Option Investor
Newsletter

Daily Newsletter, Wednesday, 03/31/2004

HAVING TROUBLE PRINTING?
Printer friendly version
The Option Investor Newsletter                   Monday 03-31-2004
Copyright 2004, All rights reserved.                        1 of 2
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Q1 Ends In The Red
Futures Wrap: See Note
Index Trader Wrap: Almost like an option expiration


Posted online for subscribers at http://www.OptionInvestor.com
*******************************************************************
MARKET WRAP  (view in courier font for table alignment)
*******************************************************************
     03-31-2004            High     Low     Volume Advance/Decline
DJIA    10357.70 - 24.00 10401.70 10314.89 1.82 bln   1713/1107
NASDAQ   1994.22 -  6.41  2004.00  1985.04 1.85 bln   1683/1398
S&P 100   551.13 -  1.40   553.69   549.40   Totals   3396/2505
S&P 500  1126.21 - 14.41  1130.83  1121.46
RUS 2000  591.67 +  0.91   591.67   585.16
DJ TRANS 2895.43 + 11.79  2899.97  2863.53
VIX        16.74 +  0.46    16.96    16.23
VXO        16.59 +  0.60    16.90    16.19
VXN        23.76 +  0.58    24.03    23.49
Total Volume 4,154M
Total UpVol  1,844M
Total DnVol  2,152M
52wk Highs     468
52wk Lows       30
TRIN          1.19
PUT/CALL      1.31
*******************************************************************

Q1 Ends In The Red
by James Brown

The first quarter of 2004 has ended and the Dow Industrials and
the NASDAQ Composite both posted losses.  Disappointing economic
news, production cuts from OPEC, concerns over this Friday's jobs
report and new violence in Iraq were all factors in today's
declines.  The good news is that the declines were mild but
volume continues to be light indicating a lack of conviction
ahead of Thursday and Friday's economic reports.

Global exchanges were mixed as Asian stocks tracked higher
against European stocks, which slipped lower.  The dollar fell
strongly against the euro and hit new four-year lows against the
yen.  The Japanese policy change about not intervening between
the dollar/yen is starting to have an effect.  The U.S. markets
were volatile earlier in the session after rumors surfaced that
Federal Reserve Chairman Alan Greenspan was sick or had a heart
attack.  This is not a new ploy by those who would try and
manipulate the market lower as we've heard the Alan is sick card
before.  However, this time the Fed chose to come out and respond
saying Greenspan is fine, which is unusual since their normal
policy is not to comment on any rumors.

The U.S. markets ended the session mixed with only about half of
the major sector indices in the red.  Yet the tone of the session
felt weak as the Dow, NASDAQ and S&P 500 all closed lower.  The
Dow ended the first quarter of 2004 with a 1% loss while the
NASDAQ lost 0.6%.  This was the first quarterly loss in a year
for both indices.  Flexing its relative strength was the S&P 500,
which ended March up 1.3% YTD.  The last few sessions have been
pretty bullish for the markets as mutual funds finished their
end-of-quarter window dressing.  Today we began to see some un-
dressing and tech stocks were hit the hardest.  Investors were
rotating out of hardware stocks and disk drives/storage related
issues mainly due to QLogic's earnings warning.  Buying was
heaviest in the airlines, homebuilders and oil.

Market internals reflected the mixed market message as well.
Advancing stocks outnumbered decliners 17 to 11 on the NYSE and
almost 17 to 14 on the NASDAQ.  Yet down volume on the NASDAQ
rushed past up volume 11-to-7.  Bulls pulled ahead on the NYSE
but up volume narrowly beat down volume 9-to-8.  Volatility
indices ticked higher and the yield on the 10-year note dropped
to 3.837% as money sought safety ahead of Friday's economic
reports.

The good news is that the markets have managed to maintain their
gains from last week's lows.  The bad news is that we're short-
term overbought and with apprehension growing over Friday's
economic reports we're liable to see some profit taking between
now and then.  The battle for support resistance remains.  The
Dow is holding above minor support at the 10,325 level but the
NASDAQ is back under the 2000 mark.  Meanwhile the S&P 500 is
trading right at its minor support/resistance level of 1125.

Chart of the Dow Industrials:



Chart of the NASDAQ Composite:



Chart of the S&P 500 Index:



The Chicago PMI and the Factory Orders numbers were the two big
economic reports out today and both turned in disappointing
results.  Economists had been looking for the Chicago Purchasing
Managers Index to drop from 63.6 in February to 61.6 in March.
Unfortunately, the results were worse than expected at 57.6 and
marked the biggest drop since March 2001.  The glass-is-half-full
crowd will tell you that March is the 11th consecutive month of
economic expansion since any reading over 50 marks improvement or
expansion.  The real story here was the employment component,
which dropped from 54.8 to 49.2.  Factories may be expanding
output but they're certainly not hiring to meet demand and this
doesn't bode well for Friday's jobs report.  Manufacturing
payrolls have dropped for 43 months in a row and today's PMI
report suggests we're going to see 44 months.  The factory orders
for February were just as disappointing.  Economists were looking
for an increase of 1.7% but received an anemic 0.3% increase
instead.

The biggest economic event today wasn't a report at all but the
decision by OPEC to proceed with their previously announced plans
to curtail oil production by 1 million barrels a day starting
April 1st.  The markets have been speculating/fretting over this
decision for weeks and now that it's here the price of crude
actually drops 49 cents to $35.76 a barrel.  Maybe it's because
everyone knows that several of OPEC's member tend to cheat and
produce more than they are supposed to.  Or that if OPEC doesn't
cheat those countries not in the cartel will pump all they can
with crude oil at 13-year highs.  While this does look like a
sell-the-news reaction in crude I'm a bit surprised that we
didn't see more volatility intraday.  It was only a week ago that
the FBI warned of possible terrorist attacks on oil refineries in
Texas and this morning British Petroleum (BP) announced that
there was a fire in one of its refineries in Texas.  Fortunately,
they were quick to suggest the cause was not likely an act of
sabotage.

Speaking of fuel Qlogic Corp's (QLGC) earnings warning this
morning sent the stock to a 22.7% loss and sparked heavy selling
across the tech sectors.  QLGC now expects Q4 earnings at 36
cents a share on revenues of just $128 million versus analysts'
consensus estimates of 38 cents and $140 million for the quarter.
QLGC is a chipmaker that specializes in circuits for storage
devices and host bus adapters.  The company blamed a drop in
orders and the news dragged its rival Emulex (ELX) to a 6.5%
loss.

On a more positive note Americans still managed to feed their
desire for the latest techno gadgets and wide-screen T.V.'s in
spite of the rising prices at the pump.  Best Buy Co (BBY) and
rival Circuit City (CC) both announced earnings this morning and
the results were strong.  BBY, the larger of the two companies,
reported earnings that were 3 cents better than estimates at
$1.42 a share.  Revenues jumped from $6.99 billion to $8.45
billion and same-store sales soared 9.7%.  BBY stood by its
forecasts for 15 to 20% earnings growth for the year and said it
should be able to maintain same-store sales growth of 4-to-6%.
Meanwhile Circuit City remains firmly in BBY's shadow but appears
to have turned a corner as earnings came in at 46 cents a share,
well above estimates for 36 cents.  Revenues came in at $3.25
billion while same-store sales managed a positive increase of 1%.
CC has been in a very lengthy restructuring to make it more
profitable and more competitive and today they announced plans to
buy Canadian firm InterTan (ITN) for $284 million in cash and a
separate deal to buy the assets of MusicNow, a provider of
digital media.   The performance of both BBY and CC is great news
for the retailers and foreshadows what many are expecting to be a
positive earnings season.

Before the markets can focus on earnings we have to wade through
a crowd of economic reports.  They begin in earnest tomorrow.
According to Ford and GM the auto and truck sales numbers
tomorrow should be pretty strong.  We'll also get the weekly
initial jobless claims and the construction spending numbers.
Yet the big reports on Thursday will be the long overdue February
PPI report and the ISM Index.  However, even these two are
overshadowed by the non-farm payrolls report on Friday morning.
Economists are looking for 120,000-125,000 new jobs but the
employment component in this morning's Chicago PMI survey isn't a
good sign.

Considering our short-term overbought status and the opportunity
for investors to use any news as an excuse to take profits ahead
of the jobs number I'm not looking for a bullish day tomorrow.
Furthermore traders might want to prepare for what could be a
volatile day on Friday.  Even if the jobs numbers does come in
strong there is the argument that strong jobs growth is the last
and final component we've been waiting on for the economic
recovery and that means the Federal Reserve is one step closer to
raising rates.  Of course we expect the Fed to wait for several
months of strong jobs growth before raising rates but you know
how excitable the markets can be.


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

Futures wrap is not emailed due to the excessive number of charts.
It may be read on the website at this address.
http://www.OptionInvestor.com/indexes/futureswrap.asp


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

Almost like an option expiration

What appeared to be a rather quiet session of trade for most of
the day livened up a bit after 02:00 PM EST, and while the major
indices ended up relatively unchanged, some of the intra-day
swings felt more like an option expiration than anything.

Yes!  It's the end of the calendar quarter, and there may be some
signs from today's trade that simply suggest some end of quarter
rebalancing, but today's trade was a good day for some
volatility, to perhaps put traders on edge ahead of Friday's
nonfarm payroll numbers.

Market Snapshot / Internals - 03/31/04 Close



The major indices looked as if they might suddenly erupt to the
upside just after 02:00 PM EST, when suddenly, and with little
notice, the indices make a quick move higher, where the only
"news" I could find to really explain the jolt higher, was a
rumor that Goldman Sachs had initiated a buy program.

While the NASDAQ Composite (COMPX) 1,994.22 -0.32% looked to be
making a break above the 2,000 level, as if by magic, the
session's high of 2,004.00 (to the penny) was found, and from
there, the NASDAQ Composite (COMPX) traded straight down to the
its close, but RIGHT in the middle of the entire day's range.

Pivot Analysis Matrix - (New MONTHLY Levels)



End of calendar quarter balancing?  Maybe a little fine tuning?
How in the heck the INDU/SPX/OEX/SOX can manage to close right at
their NEW MONTHLY as well as tomorrow's DAILY Pivots is beyond my
comprehension, other than to think today's trade was largely
influenced by computers, which were determined to mark a close at
their particular levels.  Coincidence perhaps.

It takes me too much time intra-week to get all the new MONTHLY
Pivot retracement levels on their charts, so I'm going to really
focus in on the SPX tonight.  I'll stay up a little later and try
and get the other major indices with their monthly levels, but
suffice it to say, today's gains/losses for just about everything
were fractional.

S&P 500 Index (SPX.X) - Daily Intervals (M/W Pivots)



I've placed the NEW MONTHLY levels and retracement on the SPX
chart, and here we are in what may be a rather critical "zone" of
resistance.  In DASHED PINK, I've circled two prior areas, where
the SPX seemed to "juke" around within a zone of 1,125-1,132.

Now, I really get focused on this 1,132 or WEEKLY R2 level.  Yes,
after Friday's trade, this WEEKLY R2 may disappear, but I'm just
noticing this additional observation, from a chart we put
together not long ago.

S&P 500 Index (SPX.X) - Daily Intervals (Fitted Retracement)



I wanted to also quickly review a chart of the SPX I showed in
prior commentary (I'm trying to find the article, but can't right
now) where as the SPX was breaking below both its MARCH MONTHLY
S2 and WEEKLY S2, I used the "Fitted retracement" (fit 38.2% at a
relative low or low close) technique for trying to find a
potential downside support level.  Trader might note that the
19.1% retracement on the above chart, is VERY close to this
WEEK's WEEKLY R2.

THIS SUGGESTS THAT 1,131 is a CRITICAL RESISTANCE LEVEL in my
opinion.  Something may be important about this level.

Two thoughts are BIG RESISTANCE, or BIG RESISTANCE if broken to
upside could see tidal wave of buying.

This second thought (tidal wave of buying) could come from the
nonfarm payroll data, but could also come if a LOT OF BEARISH
HEDGES were put on at MARCH expiration, and those hedges all
unwind should 1,131 be a CRITICAL level.

On Friday, the nonfarm data is going to come out, and you, or at
least I, can now hear two type of analysis.  But here is where I
think a trader that "shuts it out" and just honors the levels and
manages their risk may benefit.

Bullish Commentary:  There you have it folks.  The economy
created 500,000 jobs in March and that's the big type of number
everyone knew was coming from the robust economy.  Look at the
SPX trading surging to 1,145.

Bearish Commentary:  There you have it folks.  The economy
created 500,000 jobs in March and that's the big number everyone
knew was coming from the robust economy.  However, this may have
already been baked into the SPX as it falls to 1,100 as
economists have been forecasting this growth for months, and may
also explain the recent rebound in the SPX from its recent lows
of 1,088.

How do YOU feel, or perceive the market now?  After that BULLISH
and BEARISH commentary?

I feel like it could go either way.  I can see both of those
scenarios right now.

I've said it recently and I'll say it again here.  The one thing,
the ONE THING that has me more bearish that bullish right now is
those darned bullish % showing some internals weakening from high
levels of bullish risk (NASAQ-100 Bullish % has fallen quite a
bit further than others though).

Now I want to quickly revisit the Market Volatility Index (VIX.X)
16.74 +2.82%, where I continue to keep an eye on things, but
really want to update traders on where we are at tonight's close.
In the past, we've looked at weekly intervals, but tonight I'm
looking at the same chart we've always looked at, but on DAILY
intervals, so we can perhaps see how we're at an inflection point
yet again, where the VIX.X may give us an indicator of what
INSTITUTIONS are doing.

My gut feel is institutions KNOW what they are going to do
regardless of the nonfarm payroll data (I think sell), but the
VIX.X may give us an indicator to monitor very close tomorrow and
FRIDAY.

Market Volatility Index (VIX.X) - Daily Intervals



I think the last time we looked at the VIX.X was in the 03/18/04
Index Trader Wrap
http://members.OptionInvestor.com/Itrader/marketwrap/iw_031804_1.ASP
 and after a brief spike above 21.22 on March 22, 2003, look
where the VIX.X has come back to?  From a PURELY OPTIONS MARKET
MAKER standpoint, and perhaps INSTITUTIONAL LEVEL, I would have
to think that selling of put premium (either profiting on long
put positions, or selling of naked put premium) may now be
REVERSING itself, whereas PREMIUM has fallen, a shift back to PUT
BUYING and CALL SELLING may be taking place.

Again... the VIX.X may also be suggesting that CURRENT LEVEL OF
TRADE in the SPX is at a rather key, or pivotal level.

If after thinking "both side of the trade" with my bullish and
bearish commentary regarding Friday's nonfarm payroll data, an
excellent option strategy is to play a COMBINATION put/call
strategy, or a STRADDLE or STRANGLE, where a move VOLATILE move
either side of the "pivotal point" stands to profit.

From a PURE option profit strategy, the greater profit potential
with volatility LOW is for a MARKET DECLINE, put options to
profit not only from a directional move lower, but for a surge in
option volatility to have PREMIUM exploding higher.

I can't say that I saw anything overly suspicious in today's
trade, but with the VIX.X slightly higher, will take note that
today's most active options for the SPX were....

SPX Option Chain (03/31/04) - Sorted by most active



The main note, though not overly unusual, is that the June 1,050
puts (SPQRJ) were most active.  The only reason for these to
trade today, in my opinion, is that they had been SOLD naked at a
much higher price (maybe a week ago at higher premium) and that
trade is close out, OR, with premium now LOWER, a bet is made on
a downside move, where if found, would have premium exploding.

We could go on and on with different scenarios of what is taking
place with options, but the June 1,050 stands out a bit (maybe
just an end of calendar quarter rollout) at double other
contracts.

Could it also be that the June 1,125 Call (SPTFE) action is an
INSTITUTION selling approximately $32.15 in the 1,125 strike,
with thought that the SPX does NOT trade above

1,125 + 32.15 = 1,157.15?

Good Gravy!  1,157.15 is pretty close to the recent highs in the
SPX.  A BULL will say.  It could also be an OVERLY SHORT bear
that isn't all that certain of WHAT the response is going to be
to the nonfarm data, and they're hedging on a chance the SPX has
NOT put in its near-term highs.

I'm quickly posting a INDU daily interval chart, but it still
shows OLD MONTHLY levels.  Still, I wanted to get a chart up, as
its WEEKLY R1 served support.

Dow Industrials Chart - Daily Intervals



I monitored Caterpillar (NYSE:CAT) $79.07 -1.16%, where its
session high was $79.85, and didn't show much follow through to
the upside after trading $80.00 yesterday.  INDU makes another
slight gain above a prior session high, and since the move off
the recent low, REFUSES to trade BELOW the prior days low.

As a final note as I run WAY PAST deadline, and Market Monitor
subscribers will know this to be true.

If there is ONE SIGN that we've seen that the MARKET is perhaps
really counting on, or KNOWS of a strong nonfarm payroll number
on Friday, it is the recent bullish move in online jobs poster
Monster Worldwide (NASDAQ:MNST) $26.20 +3.96%.  Swing traders
made a decent bullish gain on the stock but today's rather
impressive break above the downward trend of $25.50, is a stock,
and technical sign that the MARKET may well be counting on a
strong number Friday.

Jeff Bailey


************************Advertisement*************************

Live Securities Brokerage Service with Licensed Option Principals

OCO Stop & Profit Orders                        OneStopOption
All types of Spreads and Buy Writes             888-281-9569
Auto-Trade Market Monitor Signals
Personal Service and Education


**Services available for Foreign Traders including Canada**

http://www.OneStopOption.com

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


*******************
FREE TRIAL READERS
*******************

If you like the results you have been receiving we
would welcome you as a permanent subscriber.

The monthly subscription price is $49.95. The quarterly
price is $129.95 which is $20 off the monthly rate.

We would like to have you as a subscriber. You may
subscribe at any time but your subscription will not
start until your free trial is over.

To subscribe you may go to our website at

www.OptionInvestor.com

and click on "subscribe" to use our secure credit
card server or you may simply send an email to

 "Contact Support"

with your credit card information,(number, exp date, name)
or you may call us at 303-797-0200 and give us the
information over the phone.

You may also fax the information to: 303-797-1333


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support


The Option Investor Newsletter                   Monday 03-31-2004
Copyright 2004, All rights reserved.                        2 of 2
Redistribution in any form strictly prohibited.


In Section Two:

Stop Loss Updates: None
Dropped Calls: None
Dropped Puts: None
Naked Puts & Calls
Spreads & Combos: Another Stalled Rally?
Watch List: AV Equipment, Defense, Refiners and Make up


************************Advertisement*************************

Live Securities Brokerage Service with Licensed Option Principals

OCO Stop & Profit Orders                        OneStopOption
All types of Spreads and Buy Writes             888-281-9569
Auto-Trade ket Monitor Signals
Personal Service and Education


**Services available for Foreign Traders including Canada**

http://www.OneStopOption.com

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


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

None


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

None


************************Advertisement*************************

Full Service Brokers

Man Financial announces the formation of the OneStopOption
Brokerage Group, addressing the demand for personalized,
experienced service for both securities* and futures trading
within the same firm. Licensed Option Principals Andrew Aronson
and Alan Knuckman specialize in live assistance of stock*,
option* and futures traders. The combination of the proven Man
Financial global presence and the convenience of one group for
all trading needs provide customers with the tools needed for
success.

Live Broker and Online Trading Available     888-281-9569

http://www.OneStopOption.com

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


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

None


******************
Naked Puts & Calls
******************

PREMIUM-SELLING PLAYS: NAKED PUTS & CALLS

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

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SUMMARY OF CURRENT POSITIONS - AS OF 03/30/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NAKED PUTS

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

APPX     APR    33    32.48   45.29    0.90   5.98%   2.77%
NEOL     APR    15    14.65   18.72    0.35   5.57%   2.39%
OSTK     APR    25    24.30   31.18    0.70   7.25%   2.88%
APPX     APR    33    32.73   45.29    0.65   5.76%   1.99%
ASKJ     APR    25    24.15   36.68    0.85   9.04%   3.52%
CLZR     APR    11    11.07   13.94    0.17   4.72%   1.54%
JNPR     APR    22    21.85   26.54    0.65   7.82%   2.97%
NEOL     APR    15    14.65   18.72    0.35   6.74%   2.39%
PDII     APR    22    21.80   24.95    0.70   8.31%   3.21%
SWIR     APR    22    22.15   35.85    0.35   5.03%   1.58%
APPX     APR    33    33.03   45.29    0.35   4.71%   1.06%
BRCM     APR    35    34.55   40.04    0.45   4.64%   1.30%
ELN      APR    15    14.65   20.15    0.35   9.84%   2.39%
OSTK     APR    22    22.25   31.18    0.25   4.47%   1.12%
PCLN     APR    20    19.75   26.71    0.25   4.90%   1.27%
SYMC     APR    40    39.40   47.26    0.60   4.89%   1.52%
XMSR     APR    25    24.40   28.29    0.60   7.74%   2.46%
YHOO     APR    40    39.40   48.79    0.60   5.13%   1.52%
APPX     APR    35    34.45   45.29    0.55   6.27%   1.60%
ASKJ     APR    25    24.55   36.68    0.45   7.51%   1.83%
CMC      APR    30    29.60   31.79    0.40   4.72%   1.35%
CSGS     APR    15    14.65   17.04    0.35   7.65%   2.39%
ECLG     APR    17    17.20   21.59    0.30   6.26%   1.74%
JILL     APR    17    17.15   20.43    0.35   6.38%   2.04%
MGAM     APR    22    22.05   24.92    0.45   6.80%   2.04%
PBY      APR    25    24.50   27.59    0.50   5.97%   2.04%
SUPG     APR     7     7.15   13.53    0.35  16.86%   4.90%
AGI      APR    30    29.55   32.23    0.45   5.39%   1.52%
ASKJ     APR    25    24.60   36.68    0.40   6.62%   1.63%
ENDP     APR    20    19.75   23.26    0.25   4.98%   1.27%
NFLD     APR    12    12.15   15.33    0.35  12.17%   2.88%
PBY      APR    25    24.55   27.59    0.45   6.18%   1.83%
PLMO     APR    15    14.65   19.00    0.35   9.66%   2.39%
RSAS     APR    15    14.55   18.03    0.45  10.23%   3.09%
SHFL     APR    40    39.60   46.40    0.40   4.13%   1.01%
SYMC     APR    40    39.35   47.26    0.65   5.79%   1.65%
ASCA     APR    30    29.70   33.34    0.30   4.73%   1.01%
ASKJ     APR    30    29.40   36.68    0.60   9.72%   2.04%
ERJ      APR    30    29.40   31.90    0.60   8.22%   2.04%
IMM      APR    15    14.70   18.69    0.30  11.43%   2.04%
INSP     APR    30    29.70   39.43    0.30   5.70%   1.01%
MICC     APR    17    16.90   21.15    0.60  15.59%   3.55%
MNST     APR    22    22.20   25.20    0.30   5.95%   1.35%
TKTX     APR    15    14.50   17.09    0.50  17.25%   3.45%

Some of Sunday's new positions may not have been available at
the listed prices, due to the broad rally on Monday.  Plays
on Amylin (NASDAQ:AMLN) and Nektar (NASDAQ:NKTR), although
positive, have been closed to limit potential losses.


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

SEAC     APR    20    20.40   15.14    0.40   7.86%   1.96%
ERES     APR    35    35.30   28.49    0.30   4.73%   0.85%
FARO     APR    30    30.40   23.03    0.40   7.33%   1.32%
AFCI     APR    25    25.50   22.25    0.50   8.84%   1.96%
FLSH     APR    22    22.75   20.10    0.25   5.62%   1.10%
ADTN     APR    35    36.30   31.52    0.80   9.56%   2.20%
DISH     APR    35    35.65   32.40    0.65   6.34%   1.82%
MTLM     APR    40    40.60   36.28    0.60   9.68%   1.48%
NIHD     APR    35    35.30   34.58    0.30   4.43%   0.85%
BRL      APR    50    50.40   46.65    0.40   4.08%   0.79%
SCHN     APR    33    33.68   32.65    0.30   7.13%   0.89%

As noted last week, the bearish position in Career Education
(NASDAQ:CECO) has been closed to limit potential losses.  The
"watch-list" position in NII Holdings (NASDAQ:NIHD) is now a
candidate for early-exit, as is Schnitzer Steel (NASDAQ:SCHN).

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

APPX - American Pharma Partners  $46.90  *** All-Time High! ***

American Pharmaceutical Partners (NASDAQ:APPX) is a specialty
drug company that develops, manufactures and markets injectable
pharmaceutical products, focusing on the oncology, anti-infective
and critical care markets.  The company is one of the largest
producers of injectables, with more than 130 generic products in
more than 350 dosages and formulations.

APPX - American Pharma Partners  $46.90

"AGGRESSIVE" PLAY (sell naked put):

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

SELL PUT  APR 43.37 AXD PZ    159    0.75  42.63   8.9%   1.8% *
SELL PUT  MAY 35    AQO QG    396    0.40  34.60   2.4%   1.2% TS
SELL PUT  MAY 40    AQO QH    114    1.25  38.75   5.7%   3.2%


__________________________________________________________________

ASKJ - Ask Jeeves  $35.73  *** Another Multi-Year High! ***

Ask Jeeves (NASDAQ:ASKJ) is a provider of Internet-wide search,
providing consumers with authoritative and fast ways to find
relevant information to their everyday searches.  Ask Jeeves
deploys its search technologies on Ask Jeeves (Ask.com and
Ask.co.uk), Teoma.com, and Ask Jeeves for Kids (AJKids.com).
In addition, to its internet sites, Ask Jeeves syndicates its
monetized search technology and advertising units to a network
of affiliate partners.  The company is based in Emeryville,
California, with offices in New York, Boston, New Jersey, Los
Angeles, London and Dublin.

ASKJ - Ask Jeeves  $35.73

PLAY (sell naked put):

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

SELL PUT  APR 30    AUK PF    3684   0.30  29.70   6.4%   1.0% *
SELL PUT  MAY 25    AUK QE     751   0.30  24.70   2.4%   1.2% TS
SELL PUT  MAY 30    AUK QF     216   1.20  28.80   7.3%   4.2%


__________________________________________________________________

COCO - Corinthian Colleges  $33.01  *** Break-Out Coming? ***

Corinthian Colleges (NASDAQ:COCO) is one of the largest for-profit
post-secondary education companies in the United States.  The firm
serves the large and growing segment of the population seeking to
acquire new, career-oriented education to become more qualified
and marketable in today's demanding workplace environment.  The
company has thousands of students enrolled and at year-end 2003,
the company operated 69 colleges and two training centers in 21
states, including 18 in California and 12 in Florida.

COCO - Corinthian Colleges  $33.01

PLAY (sell naked put):

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

SELL PUT  APR 30    UCS PF     400   0.25  29.75   4.6%   0.8% *
SELL PUT  MAY 30    UCS QF     316   0.65  29.35   3.6%   2.2% TS
SELL PUT  MAY 32.5  UCS QZ     670   1.55  30.95   6.5%   5.0%


__________________________________________________________________

FWHT - FindWhat.com  $21.61  *** Internet Locator! ***

FindWhat.com (NASDAQ:FWHT) operates online marketplaces that
connect the consumers and businesses that are most likely to
purchase specific goods and services with the advertisers that
provide those goods and services.  Online advertisers determine
the per-click fee they will pay for their advertisements, which
FindWhat.com and its private-label partners such as Terra Lycos's
Lycos.com and HotBot distribute to millions of Internet users.
Their network includes hundreds of distribution partners, such as
CNET's Search.com, Excite, Webcrawler, NBCi, MetaCrawler, Dogpile,
Go2Net and Microsoft Internet Explorer Autosearch.

FWHT - FindWhat.com  $21.61

PLAY (sell naked put):

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

SELL PUT  APR 20    HFQ PD     343   0.55  19.45  13.8%   2.8%
SELL PUT  MAY 17.5  HFQ QW      60   0.35  17.15   4.3%   2.0% TS
SELL PUT  MAY 20    HFQ QD      56   1.15  18.85   8.4%   6.1%


__________________________________________________________________

MICC - Millicom Cellular  $22.00  *** Wireless Telecom Giant! ***

Millicom International Cellular S.A. (NASDAQ:MICC) is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa.  The company has a number of cellular
operations and licenses in countries around the world and the
group's cellular operations have a combined population under
license of over 500 million people.  In addition, MIC operates
a GSM clearing house, provides high-speed wireless data services
in various countries and has a licenses to develop high speed
wireless data services in other areas.  MIC also has a major
interest in Tele2 AB, an alternative pan-European telecom firm
offering fixed and mobile telephony, data network and Internet
services.

MICC - Millicom Cellular  $22.00

PLAY (sell naked put):

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

SELL PUT  APR 17.5  CQD PW    1471   0.20  17.30   8.3%   1.2% *
SELL PUT  APR 20    CQD PD     469   0.35  19.65   9.3%   1.8%
SELL PUT  MAY 17.5  CQD QW      15   0.45  17.05   5.5%   2.6%


__________________________________________________________________

MNST - Monster Worldwide  $26.20  *** Rally Mode! ***

Monster Worldwide (NASDAQ:MNST), formerly known as TMP Worldwide,
is a global provider of career solutions.  The company, through
its flagship Interactive product, Monster (www.monster.com), is
engaged in online career management. Monster Worldwide is also a
worldwide recruitment advertising agency through its Advertising
& Communications division and a yellow pages advertising agency
through its Directional Marketing division.  On March 31, 2003,
the company completed the spin-off of the common stock of Hudson
Highland Group, previously the eResourcing and Executive Search
divisions of Monster Worldwide.

MNST - Monster Worldwide  $26.20

PLAY (sell naked put):

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

SELL PUT  APR 25    BSQ PE     214   0.50  24.50   9.7%   2.0%
SELL PUT  MAY 22.5  BSQ QX      38   0.55  21.95   4.5%   2.5% TS
SELL PUT  MAY 25    BSQ QE      56   1.25  23.75   7.1%   5.3%


__________________________________________________________________

PLMO - palmOne  $21.40  *** Up, Up & Away! ***

palmOne (NASDAQ:PLMO), formerly Palm, develops, designs and sells
Palm-branded, hand-held devices, accessories and the operating
system Palm OS.  The company was historically organized into two
operating segments: the Solutions Group and PalmSource.  Now the
Solutions Group develops and markets hand-held devices and other
accessories to provide the user with a simple, elegant and useful
productivity tool.  PalmSource developed and licensed the Palm OS
and related software, which is referred to as the Palm platform.
The Palm platform is the foundation for Palm devices, as well as
for devices manufactured by other third-party licensees.

PLMO - palmOne  $21.40

PLAY (sell naked put):

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

SELL PUT  APR 20    UPY PD     571   0.75  19.25  18.0%   3.9%
SELL PUT  MAY 17.5  UPY QW     523   0.60  16.90   6.8%   3.6% *
SELL PUT  MAY 20    UPY QD     364   1.40  18.60   9.8%   7.5%


__________________________________________________________________

TTN - Titan  $20.19  *** Lockheed Merger In Doubt? ***

Titan (NYSE:TTN) is a technology developer and systems integrator
for the Department of Defense (DoD), the Department of Homeland
Security and intelligence and other key government agencies.  It
provides a range of services and systems solutions that include
research and development, design, installation, integration, test,
logistics support, maintenance and training.  Titan also provides
services and solutions to government agencies with sophisticated
information systems including information processing, information
fusion, data management and communication systems.  It focuses on
four markets: C4ISR (command, control, communications, computers,
intelligence, surveillance and reconnaissance), transformational
programs, enterprise IT (information technology) and the war on
terrorism/homeland security.

TTN - Titan  $20.19

"SPECULATIVE" PLAY (sell naked put):

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

SELL PUT  APR 17.5  TTN PW    4418   0.25  17.25   8.4%   1.4% *
SELL PUT  APR 20    TTN PD    2971   0.70  19.30  15.5%   3.6%


__________________________________________________________________

TTWO - Take-Two Int. Software  $36.79  *** Entry Point? ***

Take-Two Interactive Software (NASDAQ:TTWO) is an integrated
developer, marketer, distributor and publisher of interactive
entertainment software games and accessories for the personal
computer, PlayStation, PlayStation2, Nintendo Game Boy Color,
Nintendo GameCube, Nintendo Game Boy Advance and the Xbox.  The
company publishes and develops products through various wholly
owned subsidiaries including Rockstar Games, Rockstar Studios,
Gathering of Developers, TalonSoft, Joytech, PopTop, Global Star
and under the Take-Two brand name.  The company maintains sales
and marketing offices in Cincinnati, New York, Toronto, London,
Paris, Munich, Vienna, Copenhagen, Milan, Sydney and Auckland.

TTWO - Take-Two Int. Software  $36.79

PLAY (sell naked put):

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

SELL PUT  APR 35    TUO PG     684   0.45  34.55   6.4%   1.3% *
SELL PUT  MAY 32.5  TUO QZ     136   0.70  31.80   3.8%   2.2% TS
SELL PUT  MAY 35    TUO QG      81   1.35  33.65   5.6%   4.0%



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

OVTI - OmniVision  $27.31  *** Stuck In A Trading Range? ***

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  $27.31

"AGGRESSIVE" PLAY (sell naked call):

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

SELL CALL  APR 30    UCM DF    13279  0.50  30.50  10.9%   1.6% *
SELL CALL  MAY 30    UCM EF     3337  1.50  31.50   9.2%   4.8%


__________________________________________________________________

SNDK - SanDisk  $28.36  *** Premium-Selling Only! ***

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.  Quarterly earnings are due 4/14/2004.

SNDK - Sandisk  $28.36

PLAY (sell naked call):

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

SELL CALL  APR 32.5  SWQ DZ    11692  0.25  32.75   6.4%   0.8% *
SELL CALL  APR 30    SWQ DF    19285  0.80  30.80  14.5%   2.6%



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SEE DISCLAIMER - SECTION 1

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


************************Advertisement*************************

Full Service Brokers

Man Financial announces the formation of the OneStopOption
Brokerage Group, addressing the demand for personalized,
experienced service for both securities* and futures trading
within the same firm. Licensed Option Principals Andrew Aronson
and Alan Knuckman specialize in live assistance of stock*,
option* and futures traders. The combination of the proven Man
Financial global presence and the convenience of one group for
all trading needs provide customers with the tools needed for
success.

Live Broker and Online Trading Available     888-281-9569

http://www.OneStopOption.com

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


****************
SPREADS & COMBOS
****************

Another Stalled Rally?
By Ray Cummins

Concerns over the rising cost of crude and upcoming economic data
kept the bulls in the holding pen during Wednesday's session.

The Dow Jones Industrial Average fell 24 points to 10,357, amid
weakness in AT&T (NYSE:T), Caterpillar (NYSE:CAT), General Motors
(NYSE:GM) and Hewlett-Packard (NYSE:HPQ).  The NASDAQ Composite
ended 6 points lower at 1,994 with computer hardware, storage and
networking shares among the worst performers.  The S&P 500 Index
was almost unchanged at 1126.  Oil services, retail, advertising,
waste management, personal services, healthcare distributor, and
airline shares saw limited buying pressure.  In the broad market,
winners outnumbered losers 2 to 1 on the NYSE but the margin was
smaller on the technology exchange.  Trading volume was light at
1.5 billion shares on the Big Board and 1.8 billion shares on the
NASDAQ.  Bond prices moved higher with the 10-year note up 15/32,
while its yield fell to 3.84%.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SUMMARY OF CURRENT POSITIONS - AS OF 03/30/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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.


PUT-CREDIT SPREADS

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

APOL    77.82  86.19   APR  65  70   0.60  69.40   0.60   Open
BZH    111.90 105.85   APR  95 100   0.70  99.30   0.70   Open
KBH     78.71  80.88   APR  65  70   0.55  69.45   0.55   Open
COF     73.50  75.78   APR  60  65   0.50  64.50   0.50   Open
SYMC    44.64  47.26   APR  37  40   0.35  39.65   0.35   Open
DNA    106.82 105.76   APR  90  95   0.60  94.40   0.60   Open
FDX     71.59  74.62   APR  65  70   0.85  69.15   0.85   Open
LLL     56.67  59.21   APR  50  55   0.50  54.50   0.50   Open
TASR    61.80  80.82   APR  45  50   0.60  49.40   0.60   Open
DE      68.23  69.94   APR  60  65   0.40  64.60   0.40   Open
FFIV    31.87  34.46   APR  25  30   0.55  29.45   0.55   Open
MRVL    42.67  45.19   APR  37  40   0.20  39.80   0.20   Open

L/P = Long Put  S/P = Short Put  CB = Cost Basis  G/L = Gain/Loss

The position in Hughes Supply (NYSE:HUG), although positive, has
previously been closed to limit potential losses.


CALL-CREDIT SPREADS

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

DISH    35.50  32.40   APR  42  40   0.30  40.30   0.30   Open
NVLS    31.15  31.65   APR  37  35   0.35  35.35   0.35   Open
VSEA    40.85  42.11   APR  50  45   0.60  45.60   0.60   Open
SFA     31.96  32.45   APR  40  35   0.55  35.55   0.55   Open
BBBY    39.04  41.32   APR  45  42   0.25  42.75   0.25   Open
MSTR    52.64  53.29   APR  65  60   0.60  60.60   0.60   Open
NTLI    53.12  59.39   APR  65  60   0.60  60.60   0.60   Open?
SINA    35.96  38.46   APR  45  40   0.70  40.70   0.70   Open
AFCO    27.85  27.79   APR  35  30   0.55  30.55   0.55   Open
CAM     43.90  43.96   APR  50  45   0.50  45.50   0.50   Open

L/C = Long Call  S/C = Short Call  CB = Cost Basis  G/L = Gain/Loss

Bearish spreads on Adobe (NASDAQ:ADBE) and Cognos (NASDAQ:COGN),
although positive, have previously been closed to limit potential
losses.  NTL Inc. (NASDAQ:NTLI) is a candidate for "early exit"
after Monday's broad rally.  Bed, Bath & Beyond (NASDAQ:BBBY),
which is due to report earnings on Wednesday after the close of
trading, is on the "watch" list.


DEBIT STRADDLES

Stock   Pick   Last   Exp.   Long  Long  Initial   Max     Play
Symbol  Price  Price  Month  Call  Put    Debit   Value   Status

GLBC    13.86  20.68   APR    15    12     1.80    5.50    Open?
SNP     40.74  37.17   APR    40    40     5.70    5.70    Open
CCMP    44.55  43.27   APR    45    45     5.90    5.75    Open
AMX     35.66  39.00   MAY    35    35     3.65    5.00    Open
AIG     74.28  71.72   MAY    75    75     5.60    7.80    Open?
SLB     65.13  63.47   MAY    65    65     6.75    6.50    Open
BSTE    30.63  32.42   JUL    30    30     6.00    6.20    Open
MKSI    23.10  23.59   JUL    22    22     4.70    4.50    Open

Global Crossing (NASDAQ:GLBC) "gapped" higher at the open on the
first day after the play was offered, however traders who paid a
slightly larger price to enter the straddle were rewarded with an
awesome short-term gain.  Prices for the new positions in American
International (NYSE:AIG) and Schlumberger (NYSE:SLB), as well as
any potential gains (max. value) for existing straddles, will not
be accurate this month as I did not monitor the portfolio during
my recent absence from the market.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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 - 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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CFC - Countrywide Financial  $95.90  *** Next Leg Up? ***

Countrywide Financial (NYSE:CFC), formerly Countrywide Credit
Industries, is a holding company that originates, purchases,
sells and services mortgage loans through its major subsidiary,
Countrywide Home Loans.  The company's mortgages are principally
prime credit first-lien mortgage loans secured by single one- to
four-family residences (prime credit first mortgages).  The firm
also offers home equity loans and sub-prime credit loans.  CFC,
through its other wholly owned subsidiaries, offers products and
services that are largely complementary to its mortgage banking
business, including lender-placed mortgage insurance, insurance
brokerage, mortgage-backed securities brokerage and underwriting,
brokerage of bulk servicing transactions, loan processing and
servicing in foreign countries, and retail banking.  The company
conducts its business through four segments: Insurance Segment,
Capital Markets Segment, Global Segment and Banking Segment.

CFC - Countrywide Financial  $95.90

PLAY (less conservative - bullish/credit spread):

BUY  PUT  APR-85.00  CFC-PQ  OI=1660  ASK=$0.40
SELL PUT  APR-90.00  CFC-PR  OI=3130  BID=$0.90
INITIAL NET-CREDIT TARGET=$0.55-$0.60
POTENTIAL PROFIT(max)=12% B/E=$89.45


__________________________________________________________________

KBH - KB Home  $80.80  *** Strong Sector! ***

KB Home (NYSE:KBH) is a homebuilder that has domestic operations
in Arizona, California, Colorado, Florida, Nevada, New Mexico and
Texas, and, through a majority owned subsidiary, international
operations in France.  KB Home builds homes that cater primarily to
first-time and first move-up homebuyers, generally in medium-sized
developments close to major metropolitan areas.  Kaufman & Broad
S.A., KB Home's majority-owned subsidiary, builds single-family
homes, high-density residential properties such as condominium
complexes and commercial projects in France.  KB Home also provides
mortgage-banking services to domestic homebuyers through its wholly
owned subsidiary, KB Home Mortgage Company.

KBH - KB Home  $80.80

PLAY (conservative - bullish/credit spread):

BUY  PUT  APR-70.00  KBH-PN  OI=3176  ASK=$0.25
SELL PUT  APR-75.00  KBH-PO  OI=2456  BID=$0.60
INITIAL NET-CREDIT TARGET=$0.40-$0.45
POTENTIAL PROFIT(max)=8% B/E=$74.60


__________________________________________________________________

NCEN - New Century Financial  $48.56  *** Upgrade = Rally! ***

New Century Financial Corporation (NASDAQ:NCEN) is one of the
nation's largest specialty mortgage companies, providing first
and second mortgage products to borrowers nationwide through its
operating subsidiaries.  It offers mortgage products to borrowers
who generally do not satisfy the credit, documentation or other
underwriting standards prescribed by conventional mortgage lenders
and loan buyers, such as the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation.  New Century is
committed to serving the communities in which it operates with
fair and responsible lending practices.

NCEN - New Century Financial  $48.56

PLAY (conservative - bullish/credit spread):

BUY  PUT  APR-40.00  URE-PH  OI=0     ASK=$0.25
SELL PUT  APR-45.00  URE-PI  OI=4136  BID=$0.65
INITIAL NET-CREDIT TARGET=$0.45-$0.50
POTENTIAL PROFIT(max)=9% B/E=$44.55



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CCMP - Cabot Microelectronics  $42.13  *** Downtrend Resumes? ***

Cabot Microelectronics (NASDAQ:CCMP) is a global supplier of high
performance polishing slurries used in the manufacture of advanced
integrated circuit (IC) devices, within a process called chemical
mechanical planarization (CMP).  CMP is a polishing process used
by IC device manufacturers to planarize or flatten many of the
multiple layers of material that are built upon silicon wafers
and necessary in the production of advanced ICs.  Planarization is
a polishing process that levels, smoothes, and removes the excess
material from the surfaces of these layers.  CMP slurries are
liquid formulations that facilitate and enhance this polishing
process and generally contain engineered abrasives and proprietary
chemicals.  CMP enables IC device manufacturers to produce smaller,
faster and more complex IC devices with fewer defects.

CCMP - Cabot Microelectronics  $42.13

PLAY (conservative - bearish/credit spread):

BUY  CALL  APR-50.00  UKR-DJ  OI=1327  ASK=$0.10
SELL CALL  APR-45.00  UKR-DI  OI=1676  BID=$0.50
INITIAL NET-CREDIT TARGET=$0.45-$0.55
POTENTIAL PROFIT(max)=9% B/E=$45.45


__________________________________________________________________

XLNX - Xilinx  $37.76  *** Consolidation In Progress? ***

Xilinx (NASDAQ:XLNX) designs, develops and markets complete
programmable logic solutions, including advanced integrated
circuits, software design tools, predefined system functions
delivered as intellectual property cores, design services,
customer training, field engineering and technical support.
The programmable logic devices include field programmable gate
arrays and complex programmable logic devices.  These devices
are standard products that its customers program to perform
desired logic functions.  Its products are designed to provide
high integration and quick time-to-market for electronic
equipment manufacturers primarily in the telecommunications,
networking, computing, industrial and consumer markets.

XLNX - Xilinx  $37.76

PLAY (conservative - bearish/credit spread):

BUY  CALL  APR-42.50  XLQ-DS  OI=2556  ASK=$0.15
SELL CALL  APR-40.00  XLQ-DH  OI=5001  BID=$0.40
INITIAL NET-CREDIT TARGET=$0.25-$0.35
POTENTIAL PROFIT(max)=11% B/E=$40.25



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
STRADDLES AND STRANGLES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Based on analysis of the historical option pricing and technical
background, these positions meet the fundamental criteria for
favorable volatility-based plays.

__________________________________________________________________

No straddles or strangles today...

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SEE DISCLAIMER - SECTION 1

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


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

AV Equipment, Defense, Refiners and Make up
___________________________________________________________________

How to use this watch list:
  Readers can use the candidates below as a springboard for their
  own research.  Many are in the process of breaking support or
  resistance or in the process of starting new trends or
  extending old ones.  With your own due diligence these could be
  strong potential plays.
___________________________________________________________________


Harman Intl - HAR - close: 79.60 change: +1.79

WHAT TO WATCH: Is it time to go long HAR again?  After a powerful
run last year to the $80 level, which it hit in January 2004, the
stock has been consolidating its gains every since.  Now the
stock looks poised for another move higher on a breakout above
the $80-81 levels.  The rally this week has already produced a
triple-top breakout buy signal on its P&F chart and points to a
$90 price target.  This is certainly one to keep on the watch
list.

Chart=


---

General Dynamic - GD - close: 89.33 change: +1.55

WHAT TO WATCH: The DFI defense sector has been on the move higher
lately boosted by a rebound in shares of Boeing (BA).  Now GD is
getting in on the rebound act and is about to challenge
resistance at the $90.00 mark and its 50-dma near $91.33.  GD's
technicals are certainly bullish and the buy signal on its MACD
is only four days old.  Once over the $90 mark traders can target
a move to the highs near $96.50.

Chart=


---

Valero Energy - VLO - close: 59.96 change: +1.16

WHAT TO WATCH: It would appear the mid-March profit taking is
over and VLO is charging ahead with a new set of higher lows as
traders bought the dip to its 40-dma.  The rally toward the $60
level is giving traders a chance to use a trigger above round-
number resistance before opening plays.  We like the above
average volume during the last two sessions and its MACD is about
to produce a new buy signal.  Keep in mind that VLO is one of the
few oil refiners in the U.S. and it should be hitting its busy
season as it prepares for the summer-drive time.  We would target
a move to $65.00.

Chart=


---

Avon Products - AVP - close: 75.87 change: +0.50

WHAT TO WATCH: There is definitely no weakness or profit taking
in AVP.  The stock gapped higher last week after issuing an
upside earnings pre-announcement.  Since then brokers have been
upgrading or reiterating their positive outlooks.  One has raised
its price target to $86 another to $94.  The stock is overbought
but it hasn't traded under the $73.50 mark in five days and held
the $74.30 level for the last four.  Consider a trigger over $76
and a tight stop loss.

Chart=



-----------------------------------
RADAR SCREEN - more stocks to watch
-----------------------------------

NOC $98.42 +0.77 - Much like GD traders can also follow shares of
Northrup Gruman (NOC), which has produced a similar bottoming
pattern and is curling higher. Bulls might want to consider new
positions in NOC on a move above the $100 mark.

LM $92.78 +1.32 - Legg Mason has rebounded back above the $90
mark and its simple 50-dma.  We like the MACD's fresh buy signal
today but the stock has resistance near $95.00.

CBH $65.88 +0.60 - The relative strength in this regional bank is
pretty impressive.  Today's move is a new closing high and its
MACD is about to produce another buy signal.

TDS $70.87 +1.37 - This telecom play has turned in a strong
bounce from its 100-dma and just cleared resistance at $70.00 and
its 50-dma.  This looks like a bullish entry for a move to the
$75 level.

DQE $19.50 +0.23 - This isn't the fastest moving stock but has
certainly been a consistent one.  Is it time to buy the bounce?


*******************
FREE TRIAL READERS
*******************

If you like the results you have been receiving we
would welcome you as a permanent subscriber.

The monthly subscription price is $49.95. The quarterly
price is $129.95 which is $20 off the monthly rate.

We would like to have you as a subscriber. You may
subscribe at any time but your subscription will not
start until your free trial is over.

To subscribe you may go to our website at

www.OptionInvestor.com

and click on "subscribe" to use our secure credit
card server or you may simply send an email to

 "Contact Support"

with your credit card information,(number, exp date, name)
or you may call us at 303-797-0200 and give us the
information over the phone.

You may also fax the information to: 303-797-1333


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support



DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives