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Daily Newsletter, Thursday, 06/05/2003

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The Option Investor Newsletter                Thursday 06-05-2003
Copyright 2003, All rights reserved.                       1 of 3
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Ding Dong the Bear is Dead
Futures Markets: Higher highs
Index Trader Wrap: Hit me with your best shot....
Market Sentiment: Getting More Extreme
Weekly Manager Microscope: Geraldine Hom: Schwab 1000 Fund (SNXFX)


Posted online for subscribers at http://www.OptionInvestor.com
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      06-05-2003           High     Low     Volume   Adv/Dcl
DJIA     9041.30 +  2.30  9045.15  8969.24 2.12 bln 2026/1220
NASDAQ   1646.01 + 11.40  1646.01  1613.99 2.43 bln 2041/1296
S&P 100   496.14 +  1.11   496.14   491.07   Totals 4067/2516
S&P 500   990.14 +  3.90   990.14   978.13
W5000    9480.80 + 49.30  9480.81  9356.67
RUS 2000  456.69 +  5.46   456.69   447.87
DJ TRANS 2511.35 - 45.10  2556.96  2480.43
VIX        23.12 +  0.64    23.65    22.82
VXN        34.53 +  1.52    34.68    33.76
Total Volume 4,873B
Total UpVol  3,170B
Total DnVol  1,662M
52wk Highs 1125
52wk Lows    19
TRIN       0.78
PUT/CALL   0.64
************************************************************

Ding Dong the Bear is Dead

If you are a trader you have probably been hearing this a lot
lately. The end of the bear market is at hand, the bear is dead,
long live the bull! While I would not rush to proclaim this from
the house tops the internals are clearly proclaiming a change in
the trend for the last three years. With even the lagging Dow up
over +25% from the October lows it is hard to disagree.

Dow Chart - Daily



Nasdaq Chart - Daily




The euphoria in the stock market even appears to be wearing off
on the retail sector with May Retail Sales up +2.0% and higher
than expectations. This makes two consecutive months of strong
gains with April gaining +3.1%. These numbers are significantly
above the trend of only +0.5% since the +3.2% gain in October.
After a five month dry spell there appears to be a retail bounce.
However, according to individual reports the buying was very
spotty. Best Buy reported sales up +2.2% while Circuit City
reported sales dropped -10%. Wal-Mart reported gains of +2.1%
while ABS saw sales dip -1.2%. It is obviously a case of shopper
selectivity based on prices and advertising. It was still enough
to power the entire sector to the gains despite a -7.6% drop in
footwear and -2.0% drop in furniture sales. Wal-Mart posted a
cause for concern that sales were following the paycheck cycle
and suggested consumers were suffering from a cash crunch as
unemployment continued to grow.

That growing unemployment was seen in soaring Jobless Claims to
442,000 for last week. Expectations were for a drop to 422,000.
The four-week moving average jumped to 430,500 and this is
pointing out the potential for a severely negative Nonfarm
Payroll report on Friday. The jump in claims this week reversed
a minor three week decline. Currently 43% of unemployment
recipients are running out of benefits before finding a job.
This means an average of 175,000 workers are dropping off the
roles each week with no job and no benefits.

The worst report of the day was the Factory Orders for April.
The report showed orders fell -2.9% and a full point more than
consensus estimates of -1.9%. This was the worst decline since
November 2001 and the aftermath of the 9/11 attack. Nondurable
goods fell -3.5%. New orders for non-defense capital goods fell
-2.73%, communications equipment -2.68% and industrial machinery
a whopping -28.51%. Computer equipment was the highlight and
rose +19.17%. Shipments fell -2.2% and back orders were flat.
There was nothing to be excited about in this report other than
the computer component and this was April data. The spin doctors
continued to claim it was impacted by the war and not relative.
The bulls bought the excuse and the dips.

Tomorrow we are going to get the Nonfarm Payrolls for May. This
report is expected to show a fourth consecutive month of declines
in real jobs. The consensus ranges from a loss of between -27,000
to -39,000 jobs depending on which consensus you believe. The
whisper number is significantly higher in the -75,000 range.
The Fed has a history of cutting rates after only three
consecutive months of declines but they didn't cut last month due
to the expected post war rebound. There is a strong belief that
should the job loss be over 100,000 on Friday the Fed will cut
rates as soon as tomorrow. That number also ranges from 100K to
200K depending on who is doing the analysis. If they do not cut
tomorrow or Monday then it is almost a 100% chance they will cut
by a quarter at the June 25th meeting. The futures are now showing
a 29% the Fed will cut by another 25 points in August and a 64%
chance of the same second cut by the September meeting.

This morning the ECB cut rates by a full 50 basis points and that
is setting the stage for a full 50 point cut by the Fed to ward
off the deflation monster and maintain parity with the ECB. If
they are really contemplating a rate cut in June and another in
August or September then they would be better served to do it
all at once in June. Slow injections may build up an immunity
to the vaccinations when a big jolt of stimulus could spark a
faster rebound. The market outlook is clear. There is an
assumption that the ECB cut has put the onus on the Fed to match
it and traders bought that rumor today despite the horrible
Jobless Claims and Factory Orders.

After the bell Intel gave it's mid quarter update and NOBODY was
scared of the result. Prices rose right into the bell with the
new 52-week highs setting another new high at 1125 compared to
new lows of only 19. Intel did not disappoint. They narrowed
guidance to $6.6-$6.8 billion from $6.4-$7.0 billion. Bottom
line $6.7 average on both estimates so the result was an inline
guidance with processor trends at the high end of seasonal normal.
This encouraged the bulls yet again and after a brief dip in
after hours the Nasdaq futures took off and jumped +10.00 to
1244 as I write this. Considering the mixed messages from other
chip companies over the last couple days this affirmation of
Intel's outlook could be the tech blessing the markets were
looking for.

Considering news from the other 800 pound gorilla the Intel news
was a breath of fresh air. CEO Steve Ballmer said in a memo to
MSFT employees that Linux represented a serious challenge to
Microsoft. Many analysts thought the mention by name of Linux
in addition to open source software in general meant the threat
was real. Linux has a long way to go to be any material threat
to Microsoft but in today's economy every dollar counts. It is
not that Linux is replacing the NT/2000 operating system that
hurts but it also takes out the SQL, Exchange, Office, etc
components that run on the Microsoft system. These are high
dollar revenue sources for Microsoft. For every server running
a Microsoft operating system there can be hundreds of users
accessing it and the licensed software it runs. Changing one
computer with Microsoft 2000 server running Microsoft Exchange
as an email host and SQL as a database program could cost MSFT
as much as $25,000 a year for a moderate size company. Every
user that connects to that computer for email or data must have
a license for that program. It is an intricate web of interleaving
license requirements that produces huge revenue from each MSFT
equipped server. BAC cut MSFT from its fresh money list on the
news. MSFT dropped back to $24 support and then rallied after
the close on the Intel affirmation.

The bullish turn of events this week has some confusing internals.
While the new highs/lows is off the scale there are some signs of
weakness. Insider selling is at a two-year high with $3.3 billion
in sales for May. This was a +150% increase from already high
April levels and sales were running nearly 4:1 to insider buys.
If the economy and earnings, the prime mover of stock prices, are
about to explode then why are so many insiders dumping stock?
The VIX, an indicator of premium prices paid for puts and calls
on the OEX has been rising with the market. This is completely
contrary to historical trends. The VIX falls when markets rise
and rises when sellers appear. The VIX hit a high of 23.65 today,
up from 20.97 on June-2nd. This would indicate a growing concern
for the strength of the rally. Don't get me wrong, this is good
because it shows the fear factor is alive and well and the market
is actually growing more balanced than in the recent past. The
point I am making is that there is a growing contingent of
doubters.

Much of that doubt is stemming from the lack of a recovery. DCX
reported today that incentives had risen to $4,500 per car and
average selling prices were down -3% due to slowing sales and
increased competition. This is a major hit to the profitability
of automakers which already signaled cuts in production earlier
this week. Retail sales are spotty and are cycling with paychecks
and unemployment could rise above 6% for May. No recovery here.

The offset to those concerns is that cash is trash and getting
cheaper daily. If the Fed does cut rates tomorrow on a worse than
expected Jobs Report then money markets could be between a rock
and a hard place. Bonds, which could not go any higher, rocketed
to a new 45 year high today with yields on the ten-year dipping
below 3.25% intraday. With a half point rate cut on the horizon
they could actually go below 3%. This is keeping bondholders
from cashing out and switching into stocks but the equity markets
are soaring anyway. Even the most bullish of pundits are now
scratching their heads at the extreme overbought conditions. Add
to the rally the very strong internals on strong volume and there
appears to be no end in sight. The war is over according to the
press and the SARS epidemic has peaked and is under control. If
Intel is not going to warn despite the dent in demand due to SARS
then there must be demand seeping in from other areas. At least
that is the consensus tonight.

What can crash this train? Assume the Jobs Report comes in lower
than expected. The Feds will likely cut rates and that would take
the upward pressure off bonds. If they cut tomorrow then they
would not likely cut again at the June 25th meeting. The next
meeting is not until August so the July doldrums could easily
settle in for the bond market. That would be good for stocks as
money would flow out of bonds at the highs and into equities.
Assume the Jobs Report came in better than expected at flat or
even slightly positive. This is highly doubtful but a possibility.
The Fed would not cut tomorrow but the pressure would still be
on to cut on the 25th to match the ECB drop. Bonds might dip on
on the news Friday but could resume their upward climb until the
decision on the 25th. Stocks should climb based on the better
than expected number. The recovery is in progress or so they
would claim if the jobs surprise to the upside.

The most damaging event to the market could be a simple inline
Jobs number in the -35,000-50,000 range. Not enough to scare the
Fed into action and not strong enough to convince traders still
waiting for recovery confirmation to come off the sidelines. At
some point the current owners should be thinking about taking
profits. The only question now is when. Before the Fed meeting
or a sell the news event after the meeting. There is little doubt
in anyone's mind that a serious bout of selling is in our future.
We are at the extreme high end of the trading range for nearly
the last year on the Dow. The closing high for last August was
9053. The high today was 9045 and the close at 9037. Assuming
the overnight futures do not blast us over that level before
morning it could be tough to break. The Jobs Report is due out
at 8:30 and the cash open will be totally dependent on that.

The Nasdaq is already in the green when it comes to resistance.
The longer term down trend was broken yesterday at 1612 and there
is but little resistance at 1650 before reaching the 61% retrace
at 1720 from the Jan-2002 high of 2099 to the October low of 1108.
With today's close at 1646 it has already gained an incredible
+48.5% from the October lows and +31% from the March lows. That
would be classified as a good year and maybe a good couple years
of gains in a regular market.

There are two things perfectly clear and in perfect divergence.
The markets are extremely overbought using any yardstick you
desire. The NDX bullish percent is at 84%, the SPX 74% and the
INDU 70%. This leaves very few stocks to add to the numbers when
you consider all the indexes have perpetual dogs that will never
be a contributor to the bullish numbers at any given time. 70%
is considered overbought by Dorsey. The second thing is that
nobody seems to care about the first. The land rush is on and
until the cash stops flowing we are just going to get more and
more overbought. This is dangerous, very dangerous. We have gone
from a bubble market to what some are calling a bubble echo. The
current justifications for the rally are purely hope although
that could turn to reality with the July earnings. It could
also implode with a nasty string of earnings warnings which may
have already started, FDX, ROAD, ABS, TQNT to name a few. To be
fair there have been quite a few affirmations and even a few
raised guidance. While there is a strong need for a pause there
is no guarantee we will see one. Extremely overbought markets
tend to get more overbought. It is not logical but it happens.

As a trader I would be extremely cautious about entering longs
at this level. Simply the number of new 52-week highs, which
proves how bullish traders are, should also warn you that there
is a strong potential for a dip. Tomorrow, next week, June-26th?
nobody knows but there needs to be a multiday pause in order to
build a new base for higher highs. With all the external forces
coming together at a peak in the markets that pause could be
more than a couple days.

Enter Very Passively, Exit Very Aggressively!

Jim Brown
Editor

Tomorrow is the last day to get in on the $1000 in free options
in the stock of your choice. I must receive the suggestions by
8:PM on Friday 6/6 to qualify. See here for details:
http://members.OptionInvestor.com/editorplays/edply_060103_1.asp


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

Higher highs
Jonathan Levinson

Daily Pivots (generated with a pivot algorithm and unverified):

Figures rounded to the nearest point:

           R2     R1    Pivot   S1     S2
ES03M     1000    996    987    982    973
YM03M     9107   9076   9019   8988   8931
NQ03M     1254   1244   1225   1216   1197


The indices gapped lower on the poor initial claims data and then
rallied on the poor factory orders data at 10AM, advancing and
retracing until a burst of frenzied buying closed the session on
the equities' highs of the day.


10 minute chart of the US Dollar Index





The US Dollar Index struggled with resistance at 94 through most
of the night and treaded water until the Bank of England
announced that it would leave rates unchanged, and the European
Central Bank cut its benchmark rate by 50 bps.  The upside
surprise in US initial claims and the downside surprise in factor
orders iced the cake, and the US Dollar Index took a nosedive to
its bear market support level at 92.00.  This move was puzzling
on the heels of the ECB rate cut, as one would expect US Dollars
to appreciate on a devaluation of a competing currency.  The
counterintuitive move was attributed to the consensus prior
expectation among traders of a 50 bp cut.

Daily chart of June gold




The action in the US Dollar was, of course, bullish for gold,
which rallied to the 370.00 level.  The stochastic downphase will
get cut short if the strength in gold continues.  In the market
monitor, I suggested that the shallowness of the price pullback
during this downphase is encouraging for bullish gold traders,
and that a successful test of the 358 support area would be a
good place for new long positions.  The jump this morning was
surprising, as the recent rally top at 371 appears to be the next
significant resistance area.  The CRB was up 1.01 to 236.16.

Daily chart of the ten year note yield




Treasuries found some sellers midway through the session after
rising to new multidecade highs, and yields closed in the green
for a change, with the five year yield up 5.5 basis points to
2.234%, TNX up 4 bps to 3.31% and the thirty year yield up 4.3
bps to 4.394%.


Daily NQ3M candles




The NQ printed a higher closing high and a higher low on the
daily candles, once again following its upphase higher.  The
stochastics and MacD are both at high levels, and ordinarily this
would be the place to warn that the greater risk is to the
downside.  That remains the case, but it's been the case for the
past two months, with the exception of the brief corrections in
the rally.  NQ closed at 1234.50, just below its intraday high of
1235.


30 minute 20 day chart of the NQ3M





The downphase was cut short yet again, and the MacD issued a
fresh buy signal well above the zero line on the 30 minute
candles.  The oscillator setup tells us that, for the moment,
both the longer and shorter cycles are in gear to the upside.


Daily ES3M candles




The ES contract closed just below its high of 991.25, and as with
the NQ, shows us nothing about which to be bearish.  The intraday
low of 977.50 did not last for long, and if the past week is any
indication with its pattern of higher lows, 977.50 should not be
seen tomorrow.  With price adhering to the upper Bollinger band
and the oscillators running out of wiggle room near the top, any
further upside will be considered a trending move and will
require strong additional buying for fuel.  Until the trend
reverses, it's unhealthy to try to pick the top, but fresh
bullish positions from here will require both tight stops and
strong courage.

20 day 30 minute chart of the ES3M





On the ES 30 minute candles, we see the same setup as with NQ.
There is additional room projected to the upside by the
oscillators, but they are not far from the tops of their
channels.


Daily YM3M candles





Nothing to add on the Dow futures, which closed just below their
new year high of 9050.

20 day 30 minute chart of the YM




Today's session showed treasuries posting a possible reversal
from their rally highs (and yields from their rally lows), and a
dramatic selloff in the US Dollar Index.  The fed had added a
modest amount of intervention money via overnight repos, an
insignificant amount in the face of the USD selloff.  With
equities constituting a very small market by comparison, the
intermarket relationships here are key.  During this rally,
equities and treasuries have rallied together against the tanking
US Dollar, and I've speculated that the moves were caused by
the fed's aggressive addition of dollars.  With the US Dollar
falling and treasuries failing to push higher, I'm led to believe
that something might have changed today.  If yields continue to
rise tomorrow and the US Dollar does not, it could be foreign
selling, which would negatively impact US equities.  I'd guess,
further, that if such occurs, the YM will suffer the most,
followed by ES and finally NQ.  We'll see how it plays out
tomorrow.


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

Hit me with your best shot....

Pat Benatar scored her first Top 10 hit with the song "Hit Me
With Your Best Shot" from the Crimes of Passion album, and while
the album itself was certified platinum, the song was certified
GOLD!

Other hits from Ms. Benatar's Crimes of Passion album were "You
Better Run" and "Hell is for Children."

You know where I'm going with this.  Don't you?

Bulls look to have survived a one-two punch from this morning's
economic data, which had weekly jobless claims coming in weaker
than economists forecast (421k) at 442,000, while April factor
orders were also weaker than forecast (-1.8%) with a 2.9%
decline.

"Well you're a real tough cookie with a long history
Of breaking little hearts, like the one in me...."

Overnight European Central Bank interest rate cuts sparked buying
in gold stocks as the equal weighted AMEX Gold Bugs Index ($HUI)
$147.14 +4.05% surged.  Meanwhile the stock weighted Gold/Silver
Index (XAU.X) 77.70 +3.46% may have "broken the hearts" if not
the potential head and shoulders top formation with today's move
above the 76.69 level.

Is the move higher in gold stocks a "bad sign?"  I'm not sure,
but I don't think so.  Some economists as well as the Fed are on
the alert for "deflation," but when one considers what the stock
market is doing, I tend to lean more toward the "inflation" camp
at this point.  I would certainly think that if "deflation" were
in play, then stocks wouldn't be hitting multi-month highs.  Now,
this isn't to say that at some point the market won't have change
in thought (gets more information), but for those torn between
thoughts of "deflation" or "inflation," it may be gold stocks
that benefit most.

"That's O.K., lets see how you do it
Put up your dukes, lets get down to it...."

What's "in play" is trader/investors seeing a falling Producer
Price Index and Consumer Price Index, that's sign of "deflation."
But what about the aggressive Fed and now ECB policy of lowering
key interest rates?  Now... the Fed hasn't made an interest rate
move since cutting the fed funds rate by 50-basis points on
November 6, 2002, but as noted in yesterday's 01:00 PM EST
Update, the MARKET is looking for at least a 25 basis point cut
by its August meeting, as depicted by the August Fed Funds
Futures contract (ff03q) 99.04.  In fact... as of today's close,
the MARKET is looking at a 15% chance of a 50 basis point cut by
the Fed between now and the August meeting.

August Fed Funds Futures - Daily Interval




Something's "out of whack" isn't it?  The August fed funds
futures are climbing and getting close to their March 10
contract high.  Where was the S&P 500 Index (SPX.X) 990.14 +0.39%
on March 10?  How about 807.48.

Deflation?  Mmmmmm.... no.  I don't think so.  Inflation?
Mmmmmm... perhaps.

Why does the Fed or ECB lower interest rates?  To pump liquidity
into the system to stimulate growth.  If growth comes, what does
one expect?  Inflation or deflation?  Some inflation right?  If
the growth is to robust?  I'll say it now... "hyperinflation."

Ahhhh!  But what if growth doesn't come and product prices
continue to fall in order to still try and spur some demand for
those goods?  "Deflation," Right?

What's a commodity that tends to perform well/bullish under
"inflation" or "deflationary" environments?

The WORST-case scenario for gold is ECONOMIC GROWTH, with NO
inflation.

Gold/Silver Index (XAU.X) - Daily chart




I now look for or am further alert to "short-squeeze" trade to
develop in many gold stocks based on today's break of the "left
shoulder."

As a trader, I think it is good to try and build scenarios for
"why" an index may be trading the way it is, as it relates to
some type of "economic meaning."

Now... lets put the "short-squeeze" trade aside for a moment and
look at periods where the XAU.X and major equity indexes that
some of us may be trading showed some DIVERGENCE (what we're
really interest in) and times where the XAU.X and major indexes
moved in unison.  Like they have been in recent months.

From the far left of the chart shown above, the XAU.X made a very
big move higher, while during the same time frame (January 2002 -
May 2002) the SPX fell from 1,160 to 1,050) and from May, BOTH
the SPX and XAU.X got back in unison.

Some economists interpreted the price action in the XAU.X simply
as a massive short squeeze in gold.  "Gold bugs" confirmed that
notion, but also said that gold prices were going back to $700 an
ounce as the economy was headed into a recession.

Hmmm.... were both wrong?

What I've "liked" and still "like" about a trade in gold, is that
there's enough UNCERTAINTY between the various scenarios of
"deflation" and potential "inflation" brought on my easy money
and lower interest rates, that the "kicker" is the potential for
another short-squeeze to take place.

Now... I point to the downward trend.  I RESPECT trend and like
to monitor and try and understand its implications.

I still say that at the EARLY part of a potential economic
recover, INFLATION IS GOOD!  Its after a prolonged period of
economic growth that INFLATION IS BAD!  Remember a couple of
years ago when the markets would rally on any type of "weak" jobs
data?  Wage inflation was the big concern.

As I see it, I've basically got three different economic
scenarios in play.

One is deflation (the rate at which the general level of prices
for goods and services is falling).

The second is inflation (the rate at which the general level of
prices for goods and services is rising, and subsequently,
purchasing power is falling).

The third is economic growth with no inflation.

Gold has the opportunity to benefit from the first two (is your
U.S. dollar buying you more today than it was a year ago?)  The
US Dollar Index (dx00y) 92.52 -1.29% closed at a new low today.
Forget my previous question about "a year."  The US Dollar Index
(dx00y) has fallen 7.5% from the 100.00 level since April 13.
Now... the decline in the dollar impacts you and I more
significantly if we like to buy foreign goods or services.

Right now, I don't see the "inflation" from the CPI or PPI and if
the MARKET is playing inflation, its because of the thought of
"easy money" now coming back to haunt us in some way.

Where our downward trend may come into some importance from a
technical and ECONOMIC scenario standpoint is this.  And that's
the DEFLATION standpoint.

I'm going to suggest that if the XAU.X breaks above that trend
and we were to see the major equity indexes break back lower,
then the MARKET may then be putting greater emphasis on
DEFLATION.

"Hit me with your best shot!  Why don't you hit me with your best
shot!  Hit me with your best shot!  Fire away!"

Now... if I start hearing.... "oh, its just a short squeeze in
gold," then a bull with a partial position could care less what's
in play.  And that's the "kicker."

"Knock me down, it's all in vain, I'll get right back on my feet
again!"

S&P 500 Index (SPX.X) - Daily Interval




The SPX got "knocked down" early, but not enough to even come
close to yesterday's low.  I received some questions from traders
that were trying to better understand the "inside day" technique
of finding a an action point, but also simply using this
technique that really instills discipline into a trader of once
you've initiated a trade, then following it systematically with a
stop.

I've tried to show some of the "inside days" that the SPX has had
in recent sessions.  The "inside day" in itself is a "neutral"
day as the day's range was "inside" the previous day's trade.
This has the shorter-term and even swing trader entering the next
day with a NEUTRAL bias as it relates to that day's trade.  All
he/she does is say, "if the SPX breaks below the inside day, then
short/put and follow with a stop just above the "inside day's"
high.  (#2 was an inside day the broke lower the next day, then
stopped out for small loss the day after that as SPX moved above
the previous bar's high).

Right now, a trader that traded bullish on Wednesday (#4) now
moves his/her stop up just under today's low.

For "inside day" (#3) I marked with a red arrow the bar that
would have exceeded the prior bar's low and had a trader stopping
out.

Now... with the major indexes, you may want to give a little
"fudge room" to a stop of this sort.  Back test the "inside day"
technique with the index or stock that you look to trade and see
if it works consistently (say 70% of the time).

Even if you don't use the inside day, it may be helpful to
"pretend" you are trading it.  Then, count the duration and
perhaps the price move that you would have been in the trade.

What you find right now, is that the BEARISH breaks of "inside
days" tend to be short-lived, and stopped out rather quickly,
while the BULLISH breaks either result in small losses or last a
little longer than would the BEARISH breaks.  As time passes, an
"inside day" trader can begin to sense changes.

I've also incorporated the use of LEVELS from the
DAILY/WEEKLY/MONTHLY pivot analysis data.

Today's not a real good example, but imagine (for the future)
that you traded an "inside day" to the upside 5 days ago, and now
sitting on a 40-point move, with 10 of those points coming in
today's trade.  Do YOU really want to give back 10 of those
points to today's low?  If not, then you might simply look to the
pivot analysis matrix, look for a level that fits your downside
RISK comfort level for the gain you've got, and then it is OK to
"hope" that there are some "buy side" computers at that level
that keep the SPX from hitting your stop.

I've said before that I don't use "hope" as a way to trade.  I do
use "hope" in this instance when I'm trying to protect a PROFIT!

Today's trade saw a net gain of 11 stocks to new point and figure
buy signals as the S&P 500 Bullish % ($BPSPX) rose 2.2% to 80.4%.

A subscriber posed a very good question today as it relates to
"bellwether" leadership.  His point was... "where is it?"
Microsoft (NASDAQ:MSFT) $24.09 -3.13% and International Business
Machines (NYSE:IBM) $24.09 -3.13%.  He also asked about Intel
(NASDAQ:INTC) $21.85 +2.19%, which jumps to $22.34 after mid-
quarter update, and Oracle (NASDAQ:ORCL) $13.36 -1.62%.

His observation I think is very meaningful toward technology at
this point, but not a bank, a homebuilder, healthcare stock or
even a resurgent airline stock mentioned.

With the SPX bullish % at 80.4% this rally has been building
broad (it has to be to get the bullish % this high).  When the
"leaders" lag thought, its a very good observation to be alert!

S&P 100 Index (OEX) Chart - Daily Interval




I have a pretty good sense of humor about things, and I think a
subscriber was "jabbing" me a little regarding a potential
head/shoulder top after my long oration about intra-day
head/shoulder tops that had been failing at the right shoulder.
However, I've shown the POTENTIAL (heavens sake, the head hasn't
even formed yet) but when I've looked back at head and shoulder
patterns that HAVE developed and unfolded, the HEAD often came a
a high level of bullish % (especially in sectors) and the BEST
place to have SHORTED/PUT was when the right shoulder developed,
when the BULLISH % was in a COLUMN OF "O" and internals didn't
confirm the rebound that formed the RIGHT SHOULDER.

Today's trade saw a net gain of 1 stock to a new point and figure
buy signal in the S&P 100 Bullish % ($BPOEX) and has this bullish
% indicator growing to 76%.

"You come on with a come on, you don't fight fair..."

I had a friend back during the Pat Benatar era, and he was a
pretty tough guy and liked to go around picking fights.  He
thought there was no such thing as fighting "fair."  With what
looks to be a positive response from Intel's mid-quarter update
in after-hours trade, bulls aren't going to pull any punches in
the NASDAQ-100 Index (NDX.X) 1,231.72 +0.56% and Tracking Stock
(AMEX:QQQ) $30.64 +0.72% with after-hours trade at $30.83.

NASDAQ-100 Index Tracking Stock (QQQ) - Daily Interval




The Q's look to have a shot at $31.16 early tomorrow morning and
that's not a "stretch" with after-hours trade at $30.83.  This
morning's "first hour" of trade turned 25.8 million shares, with
support coming just above DAILY S1 of $29.90, but most likely the
extension of the upper end of our "bullish wedge."  It was laaate
Tuesday that we thought a trade at $29.85 was the "trigger" for a
bull to try and inflict some "pain" on bears that may have been
shorting that trend, which broken, did look to be resistance
intra-day on Tuesday.  This morning's "gap lower" good spot for
short-covering and as the session grew long, so did a bear's
FEAR.  Tomorrow's GREED point for bulls is the MONTHLY R2 of
$31.63.  I wouldn't be GREEDY and $31.48, just below $31.50 would
be an early exit.  Day traders that don't like to chase gaps, but
willing to take a shot at $31.48, WATCH the 5-minute bar chart
and try and MAKE SURE you get a 5-minute close ABOVE $31.16.

Today's trade saw a net gain of 3 stocks to point and figure buy
signals in the NASDAQ-100.  This has the NASDAQ-100 Bullish %
($BPNDX) rising to 87%.

Dow Diamonds (AMEX:DIA) - Daily Intervals




When the bullish % are as high as they are, I become more like
"Sherlock Homes" than anything and I think a bull wants to see a
break and close above that "tweezer top" dating back to August of
last year.  The Dow Industrials (INDU) 9,041.30 +0.02% is perhaps
the most-often quoted index in the world and looks determined to
close the 9,000 level.  Bulls don't want to keep market
psychology positive and a close above 9,100 then brings thought
of 9,250 and 9,500.

Bulls do NOT like the way IBM and MSFT are trading and if
tonight's "good news" out if INTC finds selling, then a tight
stop under today's lows provides the protection I think bullish
traders need at these higher levels of risk.

Today's trade saw no net change in the very narrow Dow
Industrials Bullish % ($BPINDU).  Still 76.67%.

Pivot Analysis Matrix




Treasuries found selling as the session progressed and with the
U.S. Dollar weakness noted above, its my thought that some money
was repatriated by foreign investors after the ECB cut rates 50
basis points.

The gloves have come off in this battle between bulls and bears
and its has gotten UGLY for the bears.  But, as I agree with the
floor trader's comments discussed in last nights Index Trader
Wrap, when the reversal comes, it isn't going to be pretty for
the bulls, so like a wise street fighter, bullish traders should
be ready to cut and run if things aren't going as planned.

One observation I'll repeat from a subscriber today is that he
was looking at a list of stocks from a stock screen of BULLISH
technicals, oscillators, etc.  The comment was that EVERYTHING
looks bullish.

Jeff Bailey


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

Getting More Extreme
by James Brown

Investor sentiment.  One need only look at the charts to figure
out what investors are thinking and feeling.  They're too afraid
to miss the move so they buy every dip.  This can't go on forever
folks.  The market needs its up's and down's to allow for
rotation of money between sectors and between securities.
Normally you don't buy both bonds and stocks at the same time.
Early today investors were buying bonds before a midday
turnaround brought them back.  This didn't stop traders from
buying stocks.

New highs hit 661 while new lows rang in at 15.  Advancing issues
outpaced decliners almost 18 to 11 on the NYSE and 19 to 12 on
the NASDAQ.  Up volume beat down volume 14 to 6 on the NYSE and
14 to 9 on the NASDAQ.  Total volume was still very strong at
more than 2 billion on both exchanges.

The DJIA managed its second close in a row over the 9000 mark but
will the bulls eventually tire of holding it up there?  The
Russell 2000 pushed out its 12th gain in a row.  The small cap
index is up more than 32 percent from its March 2003 lows.  The
breadth of the market advance is great news but it needs a rest!

The ARMS index 5 & 10-dma are both getting to dangerously low
levels at 0.89 and 0.95 respectively.

The bullish percents just keep climbing.  Eventually there will
be nowhere else to go but down.  The bullish percent for the S&P
100 hit 76 today.  It has only been this high three times in the
last four years.  The NASDAQ-100 jumped to 87.  This is the 3rd
time since the beginning of 1999 that its bullish percent has
been this high (or higher).  The biggest reading of extreme
bullishness is the S&P 500 bullish percent.  It reached 80.4
today.  This is the MOST bullish reading EVER in the last four
years.

Needless to say while we're very encouraged that the markets are
celebrating the death of the bear market we're VERY skeptical
that it can keep this pace up for much longer.  If I had a sense
of humor I'd find it funny that at the time of this writing
shares of Intel are up after its meeting today and the S&P
futures, while off its highs, are trading up in after hours.

Viva la bull.


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

Market Averages

DJIA ($INDU)

52-week High:  9801
52-week Low :  7197
Current     :  9041

Moving Averages:
(Simple)

 10-dma: 8823
 50-dma: 8491
200-dma: 8336



S&P 500 ($SPX)

52-week High: 1050
52-week Low :  768
Current     :  990

Moving Averages:
(Simple)

 10-dma:  960
 50-dma:  914
200-dma:  886



Nasdaq-100 ($NDX)

52-week High: 1163
52-week Low :  795
Current     : 1232

Moving Averages:
(Simple)

 10-dma: 1183
 50-dma: 1110
200-dma: 1020



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

The slight rise in the volatility indices in spite of the
market strength is interesting.  Could it be traders, who remain
skeptical of the market's advance, buying puts to speculate on
a pull back?

CBOE Market Volatility Index (VIX) = 23.12 +0.64
Nasdaq-100 Volatility Index  (VXN) = 34.53 +1.52

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.64        732,352       467,441
Equity Only    0.59        598,165       353,665
OEX            1.33         19,402        25,868
QQQ            1.43         38,212        54,694


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

Bullish Percent Data

           Current   Change   Status
NYSE          67.7    + 2     Bull Confirmed
NASDAQ-100    87.0    + 4     Bull Confirmed
Dow Indust.   76.7    + 3     Bull Confirmed
S&P 500       80.4    + 4     Bull Confirmed
S&P 100       76.0    + 5     Bull 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  0.89
10-Day Arms Index  0.95
21-Day Arms Index  1.12
55-Day Arms Index  1.15


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

            -NYSE-   -NASDAQ-
Advancers    1775      1908
Decliners    1119      1207

New Highs     399       262
New Lows       13         2

Up Volume   1443M     1435M
Down Vol.    650M      959M

Total Vol.  2109M     2424M

M = millions


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


Commitments Of Traders Report: 05/27/03

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

The large S&P futures contract is not showing much change
this week.  Commercials remain slightly bullish while
small traders just flipped from slightly bullish to
slightly bearish.

Commercials   Long      Short      Net     % Of OI
05/06/03      429,519   419,545     9,974     1.2%
05/16/03      429,028   419,553     9,475     1.1%
05/20/03      438,238   426,569    11,669     1.3%
05/27/03      435,195   423,474    11,721     1.4%

Most bearish reading of the year: (111,956) -   3/6/02
Most bullish reading of the year:   14,366  -  4/15/03

Small Traders Long      Short      Net     % of OI
05/06/03      150,345   148,681     1,664      0.6%
05/16/03      151,883   148,479     3,404      1.1%
05/20/03      157,034   154,980     2,054      0.7%
05/27/03      147,687   149,344    (1,657)     0.6%

Most bearish reading of the year:  (1,657)- 5/27/03
Most bullish reading of the year: 114,510 - 3/26/02


E-MINI S&P 500

We are seeing an increase in both long and short positions
for both the small trader and the commercial trader but
the overall sentiment remains unchanged.  Commercials are
net short and small traders are net long.

Commercials   Long      Short      Net     % Of OI
05/06/03      169,388   447,330   (277,942)  (45.1%)
05/16/03      178,679   452,727   (274,048)  (43.4%)
05/20/03      232,184   468,006   (235,822)  (33.7%)
05/27/03      252,655   485,962   (233,307)  (31.6%)

Most bearish reading of the year: (337,496)  - 04/29/03
Most bullish reading of the year: (222,875)  - 04/01/03

Small Traders Long      Short      Net     % of OI
05/06/03      423,918    55,932   367,986    76.7%
05/16/03      421,540    57,483   364,057    75.9%
05/20/03      422,555    62,580   359,975    74.2%
05/27/03      427,412    66,031   361,381    73.3%

Most bearish reading of the year: 283,831   - 04/08/03
Most bullish reading of the year: 409,657   - 04/29/03


NASDAQ-100

The dead heat between long and shorts in the commercial
positions is narrowing.  Small traders have turned a bit
more bearish with a big increase in shorts compared to last
week's abnormally low reading.

Commercials   Long      Short      Net     % of OI
05/06/03       46,327     38,216     8,111    9.6%
05/16/03       43,539     39,046     4,493    5.4%
05/20/03       42,864     42,040       824    1.0%
05/27/03       40,999     41,491       492    0.6%

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
05/06/03       13,482    21,010   ( 7,528)  (21.8%)
05/16/03       11,706    16,104   ( 4,398)  (33.0%)
05/20/03       11,024     9,965   ( 1,059)  ( 5.0%)
05/27/03       12,194    13,339   ( 1,145)  ( 4.5%)

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

DJIA futures traders still seem gripped by indecision.
The commercials inched up their short positions by more
than 1000 but remain net long.  The small trader effectively
maintains a net short position but not a very convincing one.

Commercials   Long      Short      Net     % of OI
05/06/03       16,772    13,568    3,204      10.6%
05/16/03       18,265    14,396    3,869      11.8%
05/20/03       18,028    14,108    3,920      12.2%
05/27/03       18,660    15,537    3,123       9.1%

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
05/06/03        7,829     8,642    (  813)   ( 4.9%)
05/16/03        7,873     9,058    (1,185)   ( 6.9%)
05/20/03        8,378     9,922    (1,544)   ( 8.4%)
05/27/03        8,225     9,316    (1,091)   ( 6.2%)

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

Geraldine Hom: Schwab 1000 Fund (SNXFX)

This fund's annualized total return over the past decade ranks in
the top third of the Morningstar large-blend category on a pretax
basis, but places in the category's top 8% on an after-tax return
basis.  Geri Hom, a vice president with Charles Schwab Investment
Management ("CSIM"), has overall responsibility for management of
the tax-efficient equity fund, valued today at over $5 billion in
total assets.

Hom joined CSIM in March 1995 and today is the firm's director of
equities.  In addition to serving as the lead manager of Schwab's
1000 Fund, she is manager or co-manager of other CSIM equity fund
products.  Prior to joining CSIM, Hom was a portfolio manager and
manager of portfolio management for equity-index funds with Wells
Fargo Nikko Investment Advisers for 10 years.

While at Wells Fargo, Hom was also responsible for "transactions-
management" services.  Previously, she was also a systems analyst
with Bank of America.  So, Hom's investment management experience
includes portfolio management, security analysis and transactions
management (i.e. trading), making her well qualified to be Schwab
1000 Fund's lead portfolio manager.

The Schwab 1000 Fund is designed to be a tax-efficient and lower
expense equity investment option for personal investors who seek
long-term capital growth and can accept significant fluctuations
in share price in pursuit of that objective.  Investor shares of
the fund require a minimum initial purchase of $1,000 to open an
IRA ($2,500 for regular accounts).  At 0.46%, the fund's current
expense ratio is relatively low adding to its appeal and helping
to keep the fund competitive over time.

For further information or to download a fund prospectus, log on
to www.schwab.com.

Investment Style/Strategy

The Schwab 1000 Fund seeks to provide a total return that equals
the return of the Schwab 1000 Index, a proprietary index made up
of common stocks of the 1,000 largest, publicly traded companies
in the United States.  In pursuit of this objective, Hom usually
invests at least 80% of total assets in Schwab 1000 index stocks,
in proportion to their weighting in the index.

Hom may invest the remaining 20% of fund assets in equities that
aren't part of the Schwab 1000 Index, consistent with the fund's
long-term growth objective.  She does not automatically buy/sell
securities to reflect changes in the Schwab 1000 Index.  Russell
1000 Index would also be an appropriate index benchmark for this
core equity portfolio.

At the end of March 2003, the fund was fully invested with 99.8%
of total assets invested in stocks.  At quarter-end, this fund's
trailing 12-month yield was 1.17% per Morningstar, offering some
income for investors.

At March 2003, the Schwab 1000 Fund had an average market cap of
nearly $39 billion, well into the large-cap style box on average.
Giant-cap stocks represented 47.8% of stock assets at March 2003;
large-caps comprised 30.6% of stock assets; and mid-caps made up
20.1% of stock assets, per Morningstar.  So, this fund gives you
primarily large-cap exposure, along with some "mid-cap" exposure.

The fund's average price valuations reflect a blend of value and
growth characteristics, consistently landing in the "core" style
box per Lipper and in the "blend" style box per Morningstar.  It
has all the makings of fine core equity investment, one with low
expense and low turnover to boot.  At just 8%, the fund's annual
turnover ratio is very low in relation to the average U.S. stock
fund, increasing its relative tax efficiency.

In the next section, we see how Hom has performed in relation to
other large-cap blend funds and compared with appropriate equity
index benchmarks.

Investment Performance

Let me start by talking about the fund's long-term returns when
compared to other large-cap blend funds.  Over the trailing 10-
year period through May 31, 2003, the Schwab 1000 Fund produced
an annual average total return of 9.5% for investors, basically
matching the annualized total returns of both the S&P 500 index
and Russell 1000 index, before deduction of expenses.  That was
strong enough to rank in the 31st percentile (top third) of the
large-blend category on a pre-tax return basis, per Morningstar.

However, trailing 10-year after-tax returns are even better and
reflect the fund's superior tax efficiency.  The fund's 10-year
"tax-adjusted" annualized return of 9.0% ranks it in the top 8%
(top decile) of the Morningstar large-cap blend category.  Fund
manager Geri Hom has been the fund's lead manager since '95, so
she deserves most of the credit for the fund's strong after-tax
results over the long run.





As you can see from the chart above, Hom has participated in the
market rally that started in March.  Through June 4, the fund is
up 12.95% on a year-to-date return basis, ranking in the top 24%
(top quartile) of the large-blend category.  The fund's "mid-cap"
exposure had helped relative performance, with mid-cap stocks in
general doing better than large-caps in this year's market rally.

Hom doesn't take too many risks away from the broad indices with
this portfolio.  Hence, its performance tends to be "average" at
worse, with the potential to do better than the average domestic
stock fund over time.  If someone told you that you could invest
in a fund that has beaten two out of three large-cap blend funds
over time with the potential to continue doing so, that would be
an attractive proposition.

Like Vanguard's index products, this Schwab equity index product
benefits from its relatively low turnover and low expense, which
allows it to remain competitive compared to the average domestic
equity fund.  Its strategy is simple, efficient and effective in
the long run, especially from a tax-adjusted return perspective.

Conclusion

The Schwab.com website states that indexing can be one of the
most economical and rewarding ways to participate in the long-
term growth potential of the U.S. equity market (since they are
designed to keep pace with the market).  The Schwab 1000 Fund's
long-term performance has essentially matched that of the broad
U.S. indices (S&P 500, Russell 1000, Schwab 1000).  In doing so,
it has produced above average returns relative to similar large-
blend funds with average relative risk for an attractive return
to risk tradeoff.

The Schwab 1000 Fund is suitable for beginning investors as well
as seasoned veterans, and is particularly well suited to regular
(taxable) investors.  It makes for fine core U.S. equity holding.

Steve Wagner
Editor, Mutual Investor
steve@mutualinvestor.com


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The Option Investor Newsletter                 Thursday 06-05-2003
Copyright 2003, All rights reserved.                        2 of 3
Redistribution in any form strictly prohibited.


In Section Two:

Dropped Calls: MEDI, VRTS
Dropped Puts: None
Daily Results
Call Play Updates: AMGN, BBY, DISH, OHP, RJR, SPW
New Calls Plays: None
Put Play Updates: ATH, IBM, LLL
New Put Plays: HCA, 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:
*****

MedImmune - MEDI - close: 39.95 change: +2.56 stop: 32.50

Whoa!  All the strength in the biotech sector finally rubbed off
on shares of MEDI and the stock broke out above the $36.50 level
on Wednesday.  That breakout appears to have either inspired the
bulls or scared the shorts as MEDI vaulted another 6.84 percent
today.  We opened MEDI as a longer-term call play on April 3rd
with a target of $40.00.  That target was reached intraday today
when MEDI hit $40.24.  Part of the motivation to go long MEDI was
the up coming June FDA approval of its FluMist product.  Here it
is June and we have yet to see an approval.  Of course the FDA
might reject or delay the approval, which could be disastrous for
MEDI's stock price. More aggressive traders can hang on and wait
for more news or just to see if the bulls can keep MEDI moving
higher.  Since the stock is up more than 20 percent in the last
two weeks and we've hit our target we're going to close this as a
successful play.

Picked on April 3rd at $34.31
Change since picked:    +5.64
Earnings Date        04/23/03 (confirmed)
Average Daily Volume = 3.9 million
Chart link:


---

Veritas Software -VRTS - close: 28.67 change: +0.21 stop: 24.50

There doesn't appear to be anything wrong with VRTS except for
the fact that it hasn't obliged to give us a viable entry point.
After its breakout last week, we were looking for a pullback to
test that breakout level as support, but it just hasn't happened.
VRTS appears too extended to chase, so rather than continue to
update the play stating that it hasn't been triggered, we're
dropping coverage this weekend.  We'll keep it on the radar
screen and look to reinitiate the play once that pullback does
occur.

Picked on May 29th at    $27.24
Change since picked:      +1.43
Earnings Date          07/23/03 (unconfirmed)
Average Daily Volume = 9.05 mln
Chart link:



PUTS:
*****

None


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

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

CALLS     LAST     Mon    Tue   Wed   Thu

AMGN     65.44   -1.49   0.51  0.43  0.95  Closing High!
BBY      42.80    1.19  -0.77  1.27  2.33  Breaking Out
DISH     34.40   -0.03   0.18  0.94  0.41  Nearing Target
MEDI     39.95   -0.35   0.73  1.31  2.56  Closed at $40
OHP      38.14   -0.08  -0.10  0.40  0.12  Still Cautious
RJR      37.63    0.86   1.09  0.36  0.78  Keeps Going
SPW      43.92    0.35  -0.15  3.14  1.78  Taking Off
VRTS     28.67   -0.63   0.36  0.65  0.21  Closed, no trigger

PUTS

ATH      74.06   -1.01  -0.09  0.41  1.27  Uh-oh, trouble.
HCA      31.45    0.00   0.25  0.25 -1.30  New, breakdown
IBM      81.90   -1.58  -3.51  0.43 -2.35  Getting worse
LLL      43.50   -0.44  -0.76  0.00  1.10  Bouncing
NOC      85.99   -0.39  -0.74 -0.70 -0.31  New, divegence


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

Amgen, Inc. - AMGN - close: 65.44 change: +0.95 stop: 63.00*new*

Another impressive day of gains in the Biotechnology sector
(BTK.X) helped to lift our AMGN play to another 52-week high.  It
looks like the bulls are intent on challenging that next level of
resistance near $66, and if the action in the rest of the market
is any indication, they probably won't stop there.  Traders that
have been taking advantage of the dips following each breakout
move are likely starting to get the hang of this game.  Buy the
dip to support, harvest some gains after the next breakout and
then look to do it all over again.  We'll continue to apply this
strategy until it stops working or until our upper target of $72
is achieved, whichever comes first.  The most recent pullback
found consistent support just above the $63 level, and since the
10-dma ($63.68) is well above that level now, we're raising our
stop to $63 tonight.

Picked on May 11th at    $61.24
Change since picked:      +4.20
Earnings Date          07/22/03 (unconfirmed)
Average Daily Volume = 10.8 mln
Chart link:


---

Best Buy Co. - BBY - close: 42.80 change: +2.33 stop: 42.00*new*

Holy Cow!  Our target for BBY was $44 and the stock came really
close to achieving that on Thursday, printing a high of $43.95.
You can thank Gerard Klauer, as the firm upgraded BBY to
Outperform this morning, setting off a buying frenzy.  After that
moonshot, there was some profit taking back to $42.05 and then a
rebound into the close, ending just below $43.  Just to be
perfectly clear, we are not advocating any new entries into the
play at this point.  BBY is up more than $4.00 from where we
picked it and nearing some stiff resistance.  It's time to start
watching for an attractive exit from the play, so that we can
chalk this one up as a winner and start looking for the next one.
If you didn't do so today, we're recommending using another push
up near $44 as a viable exit.  Note that we're getting aggressive
with our stop tonight, raising it to $42.  While we want to give
BBY the opportunity to run still higher, if this rally falls
apart, we don't want to give back much of the currently
unrealized gains.

Picked on June 1st at    $38.70
Change since picked:      +4.10
Earnings Date          06/18/03 (unconfirmed)
Average Daily Volume = 4.10 mln
Chart link:


---

EchoStar Comm. - DISH - cls: 34.40 chg: +0.41 stop: 32.00*new*

The broader market's inability to pull back is not hurting our
play in DISH.  The stock's slow climb is picking up a little
speed and shares are closing at one-year highs.  In the news,
EchoStar and Allbritton Communications solved their transmission
dispute but not much was said about the negotiations.  DISH is
approaching potential resistance at $35.00.  With the stock up
more than 10 percent from our entry price conservative traders
should be taking some profits and or closing out altogether.  We
suspect that DISH will be able to trade to the $36.00 level,
which would coincide with its rising trendline across its tops
(Jan'03 - May '03).  We're going to raise our stop loss to $32.00
but anyone wishing to protect a 5 percent gain should consider a
stop loss near 32.65.  We would not recommend new entries at this
level but aggressive traders could target a dip to $33.00.

Picked on May 21st at $31.10
Change since picked:   +3.30
Earnings Date       05/06/03 (confirmed)
Average Daily Volume = 3.3 million
Chart link:


---

Oxford Health - OHP - cls: 38.14 chg: +0.12 stop: 37.25 *new*

OHP seems to be in a lazy drift higher.  Intraday ranges have
been very narrow and volume has been low the last few days.  We
remain very cautious on OHP and do not recommend new plays at
current levels (look at WLP or UNH).  The big news in this sector
recently was the Wellpoint (WLP) buyout news of Cobalt (CBZ).
What really surprises us is how shares of WLP, the buyer, did not
see much of a dip on the news at all.  Wall Street must really
approve of the deal.  Putting action to our cautious words we're
raising our stop loss to $37.25, which is just under the simple
10-dma.  If you like the sector instead of playing OHP consider a
play on WLP, which is rebounding from a small dip and just closed
over $85.  A run to $90 looks doable.  Shares of UNH also look
stronger but short-term upside is probably limited to $100.  UNH
does have a stock split coming up.  Don't forget that OHP's
management will be speaking at the June 10th Goldman Sachs 24th
Annual Global Healthcare Conference.

Picked on May 20th at $36.51
Change since picked:   +1.63
Earnings Date       05/05/03 (confirmed)
Average Daily Volume = 857 thousand
Chart link:


---

RJ Reynolds Tobacco - RJR - cls: 37.63 chg: +0.78 stop: 34.95*new*

The strong steady climb for tobacco maker RJR continues.
Investors' thirst for high dividend stocks could remain
unsatisfied for weeks and months to come.  Shares are quickly
approaching potential resistance at $39.00 and new entries are
probably better made on pull backs to the $36.00 area.  We do
note that the 10-dma looks like decent short-term support and
conservative traders could use it as a guide to place their
stops.  We're following our own advice tonight and raising our
stop to $34.95.  Remember, our profit target is $40.00.

Picked on June 3rd at $36.49
Change since picked:   +1.14
Earnings Date       07/25/03 (unconfirmed)
Average Daily Volume = 1.6 million
Chart link:


---

SPX Corp. - SPW - close: 43.92 change: +1.78 stop: 42.00*new*

Score another victory for the bulls!  First we were concerned
about the $40 resistance and then the 200-dma.  SPW just blasted
through both of those levels in the past two days and ended the
day just off its high with a more than 4% gain on Thursday.
Solid volume has been backing this rally, so we don't want to cut
it off just yet.  But at the same time, there are some solid
gains accrued and we don't want to give them back.  After moving
up nearly $5 in the past 2 sessions, it should be clear that the
time for entries has passed.  From here forward, this play is all
about managing open positions to maximize gains.  To that end,
we're aggressively raising our stop to $42 tonight and setting
our sights on that bearish resistance line ($46).  A charge
higher into the $45-46 area should be used to exit open positions
and book those gains, as that first test of bearish resistance
could result in a sharp reversal.

Picked on May 27th at    $36.86
Change since picked:      +7.06
Earnings Date          07/22/03 (unconfirmed)
Average Daily Volume = 1.11 mln
Chart link:



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

Anthem, Inc. - ATH - close: 74.06 change: +1.27 stop: 75.50

Sometimes the market delivers precisely what you ask for and
you're left asking if that was what you really wanted.  That's
certainly the case with our ATH play.  The breakdown below the
bottom of the stock's ascending channel looked good enough on
Tuesday and a rebound to the $74 level looked like an ideal entry
point on the rollover.  Well, today's action delivered the
rebound to the $74 level, complete with a midday rollover.  The
problem is that the dip was bought and ATH ended right back at
the $74 level.  So, is this a viable entry point or not?
Normally, we'd give a qualified yes, but the strength of today's
rebound has us thinking the breakdown was a bear trap.  Adding
credence to that thought process is the daily Stochastics, which
are launching a nice bullish reversal over the past two days, and
it appears likely to continue tomorrow.  Aggressive traders can
certainly consider new positions on a rollover in the $74-75
area, with the understanding that a rollover could be reversed
just as quickly as today's was.  The best approach for those
looking to enter the play at this elevated level would be to look
for confirming weakness from the HMO index.  That weakness was
nowhere to be found on Thursday, as the index charged to a fresh
all-time high.  While it won't provide quite as good an entry
point, the more conservative entry strategy would now be to wait
for a break below the $71.70 level (just below this week's
intraday lows) before initiating new positions.

Picked on June 3rd at   $72.38
Change since picked:     +1.68
Earnings Date         07/30/03 (unconfirmed)
Average Daily Volume = 1.19 mln
Chart link:


---

Intl Business Machine - IBM - cls: 81.90 chg: -2.35 stop: 85.01*new*

Hmm...  it seems we have more interesting price action in shares
of IBM today.  The stock dropped another 2.78 percent on volume
more than twice the normal.  The headlines were generally
positive for Big Blue.  IBM is once again back on top as the #1
seller of servers worldwide.  Plus, Standard & Poor's said the
current investigation will not affect IBM's credit ratings, at
least not yet.  Still, the good news was not enough to soothe
what appears to be concerned investors over the SEC probe into
IBM's revenue recognition.  Shares closed just 15 cents off their
low for the day, which is not a good sign for Friday's session.
Conservative traders should be preparing to exit as IBM
approaches the $80 level.  Actually, tomorrow is not a bad time
to start taking at least some profits off the table as Mondays
have been pretty bullish lately (not that IBM has been
participating).  The question more aggressive traders are
probably asking is this: "will IBM find support at its 200-dma,
which also coincides with support on its PnF chart near $78?  or
will the SEC news achieve enough momentum to have Big Blue retest
stronger support near $75.00?"  If you're willing to be vigilant
in moving stops down then one can leave the play open and see how
far it goes.   We're going to lower our stop to $85.01 but the
$84 level doesn't look bad either.

Picked on May 29th at $87.36
Change since picked:   -5.46
Earnings Date       04/14/03 (confirmed)
Average Daily Volume = 8.2 Million
Chart link:


---

L-3 Comms -LLL - close: 43.50 change: +1.10 stop: 44.10

Here we go again!  Just when it seemed LLL was headed south,
those pesky bulls came out for another romp.  The 50-dma
(currently $42.02) looks like it spoiled our party again,
providing support on Wednesday and the launch point for today's
sharp rebound.  As noted on Tuesday, if LLL is able to move back
over the $44 level, that would be a clear sign that the bulls are
in charge.  Attempting new entries on a rollover near current
levels should only be considered by aggressive traders, given the
stock's recent resilience.  Before it becomes clear that there is
any decent downside potential for the play, LLL will need to
close below that 50-dma, preferably on strong volume.  The other
hint that this play may be doomed to triggering its stop comes
from the Defense index (DFI.X), which rallied through its mid-May
highs and closed above the 200-dma for the first time since last
Summer.

Picked on May 20th at   $41.94
Change since picked:     +1.56
Earnings Date         07/22/03 (unconfirmed)
Average Daily Volume = 1.38 mln
Chart link:



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

HCA, Inc. - HCA - close: 31.45 change: -1.30 stop: 34.00

Company Description:
HCA Inc. is a healthcare services company that, as of the end of
2002, operated 179 hospitals, comprised of 166 general, acute
care hospitals, six psychiatric hospitals, one rehabilitation
hospital and six hospitals included in joint ventures.  In
addition, the company operated 78 free-standing surgery centers.
The company's facilities are located in 22 states, England and
Switzerland.  The general, acute care hospitals provide a full
range of services to accommodate such medical specialties as
internal medicine, general surgery, cardiology, oncology,
neurosurgery, orthopedics and obstetrics, as well as diagnostic
and emergency services.

Why we like it:
After just the briefest of consolidations earlier this week the
Health Care Payor's index (HMO.X) surged to a fresh all-time high
on Thursday, ending right at its high of the day with a 1.2%
gain.  While that may not seem too impressive, it needs to be
taken in the context of more than 28% since the middle of April.
In marked contrast to this unmitigated strength, shares of HCA
are a clear picture of weakness.  The stock suffered a major
selloff in mid-April following its Q1 earnings warning, falling
as low as the $28 level before gradually clawing its way back to
the $33 area on the back of the broad market rally.  But rather
than continue to advance, HCA has found a firm lid on its price
in the $33.50 area for the past month, building a compelling
picture of relative weakness.  That weakness really began to
appear on Thursday, as the stock broke sharply lower on volume
that more than doubled the ADV.  Should this fledgling selloff
continue, a retest of the April lows seems quite likely.

The daily Stochastics are rolling lower in bearish fashion and
have now recorded a series of 3 lower highs in the past month.
In addition, the MACD is just giving a bearish crossover, and it
is occurring right at the zero line.  All technical signs point
to further price weakness, and the PnF chart confirms this
weakness as the stock has been unable to get anywhere close to
giving a new Buy signal.  Price action over the past month has
demonstrated that the $33.50 level is a firm ceiling for the
stock, allowing us to confidently place our stop at $34.  The
ideal entry setup would come from a failed rebound near the 20-
dma (currently $32.74), but we may have to settle for a weaker
rebound entry.  Note that the top of today's gap was near $32.50,
and that should provide solid resistance as well.  Traders
willing to chase the stock lower will want to look for a drop
under $30.75 (below today's intraday low and support from late
April) to trigger an entry.  Look for continued weakness relative
to the HMO index before playing.

Suggested Options:
Short-term traders will want to focus on the June 32 Put, as it
will provide the best return for a short-term play.  Those
looking for a larger move down below the $30 level will want to
utilize the July 30 Put, which provides greater insulation from
the spectre of time decay.

BUY PUT JUN-32 HCA-RO OI=1854 at $1.45 SL=0.75
BUY PUT JUN-30 HCA-RN OI=1145 at $0.35 SL=0.20
BUY PUT JUL-30 HCA-SN OI= 650 at $0.95 SL=0.50

Annotated Chart of HCA:




Picked on June 3rd at   $31.45
Change since picked:     +0.00
Earnings Date         07/22/03 (unconfirmed)
Average Daily Volume = 5.22 mln
Chart link:


---


Northrop Gruman - NOC - close: 85.99 change: -0.31 stop: 88.75

Company Description:
Northrop Grumman Corporation is a $25 billion global defense
company, headquartered in Los Angeles, Calif. Northrop Grumman
provides technologically advanced, innovative products, services
and solutions in systems integration, defense electronics,
information technology, advanced aircraft, shipbuilding and space
technology. With approximately 120,000 employees and operations
in all 50 states and 25 countries, Northrop Grumman serves U.S.
and international military, government and commercial customers.
(source: company press release)

Why We Like It:
We think the market is trying to tell us something.  The DFI
defense index has just closed over its simple 200-dma since its
inception.  After weeks of consolidating in the 500-505 range it
closed at 508 today.  Yet at the same time shares of NOC, the
country's second biggest defense contractor, has been slowly
sliding.  Today is the second day in a row that NOC has closed
under its simple 50-dma.  NOC has been a complete laggard
compared to the overall strength in the markets.  What makes this
perplexing is that NOC has confirmed it would turn in double-
digit revenue and earnings growth for the next two years as
defense budgets rise.  What does Wall Street see that we don't?
The long-term down trend, which has been reversed in so many
sectors and stocks across the markets, is still very much intact
for NOC.  We suspect that NOC could retest support at the $80.00
mark and recent action offers us an entry point for a put play.
However, because the broader markets have been so strong, we are
going to use a TRIGGER at 85.74 to leg us into this NOC play.
The last couple of weeks have shown a trend of lower highs for
NOC but we'd feel more comfortable opening a position as the
stock takes out today's low.

One word of CAUTION, NOC's point-and-figure chart does show the
stock currently testing bullish support at $84.00-85.00.  PnF
aficionados may want to wait for that support to break.

Suggested Options:
We're going to list June, July and August puts for NOC but with
two weeks left before June expiration our preference would be for
July strikes.

BUY PUT JUN 85 NOC-RQ OI=3083 at $1.85 SL=0.90
BUY PUT JUN 80 NOC-RP OI=2172 at $0.50 SL=0.00 *more risky*
BUY PUT JUL 85 NOC-SQ OI= 655 at $3.20 SL=1.60
BUY PUT JUL 80 NOC-SP OI= 305 at $1.45 SL=.0.75
BUY PUT AUG 80 NOC-TP OI= 492 at $2.15 SL=1.00

Annotated Chart of NOC




Picked on June 5th at $xx.xx
Change since picked:   -0.00
Earnings Date       07/29/03 (unconfirmed)
Average Daily Volume = 1.6 million
Chart link:



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The Option Investor Newsletter                 Thursday 06-05-2003
Copyright 2003, All rights reserved.                        3 of 3
Redistribution in any form strictly prohibited.


In Section Three:

Play of the Day: PUT - HCA
Traders Corner: What Is Progress? Learning From The Mistakes Of
Others!


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

HCA, Inc. - HCA - close: 31.45 change: -1.30 stop: 34.00

Company Description:
HCA Inc. is a healthcare services company that, as of the end of
2002, operated 179 hospitals, comprised of 166 general, acute
care hospitals, six psychiatric hospitals, one rehabilitation
hospital and six hospitals included in joint ventures.  In
addition, the company operated 78 free-standing surgery centers.
The company's facilities are located in 22 states, England and
Switzerland.  The general, acute care hospitals provide a full
range of services to accommodate such medical specialties as
internal medicine, general surgery, cardiology, oncology,
neurosurgery, orthopedics and obstetrics, as well as diagnostic
and emergency services.

Why we like it:
After just the briefest of consolidations earlier this week the
Health Care Payor's index (HMO.X) surged to a fresh all-time high
on Thursday, ending right at its high of the day with a 1.2%
gain.  While that may not seem too impressive, it needs to be
taken in the context of more than 28% since the middle of April.
In marked contrast to this unmitigated strength, shares of HCA
are a clear picture of weakness.  The stock suffered a major
selloff in mid-April following its Q1 earnings warning, falling
as low as the $28 level before gradually clawing its way back to
the $33 area on the back of the broad market rally.  But rather
than continue to advance, HCA has found a firm lid on its price
in the $33.50 area for the past month, building a compelling
picture of relative weakness.  That weakness really began to
appear on Thursday, as the stock broke sharply lower on volume
that more than doubled the ADV.  Should this fledgling selloff
continue, a retest of the April lows seems quite likely.

The daily Stochastics are rolling lower in bearish fashion and
have now recorded a series of 3 lower highs in the past month.
In addition, the MACD is just giving a bearish crossover, and it
is occurring right at the zero line.  All technical signs point
to further price weakness, and the PnF chart confirms this
weakness as the stock has been unable to get anywhere close to
giving a new Buy signal.  Price action over the past month has
demonstrated that the $33.50 level is a firm ceiling for the
stock, allowing us to confidently place our stop at $34.  The
ideal entry setup would come from a failed rebound near the 20-
dma (currently $32.74), but we may have to settle for a weaker
rebound entry.  Note that the top of today's gap was near $32.50,
and that should provide solid resistance as well.  Traders
willing to chase the stock lower will want to look for a drop
under $30.75 (below today's intraday low and support from late
April) to trigger an entry.  Look for continued weakness relative
to the HMO index before playing.

Suggested Options:
Short-term traders will want to focus on the June 32 Put, as it
will provide the best return for a short-term play.  Those
looking for a larger move down below the $30 level will want to
utilize the July 30 Put, which provides greater insulation from
the spectre of time decay.

BUY PUT JUN-32 HCA-RO OI=1854 at $1.45 SL=0.75
BUY PUT JUN-30 HCA-RN OI=1145 at $0.35 SL=0.20
BUY PUT JUL-30 HCA-SN OI= 650 at $0.95 SL=0.50

Annotated Chart of HCA:




Picked on June 3rd at   $31.45
Change since picked:     +0.00
Earnings Date         07/22/03 (unconfirmed)
Average Daily Volume = 5.22 mln
Chart link:



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

What Is Progress? Learning From The Mistakes Of Others!

By Mike Parnos, Investing With Attitude

Life isn't all peaches and cream.  As you know, when you go
hunting, sometime you get the bear and sometimes the bear gets
you.  After teaching the world how to make placemats out of banana
peels, Martha Stewart, will likely be making her caramel apples
for her fellow inmates in the foreseeable future.  You can expect
sales of striped sheets to go through the roof at Kmart.

As some of our positions approach or violate our range (and you
haven't lived until you've had your range violated!), I receive a
steady stream of email questions.  Since all trades are not going
to cooperate and provide us with profit, it's nice to have
choices.  Today, we're going to address a few of these questions.
The idea here is to get you used to thinking and exploring the
alternatives.  If we can learn from other people's mistakes
instead of our own, it's progress – real progress.
______________________________________________________________

Hi Mike,
It looks like SPX is threatening the upper limits of this play.
What are some of my choices for adjustments?  Is it better to roll
or just simply exit the play?  Just trying to get prepared.  What
about the bottom (bull put) part of the Iron Condor?

Response:
(At this writing, SPX was at 986.24)
You have the right attitude.  You probably should have asked this
question before you put on the trade, but at least you didn't wait
until you were in way over your cajones.

Your adjustment will depend on what you think the market will do.
Here are a few possible scenarios.  Keep in mind that a lot can
happen in 2 1/2 weeks -- good and bad.

1.  You can simply close out the SPX 995/1010 for about $5.70.  We
took in $2.90.  The loss would be about $2.80

2.  You can ride it out and wait for the pullback that has to
happen eventually (hopefully while we're still young).

3.  You can close out the June SPX 995/1010 for about $5.70.  Then
 . .
a) If you are still bearish, you can roll the spread out to a June
or July SPX bear call spread.  We want to try to make back the
additional $2.80 it cost us, over and above our $2.90 credit, to
unwind our June 995/1010 spread.  For instance, the June 1010/1025
bear call spread currently could be sold for appx. $2.80.  That
would give you an additional 15-point cushion to the upside.

b) If you are bullish, we could put on a bull put spread below
with the expectation that the SPX will continue up.  For instance,
the June 965/950 bull put spread would provide a credit of about
$2.65 -- that would just about cover the $2.80 cost.

Regarding the bottom part of the condor.
Check out the prices.  With the underlying trading near the upper
limits of it's range, it may be worth your while to close out the
bottom (bull put) spread – or at least buy back the short option
if it's not too expensive.

When you buy back your short put, you no longer have an obligation
to perform (except with your wife, of course).  It's no longer a
spread, thereby freeing up the maintenance held against the bull
put spread.  That money may be useful if you have to make
adjustments that result in additional contracts.
______________________________________________________________

Hi Mike,
When would be the time a rollover is use?  I'm in the following
bear call spread on GM which is going against me and don't want to
be called.
Sold GM June $32.50 call @ $1.70
Bought BM June $35 call @ $.50
Net credit: $1.20

I still think GM will go down considerably. How do I protect
myself without buying back the June $32.50 back? A rollover???
Thank you.

Response:
Your choices are:
a) Let it ride and cross your fingers it reverses in the next
three weeks.
b) Close out the June $32.5/$35 bear call spread and take a $1.10
loss.
c) Close out the June spread and roll to a July $35/$37.50 spread
for a credit of $1.80.  If GM finished below $35 in July, you'd
still have a small profit of $.60.
d) To roll out to the July $35/$37.50 spread, but increase the
number of contracts that would allow the credit to replenish the
$2.30 it takes to close out the June position.  For example, if
you did 10 contracts in the June position, you'd need to do 13
contracts.

If you really have strong feelings about GM, fine.  If not, keep
in mind that, if you lose money in a stock, you don't have to make
it back in that same stock.
______________________________________________________________

CPTI JUNE POSITION UPDATE
June Position #1 – SPX Iron Condor – Currently at 990.14
We sold 5 contracts of SPX June 995 calls and 5 contracts of SPX
June 895 puts.  For protection we bought 5 contracts of SPX June
1010 calls and 5 contracts of SPX June 880 puts.  Total net credit
of $2.90.

We're giving the S&P 500 a 100-point range.  We'll get our maximum
profit of $1,450 if SPX closes within a huge 895 to 995 range.
Our exposure is $12.10 ($15 points less the $2.90 credit).  If it
works, it's about a 24% return on risk.

_____________________________________________________________

June Position #2 – BBH Iron Condor – Aborted
_____________________________________________________________

June Position #3 – TOL – Bear Call Spread Plus – Currently at
$31.01
Sell 10 contracts of June TOL $25 calls @ $1.40
Buy 20 contracts of June TOL $30 calls @ $.15
Net credit of $1.10
We're slightly bearish on the housing market and believe TOL will
finish below $25.  But, just in case we're wrong, we're buying 10
additional contracts of the $30 calls to protect ourselves.  The
market has gone against us.  We have two weeks for TOL to move
back down to $25 or up to $35.  Maximum potential profit is
$1,100.
______________________________________________________________

June Position #4 – COF Iron Condor – Currently at $53.16
Sell 10 contracts of June COF $47.50 calls @ $1.55
Buy 10 contracts of June COF $50 calls @ $.95
Net credit of $.60
Sell 10 contracts of June COF $40 puts @ $1.05
Buy 10 contracts of June COF $37.50 puts @ $.65
Net credit of $.40

Total credit of $1.00.   We're giving COF a $7.50 range.  This is
a credit card stock that appears to have topped out and there's
support around $40.  We'll get our maximum profit of $1,000 if COF
closes between $40 and $47.50.  The nice part is that our exposure
is only $1.50 ($2.50 less our $1.00 credit).  If it works, it's an
80% return on risk.
______________________________________________________________

June Position #5 – QQQ ITM Baby Strangle – Currently at $30.42
Buy 10 contracts of the July QQQ $30 puts @ $2.05
Buy 10 contracts of the July QQQ $28 calls @ $1.80
Total debit of $3.85.
The QQQs have made a big move up.  It's either going to break
through resistance or bounce of and head back down.  Our objective
is for a $3-4 move in the next month.  One of our long options
will hopefully pay for almost the entire position.  That will
leave our other long option, which is now practically free, poised
for the bounce back as the QQQs reverse.

Our exposure is only $1.85 because we have $2.00 of intrinsic
value.  This worked quite well in the past for us.  It will take
some time to play out so be a little patient.   With the move up,
we find ourselves in a profitable position.
____________________________________________________________

Unofficial CPTI Replacement PositionQQQ Strangle - $30.42
We bought 10 contracts of the QQQ June $31 calls @ $.10 and 10
contracts of the QQQ June $25 calls @ $.10.  Total debit is only
$200.

Pretty cheap, huh?  We're playing for a big move in the QQQs.  If
the QQQs move $3-4 in the next few weeks, our long put or call
could easily be worth $.75 - $1.25.  That would be a nice return –
IF it happens.  If not, que sera, sera – whatever will be will be.
We're only risking a total of $.20.

Greater risk takers (speculators) can buy closer strikes.  The $26
put and the $30 call would cost $.20 each or a total of $.40 ($400
for 10 contracts.  The benefit is that the delta is slightly
higher and a smaller move would be necessary to get into the
profit zone.

Good News!  With the continued move up, our $200 bet is now worth
$550.  If you bet $400, it's now worth $1,150.
_____________________________________________________________

New To The CPTI?
Are you a new Couch Potato Trading Institute student?  Do you have
questions about our plays or our strategies?  Feel free to email
me your questions.  An excellent source for new students is the
OptionInvestor archives where we've been discussing strategies and
answering questions since last July.  To find past CPTI (Mike
Parnos) articles, look under "Education" and click on "Traders
Corner."  They're waiting for you 24/7
______________________________________________________________

Parting Thought . . .
One of the top 25 Country/Western songs of all time:
"I'm Still Missin' You Baby, But My Aim's Gettin' Better"

An actual classified ad:
For sale: Antique desk suitable for lady with thick legs and large
drawers.
______________________________________________________________

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 Master Strategist and HCP


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