite bullish after the
sustained buying in the NQs today.  RSI/CCI above their moving
averages, Macd crossed bullish and is aiming for the centerline,
and even Wovo looks to cross the centerline if we hold positive
for a couple more hours.

NQ 60 Minute Chart:




If today was the retest of support, then, like the 60 minute
charts show, we could be reversing back up.  However, we already
reversed back up and it failed miserably at the most recent highs.
To move back up toward those highs again on a very weak base would
almost doom it to failure.  The market would be smart to allow
some real selling to take place so that support can be hit, and
then if the bulls want to buy it up, they can do so, probably with
a fair number of bears in tow.  However, as it stands, we are
again at a point of pondering the indecisiveness of the charts.


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

Check the Site Later Tonight For Jeff’s Index Trader Article
http://members.OptionInvestor.com/itrader/marketwrap/iw_041003_1.asp


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

Support Holds
by Steven Price

The markets finally found some support today, testing previously
significant levels.  With the war winding down and earnings set
to begin flowing over the next few weeks, it appears traders are
in a wait and see mode.

The Dow traded down to the 8120-8150 range, which has provided
both support and resistance in the past few months.  The OEX also
traded down to the correlative 437-440 range.  Both of these
indices tested the 50% retracement of the October-December lo-hi
range and found buyers when they got there. The Nasdaq Composite
also traded down to a previously pivotal support/resistance level
at 1350, with a low of 1351 and got a bounce.  It filled the gap
from April1-2 and also bounced.   The ten-year treasury yield has
slowed its drop at the 3.9% level, finding support there for the
past two days, as treasury buyers apparently have lost some steam
and are possibly getting ready to move back into equities. The
U.S. Dollar Index (DX00Y) remains the weak link, moving back
below 100.0, but has found some support at its 50-dma.

The bullish percents in the Dow/SPX/OEX/COMP/NDX/NYSE have all
held recent gains, in spite of the recent pullback.  Also helping
to support stock prices has been a pullback in oil prices.  The
May Crude Oil futures gave back some of Wednesday's gains that
came on the news that U.S. oil reserves had dropped and also the
news that OPEC was considering a pullback in production of 2
million barrels per day at its April 24 meeting.  The inverse
relationship between oil prices and stock prices has been
incredibly consistent for the past year.  However, today's action
saw both lower to start the day.  This could mean a couple of
things. Either the action in oil tells us that the dip in
equities is short lived and we'll see buyers coming back at
support, or it is possible that this relationship will not be as
reliable as in the recent past with the end of war.  The
relationship reflected not only business costs, but also geo-
political issues and with those issues seemingly finding closure,
we may no longer see the consistency that we have in recent
months.  We'll have to watch this for the next few weeks to see
if this is truly a break in trend, or just a one-day anomaly.

The semiconductor stocks have also begun to recover from the post
RFMD warning drop, finding support at a rising 50-dma in the
Semiconductor Index (SOX).  This index has flirted with the
pivotal 300 level on the last two pullbacks and has found there
each time. A number of these stocks report earnings next week and
some analysts are expecting a 70% drop in those earnings overall.
Some of the bigger stocks to report will be NVLS on April 14, TXN
and INTC on 4/15 and KLAC on 4/17.  Novellus (NVLS) saw its
rating cut from 'neutral' to 'sell' today by Fahnestock, based on
expectations for cautious second quarter guidance. The firm said
Q2 orders are likely to be down 5-10% and thinks estimates for
the second and third quarters are too optimistic. If they are
right and the sector starts to warn, then that 50-dma could be a
memory and we could test support around the 280 level.

This morning's economic data was somewhat encouraging, or at
least better than expected. The initial unemployment claims data
showed a decrease of 38,000 from the previous week and took the
four-week moving average down to its lowest level in a month.
However, the decline of 3,750 took the average down to 419,500,
which is still above the 400,000 level that is used to gauge a
worsening labor picture.   The flip side of the report showed
that it is taking longer to find work once unemployed.  The
average number of workers receiving state benefits increased by
10.750 to 3.513 million - the highest reading since last
November.

These numbers also have to be taken in light of the latest CEO
economic survey released by the Business Roundtable. That survey
showed 45% of CEOs expect their companies to cut jobs in the next
six months, while only 9% expect to increase hiring. They cited
consumer uncertainty from the implications of war and terrorism,
along with weak consumer demand, as posing the greatest
challenges to business.

While the data is mixed on a relative basis, it still points to
an increasingly troubled economy.  That doesn't mean the markets
can't bounce if the upcoming earnings reports are better than
grim expectations.  Today's trading shows us bouncing from a
pivotal level and the reports of the next couple of weeks should
either reinforce that bounce, or lead us back down through
support.  If we do lose these levels of support then we could
revisit recent lows.  However, so far it looks like the bounce is
holding.

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

Market Averages

DJIA ($INDU)

52-week High: 10673
52-week Low :  7197
Current     :  8221

Moving Averages:
(Simple)

 10-dma: 8203
 50-dma: 7997
200-dma: 8350



S&P 500 ($SPX)

52-week High: 1176
52-week Low :  768
Current     :  872

Moving Averages:
(Simple)

 10-dma:  870
 50-dma:  848
200-dma:  883



Nasdaq-100 ($NDX)

52-week High: 1573
52-week Low :  795
Current     : 1033

Moving Averages:
(Simple)

 10-dma: 1042
 50-dma: 1013
200-dma:  989



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

The Dow Jones Home Construction Index (DJUSHB): The DJUSHB has
been building on recent gains, in spite of an erratic broader
market. While mortgage rates had been creeping up, the bond
market has seen buying the past few days, pushing interest rates
lower. Even Alan Greenspan has said he expects a drop from 2002's
pace in the housing market, but investors are still coming for
these stocks. the DJUSHB has blasted above its 200-dma and is now
approaching resistance at 346 - a level it hasn't seen since last
September.  Traders looking to jump on these stocks may want to
wait for a break over that level to avoid getting in just before
a pullback.  The other option might be to play a bounce in the
sector on a pullback in the DJUSHB to previous resistance at 330.

52-week High: 397
52-week Low : 260
Current:      344

Moving Averages:
(Simple)

 21-dma: 327
 50-dma: 319
 200-dma: 318

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

Market Volatility

The VIX broke below an important level this afternoon.  The 29-
30% level has served as support and indicated that it was time
for a market pullback.  We tested that level repeatedly last
December, with each test holding above 29 and leading to an
equity drop. Today, we dropped down to 28.96, just barely
breaking below those December lows.  The VIX has tended to trade
like a stock, with support and resistance giving reliable
signals.  The break below 29 would indicate a drop to 26% and a
market rally in the meantime. It is not a definite measure and is
derived from 8 different options in the OEX.  The break was also
by only 0.04, however, we are getting some bullish signals here
for traders to keep an eye on.

CBOE Market Volatility Index (VIX) = 28.96 -1.95
Nasdaq-100 Volatility Index  (VXN) = 40.33 -1.12

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.93        448,368       415,422
Equity Only    0.89        303,913       269,650
OEX            0.84         26,878        22,596
QQQ            1.98         26,157        51,846


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

Bullish Percent Data

           Current   Change   Status
NYSE          43.9    + 0     Bull Confirmed
NASDAQ-100    57.0    + 0     Bull Alert
Dow Indust.   43.3    + 0     Bull Alert
S&P 500       47.2    - 1     Bull Confirmed
S&P 100       45.0    - 2     Bull Alert


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

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

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

 5-Day Arms Index  1.29
10-Day Arms Index  1.31
21-Day Arms Index  1.24
55-Day Arms Index  1.37


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       1602           1178
NASDAQ     1510           1413

        New Highs      New Lows
NYSE        62               36
NASDAQ      70               40

        Volume (in millions)
NYSE       1,442
NASDAQ     1,239


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


Commitments Of Traders Report: 04/01/02

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 stayed long for second most bullish reading of the
year, just one period after shifting from net short to net long.
Small traders reduced their overall net long position by
increasing their shorts.

Commercials   Long      Short      Net     % Of OI
03/11/03      440,688   485,938   (45,250)   (4.9%)
03/18/03      483,224   490,582   ( 7,358)   (0.1%)
03/25/03      424,781   415,258     9,523     1.1%
04/01/03      417,637   409,332     8,305     1.0%

Most bearish reading of the year: (111,956) -   3/6/02
Most bullish reading of the year:    9,523  -  3/25/03

Small Traders Long      Short      Net     % of OI
03/11/03      169,450   102,631    66,819     24.6%
03/18/03      184,907   153,400    31,507      9.3%
03/25/03      143,402   123,178    20,224      7.6%
04/01/03      143,580   126,594    16,986      6.3%

Most bearish reading of the year:  20,224 - 3/25/03
Most bullish reading of the year: 114,510 - 3/26/02


E-MINI S&P 500 *NEW SECTION DUE TO READER REQUESTS*

This is our first report of this data.  Commercials currently
maintain a net short position, while small traders  are net long.

Commercials   Long      Short      Net     % Of OI
04/01/03     98,460    321,335   (222,875)  (53.1%)


Most bearish reading of the year:  (222,875)  - 04/01/03
Most bullish reading of the year:  (222,875)  - 04/01/03

Small Traders Long      Short      Net     % of OI
04/01/03        2,296     1,146     1,150    33.4%


Most bearish reading of the year:   1,150   - 04/01/03
Most bullish reading of the year:   1,150   - 04/01/03

NASDAQ-100

Commercials reduced long positions by just under 10%, while small
traders left long positions nearly unchanged, but reduced shorts
by about a third.

Commercials   Long      Short      Net     % of OI
03/11/03       43,641     56,020   (12,379) (12.4%)
03/18/03       58,877     64,302   ( 5,425) ( 4.4%)
03/25/03       44,403     36,436     7,967    9.9%
04/01/03       40,493     36,893     3,600    4.7%

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
03/11/03       27,196     9,674    17,522    47.5%
03/18/03       37,097    26,951    10,146    15.8%
03/25/03       10,313    20,080   ( 9,767)  (32.1%)
04/01/03        9,771    13,306   ( 3,535)  (15.3%)

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 increased short positions slightly, while leaving the
long side alone. Small traders left both sides of the equation
unchanged.

Commercials   Long      Short      Net     % of OI
03/11/03       21,726    14,370    7,356      20.4%
03/18/03       26,880    18,853    8,027      17.6%
03/25/03       19,752    10,212    9,540      31.8%
04/01/03       19,068    12,672    6,396      20.2%

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

Small Traders  Long      Short     Net     % of OI
03/11/03        5,549     7,727    (2,178)   (16.4%)
03/18/03        6,589     8,343    (1,754)   (11.7%)
03/25/03        5,076     7,721    (2,645)   (20.7%)
04/03/01        5,142     7,459    (2,317)   (18.4%)

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


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WEEKLY MANAGER MICROSCOPE
*************************

David Williams: Excelsior Value & Restructuring (UMBIX)

This manager seeks long-term growth opportunities among companies
that are creating value through restructuring and industries that
are consolidating, an approach that may be well suited to today's
environment.  David Williams is a managing director of U.S. Trust
(advisor to the Excelsior Funds) and has managed the $1.6 billion
Excelsior Value & Restructuring Fund (UMBIX) since fund inception
on December 31, 1992.

Assisting Williams today in the portfolio management of the fund
is Timothy Evnin, a manager director and senior portfolio manager
(like Williams) with U.S. Trust Company.  Both professionals have
been with U.S. Trust since 1987 and have many years of experience
over multiple market cycles.  Williams has primary responsibility
for the day-to-day management of the fund's portfolio, and sports
one of the better 10-year records of performance.

The no-load Excelsior Value & Restructuring Fund (UMBIX) requires
an initial investment of $500 to open a regular account ($250 for
IRAs).  You can buy the fund directly from the Excelsior Funds or
through any one of several brokerages that offer the fund on a no
load, no-transaction fee (NTF) basis.  Morningstar's report has a
list of all the brokerage fund networks that this fund is offered
through.  For more information or to download a prospectus, go to
the Excelsior Funds website at www.excelsiorfunds.com.  Also, you
can go to the U.S. Trust Company website www.ustrust.com for more
information on them as an investment manager.

Management Overview

The primary objective of the Excelsior Value & Restructuring Fund
is long-term capital appreciation.  Williams seeks to achieve the
fund's objective by investing in companies that will benefit from
their restructuring or redeployment of assets and operations, and
as a result, become more competitive and profitable.  In security
selection, Williams and Evnin invest primarily in common stock of
companies they feel are undervalued by the market and whose stock
price is expected to benefit from the value created through their
restructuring activities or industry consolidation.

The fund is an actively managed portfolio; hence its holdings are
subject to change.  As of year-end 2002, the fund's portfolio had
98% of assets invested in stocks, with only 4% of assets invested
in foreign securities.  So, Williams fishes primarily in domestic
waters.  The fund's average market capitalization at the time was
$9.4 billion, per Morningstar, landing it in the large-cap growth
style box.  However, Williams looks for value opportunities among
all capital sectors, so maybe "multi-cap value" is a better style
description for this fund.  At December 31, 2002, the fund assets
were invested as follows:

 Market Capitalization: % of Portfolio
 11.0% Giant-Cap
 45.4% Large-Cap
 34.8% Mid-Cap
  8.8% Small-Cap

Since 2002 the fund overall has landed in the large-cap style box
per Morningstar.  But as you can see, the fund's portfolio is all
market capitalization in nature.  Since it takes a long-term view
in managing holdings, this fund may also occassionally drift into
the "blend" style box as the value of fund holdings rise to their
appraised value, but it still has a value discipline with respect
to its buy decisions.

Looking at Morningstar's valuations and growth rates for the fund
as of year-end 2002, one can see that the fund's price valuations
were below that of the average large-cap value fund, while growth
rates were above that of the average large-cap value fund.  So in
relation to other large-cap value managers, Williams likes stocks
that are even more undervalued and possess more growth potential.

At only 8%, the portfolio's annual turnover is low, making it an
appropriate investment for all account types including taxable or
regular accounts.  The fund consisted of 65 stock holdings at the
end of 2002, diversified across many industry sectors, with 28.1%
of assets represented by the fund's top ten holdings.  Black and
Decker, Union Pacific, Kraft Foods and Centex were the fund's top
four holdings at that time.  No one holding represented more than
4% of portfolio assets.  So all in all, a fairly well diversified
equity portfolio.

Performance Overview

Because Williams has served as the lead manager or co-manager for
the Excelsior Value & Restructuring Fund since its inception date
(December 31, 1992), we want to look first at the fund's long-run
performance record over the trailing 10-year period through March
31, 2003.  Investors with truly long-term investment horizons may
want to focus their attention on the fund's long-term performance
history over multiple market cycles.

For the trailing 10-year period, Williams produced a 13.6% annual
equivalent rate of return, outperforming the S&P 500 index by an
average of 5.1% and the Russell 1000 index by an average of 5.2%,
to rank in the 1st percentile of the Morningstar large-value fund
category.  That average annual rate is still also well above the
assumed 10% historical annual norm for U.S. stocks, so Williams
has done a superb job over the long term of creating wealth for
shareholders.

But, as the old saying goes, higher returns are often associated
with higher risk, and such has been the case here.  According to
Morningstar, the fund's risk level has been high relative to its
large-value category peers over the past decade.  Still, returns
have been so good that Morningstar still awards the fund 5 stars
overall for the trailing 10-year period.  In other periods, risk
limits the fund's overall star rating to 4 stars (above average).
So, the Excelsior Value & Restructuring Fund may also be labeled
an "aggressive value" fund.






The 1-year chart above gives you a sense of how much the fund's
share price can fluctuate within a yearly period.  Other value-
driven funds may be less volatile than this offering, so if you
are not risk tolerant, this fund may not be appropriate for you.

f you are risk tolerant, this fund may offer above average/high
appreciation potential over the long run.  Below is a summary of
the fund's returns and category rankings for the trailing 3-year
and 5-year periods through April 9, 2003.


 3-Year Total Returns/Category Rankings:
 -10.3%  Excelsior Value & Restruct. (UMBIX) 10th Percentile
 -15.8%  S&P 500 Index

 5-Year Total Returns/Category Rankings:
 + 0.9%  Excelsior Value & Restruct. (UMBIX) 6th Percentile
 - 3.5%  S&P 500 Index

 10-Year Total Returns/Category Rankings (March 31, 2003):
 +13.6%  Excelsior Value & Restruct. (UMBIX) 1st Percentile
 + 8.5%  S&P 500 Index


We put the 10-year annualized returns up there again so you can
see the "alpha" Williams has generated over longer time periods.
In all longer-term trailing periods, Williams has outpaced fund
peers and the market as a whole (S&P 500) by significant margins.

Conclusion

With the economy in the doldrums, most U.S. companies have had to
streamline their businesses to stay competitive or to become more
competitive.  If you seek a portfolio manager that takes a value
approach to investing and buys companies that will grow in value
because of their restructurings or due to industry consolidation,
then the Excelsior Value & Restructuring Fund may be appropriate.

Because Williams and Evnin incur higher portfolio risk than their
large-value fund peers, the fund may not be well suited to people
with low risk tolerances.  But those who can accept "significant"
fluctuations in NAV share price have been amply rewarded over the
long term for the risk incurred by these fund managers.  For more
information, go to the www.excelsiorfunds.com website.

Steve Wagner
Editor, Mutual Investor
steve@mutualinvestor.com


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

Predictable Bounce

The markets tested some important support levels this morning and
the bounce was impressive.


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                 Thursday 04-10-2003
Copyright 2003, All rights reserved.                        2 of 3
Redistribution in any form strictly prohibited.


In Section Two:

Dropped Calls: IGT
Dropped Puts: ROOM
Daily Results
Call Play Updates: BBBY, BLL, MMM, UNH, WFMI
New Calls Plays: LXK
Put Play Updates: CDWC, LLL, NOC, WHR
New Put Plays: None


****************
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:
*****

Intl. Game Tech. - IGT - close: 79.00 change: -2.61 stop: 78.50

After a brief moment in the sun on Monday, IGT faded with the
rest of the market, settling back into the $81-82 area by the
closing bell on Wednesday.  While it didn't provide what could be
called an entry point, it certainly didn't give a clue as to the
carnage that occurred on Thursday.  UBS cut their rating on
Argosy Gaming due to a proposal in Illinois to raise gaming
taxes, and then extended their bearish comments to cover other
gaming stocks, including IGT.  That proved to be the death knell
for our play, as it plunged at the open and never managed to
stage any kind of meaningful bounce all day.  Finally closing at
$79, just off its low of the day, IGT gives us no reason to hold
the play hoping for a rebound.  We're dropping coverage tonight,
chalking this one up as a loser, thankful that we never really
got a decent entry point.

Picked on April 6th at $82.18
Gain since picked:       -3.18
Earnings Date         04/22/03 (confirmed)
Average Daily Volume = 1.20 mln


PUTS:
*****

Hotels.com - ROOM - close 63.50 change: +10.20 stop: 57.25

Ouch!  Now that was exceedingly unpleasant!  Our ROOM play was
proceeding like clockwork right up through the close of trading
on Wednesday, finally cracking below the $54 support level and
looking like a shoe-in to reach our $50 target.  That was before
this morning's announcement that USAI would buy the remaining
shares of ROOM that it didn't already own, sending the stock
soaring through the $60 level (and obviously through our stop) at
the open.  That proved to be the best opportunity to exit the
play (a good advertisement for stops), as ROOM continued to climb
throughout the day, coming to rest more than 19% above
yesterday's close, turning a nice winning play into a painful
loser.  Needless to say, we're dropping the play tonight.

Picked on March 30th at $58.58
Change since picked:       +4.92
Earnings Date         04/24/03 (unconfirmed)
Average Daily Volume = 1.15 mln


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

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

CALLS              Mon    Tue    Wed    Thu

BBBY     37.24   -0.55   0.73  -0.71  0.77  $38 trigger
BLL      56.72   -1.04  -0.02  -0.64  0.22  21-dma bounce
IGT      79.00   -3.14   0.11  -0.64 -2.61  Drop, Tax Probs
LXK      69.02   -2.13  -0.78   0.49  1.39  New, pullback
MEDI     32.72   -1.17   0.31  -0.57  0.01  Channeling
MMM     132.78   -2.39   0.92  -1.87  1.17  $130 support
UNH      91.64   -0.60   1.27  -1.28 -0.78  THC news
WFMI     56.80   -1.30   0.39  -0.25  0.59  21-dma bounce


PUTS

CDWC     40.77   -1.04  -0.59  -0.50  0.40  $40 test
LLL      36.48   -0.71  -0.45  -0.37 -0.85  Sliding
NOC      81.38    0.99  -0.30   0.20 -2.27  Breakdown
ROOM     63.50   -0.99  -0.25  -1.04 10.20  Drop, merger
WHR      51.74   -0.63   0.08  -0.57  0.60  200-dma


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

Bed Bath & Beyond - BBBY close: 37.13 change: +0.66 stop: 35.00

Broad market weakness was not what Retail bulls wanted to see on
Wednesday and the Retail index (RLX.X) fell back from the $288
resistance level, closing right at the low of the day.
Thursday's session was a mirror image, as the index reversed
yesterday's loss to close right at resistance again.  BBBY
mirrored that action, showing a small loss on Wednesday that was
almost exactly reversed today.  BBBY is right back at the lower
edge of that major resistance from $37-38, and the action of the
past couple days demonstrates precisely why we initiated coverage
with a trigger at $38.  It will take some bullish conviction to
push both the RLX and BBBY through their respective resistance
levels, but once those levels are cleared, it ought to unleash
more bullish action.  Aggressive traders can enter on the initial
breakout over $38, while those with a more conservative approach
will want to wait for a subsequent pullback to newfound support
in the $37-38 area before entry.

Picked on April 8th at  $37.18
Gain since picked:       -0.05
Earnings Date         07/02/03 (unconfirmed)
Average Daily Volume = 3.24 mln

---

Ball Corporation - BLL - close: 56.72 change: +0.22 stop: 55.50

It's make or break time for our BLL play, as the stock has been
drifting lower all week after Monday's surge above the $59 level.
The decline continued this morning all the way down to the $56
level before a relatively solid bounce commenced, lasting right
into the closing bell.  We've been looking for a decline to this
level for new entries into the play and the market certainly
delivered today.  The big question is whether this rebound is
sustainable.  Daily Stochastics are still falling, so it is
possible that we'll see another test of that level (also the site
of the 20-dma ($55.93), and if the bulls step forward to defend
it again, it will only reinforce the validity of that support.
Momentum entries will be hard to justify until BLL can push back
through $57.75, the site of intraday resistance earlier in the
week.  Maintain tight stops at $55.50.

Picked on March 21st at $55.87
Change since picked:       +0.85
Earnings Date         04/24/03 (confirmed)
Average Daily Volume = 451 K

---

3M Company - MMM - close: 132.78 change: +1.17 stop: 129.75

Steady as she goes, our MMM play has really been impressive in
its resilience this week.  While well off of its highs from
Monday, the stock hasn't really succumbed to the weakness seen in
the rest of the market.  Instead of filling its 4/02 gap down to
just below $131, the stock found willing buyers this morning near
$131.50 before a mild advance throughout the day to end just
above the top of that gap.  It is interesting to note that the
20-dma ($131.46) seemed to provide support for Thursday's bounce.
We'll need to keep an eye on this moving average to see if it
continues to do so.  Intraday dips and rebounds should still
provide solid entries near the $131.50 area should still provide
the best entries into the play.  Traders looking for a momentum
entry will need to wait for a breakout over $135, and need to
confirm such a move with strong volume.  Remember what happened
on Monday as that initial breakout failed miserably.  That was
the second failure by the stock to hold higher ground on a
breakout, highlighting the fact that buying the dips is the safer
way to play.  Our stop remains just below the $130 level until
MMM can close over that $135 level.

Picked on March 27th at $131.66
Change since picked:       +1.12
Earnings Date         04/21/03 (confirmed)
Average Daily Volume = 2.37 mln

---

Unitedhealth - UNH - close: 91.64 change: -0.78 stop: 89.48

UNH has had a rough couple of days, since testing resistance in
the $94-$96 range.  A broad market sell-off took it down on
Wednesday and bad news for the healthcare sector took a swipe at
this call play on Thursday. The news came from Tenet Health Care
(THC), which reported a loss of $55 million for the quarter and
lowered future guidance for fiscal 2004.  One of the reasons it
gave for lowering guidance was rules changes to outlier payments,
which are collected from Medicare for their sickest patients.
Tenet, however, has had problems with these issues since last
year, and so far those issues have not effected UNH.  Still, the
problems were enough to hurt the sector index (HMO), which took
down most of the stocks in the sector. UNH continues to find
support above the $90 breakout level and we will rely on our stop
at $89.48 to dictate weakness. Traders looking for new entries
can use the pullbacks above that level to initiate new long
plays.

Picked on March 25 at $90.66
Change since picked:   +0.98
Earnings Date         04/16/03

---

Whole Foods Mkt - WFMI - close: 56.76 change: +0.55 stop: 54.50

It was another tight-range consolidation day in the broad market,
and that certainly seemed to apply to our WFMI play as well.
Both of the last two days have seen the stock test the ascending
trendline ($56.25) from the February lows and to the bulls'
credit, they managed to squeak out a close above that level
today.  Dips below that trendline have been buyable for
aggressive traders, and now the daily Stochastics are starting to
hook up in bullish fashion without falling into oversold
territory.  Shallow dips below the $56 level can still be used
for entry, but at this point, it looks like WFMI should start
making some upward progress towards a retest of resistance at the
$58.25 level.  Traders looking for confirmation will want to see
a volume-backed move over that level before playing.  Our stop
remains at $54.50 until we can get a close over that resistance.

Picked on April 1st at $56.42
Change since picked:      +0.34
Earnings Date         05/08/03 (unconfirmed)
Average Daily Volume = 908 K


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

Lexmark Intl. - LXK - close: 69.02 change: +1.39 stop: 66.00

Company Description:
Wrapping its arms around the entire life-cycle of printers, LXK
develops and manufactures a broad range of laser, inkjet and dot
matrix printers for the office and home markets.  The company is
also the exclusive source for new print cartridges for the laser
and inkjet printers it manufactures.  Additionally, LXK provides
supplies for IBM printers and offers after-market laser
cartridges for the large installed base of a range of laser
printers sold by other manufacturers.

Why we like it:
There are very few companies that have managed to carve out a
consistently growing profitable niche in the cutthroat computer
business.  DELL is the standout leader in the computer
manufacturing business and MSFT holds the undisputed crown in the
PC software arena.  Sometimes we forget that with each PC sold,
there has to be a printer to go with it.  Not only that, but the
printing business can be considered one of consumables, as those
pesky little printer cartridges keep running out of ink and we
have to go out and get more.  While it may not have the largest
market share, LXK does have an impressive claim to fame over its
nearest competitor (HPQ).  Not only is LXK continuing to grow its
revenue and earnings, but last quarter saw the company reporting
record revenues and its best earnings since April of 1999.

This solid financial performance in a challenging economy hasn't
been lost on investors, as the stock traded to a new multi-year
high of $71.50 earlier this week.  That high came in the midst of
the euphoric broad-market ramp on Monday, so it is no great
surprise that the stock pulled back after posting that high.  The
stock pulled back near $67 and caught a nice bounce from there,
showing that former resistance is now acting as newfound support.
Adding further support is the combination of the 20-dma ($66.65)
and the ascending trendline from the February lows at $66.25.
While we could see another dip towards the $67 support level, the
fact that daily Stochastics are trying to turn upwards hints that
perhaps investors are trying to take advantage of a possible run
towards earnings on April 21st.  Note that the PnF chart is
really showing the stock's strength, as it looks quite bullish,
and has a bullish price target of $79.  If LXK can get back over
it's relative high from Monday, we could actually see a run
towards that level ahead of earnings.  Just remember that this
will be a short-term play, as we'll be dropping it ahead of the
earnings release.

With the unsettled nature of the broad market, the preferred
entry strategy is to buy a dip, but if the bulls are feeling
frisky, it wouldn't be out of the question to see a powerful
breakout to new highs.  Such a breakout will require stronger
volume than we've seen over the past few days, with Thursday's
tally coming in at about 75% of the ADV.  While a dip to $67
would be the ideal scenario for dip buyers, we can see that
intraday support looks decent near $68.  A dip and rebound in the
$67-68 area looks like the best we're likely to get on a
pullback.  Eager momentum types will need to exercise patience
and wait for a volume-backed move over the $71.50 level (Monday's
intraday high) as the $71 level has been persistent resistance
for the stock since the middle of 2000.   We're initially setting
our stop at $66, which is below what should be very strong
support.

Suggested Options:

Shorter Term: The April 70 Call will offer short-term traders the
best return on an immediate move, with manageable risk.  With
April expiration looming next week though, this option should
only be used by aggressive traders.

Longer Term: Traders looking to capitalize on a sustained
breakout move over the 2 weeks will want to look to the May 70
Call.  This option is currently out of the money, but should
provide sufficient time for the stock to move higher ahead of
earnings without time decay becoming a dominant factor over the
short run.

BUY CALL APR-65 LXK-DM OI=2888 at $4.50 SL=2.75
BUY CALL APR-70 LXK-DN OI=4106 at $1.00 SL=0.50
BUY CALL MAY-65 LXK-EM OI= 617 at $6.10 SL=4.00
BUY CALL MAY-70 LXK-EN OI= 365 at $2.90 SL=1.50

Annotated Chart of LXK:
http://www.OptionInvestor.com/oin/images/commentary/newsletter/2003-04-10/LXK041003.gif



Picked on April 10th at  $69.02
Gain since picked:       +0.00
Earnings Date          04/21/03 (confirmed)
Average Daily Volume = 1.59 mln


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

CDW Computer - CDWC - close: 40.77 change: +0.40 stop: 43.25

CDWC finally made it back down to the $40 support level we first
targeted for the breakdown possibilities. The failed rebound at
the 50-dma provided a good entry point for aggressive traders,
and although it caught a bounce today, it traded down to its
lowest level since the middle of March.  We don't see any sea
change here and although the stock is once again testing support,
it has now rolled over from a lower high and nothing much has
changed on a technical basis. There was one report that could
have a negative impact on CDWC, which caters to businesses and
government agencies. A Business Roundtable survey of CEOs
indicated not only that almost half were planning on reducing
their workforce in the next six months - therefore reducing the
need for PCs and other tech items as support for their staff, but
also 27% said they were planning on a reduction in capital
spending, versus 18% seeing an increase.  Those cap-ex dollars
apply directly to items such as the ones purchased from CDWC and
the report doesn't seem to indicate much hope for a business
spending turnaround in the near future. New entries can target a
move below today's low of 39.54, with a trigger of $39.45.

Picked on April 1 at $40.00
Change since picked:   +0.77
Earnings Date         04/15/03

---

L-3 Comms - LLL - close 36.48 change: -0.85 stop: 38.50*new*

Now that's the way it's supposed to work.  As it has become more
clear that the main part of the Iraq war is over, Defense stocks
have continued to slide and despite a mild lift in the broad
market on Thursday, there was no joy in the Defense index
(DFI.X), which slid another 1.6%, falling back under the $445
support level.  Our LLL play is performing nicely as well, losing
the $37 level as support and actually trading as low as $36
before seeing a mild bounce into the close.  With the $35.50
level being our eventual downside target for the play, we aren't
advocating any new entries here.  It's just about managing open
positions so as to maximize gains.  A downward continuation to
that target area on Friday should be used to close out open
positions for a modest gain.  While we're still giving LLL some
room to move, with our stop now set at $38.50 (just above the
last upswing high), more conservative traders may want to get
more aggressive with their stops, using $37.65 as the line in the
sand, as this is just above the descending trendline that has
been capping each failed rally since the beginning of April.

Picked on April 3rd at $38.84
Change since picked:      -2.36
Earnings Date         04/22/03 (confirmed)
Average Daily Volume = 1.60 mln

---

Northrop Grumman - NOC - close: 81.38 change: -2.27 stop: 85.01

NOC finally broke down from its bear pennant formation we
highlighted in the original write-up.  As the war in Iraq winds
down, it seems those investors betting on an extended conflict -
and thus the need to replenish military supplies - have begun to
exit the sector. The Defense Index (DFI) had been flatlining, but
continued to find resistance at its descending 50-dma over the
past couple of weeks.  Today, the DFI finally broke down, taking
a number of defense stocks with it.  Losses were seen in LMT, LLL
and ATK, along with NOC. A note from Banc of America said a short
war may eventually be good for the defense sector, as it would
create more praise for the Pentagon and reduce the chances of its
budget being cut.  While that may be true in the long run, it
doesn't appear to have convinced anyone about the short-term
business prospects.  NOC is still hovering over recent support at
$80, with a low of $80.55, so we'll need to see another push down
through that support before we have a chance to test the support
at $76 from last summer.  New entries can look for a trade below
$80 to initiate plays, but more conservative traders will note
the bounce from $78 on March 12.

Picked on April 5 at $83.26
Change since picked:   -1.88
Earnings Date         04/29/03

---

Whirlpool - WHR - close: 51.74 change: +0.60 stop: 52.76

Whirlpool continues to drift lower, following the descending 200-
dma. While it hasn't given us the big breakdown we were hoping
for, it continues to struggle and set a series of lower highs.
It appears to be rolling over from a double-top formation, but
has also bounced once again from its 21-dma (50.67), which also
sits above support at $50.   We are not ready to punt on this one
yet as it still appears the stock is rolling over, but we
wouldn't recommend new entries until we get a break of $50.  With
the 50-dma sitting at $49.89, it seems worth waiting an extra
$0.25 for an entry at $49.75.  The strength today in the
homebuilding sector may have had something to do with WHR holding
up, since the majority of their products count on the housing
market for a portion of business. However, with rising mortgage
rates and Sir Alan himself indicating he expects a drop-off in
the sector this year, we are not terribly concerned about WHR's
business benefiting more this year from that market.

Picked on March 29 at $49.58
Change since picked:   +2.16
Earnings Date         04/16/03


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

None


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The Option Investor Newsletter                 Thursday 04-10-2003
Copyright 2003, All rights reserved.                        3 of 3
Redistribution in any form strictly prohibited.


In Section Three:

Play of the Day: CALL - LXK
Traders Corner: It's Dangerous Out There - Unless You're Armed
With The CPTI
Options 101: The Tax Man Cometh

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

Lexmark Intl. - LXK - close: 69.02 change: +1.39 stop: 66.00

Company Description:
Wrapping its arms around the entire life-cycle of printers, LXK
develops and manufactures a broad range of laser, inkjet and dot
matrix printers for the office and home markets.  The company is
also the exclusive source for new print cartridges for the laser
and inkjet printers it manufactures.  Additionally, LXK provides
supplies for IBM printers and offers after-market laser
cartridges for the large installed base of a range of laser
printers sold by other manufacturers.

Why we like it:
There are very few companies that have managed to carve out a
consistently growing profitable niche in the cutthroat computer
business.  DELL is the standout leader in the computer
manufacturing business and MSFT holds the undisputed crown in the
PC software arena.  Sometimes we forget that with each PC sold,
there has to be a printer to go with it.  Not only that, but the
printing business can be considered one of consumables, as those
pesky little printer cartridges keep running out of ink and we
have to go out and get more.  While it may not have the largest
market share, LXK does have an impressive claim to fame over its
nearest competitor (HPQ).  Not only is LXK continuing to grow its
revenue and earnings, but last quarter saw the company reporting
record revenues and its best earnings since April of 1999.

This solid financial performance in a challenging economy hasn't
been lost on investors, as the stock traded to a new multi-year
high of $71.50 earlier this week.  That high came in the midst of
the euphoric broad-market ramp on Monday, so it is no great
surprise that the stock pulled back after posting that high.  The
stock pulled back near $67 and caught a nice bounce from there,
showing that former resistance is now acting as newfound support.
Adding further support is the combination of the 20-dma ($66.65)
and the ascending trendline from the February lows at $66.25.
While we could see another dip towards the $67 support level, the
fact that daily Stochastics are trying to turn upwards hints that
perhaps investors are trying to take advantage of a possible run
towards earnings on April 21st.  Note that the PnF chart is
really showing the stock's strength, as it looks quite bullish,
and has a bullish price target of $79.  If LXK can get back over
it's relative high from Monday, we could actually see a run
towards that level ahead of earnings.  Just remember that this
will be a short-term play, as we'll be dropping it ahead of the
earnings release.

With the unsettled nature of the broad market, the preferred
entry strategy is to buy a dip, but if the bulls are feeling
frisky, it wouldn't be out of the question to see a powerful
breakout to new highs.  Such a breakout will require stronger
volume than we've seen over the past few days, with Thursday's
tally coming in at about 75% of the ADV.  While a dip to $67
would be the ideal scenario for dip buyers, we can see that
intraday support looks decent near $68.  A dip and rebound in the
$67-68 area looks like the best we're likely to get on a
pullback.  Eager momentum types will need to exercise patience
and wait for a volume-backed move over the $71.50 level (Monday's
intraday high) as the $71 level has been persistent resistance
for the stock since the middle of 2000.   We're initially setting
our stop at $66, which is below what should be very strong
support.

Suggested Options:

Shorter Term: The April 70 Call will offer short-term traders the
best return on an immediate move, with manageable risk.  With
April expiration looming next week though, this option should
only be used by aggressive traders.

Longer Term: Traders looking to capitalize on a sustained
breakout move over the 2 weeks will want to look to the May 70
Call.  This option is currently out of the money, but should
provide sufficient time for the stock to move higher ahead of
earnings without time decay becoming a dominant factor over the
short run.

BUY CALL APR-65 LXK-DM OI=2888 at $4.50 SL=2.75
BUY CALL APR-70 LXK-DN OI=4106 at $1.00 SL=0.50
BUY CALL MAY-65 LXK-EM OI= 617 at $6.10 SL=4.00
BUY CALL MAY-70 LXK-EN OI= 365 at $2.90 SL=1.50

Annotated Chart of LXK:
http://www.OptionInvestor.com/oin/images/commentary/newsletter/2003-04-10/LXK041003.gif



Picked on April 10th at  $69.02
Gain since picked:       +0.00
Earnings Date          04/21/03 (confirmed)
Average Daily Volume = 1.59 mln

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

It's Dangerous Out There - Unless You're Armed With The CPTI

By Mike Parnos, Investing With Attitude

Easy Come, Easy Go
Once upon a time there was a Couch Potato Trading Institute
student.  Let's call him George.  He said he wanted to learn how
to make money.   He had been reading our columns and was
converting to the CPTI philosophy.

For a few months, George made money on iron condors, straddles,
and credit spreads.  Then, one day, he heard on TV about a small
biotech stock that had found a cure for some form of cancer.  He
fell off the wagon and bought 2,000 shares.  The stock moved up a
point.  George was excited.  The next day it moved up another
point.  George was giddy.  Then, another point.  He was drunk with
profits.  Wow! $6,000 in less than a week.  He booked a cruise and
put it on his credit card.  "This stock is going to the moon,"
said George.

News came out.  Turns out that the cancer may have been cured, but
it gave the patients leukemia.  Did George take any profits?  What
do you think?  "It'll bounce back up," said George confidently.

Today, the stock is below where George bought it.  He's not a
happy camper.  He shouldn't have gone camping.  When you get off
the couch, you better be going to the kitchen or the bathroom.
Those are the "safe" rooms.  When you go camping, there are bears
out there.  Sometimes you get the bear.  Sometimes the bear gets
you.

It's people like George that give stupid people a bad name.  He's
the kind of guy who would let Michael Jackson baby-sit his kids.

Let me publicly say, "Thank you, George."  It's traders like you
that make it possible for the small (but growing) army of CPTI
traders to make a nice, consistent living – thinking with the
little head, and not the big one.  I sure hope he can get a refund
on that cruise.  I hear it's dangerous.
_____________________________________________________________

Mike,
Sometimes, when I'm looking at the open interest of an option, the
volume for the day is higher than the open interest.  How can that
be?

Response:
In past columns we've discussed how open interest can often
provide a guideline to support and resistance levels. It can also
suggest the strike price close to which the market makers would
like the stock to finish.

It can be a little confusing, though. Sometimes, when there is
news on a stock, there is an unusual amount of volume on a
particular option.

The question -- How can the daily volume of an option be greater
than the open interest?  It leaves some newer traders confused –
even more than usual. Let's see if we can clarify this question.

When you read an open interest figure, it represents the total
number of outstanding contracts of a particular option at the end
of the previous trading day. For instance: XYZ company's December
$45 call has open interest of 810 contracts. Essentially, that
means that traders have either "bought to open" or "sold to open"
a total of 810 contracts during the life of the December $45 call
option - and the positions are still "open."

Assume some news came out on XYZ and a volume of 1250 contracts
were traded on Thursday. The daily option volume is just that -
the number of options traded that day. They could have been
options "bought to open," "bought to close," "sold to open," or
"sold to close."

Open interest is calculated at the end of every trading day. On
Thursday, every time a contract was "bought or sold - to close,"
that contract was deducted from the 810 open interest number. By
the same token, every contract that was "bought or sold - to
open," will be added to the 810 figure.

If, out of the 1,250 contracts that were traded on Thursday, 500
were to "close" and 750 were to "open," here's how the new open
interest figure would be calculated.

Wednesday's Open Interest: 810 Contracts
Thursday "to close": (500) Contracts
Sub Total: 310 Contracts

Thursday "to open": 750 Contracts
Total: 1,060 Contracts = New Open Interest

When an option is first opened, the volume will almost always
exceed the open interest, because it started at zero. If you watch
the relationship between open interest and daily volume, it can
indicate what kind of trading took place that day.

Now that we resolved that problem, during the next commercial
we'll review nuclear physics.


Mike,
I've heard that the volume of options traded in a day can give you
an idea of the direction of a stock.  Is that true and how do
those people know ahead of time what's going on with a stock?

Response:
Stocks have an average number of contracts that trade during the
course of a day. This is the sum of all the puts and calls at all
available strikes. Maybe one day the total will be 1,500, 1,800
the next day, then 1,200 the day after that. The average is about
1,500 contracts.

Occasionally, there will be an unusual number of contracts traded
for a day, maybe two, unaccompanied by any news that would justify
that amount of activity. AHA!! Something is likely going on, but
we don't know what it is. An impending merger? An earnings
warning? An analyst downgrade? An early FDC ruling?  Maybe a
hooker sighting at the annual meeting?

Maybe it's just a fluke, but often there's "something is going to
hit the fan." We don't know what's going to happen - but SOMEBODY
DOES!! And those opportunists are going to take advantage of it.
As we curse them under our breath, many of us secretly wish we
were "in the know" so we could, just once, be one of the
opportunists and make a quick killing on an unsuspected move in a
stock. Although it's not foolproof, it's right often enough to be
considered by many a "leading indicator." The tip-off is the
unusual (much higher than average) volume of options traded.

It's a type of insider trading. These happenings go largely
undetected by the SEC. As you know, insider trading is how Martha
Steward got her unscheduled spanking.  I suspect she enjoys an
occasional spanking, but this one was particularly costly.

If Martha was a sharp chocolate chip cookie, instead of selling
her shares of IMCL, she could have just bought more puts than the
amount of stock she owned. Then, her shares would have been
covered.  It's not foolproof, but, if scrutinized, she was just
buying protective puts plus a few more for good measure.

But now, Martha's lost a lot of her cookie dough. People will
still buy her products at Kmart, but the SEC isn't buying her
story at all.  She's still making those exciting placemats on TV
every day (Yawn!!!).

_____________________________________________________________

CPTI Portfolio Update
Position #1 – OEX Iron Condor – closed Thursday at $442.73.
We created an Iron Condor with a 70-point range of 420 to 490 for
April.  The objective is for the OEX, at April expiration, to
finish anywhere within the spread.

The total credit for the Iron Condor position is $2.35.  With five
trading days left, we're looking real good!

Position #2 – BRCM Short Straddle – Trading at $13.12.
About three points ago we sold 10 contracts of BRCM April $15
calls and sold 10 contracts of BRCM April $15 puts for a total
credit of $2.60.  Our safety range is from $12.40 to $17.60.

On Monday, we were presented with an opportunity.  The market
spiked up.  BRCM traded as high as $13.90.  To buy back the $15
put would have cost $1.60.  There is heavy resistance at about
$14.  We decided that, if BRCM reversed, we would close out our
position.  When BRCM moved down to $13.80, we bought back the $15
put for $1.65.  We had taken in $2.60.  Our profit is $950.
Celebration may be a bit premature because we're still short the
April $15 call.  If we can buy it back for $.05 in the next few
days, we will.  If not, we'll just let it expire worthless.

Position #3 – MMM Iron Condor – $132.78.
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, to finish anywhere
within the spread.

The market has gone up too far and much to fast.  We have another
week for calmer heads to prevail and return MMM, to a more
reasonable level (below $130).  We'll see if Fibonacci was right.
We're still betting on it.

Ongoing Position #1 -- QQQ ITM Strangle – $25.77.
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.  Our cost basis for the position is $5.30.

Since premiums are so low, the chances of making a substantial
profit from this position are slim.  Plus, it ties up a lot of
money.  We closed this four-month position with a $400 profit.

Ongoing Position #2 – OIH - Diagonal Calendar Spread – $56.30.
We felt there was a great deal 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.

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.  According
to plan, the March $50 put expired worthless.  We then sold the
April $50 put for $.70 to bring our cost basis down to $3.15.

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



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

The Tax Man Cometh
Buzz Lynn
buzz@OptionInvestor.com

It's tax time again!  How would you like to save some money and
AVOID (not evade) some Uncle Sam outlay this year?

Many would.  And so it is tonight that I'll ask veteran readers to
hang in there for benefit of our new readers.  Heck, even veterans
can use a refresher course from time to time.  But I want to get
back into the subject of "Trader Status", which I encourage all to
investigate.  So do you have trader status with the IRS?

"That's almost an insulting question!  Of course I have trader
status.  I'm a trader!  Err, well, maybe I qualify.  OK, I lost
$100,000 last year and quit trading after March, so maybe not.
But boy, how I wish I could claim the whole loss suffered in
instead of using a measly $3,000 per year over the next 34 years
for what seems like eternity."  (Either that or plan on making
exactly $97,000 trading profits next year so you net out at $0
earned from trading.)

Anybody utter these words to themselves over the last three years?
We get plenty of reader e-mail from those who have.  Invariably,
they go on to ask if we know what is/how to get trader status that
would allow deductions for substantial losses exceeding the $3,000
annual limit.  While we are not accountants (at least none of the
folks I know at OIN are) and we don't even play them on TV, we
know people who are.

So we figured, "what the hey".  Not only would this make a great
article of immense benefit to fellow readers, it would also give
us an excuse to seek out and ask the questions of an expert in the
field.  Just as we would never entrust our hard-earned dollars to
a brick maker for the purpose of buying fine jewelry, so too
should we avoid trusting our accounting issues to Fundamentals Guy
or any other analyst, market strategist, and trader on our staff.

While we know tidbits, we are in no way qualified to talk
specifics on the subject of trader status and tax liability.  For
those issues, we need an expert.  And that expert is Jim Crimmons
of www.tradersaccounting.com.

Here's the reader e-mail that got the ball rolling on this:

"Hi,

Would you please direct this question to the most appropriate individual
at option investor?  I realize that you are not accountants but you all
do the same thing with options.

I have discussed for many years the tax strategies with my accountant
and to date have always been an investor and not a trader and have not
marked to market.  I make over 400 option transactions per year, create
a lot of margin debt and had huge losses over the past two [now three
since this e-mail was written] years that would have been better
offsetting earned income rather than the current $3000 per year until
offset by future capital gains.

Would some please devote an article to trader Vs investor?  My
accountant say that the rules are deliberately ambiguous so that most
people will end up investors and not risk going into unchartered waters
where they are subject to audits, penalties and interest for trying to
write off home office expenses, and use mark to market today.  He says
that one has to get permission from the IRS to go back from market
status to investor status after making their first election so that in
years where there are huge capital gains one would regret that they no
longer can have long-term capital gains.  He says that having separate
accounts at separate brokerage firms does not allow one to be a trader
in one account and an investor in another account as there has been no
ruling and that at an audit one would have to pay penalties and interest
and then go to tax court to try to win your case without any ruling.

Would someone at Option investor please comment on the tax options
available to option investors/traders.

Thank you"

Dear Reader - Your day is here!

Rather than try to answer our fellow reader's question with just a
paragraph from one of us here, we posed the question to Jim
Crimmons, founder of www.tradersaccounting.com.  What we got back
was detailed enough to answer almost anyone's questions on the
entire subject.  I'll let Jim do the talking from here.

Me: What say you, Jim?

Jim:

Executive Summary:  Tax planning is worthless unless it is put in
place.  Probably the biggest reason people do not follow through
is that the idea is either too complex, or forces them to change
their lifestyle in a dramatic fashion.  While the following
suggestions may sound intimidating and complex initially, their
operation is fairly simple and is designed not to make any major
changes in your current lifestyle.  Remember the idea is to plan
ahead to establish your Tax Efficient Trading Plan, which dove
tails with your overall Trading Plan.

Treat it as a business:  Establish an LLC for your trading.
Advantages.  Since you can treat the LLC as a pass-through entity,
you will not be subject to double taxation as you could with a C
corporation, but you can run your business deductions through it.
This account will be your active trading account and will provide
you with liquidity and asset protection.  When there is sufficient
trading activity, you can adopt the Mark to Market method of
accounting, which allows you to ignore both the Wash Sale Rule, as
well as the $3,000 cap on Capital Loss Deduction.  Because many of
the expenses you are now paying out of your own pocket can be
expensed out through your trading company, you will be lowering
the amount of money you need to live on, and by this means
lowering your personal income taxes.

Learn to deduct expenses that you cannot fully do personally, like
education, meetings, and trading expenses.  For example,
Healthcare costs - Your company can pay Medical Insurance
premiums.

Medical Savings Account - If you are funding your own medical
insurance, a Medical Savings Account for your family generally
saves our clients a lot of money, as well as add to their
retirement income.  If you are unfamiliar with MSA’s order our
free special MSA report by e-mailing us at
questions@tradersaccounting.com, enter the words MSA in the
subject box.  [Shameless plug for Jim :-)]

Work With Your Tax Advisor Quarterly:  As the year progresses,
because of the extremely volatile nature of trading, you need to
evaluate your tax strategy needs.  You cannot wait until this time
next year and enact any strategies for this year.  A pro-active
tax advisor will work with you on a quarterly basis, to ascertain
what you need to do to lower your taxes.

Traders Education:  Learning from others can often be the least
costly.  As a former dean of Harvard put it:  “If you think
education is expensive, try ignorance.”  Investment seminars and
publications present important learning opportunities that are
essential to mastering your trading skills.

Me: Sounds good so far, Jim, but why should we trade in a business
entity?

Jim:  Some clients have traded as a business, and others have
traded in their own name and are considered investors.  When we
talk with the last group we are always asked, “Why should I trade
in a business entity?”  It is important that you understand both
the pros and cons of trading as a trader and as an investor.
Trading as an “investor” limits you in several aspects, the first
being taxes.

Taxes: Because the IRS treats an investor as a hobbyist,
educational expenses and the related expenses of attending
seminars such as travel and meals are not deductible.  If you are
a trader like I am, you realize that from time to time you need to
go to an educational workshop to hone your skills.  This generally
is an on-going process, many of us go to at least one trade show
or workshop each year, and the expenses can be pretty substantial.
The rub is we bump up against the 2% threshold the IRS imposes for
expenses on our personal tax return.  What this means is that if
our Adjusted Gross Income for the year is $100,000 the first
$2,000 of expenses we have cannot be deducted.
Let’s look at two examples where our taxpayer has made money:

John is an investor trading in his own name without benefit of a
business.  At the end of the year he finds he has made $40,000
trading.  He and his spouse both work; together they have made an
additional $100,000.  Their trading expenses look like this:

Telephones       $480            Seminars           $3500*
                                 Travel &
Fees            $1200              Entertainment     $650*
                                 Home Office        $1800*
Cable            $360            Office Equipment  $10000*
DSL              $240            Sub-Total         $15950

Margin Interest $6000
Sub-Total       $8280            TOTAL             $24230

Of this amount, how much could be deducted by John?  He can claim
only $8,280 in expenses.  He cannot claim the items above which
are marked with an asterisk, since he is classified an investor,
and the hobby rules indicate that he cannot deduct these items.
He and his spouse have approx. $140,000 in income for the year, so
the first 2% of his expenses are not deductible.  This would mean
that $2,800 in expenses could not be deducted, leaving John with
$5,480 he could deduct, which at a 30% tax bracket would save him
$1,644!  (Obviously for illustration this example is flawed in its
simplicity.  Most taxpayers will have other deductions as well as
adjustments to their gross earnings.)

Susan on the other hand has set up a business entity to trade in.
Within the business she has filed for the Mark to Market
Accounting Method.  Assuming she is in the same exact situation
that John is with the same total income and expenses, Susan would
be able to deduct the additional $15,950.  According to section
162 of the IRS code, a business can deduct "all ordinary and
necessary expenses."  Susan, also in the 30% tax bracket, is able
to deduct the entire $24,230.  Susan saves $7,269 in taxes.

Lets see:  the difference between John and Susan is $5,625 more in
Susan’s trading account at the end of the yearthat’s quite a
difference!

Ok, we have seen that Susan wins out when they both have made
$40,000 in trading income, but what happens when they have a
losing year.  Let’s remain consistent with our expenses, the same
as before, but this year each has lost $40,000 with their trading.

Now John really gets stiffed because he has the same limitations
on his expenses that he had in example one, but since he did not
make money trading he cannot deduct his margin expense.  (You can
only deduct margin interest to the extent that you have made money
trading securities or options.)

At this point he has $2,280 in deductible expenses.  Since he lost
money trading, his AGI has dropped to $100,000, which means that
the first $2,000 of expenses is not deductible.  He is now able to
deduct only $280 in expenses this year, and $3,000 of his capital
loss for a total of $3,280 of deductions.

Assuming he remains at the 30% tax level he will save a whopping
$984 in tax saving!  Oh yes, in addition to this he has a $37,000
loss carryover, which he can use at $3,000 a year in subsequent
years!

However, Susan is still able to save the complete $7,269 in taxes,
(all ordinary and necessary expenses for the business).  Plus,
since she is a trader who has taken Mark to Market, she can offset
her regular income of $100,000 with her $40,000 loss, bringing her
AGI to $60,000, so she saves another $12,000, for a total savings
of $19,269 in taxes.

The difference this year?  $18,285 more for Susan’s Account.  So,
no matter whether you make or lose money in the market, it makes
sense to be trading as a business!

Lets summarize:

Example              John           DIFFERENCE          Susan
1.  $40K gain
Tax Savings          $1644         $ 5625               $7269
2.  $40K loss
Tax Saving           $ 984         $18825              $19269

Me:  Wow!  That's quite a difference.  It really does seem to pay
off if we establish a separate trading entity and run it like a
business.

Jim:  In addition to the huge difference in the tax savings, when
you trade as a business there are other issues that we should
bring to your attention.

Wash Sales
When your entity is set up properly and you are trading at a level
to validate using Mark to Market Accounting, you no longer have to
worry about the Wash Sale Rules, which has been a boon to those
active traders who trade the same stock over and over throughout
the year.

[Note: Wash Sale rules can affect persons who trade the same stock
repeatedly throughout the year.  An example of one of the rules
should suffice to illustrate.  You buy Microsoft at $50, it goes
to $45; you sell for a loss of $5.  If you buy Microsoft again
within 30 days, you cannot claim the $5 loss; rather you must
increase your basis.  In this situation if you buy Microsoft at
$30, then your basis would be increased by the amount of the prior
loss to $35.  See "Beat the Tax Man" from March 19, 2002, Trader's
Corner.]

Fringe Benefits
When you trade as a business, you have the ability to pay for
health insurance, set up higher education plans, and provide for
retirement plans, child care and other benefits for your
employees.  Most traders have immediate family members as their
only employees, so this can be a huge benefit, lowering your taxes
by increasing the legitimate expenses of your trading business.

In my opinion there is absolutely no reason you would not want to
trade as a business.  Whether you use Mark to Market accounting
needs to be investigated thoroughly.  Don’t wait another day, as
you gain nothing doing so, and will probably penalize yourself by
losing money each day you wait.

Me:  Thanks, Jim for that information that could save us traders
countless thousands of dollars!

As we can see, Jim has a wealth of knowledge on the subject and
has barely broken through the surface on the topic.  Many of you
are probably wondering about "trader status", which is a topic
worthy of a full column in and of itself.  So we don't have to
wait a full week, check out the following links of previous
articles for a plethora of tax-saving ideas.

http://members.OptionInvestor.com/archive/traderscorner/2002/tc_032702_1.asp
http://www.OptionInvestor.com/traderscorner/tc_040402_1.asp
http://www.OptionInvestor.com/traderscorner/tc_040902_1.asp
http://www.OptionInvestor.com/traderscorner/tc_041102_1.asp
http://www.OptionInvestor.com/traderscorner/tc_041602_1.asp


Until next time, make a great weekend for yourselves!

Buzz


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