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Daily Newsletter, Sunday, 04/11/2004

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The Option Investor Newsletter                   Sunday 04-11-2004
Copyright 2004, All rights reserved.                        1 of 5
Redistribution in any form strictly prohibited.

Entire newsletter best viewed in COURIER 10 font for alignment

In Section One:

Wrap: Yahoo!
Futures Market: See Note
Index Trader Wrap: Home on the Range
Index Trader Wrap: A week of rest
Editor's Plays: Heard the News?
Market Sentiment: Markets Pause For Easter
Ask the Analyst: See Note
Coming Events: Earnings, Splits, Economic Events


Posted online for subscribers at http://www.OptionInvestor.com
******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
       WE 04-09        WE 04-02        WE 03-26        WE 03-19
DOW    10442.03 - 28.56 10470.6 +257.62 10212.9 + 26.37 - 53.48
Nasdaq  2052.86 -  4.31 2057.17 + 97.15 1960.02 + 19.55 - 44.26
S&P-100  556.12 -  1.98  558.10 + 14.58  543.52 -  0.16 -  6.24
S&P-500 1139.33 -  2.48 1141.81 + 33.75 1108.06 -  1.68 - 10.83
W5000  11166.06 - 36.36 11202.4 +362.24 10840.2 - 12.80 -115.20
SOX      511.78 -  2.08  513.86 + 34.61  479.25 + 15.90 - 21.75
RUT      597.88 -  5.57  603.45 + 30.53  572.92 +  2.18 - 12.10
TRAN    2926.88 - 39.78 2966.66 +130.76 2835.90 + 49.07 - 76.26
VIX       16.34 +   .69   15.64 -  1.69   17.33 -  1.82 +  0.85
VXO       15.83 +   .27   15.56 -  1.65   17.21 -  1.95 +  0.44
VXN       21.38 +   .03   21.35 -  1.69   23.04 -  2.95 +  0.69
TRIN       0.82            0.52            0.89            1.93
Put/Call   0.74            0.68            0.77            1.03
******************************************************************

Yahoo!
by Jim Brown

The earnings blowout by Yahoo had traders in Internet stocks
yelling Yahoo! on Friday but they we about the only traders
with any real excitement. YHOO gained +7.86 to $56.20 and a
three year high. Unfortunately the broader markets were down
across the board on weekend event fears. Only the Nasdaq and
the SOX were able to close in positive territory thanks
mostly to YHOO and Dell.

Dow Chart - Daily


Nasdaq Chart - Daily


S&P Chart - Daily



Thursday morning opened with a bang and the S&P rallied
right to the 1150 resistance level on strong earnings. The
gap open failed to hold once shorts covered on the stocks
impacted and the trend for the day immediately turned down.
It was not due to a lack of positive earnings news but more
of an abundance of terror news. We had hostages in Iraq,
bomb scares in Paris, refineries exploding in the US and
the 9/11 testimony to provide unrest before the holidays.

The economic news in the US was good with Chain Store Sales
for March rising +7.0% and stretching the string of months
over 6% to three. This was above expectations and suggests
the consumer is not as concerned about conditions as the
February sentiment reports suggested. Gains were broad
based and were up +12.6% year over year. 61% of retailers
beat expectations. Forecasters did predict a drop to only
+5.5% growth in April due to the early Easter this year.
Only +5.5% growth? Retailers would gladly take it.

Jobless claims fell to 328,000 and the lowest level since
Jan-2001. This is very good news and suggests employment
is increasing and the April jobs report will show strong
gains. This is one of those good news-bad news numbers.
If we do see back to back blowout Jobs numbers the Fed
would feel it necessary to start the rate hike process.

More good news came from the Manufacturers Alliance Survey
which set a new record high at 78 for 2004-Q1. The majority
of the components rose with the exception of the investment
index which fell to 69 from 81. The MAPI is showing strong
correspondence to the ISM and the ISM has been above 60 for
the last five months. This is the longest string since 1983.

The Wholesale Trade numbers showed a big jump to +1.3%
compared to estimates of only +0.5%. The inventory
component jumped +1.2% and was twice the level expected
by analysts. Wholesale sales also jumped +1.3%. Despite
this bounce in sales the inventory to sale ratio remained
at record low levels of 1.17. This is very positive as
we move forward and suggests we will see even further
gains in manufacturing to keep up with the pace of sales.
This is however old data for the February period but the
trend was definitely up and we saw nothing to change the
trend in March.

The good economic news is being helped by positive earnings
and today was a good preview of next week. Yahoo blew out
estimates Thursday night and jumped to a three year high.
The Internet business is good and the survivors are doing
very well. All the current players soared on the news but
it was likely more of a Yahoo specific event. As Yahoo
expands its reach with things like its acquisition of
Monster.com, Inktomi, Overture and others it is becoming
a broad based cash generator and not just an Internet
portal. While ASKJ, CNET, INSP, FWHT, LOOK, AQNT, DCLK
and SINA may have jumped to new levels on the news none
of them have the breadth and depth of Yahoo. YHOO also
announced a 2:1 split.

Adding to the positive outlook for techs was the guidance
upgrade from Dell. The company raised its guidance by
+$200 million for the quarter and increased a planned
stock buyback. While that was positive news the real
excitement came from Dell's longer term comments. They
said shipments of PCs and other Dell products were growing
so quickly they would likely exceed their $60 billion sales
goal for 2007. Last year they booked only $41 billion. This
is strong statements from the computer manufacturer. They
also said the long awaited IT replacement cycle had begun
and corporations were finally replacing aging systems.
Dell's CFO said they were seeing better than expected
demand and they were hitting targets across every business
category. He expects revenue to increase +25% in Q1. Dell
rose to $35.60 on the news and close to a three month high.

The very optimistic outlook from Dell helped power the SOX
to a gain for the day despite the negative market action.
Intel rose strongly at the open but closed negative because
of lingering fears that the STX notebook warning this week
was going to impact Intel's earnings next week. Also hitting
Intel was news that Japan's FTC raided three Intel offices
in an antitrust probe. AMD has complained in Europe and
Asia that Intel has been competing unfairly by selling
chips cheaper to push AMD out of the market. Antitrust
rules overseas are seen as stricter than in the US and
this is an example of the trouble AMD has caused. AMD
also claims Intel threatened to halt shipments of chips
to manufacturers that also sold computers made with AMD
chips.

Another major earnings release on Thursday came from GE
which reported $3.2 billion in profit for the quarter.
This amazing performance was inline with expectations and
GE said nine of its 11 businesses had double-digit growth.
Among its 11 divisions, profit rose 53 percent in its
equipment and other services operation, 40 percent in
advanced materials and 20 percent in its infrastructure
business. Profits fell 28 percent in the energy division
and 20 percent in insurance. They are continuing to grow
with almost monthly acquisitions. They recently completed
their acquisition of Amersham and have deals in the works
to acquire INVN and Vivendi among others. Overall Jeff
Immelt said business was booming with the broadest growth
since early 2000. He said industrial orders had jumped
+20% and sales in its growth business had jumped +29%
for the quarter. Sounds like a pretty strong projection
of the current economy.

What all of this means for next week is that earnings are
going to be strong for most companies. There are some weak
spots like Seagate and SunMicro but overall the economy
and earnings appear to be growing strongly. The question
is will this translate into higher stock prices. The rally
over the last two weeks has been on expectations of strong
earnings. How much higher can it go? Will strong earnings
from +300 companies next week push us higher in the face
of continued terror threats and rising violence in Iraq
or will traders call it a day, pocket profits and head to
the safety of the sidelines?

There is historical evidence that in presidential election
years markets tend to decline after the April earnings
peak until after the Democratic convention. That event
is in late July. I think broad historical trends are
just that, broadly historical and may not be specific
to any single election year. The trend comes from the
non-incumbent party using the economy as a club against
the incumbent party and the negative sentiment created
depresses the markets. Traders hate uncertainty and there
will be uncertainty until the convention is over. Once
all the issues have been dissected, the VP candidate
named and the final race begins investors will decide
how to place their bets. The other convention begins
August 30th but is not deemed as important to traders.
In theory the attacking party has to storm the castle
with every weapon it can find and the incumbent party
defends from a position of strength.

This week was clearly a profit-taking week. The markets
opened strong and concluded a two week rally on Tuesday.
The flurry of earnings warnings headlined by NOK/STX put
a cloud on techs and the sudden increase in violence in
Iraq added rain to that cloud. Reports of bomb threats
and the 9/11 inquisition focused traders thoughts on the
long weekend event risk. It could not have been scripted
any better. The markets needed to rest after a +563 point
Dow romp. They used the multiple excuses above to take
profits and reposition themselves for the coming week. In
my opinion next week will start off with a bang assuming
we have no explosions over the weekend.

The Dow is very well positioned after the -130 point two
day drop and the Nasdaq is in even better shape only -23
points off the highs for the week. Even better off is the
Russell, which closed only -2 points from resistance at
600. The selling on Friday was light as was the volume
and there was buying at the close as bargain hunters
jumped in front of an expected Monday bounce. I am sure
there were plenty of shorts covering as well but that
also is bullish. It means they were also expecting a
Monday bounce.

If we do bounce next week there is still strong resistance
in the Dow 10600-10650 range and it will be tough to break.
The Nasdaq has strong resistance at 2090-2100. Both indexes
have room to run but they will quickly run into a steep
uphill climb. While I personally think we will start the
week positive it will be much more difficult to end the
week at a higher level.

Should we move down on Monday the Dow has two retracement
levels in the 10300-10350 range that should hold any
selling. The Nasdaq has a little more risk with a large
unfilled gap from April 2nd at 2013 and no strong support
until 1980-2000. This would not be a major step backwards
for either index but it would be a major black eye for
April earnings sentiment and a potential resumption of
the January down trend.

For the week to be successful and for the April earnings
run to be successful we must move higher on Monday/Tuesday.
If we do not move higher early then the premise for any
remaining April gains will be seriously in question. The
challenge remains in the expectations. If the coming
earnings reports contain guidance similar to Dell and YHOO
then a case could be built for another quarter of strong
growth. If these reports end up with a proliferation of
only inline guidance then we could be in trouble. We have
discussed before that comparisons for the rest of the year
will become progressively harder.

For Monday I would gladly join in any opening rally and
ride it as far as it goes. I would also not hesitate to
jump off the train should the momentum appear to slow as
we near resistance. Despite the strong earnings potential
sentiment is weakening. Whether from terror news, Iraq
news, election concerns or just simply from a tired year
long tech rally we don't know. We really should not care.
Many investors have gone bust trading their beliefs instead
of the market. Enjoy any rally we get next week but keep
your stops in place in case it fails.

Enter Very Passively, Exit Very Aggressively!

Jim Brown


**************
FUTURES MARKET
**************

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

Home on the Range
By Leigh Stevens
lstevens@OptionInvestor.com

THE BOTTOM LINE –
The range we're in is not the one where the deer and the antelope
play, but a broad price range that the market indices may be
locked in for a while. We've seen that the market can rebound
sharply once stocks get cheaper, but it remains to be seen what
will drive this market to above the highs already made in '04 -
at least soon.

Better earnings?  Well, they're coming in at least in the early
going for Q1 reports, but may be priced in. An economy in full
swing? - a fall in the jobless rate and a boost in retail sales
were in the news Thursday, but this also raises the specter of
the Fed raising rates. Ah, the ever vigilant worried market!  A
more pacified Iraq would help no doubt. The market doesn't like
uncertainty and the Middle East is full of surprises.

Technically, the S&P - and these stocks are where the biggest
money is going right now - has not broken out of a downtrend
channel.  To achieve an upside break out, a move is needed to
above 1150 in the S&P 500, 560 in the 100 (OEX) and 10550-10600
in the Dow 30.  In terms of the Nasdaq Composite (COMPX),
resistance begins at 2080. A close or better, two, above this
level, suggests a possible re-test of the prior (Jan) 2150 peak.

Taking on new Index call or put positions looks like a roll of
the dice and favors only chance odds. If you bought index calls
anywhere near recent lows you have a relatively easy decision -
exit with at least some of the gains as the market looks like it
could churn around or fall back further off Thursday's high in
the coming week.

THURSDAY END-OF-WEEK TRADING ACTIVITY

Profit taking set in NYSE stocks but the tech-heavy Nasdaq
managed to eake out gains.

The S&P 500 (SPX) was off 1% 1,139.33 on the close on Thursday,
down 3 tenths of per cent on the week, as was the Dow 30
Industrials.

The Nasdaq Composite (COMPX) up 2.62 points on the day to close
at 2,052.86, but down from its intraday high of 2,075.33. The
Composite garnered support from the chip stocks, as the SOX
semiconductor index ran up nearly a percent. The Internet stock
sector was firm under the influence of Yahoo's Q1 earnings, which
blew away expectations.

EARNINGS EXCITEMENT -
A higher opening came on the back of some good to great earnings
in several bellwether stocks.

In the Dow, General Electric (GE) had released earnings,
indicating that it earned 3.2 billion dollars (32 cents per
share), which was in-line with estimates.  GE said that 9 of its
11 business units had earnings growth of 10% or more in Q1. GE
expects it overall earnings to grow 10% or more in 2005.

In the not so exciting category, Dow stock Alcoa (AA) fell over
2%, after being down 5% on Wed., based on fallout from its
announced Q1 earnings, which were under consensus estimates.

ExxonMobil (MOB) rose over a percent in its price as crude oil
continued to rise going into the long weekend and with Iraqi
unrest in full swing.

Yahoo! Inc. (YHOO), a mighty influence in the Nasdaq, had gained
heavily in U.S. after hours trade and in Europe ahead of the U.S.
opening, where I was watching it, it beat expectations on it's
earnings and also announced a 2 for 1 stock split. Ah, nothing
gets the average small investor more excited than getting two for
the price of one!  Of course, the value is supposed to a half
also, but it never seems to quite work out like this on this
glamour stocks and tech darlings.

YHOO reached a 52-week high of $56.24 after its Q1 earnings,
announced after hours on Wednesday, was well above expectations.
It's Q1 sales grew 168%.  The stock closed up $7.86, or 16.3% at
$56.21.

Another tech darling, Dell Computer (DELL), was actively traded
ahead of the Thursday opening. DELL climbed 81 cents, or 2.3%, to
$35.63 after the computer maker raised its Q1 revenue forecast to
$11.4 billion due to increasing sales in overseas markets. Dell
also repeated its earnings estimate of 28 cents a share at its
annual analyst day meeting in Austin, Texas.

RETAIL SALES - There were a batch of March same-store sales
reports and were quite robust.  The stocks in this sector had
been running up actively in recent weeks and were off on profit
taking.

Wal-Mart (WMT) indicated a 6% rise in same-store sales in March,
against a monthly increase of 0.7 percent a year earlier.
For April, WMT said it is expecting U.S. same-store sales to rise
in the 4-6% range. The stock was down $1.29, tp $56.69.

The Gap (GPS)had a 8% rise in March same-store sales, with sales
at its Banana Republic chain jumping a whooping 25%. GPS was down
52 cents to close at $21.81.

ECONOMIC NEWS -
First-time unemployment insurance claims fell an unexpected
14,000 in the week ended April 3 - to 328,000 (from 342,000),
which was the lowest in some 3 years.  This drop in claims was
beyond Street forecasts for a decline of maybe 2,000.  The Labor
Department's 4-week moving average of new claims, fell 3,250 last
week to 336,750, the
lowest in over 3 years.

Wholesale inventories rose 1.2% in February, while sales rose
1.3%.  The inventory gain was well above a forecasted 0.3%.  The
inventory build up as compared to strong sales, suggested an
attempt to build inventories due to demand being strong.  The
inventory/sales ratio fell to a record low of 1.17 months.

OTHER MARKETS –
Treasury bonds ended lower on the job data, with the benchmark
10-year Note down 7/32 to 98 14/32 in pre-holiday shortened
trade. The 10-year yield edged up to 4.19%, versus 4.15% at the
Wednesday close.

The dollar was higher.  The Euro was down 0.7% against the
greenback at $1.2086 while the British pound fell 0.3% to
$1.8335. Versus the Yen, the dollar was up 1% to close at 106.28.

MY INDEX OUTLOOKS –

S&P 500 Index (SPX) – Daily chart:
I am usually bearish on price patterns that have a series of
highs that form such that a rounding top pattern is traced out,
as I've done on the chart below. To break out above this bearish
pattern such as at resistance implied at the red arrow, a move
above 1150 in the S&P 500 (SPX) is needed. A close above 1160 and
would suggest a new up leg.

The rounding top and the near-term overbought condition in the
stochastic indicator suggests a put purchase based on a risk to
reward outlook - assuming an exiting stop point at 1155, downside
potential is probably back to at least 1120, if not back to the
up trendline and likely support in the low 1100 area.




S&P 500 Index (SPX) – Weekly chart:
The S&P is back in the middle of its broad uptrend channel which
has support pegged at 1100 on the downside and 1200 above.  I
would not be surprised to see one more decline, maybe more of a
slow sideways to lower drift, perhaps back to the lower trend
channel boundary.

I've had the feeling that the next sustained rally would come
after a more fully oversold reading on the weekly oscillators
(RSI & Stochastics)- this is hunch more than something that
screams out at me.




I know one thing - as my dear ol pappy told me, "Son, don't bet
the ranch when you're in the middle of the stream" - or, in the
middle of an expected range. At least for major bet-the-ranch
kind of positions.

S&P 100 Index (OEX) – Daily chart:
There was a prior line of support around 563 that is proving to
be at least minor resistance - support (once broken) "becomes"
resistance (later on).  A close above 563 in the S&P 100 (OEX)
would overcome this selling pressure, in which case the key area
becomes 570-572 to watch.  If OEX closes above 572 and can stay
above this level, I measure next upside potential to 590.

Likely support is harder to figure: 549-550 is near support, but
below that, it's just where it stops going down.  The cluster of
prior lows around 532-533 is an obvious key area however. Better
to go to the hourly chart for more on this.




S&P 100 Index (OEX) – Hourly chart:
What is of interest in the hourly pattern is the fact that OEX is
still within a downtrend channel and doesn't break out of this
unless there is a decisive penetration of 560-561. We would be
looking at 569-570 above that as key resistance - as implied by
the prior cluster of hourly highs.  The reason that the study of
price history "works" to predict future activity is that this is
simply the visual record of where sellers came in before. History
repeats itself often enough to make some expected rules out of it
all.  Stay tuned.




If the 560 area is key resistance in the OEX, with 570 as major
technical resistance, then 530 is expected major support, at the
low end of the downtrend channel.

Based on the way the market acted this past week, it seems there
should be enough buying interest under 550 to keep OEX from
getting back down much under this area - but if prices did drop
much below 550 for some reason, those prior lows around 533 and
the low end of the channel (530) shown above is where I would
expect a stop to a fall.

Dow Industrials (INDU) Daily:
The Dow chart looks much like the broader S&P - the rounding top
pattern, move back to prior lows plus a return to the prior
uptrend line suggest key technical resistance coming in at
10,555-10,600 in the Dow Industrials.

10,300 is near support, then the 10,200 area - a close under here
would be a break of a trendline that goes back to a year ago low.
10,000 is the mother of all support however.  Absent a weekly
close under 10,000 I remain bullish on the longer-term trend.




Nasdaq 100 (NDX) Index  – Daily:
The NDX index chart has some obvious features or aspects to
suggest how to trade it.  1392-1400 is a major support area and
place to buy Index calls.  Near-term what I'm suggesting to watch
is the gap area at 1458-1470, the little "break" in prices when
this Index jumped to the upside on a higher opening last week.
As gaps do fairly often get "filled in", 1460 is suggested as an
area to watch as a possible buy point for calls.

[For more on chart gaps, see my past week's Trader's Corner
article at -
http://www.OptionInvestor.com/traderscorner/tc_040604_2.asp

The red arrow at the recent peak around 1500 came at the prior up
trendline and offers an added bearish technical note. If I had
wanted to go into the long weekend with one position or the
other, I would rather have gone home short (in puts) than long
(in calls).

I'm not excited about further NDX potential unless there is a
daily close or two above 1500, in which case we could see the Nas
100 index return to the area of its prior high in the 1550 area.
Any sign of a top in this area suggests a put purchase based on a
double top pattern.




Nasdaq 100 tracking Stock (AMEX:QQQ)– Daily:
The gap area where prices jumped higher from one day to the next
last week, suggest minor support on pullbacks at 36.25-36.50.
Next lower support, as noted at the green (up) arrow is at 35.50,
at the previously broken down trendline. I would be a buyer of
the stock in this area, with an exit point if there was a close
under the 200-day moving average, currently intersecting at
34.65.

I peg resistance at the level dashed lines - at 37.70, then 38.70.
I would turn seller in the 38.70-39 area, not only to 38.70 exit
long positions but to short the stock and buy puts.



Nasdaq 100 tracking Stock (AMEX:QQQ)– Hourly:
The hourly chart shows a definite bearish aspect as tops have
formed just above 37, at around 37.15, multiple times. The last
hourly top was accompanied by a bearish divergence on the two
stochastic models (length 5 and 21) - if I had had to be either
long or short ahead of the 3-day market hiatus, I would have been
short based on the hourly pattern.  My downside objective is to
the 35.50 area, possibly to 34.50.




FINAL NOTE:
Please e-mail me on question(s) related to trading/technical
analysis tools of interest.

Good Trading Success!


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

A week of rest

Some mixed reactions to the first spat of quarterly earnings,
some resurgence of resistance toward the coalition forces in
Iraq, and some cautionary trade into the three-day weekend found
the major indices finishing fractionally lower this week, and
seeing a mixed to fractionally lower trade on Thursday.

Market Snapshot / Internals - 04/08/04 Close



The major indices jumped at the open, but then trended lower for
the rest of the day on relatively light volume, as traders seemed
a little more focused on protecting some gains into an extended
weekend.

Pivot Analysis Matrix



Thursday's high and low for both the DIA and SPY was this week's
range for both of these trackers, so you're not seeing double
when looking at the DAILY/WEEKLY matrix levels for Monday.
Tentative resistance correlation are found in the NDX/QQQ and
SOX.X at the WEEKLY/DAILY Pivot, where more meaningful resistance
would be higher at the MONTHLY R1s, where both the NDX/QQQ opened
for trade Thursday's morning.

Internet HOLDRs (AMEX:HHH) - Weekly Intervals



Last weekend, it may have been economists' putting in some extra
hours at the office and fine tuning their models to compensate
for more robust job additions.  This weekend it may be Internet
analysts rerunning some numbers after Yahoo! Inc. (NASDAQ:YHOO)
$56.21 +16.25% blew past analysts' estimates.  The news sent the
Internet HOLDRs (AMEX:HHH) $55.77 +5.74% surging to a 3-year
high.

The Internet Infrastructure HOLDRs (AMEX:IIH) $4.18 +2.70% was
the second-biggest percentage gainer among the ETFs (Exchange
Traded Funds).

Starting next week, the Dow Industrials (INDU) 10,442.03 -0.36%
will begin trading with its three new additions.

Dow Industrials (INDU) - Components starting next week



This is how the "new" price weighted Dow Industrials will look
starting next week.

In he age of wireless communications, Verizon (NYSE:VZ) $37.31
gets the nod over AT&T (NYSE:T), which sold its wireless
division, while American International Group (NYSE:AIG) $76.27 is
a refreshing addition, representing the insurance segment of the
U.S. economy.  With an aging population, Pfizer (NYSE:PFE) $35.60
complements Merck (NYSE:MRK) $44.63.  With two drug components in
the Dow Industrials, this year's presidential election results
could loom large for both components, where healthcare and drug
costs are a focal point.  Eastman Kodak (NYSE:EK) $25.44 is
transitioning toward digital products, some say a little too
late, where the digital age may have simply been a determiner for
International Paper (NYSE:IP) $42.01 -0.91% being removed.

Personally, I'll miss T, EK and IP, but as the saying goes....
"times keep'a chang'n."

Dow Industrials (INDU) Chart - Daily Intervals



It was a marginally lower trade for the major indices this week,
where Thursday's trade finds a close below last Friday's nonfarm
payroll close.  I thought today's question and answer coverage of
the White House's National Security Adviser Condoleezza Rice by
the Nine-Eleven commission helped cast a cloud over much of
today's upbeat market news, where focus of what the current
administration knew, or didn't know, and what the administration
"should have done" prior to 09/11, was a bit unnerving ahead of
the 3-day weekend.

A jump in crude oil prices on increasing upheaval in Iraq may
have also dampened bullish enthusiasm in Thursday's trade, where
a trade at $36.25 on this contract has the $0.25 box size point
and figure chart generating a double-top buy signal, negating the
prior bearish vertical count of $31.75, and now hinting at a
bullish price objective of $44.25.

June Light, Sweet Crude Oil futures (cl04m) - Daily Intervals



I should have changed my time intervals to 720 instead of Daily,
as today's trade for June crude saw a session trade from $35.59
to $36.65 (not $34.23-$36.65 as displayed in data box), but the
last two sessions has seen a sharp rebound in oil prices, where
the escalation of war in Iraq has been building again.

AMEX Gold Bugs Index ($HUI.X) - Daily Intervals



I keep waiting for gold stocks to show some life above the 243
level, and one would think that with some of the geopolitical
events taking place, and higher oil prices being somewhat
inflationary, this group would catch a bullish bid.  I'm not sure
but what higher energy prices may be negatively impacting some of
the gold miners, where a recent contract high in June gold finds
the $HUI.X well off its highs.

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



There may well have been some decisions made prior to today's
open to continue to take some profits into the 3-day weekend,
which of late, traders have been a little cautious on thoughts of
potential terrorist strikes.  The selling was very calm and
methodical, and didn't depict a "that was the good news, now
let'em have it."

That darned 1,125 level shows up again, this time as WEEKLY S2,
which is correlative with the MONTHLY Pivot, and with a rather
narrow range of trade having been found this week, I would think
the WEEKLY S2-R2 range could be traded.

I placed a downward trend on the SPX, mainly because the SPX has
closed back below last Friday's close where the nonfarm payrolls
offered a bullish surprise, where follow through bullishness on
Monday now marks a relative high.  Technology stocks have
comprised the bulk of the gains for the SPX, as financials,
especially the banks trade just off their March lows.

S&P Banks Index (BIX.X) - Daily Intervals



I wanted to quickly review a chart of the S&P Bank Index (BIX.X),
where tonight I'm making note that the BIX.X is sitting right
near the base-end of rising regression from its March 2003 lows,
where at this point, I'd have to say the "jury is still out" as
to what impact Friday's nonfarm payroll data, along with the jump
in Treasury YIELDS are having on this group.

In Thursday morning's 09:00 AM EST Update, I noted that
Commercial Federal (NYSE:CFB) $26.92 -3.47% warned on quarterly
earnings, saying its mortgage lending business had slowed.  With
regional banks comprising the SPX/OEX, I would view a break much
below WEEKLY S2 a potential negative, or at least a heavier
weight for the SPX/OEX.

Still, traders and investors noted that insurer Allstate
(NYSE:ALL) $47.85 +4.36%, which surged to a 5-year high today,
was a stock we touched on in Monday's Index Trader Wrap, when we
quickly reviewed some of the OEX components.

While the bankers/insurance trade could end up being a wash,
where insurance stocks take up slack for the banks, we'll want to
still keep a watch on Treasury YIELDS (10-year in our pivot
matrix), which edged up fractionally from last Friday's close.

Tonight I want to make the observation of trend in the above
BIX.X chart, but also that downward trend in the 10-year YIELD
($TNX.X).

10-year YIELD ($TNX.X) Chart - Daily Intervals



Broader equities have not responded negatively to the recent rise
in Treasury YIELDs ($TNX.X), and I would still think gradual rise
is acceptable near-term as the economy's growth can offset higher
consumer borrowing rates.  What would trigger a negative reaction
toward stocks is a sharp unwinding in the bond market, where
YIELDS rise quickly.

NASDAQ-100 Tracker (QQQ) - Daily Intervals



With the Internet HOLDRs breaking out to knew highs on Yahoo's!
(YHOO) earnings, I was a bit surprised the QQQ didn't make more
of a "euphoric" move, or trade above Monday's highs.  I still
think there's a better than 60/40 chance that the QQQ might see a
backfill of its nonfarm payroll gap higher, which would find
WEEKLY S2 in play.

Many analysts had little negative to say regarding Dell
Computer's (NASDAQ:DELL) $35.63 +2.32% upbeat guidance, where for
the first time in a long time, Dell sounded more upbeat in
regards to corporate IT spending really starting to show more
sustainable growth.

If simply eyeballing a bar chart of DELL relative to the QQQ,
DELL is approaching its January relative highs of $36 (QQQ
equivalent $37.87) and DELL's recent 52-week high was found at
$37, right where the QQQ spiked to its 52-week high and QQQ
MONTHLY R2.

Jeff Bailey


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**************
Editor's Plays
**************

Heard the News?

News Corp Ltd, headed by Rupert Murdoch and officially
headquartered in Australia will be moving to the US.
The global communications company makes 75% of its
profit in the US and is run by Murdoch out of New York.

Murdoch had kept NWS as an Australian company to avoid
capital gains taxes while he bought other companies and
sold the parts he did not want. He has decided that by
reincorporating the company in the US he will gain
access to a substantially larger investor base. Many
global investors do not have access to the Australian
market and while the stock does trade in the US as an
ADR it is not widely held. Many mutual funds and all
the index funds do not traffic in ADRs due to different
accounting standards.

By incorporating in the US and dumping the ADR status
the stock will immediately become available for inclusion
in the S&P-500 and index funds will be forced to buy it.
With a current market cap in the $50 billion range they
would have to buy a lot of it. One analyst estimated
that by just moving to the US the stock could gain $10B
in market cap even before it was eligible for the S&P.
To be eligible the stock must trade in the US for one
year.

News Corp owns all or part of 20th Century Fox, Fox
News, BSkyB, DirecTV and scores of newspapers and pay
TV stations.

Because of the time required for NWS to become part of
the S&P this has to be a leap play. NWS is currently
trading at $38.10. The January-2006 $40 call leap is
$5.10. The $45 leap $3.30.

If a trader wanted to own the stock now for $38.10 and
sell the Jan-2006 $45 leap for $3.00 the return for a
close over $45 in 2006 would be in the 35% range. It
would also lock in your gains while providing only
slightly less risk.

With the stock expected to rise +20% once it is a US
company it could rise another 20% once it is added to
the S&P. That would target something in the $55 range
before Jan-2006. That would make the return on the
$40 leap about 200%. It all requires a leap of faith
but all investing requires some faith.

It is a long-term play and we can reduce that risk over
the next 20 months by selling short term calls against
our leap. This will further reduce our risk and increase
our profit. I will continue to recommend these strategies
on a monthly basis as time passes.

Unfortunately NWS is on the top of an uptick cycle and
the announcement this week only accelerated that cycle.
I would love to wait for a pullback to something in the
$34-36 range to enter but others are likely to see the
potential and keep the price in motion.

To offset the potential for buying at the highs I am
going to suggest we stair step into this trade.

Let's try to accumulate a position of six contracts
of the NWS Jan-2006 $40 call leaps. (WLN-AH)

Since the news on Tuesday provided a bounce in the stock
lets not buy the first two contracts until we see a trade
at $37. It moved down slightly on Thursday and maybe that
is the beginning of a little short term profit taking.

For the first two contracts we will buy them with either
a trade at $37 or a trade at $38.50. That covers us against
a resumption of the uptrend on Monday.

For the next two levels we will try to wait for a pullback
to $36 initially and then the 200dma, currently $34.50.
If the stock moves higher we will deal with that when it
happens. I am counting on the summer doldrums producing
enough weakness to bring it back to the bottom of the
current uptrend channel.

Game Plan:

Buy (2) Jan-2006 $40 Calls WLN-AH
with a NWS trade at $37.00 or $38.50,
whichever occurs first.

Buy (2) Jan-2006 $40 Calls WLN-AH with a trade at $36.
Buy (2) Jan-2006 $40 Calls WLN-AH with a touch of 200dma

Once we have a position we will sell calls against
the leaps to reduce our cost.


(NWS) News Corp Chart - Daily



Chips Dipped

The Intel long play from last week was looking good as
the market rose into Tuesday but the Seagate warning on
Tuesday night and the Nokia warning Wednesday morning
put the skids on chips.

Back in early March Intel took a serious hit on news
that laptop deliveries were slowing. Laptop chips are
very high profit for Intel and a significant drop could
impact profits. This week Seagate warned that demand
for disk drives used in laptops had dropped one million
units in the first quarter. This was a -7% decline in
laptop shipments and a material problem for Intel.

The recommended April $27.50 call was $1.10 when I
recommended it last week. It closed at 60 cents on
Thursday. Based on the Seagate warning I would close
the play. The outlook for Intel is questionable.


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

Markets Pause For Easter
- J. Brown

As of last Monday the stock markets were very short-term
overbought and due for a pull back.  We got that pull back over
the last three days with relatively mild profit taking.
Thursday's weakness was completely related to the long weekend
and investor concerns that we could see a terrorist event,
especially with new fighting in Iraq and the recent string of
bomb threats in Europe.  Assuming the long Easter weekend is a
quiet one the markets feel ready to resume the rally as the
earnings parade begins again on Tuesday.

Contributing to investor optimism was the strong earnings news on
Wednesday evening.  No doubt you've heard of YHOO's impressive
numbers and 2:1 split announcement.  This launched the Internet
index to a new 2 1/2 year high and YHOO to new 3 1/2 year highs.
RIMM and DNA joined in with strong earnings news and split
announcements of their own.  Even DELL chimed in by raising their
revenue estimates.  This completely erased the dark clouds
created by Nokia's warning and Alcoa's earnings miss on Tuesday.
First Call is predicting that earnings should grow between 17-20%
so there is understandably a positive under current for stocks.
Further contributing to the positive tone was the jobless claim
numbers and news that corporate layoffs were at the lowest levels
in three years.

I'm not trying to downplay the rising tensions in Iraq.  They're
experiencing the worst fighting since the official end of the
war.  However, I believe that the U.S. army will do what it takes
to regain control of the cities in question.  The challenge to
the stock market is the perception that this has become the
quagmire it was feared to be, which will negatively impact Bush's
reelection efforts.  Fortunately with earnings season here Wall
Street should be distracted for the next few weeks with corporate
announcements and guidance.  Watch out for the "sell-the-news"
reaction we saw in January.


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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  8145
Current     : 10442

Moving Averages:
(Simple)

 10-dma: 10417
 50-dma: 10455
200-dma:  9876



S&P 500 ($SPX)

52-week High: 1163
52-week Low :  862
Current     : 1139

Moving Averages:
(Simple)

 10-dma: 1133
 50-dma: 1133
200-dma: 1063



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1018
Current     : 1485

Moving Averages:
(Simple)

 10-dma: 1465
 50-dma: 1459
200-dma: 1393



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

The VIX and VXO traded higher on Thursday as traders loaded up
on puts to protect positions over the long weekend.  The VXN
slipped lower on mild strength in tech stocks.

CBOE Market Volatility Index (VIX) = 16.26 +0.50
CBOE Mkt Volatility old VIX  (VXO) = 15.83 +0.41
Nasdaq Volatility Index (VXN)      = 21.38 -0.61

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.74        701,853       516,837
Equity Only    0.59        576,071       338,140
OEX            0.92         36,625        33,752
QQQ            3.24         14,057        45,608


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

Bullish Percent Data

           Current   Change   Status
NYSE          76.1    + 2     Bull Correction
NASDAQ-100    53.0    + 0     Bear Correction
Dow Indust.   90.0    + 7     Bear Correction
S&P 500       77.2    + 0     Bear Confirmed
S&P 100       80.0    + 1     Bull Correction


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

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


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

 5-dma: 0.90
10-dma: 0.86
21-dma: 1.18
55-dma: 1.17


Extreme readings above 1.5 are bullish, and readings below .85
are bearish.  These signals don't occur often and tend be early,
but when they do, they can signal significant market turning
points.


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

Market Internals

            -NYSE-   -NASDAQ-
Advancers     976      1427
Decliners    1794      1657

New Highs     107       132
New Lows       24        15

Up Volume    600M      876M
Down Vol.    819M      789M

Total Vol.  1437M     1682M
M = millions


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

Commitments Of Traders Report: 03/30/04

*****EDITOR'S NOTE*****
Look For New COT Data on Tuesday's Edition of the Market Sentiment!
***********************

Weekly COT report discloses positions held by small specs
and commercial traders of index futures contracts at the
Chicago Mercantile Exchange and Chicago Board of Trade. COT data
can be found at www.cftc.gov.

Small specs are the general trading public with commercials being
financial institutions. Commercials are historically on the
correct side of future trend changes while small specs tend
to be wrong.

S&P 500

Not much change in the commercial traders' positions this
past week.  Small traders turned a little less bearish.


Commercials   Long      Short      Net     % Of OI
03/09/04      418,394   433,237   (14,843)   (1.7%)
03/16/04      454,635   449,505     5,130     0.6%
03/23/04      401,456   418,732   (17,273)   (2.1%)
03/30/04      407,987   420,624   (12,673)   (1.5%)

Most bearish reading of the year: (111,956) -  3/06/02
Most bullish reading of the year:   23,977  - 12/09/03

Small Traders Long      Short      Net     % of OI
03/09/04      155,947    88,317    67,630    27.7%
03/16/04      159,054   115,023    44,031    25.3%
03/23/04      130,648    89,943    40,705    18.5%
03/30/04      130,112    81,937    48,175    22.7%

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


E-MINI S&P 500

Almost the same holds true here.  Commercial traders edged up
their short positions but not by much.  Small traders turned a
little less bullish.


Commercials   Long      Short      Net     % Of OI
03/09/04      431,623   485,268    (53,645)  ( 5.9%)
03/16/04      472,809   574,241   (101,432)  ( 9.7%)
03/23/04      268,647   294,930    (26,283)  ( 4.7%)
03/30/04      265,492   305,797    (40,305)  ( 7.1%)

Most bearish reading of the year: (354,835)  - 06/17/03
Most bullish reading of the year:  133,299   - 09/02/03

Small Traders Long      Short      Net     % of OI
03/09/04     135,233     76,558    58,675    27.7%
03/16/04     192,136     96,691    95,445    33.0%
03/23/04     131,879     59,210    72,669    38.0%
03/30/04     123,494     59,550    63,944    35.0%

Most bearish reading of the year: (77,385)  - 09/02/03
Most bullish reading of the year: 449,310   - 06/10/03


NASDAQ-100

Whoa!  Commercials turned bearish on the NASDAQ just before
it broke out over resistance.  Unless that's a typo by the COT
it will be interesting to see how that number changes next
week.  Small traders turned more bearish.  It's been a painful
week for everyone here.


Commercials   Long      Short      Net     % of OI
03/09/04       57,368     46,082    11,286   10.9%
03/16/04       68,285     54,899    13,386   10.9%
03/23/04       52,014     34,017    17,997   20.9%
03/30/04       52,749     67,967   (15,218) (12.6%)

Most bearish reading of the year: (21,858)  - 08/26/03
Most bullish reading of the year:  13,386   - 03/16/04

Small Traders  Long     Short      Net     % of OI
03/09/04       15,533     8,070     7,463    31.6%
03/16/04       27,859    18,333     9,526    20.6%
03/23/04        9,884    12,887    (3,003)  (13.2%)
03/30/04        8,928    16,551    (7,623)  (30.0%)

Most bearish reading of the year: (10,769) - 06/11/02
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

Very little change in commercial traders' positions while
small traders pared back their longs.  Remember, these numbers
are prior to the jobs report on Friday.


Commercials   Long      Short      Net     % of OI
03/09/04       26,867    12,845   14,022      35.3%
03/16/04       32,317    17,514   14,803      29.7%
03/23/04       23,048    22,119      929       2.1%
03/30/04       23,642    22,180    1,462       3.2%

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

Small Traders  Long      Short     Net     % of OI
03/09/04        7,053    19,159  (12,106)   (46.2%)
03/16/04       10,002    20,970  (10,968)   (35.4%)
03/23/04        8,344     6,734    1,610     10.7%
03/30/04        7,020     6,711      309      2.3%

Most bearish reading of the year: (12,106) -  3/09/04
Most bullish reading of the year:   8,523  -  8/26/03

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


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***************
ASK THE ANALYST
***************

No Ask the Analyst this Week.


*************
COMING EVENTS
*************

-----------------
Earnings Calendar
-----------------

Symbol  Co               Date           Comment      EPS Est

------------------------- MONDAY -------------------------------

FNB    F.N.B. Corporation    Mon, Apr 12  -----N/A-----       0.29
GCI    Gannett               Mon, Apr 12  Before the Bell     1.00
IFIN   Invest Finl Serv Corp Mon, Apr 12  -----N/A-----       0.45
MDC    M.D.C Holdings        Mon, Apr 12  After the Bell      1.44
NVLS   Novellus Systems, Inc Mon, Apr 12  -----N/A-----       0.10
ROS    Rostelecom            Mon, Apr 12  -----N/A-----        N/A
NYT    The New York Times Co Mon, Apr 12  Before the Bell     0.36
TSCO   Tractor Supply Co     Mon, Apr 12  After the Bell      0.05


------------------------- TUESDAY ------------------------------

ASO    AmSouth Bancorp       Tue, Apr 13  Before the Bell     0.45
ARA    ARACRUZ CELULOSE S A  Tue, Apr 13  -----N/A-----       0.35
BBT    BB&T Corporation      Tue, Apr 13  Before the Bell     0.63
CBH    Commerce Bancorp, Inc Tue, Apr 13  Before the Bell     0.75
CBSH   Commerce Bancshares   Tue, Apr 13  -----N/A-----       0.75
DJ     Dow Jones & Company   Tue, Apr 13  Before the Bell     0.20
INFY   Infosys Tech LTD      Tue, Apr 13  -----N/A-----       0.56
INTC   Intel Corporation     Tue, Apr 13  After the Bell      0.27
JEF    Jefferies Group       Tue, Apr 13  Before the Bell     0.45
JNJ    Johnson & Johnson     Tue, Apr 13  -----N/A-----       0.80
LLTC   Linear Technology     Tue, Apr 13  After the Bell      0.25
MI     Marshall & Ilsley     Tue, Apr 13  Before the Bell     0.62
MCD    McDonalds Corporation Tue, Apr 13  -----N/A-----       0.37
PBG    Pepsi Bottling Group  Tue, Apr 13  Before the Bell     0.17
PHG    Royal Philips Elect   Tue, Apr 13  Before the Bell      N/A
STT    State Street Corp     Tue, Apr 13  Before the Bell     0.66
WABC   Westamerica Bancorp   Tue, Apr 13  -----N/A-----       0.75
WES    Westcorp              Tue, Apr 13  After the Bell      0.80
WFSI   WFS Financial         Tue, Apr 13  After the Bell      1.47


------------------------ WEDNESDAY -----------------------------

ADTN   ADTRAN, Inc.          Wed, Apr 14  Before the Bell     0.22
AMD    Advanced Micro Dev    Wed, Apr 14  After the Bell      0.03
AMB    AMB Property Corp     Wed, Apr 14  After the Bell      0.53
ASD    American Standard     Wed, Apr 14  Before the Bell     1.13
AAPL   Apple Computer, Inc.  Wed, Apr 14  After the Bell      0.09
BAC    Bank of America Corp  Wed, Apr 14  Before the Bell     1.80
BRE    BRE PROPERTIES INC    Wed, Apr 14  After the Bell      0.57
BRO    Brown & Brown         Wed, Apr 14  After the Bell      0.49
CEC    CEC Entertainment     Wed, Apr 14  After the Bell      0.78
CYN    City National Corp    Wed, Apr 14  After the Bell      0.99
CNET   CNET Networks         Wed, Apr 14  After the Bell     -0.04
CCK    CROWN HOLDINGS INC    Wed, Apr 14  After the Bell     -0.05
DHI    D.R. Horton           Wed, Apr 14  After the Bell      0.71
DAL    DELTA AIR LINES DEL   Wed, Apr 14  Before the Bell    -2.96
DRL    Doral Financial       Wed, Apr 14  After the Bell      0.81
ETN    Eaton                 Wed, Apr 14  Before the Bell     0.79
LRCX   Lam Research          Wed, Apr 14  After the Bell      0.10
MOGN   MGI Pharma            Wed, Apr 14  Before the Bell    -0.08
MTG    MGIC Investment Corp. Wed, Apr 14  Before the Bell     1.19
OCENY  Oci N.V.              Wed, Apr 14  Before the Bell      N/A
RJF    Raymond James         Wed, Apr 14  -----N/A-----       0.37
RDC    Rowan Companies, Inc. Wed, Apr 14  Before the Bell    -0.06
SNDK   SanDisk Corp.         Wed, Apr 14  After the Bell      0.32
TSFG   South Financial Group Wed, Apr 14  Before the Bell     0.46
STLD   Steel Dynamics        Wed, Apr 14  After the Bell      0.49
TFX    Teleflex, Incorp      Wed, Apr 14  After the Bell      0.73
TXN    Texas Instruments     Wed, Apr 14  After the Bell      0.21
SSP    The E.W. Scripps Co   Wed, Apr 14  Before the Bell     0.71
PGR    The Progressive Corp  Wed, Apr 14  After the Bell      1.76
TSS    TSYS                  Wed, Apr 14  -----N/A-----       0.17


------------------------- THUSDAY -----------------------------

AD     ADVO                  Thu, Apr 15  After the Bell      0.41
AVID   Avid Technology, Inc. Thu, Apr 15  After the Bell      0.37
CSL    Carlisle Companies    Thu, Apr 15  Before the Bell     0.64
CATY   Cathay General BancorpThu, Apr 15  After the Bell      0.75
CDWC   CDW Computer Centers  Thu, Apr 15  After the Bell      0.59
CEN    Ceridian              Thu, Apr 15  Before the Bell     0.16
C      Citigroup Inc.        Thu, Apr 15  Before the Bell     0.94
CMA    Comerica Incorporated Thu, Apr 15  Before the Bell     0.89
CFBX   Comm First Bankshares Thu, Apr 15  Before the Bell     0.47
CREE   Cree Inc.             Thu, Apr 15  -----N/A-----       0.18
CY     Cypress Semiconductor Thu, Apr 15  Before the Bell     0.18
DCLK   DoubleClick           Thu, Apr 15  After the Bell      0.05
EWBC   East West Bancorp     Thu, Apr 15  Before the Bell     0.65
EMC    EMC Corporation       Thu, Apr 15  Before the Bell     0.06
EMMS   Emmis Communications  Thu, Apr 15  Before the Bell    -0.08
EQT    Equitable Resources   Thu, Apr 15  Before the Bell     1.09
FCS    Frchld Semiconr Intl  Thu, Apr 15  Before the Bell     0.15
FITB   Fifth Third Bancorp   Thu, Apr 15  Before the Bell     0.75
FMER   FirstMerit            Thu, Apr 15  Before the Bell     0.33
GPC    Genuine Parts         Thu, Apr 15  Before the Bell     0.54
GENZ   Genzyme Corporation   Thu, Apr 15  -----N/A-----       0.37
GGG    Graco                 Thu, Apr 15  After the Bell      0.30
HIB    Hibernia Corp.        Thu, Apr 15  Before the Bell     0.44
HCBK   Hudson City Bancorp   Thu, Apr 15  After the Bell      0.29
HBAN   Huntington Bancshares Thu, Apr 15  Before the Bell     0.40
IBM    Intl Business MachinesThu, Apr 15  After the Bell      0.93
JCI    Johnson Controls      Thu, Apr 15  Before the Bell     0.81
KEY    KeyCorp               Thu, Apr 15  Before the Bell     0.53
KRI    Knight Ridder         Thu, Apr 15  Before the Bell     0.67
LSTR   Landstar System       Thu, Apr 15  Before the Bell     0.23
LEXR   Lexar Media           Thu, Apr 15  After the Bell      0.12
LECO   Lincoln Electric      Thu, Apr 15  Before the Bell     0.39
LOGI   Logitech Intl         Thu, Apr 15  Before the Bell     0.69
MEG    Media General         Thu, Apr 15  Before the Bell     0.31
MOLX   Molex Inc.            Thu, Apr 15  -----N/A-----       0.22
NCC    National City         Thu, Apr 15  Before the Bell     0.72
NCF    Natl Commerce Finl    Thu, Apr 15  After the Bell      0.44
NAP    National Processing   Thu, Apr 15  Before the Bell     0.16
NFLX   NetFlix.com           Thu, Apr 15  After the Bell     -0.03
NE     Noble Corporation     Thu, Apr 15  -----N/A-----       0.20
NFB    North Fork Bancorp    Thu, Apr 15  Before the Bell     0.67
PBCT   People's Bank         Thu, Apr 15  -----N/A-----       0.31
PEP    PepsiCo               Thu, Apr 15  Before the Bell     0.46
PMCS   PMC-Sierra, Inc.      Thu, Apr 15  After the Bell      0.04
PII    Polaris Industries    Thu, Apr 15  Before the Bell     0.30
PPG    PPG Industries        Thu, Apr 15  Before the Bell     0.58
RS     Reliance Steel        Thu, Apr 15  Before the Bell     0.81
SEBL   Siebel Systems        Thu, Apr 15  After the Bell      0.05
SLM    SLM Corporation       Thu, Apr 15  Before the Bell     0.50
LUV    Southwest Airlines    Thu, Apr 15  Before the Bell     0.04
SYK    Stryker               Thu, Apr 15  After the Bell      0.63
SUNW   Sun Microsystems      Thu, Apr 15  -----N/A-----      -0.06
TCB    TCF Financial Corp    Thu, Apr 15  Before the Bell     0.85
MNI    The McClatchy Company Thu, Apr 15  Before the Bell     0.59
TRB    Tribune               Thu, Apr 15  -----N/A-----       0.43
UCBH   UCBH Holdings, Inc.   Thu, Apr 15  After the Bell      0.37
UPC    Union Planters Corp   Thu, Apr 15  Before the Bell     0.50
UIS    Unisys                Thu, Apr 15  Before the Bell     0.09
WFSL   Washington Federal    Thu, Apr 15  Before the Bell     0.42
WBS    Webster Financial CorpThu, Apr 15  Before the Bell     0.91


------------------------- FRIDAY -------------------------------

BXS    BancorpSouth, Inc.    Fri, Apr 16  After the Bell      0.39
CPF    Central Pacific Finl  Fri, Apr 16  Before the Bell     0.49
CNB    Colonial BancGroup    Fri, Apr 16  Before the Bell     0.30
CBSS   Compass Bancshares    Fri, Apr 16  -----N/A-----       0.69
DPH    Delphi                Fri, Apr 16  Before the Bell     0.20
ET     E*TRADE Group, Inc.   Fri, Apr 16  Before the Bell     0.20
FFCH   First Finl Holdings   Fri, Apr 16  -----N/A-----       0.43
LEE    Lee Ent, Incorp       Fri, Apr 16  Before the Bell     0.36
NOK    Nokia                 Fri, Apr 16  -----N/A-----       0.24
PTZ    Pulitzer Inc.         Fri, Apr 16  Before the Bell     0.38
RF     Regions Financial CorpFri, Apr 16  Before the Bell     0.74
PIK    Water Pik TechnologiesFri, Apr 16  -----N/A-----        N/A
WL     Wilmington Trust      Fri, Apr 16  Before the Bell     0.54


----------------------------------------------
Upcoming Stock Splits In The Next Two Weeks...
----------------------------------------------

Symbol  Co Name              Ratio    Payable     Executable

CFC     Countrywide Financial Corp3:2      Apr  12th   Apr  13th
CBU     Community Bank System Inc 2:1      Apr  12th   Apr  13th
HIBB    Hibbett Sporting Goods    3:2      Apr  16th   Apr  19th
AVD     American Vanguard Corp    3:2      Apr  16th   Apr  19th
MSFG    MainSource Financial Group3:2      Apr  16th   Apr  19th
SHFL    Shuffle Master, Inc       3:2      Apr  16th   Apr  19th
UNFI    United Natural Foods, Inc 2:1      Apr  19th   Apr  20th
MTLM    Metal                     2:1      Apr  20th   Apr  21st
CRED    CREDO Petroleum Corp      3:2      Apr  20th   Apr  21st


--------------------------
Economic Reports This Week
--------------------------

The Q1 Earnings parade begins on Tuesday and won't stop for the
next four to five weeks.  Plus we have a very heavy economic
report schedule this week starting on Tuesday and running through
Friday.


==============================================================
                       -For-

----------------
Monday, 04/12/04
----------------
None


-----------------
Tuesday, 04/13/04
-----------------
Business Inventories (BB)  Feb  Forecast:    0.3%  Previous:     0.1%
Retail Sales (BB)          Mar  Forecast:    0.7%  Previous:     0.7%
Retail Sales Ex-auto (BB)  Mar  Forecast:    0.6%  Previous:     0.0%
Treasury Budget (DM)       Mar  Forecast: -$70.0B  Previous:  -$58.9B


-------------------
Wednesday, 04/14/04
-------------------
Trade Balance (BB)         Feb  Forecast: -$42.6B  Previous:  -$43.1B
CPI (BB)                   Mar  Forecast:    0.3%  Previous:     0.3%
Core CPI (BB)              Mar  Forecast:    0.2%  Previous:     0.2%


------------------
Thursday, 04/15/04
------------------
Initial Claims (BB)      04/10  Forecast:     N/A  Previous:      N/A
NY Empire State Index (BB) Apr  Fprecast:    29.0  Previous:     25.3
Philadelphia Fed (DM)      Apr  Forecast:    26.0  Previous:     24.2


----------------
Friday, 04/16/04
----------------
Housing Starts (BB)        Mar  Forecast:   1900K  Previous:    1855K
Building Permits (BB)      Mar  Forecast:   1910K  Previous:    1909K
Industrial Production (BB) Mar  Forecast:    0.4%  Previous:     0.7%
Capacity Utilization (BB)  Mar  Forecast:   76.9%  Previous:    76.6%
Mich Sentiment-Prel. (DM)  Apr  Forecast:    96.5  Previous:     95.8


Definitions:
DM=  During the Market
BB=  Before the Bell
AB=  After the Bell
NA=  Not Available


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The Option Investor Newsletter                   Sunday 04-11-2004
Sunday                                                      2 of 5


In Section Two:

Watch List: Stocks To Watch Next Week
Dropped Calls: BBY, MGG
Dropped Puts: None


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

Stocks To Watch Next Week

___________________________________________________________________

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.
___________________________________________________________________


Amazon.com - AMZN - close: 48.10 change: +2.25

WHAT TO WATCH: Internet stocks are back en vogue with YHOO's 16%
gain on Thursday.  The strong earnings report from the Internet
portal sparked a 4.9% rally in Internet retailer AMZN.  We took
notice because AMZN closed above resistance at $47.50 and its
simple 200-dma.  Traders might start a pre-earnings momentum run
in AMZN ahead of its April 22nd report.

Chart=


---

Borg Warner - BWA - close: 85.15 change: -0.65

WHAT TO WATCH: We strongly considered BWA for the weekend play
list.  The stock appears to have failed at price resistance at
$88.00 and its simple 40-dma.  With its MACD hinting at a bearish
roll over and short-term technicals already showing weakness
bearish traders could target a move back toward $80 and its 200-
dma.

Chart=


---

Sina Corp - SINA - close: 41.19 change: +2.54

WHAT TO WATCH: YHOO's earnings announcement on Wednesday night
sparked a wild fire in Internet stocks and the INX index hit a
new 2 1/2 year high.  SINA enjoyed a 6.5% rally as the stock
gapped above resistance at $40.00 and its simple 50-dma.  This
looks like an aggressive entry point for a run to the $46 level
as traders bid up the stock in anticipation of its April 26th
earnings report.  Unfortunately, that earnings date is
unconfirmed.

Chart=


---

Electronic Arts - ERTS - close: 53.07 change: +0.04

WHAT TO WATCH: News that ERTS' president will be resigning sent
the stock back toward support at $50.00 but traders saw the
opportunity and bought the dip to $51.35.  By Thursday's close
shares had recouped all of its losses.  This produced a bullish
reversal-styled candlestick (a "hammer") but we need to see some
follow through on Monday.  If there is no follow through then
bullish traders can look for ERTS to consolidate back towards the
$50 level, which should be strong support.

Chart=



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

APOL $91.77 +1.32 - Shares of APOL and its subsidiary UOPX have
been incredibly strong.  So much so that we hesitate to recommend
bullish plays because they look so overbought.  Yet now both are
above the $90 mark.  Very aggressive traders might try and buy
dips to the simple 10-dma but use a tight stop to protect your
capital.

NTES $56.60 +2.90 - NTES is another Internet stock boosted by
YHOO's impressive performance.  There is some resistance near $58
but NTES looks poised to run toward the $60 level.

PD $78.90 -2.02 - Yup, we're putting PD back on the radar screen.
The stock broke down below support at its 50-dma and the $80
mark.  It would appear to be in a descending channel and bears
could probably target the $74-73 level but its 100-dma near $75
could be support.  Keep an eye on copper futures too, which are
currently resting at support of its 50-dma.

COP $71.12 +1.12 - Major oil stocks are also on the move with
crude oil racing higher and poised to breakout over $37 a barrel.
COP appears to be out performing its peers XOM and CVX but they
all appear bullish.


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**************************
PICKS WE DROPPED THIS WEEK
**************************

Remember that historically, when we drop a pick it will go up
10 to 15% the very next week. It is part of Murphy's Law.
Just because we drop a stock as a pick does not mean we are
advocating a "sell" on any position you have. We are simply
dropping our recommendation as a new play. Existing plays
can and do continue on and are usually profitable.


CALLS
^^^^^

Best Buy Company - BBY - close: 53.92 change: +1.62 stop: 50.75

There was certainly a compelling reason to add BBY to our Call
list last week, as it looked like the stock was ready to finally
break out from its recent consolidation.  But the price action
last week was not encouraging, as the stock rolled over near $54
and is now headed back towards the bottom of its range.  Rather
than hold onto this non-performing play, we'll pull the plug this
weekend to make room for stronger candidates.  The stock never
activated our $55 entry trigger, reducing the play to no more than
an academic exercise that so far has not worked in our favor.  BBY
may yet break out from this consolidation pattern, so we'll keep
our eyes open for another bullish setup.

Picked on April 4th at       $53.92
Change since picked:          +0.00
Earnings Date                6/16/04 (unconfirmed)
Average Daily Volume =     3.75 mln
Chart =


---

MGM Mirage - MGG - close: 46.43 change: -0.66 stop: 46.75

The bidding war continues for British racetrack operator Wembley
and MGG just officially upped its bid to $556 million.  Yet we
don't feel that the bidding news was to blame for Thursday's
decline.  Instead investors were taking profits ahead of the long
weekend and MGG has been a big winner for the month of April.  We
were stopped out at $46.75 but traders still interested in the
stock might want to watch it for a bounce from support at $46.00.

Picked on March 25 at $ 45.69
Change since picked:   + 0.74
Earnings Date        04/21/04 (confirmed)
Average Daily Volume:     597 thousand
Chart =



PUTS
^^^^

None


***********
DEFINITIONS
***********

SL  = Suggested stop loss. Sell if bid breaks this price.
OI  = Open Interest - the number of open contracts outstanding.
ITM = In the money
ATM = At the money
OTM = Out of the money
ADV = Average Daily Volume

The options with a "*" by the strike price are our choices from the
group. If the stock moves as expected we feel they have the best
chance to substantially increase or double in price with the best
risk/reward ratio compared to the other options for the same stock.
You must determine if they fit your risk profile for time and price.

RISKS of SELLING PUTS:
The risk of selling naked puts is always the possibility
of a catastrophic event that drops the stock below the
strike price and could result in the stock being PUT to you.
Always protect yourself with a "buy to cover" limit order
to take you out before this can happen.


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DISCLAIMER
**********

Please read our disclaimer at:
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The Option Investor Newsletter                   Sunday 04-11-2004
Sunday                                                      3 of 5


In Section Three:

Current Calls: CAT, EBAY, ESRX, NEM, NSM, PDCO, TK
New Calls: SLAB, ZBRA
Current Put Plays: AHC, CFC, LEH, UTSI
New Puts: None


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******************
CURRENT CALL PLAYS
******************

Caterpillar - CAT - close: 81.98 change: -0.12 stop: 78.95

Company Description:
For more than 75 years, Caterpillar Inc. has been building the
world's infrastructure and, in partnership with its worldwide
dealer network, is driving positive and sustainable change on
every continent. With 2003 sales and revenues of $22.76 billion,
Caterpillar is a technology leader and the world's leading
manufacturer of construction and mining equipment, diesel and
natural gas engines and industrial gas turbines. More than half
of all sales were to customers outside of the United States,
maintaining Caterpillar's position as a global supplier and
leading U.S. exporter. The company employs nearly 70,000 people
around the world. (source: company press release)

Why We Like It:
Bulls can't complain.  The Dow Industrials have been slipping
lower the last couple of sessions and Dow component CAT has
managed to churn sideways maintaining most of its gains.  The
stock has been doing very well in spite of the looming threat of
higher interest rates, which put pressure on heavy machinery
companies like CAT.  Another hurdle pressing in on CAT has been
rising steel prices but the company says it can currently pass on
these rising costs to the customer due to strong demand.  That
demand is coming from the recovering U.S. economy as well as an
expanding global economy.

Should shares of CAT slip back toward the $80.00 level we would
use the dip as an entry point for new bullish positions.  Our
target remains firm at the $85.00 mark.  However, traders looking
for new positions should keep in mind that CAT's earnings are on
April 22nd, which only gives us eight trading days for the stock
to make its run higher.  We will be dropping the play just before
its earnings announcement.

Suggested Options:
We're going to suggest the May options since Aprils are due to
expire in two weeks.  Our favorite would be the May 75s if you
can afford them.  Otherwise the May 80s.

! Alert - April options EXPIRE on Friday!

BUY CALL MAY 75 CAT-EO OI=2020 at $7.70 SL=5.25
BUY CALL MAY 80 CAT-EP OI=5663 at $3.90 SL=1.90

Annotated Chart:



Picked on April 02 at $ 80.25
Change since picked:   + 1.73
Earnings Date        04/22/04 (confirmed)
Average Daily Volume:     2.5 million
Chart =


---

eBay Inc - EBAY - close: 75.94 change: +2.04 stop: 70.95*new*

Company Description:
eBay is The World's Online Marketplace(TM). Founded in 1995, eBay
created a powerful platform for the sale of goods and services by
a passionate community of individuals and businesses. On any
given day, there are millions of items across thousands of
categories for sale on eBay. eBay enables trade on a local,
national and international basis with customized sites in markets
around the world. (source: company press release)

Why We Like It:
The pre-earnings run up has officially begun.  EBAY got an early
start last Friday with the breakout over resistance at $70.00
(and $72.00) in strong volume.  The Internet auction giant
managed to hold on to its gains all week despite mild profit
taking in some of the tech sectors and cautious apprehension
ahead of YHOO's earnings announcement on Wednesday night.
Fortunately, YHOO more than delivered by surpassing earnings
estimates, raising guidance for the year and announcing a 2-for-1
stock split.

Now it's EBAY's turn.  While we're not expecting EBAY to announce
a split but investors are likely to bid up shares in anticipation
of the company's earnings announcement.  We currently have seven
trading days before EBAY announces.  That may be too brief a
timetable for more conservative traders so be sure you're
comfortable with the risk.  We are not planning to hold over
EBAY's report.  We're still expecting a dip but at this point it
may only be to the $74 level.  Bulls can use it as an entry point
but remember the short time frame.  We're going to raise our stop
loss to $70.95.

Suggested Options:
EBAY's earnings are the 21st of April and we don't plan to hold
over the event.  However, April options expire on the 16th.  So
we're going to suggest May calls.  Our favorite is the May 70s.
Remember, we're suggesting a buy on the dip so these should get
cheaper.

! Alert - April options EXPIRE on Friday!

BUY CALL MAY 70 XBA-EN OI= 3050 at $7.20 SL=4.65
BUY CALL MAY 75 XBA-EO OI= 5998 at $3.80 SL=1.90

Annotated chart:



Picked on April 01 at $ 72.25
Change since picked:   + 3.69
Earnings Date        04/21/04 (confirmed)
Average Daily Volume:     7.0 million
Chart =


---

Express Scripts - ESRX - close: 76.49 change: -0.31 stop: 74.00

Company Description:
Express Scripts provides health care management and administration
services on behalf of clients that include health maintenance
organizations, health insurers, third-party administrators,
employers and union-sponsored benefit plans.  The company's fully
integrated pharmacy benefit management services include network
claims processing, mail pharmacy services, benefit design
consultation, drug utilization review, formulary management,
disease management, medical information management services and
informed decision counseling services through its Express Health
Line division.

Why we like it:
Traders had to be nimble to catch the breakout entry in shares of
ESRX on Monday, as the stock soared to $78.50 before running out
of steam.  So we're actually pleased to see the stock pulling back
over the past few days.  In fact, Thursday's early dip could be
viewed as another entry point for nimble traders, as the stock
dipped to $75.60, almost to the 10-dma ($75.42) before bouncing
back and then consolidating in the $76.00-76.50 area for the
remainder of the day.  With the amount of time ESRX spent banging
into the $75-76 area as resistance, we should now expect that zone
to provide solid support.  The PnF chart still looks quite strong,
and the bullishness indicated by its $93 price target was
reinforced with last week's breakout, which gave us another Buy
signal to work with.  Traders that prefer to enter on strength
will now need to see a rally through the $78.75 level before
opening new positions, so clearly our preference is to buy the
dips.  With the stock trading in new high territory, picking a
target above last week's highs is rather difficult, so we'll
continue to target a run to $85.  Note that our stop is now $74,
just under the 30-dma ($74.52).

Suggested Options:
Shorter Term: The April $75 Call will offer short-term traders the
best return on an immediate move, as it is currently in the money.
But with April options expiring next week, the May strikes may be
a better choice.

Longer Term: Aggressive longer-term traders can use the May $80
Call, while the more conservative approach will be to use the May
$75 strike.  Our preferred option is the May $75 strike, as it is
currently in the money and should provide sufficient time for the
play to move in our favor.

! Alert - April options expire next week!

BUY CALL APR-75 XTQ-DO OI= 714 at $2.40 SL=1.00
BUY CALL MAY-75*XTQ-EO OI=1760 at $4.10 SL=2.50
BUY CALL MAY-80 XTQ-EP OI= 699 at $1.65 SL=0.75

Annotated Chart of ESRX:




Picked on April 4th at       $75.36
Change since picked:          +1.18
Earnings Date                4/28/04 (unconfirmed)
Average Daily Volume =     1.04 mln
Chart =


---

Newmont Mining - NEM - close: 45.06 change: -0.30 stop: 43.50

Company Description:
Newmont Mining Corporation is a holding company and is principally
engaged in gold mining.  As of the end of 2002, the company had
gold reserves of 86.9 million equity ounces and an aggregate land
position of approximately 63,000 square miles.  NEM has operations
in North America, South America, Australia, New Zealand,
Indonesia, Uzbekistan and Turkey.  In 2002, the company obtained
more than 69% of its equity gold production from politically and
economically stable countries, namely the United States, Canada
and Australia.

Why we like it:
For the mining stocks, last week's action was dominated by
consolidation following the negative reaction to the prior week's
jobs report that raised the concern of rising interest rates and a
potentially strengthening dollar.  Despite those concerns, gold
held up fairly well towards the end of the week, gravitating to
the $420 level and NEM continued its consolidation near support in
the $44.50-45.00 area.  This still looks like a good point at
which to initiate new positions, as the stock consolidates at
support in preparation for the next upward thrust.  More
conservative traders will want to see a rally back over $46 before
entering the fray, as such a move would provide confirmation that
the stock is once again gaining strength for a push towards the
late March highs and then towards strong resistance at $50.
Maintain stops at $43.50, which is now solidly below the 50-dma
($43.83).

Suggested Options:
Shorter Term: The April $45 Call will offer short-term traders the
best return on an immediate move, as it is currently at the money.
With April strikes expiring next week, the May strikes appear to
be the better choice.

Longer Term: Aggressive longer-term traders can use the May $47 or
$50 Calls, while the more conservative approach will be to use the
June $47 strike.  Our preferred option is the May $45 strike, as
it is currently at the money and should provide sufficient time
for the play to move in our favor.

! Alert - April options expire next week!

BUY CALL APR-45 NEM-DI OI=15336 at $0.70 SL=0.35
BUY CALL MAY-45*NEM-EI OI= 4135 at $2.15 SL=1.00
BUY CALL MAY-47 NEM-EW OI= 9656 at $1.15 SL=0.50
BUY CALL JUN-47 NEM-FW OI= 6243 at $1.75 SL=0.80

Annotated Chart of NEM:



Picked on March 28th at      $46.15
Change since picked:          -1.09
Earnings Date                2/04/04 (confirmed)
Average Daily Volume =     6.32 mln
Chart =


---

National Semi. - NSM - cls: 48.20 chng: +1.00 stop: 45.40*new*

Company Description:
National Semiconductor Corporation designs, develops, manufactures
and markets an array of semiconductor products, including a line
of analog, mixed-signal and other integrated circuits (ICs).
These products address a variety of markets and applications,
including amplifiers, personal computers, power management, local
and wide area networks (LANs and WANs), flat panel and cathode ray
tube displays and imaging and wireless communications.  The
Company's operations are organized in five groups: the Analog
Group, the Displays Group, the Information Appliance and Wireless
Group, the Wired Communications Group and the Custom Solutions
Group.

Why we like it:
In defiance of its detractors, the Semiconductor index (SOX.X) had
a pretty solid week, hanging onto support near $500 and actually
pushing slightly higher on Thursday.  That performance pales in
comparison to our NSM play though, as it maintained its gains from
the prior week, dipped to fill the gap on Tuesday and then vaulted
higher into the close on Thursday, notching another multi-year
closing high.  The bulls seem intent on driving shares of NSM up
to test strong resistance at $50 and who are we to argue.  Our
final destination is close enough that we aren't enthusiastic
about new entries, particularly not breakout entries.  Aggressive
traders can take advantage of dips into the $46.50-47.00 to enter
new positions, but we need to keep a tight reign on the play with
our stop now raised to $45.40, just under the bottom of Tuesday's
dip.

Suggested Options:
Shorter Term: The April $45 Call will offer short-term traders the
best return on an immediate move, as it is currently in the money.

Longer Term: Aggressive longer-term traders can use the May $50
Call, while the more conservative approach will be to use the May
$45 strike.  Our preferred option is the May $45 strike, as it is
currently in the money and should provide sufficient time for the
play to move further in our favor.

! Alert - April options expire next week!

BUY CALL APR-45 NSM-DI OI= 9678 at $3.60 SL=1.75
BUY CALL MAY-45*NSM-EI OI=13482 at $5.00 SL=3.00
BUY CALL MAY-50 NSM-EJ OI= 3007 at $2.10 SL=1.00

Annotated Chart of NSM:



Picked on March 30th at      $44.43
Change since picked:          +3.77
Earnings Date                6/10/04 (unconfirmed)
Average Daily Volume =     4.27 mln
Chart =


---

Patterson Dental Co - PDCO - cls: 75.17 chg: +0.17 stop: 70.99*new*

Company Description:
Patterson Dental Company is a value-added distributor serving the
dental, companion-pet veterinarian and rehabilitation supply
markets.  (source: company press release)

Why We Like It:
PDCO is right on track!  The stock witness a very strong follow
through to last week's breakout above resistance with rising
volume to back it up.  Investors applauded news that PDCO would
be adding to its veterinary supply business with another
acquisition.  Furthermore we've very impressed by its relative
strength the last couple of sessions.  Investors have bought the
dip  or there's been a lack of sellers and PDCO appears to have
new (very minor) support at $74.00.  If the market should see any
deeper profit taking next week then we might expect PDCO to pull
back toward the $72.00-72.50 region.  However, if the weekend is
a quiet one then next week is liable to be bullish for the
markets and PDCO.  We're going to raise our stop loss to $70.99.
FYI: the P&F breakout we pointed to last weekend has extended and
now points to a $97 price target.  We're still aiming for a run
to the $77.50-80.00 region and thus it may not be prudent to
consider new positions unless PDCO does pull back a couple of
points.

Suggested Options:
We don't have to worry about earnings for PDCO until May. So
we're going to suggest the May or July calls.  Our favorite is
the May 70s on a dip or the May 75s.

! Alert - April options EXPIRE on Friday!

BUY CALL MAY 70 DOU-EN OI= 72 at $6.60 SL=3.50
BUY CALL MAY 75 DOU-EO OI=292 at $3.40 SL=1.70
BUY CALL JUL 70 DOU-GN OI=262 at $7.70 SL=4.50
BUY CALL JUL 75 DOU-GO OI=597 at $4.60 SL=2.35

Annotated Chart:



Picked on April 04 at $ 72.14
Change since picked:   + 3.03
Earnings Date        02/19/04 (confirmed)
Average Daily Volume:     493 thousand
Chart =


---

Teekay Shipping - TK - close: 67.60 change: +0.86 stop: 65.95

Company Description:
Teekay Shipping Corporation is the leading provider of
international crude oil and petroleum product transportation
services, transporting more than 10 percent of the world's sea-
borne oil. With offices in 13 countries, Teekay employs 4,700
seagoing and shore-based staff around the world. The Company has
earned a reputation for safety and excellence in providing
transportation services to major oil companies, oil traders and
government agencies worldwide. (source: company press release)

Why We Like It:
Crude oil prices have made a huge comeback this week and look
poised to breakout over resistance at $37.00 a barrel.  With some
of the oil and oil service stocks breaking out odds are growing
that TK will join them and break out over resistance at $70.00.
The rising demand of oil means steady business for a fleet of oil
tankers like TK and that's reflected in its steady climb higher.
More aggressive traders who are not willing to wait for TK to
trade at or through our TRIGGER at $70.05 can buy this bounce
from its simple 40-dma.

Suggested Options:
Earnings for TK should be in late May so we're going to suggest
the May or July calls.  Right now our favorite would be the May
70s on a breakout but the 65s look good, especially on a dip.

! Alert - April options EXPIRE on Friday!

BUY CALL MAY 65 TK-EM OI=  50 at $4.50 SL=2.25
BUY CALL MAY 70 TK-EN OI=1877 at $1.95 SL=1.00
BUY CALL MAY 75 TK-EO OI= 107 at $0.80 SL= --
BUY CALL JUL 70 TK-GN OI=1190 at $3.50 SL=1.75

Annotated Chart:




Picked on April xx at $ xx.xx <-- see trigger
Change since picked:   + 0.00
Earnings Date        02/25/04 (confirmed)
Average Daily Volume:     374 thousand
Chart =



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

Silicon Labs. - SLAB - close: 58.50 change: +0.73 stop: 55.00

Company Description:
Silicon Laboratories designs, manufactures and markets
proprietary high-performance mixed-signal integrated circuits
(ICs) for the wireless, wireline and optical communications
industries.  The company initially focused its efforts on
developing ICs for the personal computer modem market and is now
applying its mixed-signal and communications expertise to the
development of ICs for other high growth communications devices,
such as wireless telephones and optical network applications.

Why we like it:
A few weeks back, we played shares of SLAB on the breakdown below
$52 support, a strategy that simply didn't work due to the
stock's strong rebound, signifying that the breakdown was a bear
trap.  Since then, with the help of the rally in the
Semiconductor index (SOX.X), SLAB has broken above all of its
moving averages, smashed through its descending trendline and is
very close to breaking out to new multi-year highs.  How's that
for a reversal of fortune?  As SLAB pushed through the $57 level
last week, the PnF chart once again turned bullish with a fresh
Buy signal and the size of the column of X's is now giving a
bullish price target of $80.  Obviously, that's a bit much to
hope for during the life of this play, but it does highlight the
strength of the reversal.  Thursday's intraday surge to $59
pushed the PnF chart right to the edge of a triple top buy signal
and as can be seen on the price chart, a breakout over $60 should
be significant.

Daily Stochastics are already overbought from the rally of the
past couple weeks, so it's entirely possible the stock will need
to consolidate just below resistance before making that breakout
move.  We'll use a trigger at $60, which will force the bulls to
prove their case before luring us into the play.  Aggressive
entries on the initial breakout looks attractive, with a pullback
near $58 being another option.  Once clear of near-term
resistance, we'll have to use the weekly chart to gauge
resistance and in that view, it appears there could be some mild
resistance near $64 and then stronger resistance at $68-70.  The
one fly in the ointment -- which is also a potential bullish
catalyst -- is that SLAB is due to report earnings on April 26th.
Since we won't be holding over the announcement, it will have to
be a quick play.  We'll target a rally to the $68 level for the
play, but more conservative traders may want to harvest partial
gains if price stalls near $64.  We'll use a stop at $55
initially (just under last Monday's intraday low) and look to
tighten it after the stock completes its breakout.

Suggested Options:
Shorter Term: The April $60 Call will offer short-term traders
the best return on an immediate move, but with April options
expiring next week, the May strikes may be the better choice.

Longer Term: Aggressive longer-term traders can use the May $60
Call, while the more conservative approach will be to use the May
$55 strike.  Our preferred option is the May $60 strike, as it
will be at the money when the play is triggered.

! Alert - April options expire next week!

BUY CALL APR-60 QFJ-DL OI=1618 at $0.95 SL=0.50
BUY CALL MAY-55 QFJ-EK OI= 340 at $6.10 SL=4.00
BUY CALL MAY-60*QFJ-EL OI= 763 at $3.40 SL=1.75

Annotated Chart of SLAB:



Picked on April 11th at      $58.50
Change since picked:          +0.00
Earnings Date                4/26/04 (unconfirmed)
Average Daily Volume =     1.46 mln
Chart =


---

Zebra Technologies - ZBRA - cls: 73.26 chg: +0.98 stop: 68.00

Company Description:
Zebra Technologies Corp. delivers innovative and reliable on-
demand printing solutions for business improvement and security
applications in 90 countries around the world. More than 90
percent of Fortune 500 companies use Zebra-brand printers. A
broad range of applications benefit from Zebra-brand thermal bar
code, "smart" label, receipt, and card printers, resulting in
enhanced security, increased productivity, improved quality,
lower costs, and better customer service. The company has sold
more than three million printers, including RFID printer/encoders
and wireless mobile solutions, and also offers software,
connectivity solutions, and printing supplies.
(source: company press release)

Why We Like It:
ZBRA is on the forefront of the RIFD system development.  This is
a new industry standard to replace a large chunk of the
ubiquitous bar code scanning.  Furthermore the upgrade has
essentially been mandated by Wal-Mart, the world's largest
retailer, to be implemented in the next couple of years.  With
that kind of muscle behind the move ZBRA should see a steady
stream of business as whole industries make the upgrade.
Investors know it hence the strong bullish trend in ZBRA's stock
price.

We like the breakout over resistance at $73.00 today, which
happened to produce a new bullish buy signal on its P&F chart.
Optimistically we might see a run toward the $80.00 region before
ZBRA's earnings report but we'll settle for a run toward $77.
We'll initiate the play with a stop loss at $68 but more
conservative traders can probably get away with a stop under $70.

Suggested Options:
Our favorite calls are the May 70s and 75s but remember we don't
plan to hold over ZBRA's earnings report in late April.

! Alert - April options EXPIRE on Friday!

BUY CALL MAY 70 ZBQ-EN OI=255 at $5.30 SL=3.25
BUY CALL MAY 75 ZBQ-EO OI=137 at $2.50 SL=1.25

Annotated Chart:



Picked on April 11 at $ 73.26
Change since picked:   + 0.00
Earnings Date        04/28/04 (unconfirmed)
Average Daily Volume:     332 thousand
Chart =



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CURRENT PUT PLAYS
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Amerada Hess Corp. - AHC - close: 64.06 change: +1.02 stop: 65.50

Company Description:
Amerada Hess Corporation explores for, produces, purchases,
transports and sells crude oil and natural gas.  These exploration
and production activities take place in the United States, United
Kingdom, Norway, Denmark, Equatorial Guinea, Gabon, Indonesia,
Thailand, Azerbaijan, Algeria, Malaysia, Colombia and other
countries.  The company also manufactures, purchases, transports,
trades and markets refined petroleum and other energy products.
It owns 50% of a refinery joint venture in the United States
Virgin Islands, as well as another refining facility, terminals
and retail gasoline stations located on the east coast of the
United States.

Why we like it:
Despite an apparent weakening near the 50-dma ($62.53) early last
week, shares of AHC embarked on a pretty impressive rebound over
the past two days and the prospects for this bearish trade
candidate do not look good.  This is precisely why we set our
entry trigger where we did, as it would force the stock to break
down before luring us into the play.  Support held at the 50-dma
and our trigger was never activated, keeping us from entering the
play and getting caught on the wrong side of the past two days'
rebound.  AHC is still below downtrend resistance near $64.50 and
the 30-dma ($64.55), but if those levels of resistance are broken,
we'll have no choice but to drop the play.  We still want to see
proven weakness in the form of a breakdown under $61.75 before
entering the play, and with that trigger in place, we cannot
consider rollover entries at this higher level.  Maintain stops
at $65.50.

Suggested Options:
With April strikes expiring next week, we've chosen to focus only
on the May strikes.  Those with a more conservative approach will
want to use the May 65 put.  Aggressive traders looking for more
insulation against time decay can use the May 60 strike.  Our
preferred option is the May 65 strike, as it is currently in the
money and should provide ample time for the play to move in our
favor.

! Alert - April options expire next week!

BUY PUT MAY-65*AHC-QM OI= 249 at $2.70 SL=1.25
BUY PUT MAY-60 AHC-QL OI=1496 at $0.85 SL=0.40

Annotated Chart of AHC:



Picked on April 1st at        $63.15
Change since picked:           +0.91
Earnings Date                4/28/04 (unconfirmed)
Average Daily Volume =         905 K
Chart =


---

Countrywide Financial - CFC - close: 86.58 chg: -1.32 stop: 90.51*new*

Company Description:
Founded in 1969, Countrywide Financial Corporation is a member of
the S&P 500, Forbes 500 and Fortune 500. Through its family of
companies, Countrywide provides mortgage banking and diversified
financial services in domestic and international markets.
Mortgage banking businesses include loan production and servicing
principally through Countrywide Home Loans, Inc., which
originates, purchases, securitizes, sells, and services primarily
prime- quality loans. Also included in Countrywide's mortgage
banking segment is the LandSafe group of companies that provide
loan closing services. Diversified financial services encompass
capital markets, banking, insurance, and global, largely through
the activities of Countrywide Capital Markets, a mortgage-
related investment banker; Countrywide Bank, a division of
Treasury Bank, NA, a banking entity offering customers CDs, money
market accounts, and home loan products; Balboa Life and Casualty
Group, whose companies are national providers of property,
liability, and life insurance; Balboa Reinsurance, a captive
mortgage reinsurance company; and Global Home Loans, a European
mortgage banking joint venture in which Countrywide holds a
majority interest. (source: company press release)

Why We Like It: (Original Write Up from Tuesday)
We're suggesting a new bearish play in CFC mainly due to the
technical breakdown in the share price but the fundamental
picture may have changed as well.  Interest rate sensitive stocks
like mortgage lenders and homebuilders have been getting dumped
the last three sessions because last Friday's job's report
immediately sparked the threat of higher interest rates sooner
than expected.  Higher rates mean higher mortgage rates and that
should mean slower business for lenders like CFC.

The stock has already dropped $8.00 from its recent highs and
yesterday we felt it looked too short-term oversold even though
it broke down through support at $90.00 and its simple 50-dma.
However, today's action looks like a failed rally at $90.00 (now
new resistance) so we're willing to speculate on a move lower.
CFC has some support in the $81.50-82.50 region and that's where
we plan to target an exit point.  Currently its P&F chart is in a
bearish sell signal and points to a $77 price target.
Coincidentally CFC appears to have produced a (bearish) double-
top at $97.

Earnings are April 21st and we don't plan to hold over the event.
Traders should also note that CFC does have a 3-for-2 split on
April 13th but given the current environment we don't think it
will be a factor.

Weekend Update:
So far so good.  The failed rally on Tuesday was indeed an entry
point for new bearish positions.  Investors are still selling
interest rate sensitive stocks on fears the fed will raise rates
sooner than expected.  It doesn't help mortgage lenders like CFC
that mortgage rates have risen sharply two weeks in a row.  The
drop under $87 has produced yet another bearish sell signal on
its P&F chart.  We are going to lower our stop loss to $90.51.

Suggested Options:
April options expire soon so we suggest using the May puts
even though we plan to close the play before April 21st.  Our
favorites are the May 90s.

! Alert - April options EXPIRE on Friday!

BUY PUT MAY 90 CFC-QR OI= 705 at $6.40 SL=3.95
BUY PUT MAY 85 CFC-QQ OI= 834 at $3.70 SL=1.85

Annotated Chart:



Picked on April 06 at $ 88.50
Change since picked:   - 1.92
Earnings Date        04/21/04 (confirmed)
Average Daily Volume:     2.5 million
Chart =


---

Lehman Brothers - LEH - close: 80.78 change: -0.54 stop: 84.75

Company Description:
Through its subsidiaries, LEH constitutes one of the leading
global investment banks, serving institutional, corporate,
government and high-net-worth individuals clients.  The company is
engaged primarily in providing financial services, including
securities writing and direct placements, corporate finance and
strategic advisory services, private equity investments and
securities sales and trading.  Completing its array of banking,
research and trading capabilities, LEH also engages in the trading
of foreign exchange, derivative products and certain commodities.

Why we like it:
It certainly looks like the $80 level is an important line in the
sand for LEH, at least judging by last week's price action.  The
stock continues to underperform the Brokerage index (XBD.X) but so
far has been unable to deliver the breakdown we're looking for.
Thursday's afternoon dip saw a trade as low as $80.20 and the
intraday violation of the 100-dma ($80.45) was encouraging.  But
the bulls bought that dip into the close, clearly wanting to avoid
the trade below $80 that would signify a breakdown in progress.
Our $80 entry trigger still appears to be in the right place, and
we're looking for that trigger to be activated early next week.
Aggressive traders can enter on the breakdown, while those with a
more conservative bias can hold out for a subsequent failed
rebound below what should be strong resistance near $82.  For now,
we'll maintain our stop at $84.75, just over the top of the most
recent failed rally and the 50-dma ($84.50).

Suggested Options:
Aggressive short-term traders can use the April 80 Put, but with
April options so close to expiration, the May strikes make more
sense.  The more conservative approach will be to use the May 80
put.  Aggressive traders looking for more insulation against time
decay will want to utilize the May 75 strike.  Our preferred
option is the May 80 strike, as it will be at the money when the
play is triggered and should provide ample time for the play to
move in our favor.

! Alert - April options expire next week!

BUY PUT APR-80 LES-PP OI=5634 at $0.90 SL=0.45
BUY PUT MAY-80*LES-QP OI=1869 at $2.65 SL=1.25
BUY PUT MAY-75 LES-QO OI= 991 at $1.05 SL=0.50

Annotated Chart of LEH:




Picked on April 6th at        $81.77
Change since picked:           -0.99
Earnings Date                3/16/04 (confirmed)
Average Daily Volume =      2.20 mln
Chart =


---

UTStarcom, Inc. - UTSI - cls: 29.85 chng: -0.16 stop: 31.50*new*

Company Description:
UTStarcom, Inc., headquartered in Alameda, California, is a global
provider of wireless and wireline access and Internet protocol
(IP) switching solutions.  The company designs, manufactures,
sells and installs an integrated suite of future-ready access
network and next-generation switching solutions.  It enables
wireless and wireline operators in fast-growth markets worldwide
to offer voice, data and Internet access services rapidly and cost
effectively by utilizing their existing infrastructure.  UTSI's
products provide a seamless migration from wireline to wireless,
from narrowband to broadband and from circuit- to packet-based
networks by employing next-generation network technology.  The
company's customers include public telecommunications service
providers that operate wireless and wireline voice and data
networks in rapidly growing communications markets worldwide.

Why we like it:
The initial breakdown in shares of UTSI looked promising, but
those stubborn bulls stepped in to support the stock and it
grudgingly rose to test the 20-dma ($30.43), which held as
resistance going into the weekend.  The stock is still below key
resistance at the descending trendline ($30.75) and the 30-dma
($31.19), so the bearish case is still intact.  The rebound off
the lows last week came on steadily declining volume and
Thursday's 1.6 million shares didn't even reach half the ADV.  The
rollover from the vicinity of the 20-dma certainly looks like a
favorable entry into the play, but we really need to see selling
volume increase to provide confirmation.  Failed rallies below the
falling trendline still look like viable entry points, while more
conservative traders will want to wait for a break below $28.70
before playing.  We're trimming our risk in the play this weekend
by lowering our stop to $31.50.  If UTSI is able to scale all
those resistance levels and trade above $31.50, then we'll know
the bears have lost the battle.

Suggested Options:
Aggressive short-term traders can use the April 30 Put, but need
to be careful with April options expiring next week.  Those with a
more conservative approach will want to use the May 30 put.
Aggressive traders looking for more insulation against time decay
can use the May 25 strike.  Our preferred option is the May 30
strike, as it is currently at the money and should provide ample
time for the play to move in our favor.

! Alert - April options expire next week!

BUY PUT APR-30 UON-PF OI=6205 at $0.90 SL=0.45
BUY PUT MAY-30*UON-QF OI=7449 at $2.05 SL=1.00
BUY PUT MAY-25 UON-QE OI=3072 at $0.50 SL=0.25

Annotated Chart of UTSI:




Picked on March 30th at       $29.38
Change since picked:           +0.47
Earnings Date                4/27/04 (unconfirmed)
Average Daily Volume =      3.59 mln
Chart =



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

None


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The Option Investor Newsletter                   Sunday 04-11-2004
Sunday                                                      4 of 5


In Section Four:

Leaps: See Note
Option Spreads: April Quickies Coming On Sunday


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Option Spread Strategies
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April Quickies Coming On Sunday
By Mike Parnos, Investing With Attitude

It’s been an interesting week – and, fortunately, it’s over.  The
market is honoring the Easter Bunny and is closed on Friday.

The positions in our CPTI portfolio are in pretty good shape.  I
will devote the next few days to “extensive” research (during the
commercials) and try to come up with some exciting quickies for
the last week of this option cycle.

Hey!  The Detroit Tigers are 4-0.  That means that anything is
possible.  It’s enough to give one hope.
__________________________________________________________

Position Adjustment
The only position adjustment we’ve made recently is to buy back
the OSX April $115 call for $.05 and roll it out to the May $110
call for $1.30.  I’ll go over it in detail and discuss the
ramifications in the Sunday column.
__________________________________________________________

Something To Think About
“Almost without exception, there is only one way to make a great
deal of money in the business world – and that is in one’s own
business.  The man who wants to go into business for himself
should choose a field that he knows and understands.  Obviously,
he can’t know everything there is to know from the very beginning,
but he should not start until he has acquired a good, solid
working knowledge of the business.” – J. Paul Getty, How To Be
Rich

Gee, where have you heard that before?  If you don’t believe it
when I say it, maybe you’ll believe it coming from J. Paul Getty.
I still get emails from students who are diving into the pool
before they know how to swim.

It’s my pleasure to share my knowledge with you, but an
inexperienced trader can get into big trouble if he doesn’t know
what he’s doing.  There’s not always a solution.  I’m here to
educate and to help you avoid having to learn those expensive
lessons.  Please, be careful.  Take your time and learn the
strategies thoroughly.  There’s no rush.  The market isn’t going
anywhere.
__________________________________________________________

APRIL CPTI POSITIONS

April Position #1 – SPX Iron Condor – 1139.32
We sold 4 SPX April 1075 puts and bought 4 SPX April 1050 puts for
credit of: $2.50 (x 4 contracts = $1,000).  Then we sold 10 SPX
April 1170 calls
And bought 10 SPX April 1180 calls for a credit:  $1.40 (x 10
contracts = $1,400).  Total net credit and potential profit of
about $2,400.  Maximum profit range is 1075 to 1170.  Safety range
is about 1072.60 to 1177.40.  Maintenance: $10,000
__________________________________________________________

April Position #2 – RUT Iron Condor – 597.88
We sold 10 RUT April 530 puts and bought 10 RUT April 520 puts for
a credit of  $1.10.  Then sold 10 RUT April 610 calls and bought
10 RUT April 620 Calls for a credit of $1.15.  Total net credit of
about $2.25.  Potential profit: $2,250.  Maximum profit range: 530
to 610.  Safety range: 527.75 to $612.25.  Maintenance: $10,000.
______________________________________________________

April Position #3 – XAU Iron Condor - $101.62
Sold 10 XAU April 95 puts and bought 10 XAU April 90 puts for a
credit of  $.85 (x 10 contracts = $950).  Sold 10 XAU April 110
puts and bought 10 XAU April 115 puts for a credit of $.55 (x 10
contracts = $550).  Total net credit: $1.40.  Potential profit:
$1,400.  Maximum profit range $95 to $110.  Safety range: $93.60
to $111.40.
______________________________________________________

April Position #4 – OSX Calendar Spread Plus – $102.52
OSX is the Oil Index.  This is a play on the common belief that
oil prices will continue to move up over the next month or two.
Bought 10 OSX June $115 calls (36 delta) and sold 10 OSX April
$115 calls (23 delta) at a cost of  $2.15 ($2,150).

We also put on an April $100/$90 bull put spread and took in an
extra $.70 ($700) to reduce the cost basis to $1.45 ($1,450).

Adjustment:  See description above.  Details to follow on Sunday.
______________________________________________________

ONGOING POSITIONS
QQQ ITM Strangle – Ongoing Long Term -- $36.94
We bought 10 contracts of the 2005 QQQ $39 puts and 10 contracts
of the 2005 QQQ $29 calls for a total debit of $14,300.   We make
money by selling near term puts and calls every month.  Here's
what we've done so far:
Oct. $33 puts and Oct. $34 calls – credit of $1,900. Nov. $34 puts
and calls – credit of $1,150. Dec. $34 puts and calls – credit of
$1,500.  Jan. $34 puts and calls – credit of $850.  Feb. $34 calls
and $36 puts – credit of $750. Mar. $34 calls and $37 puts –
credit of $1,150. Apr. $34 calls and $37 puts – credit of $750
Total credit: $8,050.

Note:  We haven't included the proceeds from this long term QQQ
ITM Strangle in our profit calculations.  It's a bonus!  And it's
a great cash flow generating strategy.

ZERO-PLUS Strategy.  OEX – 556.12
In my Feb. 8th column, I outlined a strategy based on an initial
investment of $100,000.  $74,000 was spent on zero coupon bonds
maturing in seven years at a value of $100,000.  The principal
$100,000 investment is guaranteed.  We’re trading the remaining
$26,000 to generate a “risk free” return on the original
investment.

Long Term: Bought 3 OEX Jan. 2006 540 calls @ $81 (x 300 =
$24,300)
March: Sold 3 OEX 585 calls @ $3.10 (x 300 = $930)
March: 535/525 Bull Put Spread for credit of $1.10 (x 300 = $330).
Bought back 3 OEX March 585 calls for $.10 & sold 3 of March 560
calls for $1.35.  A credit of $1.25 x 300 = $375.00.  Bought back
March 560 calls for $.15, locked in profit of $120 x 3 = $360.
Cash position is $3,320 ($1,620 plus the unused $1,700).

April Positions:
OEX Bull Put Spread - $556.12.  Sell 5 OEX April 515 puts and buy
5 contracts of April 505 puts for credit of  $.90 (x 5 contracts =
$450).
Sell call against long 540 call. Sell 5 OEX April 570 calls for
$1.35 (x 5 contracts = $675).

New cash position is $2,640 plus unused $1,700 = $4,340.
______________________________________________________

New To The CPTI?
Are you a new Couch Potato Trading Institute student?  Do you have
questions about our educational plays or our strategies?  To find
past CPTI (Mike Parnos) articles, first look under "Education" on
the OI home page and click on "Traders Corner."  For more recent
columns, you can look under “Strategies” and click on
“Combinations.”  They're waiting for you 24/7.
______________________________________________________

Happy Trading!
Remember the CPTI credo: May our remote batteries and self-
discipline last forever, but mierde happens. Be prepared! In
trading, as in life, it’s not the cards we’re dealt. It’s how we
play them. Your questions and comments are always welcome.

Mike Parnos
CPTI Master Strategist and HCP
______________________________________________________

Couch Potato Trading Institute Disclaimer
All results reported in this section are hypothetical. While the
numbers represented here may have been achieved or beaten by our
readers, we make no representation that any individual investor
achieved these exact results. The tracking for the plays listed in
this section uses closing prices for the day the newsletter is
published and it is not meant to imply that any reader actually
received those prices or participated in these recommendations.
The portfolio represented here is hypothetical and for investment
education purposes only. It is only an illustration of what type
of gains a knowledgeable investor might receive utilizing these
strategies.


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The Option Investor Newsletter                   Sunday 04-11-2004
Sunday                                                      5 of 5


In Section Five:

Spreads and Straddles: A Much-Needed Holiday!
Premium-Selling Plays: Naked Puts & Calls


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*******************
SPREADS & STRADDLES
*******************

A Much-Needed Holiday!
By Ray Cummins

Stocks ended mixed ahead of Good Friday as geopolitical concerns
neutralized investor optimism over favorable earnings from Yahoo!
and Dell's positive revenue outlook.

The Dow Jones Industrial Average slipped 39 points to 10,440 with
Wal-Mart (NYSE:WMT) leading the blue-chip decliners amid a broad
retreat in retail stocks.  The NASDAQ Composite ended up 2 points
at 2,052 on gains in the Internet group and a late buying spree in
the chip sector.  The S&P 500 index fell 1 point to 1,139 as gold,
retail, aluminum, and homebuilding stocks slumped.  Trading volume
was 1.19 billion on the NYSE, where losers outpaced winners 2 to 1.
On the technology exchange, 1.69 billion shares changed hands with
decliners slightly ahead of gainers.  In the U.S. bond market, the
10-year note was down 2/32 while its yield climbed to 4.17%.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SUMMARY OF CURRENT POSITIONS - AS OF 04/07/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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  90.45   APR  65  70   0.60  69.40   0.60   Open
BZH    111.90 101.82   APR  95 100   0.70  99.30   0.70  Closed
KBH     78.71  75.82   APR  65  70   0.55  69.45   0.55   Open
COF     73.50  75.86   APR  60  65   0.50  64.50   0.50   Open
SYMC    44.64  47.50   APR  37  40   0.35  39.65   0.35   Open
DNA    106.82 108.45   APR  90  95   0.60  94.40   0.60   Open
FDX     71.59  75.06   APR  65  70   0.85  69.15   0.85   Open
LLL     56.67  62.10   APR  50  55   0.50  54.50   0.50   Open
TASR    61.80  98.04   APR  45  50   0.60  49.40   0.60   Open
DE      68.23  72.82   APR  60  65   0.40  64.60   0.40   Open
FFIV    31.87  33.85   APR  25  30   0.55  29.45   0.55   Open
MRVL    42.67  47.10   APR  37  40   0.20  39.80   0.20   Open
KBH     80.80  75.82   APR  70  75   0.40  74.60   0.40  Closed
NCEN    48.56  48.55   APR  40  45   0.45  44.55   0.45   Open
RIMM   104.14 107.98   APR  85  90   0.50  89.50   0.50   Open
YHOO    50.15  48.35   APR  45  47   0.35  47.15   0.35   Open
HSIC    75.81  76.85   MAY  65  70   0.45  69.55   0.45   Open
NAV     49.90  49.33   MAY  40  45   0.60  44.40   0.60   Open

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

Positions in Countrywide Financial (NYSE:CFC) and Hughes Supply
(NYSE:HUG), which is positive, have previously been closed to
limit potential losses.  Positions in Beazer (NYSE:BZH) and KB
Home (NYSE:KBH); at the $75 strike, are candidates for early exit.


CALL-CREDIT SPREADS

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

DISH    35.50  32.96   APR  42  40   0.30  40.30   0.30   Open
NVLS    31.15  33.40   APR  37  35   0.35  35.35   0.35   Open
VSEA    40.85  43.71   APR  50  45   0.60  45.60   0.60   Open?
SFA     31.96  33.74   APR  40  35   0.55  35.55   0.55   Open?
BBBY    39.04  39.11   APR  45  42   0.25  42.75   0.25   Open
MSTR    52.64  53.47   APR  65  60   0.60  60.60   0.60   Open
NTLI    53.12  56.91   APR  65  60   0.60  60.60   0.60   Open?
SINA    35.96  38.65   APR  45  40   0.70  40.70   0.70   Open?
AFCO    27.85  28.39   APR  35  30   0.55  30.55   0.55   Open?
CAM     43.90  44.88   APR  50  45   0.50  45.50   0.50  Closed
CCMP    42.13  42.24   APR  50  45   0.45  45.45   0.45   Open
XLNX    37.76  39.51   APR  42  40   0.25  40.25   0.25  Closed
PHM     52.87  51.56   APR  60  55   0.40  55.40   0.40   Open
SOHU    25.46  25.17   MAY  35  30   0.60  30.60   0.60   Open
SFNT    31.65  32.07   MAY  40  35   0.70  35.70   0.70   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),
which is positive, have previously been closed to limit potential
losses.  Xilinx (NASDAQ:XLNX) and Cooper-Cameron (NYSE:CAM) are
"early-exit" candidates.  NTL Inc. (NASDAQ:NTLI), Applied Films
(NASDAQ:AFCO), Varian Semi (NASDAQ:VSEA), Sina (NASDAQ:SINA) and
Scientific Atlanta (NYSE:SFA) are 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  19.71   APR    15    12     1.80    5.50   Closed
SNP     40.74  39.40   APR    40    40     5.70    5.70   Closed
CCMP    44.55  42.24   APR    45    45     5.90    5.75   Closed
AMX     35.66  38.84   MAY    35    35     3.65    5.00    Open
AIG     74.28  76.25   MAY    75    75     5.60    7.80    Open
SLB     65.13  60.76   MAY    65    65     6.75    6.50    Open
BSTE    30.63  39.89   JUL    30    30     6.00   11.50    Open?
MKSI    23.10  25.45   JUL    22    22     4.70    5.50    Open
BRKS    22.66  22.37   APR    22    22     1.60    1.50    Open
LF      19.67  20.27   JUN    20    20     3.50    3.25    Open

The recent straddle in Biosite (NASDAQ:BSTE) has nearly doubled
in value (as of April 8, 2004) and the speculative position in
Global Crossing (NASDAQ:GLBC) provided a large short-term gain
for those traders who paid a small premium to initiate the play.
Prices for the new positions in American International (NYSE:AIG)
and Schlumberger (NYSE:SLB), as well as any potential gains (max.
value) for straddles in play during my recent absence from the
market, will not be accurate.

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

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

DNA - Genentech  $112.00  *** Favorable Earnings! ***

Genentech (NYSE:DNA) is a biotechnology firm using human genetic
information to discover, develop, manufacture and commercialize
biotherapeutics for significant unmet medical needs.  The company
manufactures and commercializes 10 biotechnology products directly
in the United States.  These include Herceptin, Rituxan, TNKase,
Activase, Cathflo Activase, Nutropin Depot, Nutropin AQ, Nutropin
human growth hormone, Protropin and Pulmozyme.  The company also
licenses several additional products to other companies and its
product development efforts, including those of its collaborative
partners, cover a wide range of medical conditions, including
cancer, respiratory disorders, cardiovascular diseases, endocrine
disorders and inflammatory and immune problems.

DNA - Genentech  $112.00

PLAY (very conservative - bullish/credit spread):

BUY  PUT  MAY-95.00   DNA-QS  OI=763  ASK=$0.55
SELL PUT  MAY-100.00  DNA-QT  OI=330  BID=$0.95
INITIAL NET-CREDIT TARGET=$0.50-$0.60
POTENTIAL PROFIT(max)=11% B/E=$99.50


__________________________________________________________________

EBAY - eBay Inc.  $75.94  *** New "All-Time" High! ***

eBay (NASDAQ:EBAY) is a Web-based community in which buyers and
sellers are brought together to browse, buy and sell items such
as collectibles, automobiles, high-end or premium art items,
jewelry, consumer electronics and a host of practical and other
miscellaneous items.  The eBay trading platform is an automated,
topically arranged service that supports an auction format in
which sellers list items for sale and buyers bid on items of
interest, and a fixed-price format in which sellers and buyers
trade items at a fixed price established by sellers.  Through
its wholly owned and partially owned subsidiaries and affiliates,
the Company operated online trading platforms directed towards
the United States, Australia, Austria, Belgium, Canada, France,
Germany, Ireland, Italy, Japan, the Netherlands, New Zealand,
Singapore, South Korea, Spain, Sweden, Switzerland and also the
United Kingdom.

EBAY - eBay Inc.  $75.94

PLAY (conservative - bullish/credit spread):

BUY  PUT  MAY-65.00  XBA-QM  OI=6362  ASK=$0.45
SELL PUT  MAY-70.00  XBA-QN  OI=7861  BID=$1.10
INITIAL NET-CREDIT TARGET=$0.65-$0.75
POTENTIAL PROFIT(max)=15% B/E=$69.35



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

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.

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

GENZ - Genzyme General  $46.40  *** Next Leg Down? ***

Genzyme General Division (NASDAQ:GENZ) is a division of Genzyme
Corporation, a biotechnology and human healthcare company that
develops products and provides services for unmet medical needs.
Genzyme General develops and markets therapeutic products and
diagnostic products and services with an emphasis on genetic
disorders and other chronic debilitating diseases with defined
patient populations.  The company is organized into two segments,
Therapeutics, which focuses on developing and marketing products
for genetic diseases and other chronic debilitating diseases,
including a family of diseases known as lysosomal storage
disorders, and specialty therapeutics, and Diagnostic Products,
which develops, markets and distributes in vitro diagnostic
products.  The company also operates a wholly owned subsidiary,
GelTex Pharmaceuticals.

GENZ - Genzyme General  $46.40

PLAY (less conservative - bearish/credit spread):

BUY  CALL  MAY-55.00  GZQ-EK  OI=665   ASK=$0.20
SELL CALL  MAY-50.00  GZQ-EJ  OI=1347  BID=$0.75
INITIAL NET-CREDIT TARGET=$0.60-$0.70
POTENTIAL PROFIT(max)=14% B/E=$50.60


__________________________________________________________________

PRX - Pharmaceutical Resources  $55.25  *** A Big "Down" Day! ***

Pharmaceutical Resources (NYSE:PRX) is a holding company that,
through its subsidiaries, is in the business of developing,
manufacturing and distributing a broad line of generic drugs
in the United States.  PRX operates primarily through its wholly
owned subsidiary, Par Pharmaceutical, Inc., a manufacturer and
distributor of generic drugs.  PRX's product line consists of
prescription and, to a lesser extent, over-the-counter generic
drugs consisting of approximately 119 products representing
various dosage strengths for 51 drugs.  The company also has
strategic alliances with several pharmaceutical and chemical
companies.  PRX markets its products primarily to wholesalers,
retail drug store chains, drug distributors and repackagers.

PRX - Pharmaceutical Resources  $55.25

BUY  CALL  MAY-65.00  PRX-EM  OI=861  ASK=$0.50
SELL CALL  MAY-60.00  PRX-EL  OI=947  BID=$1.20
INITIAL NET-CREDIT TARGET=$0.70-$0.80
POTENTIAL PROFIT(max)=16% B/E=$60.70



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

__________________________________________________________________

GCI - Gannett  $90.42  *** Earnings Speculation Only! ***

Gannett (NYSE:GCI) is a diversified news and information company
that publishes newspapers, operates broadcasting stations and is
engaged in marketing, commercial printing, a newswire service,
data services and news programming.  The firm is an international
business operating primarily in the United States and in the U.K.
Approximately 87% of its revenues come from domestic operations
in 43 states, the District of Columbia and Guam.  It has foreign
operations in certain European and Asian markets.

GCI - Gannett  $90.42

PLAY (very speculative - neutral/debit straddle):

BUY CALL  APR-90.00  GCI-DR  OI=824  ASK=$1.15
BUY PUT   APR-90.00  GCI-PR  OI=162  ASK=$0.75
INITIAL NET-DEBIT TARGET=1.60-$1.75
INITIAL TARGET PROFIT=$0.45-$0.80


__________________________________________________________________

SEBL - Siebel Systems  $12.15  *** More Earnings Speculation! ***

Siebel Systems (NASDAQ:SEBL) is a global provider of e-business
applications software and is principally engaged in the design,
development, sales and support of Siebel eBusiness Applications.
This family of enterprise applications software enables a company
to better manage its customer, partner and employee relationships.
The company's eBusiness Applications are designed to meet the
requirements for managing these relationships for organizations
of all sizes, from small businesses to the largest multinational
organizations and government agencies.

SEBL - Siebel Systems  $12.15

PLAY (very speculative - neutral/debit straddle):

BUY CALL  APR-12.50  SGQ-DV  OI=24192  ASK=$0.25
BUY PUT   APR-12.50  SGQ-PV  OI=4184   ASK=$0.60
INITIAL NET-DEBIT TARGET=$0.70-$0.75
INITIAL TARGET PROFIT=$0.25-$0.40



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

SEE DISCLAIMER - SECTION 1

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


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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 04/07/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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.


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

APPX     APR    33    32.48   46.56    0.90   5.98%   2.77%
NEOL     APR    15    14.65   20.24    0.35   5.57%   2.39%
OSTK     APR    25    24.30   32.82    0.70   7.25%   2.88%
APPX     APR    33    32.73   46.56    0.65   5.76%   1.99%
ASKJ     APR    25    24.15   38.08    0.85   9.04%   3.52%
CLZR     APR    11    11.07   15.36    0.17   4.72%   1.54%
JNPR     APR    22    21.85   27.21    0.65   7.82%   2.97%
NEOL     APR    15    14.65   20.24    0.35   6.74%   2.39%
PDII     APR    22    21.80   28.07    0.70   8.31%   3.21%
SWIR     APR    22    22.15   41.86    0.35   5.03%   1.58%
APPX     APR    33    33.03   46.56    0.35   4.71%   1.06%
BRCM     APR    35    34.55   42.19    0.45   4.64%   1.30%
ELN      APR    15    14.65   20.05    0.35   9.84%   2.39%
OSTK     APR    22    22.25   32.82    0.25   4.47%   1.12%
PCLN     APR    20    19.75   26.65    0.25   4.90%   1.27%
SYMC     APR    40    39.40   47.50    0.60   4.89%   1.52%
XMSR     APR    25    24.40   29.86    0.60   7.74%   2.46%
YHOO     APR    40    39.40   48.35    0.60   5.13%   1.52%
APPX     APR    35    34.45   46.56    0.55   6.27%   1.60%
ASKJ     APR    25    24.55   38.08    0.45   7.51%   1.83%
CMC      APR    30    29.60   31.30    0.40   4.72%   1.35%
CSGS     APR    15    14.65   17.07    0.35   7.65%   2.39%
ECLG     APR    17    17.20   21.88    0.30   6.26%   1.74%
JILL     APR    17    17.15   20.60    0.35   6.38%   2.04%
MGAM     APR    22    22.05   23.83    0.45   6.80%   2.04%
PBY      APR    25    24.50   27.77    0.50   5.97%   2.04%
SUPG     APR     8     7.15    7.66    0.35  16.86%   4.90%
AGI      APR    30    29.55   33.19    0.45   5.39%   1.52%
ASKJ     APR    25    24.60   38.08    0.40   6.62%   1.63%
ENDP     APR    20    19.75   25.97    0.25   4.98%   1.27%
NFLD     APR    12    12.15   15.80    0.35  12.17%   2.88%
PBY      APR    25    24.55   27.77    0.45   6.18%   1.83%
PLMO     APR    15    14.65   22.88    0.35   9.66%   2.39%
RSAS     APR    15    14.55   18.81    0.45  10.23%   3.09%
SHFL     APR    40    39.60   47.76    0.40   4.13%   1.01%
SYMC     APR    40    39.35   47.50    0.65   5.79%   1.65%
ASCA     APR    30    29.70   37.54    0.30   4.73%   1.01%
ASKJ     APR    30    29.40   38.08    0.60   9.72%   2.04%
ERJ      APR    30    29.40   32.21    0.60   8.22%   2.04%
IMM      APR    15    14.70   20.26    0.30  11.43%   2.04%
INSP     APR    30    29.70   39.82    0.30   5.70%   1.01%
MICC     APR    17    16.90   24.39    0.60  15.59%   3.55%
MNST     APR    22    22.20   27.66    0.30   5.95%   1.35%
TKTX     APR    15    14.50   16.22    0.50  17.25%   3.45%
APPX     APR    43    42.63   46.56    0.75   8.92%   1.76%
ASKJ     APR    30    29.70   38.08    0.30   6.44%   1.01%
COCO     APR    30    29.75   33.40    0.25   4.55%   0.84%
FWHT     MAY    17    17.15   21.84    0.35   4.27%   2.04%
MICC     MAY    17    17.15   24.39    0.35   4.39%   2.04%
MNST     MAY    22    21.95   27.66    0.55   4.48%   2.51%
PLMO     MAY    17    16.90   22.88    0.60   6.80%   3.55%
TTN      APR    17    17.25   19.60    0.25   8.43%   1.45%
TTWO     APR    35    34.55   36.04    0.45   6.40%   1.30%
BARZ     APR    35    34.35   40.83    0.65  12.11%   1.89%
HNT      MAY    22    22.00   27.25    0.50   4.76%   2.27%
IPXL     MAY    20    19.50   25.07    0.50   5.43%   2.56%
SSNC     MAY    22    21.60   28.71    0.90   7.85%   4.17%
TRID     APR    15    14.75   16.79    0.25  12.19%   1.69%
UTHR     APR    22    22.05   23.95    0.45  13.47%   2.04%
XMSR     APR    27    27.20   29.86    0.30   7.69%   1.10%
ACCL     MAY    17    17.25   21.64    0.25   4.08%   1.45%
ADEX     MAY    20    19.45   22.60    0.55   6.05%   2.83%
IMM      MAY    15    14.70   20.26    0.30   5.24%   2.04%
IPXL     MAY    20    19.65   25.07    0.35   4.93%   1.78%
JBLU     MAY    22    22.15   26.54    0.35   4.11%   1.58%
LSCP     MAY    22    21.95   28.97    0.55   6.11%   2.51%
PDII     APR    25    24.55   28.07    0.45  15.04%   1.83%
TINY     MAY    17    17.00   22.74    0.50   7.27%   2.94%
USG      MAY    15    14.25   17.71    0.75  11.45%   5.26%
XMSR     MAY    25    24.50   29.86    0.50   4.90%   2.04%

Some of the new positions may not have been available at the
listed prices, due to the recent market rallies.  Positions
in 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   29.63    0.30   4.73%   0.85%
FARO     APR    30    30.40   23.09    0.40   7.33%   1.32%
AFCI     APR    25    25.50   22.42    0.50   8.84%   1.96%
FLSH     APR    22    22.75   21.98    0.25   5.62%   1.10%
ADTN     APR    35    35.80   30.00    0.80   9.56%   2.23%
DISH     APR    35    35.65   32.96    0.65   6.34%   1.82%
MTLM     APR    40    40.60   39.35    0.60   9.68%   1.48% *
BRL      APR    50    50.40   48.39    0.40   4.08%   0.79%
OVTI     APR    30    30.50   28.68    0.50  10.89%   1.64%
SNDK     APR    32    32.75   32.25    0.25   6.38%   0.76% *
HOV      APR    42    42.90   39.85    0.40   7.29%   0.93%
AFCI     MAY    25    25.75   22.42    0.75   7.73%   2.91%
QLGC     MAY    37    37.95   32.21    0.45   4.22%   1.19%

M-Systems Flash Disk (NASDAQ:FLSH) and Omnivision Technologies
(NASDAQ:OVTI) are on the "watch" list.  Conservative traders
should consider closing positions in Sandisk (NASDAQ:SNDK) and
Metal Management (NASDAQ:MTLM).  Positions in Career Education
(NASDAQ:CECO), NII Holdings (NASDAQ:NIHD), and Schnitzer Steel
(NASDAQ:SCHN) have previously been closed to limit potential
losses.

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

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

NEW NAKED-PUT CANDIDATES

Stock   Strike Strike Cost   Current   Max     Max    Simple
Symbol  Month  Price  Basis   Price   Profit  Yield   Yield

ASKJ     MAY    30    29.50    40.05   0.50   5.42%   1.69%
BRCM     MAY    37    36.70    42.85   0.80   5.86%   2.18%
CLZR     MAY    15    14.25    17.01   0.75  12.47%   5.26%
FWHT     MAY    20    19.35    23.11   0.65   8.83%   3.36%
IMM      MAY    17    17.05    21.66   0.45   8.37%   2.64%
INSP     MAY    35    34.45    45.26   0.55   5.28%   1.60%
MRVL     MAY    42    41.55    48.09   0.95   6.00%   2.29%
NFLX     MAY    27    27.10    37.65   0.40   4.65%   1.48%

__________________________________________________________________

ASKJ - Ask Jeeves  $40.05  *** Another New 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  $40.05

PLAY (sell naked put):

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

SELL PUT  MAY 30    AUK QF     979   0.50  29.50   5.4%   1.7% *
SELL PUT  MAY 35    AUK QG     734   1.70  33.30  12.4%   5.1%


__________________________________________________________________

BRCM - Broadcom  $42.85  *** The Uptrend Resumes! ***

Broadcom (NASDAQ:BRCM) is a leading provider of highly integrated
silicon solutions that enable broadband communications and the
networking of voice, video and data services.  Using proprietary
technologies and advanced design methodologies, Broadcom designs,
develops and supplies complete system-on-a-chip solutions and
related hardware and software applications for all broadband
communications markets.  Their diverse product portfolio includes
solutions for digital cable and satellite set-top boxes; cable
and DSL modems and residential gateways; high-speed transmission
and switching for local, metropolitan, wide area and storage
networking; home and wireless networking; cellular and terrestrial
wireless communications; Voice over Internet Protocol (VoIP)
gateway and telephony systems; broadband network processors; and
SystemI/O(TM) server solutions.

BRCM - Broadcom  $42.85

PLAY (sell naked put):

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

SELL PUT  MAY 35    RCQ QG    5567   0.40  34.60   3.8%   1.2% TS
SELL PUT  MAY 37.5  RCQ QT    3158   0.80  36.70   5.9%   2.2% *


__________________________________________________________________

CLZR - Candela  $17.01  *** Multi-Year High! ***

Candela (NASDAQ:CLZR) develops, manufactures, and distributes
innovative clinical solutions that enable physicians, surgeons,
and personal care practitioners to treat selected cosmetic and
medical conditions using lasers, aesthetic laser systems, and
other advanced technologies.  Founded near Boston in 1970, the
company markets and services its products in over 60 countries
from offices in the United States, Europe, Japan and other Asian
locations.  Candela established the aesthetic laser market 14
years ago, and currently has an installed base of over 6,000
lasers worldwide.

CLZR - Candela  $17.01

PLAY (sell naked put):

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

SELL PUT  MAY 12.5  UKZ QV     278   0.15  12.35   3.9%   1.2% TS
SELL PUT  MAY 15    UKZ QC     149   0.75  14.25  12.5%   5.3% *


__________________________________________________________________

FWHT - FindWhat.com  $23.11  *** Strong Sector! ***

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  $23.11

PLAY (sell naked put):

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

SELL PUT  MAY 20    HFQ QD      80   0.65  19.35   8.8%   3.4% *
SELL PUT  MAY 22.5  HFQ QX       0   1.50  21.00  13.6%   7.1%


__________________________________________________________________

IMM - Immtech International  $21.66  *** Drug Speculation! ***

Immtech International (NYSE:IMM) is a pharmaceutical company
focused on the development and commercialization of oral drugs
to treat fungal, parasitic, bacterial and viral diseases.  The
company has development programs that include fungal infections,
malaria, tuberculosis, hepatitis, pneumocystis carinii pneumonia
and tropical medicine diseases, including the African sleeping
sickness (a parasitic disease also known as trypanosomiasis) and
leishmaniasis (a parasitic disease that destroys the liver).  One
of its most significant research developments was the discovery
of oral drug delivery technology for dication drugs.  This unique
proprietary technology temporarily masks the positive charges of
the dication, enabling the active compound to move easily across
digestive membranes into blood circulation.

IMM - Immtech International  $21.66

PLAY (sell naked put):

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

SELL PUT  MAY 17.5  IMM QW     220   0.45  17.05   8.4%   2.6% *
SELL PUT  MAY 20    IMM QD     130   1.25  18.75  14.0%   6.7%


__________________________________________________________________

INSP - InfoSpace  $45.26  *** Up & Into Outer-Space! ***

InfoSpace (NASDAQ:INSP) develops and delivers a wireless and
Internet platform of software and application services to a
range of customers that span each of its wireline, merchant
and wireless business units.  Many of the company's products
and application services are offered to its customers, which,
in turn, offer these products and application services to
their customers as their own solutions.  InfoSpace provides
its services across multiple platforms, including personal
computers and non-PC devices.

INSP - InfoSpace  $45.26

PLAY (sell naked put):

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

SELL PUT  MAY 35    IOU QG     204   0.55  34.45   5.3%   1.6% *
SELL PUT  MAY 40    IOU QH       7   1.70  38.30  10.8%   4.4%


__________________________________________________________________

MRVL - Marvell Technology  $48.09  *** New Multi-Year High! ***

Marvell (NASDAQ:MRVL) designs, develops and markets integrated
circuits utilizing proprietary communications mixed-signal and
digital signal processing technology for communications-related
markets.  Marvell offers its customers a wide range of integrated
circuit solutions using proprietary communications mixed-signal
processing and digital signal processing technologies.  Marvell's
product groups include: storage products, consisting of a variety
of read channel, system-on-chip and preamplifier products; and
broadband communications products, consisting of a variety of
transceiver products, switching products, internetworking
products and wireless LAN products.

MRVL - Marvell Technology  $48.09

PLAY (sell naked put):

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

SELL PUT  MAY 40    UVM QH    5422   0.50  39.50   4.0%   1.3% TS
SELL PUT  MAY 42.5  UVM QT    3400   0.95  41.55   6.0%   2.3% *


__________________________________________________________________

NFLX - Netflix  $37.65  *** On The Rebound! ***

Netflix (NASDAQ:NFLX) is an online entertainment service in the
United States that provides more than 600,000 subscribers access
to a comprehensive library of more than 11,500 movie, television
and other filmed entertainment titles.  The company's standard
subscription plan allows subscribers to have three titles out at
the same time with no due dates, late fees or shipping charges.
Subscribers can view as many titles as they want in a month and
they select these titles at the firm's Website (www.netflix.com)
aided by its proprietary CineMatch technology.  They receive them
on DVD by first-class mail and return them to the company at their
convenience using prepaid mailers.  Once a title has been returned,
Netflix mails the next available title in a subscriber's queue.

NFLX - Netflix  $37.65

PLAY (sell naked put):

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

SELL PUT  MAY 27.5  QNQ QY    1345   0.40  27.10   4.6%   1.5% *
SELL PUT  MAY 30    QNQ QF    3401   0.80  29.20   8.9%   2.7%



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

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.

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

ADTN - Adtran  $29.50  *** Premium-Selling Only! ***

Adtran designs, develops, manufactures, markets and services a
broad range of high-speed network access products utilized by
providers of telecommunications services and corporate end users
to implement advanced digital data services over both public and
private networks.  The company's business is arranged with two
divisions, the Carrier Networks Division (CN) and the Enterprise
Networks Division (EN), to enable it to quickly respond to the
needs of the two important market segments that its products
address.  These two market segments are CN products for use in
the service provider's Local Loop, including central office,
remote terminal and customer premises, and EN products for use
at enterprise headquarters, remote offices and telecommuting
locations.  Adtran offers more than 500 products built around a
set of core technologies, and developed to address high-speed
digital communications over the last mile of the Local Loop.

ADTN - Adtran  $29.50

PLAY (sell naked call):

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

SELL CALL  MAY 35    RQA EG    1231   0.55  35.55   7.4%   1.5% *
SELL CALL  MAY 32.5  RQA EZ    1533   1.05  33.55   9.8%   3.1%


__________________________________________________________________

FRED - Fred's  $22.72  *** Sector Slump! ***

Fred's (NASDAQ:FRED) operates 414 discount general merchandise
stores in 14 states primarily in the southeastern United States.
Fred's stores generally serve low-, middle- and fixed-income
families located in small to medium-sized towns.  Fred's stores
combines everyday basic merchandise with certain specialty items
to offer its customers a selection of general merchandise.  The
selection of merchandise is supplemented by seasonal specials,
private label products and the inclusion of pharmacies in its
stores.

FRED - Fred's  $22.72

PLAY (sell naked call):

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

SELL CALL  MAY 25    FMU EE     391   0.45  25.45   5.7%   1.8% *
SELL CALL  MAY 22.5  FMU EX       0   1.30  23.80  11.3%   5.5%



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

SEE DISCLAIMER - SECTION 1

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


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