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Daily Newsletter, Wednesday, 06/25/2003

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The Option Investor Newsletter                   Monday 06-25-2003
Copyright 2003, All rights reserved.                        1 of 2
Redistribution in any form strictly prohibited.


In Section One:

Wrap: The Fed Cuts One
Futures Wrap: Downside break
Index Trader Wrap: See Note
Weekly Fund Family Profile: Gartmore Funds


Posted online for subscribers at http://www.OptionInvestor.com
*******************************************************************
MARKET WRAP  (view in courier font for table alignment)
*******************************************************************
      06-25-2003           High     Low     Volume   Adv/Dcl
DJIA     9011.53 - 98.32  9161.74  9000.68 1.74 bln 1538/1332
NASDAQ   1602.66 -  2.95  1629.97  1600.28 1.53 bln 1653/1423
S&P 100   491.60 -  4.89   500.76   491.40   Totals 3191/2755
S&P 500   975.32 -  8.13   991.64   974.86
W5000    9333.19 - 54.80  9468.13  9328.46
RUS 2000  443.21 +  2.32   446.36   440.89
DJ TRANS 2356.13 - 32.98  2393.62  2352.87
VIX        23.19 +  0.43    23.97    22.73
VXN        31.95 -  0.48    32.98    31.34
52wk Highs  158
52wk Lows    21
PUT/CALL   0.78
*******************************************************************

The Fed Cuts One
Jonathan Levinson

The Federal Reserve surprised no one but the treasury market
today, announcing a 25 basis point rate cut and maintaining its
easing bias.  The biggest reaction was in the treasury market,
which saw yields spike following the announcement.


Daily Chart of the INDU




Today's selloff brought the indices to trendline support and
confirmed the oscillator sell signals.  If the trendline fails,
there's an excellent chance that we've seen the top of the rally.
Last week's gravestone doji would fit well with that scenario.

Daily Chart of the COMPX




The Mortgage Bankers Association (MBA)announced this morning that
seasonally-adjusted demand for mortgage refinancings, the MBA
refinancing index, fell 10.5 percent to 8,204.6 in the week ended
June 20.  Demand for loans with which to buy homes, the Purchase
index, dropped 1.9 percent to 411.2. The MBA's market index, an
overall measure of mortgage activity, fell 8.7 percent to
1,554.5.  The average contract interest rate for a 30-year fixed
rate mortgage rose to 5.10 percent from the previous record low
of 4.99 percent during the previous week, causing refinancing
activity to drop to 75.8 percent of total applications from 77.3
percent the previous week.

The Commerce Department said that U.S. durable goods orders fell
0.3 percent in May, the second decline in a row.  The industrial
sector saw weaker demand in May, led by a 13.8 percent drop in
orders for defense capital goods. Core non-defense, non-aircraft
capital goods orders fell 0.5 percent.  Expectations had been for
a 1 percent gain after durable orders fell a revised 2.4 percent
in April. Unfilled orders fell 0.1 percent.

No doubt fueled by the record low interest rates being widely
reported everywhere over the past month, the Commerce Department
announced that annualized sales of new dwellings rose to a record
1.16 million units in May. The 12.5 percent increase was the
largest in one month since September 1993.  Expectations were for
1.03 million units. The number broke the previous record of 1.057
million set in September 2002. April's level was left nearly
unchanged at 1.03 million units.

The Fed Funds rate was brought to a level not seen since 1958 by
today's quarter-point cut.  In other words, money is as cheap as
its been in 56 years.  While my data doesn't go back that far,
 here's a view of the money supply, and what's been the result of
the Fed's rate cuts since it began 13 cuts ago:

MZM chart



I've been harping on the dubious effectiveness of these cuts,
other than to create jobs in China (see last week's discussion
of the current account deficit), a mortgage bubble, and,
arguably, a stock and treasury market bubble.  The money injected
by the Fed has not, unfortunately, found its way to the one
sector that could spark a real recovery:

Chart of Commercial and Industrial Loans (St-Louis Fed)



The above chart is confirmed by the persistent unemployment we've
been following.  We await the initial claims data to be released
tomorrow, but in my opinion, a drop in unemployment will be the
true recovery, the one that we can trust.  So far, it has yet to
appear.

In other news, the Energy Department reported a 4.1 million-
barrel drop in U.S. crude oil inventories for the week ended June
20.   The move surprised analysts once again, this time expecting
a rise. It would appear that the job of analysts covering this
sector is to be surprised, which they have done with remarkable
consistency for the past two months.  Total inventories are 284.2
million barrels, or 11.5 percent below this week's level one year
ago. Gasoline inventories were lower by 900,000 barrels at 208.2
million barrels during the week ended June 20. Distillate
supplies were unchanged at 109.4 million barrels.  Crude oil
futures closed just below $30 per barrel.

The Federal Energy Regulatory Commission announced its ruling
barring Enron from selling electricity and gas in the United
States. "This is the first time the commission has imposed the
so-called 'death penalty'," said FERC Chairman Pat Wood. "By
revoking the company's authority to sell electricity at market-
based rates, we send a clear signal that the markets must work in
interest of consumers and the public interest."

In the ongoing saga of FRE's accounting woes, the company today
made public details of its restatement of financial results.  FRE
expects the cumulative effect of the required changes to increase
its retained earnings as of Dec. 31 by $1.5 billion to $4.5
billion. The company expects to report a material increase in the
fair value of shareholders' equity for year-end 2002 from 2001.
The company attributed the increase in its retained earnings to
"gains on certain derivatives and mortgage securities that will
be marked to fair value during periods in which interest rates
were declining."   FRE warned that the accounting policy changes
being implemented "will cause greater volatility in Freddie Mac's
financial statements for prior periods," and it believes there
will also be "significant volatility" in results for future
periods.  No kidding.  Many observers have complained of the
absence of transparency in accounting for derivatives positions,
and the difficulty in accounting for over-the-counter, illiquid
instruments.  This is one of the "new" factors in our markets,
and the volatility and enormous leverage of such positions
presents new risks for investors to attempt to evaluate.

GS reported earnings of $695 million for its fiscal Q2, up from
$563 million in the prior Q2. Earnings per diluted share were up
$1.06, up from $1.06 and beating expectations of $1.19. Revenue,
net of interest expense, rose 3 percent to $3.99 billion.   The
company also announced an increase in its dividend to 25 cents.
Tomorrow, 50 million shares come out of lockup, which should
pressure the stock downward against today's good news.


For tomorrow, we have a full slate of economic data due before
the bell:

              Report                     Briefing  Market   Prior
                                         Expects   Expects
Jun 26 8:30 AM Chain Deflator-Final Q1 -   2.5%    2.5%     2.5%
Jun 26 8:30 AM GDP-Final Q1 -              1.9%    1.9%     1.9%
Jun 26 8:30 AM Initial Claims 06/21 -      425K    415K     421K
Jun 26 10:00 AM Help-Wanted Index May -      36      36       35
Jun 26 2:00 PM FOMC Minutes


For tomorrow, the outlook is decidedly bearish but for the
trendline support yet to be tested.  I believe it will ultimately
fail, but the possibility of an intervening bounce cannot be
ignored.  Tomorrow's opening data is "market moving", and the
tone will likely be set before the bell.


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

Downside break
Jonathan Levinson

The indices broke out of their inside day to downside following
the Fed's rate cut announcement.  The move took out the S2
support levels on ES and YM, but not on NQ.

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

Figures rounded to the nearest point:

           R2     R1    Pivot   S1     S2
ES03U      997    984    978    965    959
YM03U     9199   9086   9025   8912   8851
NQ03U     1226   1208   1198   1180   1170


10 minute chart of the US Dollar Index



The US Dollar Index surprised many observers, myself included,
when it broke below 93.90, and even more when it broke back
above.  It appears from the rebound in the dollar and the selloff
in treasuries following the Fed's rate cut announcement that the
markets were expecting 50 bips and not the 25 cut by the Fed.
Fed funds futures did not, but treasury yield and US Dollar
bounces seem to indicate just that.

Daily chart of August gold




August gold recovered off yesterday's low, touching 350 but
failing to hold it.  The rate cut should be bullish for the
metal, and the August contract, HUI and XAU all closed green, but
the 25 bp cut was widely anticipated and apparently priced in
already.  It will be the "extraordinary" measures and
interventions from here that should have the greater effect on
the metal and other commodities.  Commodity futures (CRB) closed
up 1.55 to 234.54, led by cotton, cocoa, soybeans and live cattle
futures.  It's heartening to see that the 230 support level has
continued to hold on this rebound in the US Dollar Index from its
bear market lows, and I remain very bullish on commodities.


Daily chart of the ten year note yield



We had a nice bullish engulfing in the ten year note yield, and
Jeff Bailey's the analyst who suggested yield calls this morning,
an excellent trade for those who took it.  The five year note
yield close up 11.6 basis points to 2.274%, TNX closed up 9.6 to
3.361% and TYX added 9.4 bps to close at 4.438%.

30 minute 20 day chart of the NQ



The NQ sold off precipitously, printing sell signals on the
stochastic and MacD oscillators.  The middle descending trendline
in the descending megaphone formation supported the price, which
closed just above it.  Both the short cycle oscillators (chart
below) and the longer one in the chart above are firmly in gear
to the downside, and they're indicating a potential trip to the
lower descending trendline.  Tomorrow's data at 8:30AM should
give us a clear indication of where tomorrow's session wants to
take us.

5 day 10 minute chart of the NQ




I've left the middle trendline undrawn here, but it coincided
with the low of the day.

20 day 30 minute chart of the ES


I've inserted the middle "support" line here, but I'm neither
confident of my placement of it or of its effectiveness.  We'll
know early tomorrow in any event.  The oscillators once again are
firmly in gear to the downside within a bearish chart pattern.


5 day 10 minute ES chart



As of this writing, ES was trading at 972.50, just above last
night's S2 support line, off its lows of the day of 970.

20 day 30 minute chart of the YM



As with the ES, the YM shows descending trendline support at the
23.6% fib retracement level, but with the 38.2% level intervening
as possible support. If the speed of today's selloff is any
indication, we shouldn't have to spend much time guessing.  The
9025 pivot level appears well placed, and that will provide first
resistance on a bounce.

5 day 10 minute YM candles



The Fed's announcement came as little surprise, other than the
selloff in treasuries and the ramp in the US Dollar Index.  It
provided another nail in the coffin of the asset reallocation
theory, as we did not see treasury selling translate into equity
buying.  The Fed has 13B in short term (10 day, 3 day and 2 day)
repos expiring tomorrow, not counting the Thursday 28 day repos
which have become standard fare.  I expect to see a very large
repo announced tomorrow.  Where it goes, whether into equities
(which I doubt or treasuries, will be of key importance in
evaluating whether we've seen the top of the rally or not.


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

Check the Site Later Tonight For Jeff's Index Trader Article
http://members.OptionInvestor.com/itrader/marketwrap/iw_062503_1.asp


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**************************
WEEKLY FUND FAMILY PROFILE/WEEKLY FUND WRAP
**************************

Gartmore Funds

This week's fund family profile takes a look at Gartmore Global
Investments, Inc. ("GGI"), Gartmore Group's U.S. investment arm,
and the Gartmore Funds family of funds.  GGI is based outside of
Philadelphia with investment management and marketing operations
in Columbus OH, Detroit MI, and Portland OR.  As of September 30,
2002, GGI had more than $28.9 billion in assets under management,
per company sources.

Gartmore Investment Management plc ("GIM"), Gartmore Group's non-
U.S. investment operation, was established in 1969 and is London-
headquartered with investment management and marketing operations
in Scotland, Jersey (Channel Islands), Spain, Germany, Sweden and
Japan.  The Gartmore name draws its roots from this international
flagship operation.  At September 30, 2002, GIM had more than $42
billion in combined assets under management.  GIM was acquired by
Nationwide Mutual Insurance Company in 2000.

Gartmore Group features nine investment adviser affiliates, which
are strategically situated in the U.S., the U.K. and Japan (shown
below).

  Gartmore Group's Nine Affiliated Investment Advisers:
  Gartmore Capital Management Ltd
  Gartmore Fund Managers Ltd
  Gartmore Global Partners
  Gartmore Investment Ltd
  Gartmore Japan Ltd
  Gartmore Morley Capital Management, Inc.
  Gartmore Mutual Fund Capital Trust
  NorthPointe Capital LLC
  Gartmore SA Capital Trust

Gartmore Mutual Fund Capital Trust and Gartmore SA Capital Trust
do business as Gartmore Global Investments ("GGI").  Through its
investment operations and affiliates, Gartmore Funds offers fund
investors a broad menu of core funds, as well as specialty funds
that purportedly look beyond traditional investment areas to add
further growth potential and diversify portfolio risk.  For more
information, go to the www.gartmoreglobalinvestments.com website.

Gartmore Funds are load funds and come in multiple share classes,
with sales charges, fund management fees and expenses varying for
each share class.  Class A shares have "front-end" sales charges,
but generally have the lowest relative expenses of the fund share
classes.  For more information or to download a prospectus, go to
the Gartmore Funds website at www.gartmorefunds.com.

Mutual Fund Overview

In terms of investment philosophy, the Gartmore Funds seek to
identify both expected and unexpected investment opportunities
across the globe by combining fundamental "bottom-up" research
with quantitative tools.  Through its U.S. and U.K. investment
operations and its investment affiliates Gartmore also seeks to
take advantage of its worldwide trading platform to ensure best
execution.

Fund portfolio holdings normally consist of companies with the
highest ratings by the various research teams at Gartmore.  In
terms of risk-reward, Gartmore Funds invest in securities that
offer unexpected growth potential at acceptable levels of risk.
In stock portfolios, securities are sold when they reach their
price target or when Gartmore believes they will disappoint vs.
their earnings growth expectations.

Gartmore Funds are divided into five broad series, as follows:

  Core Series
  Concept Series
  International Series
  Leadership Series
  Sector Series

The Core Series is comprised of 13 funds including three equity
funds, five fixed income funds, and five asset allocation funds.
The core equity funds are designed to serve as a foundation for
one's long-term portfolio.  They invest primarily in larger U.S.
companies with the potential for profitability and solid returns.
The core fixed income funds seek to provide income and preserve
principal, and include one general bond fund and one government
bond fund, as well as three money market fund options.  The core
asset allocation series consists of five portfolios and range in
risk from conservative to aggressive.  The series was developed
in partnership with the leading asset allocation-consulting firm
of Ibbotson Associates.

Gartmore's Concept Series consists of four funds that supposedly
look beyond traditional funds and try to capitalize on new ideas,
unique investment strategies and developing trends in the market.
Included in this series is one high yield bond fund, one "value"
driven equity fund, one "growth" strategy for the new millennium,
and a new micro-cap stock fund product.  The International Series
includes three funds allow investors to capture investment growth
opportunities overseas.  There's an international growth fund and
international small-cap growth fund, and an emerging-market fund.

The three equity funds in the Leadership Series are more focused
(concentrated) in their fund holdings, providing the opportunity
to achieve greater returns over time, commensurate with a higher
risk level.  These funds include only the best of the best ideas
of Gartmore's portfolio managers and pursue growth opportunities
both nationwide and worldwide.  Gartmore's Sector Series is made
up of four specialty funds: financial services, utilities, health
sciences and technology sectors.

Our Favorite Funds

Starting first with Gartmore Funds' fixed income funds, there are
two funds worth considering, Gartmore Bond Fund managed by Thomas
Leggett since January 2001, and Gartmore Government Bond Fund run
by Gary Hunt since May 1998.  Both funds are part of the Gartmore
Core Fixed Income Series.

Gartmore Bond Fund, Class A (NBDAX) seeks high income, consistent
with capital preservation, by investing primarily in fixed-income
securities, including investment-grade corporate debt securities
and U.S. Government mortgage-backed securities.  Since Leggett's
arrival in early 2001, the fund has performed much better versus
similar funds.  According to Morningstar, the Gartmore Bond Fund
A shares sport a trailing 1-year return through June 23 of 13.0%,
ranking in the 12th percentile of the intermediate-term bond fund
category.  The fund's 3-year average total return of 10.5% ranks
in the category's top quintile (19th percentile).  Leggett wasn't
there the whole three years, but he is mostly responsible for the
fund's strong relative performance over this time period.

Gartmore Government Bond Fund, Class A (NUSAX), like its sibling,
seeks as high a level of income as is consistent with principal
preservation.  Here, manager Gary Hunt seeks an attractive risk-
adjusted total return with an emphasis on current income through
investments in U.S. government debt securities.  Per Morningstar,
the fund has a 3-year annualized return of 10.5% through June 23,
ranking in the top 11% of the intermediate-term, government bond
category.  Its trailing 5-year annualized return of 7.2% ranks in
the category's 17th percentile.  So, in Hunt's tenure, investors
have been rewarded with first-quintile return performance within
their category peer groups.

Among the Gartmore equity fund offerings, Gartmore Growth Fund A
(NMFAX), one of the funds in the Core Equity Series, is up 14.9%
on a year-to-date basis through June 23 (+2.3% vs. S&P 500 index)
but struggled during the market downturn.  If you're confident in
the market's recovery and believe it will persist, you may desire
to have a look at Gartmore Growth Fund.  Gartmore Nationwide Fund
A (NWFAX) sports a YTD return of 12.8%, ranking in the top 18% of
the Morningstar large-blend category.  It minimized losses during
the market downswing relative to similar funds and is holding its
own in the 2003 stealth rally.

Investors who wish to invest based on their risk profile may wish
to look at one of the funds that comprise the Gartmore Core Asset
Allocation Series.  The fact that these five funds were developed
in partnership with Ibbotson Associates is a big plus in our view
since Ibbotson's one of the top asset allocation consulting firms
to institutions in this country.  If you want (need) to invest in
a conservative way, there is a conservatively structured fund for
you.  If you want to be aggressive, there is an aggressive option
that invests more heavily in stocks (and more aggressively within
the stock sector).  You pick your risk profile, and the fund does
the rest.

Conclusion

We're going to stop here and let you explore the Gartmore Funds a
little further.  Judging by what we've seen so far, there is good
reason to continue your research.  Gartmore's name and reputation
stem from its London-based investment operations.  Accordingly, I
would suggest looking at the funds in the International Series if
you seek international diversification.

As for the Leadership Series and Sector Series, there are focused
(concentrated) funds and specialized-sector funds to consider but
only if you are very risk tolerant.  Because they are not as well
diversified between sectors and securities as traditional equity
funds, they are generally associated with a higher level of risk.
If you are looking for a unique investment strategy (or niche) or
seek exposure to a particular sector, such as financial services,
then you may want to give these two Gartmore Funds series a look.

For more information, or to download a fund prospectus, go to the
www.gartmorefunds.com website.  For more information on Gartmore
Global Investments Inc. as an investment firm, go the GGI website
at www.gartmoreglobalinvestments.com.

Steve Wagner
Editor, Mutual Investor


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The Option Investor Newsletter                   Monday 06-25-2003
Copyright 2003, All rights reserved.                        2 of 2
Redistribution in any form strictly prohibited.


In Section Two:

Stop Loss Updates: IGT, KSS, RYL
Dropped Calls: None
Dropped Puts: None
Play of the Day: Put (RYL)
Premium-Selling Plays: Stocks Slide On Fed Rate Cut
Watch List: These Look REALLY Tempting as Plays!

Updated on the site tonight:
Market Posture: Edging Towards The Cliff



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

CALLS
^^^^^

Intl Game Technology - IGT - cls: 99.84 chg: +1.44 stop: 97.00*new*

This is it!  IGT has hit our short-term target of $100.00.  Shares
traded above the $100 mark several times late this afternoon.  We
have been encouraging call option holders to begin taking profits
as IGT approached the $100 level for days now.  Don't get greedy!
Be sure you take some of your profits off the table.  For some
traders (not all) it may be okay to keep a small speculative
position open.  IGT still has a few days left before its 4-for-1
split and the momentum traders might be able to drive the stock
even higher.  Since we're going to keep the play open as
speculative play we're going to raise our stop from $94.99 to
$97.00.

Picked on June 10th at $91.87
Change since picked:    +7.97

PUTS
^^^^

KSS - put
Adjust from $52.25 down to $51.75

RYL - put
Adjust from $75.25 down to $74.50


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

None


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

None


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

The Ryland Group - RYL - close: 69.95 change: -1.95 stop: 74.50

Company Description:
The Ryland Group is a homebuilder and mortgage-finance company
that has built more than 175,000 homes.  Additionally, the Ryland
Mortgage Company (RMC) has provided mortgage financing and related
services for more than 155,000 homebuyers. Currently, Ryland homes
are available in more than 260 communities in 21 markets across
he United States.

Why we like it:
Like the Energizer Bunny, the Housing stocks keep going and going.
Late last week, the group looked like it had started a process of
weakening that we expected to continue through the FOMC meeting
and then pick up speed.  Contrary to that expectation, the DJUSHB
index held its ground on Monday while the rest of the market
headed sharply higher and then managed a better than 1% rebound on
Tuesday.  Going along with the sector, shares of RYL bounced
smartly from the $68.50 level (just above the intraday support
found in early June) and tacked on 2.6% to close very near the
high of the day.  Did we get suckered again?  Only time will tell,
but the price action so far this week is demonstrating precisely
why we mentioned the possibility of a pre-FOMC rebound with the
possibility of a subsequent sell the news drop.  We're getting
that rebound and RYL stalled on Tuesday right at that first
potential resistance of $71.50.  A rollover from there tomorrow
may make for a solid, if aggressive entry point.  Traders looking
for a better entry may be able to take advantage of a failed rally
up near the $73.50 area.  Clearly, risk-averse traders will need
to wait until after the FOMC announcement tomorrow before taking a
position and may want to wait for RYL to decline back under $68.50
before playing.  Regardless of entry strategy, look for
confirmation of weakness from the DJUSHB index breaking below the
$440 support.  Until we see how the post-FOMC action is going to
shake out, we'll continue to work with a wide stop at $75.25.

Why This is our Play of the Day
It looked like deja vu all over again as RYL began to bounce
yesterday ahead of the FOMC meeting.  And continuing up through
the $72 level this morning certainly didn't inspire confidence in
the downside.  But then the Fed lowered rates by the expected 25
basis points and it was 'sell the news' time.  RYL plunged back
under $70, while the $DJUSHB index gave up 2.46% on the day.
Suddenly, things are looking much brighter for the bears.
Downside continuation tomorrow could have that initial $65 target
within reach before the weekend.  Aggressive traders willing to
chase the stock lower can use a trade below $68.50 (yesterday's
intraday low) as an entry point.  Those with a more conservative
style can look for another failed rebound below $72 as their entry
trigger.  Traders that have already established a position may
want to be more aggressive with their stops, setting them just
above today's intraday high in case of a strong rebound from above
$68.50.  Hey, nobody wants to get burned in this volatile sector!
But for the time being, we're going to maintain a rather wide
stop, looking for a close under $68.50 before getting more
aggressive with it.  Note that we have slightly lowered our stop
to $74.50 tonight.

Suggested Options:
Short-term traders will want to focus on the July 70 Put, as it
will provide the best return for a short-term play.  Those looking
for a larger move down towards the $65 level will want to utilize
the July 65 contract or even the October strike, the latter of
which provides greater insulation from the spectre of time decay.

BUY PUT JUL-70 RYL-SN OI= 866 at $3.80 SL=2.25
BUY PUT JUL-65 RYL-SM OI=1442 at $1.85 SL=1.00
BUY PUT OCT-65 RYL-VM OI= 207 at $5.10 SL=3.00

Annotated Chart of RYL:



Picked on June 22nd at   $69.95
Change since picked:      -0.46
Earnings Date           07/23/03 (unconfirmed)
Average Daily Volume =    887 K


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Order today and save 25% (only $15) by clicking on PreferredTrade
and clicking on the link to the book on its home page.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


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

Stocks Slide On Fed Rate Cut
By Ray Cummins

The major equity averages ended lower today despite a decision by
the FOMC to reduce interest rates 25 basis points.

The Federal Reserve commented on its decision saying, "a slightly
more expansive monetary policy would add further support for an
economy, which it expects to improve over time," however stock
buyers were not impressed with the optimistic comments.  The Dow
Jones Industrial Average retreated 98 points to 9,011 with General
Electric (NYSE:GE), Altria Group (NYSE:MO) and Disney (NYSE:DIS)
among the worst performing components.  The NASDAQ fell 3 points
to 1,602 with technology stalwarts Microsoft (NASDAQ:MSFT) and
Intel (NASDAQ:INTC) leading a sell-off at the close despite early
gains.  The S&P 500 index dropped 8 points to 975 on weakness in
homebuilding, tobacco, managed healthcare, hotels, data processing,
advertising, and aluminum stocks.  Volume was moderate with 1.44
billion shares traded on the Big Board while 1.56 billion shares
were swapped on the NASDAQ.  Gainers outpaced decliners by small
margins on both exchanges.  In the U.S. bond market, the benchmark
10-year note slid 1-9/32 in price, lifting its yield to 3.40%.

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

SUMMARY OF CURRENT POSITIONS - AS OF 6/24/03

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

The following summary is a reasonable account of the positions
previously offered in this section.  However, no representation
is being made as to the actual performance of a position and in
fact, there are frequently large differences between the summary
results and those of our subscribers, due to the variety of ways
in which each play can be opened, closed, and/or adjusted.  In
addition, the summary might not be completely representative of
the manner in which the average trader would react to changing
conditions in a position and to the options market in general.
The editor of this section does not take actual positions in any
published plays and the summary comments are simply a service to
help new traders understand when positions might be opened and
closed.  In most cases, actions taken based on the commentary
would be far too late to be effective, thus it is not intended
as a substitute for personal trade management nor does it in
any way replace your duty to diligently monitor and manage the
positions in your portfolio.


MONTHLY YIELD FOR UNCOVERED OPTIONS: MAXIMUM & SIMPLE

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


Naked Puts
**********

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

BGEN     JUL    37   36.90  41.30    $0.60   4.59%   1.63%
CVTX     JUL    25   24.45  30.25    $0.55   4.93%   2.25%
MERQ     JUL    40   38.30  39.38    $1.08   4.79%   4.44%
NVDA     JUL    20   19.60  22.79    $0.40   4.97%   2.04%
AMHC     JUL    25   24.65  31.04    $0.35   4.99%   1.42%
ARTI     JUL    20   19.70  22.91    $0.30   5.63%   1.52%
AVCT     JUL    27   27.05  29.95    $0.45   5.32%   1.66%
GILD     JUL    42   42.00  52.80    $0.50   4.49%   1.19%
MERQ     JUL    35   34.50  39.38    $0.50   5.25%   1.45%
MVSN     JUL    17   17.25  20.54    $0.25   5.11%   1.45%
NVDA     JUL    20   19.60  22.79    $0.40   7.38%   2.04%
OVTI     JUL    25   24.45  30.13    $0.55   7.88%   2.25%
YHOO     JUL    27   24.80  31.36    $0.45   5.32%   1.81%
QCOM     JUL    32   32.00  35.81    $0.50   4.38%   1.56%

The primary issue on the watch-list is Mercury Interactive
(NASDAQ:MERQ), however all bullish plays should be monitored
closely in the event of further consolidation in the broader
equity markets.


Naked Calls
***********

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

LLTC     JUL    37   38.30  31.85    $0.80   5.98%   2.09%
XLNX     JUL    32   33.05  24.97    $0.55   5.77%   1.66%
IGEN     JUL    45   45.90  32.79    $0.40   5.71%   0.87%
CNF      JUL    30   30.45  26.60    $0.45   5.02%   1.48%
TRMS     JUL    55   55.75  45.34    $0.75   5.65%   1.35%


Put-Credit Spreads
******************

Symbol  Pick   Last   Month L/P S/P Credit  C/B    G/L   Status

CMCSA   32.85  30.48   JUL   28  30  0.20  29.80  $0.20   Open
IDPH    40.29  36.52   JUL   30  35  0.65  34.35  $0.65   Open
IGT     94.37  98.40   JUL   80  85  0.60  84.40  $0.60   Open
CCMP    52.60  49.08   JUL   40  45  0.50  44.50  $0.50   Open
CECO    69.32  64.36   JUL   55  60  0.50  59.50  $0.50   Open
LXK     76.99  74.08   JUL   65  70  0.50  69.50  $0.50   Open

Comcast (NASDAQ:CMCSA) and Idec Pharmaceuticals (NASDAQ:IDEC)
are candidates for early exit on any further downside activity.


Call-Credit Spreads
*******************

Symbol  Pick   Last   Month L/C S/C Credit  C/B    G/L   Status

CEPH    45.33  42.00   JUL  55  50   0.60  50.60  $0.60   Open
CI      49.61  47.75   JUL  60  55   0.55  55.55  $0.55   Open
MXIM    36.51  34.15   JUL  45  40   0.60  40.60  $0.60   Open
ADBE    32.07  30.92   JUL  40  35   0.50  35.50  $0.50   Open
CEPH    44.59  42.00   JUL  55  50   0.60  50.60  $0.60   Open


Synthetic Positions
*******************

No Open Positions


Debit Straddles
***************

No Open Positions

Questions & comments on spreads/combos to Contact Support
**************

NEW POSITIONS

This following group of plays is simply a list of candidates to
supplement your search for profitable trading positions.  As with
any new investment, you must decide if the selections meet your
criteria for potential plays.  Only you can know what strategies
are suitable for your personal skill level, risk-reward tolerance
and portfolio outlook.  In addition, we recommend that you avoid
any trading techniques in which you are not completely comfortable
with the potential capital loss, the necessary adjustments, and
the common entry-exit strategies.  The positions with "*" will be
included in the weekly summary.  Those with "TS" (Target-Shoot)
are below our minimum monthly return, but may offer a favorable
entry price with a limit order, due to the daily volatility of
the underlying issue.

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

BULLISH PLAYS - NAKED PUTS

All of these issues have robust option premiums and relatively
favorable technical indications.  However, current news and market
sentiment will have an effect on these stocks, so review each play
thoroughly and make your own decision about its future outcome.

WARNING: THE RISK IN SELLING UNCOVERED OPTIONS IS SUBSTANTIAL!

The sale of uncovered puts entails considerable financial risk,
far more than the initial margin or collateral required to open
a position.  The maximum financial obligation for the sale of a
naked put is the strike price (of the underlying stock) that is
sold.  Although this obligation is reduced by the premium from
the sale of the option, a writer of puts should have the cash or
collateral equivalent of the sold strike price in reserve at all
times.  In addition, there is one very important rule when using
this strategy: Don't sell puts on stocks that you don't want to
own!  Why?  Because stocks occasionally experience catastrophic
declines, exponentially increasing the margin maintenance and
possibly causing a devastating shortfall in your portfolio.  It
is also important that you consider using trading stops on naked
option positions to help limit losses when a stock's price falls.
Many professional traders suggest closing the position when the
underlying share value moves below the sold strike, or using a
"buy-to-close" stop order at a price that is no more than twice
the original premium received from the sold option.

**************
ARTI - Artisan Components  $23.64  *** UBS Upgrade! ***

Artisan Components (NASDAQ:ARTI) is a maker of high-performance,
high-density and low-power embedded memory, standard cell and
input/output intellectual property components for the design and
manufacture of complex integrated circuits or semiconductors.
The firm's products are used for the design of integrated circuits
used in complex, volume applications, such as portable computing
devices, cellular phones, consumer multimedia products, automotive
electronics, personal computers, workstations and servers.  Artisan
focuses on licensing its products and providing related services to
semiconductor manufacturers and integrated circuit design companies.

ARTI - Artisan Components  $23.64

PLAY (sell naked put):

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

SELL PUT  JUL 20    UAR SD      76    0.25  19.75   5.5%   1.3% *
SELL PUT  JUL 22.5  UAR SX     111    0.85  21.65  12.3%   3.9%


**************
AVCT - Avocent  $30.68  *** New Entry Point? ***

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

AVCT - Avocent  $30.68

PLAY (sell naked put):

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

SELL PUT  JUL 27.5  QVX SY     167    0.60  26.90   8.2%   2.2% *
SELL PUT  JUL 30    QVX SF     406    1.40  28.60  14.3%   4.9%


**************
GILD - Gilead Sciences  $53.50  *** Bullish Trend Intact! ***

Gilead Sciences (NASDAQ:GILD) is an independent biopharmaceutical
company that discovers, develops and commercializes therapeutics
to advance the care of patients suffering from life-threatening
diseases.  The company has five products that are marketed in the
United States and in other countries worldwide.  These are Viread,
a drug for treating HIV infection; AmBisome, a drug for treating
and preventing life-threatening fungal infections; Tamiflu, a drug
for treating and preventing influenza; Vistide, a drug for treating
cytomegalovirus (or CMV) retinitis in AIDS patients, and DaunoXome,
a drug for treating AIDS-related Kaposi's sarcoma.

GILD - Gilead Sciences  $53.50

PLAY (sell naked put):

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

SELL PUT  JUL 45    GDQ SI   2,311    0.35  44.65   3.5%   0.8% TS
SELL PUT  JUL 47.5  GDQ ST   1,312    0.60  46.90   5.0%   1.3% *
SELL PUT  JUL 50    GDQ SJ   3,772    1.10  48.90   7.7%   2.2%


**************
ICST - Integrated Circuit Systems  $29.61  *** FBR Upgrade! ***

Integrated Circuit Systems (NASDAQ:ICST) is a leader in the design,
development and sales of silicon timing devices for communications,
networking, computing and digital multimedia applications.  All
electronic devices require a timing signal and those with any
degree of complexity require silicon timing devices to time and
synchronize their various operations.  Silicon timing devices are
used in a variety of consumer and business electronics such as
personal computers or PCs, digital cameras, set-top boxes, PC
peripherals and personal video recorders.  ICST’s products are
also increasingly being used in communications applications such
as routers, switches, fiber optics, line cards and ADSL equipment.

ICST - Integrated Circuit Systems  $29.61

PLAY (sell naked put):

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

SELL PUT  JUL 25    IUY SE     882    0.25  24.75   4.4%   1.0% *
SELL PUT  JUL 30    IUY SF     182    1.65  28.35  15.7%   5.8%


**************
IMCLE - ImClone  $32.15  *** The Quarterly Report Is In! ***

ImClone Systems (NASDAQ:IMCL) is a biopharmaceutical company whose
mission is to advance oncology care by developing a portfolio of
targeted biologic treatments designed to address the medical needs
of patients with a variety of cancers. The company's lead product,
Erbitux, is a therapeutic antibody that inhibits stimulation of
epidermal growth factor receptor upon which certain solid tumors
depend in order to grow. In addition to the development of its
lead product candidates, the company conducts research in a number
of areas related to its core focus of growth factor blockers, as
well as cancer vaccines and angiogenesis inhibitors. IMCL has also
developed diagnostic products and vaccines for certain infectious
diseases.

IMCLE - ImClone  $32.15

PLAY (sell naked put):

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

SELL PUT  JUL 25    QCI SE   4,650    0.35  24.65   6.8%   1.4% *
SELL PUT  JUL 30    QCI SF   3,273    1.60  28.40  17.2%   5.6%


**************
JCOM - j2 Global Comm.  $46.65  *** Rate Hike = Rally! ***

j2 Global Communications (NASDAQ:JCOM) provides outsourced value
added messaging and communications services to individuals and
businesses throughout the world.  The company offers faxing and
voicemail solutions, Web initiated conference calling, document
management solutions and unified messaging services.  j2 Global
markets its services principally under the brand names eFax and
jConnect.  The company delivers its services through its global
telephony/Internet protocol network, which spans more than 600
cities in 18 countries across five continents, including four
capital cities in Latin America where j2 Global is in the process
of launching its unique service.

JCOM - j2 Global Comm.  $46.65

PLAY (sell naked put):

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

SELL PUT  JUL 35    JQF SG     711    0.30  34.70   4.1%   0.9% TS
SELL PUT  JUL 37.5  JQF SU       0    0.45  37.05   6.0%   1.2% *
SELL PUT  JUL 40    JQF SH   1,001    1.15  38.85  11.6%   3.0%


**************
OVTI - OmniVision  $31.01  *** Consolidation Complete? ***

OmniVision Technologies (NASDAQ:OVTI) designs, develops and sells
high performance, high quality and cost efficient semiconductor
imaging devices for computing, telecommunications, industrial,
automotive and consumer electronics applications.  The company's
main product, an image sensing device called a CameraChip, is used
to capture an image in cameras and camera-related products in a
range of imaging applications such as personal computer cameras,
digital still cameras, security and surveillance cameras, personal
digital assistant cameras, mobile phone cameras, and cameras for
automobiles and toys that incorporate both still picture and live
video applications.

OVTI - OmniVision  $31.01

PLAY (sell naked put):

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

SELL PUT  JUL 25    UCM SE   1,244    0.30  24.70   5.9%   1.2% *
SELL PUT  JUL 30    UCM SF   1,164    1.75  28.25  17.6%   6.2%


**************
RIMM - Research In Motion  $22.83  *** Testing 2003 Highs! ***

Research In Motion Limited (NASDAQ:RIMM) is a designer, builder,
and marketer of wireless solutions for the mobile communications
market.  Through development and integration of hardware, software
and services, the firm provides solutions for seamless access to
time-sensitive information and communications, including e-mail,
telephone, messaging and Internet- and intranet-based applications.
The company's technology also enables a broad array of third-party
developers and manufacturers around the world to enhance their own
products and services with wireless connectivity.  RIM's portfolio
of products includes a family of wireless handhelds, the BlackBerry
wireless e-mail solution, embedded radio modems and a suite of
software development tools.

RIMM - Research In Motion  $22.83

PLAY (sell naked put):

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

SELL PUT  JUL 20    RUL SD     908    0.50  19.50   9.7%   2.6% *
SELL PUT  JUL 22.5  RUL SX     853    1.35  21.15  17.6%   6.4%


**************
SNDK - SanDisk  $40.25  *** "Short-Covering" Rally Continues! ***

SanDisk (NASDAQ:SNDK) designs, manufactures, and markets flash
memory storage products that are used in a wide variety of
electronic systems.  The company has designed its flash memory
storage solutions for applications in the consumer electronics
and industrial/communications markets.  The company's products
are used in a number of rapidly growing consumer electronics
applications, such as digital cameras, PDAs, portable digital
music players, digital video recorders and smart phones, as well
as in industrial and communications applications.  The company's
products include removable CompactFlash cards, MultiMediaCards,
FlashDisk cards and Secure Digital Cards and embedded FlashDrives
and Flash ChipSets with storage capacities ranging from eight
megabytes to 1.2 gigabytes.

SNDK - Sandisk  $40.25

PLAY (sell naked put):

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

SELL PUT  JUL 30    SWQ SF   4,891    0.35  29.65   5.5%   1.2% *
SELL PUT  JUL 32.5  SWQ SZ   1,016    0.60  31.90   8.9%   1.9%
SELL PUT  JUL 35    SWQ SG   2,122    1.10  33.90  12.2%   3.2%


**************
YHOO - Yahoo!  $31.35  *** Global Internet Leader! ***

Yahoo! (NASDAQ:YHOO) is a worldwide Internet business and consumer
services company that offers a comprehensive branded network of
properties and services to more than 200 million individuals
worldwide.  The company offers an online navigational guide to the
Internet via its www.yahoo.com Website, which is a guide in terms
of traffic, advertising and household and business user reach.
Through Yahoo! Enterprise Solutions, the firm also provides many
business services designed to enhance the productivity and Web
presence of its clients.  Yahoo! has offices in the United States,
Europe, Asia, Latin America, Australia and Canada.

YHOO - Yahoo!  $31.35

PLAY (sell naked put):

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

SELL PUT  JUL 27.5  YHQ SY   4,697    0.40  27.10   5.8%   1.5% *
SELL PUT  JUL 30    YHQ SF   6,687    1.00  29.00  10.8%   3.4%


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

BULLISH PLAYS - CREDIT SPREADS

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

***************
BVF - Biovail  $46.00  *** FDA Approval Speculation ***

Biovail Corporation (NYSE:BVF) is a pharmaceutical firm engaged
in the development, manufacture and marketing of medications
utilizing advanced drug delivery technologies for the treatment
of chronic medical conditions.  The company's primary focus is on
three major therapeutic areas: cardiovascular (including Type II
diabetes), central nervous system and pain management.  Other
areas of interest include antiviral medicine and select niche
therapeutic categories with identified potential.  The firm's
Canadian subsidiary performs sales and marketing activities in
Canada for company products, as well as for products licensed
from third parties. Biovail also has a full-service independent
Contract Research Division that provides clinical research and
laboratory testing services for its product development projects
and for third-party international and domestic pharmaceutical
companies, including several developmental partners.

BVF - Biovail  $46.00

PLAY (speculative - bullish/credit spread):

BUY  PUT  JUL-35.00  BVH-SG  OI=2462  ASK=$0.55
SELL PUT  JUL-40.00  BVF-SH  OI=5295  BID=$1.15
INITIAL NET-CREDIT TARGET=$0.60-$0.70
POTENTIAL PROFIT(max)=14% B/E=$39.40


**************
IGT - International Game Tech.  $99.84  *** 4:1 Split Coming! ***

International Game Technology (NYSE:IGT) is engaged in the
development and production of computerized gaming products.
The company operates in three lines of business: product sales,
proprietary gaming and lottery systems.  Product sales encompass
the development, manufacturing, marketing, distribution and sales
of computerized gaming products and systems.  Proprietary gaming
is comprised of IGT's wholly owned gaming operations, including
activities that the company performs on behalf of its strategic
marketing alliances, as well as its unconsolidated joint venture
activities.  The lottery systems segment consists of development,
manufacturing, operation and sale of equipment for online lottery
and pari-mutuel systems.

IGT - International Game Technology  $99.84

PLAY (very conservative - bullish/credit spread):

BUY  PUT  JUL-85.00  IGT-SQ  OI=2486  ASK=$0.40
SELL PUT  JUL-90.00  IGT-SR  OI=2202  BID=$0.70
INITIAL NET-CREDIT TARGET=$0.40-$0.45
POTENTIAL PROFIT(max)=8% B/E=$89.60


**************
NKE - Nike  $56.90  *** New Trading Range? ***

Nike (NYSE:NKE) principally is engaged in the design, development
and worldwide marketing of footwear, apparel, equipment and other
clothing accessory products.  Nike sells its products to over
17,000 retail accounts in the United States and through a mix of
independent distributors, licensees and subsidiaries in over 140
countries around the world.  Virtually all of Nike's products are
manufactured by independent contractors.  Most of the company's
footwear products are produced outside the United States, while
apparel products are produced in the United States and abroad.

NKE - Nike  $56.90

PLAY (less conservative - bullish/credit spread):

BUY  PUT  JUL-50.00  NKE-SJ  OI=1823  ASK=$0.25
SELL PUT  JUL-55.00  NKE-SK  OI=1351  BID=$0.85
INITIAL NET-CREDIT TARGET=$0.60-$0.70
POTENTIAL PROFIT(max)=14% B/E=$54.40


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

BEARISH PLAYS - NAKED CALLS

Based on analysis of option pricing and the underlying stock's
technical background, these positions meet our fundamental
criteria for bearish "premium-selling" strategies.  Each issue
has robust option premiums, a well-defined resistance area and
a high probability of remaining below the target strike prices.
As with any recommendations, these positions should be carefully
evaluated for portfolio suitability and reviewed with regard to
your strategic approach and personal trading style.

WARNING: THE RISK IN SELLING UNCOVERED OPTIONS IS SUBSTANTIAL!

The sale of uncovered calls entails considerable financial risk,
far more than the initial margin or collateral required to open
the position.  The maximum financial obligation for the sale of a
naked option is the strike price (of the underlying stock) that
is sold.  Although this obligation is reduced by the premium from
the sale of the option, a writer of options must have the cash or
collateral equivalent of the sold strike price in reserve at all
times.  The simple fact is: stocks often experience large price
swings, exponentially increasing the margin maintenance and very
possibly causing a devastating shortfall in your portfolio.  It
is also important that you consider using trading stops on naked
option positions to help limit losses when a stock price moves in
a volatile manner.  Many professional traders suggest closing the
position when the underlying share value moves beyond the sold
strike, or using a "buy-to-close" stop order at a price that is no
more than twice the original premium received from the sold option.

***************
AFFX - Affymetrix  $19.99  *** Genomic Research Slump? ***

Affymetrix (NASDAQ:AFFX) is a pioneer in creating breakthrough
tools that are driving the genomic revolution.  By applying the
principles of semiconductor technology to the life sciences,
Affymetrix develops and commercializes systems that enable
scientists to improve the quality of life.  The firm's customers
include pharmaceutical, biotechnology, agrochemical, diagnostics
and consumer products companies as well as academic, government
and other non-profit research institutes.  Affymetrix offers an
expanding portfolio of integrated products and services, as well
as its integrated GeneChip platform, to address growing markets
focused on understanding the relationship between genes and
human health.

AFFX - Affymetrix  $19.99

PLAY (sell naked call):

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

SELL CALL  JUL 22.5  FIQ GX     575   0.35  22.85   8.0%   1.5% *
SELL CALL  JUL 20    FIQ GD     136   1.15  21.15  16.7%   5.4%


**************
DCTM - Documentum  $19.96  *** Profit-Taking Underway! ***

Documentum (NASDAQ:DCTM) provides enterprise content management
software solutions that bring intelligence and automation to the
creation, management, personalization and distribution of vast
quantities and types of content, including documents, Web pages,
XML files and rich media, in one common content platform and
repository.  DCTM's platform makes it possible for companies to
distribute content globally across all internal and external
systems, applications and user communities.  Documentum's products
include site delivery services, content personalization services
and document control managers, among others.

DCTM - Documentum  $19.96

PLAY (sell naked call):

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

SELL CALL  JUL 22.5  QDC GX     518   0.55  23.05  12.1%   2.4% *
SELL CALL  JUL 20    QDC GD   1,404   1.45  21.45  20.4%   6.8%


**************
HCA - HCA Inc.  $31.90  *** Stuck In A Range? ***

HCA Inc. (NYSE:HCA) is a healthcare services company that operates
general and acute care hospitals, as well as psychiatric hospitals,
a rehabilitation hospital and six hospitals in joint ventures.  In
addition, the company also operates freestanding surgery centers.
The company's facilities are located in the U.S., England and in
Switzerland.  HCA's general, acute care hospitals provide a 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.  All outpatient and ancillary healthcare services are
provided by HCA's general, acute care hospitals and through its
freestanding surgery centers, diagnostic centers and rehabilitation
facilities.  HCA's psychiatric hospitals provide a range of mental
healthcare services through inpatient, partial hospitalization and
outpatient settings.

HCA - HCA Inc.  $31.90

PLAY (sell naked call):

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

SELL CALL  JUL 35    HCA GG   3,352   0.45  35.45   5.9%   1.3% *
SELL CALL  JUL 32.5  HCA GZ   2,942   1.20  33.70  11.9%   3.6%


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

BEARISH PLAYS - CREDIT SPREADS

All of these positions are favorable candidates for "bear-call"
credit spreads, based on the current price or trading range of
the underlying issue and its recent technical history or trend.
The probability of profit from these positions may be higher
than other plays in the same strategy, due to disparities in
option pricing.  However, current news and market sentiment will
have an effect on these issues, so review each play individually
and make your own decision about its future outcome.

**************
HDI - Harley-Davidson  $40.19  *** Revenge Play! ***

Harley-Davidson (NYSE:HDI) operates in the motorcycles and other
related products segment and the financial services segment.
The motorcycles and related products segment includes the group
of companies doing business as Harley-Davidson Motor Company,
subsidiaries of H-D Michigan, and Buell Motorcycle Company LLC.
The motorcycles segment designs, manufactures and sells primarily
heavyweight touring, custom and performance motorcycles, as well
as a complete line of motorcycle parts, accessories, clothing and
collectibles. The financial services segment consists of the firm's
subsidiary, Harley-Davidson Financial Services, and its various
subsidiaries.  HDFS is engaged in the business of financing and
servicing wholesale inventory receivables and consumer retail
installment sales contracts (primarily motorcycles and aircraft).

HDI - Harley-Davidson  $40.19

PLAY (speculative - bearish/credit spread):

BUY  CALL  JUL-45.00  HDI-GI  OI=3991  ASK=$0.25
SELL CALL  JUL-42.50  HDI-GV  OI=3954  BID=$0.60
INITIAL NET-CREDIT TARGET=$0.35-$0.45
POTENTIAL PROFIT(max)=17% B/E=$42.85


**************
MDC - MDC Holdings  $46.94  *** Sector Sell-Off! ***

MDC Holdings (NYSE:MDC), whose subsidiaries build homes under the
name "Richmond American Homes," is one of the largest homebuilders
in the United States.  The firmy also provides mortgage financing,
primarily for MDC's homebuyers, through its wholly owned subsidiary
HomeAmerican Mortgage.  MDC is a major regional homebuilder with a
significant presence in some of the country's best housing markets.
The firm is the largest homebuilder in Colorado; among the top five
homebuilders in Northern Virginia, Phoenix, Tucson and Las Vegas;
among the top ten homebuilders in suburban Maryland, Northern
California, Southern California and Salt Lake City; and has also
recently entered the Dallas/Fort Worth and Houston markets.

MDC - MDC Holdings  $46.94

PLAY (less conservative - bearish/credit spread):

BUY  CALL  JUL-55.00  MDC-GK  OI=66   ASK=$0.20
SELL CALL  JUL-50.00  MDC-GJ  OI=260  BID=$0.65
INITIAL NET-CREDIT TARGET=$0.50-$0.60
POTENTIAL PROFIT(max)=11% B/E=$50.50


**************
TIN - Temple Inland  $43.56  *** Trading Range Drop-Out? ***

Temple-Inland (NYSE:TIN) is a holding company that conducts all
of its major operations through its subsidiaries.  Its principal
subsidiaries include Inland Paperboard and Packaging, Inland
Forest Products Corporation, Temple-Inland Financial Services,
Guaranty Bank and Guaranty Residential Lending.  The business of
Temple-Inland is divided among three groups: the Paper Group,
which manufactures corrugated packaging products, the Building
Products Group, which manufactures a range of building products
and manages the Company's forest resources of approximately 2.1
million acres of timberland in Texas, Louisiana, Georgia, and
Alabama, and the Financial Services Group, which consists of
savings and mortgage banking, real estate and insurance brokerage
activities.

TIN - Temple Inland  $43.56

PLAY (less conservative - bearish/credit spread):

BUY  CALL  JUL-50.00  TIN-GJ  OI=810  ASK=$0.20
SELL CALL  JUL-45.00  TIN-GI  OI=31   BID=$0.80
INITIAL NET-CREDIT TARGET=$0.60-$0.70
POTENTIAL PROFIT(max)=14% B/E=$45.60


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

SEE DISCLAIMER - SECTION 1

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


**********
Watch List
**********

Goldman Sachs - GS - close: 84.78 change: -1.82

WHAT TO WATCH: This is it!  GS is offering another opportunity
for a bearish play.  The company came out with earnings today,
and as expected they were above expectations.  Management even
doubled their dividend from 12 cents to 25 cents.  Despite the
positive headlines, investors "sold the news".  We'd look for a
move below 84.62 as our trigger to open bearish plays.  Our
short-term target would be $80.00 and its 50-dma.

Chart=


---

MicroStrategy - MSTR - close: 36.60 change: +1.85

WHAT TO WATCH: Shares of MSTR have bounced strongly from their
rising 50-dma.  Given the stock's history this looks like a very
tempting entry point for new long plays.  We would consider
targeting the recent highs near $42.50 as our profit target.
Aside from its MACD most of MSTR's oscillators have produced a
violent reversal upward.

Chart=


---

Maxim Integrated Products - MXIM - close: 33.85 change: -0.30

WHAT TO WATCH: The chip sector has been the real under performer
for the technology group lately.  The SOX index looks ready to
break 350 and its 50-dma.  Meanwhile MXIM is leading the decline.
After spending several days between $37.00 and $35.00, the stock
has broken below support at $35.00 and its 200-dma.  A retest of
$30.00 looks like a strong bet.

Chart=


---

Electronic Arts - ERTS - close: 74.72 change: +1.51

WHAT TO WATCH:  The behemoth in gaming software, ERTS, has
continued to maintain its up trend.  Shares had seen some profit
taking the last few days but dip buyers stepped in and lifted
share more than two percent today.  We would have felt more
comfortable opening bullish positions if ERTS had closed above
$75.00 so conservative traders may want to wait for some
confirmation.

Chart=


---

Affiliated Computer Services - ACS - close: 44.25 change: -1.38

WHAT TO WATCH: Shares of this computer services company have
fallen five days in a row.  What's more the last two sessions
have seen their declines come on BIG volume for the stock.  The
breakdown under $45 looks bad but shares stalled right at
previous support of $44.00.  We would consider a trigger under
$44.00 to evaluate new bearish plays and target a move to the
$40.00 area.

Chart=


---

Millennium Pharmaceuticals - MLNM - close: 14.89 change: +0.78

WHAT TO WATCH: This biotech/drug stock isn't quite the high-flyer
it once was but shares have certainly come a long way from their
sub-$7 levels in early Spring 2003.  The profit taking that
started last week may have run its course.  Shares are bouncing
from their 50-dma and the $14.00 level.  Aggressive traders could
aim for the $17.25-$17.50 range as a profit target.

Chart=



====================================
RADAR SCREEN - more stocks to watch:
====================================

ACL $45.97 - Shares of this drug company appear to be hitting new
all-time highs.  Volume has been strong the last two sessions
adding some confidence to the rally.  A bounce from $45.00 might
be a good place to evaluate new long positions.

CKFR $28.94 - Here's another computer service company except this
one is climbing higher.  Watch it for a close over strong
resistance at $30.00.

SYNA $13.56 - This is a VERY speculative play.  Options are
thinly traded and the stock doesn't have a long history.  Shares
have more than doubled from their March lows but dip buyers have
been bidding it higher.


- These four stocks are from Monday's Watch List -

CVH $43.42 - Shares have performed their second failed rally
under $45.00 in two days.  A retest of the 50-dma near $41 is a
good bet.

UHS $38.98 - The downtrend continues for UHS.  This close under
the $40 level looks like a decent entry point with a target of
$36 to $35.

GRMN $38.28 - While already short-term oversold, we've seen two
failed rallies at the $40 level in two days.  A bearish position
with a tight stop looks tempting.  Our short-term target would be
$35.00.

LEH $69.48 - The brokerage stock has been hovering around the $70
level finding support at its rising 50-dma but resistance at its
30-dma.  The failed rally today looks like a decent entry point
for shorts targeting $65.00 but it may "feel" better waiting for
a breakdown below its 50-dma.


**************
MARKET POSTURE
**************

Edging Towards The Cliff

To Read The Rest of The OptionInvestor.com Market Watch Click Here
http://www.OptionInvestor.com/marketposture/mp_062503.asp


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